Marui Group Co., Ltd. (8252) Earnings Call Transcript & Summary

So we would like to start presentation of the second quarter results of fiscal year ending March '25 for Marui Group Company Limited. Thank you very much for participating in your busy schedule. The document we will be using can be downloaded at our corporate website. So please look at our presentation material. We will be spending the first half an hour with our presentation followed by Q&A session. Today, presentation will be given by CFO, Director Managing Executive Officer, Kato, talking about our business and outlook. And it will be followed by presentation of our President and Representative Executive Officer, Aoi. On top of the 2, for Q&A session, Epos Card, President, Saito; Aono, President of Marui; and General Manager of IR Department, [indiscernible], will be answering to your questions. These will be the content we will be presenting today. First, CFO, Kato will be presenting our financial results and outlook.

I will now present an overview of the financial results for the fiscal year ending March '25. This is our consolidated results. We have the 3 major assets. Total transaction increased 10% to JPY 2.3829 trillion continuing to set new records. Consolidated operating income increased 15% to JPY 21.5 billion, the fourth consecutive quarterly increase. FinTech's real operating income increased for the fourth consecutive year, rising JPY 1.4 billion Y-o-Y to JPY 22.5 billion and real operating income increased steadily raising JPY 1.3 billion Y-o-Y to JPY 3.3 billion. These are the financial indicators. As explained in the digest, the Group's total transaction volume reached a record high for the quarter. Both operating income and net income increased from the previous year and actual results, excluding the impact of liquidation of receivables exceeded the pre-COVID level. This is revenue and operating income by segment. Retail sales revenue was JPY 39.1 billion, up JPY 3.1 billion Y-o-Y and operating income was JPY 3.3 billion, up by JPY 1.3 billion Y-o-Y. FinTech's net sales increased JPY 8.5 billion Y-o-Y to JPY 89.2 billion, and operating income increased JPY 1.3 billion Y-o-Y to JPY 22.4 billion. Breakdown of the changes in operating income. Operating income for the period was JPY 21.5 billion, an increase of JPY 2.8 billion Y-o-Y. Excluding the impact of the liquidation of receivables, real profit increased by JPY 2.9 billion and significant improvement from the previous year's real profit, a decline of JPY 1.2 billion. These are the retail businesses. Breakdown of changes in operating income. An increase of JPY 1.3 billion was due to the continued increase in tenant rental revenue from the previous year, strong performance of related business, it had struggled last year. This is a reason for the increase in the tenant revenue. Tenant revenue increased by JPY 900 million due to decreased in unoccupied floor space. Status of unoccupied area. The unoccupied area decreased from 8,700 tsubo to 6,800. We plan to reduce the size down to 6,500 tsubo. Progress of the stores that don't sell. In the second quarter, the ratio of floors space occupied by stores that don't sale, tenants increased to 4% from the previous year to 62% with the shift of the category, we plan to increase the composition to 65% by the end of March '25. This is the status of EC transaction volume. Q2 transaction volume increased 4% Y-o-Y, starting with the utilization of web specialists. This was the 11th consecutive quarterly increase in continued growth. Now on to the FinTech situation, breakdown of changes of operating income. This year, in addition to increase in revenue due to the growth of transaction volume, we have also seen an increase in the number of customers the increase of JPY 1.3 billion was due mainly to the curbing of labor costs and improving productivity and the decrease in the point expenses. Excluding the impact of liquidation and receivables, real profit increased by JPY 1.4 billion, with a significant increase. This is the trend of card -- credit card transaction volumes. Second quarter transaction volume was JPY 1.1122 trillion, a record high for the quarter. Changes for installment revolving fees, year-on-year growth in installment and revolving transaction volume exceeded growth in card credit transaction volume and fee income grew steadily by 8% to 29.3% -- JPY 1 billion, sorry. Then there is a status of new cardholders. New cardholders in the fiscal year totaled to 390,000 at the same level as the previous year. So the number of Epos Card that support individual interest was 11 in the first half of the year. And for the second half, we currently plan to have 26. As for the new JQ Card Epos design, in addition to the popular Kyushu Shinkansen 800 series Tsubame, we have plans to release cards featuring popular artists and popular games in the future, which we are optimistic will contribute to expanding our new membership. As of September 2024, the total card membership reached a record high of 7.73 million. The number of cards that support individual interest has surpassed 1 million and the composition of platinum, gold and cards that support individual interest has expanded to 58%. This is the status of co-creative investments. In the first half of the year, we invested JPY 1.1 billion in start-up companies and JPY 500 million in funds totaling JPY 1.6 billion in investments, bringing the cumulative investment amount to JPY 29.6 billion. The profit contribution through co-creative investments has reached JPY 1.4 billion. The IRR of the startup of companies we have invested in so far is 10%, which is on par with the hurdle rate of 10%. Regarding the balance sheet and capital allocation. This is the status of the balance sheet. Total assets increased by JPY 85.9 billion from the end of the previous fiscal year, reaching JPY 1.0894 trillion. Additionally, the equity ratio has decreased by 1.8% from the previous fiscal year-end, 23.4%. On capital allocation. Out of the fundamental operating cash flow of JPY 25.9 billion, we allocated JPY 8.3 billion for growth investment, JPY 9.6 billion for dividends and conducted a share buyback worth JPY 3.2 billion. Investment in human capital amounted to JPY 4.6 billion, which represents 25% of personnel expense. Regarding ESG status. In terms of external evaluation in the first half of this fiscal year, we were selected for the first time for the highest rating under the active promotion of women's participation and advancement in the workplace, receiving the Platinum L-boshi designation. As of the end of September '24, there are 68 companies certified as Platinum L-boshi which is about 2% of the total 3,100 companies certifies as L-boshi. We have also received other evaluations as shown. Finally, regarding full year forecast. For the fiscal year ending March 2025, we expect to achieve the initial targets for the 3 KPIs, EPS, ROE and ROIC. As for segment profits, retail is projected to increase by 22% to JPY 8.5 billion and FinTech is expected to rise by 5% to JPY 44.5 billion, with no changes from the plan set at the beginning of the period. Segment forecast for the second half of the fiscal year. Retail segment forecast. Revenue is expected to continue to grow steadily. However, due to increases in utility costs and strategic expenditures such as system terminal costs, operating income is projected to be limited to an increase of JPY 200 million. The full year forecast remains at JPY 8.5 billion, in line with the initial plan. FinTech forecast for the second half. While the increase in operating income will be smaller compared to the first half due to rising data center-related costs and changes in the reward point program, operating income is still expected to reach JPY 44.5 billion, consistent with the initial plan. Finally, regarding share buybacks. If the stock price does not adequately reflect future profitability, we will continue to maintain a flexible share buyback policy. Following the first half, we will set a maximum share buyback limit of JPY 20 billion for the second half. Next, the growth strategies and capital allocation based on this growth strategy will be explained by the Representative Director and President, Aoi.

This is Aoi. Thank you for your attention. Many investors have requested an advanced explanation of the outline for the next medium-term management plan. Therefore, today, I will explain the key elements of the upcoming medium-term management plan, specifically focusing on the future growth strategy. The content is summarized in 3 points. First, on the theme of the economy driven by interest. Our company issued Japan's first credit card in 1960, developed fashion retail stores targeting young people in the 1980s. And since the 2000, we have expanded our unique business model to include a triad of retail, FinTech and future investments. We have continuously pursued forward-thinking initiatives to achieve growth. This is due to the basic stance of not competing in existing markets, but rather develop in new markets of our own. Such is our forecast for the future. It's an economy driven by individual interests. In the deflationary economy, with the wages not rising, the emphasis has been on function and price balance. This trend is also known as cost performance or cost bar and the consumers have become more cost conscious over the years. At the same time, however, another trend is emerging. This is a trend known as mixed consumption behaviors. According to the NRI survey, 68% of consumers said they usually divide themselves between what they save and what they spend money on, more than the 28% who said buy cheap and economical things anyway. In this case of a balanced economy or mixed consumption, there is a tendency to spend as much as possible on things that are important to them such as hobbies and collections, which is the exact opposite of the cost bar economy. Now that deflation is expected to be over, the Bank of Japan and major think tanks are also paying attention to moves such as the consumption [ mediocre ] at consumption and the [ trusting ] activities. Using this as a reference, there is a breakdown of the current economy -- if an economy -- if an economy emphasizes function and price is called cost bar economy, the non-cost bar economy that emphasis the emotion and value is positioned as the opposite of the spectrum. In contrast to the cost bar economy, which has become a red ocean due to the prolonged deflationary economy, the non-cost bar economy is a new market and is considered to a blue ocean with growth. We would like to call the blue ocean and economy driven by individual interest. We will also leave the red ocean when the fierce cost competition and steer major courses toward the new economy driven by interest as a source of power. To this end, we will place individual interest at the center of trinity of retail, fintech and future investment. We will then develop a new growth strategy with our investment. So what is the business that supports the individual interest? The platform for this is occurred to support individual interests. We aim to achieve both customer happiness and profitability by using cards and that support individual interest as a platform to connect each customer's individual interest with our business. The number of cards supporting interest currently stands at 88 projects and 1.01 million members. The content of these cards range from social contribution programs such as support for refugees in Ukraine, music sports characters such as Chiikawa, animation, the games. In addition, one card was introduced this year. Here is the first of these Epos Pet Card. The photo shows the actual card face, which was posted with the customers at the pets. It is literally the only card of its kind in the world. Another reason for your support is that the portion of the amount you spend is donated to animal shelters. Household with the pets exceed those with the children at 10.5 million nationwide. Since the pet-related expenditures totaled JPY 360,000 per year, the market has multiplied by the number of households is expected to be JPY 3.8 trillion on large TAM. This is the expected market. The so-called [indiscernible] supporting fave market alone is worth JPY 3 trillion, but we envision a larger market that is not limited to supporting fave, but it includes individual interest. In the broader sense such as pet, sports, music and so on. The size of the market excess JPY 10 trillion. It is also assumed that the object of liking will expand as the number of people increases. 10 people have 10 likes, the 100 people have 100. The [indiscernible] cards of support individual interest have the potential to increase the number of individual interest infinitely by utilizing print on demand to develop a long tail of interest. In addition, cards that support interest are more likely to be used as the main cards because of their strong connection to customers, values and emotions and can be expected to generate 2 or 7x higher lifetime earnings than general credit card. In addition, in business that has bought interest, employees interests are utilized in their work. We will create a new business by connecting employees and customers who are previously divided in the form of service providers and consumers through common interest. In the recent supporting interest competition, 131 employees participated and competed with their suggestions despite the fact that it was the first time the competition was held. The proposal that won the Excellence Award is currently under development for the implementation. In the future, we will continue to develop unique services. Next is a trinity, the business strategy that places interest at the center. We will maximize group synergy by reorganizing and evolving business. Let me explain the synergy between retail and FinTech. Our company has consistently grown through the support of credit cards for retail over the 75 years from our founding in 1931 with furniture installment sales to the issuance of the Epos Card in 2006. Since the issuance of the Epos Card, this dynamic has fleet, allowing retail to support FinTech, resulting in high growth of 16% per year over the subsequent 17 years. When we reassess our FinTech strength from the perspective of synergy through retail, we see that we can consistently recruit 700,000 to 800,000 new members annually by focusing on in-store membership recruitment. Additionally, our retail employees can acquire members through customer services and sales, which keeps customer acquisition costs lower than those competitors. Furthermore, recruiting members in Marui stores which attract many young visitors for shopping and events leads to a higher proportion of younger members contributing to elevated rates of revolving and installment payments. Moreover, recruitment driven by shopping and service usage, what we call embedded finance, results in lower rejection rates, higher utilization rates and lower default rates. The combination of all these factors has allowed us to achieve high growth and profitability that exceed industry standards. This unique management structure, which retail supports FinTech has also received high praise from the CEO of our partner, Visa, who described it as one of the most successful examples worldwide. However, there are challenges associated with the synergy between retail and FinTech. One such challenge is the decrease in customer touch points due to the withdrawal from in-house and private brand products. Therefore, moving forward, we will develop events and merchandise that closely aligned with the Epos Cards that support individual interest as new initiatives to replace in-house and private brand offerings, thereby enhancing the synergy with FinTech once again. The approximately 1,000 employees responsible for these operations have transitioned from retail to FinTech due to the withdrawal of private label products. Most of these employees are currently active at customer touch points such as in-store and card centers, but there are also many who are engaged in unfamiliar administrative tasks. These employees can once again thrive by applying the event management skills and customer service techniques they developed in retail to the events that support individual interests. Additionally, they can leverage their know-how gained from planning, manufacturing and selling private label products to create new revenue stream through merchandise that support individual interests. Through these efforts, we will significantly increase the recruitment of cars that support individual interest in stores. Next, regarding the direction of FinTech. In addition to the gold cards that have driven growth so far, we will introduce cards that support individual interest as a new growth driver evolving from a single engine to a dual engine model, thereby accelerating growth once again. To this end, we will launch a premium version of the cards that support individual interest. First, we will raise the credit limit to that of the gold cards to make them the primary cards. Next, we will differentiate ourselves from competitors by offering exclusive original merchandise instead of bonus points. Finally, we will provide benefits that allow customers to make donations according to their interest, responding to their social contribution needs and aiming to balance impact with profit. In the future, we will improve the UX of the Epos Lifestyle app, which will become an important customer touch point alongside physical stores through the new company, Marui Unite, which focuses on in-house front development, aiming to enhance customer lifetime value. Next, regarding the direction of future investments, we will leverage the know-how gained from co-creative investments in start-ups to support start-ups that promote individual interests, invest in intellectual property and collaborate with individual creators by enhancing group synergy. Now let's discuss capital allocation based on our future growth strategy. We will compress noncore businesses and focus on investments on businesses that support individual interests, thereby accelerated growth once again. I will explain 4 key initiatives. First, the asset allocation of stores to maximize synergy between retail and FinTech. As mentioned earlier, I discussed the importance of stores in supporting the high growth and profitability of FinTech. However, not all stores contribute to FinTech. Some have low profitability, low customer attraction and do not help in recruiting members. Therefore, we will proceed to close or sell stores that do not show potential for synergy compressing assets and investments. Conversely, we will strengthen investments in stores with high customer attraction where strategies for supporting individual interest through events and merchandise can be effectively utilized, maximizing synergy with FinTech. Next is the allocation of human resources to leverage individual and organizational capabilities. With the structural transformation of the group's business, the retail workforce has decreased by about 60% over the past decade, while the FinTech workforce has doubled. While productivity in FinTech seems to have doubled in terms of transaction volume, the number of cardholders per employee has dropped to 70%. This decline is influenced by the acceptance of personnel from retail following downsizing of retail. Going forward, in addition to reallocating personnel to retail due to the commercialization of events and goods, we will improve the number of cardholders per employee to levels exceeding those of 10 years ago through efficiencies gained from digital transformation. Next, we will discuss the revenue contribution from new services that have emerged from human resource investments. High-margin new services developed so far, such as owner cards, dental credit, freelancer cards and residual value setting credits, are expected to make significant contributions to profits. In 6 years, we anticipate a contribution of JPY 3 billion to JPY 5 billion in contribution margin and JPY 20 billion to JPY 30 billion in LTV. In the future, while FinTech may face negative factors due to rising interest rates, we will hedge against these negatives through increased revenues from new services, cost reductions in variable expenses from card supporting individual interests and fixed cost reductions from DX creating a solid structure where high growth in transaction volume leads to a high growth in profits. Compression of corporate assets. Since the formulation of the Corporate Governance Code in 2015, we have been gradually selling off cross-share holdings and we will continue to proceed with the sale of the remaining holdings. Finally, regarding the next midterm management plan. To implement our growth strategy early and advanced transformation aimed at enhancing corporate value, we are developing the next midterm management plan through the fiscal year ending March 2031. Our goal is to achieve accelerated growth. We aim to double our group transaction volume to JPY 10 trillion. Our target for ROE is between 17% to 20% with a PBR of 3 to 4x. Additionally, we aim for future KPIs of ROE above 25% and PBR over 5x. Specific business strategies based on today's direction will be explained by the responsible executives at the IR Day in December. Moreover, we plan to announce the next midterm management plan at the financial results briefing in May 2025. That concludes my presentation. Thank you for your attention.

So we would like to move on to Q&A session. Takahashi-san of the Mizuho Securities, please.

This is Takahashi of Mizuho Securities. Thank you for the detailed explanation. And I have questions, one for Kato-san and one for Aoi-san. Question for Kato-san. I think the second quarter results was favorable. But against your full year guidance, what was your progress achievement for your profit? You showed your outlook for the second half. Just so I understand your progress is in line with your full year guidance. But if there is any gap for like a FinTech business, can you please share us some details?

Okay. So I will be giving an answer for your question. So the profit increase in the first half was substantial compared to our full year guidance, but there will be data center-related expenses expected in the second half. So you can understand our first half results was in line with our expectation. So if the business continues to progress as we plan, we will be achieving our full-year guidance. So there is no specific gap against our full-year guidance.

So for retail and FinTech, separately, is that the right understanding?

Yes. So it seems like our profit increase in the second half will slow down, but in the second half for FinTech, there will be a data center-related expenses. And for retail, as there will be replacement of terminals. So for both of those segments, situations are the same.

So for FP&A, the impact of the developing FP&A organization, do I understand you are already seeing the positive contribution from that?

On a monthly basis, on the monitoring framework, we are checking the progress at the Board of meeting as well, and we are already tracking. We're always tracking the progress.

So my second question is for Aoi-san. For non-forecasted businesses, you are going to reduce the size of those businesses, but I understand you have done substantial restructuring already. But if you are going to do further restructuring, I think that is a good surprise to me. And my question is about -- so you are going to achieve growth, mainly in the credit cards and you are going to support the retail business because it's going to be attractive to the get the new cardholders. So as you're going to downsize the retail network, the connecting points for -- with the new customers, with the existing stores, do you think you will have enough connecting points with the customers? Maybe you will be sharing some more details at the next year. But in terms of competition, and also some business alliances with other companies, are you going to further utilize those other networks and your strategy to expand the total transaction? But at the same time, you are going to downsize your retail, the network. So can you share how you're going to keep those 2 strategies in well balanced?

Thank you for your question. So first of all, we have been improving efficiency of our stores. We have taken a proactive approach in the measures to do that. And however, we still think there is a further room for improvement. And if I can share what we have done already in the last 10 years, so we have shifted the retail business to a fixed term contract and we have been reducing the retail stores. So as we have shifted our business model for retail we have seen the total size of the retail business to decline. But by closing low-efficiency stores, we wanted to really focus our resources. But if we accelerate the process of closing the stores, we may see a temporary losses, but we will still have some human resources and there will be some labor-related costs weighing on our profit. So we could not really proceed the improvement of efficiency as we had planned. But from the beginning of this year, we were able to keep the good balance between the number of our retail human resources and the cost. And now it seems like we are facing some situation, we don't have enough of the labor. So that makes it easier for us to improve the efficiency of the retail business. so we are going to accelerate this initiative going forward. And to your second question, so at the stores, if -- while we try to improve the efficiency further, the connection points with our customers, it could have a negative impact to our credit card business. You have some concern over that. And for the existing or the remaining stores, those will be flagship Marui stores for us. And at those stores, we have a very wide market area, which attracts the customers from nationwide. And on top of the shopping, we will be holding events. And also, we will events -- have events to support individual interests. So we are expecting to attract the customers across the nation, especially young customers. And that will be reflected in the opportunity to acquire new credit card holders. We already have relatively high market share within the metropolitan area. But in terms of LTV, we want to attract young customers. That is going to be our intention. So from these 2 perspectives, at our flagship stores, which can attract many customers, we will be accelerating investment in those flagship stores. So there will be like a Chinese stores as a representative of Marui stores, we will be able to attract customers from all over the country and these Marui stores will be the destination for all these customers. We think we can increase the contact points with customers from these efforts. So at the Marui stores for credit cards, that will help us to raise the brand equity of Marui by consolidating all these businesses, and we will be enhancing our investment to achieve that.

Thank you for a detailed answer. If I can confirm what I heard, so the economy driven by individual interest. I think it was a very interesting mix and expression. So the economy driven by interest for events or merchandisers because these are the things people like and have strong interest in. Even if the stores are in the far away from where you live, they will still be coming to visit your stores. So that will be slightly different from cost by market. You can reach out to wider the market area and by making more investment in those flagship stores, those stores can attract customers from wider area. Is that the right understanding?

Yes, exactly, that is a good summary of what I wanted to say. Yes, that's what we intended to do. So far for e-commerce -- as we shifted to e-commerce the area -- sorry, era, and we were trying to change our stores to the stores that do not sell. And with our stores, we were expanding the events in the [indiscernible] and also experiences. And for these are the experience events, we are -- we needed to further enhance these events. That will be the future image of the stores for us. And that will be also linked to group synergy in the future. So we will be specializing in those and focusing on those initiatives when we develop our stores. Thank you very much.

We will take the next question. Daiwa Securities, Mr. Shigeoka, please go ahead with your questions.

This is actually Miss. Shigeoka. I have 2 questions. First question is regarding the revolving and installment payments, commissions increased? And what are the thinking behind that? And could you give us updates on Page 78 of the document, the FinTech's revenue structure changes are explained and the funding cost is increasing. And under the circumstances, you have been taking measures to increase the commissions and are they included in your reform measures? And what is your current thinking around this?

Thank you for the question. This is Saito. In terms of the installment and revolving payments commissions revision, other companies have started on working on that, and that's what we recognize. And in our case, we have been considering about this. And at any time, we have made preparations for us to implement that. But at this point in time, at what point in time, what kind of changes will be implemented, nothing has been official as of yet. And the interest rates have been revised. And today, the future strategy -- growth strategy was explained, while membership expansion and transaction volume expansion, how we're going to realize these will be the priority in terms of our strategy. And from the profit perspective, the installment and revolving payment commission revisions -- well, that's one thing, but we believe there is still room for expense control. For instance, the productivity will go up significantly. And once the efficiency goes up, the productivity and profitability will go up as well. So various strategies and measures have been implemented. At this point in time, we're trying to prioritize those measures and strategies to be implemented.

As for the installment and revolving payment commissions increases, you have been considering that and once determined, as necessary, you'll be making the disclosure. Is that the right way to understand this? At this point in time, you don't have numbers that can be shared and you are positively considering about this.

At this point in time, at what point in time we are going to implement such revisions, we hadn't factored that into our plans. Epos Card in the industry, profit card, credit card is extremely high. That means that many customers have been using the installment payments and revolving payments and revising the interest rate associated with that will require understanding of our customers. So we'd like to carefully consider that.

Second question is regarding the next midterm plan. The growth story were explained in a very easy-to-understand manner that this midterm plan updates EPS, JPY 200 and OP JPY 60 billion. When it comes to the thinking behind those numbers, when you make the financial results briefing for the fiscal year 2024, you'll be also talking about the fiscal year 2025 forecast or at the time of the IR Day in December, you'll be sharing the thinking behind the numbers? For this midterm plan, the current midterm plan, when will you be talking about the thinking around this midterm plan?

Thank you for the question. Let me answer the question. As for the current midterm plan, the recovery from COVID pandemic was not predicted correctly, so that progress is being delayed. As for EPS and ROE, the third year targets will be achieved in the fourth year this year, that means there is a delay of one year. And for the fiscal year, ending in March 2026, which is the last year of the midterm plan, the original plan included the contribution of profits from the new businesses and other co-creative investments and other share buyback, these will have impact so right now, we are scrutinizing all of this. So next year in May, we will be able to disclose the numbers in an official manner. So I would ask for your understanding about this.

Understood. Well, due to the COVID pandemic, the business environment has changed, and that is what I understand totally, including the point, the forecast and variance from the variance countermeasures implemented, EPA department was established. And recently, the budget creation and forecast accuracy have been improved. And I believe that this will lead to the next midterm plan, and that will be explained in the future, I hope. Understood.

So we would like to move on to the next question. Kanamori-san from Okasan Securities.

This is Kanamori of Okasan Securities. I have 2 questions. In the first quarter -- this will be a question for Kato-san. So for revenue and the expenses, you always represent the water flow chart. As of the first quarter, you have done some adjustment for the transaction volume and FP&A expenses by making flexible adjustment, you were able to control the cost. So you did not change your operating the profit, the budget. And now you have presented your outlook for the second half. Maybe my other question is very granule. But if we combine the first half results in the second half outlook, so the total revenue for the full year -- so -- yes, the adjustment, the revenue is that still slightly less than what you have announced. Would this -- maybe this will be a minor issue that will be -- but in the FinTech business environment, are you taking more cautious stance? Or you expect this to be the minimum at the level you can achieve under the current circumstance?

So the adjustment or revision we made in the first half was mainly in the travel and entertainment, JPY 30 billion, the transaction volume was adjusted. So because the fee, the ratio itself was not so high to begin with the 4 merchants. And there was some upside to the merchants [indiscernible] fee. So we did not change our full year outlook or the guidance. And we continue to see the same trend against what we had expected back then. Travel & Entertainment is showing some weakness, but because we did not think it was necessary to make a revision. The current situation is almost the same as the first half -- first quarter. So we believe we can still achieve a full-year guidance.