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

My name is Kato. I'll talk about the overview of the financial results as well as the outlook for the March end of 2027. So first of all, the consolidated financial results. This is the 3 points in the financial results, digest highlights. EPS has increased by 11% to JPY 158.4, ROE is 11.6%. ROIC is 4%. So 3 industries have been all achieved its targets. In the consolidated operating profit, 13% increase to become JPY 50.2 billion. This is an increase in 5 consecutive quarters and achieved its targets. In segment, retail, JPY 2.3 billion increase of profit, FinTech, JPY 3 billion increase and achieved the target and also the 7% increase in JPY 28.5 in the profits and achieved JPY [ 7.5 ] million to achieve its plan targets. So financial 11.6% in ROIC and ROE is 11.6%, exceeding the shareholder equity cost, ROIC exceeding the WACC. And also this is the final group and total sales has a record high, JPY 5.7 increase by the previous quarter, JPY 52.2 billion in operating profits and also JPY 1.9 billion exceeded to become JPY 28.5 billion. So the operating profits, current profits also achieved its targets and the JPY 3 billion increase due to the nonoperating expenses. However, the current profits increased by 7%. Extraordinary profits in accordance with the impairment of the equity as well some of the loss due to the closure of the store, current profits are 7% increase to achieve JPY 28.5 billion. So in the FinTech profits, this is the revenue profit and operating profit. Retail operating profit has increased to become JPY 11.2 billion. FinTech operating profit is a record high JPY 47 billion for both segments achieved increased profits. And also the retail plus, the FinTech retail plus JPY 2.6 billion, Fintech plus JPY 6.8 billion in total expenses plus JPY 100 million, excluding the special factors, that is a JPY 9.5 billion increase of profits. And also tenant revenue have increased and that increase the expense increase that is achieved, the JPY 11.2 billion for the rents and the expenses, those proportional rent has increased. This is the transaction volume in the 44 months has increased the previous year, it is a higher level than the total region department store is [ 111% ] compared to the previous year. In the tenant revenue segment, the minus JPY 500 million and also due to the variable rents, JPY 2.3 billion increase in the tenant revenue. And this is the card and this is due to the sales increase at the area, nonoperating area has decreased -- declined to [ 4,700ub ] due to the withdrawal of our own store base and compared 5% increase and now became 70%. As planned, the category has been increasing. The next is the FinTech situation. In the FinTech, this is the breakdown of the operating profits. And this is due to the change of the revolving and installment payments, the JPY 6.8 billion increase in FinTech. And then this is including the special factors, it is a JPY 3 billion increase. This is the card and credit card. And in the 10% increase, 1.2 -- so this is JPY 1.2 trillion. This is a record high. And this is the merchant commission rate. This merchant commission rate compared due to the revision of the foreign exchange rates fees, they have increased by 22%. And this is the revolving and installment payments in the March ending the JPY 473.2 billion expanded. And this increase -- this is the -- if looking at the industry compared to the March, the 1.1x in 2020 March, but now it is 1.7x that we have the case compared to the other peers in the industry. This is the commission fee revenue due to the revision of the fees since October has expanded to JPY 69 billion, which is JPY 9.4 billion increase. Next is the new memberships in the 2020 March in the entire new card issuance is still going, but then card supporting the [ Suki ] has increased and increased by 50,000 to achieve the 870,000 people members. So these card numbers of membership is the record high JPY 8.3 million. The [ Suki ] supporting card members are 1.38 million people. The Platinum and Gold Card percentage is including that ratio is 64%. This is the decline in the repayment of the profit, repayment of the yield and interest. So the JPY 1.5 billion has been placed as provisions for the loss of the repayment of that.

This is the total asset with the account receivable increase compared to last year-end, JPY 87.9 billion increase of JPY 1.1413 trillion. Equity ratio compared to last year-end, less by 2%, so 21.4%. In terms of the capital allocation, the basic cash flow, JPY 2.6 billion borrowing JPY 1.5, JPY 1.8 billion for growth and then dividend 21.4% and then the share buyback 7.7%. Also in terms of the human resource investment, JPY 9.7 billion. Total investment is JPY 27.7 billion. ESG situation. The main external valuation, [indiscernible] brand, we were the first 9 years in a row, selection. Other health-related management, we are the first for retail, we are selected for the last 9 years consecutively. In terms of the renewable energy, 100%. We have our own solar generation from '27, we will be improving by 97% for this year. And then we didn't have our own generator during the Ukraine crisis, our electricity bill went up by 30%, 27 March, even with the Middle East crisis with the tenants included, we will be plus 17% right. So it's half of the Ukraine crisis. In terms of the outlook for March '27. EPS, 4% growth, JPY 16.4 billion, ROE, 11.8% will be higher than previous year. Group total will be 9% increase, JPY 5.900 billion and then operating profit, 10% increase, JPY 55 billion, then net income will be 4% increase, JPY 29.5 billion. In terms of the ordinary profit, with the interest rate going, we have minus JPY 34, but we have the operating profit, so some 3% increase of the ordinary profit, JPY 44 billion. By segment, this is the operating profit. Retail, 3% increase, 11.5% FinTech 8% increase JPY 51 billion. The Retail segment operating profit, plus and minuses, tenant income and event will be expanding. In terms of the other utility costs, we have increase of JPY 800 million. Lessening of the real estate increase, there will be down of JPY 500 billion. So we will have a JPY 300 million or so operating profit. For FinTech, with the expansion, the merchant fees and the installment and repayment fee changes, actual operating profit will be JPY 3.5 billion because of the interest repayment loss that we accounted for last year, there will be JPY 4 billion for the operating profit. Per head dividend, DOE 10%, we will maintain for March 27. It will increase by [ JPY 3 ] to JPY 134. We are increasing for the last 15 terms. So that's all from me. Thank you. So now we would like to have direction for Suki business. Our CEO, Mr. Aoi will present. So this is Aoi. I would like to talk about the business supporting Suki and going forward. We have the vision of the economy that is driven by Suki. So we have the business that is supporting Suki. The business that supports Suki through Suki, consuming something for somebody and society through Suki is what we want to do the impact to society. We are using our benefit to launch into new businesses and evolve into the new businesses. First, we will do the businesses to support Suki. We, up to now, retail FinTech, we have the co-creation investment with the Trilogy. So we will putting Suki in the center, we would evolve all of the 3 aspects. First, retail. In retail, we have event goods, cards, Suki support unit will be the main ones. Store management operation, we have events to support EV and then our own private brand expertise goods will be utilized. And our unique feature, we will continue to draw more card membership through our services. The unit that supports Suki, we are able to change our way of managing stores as well as opening our policies. Yokohama, we closed in February. We have a unit specializing in Suki to reopen. Yokohama membership, 70% are coming to the Suki events. So through this change, 145 of the area and then 1/10 of the staff, we are able to make sure that we are drawing more membership. So it's much more efficient sales. Especially efficient operation, we have other different types of outlets. In Osaka, after [indiscernible], we have our second store that is supporting Suki. If the operation unit succeeds, then we can make the asset of the store efficient so that we will be more of an asset-light business. Next, we will talk about FinTech. Up to now, Gold Card was drawing the growth and driving growth. By adding the Suki support card, we can grow in new areas. Up to now, becoming a general card to Gold card, we are seeing more usage and then people are using their Gold Card as their main card, and there will be more usage. So it's a 2-stage approach for our loyal customer. Royal customer is simple for the Gold Card, but it's very effective. Last 20 years, we have had 19% increase every year, which is a very high growth. March 26, also in terms of how we traded, 75% increase was from the Gold Card. As you can see, absolute gold card. On the other hand, Apple Card, we think there is potential that we can draw from. This diagram I would like to use. This is the loyal customer outlined by Gold Card in numbers. The new member, 100. Of that, 45% of our customers, invitations are sent out for Gold Card. Of that, 20% of the customers switched to Gold Card. And of that, 15% of them make it our main card. So therefore, they become a true loyal customer. On the other hand, those customers who do not apply to the invitation or even if they become a Gold Card, they don't use it as a main card, there are 5% of those. So total 30% of those. So meaning that the loyal customers, 15%, double that, 30% is still left behind. So that's our great potential. Therefore, utilizing the Suki support card mission, we would like to take all of these 30% customers into our loyal customer path. To do so, the core competence, we would like to co-create trust.

For that purpose, we will practice co-creation of the trust, which is a core competence. The founders expressed the trust is something not given to the customer, but rather trust is to be co-created with the customer. Gold Card is relatively closer to the trust that we give to the customer, but the Suki supporting card is the co-creating the trust and loyal customer creation will be proceeded. So here, the important point is the customers, the self-confidence and self-positive attitude toward oneself in regards to the management of money. And Japanese people, in general, has the less knowledge about the finances and the self-confidence is quite low in terms of financial management. So therefore, some customers feel I'm not really good enough to have the Gold Card. So therefore, they would hesitate to switch to a Gold Card and they will not use Gold card. That is about 30% of the customers that I just explained. By the Suki supporting card for them to become loyal customers, most specifically until 1970s, since inception, in Marui Store, we have the communication with the customers face-to-face, which we have done in our stores. In application AI technology utilized to be produced again, that's a customer interaction. And based on that, to support the customers' self-confidence by providing the appropriate feedback at the appropriate timing. This communication with the customers, that is the trust is something that is not just given, but also the customer themselves would grow that confidence and to gain the trust so that they -- as a result of the one's trust to be grown encourage to be grown each customer, they would eventually become a loyal customer, and that is a business to be supported. So the Suki supporting card, the co-creation of the trust in the volume of the JPY 1.5 trillion to JPY 2 trillion will be the increase of the revenue. And also in the invitation standard is not reached in those are 55%. Those are the other companies' credit card that use as the main card. But then by recommending Suki supporting card, we will promote the switching and charging to our -- the main card to become use ours. So in the Pet card, 10% of the members Epos Gold Card switch from Epos Gold Card. So among new members, the other company's main card there are certain numbers of customers who have switched from other companies' main card to our card. And those supporting card other than just the status that you can buy paying money, but also represented in the love for their pets. This is the priceless Suki or like or love is valued as very important for the customer. So through this card, supporting Suki or their individual interest, that has been those 55% of the customers now recommending them to switch to our cards for them to become loyal customers. In 2031, the 15% of the customers will become loyal customers by 2031. So therefore, the transaction volume should reach an increase of the JPY 300 billion to JPY 500 billion by March ending in 2031, in main card ratio become -- increases from 23% to 35%. So the group transaction volume to reach JPY 10 trillion is our target. This is the fusion of retail and FinTech and now the card membership to be collected and the loyal customers, we combine retail and FinTech so that we can support the long-lasting customer journey. Not just the event to get our members, but also the Suki supporting card, we provide the experiences. So this is linked with the lifestyle application. The event can be reserved and this is a service for the members, and this is implemented, then the customers like based -- Suki-based event announcement as well as the preferred reservation and invitation can be used at the benefits. This is a good. These goods are sold in charge of the retails. The goods provided for the members are differently sourced from the person in charge. But now we're going to merge the 2 by having the more unique own goods as well as through the sales is also monetize our sales and also to the original benefits provided to our card members as well as a cost. So the retail and card will be combined to be used, initial cost will be hedged by the revenues in retail and also the initial [indiscernible] can be recovered to achieve the -- over the lifetime achieving the business model and the profits. And so the need and sales and FinTech to be fused together so that we can achieve this effect by the joint cost sharing so that we can increase our profit ratio. Setup collaboration to be increased and co-creation has been reduced in the recent years due to our review on collaboration policy. But in the future from now on, we will be supporting the business supporting the Suki and also conversion IP and content, those nontangible asset investment will be done to promote further collaboration. Next is the DX strategy, digital transformation strategy supporting Suki. This is a communication, a more tailored personalized communication to promote the creation of the trust and also data to be utilized and AI to be utilized and to achieve marketing. Events and goods are linked. The online and offline experiences can be combined together through the Suki or likes to support each individual happiness. So this strategy is a professional resources in the DX area. We didn't have much of the tech image before in Marui Group but now we have the -- thanks to the efforts by Mr. Tsuchiya, our CDXO, former Goodpatch, the former Marui Group -- Goodpatch President. And from April, Tokyo University, [ Takamatsu ] Research X, coming from that research lab, AI [indiscernible] Executive Chief Technology Officer; and Goodpatch also a joint venture mature, UX design special software development internal can be internally done in Marui in it, product development specialists as well as key supporting unit, data utilization experts as well. And the DX strategy will be further promoted by -- so this is the -- for the co-creation as well as the -- also how it should work in the future, business development is made. And most specifically since 2024, employees' own likes Suki can be developed into business development and Suki supporting business [indiscernible] has been done. 240 employees in the past 2 years have applied in 152 plants and the likes in the museums and art museums and the museum card and support card has been commercialized. We have been expanding the participants to outside to the public from 2026. Broader idea has been collected [ fast right ]. But out of 170 applications, about 130 of them are from outside.

The breakdown, other companies and overseas people, university, graduate students and long-term intern people. The topic was space [ Wajima Lacquer ] and philosophy. This is the day of the contest. Various types of Suki is presented and support from the audience, it was very much a big hype. Through this place of co-create, [indiscernible] Group strength and the Suki of individuals can be merged together to have very diversified Suki. For this business, we will have various employment as well as midterm hire as well as contracts as well as long-term internship, we will have a work style based on project. In that case, company will not be a box where they will split the external, internal. It will be a more free place where people can come and go as well as utilizing their expertise. Using this co-create place, we would like to create a way of working so that we can get excellent talent from around the globe so that we can evolve into a company that supports Suki. So the new structure for our Board for the last 12 years, External Director, Okajima [indiscernible] is going to be retiring this year. And then the new External Director, [indiscernible] is from the McKinsey & Company as well as has been a fellow for the Kingdom of [indiscernible] and right now is the President for the [indiscernible]. So a management that has both impact and profit at its core. So also our director is changing. Kato and Kojima are retiring and the new candidate for the Director is the Senior Managing Executive Officer, Epos President, Aida, and also the Senior Manager, Corporate Planning, Endoh. Also, we have a director that we will increase from Goodpatch President. The CDXO Senior Officer, Tsuchiya, will be recommended. In the June General Meeting of Shareholders needs to approve these new members, we would like to expand as well as make sure we can have a switch of generations for March 2031. We will make sure we all achieve our target. So that's all I had to say thank you. Thank you for your time. Let's move on to Q&A.

So the first question, [ SBI, Otsuka-san ], please. This is [ Otsuka from SBI ]. Do you hear me? Yes. Two questions to Mr. Aoi. So one by one. Is that okay? Yes, that's fine. First question, today, you talked about in terms of the trust, Page 56, after 56, you have mentioned some of these engagements, which is very interesting for me. So you want to elaborate on this for 56? Of course, as you mentioned, especially financial service in terms of credit is providing for. So the financial institutions normally think in that approach. In terms of co-create, Idea is a differentiator for you, I'm sure. The question is for the differentiation, how would you like to bring it into more solid? For instance, as you said, Suki support, Suki support card, then that will be something that you can benefit. Like you commented, the 30% of the people who are still not necessarily have no Suki support card or no plan that they can relate to. The digital communication that you will be using as a tool. Not necessarily, you are not able to hook these audience, and they may not feel the attraction to what you are providing. So strategy going forward, if you could be -- that's first question. So one by one. Thank you for the question. In terms of trust co-creation to be more specific and how to make it more possible. If I make it very short, last before, from starting of our business late 1970s, we said, especially 1960s or '70s, it's hard to imagine from today at the very top of the floor of our store, we had a payment counter. Every month, customers would come to make their payment to us. And our employees face-to-face would receive that payment for the repayment. And actually, there is a lot of dialogue going on. For instance, every time when they make payment, we say thank you, and there's a conversation. For instance, after they finish their 10x payment, this is -- you're done with 10 -- not just saying thank you and expressing appreciation, we say this is just a token of our appreciation. We will give them a gift. We used to. Then, those customers still treasure those gifts today. It's putting our appreciation into the gift from the customer, limited income, whether they were able to pay the whole 10x, they are so relieved that they were able to pay up all the installments and to be thank for that. Having it in the form of a gift, it means that they means that they were able to build up their credit, their trust. So it's a psychological benefit that they can be positive about what they've done later, we analyzed. So those customers, there's quite a lot who are happy with themselves. Our trust co-creation credit cards business, customers, we want to be very sympathetic to how they feel. These are the expertise we have in our company. Unfortunately, in terms of the storefront communication going away, but our idea, our communication with customer is getting less. So we want to revive that kind of relationship is what I explained to you. For instance, today, lifestyle app, we have to engage with customer or communicate with the customer. Every month, the closing date. What kind of communication today? We will close soon. Are you okay? Yes. If you want to do a change to the revolving type of payment, you can tell us when and we can change it to a lesser amount and then make it in a new revolving. But the new payment date, we don't have any comment. But just if they are late to pay, there's a telephone or there's a short mail sent. And we ask them, you need to pay us soon. For instance, we want to put our minds in the shoes of the customer. We should say thank you on the day they made the payment for the installments. We start there. If it's a 10x payment installment, then we say this is done, you completed. So this is just our appreciation. So if you don't mind, we can give them a [indiscernible] target gift like a little animal, stuffed animal or digital something is the way so that we can recreate what was there in our history. Sorry, I'm getting long-winded, but how we can make this possible? Based on our history, the expertise. This is our core competence actually. Others cannot copy our own unique capability is how we appreciate this. Customers psychological, we are able to sympathize with this kind of method. This inevitably is going to be the source of how we can deploy and what we said. The top-tier DX talent, DX UX to recreate. We have -- we need dedicated professionals. Fortunately, we have some very capable people here who are working together with us. So together with these people, our staff are working with these talented people, professionals to create the experience that other companies are not able to match. So this is a new business that we work together with our customers is the differentiation that we're looking for.

With the financial money rending agreement contract was made. And then, however, the customer receive being told that [indiscernible] -- and by being able to do that, that is a very good factor to evolve further communication. And if you have some data, I will let you know as well. More specifically, in the current [indiscernible] supporting business, what is the progress or any impact -- effect that you are able to achieve from that business? From Mr. [indiscernible] viewpoint, are there any favorable results? For example, employees also, there are many situations where the employees themselves will be encouraged from that. Any positive achievement and positive aspects that you are able to achieve. In addition, what are the negative or somewhat not achieving expected results from the Suki supporting business? In terms of positive things, as you just mentioned, with this Suki likes to be the good trigger. The employees who about 65%, very high percentage. And now that percentage is increasing. And in addition to that, I'm very pleased with the fact that Suki supporting business concur was held this March. And for the first time, we have also opened it to outside the company as well. About 140 -- close to 140 ideas or close to 130 ideas come from outside the company. So these ideas were proposed -- very good proposals were given or very passionate proposals were given to us from outside the company. So those who have received, we want to commercialize and to put that into business as well. So these ideas can be collected from outside and can be used in event and goods and cars by Marui and combining with our existing business and Suki supporting business can be started one after another. That is the -- what we are actually happening. That was the thing we have thought about, even though we were just started, but it is now seemed to provide better results. And on the other hand, what is somewhat negative or not achieving yet was as your second question, the Suki supporting card to create the trust. Those who can -- the experts who can support this are participating the Suki supporting card and business. But now we are -- the members are now there, players are now there. But then we further need to implement this and to realize such business. I think there's still some room for growth and there are still some conceptual stage. We will need to make more efforts in this area to further make it grow.

We'd like to go on to the next question from Mizuho Securities, [Takai-san,] please.

So this is [Takai] from Mizuho. Two questions. Number one, same with the first question, the Suki support card, how to expand that. You previously told us your card, your operating cost is very low, even that is very difficult for other peers to copy. One possibility, this sort of Suki support card, having this, it's not communicated properly, but people don't know the content very well. They're very vague. It's very, very difficult for them to use the card or people who are nonusers, you want to expand it to nonusers, you need to have more recognition awareness. One of them is the Umeda, the new store that you are opening in Umeda and Osaka, so that you're more positive about your own self kind of. Those message you need to expand it to people who don't know you? Or how would you like to go about expanding this? That's number one.

Thank you for the question. Yes, Suki Support card is very -- compared to before, has great opportunity. The opportunity lies in large way to improve awareness for many people to understand what we did before. Until we communicated, people didn't understand this. But for instance, Suki support card, the original source before we had the engagement, the anime business that we used to be working. Anime events, we would work together with in the card. Those sorts of credit cards working with anime. From 10 years back, we have been doing through that operation, we understood those anime content fans normally -- in social media X, every day, they have frequent communications within the community. So within the community, we would send a message to this community. Then that becomes a big hype within the community. It gets transmitted by them also by the community. So communicating to the fan community, the speed, the scope compared to before, it's easier for us to get in touch with the group using social media already, the fan community is already established. We can notify them. So the fans actually can communicate to their peers is how we are able to communicate. So using Suki as the core, we are getting a big benefit advantage through this. Of course, we will continue to communicate and introduce people to these sorts of cards aggressively. But on the other hand, cost and without us putting too much effort, the fan themselves are able to communicate. So that structure already exists for us. So that is our businesses that we are very appreciative of in the nature of it.

And that is why the business concur that is also open to the public, that is very good, including those aspects, those ideas can be collected more broadly from the audience and so that you can increase and you can grow the community. And then this will be naturally expanding from those effort. Is that correct?

Yes, that is correct. That is what we are thinking. Yes.

My second question, in the new organization, you mentioned, could you please let me know your -- the new members are also wonderful. You're also including the young employees and as well as the external directors compared to before, I think you have the younger generation working more and those who are knowledgeable in the business has been the new members of the Board of Director meeting. And how do you want to evolve your Board of Director meeting? That is my second question.

Thank you for your question. [indiscernible] has been working for a long time to increase our corporate value, company value. Okajima-san has joined 12 years ago. At that time, the share price was JPY 1,000. Now our equity price is 3x more, JPY 3,000 level today. After 12 years of his assignment, now he is retiring from that position and the successor is Mitarai-san. Mitarai-san, and Mitarai-san also have been introduced from Okajima-san and they have worked in McKinsey and Company before. Both of them have worked in the company before and Mitarai-san and also in the East, Great East Japan earthquake, Mitarai-san was the Bhutan loyal government Prime Minister fellow, and then now -- and then she is doing the social business quite successful called [Kesennuma] meeting. So this is a social enterprise. She's been working. So now she's joining us as an external representative director, so that is the director so that we can increase our corporate value. So in case of our internal director, we have increasing internal directors. This is from good batch Representative Director, Mr. Tsuchiya. He is already our Executive Officer, CDXO and Digital Transformation Officer. And Mr. Tsuchiya has been the nonpermanent officer, but now thinking about the future directors within the Board, we do need a person knowledgeable about digital and technology. So that is what we felt we need such an individual talent. So that is why as we have discussed internally in our Board meeting, and we decided to invite this timing that we want to ask Mr. Tsuchiya to become our internal director at this time. The other person is currently the President of EPOS Card, Mr. Aida. He is the Managing Executive Officer and CDO. And he had worked in the corporate planning as well as he had worked in the putting the new stores in Hakata. He was also the founding member of that store. So both in the credit card as well as the retail. So Mr. Aida is very knowledgeable of our business. So he has done the operation of the company as well as for the business. So as Mr. Aida, we'd like to ask Aida-san to become the Internal Director. And Ms. Endo, she would be the youngest, but she is the IR -- in charge of the IR and also she is the Corporate Planning Director. So FP&A and she is very knowledgeable about figures and numbers. And also, she is very experienced and knowledgeable in the business management area as well. Mr. Kato is the CFO, but Ms. Endo is a future potential human resource to succeed Mr. Kato in the future. So Mitarai-san and Endo-san are females. So with the -- so the average age with these 2 individuals, the average age of the Board of Director members would become younger, Rich. And toward the 2030, we will be trying to get more younger members included in our business management as well as the Board of Director meeting members. And that is what we are trying to do.

Okasan [indiscernible], Kanamori-san, please.

Yes, we hear you fine. Kato-san Fintech business, I need to confirm. So that's the reason for my question. Up to now, in the material, you used to put in terms of the loss and then changes in the fee commission impact. Usually, you would put it into the material. I was not able to find it myself. In terms of 26th March, the original Q3. At the end of the day, the actual -- what is the situation I would like to know. And 27 March, for the first part, the positive of the fee change, commission change. The original plan, raising the fee, the operating profit benefit, 26 March, JPY 4.8 billion. 27 March, JPY 12 billion would be the number. [indiscernible] is going to be a plus JPY 7 billion. However, in terms of you have a lot of the depreciation by quarter, you are trying to fasten out. In terms of the plan, 27 March, the number -- outlook, how do you have the plan laid out?

Yes. So I would like to respond to your first, the 26 March results. Up to now, in terms of installment change fee, JPY 4.8 billion, we assumed that transaction is not going to change. It Went by 0.2. So it's JPY 5 billion instead of JPY 4.8 billion. 27 March. What we said, no change in the numbers. It will be all benefit of the fee we won't do this in this fiscal year. But going forward, all the expense costs structurally will be readdressed. So annually, in terms of the credit liquidation, we want to make it negative. So asset securitization, we want to make it negative for the quarter. We want to make sure it doesn't go up and down too much. That's a specific area that we want to be more specific about.

Kato-san, by quarter, this chart I used to receive, you're not going to make that available.

Previously, when we closed for the Q1, this year also, after Q1, we should be able to give you a better plan outline that we can share.

Okay. I understand. Another confirmation is the year that closed, Q3 cumulative performance, it was an upside with FinTech?

Yes.

However, Q4, the upside is getting more extra. Strategic cost is going to be put into Q4, I believe. In reality, value, how much did you account for here? Also '27 March, the strategic cost expense, what's your direction? Please comment to the extent that you can comment today.

Strategic expense, we wanted to use. But as we said, interest repayment that we had to account for was more than expected. So as a result, we couldn't build on it. Therefore, rather, we didn't want to -- we accounted for some of the loss. So we put JPY 1.5 billion for the interest repayment. So we were able to -- for this year, the revolving changes in the fees. For digitalization, for the app development cost, we want to account for more so that we didn't have any bad debt. So therefore, we want to have a database buildup. We want to spend more is what we wanted to do. So we wanted to lessen ourselves with the bad debt.