Mitsui & Co., Ltd. (8031) Earnings Call Transcript & Summary

Thank you very much for joining us at this Investor Day 2023 of Mitsui & Co. I'd like to be the emcee. I am Konishi of Investor Relations division. Thank you very much once again. This event is being streamed live. And the copyright of the images and sound of this session belongs to us as well as to the management company. Please refrain from copying or using all or part of the session for any purposes without permission. Today's event is being recorded and will be distributed on demand from our website. We would like to ask for your understanding and cooperation. So first of all, I'd like to invite our President and CEO, Kenichi Hori, to deliver opening address and explain management policy. [Presentation]

Good afternoon. I'm Kenichi Hori, President and CEO. Thank you for taking the time out of your busy schedules to attend Mitsui & Co.'s Investor Day 2023. Today, I would like to speak about our initiatives to enhance Mitsui's corporate value under the current medium-term management plan for MTMP. We have continually transformed our business portfolio to ensure that through our business activities, we can provide real solutions for ever-changing social issues. If you look at the past 2 decades shows that we have reconfigured our business portfolio in response to changes in the operating environment, change our profit mix and the continued increase of our market capitalization has reflected these changes. Transforming our business portfolio is a crucial way to generate profits and cash while adapting to diverse business conditions, and it is a driver for our corporate value enhancement. As I explained when we announced MTMP 2026 in May, to further enhance our corporate value, we will work to improve profitability, strengthen shareholder returns and pursue an optimal capital structure and link these approaches to sustainable enhancement in ROE. Today, I will focus on profitability improvement. One of our strategies for improving profitability calls for the enhancement of our base profit. To that end, we're working to drive forward the middle game business, transform our business portfolio and optimize the allocation of management resources. Here, middle game refers to our endeavors to reinforce competitiveness improve efficiency and promote various measures for turnarounds in the existing businesses. We're determined to further reinforce the competitiveness of each business, something that has been continuously heightened while overcoming a number of challenges in an ever-changing environment. We will also continue to transform our business portfolio. Throughout its history, Mitsui created a faster core businesses in a wide range of fuels. Through this process, we have gained deep expertise of each business field. The key to our growth investments has been investing in familiar areas of business where we have extensive expertise and subsequent the forming business clusters. To succeed with these initiatives at the highest level, we must optimize the allocation of our finite management resources. As shown in this slide, we aim to improve base profit by a total of JPY 170 billion during MTMP 2026. This consists of JPY 110 billion profit contribution resulting from our middle game endeavors and JPY 60 billion from new businesses. Around 1/2 of the JPY 60 billion contribution from new businesses is already in sight. While we will report on quantitative progress towards JPY 110 billion contribution from the initiatives when we announced on our full year financial results. Today, Tetsuya Daikoku, our Senior Executive Managing Officer in charge of the Mobility business, will provide some examples of our middle game initiatives. Also, CFO, Tetsuya Shigeta, will speak about our efforts to improve efficiency and achieve business turnarounds. In addition to our efforts to strengthen our existing businesses, we are accelerating the execution of growth investments. During the previous MTMP, by combining our diverse businesses, we proposed and successfully provided real solutions to the social issues that emerged as a result of changes in the global operating environment. These activities resulted in significant qualitative and quantitative enhancement of our investment project pipeline. We see the 3-year period covered by the current MTMP has a time to accelerate [indiscernible] rigorously selected investments while further expanding our project pipeline. In the current fiscal, we plan to execute the investments totaling around JPY 1 trillion, including some projects from the previous MTMP that were carried over into the current plan. Along with the new investments, we are also proactively divesting assets. We estimate that our investment cash inflows will exceed JPY 500 billion in this fiscal year, and we're accelerating our portfolio reconfiguration. This substantial qualitative and quantitative enhancement of our investment project pipeline enable us to select high-quality projects, that meet or you can exceed our criteria despite an environment that requires high investment returns. When selecting projects, we first identify the areas with growth expectations to form the core business clusters aligned with the 3 key strategic initiatives defined in the MTMP 2026. Projects selected this way are then assessed from a company-wide perspective by executive officers in charge of multiple business fields. Further, through a multilayer discussions by the portfolio management committee and corporate management committee, we delve deeper into these projects in terms of factors, including quantitative contribution, management resources and ESG before making institutional decisions. In the first half of the current fiscal year, we executed multiple large-scale investments in the food and nutrition domain to drive one of our key strategic initiatives, wellness ecosystem creation. The animal protein business cluster includes Santa Priscila shrimp farming business in Ecuador. And in the food science area, we invested in the functional food ingredient Nutrinova. Examples in the Foodservice business [indiscernible], which manufactures and sales process live products as well as a contract food service company and services. Also in the health care field, we are pursuing growth investments with the aim of strengthening the competitiveness of the hospital and clinical business centered on IHH. We have expanded our hospital and clinic portfolio by investing in a clinic business that provides both online and safety face consultations. In the testing and diagnosis area, we are working to reduce health care costs while better treatment benefits through investment in the health care technology businesses that can provide hospitals and in Phoenix with advanced technology and solutions, including the vital utilization of health care data and AI. Although the businesses that I just mentioned are examples of growth investments in familiar areas of business, in each business field, we have made acquisitions that are highly profitable and complement our core business functions by thoroughly strengthening these newly added businesses middle game endeavors, we will turn them into drivers of profit expansion. As I have explained, Mitsui is actively executing growth investments while also accelerating strategic asset sales at the same time. Even if an asset is currently contributing to profit, it may be subject to divestment if there is limited upside from Mitsui. In addition to realizing the intrinsic value of assets, divesting them also enables management resources to be acquired, such as financial and human resources, which can then be reallocated. We accelerate the business portfolio reconfiguration by appropriately allocating such resources. In the current fiscal year, we saw and acted upon several opportunities for strategic asset sales and realized the substantial gains. For example, by divesting MRCE, a locomotive leasing business in Europe and Thorne HealthTech, which develops, manufactures and sells high-quality dietary supplements, we are still in the process of intensifying divine coagulation of our portfolio based on the current business environment and outlook. We therefore expect the level of strategic sales gain compared with the past. As I said earlier, we estimate that investment cash inflows will exceed JPY 500 billion in the current fiscal year. Through the initiatives to enhance profitability that I have explained today, we have steadily expanded our cash flows. Over the past 20 years, we have increased our dividend per share by 17% per annum, in line with cash flow expansion. Moreover, since FY March 2014, we have used flexible share repurchases to enhance both total payout and cash flow per share. we will continue these efforts to enhance shareholder returns along with cash flow growth. Lastly, changes in global dynamics and the operating environment are expected to continue. And social issues such as climate change and the maintenance of natural capital will become even more complete. While continuing to provide real solutions to social issues, we are determined to respond to the expectations of our shareholders but sustainably enhancing ROE, corporate value, underpinned by profitability improvement, strengthening of shareholder returns and pursuit of an optimal capital structure. That completes my presentation today.

Thank you very much, President Hori. I would like to open the floor for questions. A microphone will go to you. So please identify yourself and your affiliation first before you ask questions. If you're participating online through Zoom, we can also questions from you. You please push the raise-hand function, on the Zoom. And if you turn comes, please unmute yourself and put your video on and ask questions. And please ask 1 question at a time. And we may limit the number of people who can ask questions in the interest of time. I would like to ask for your kind cooperation. Because of simultaneous interpretation service being available, please simplify your question as much as possible. Thank you. Now raise your hands if you have any questions.

Thank you for the presentation. I have 1 question. What you failed to mention, the optimum capital structure on Page 3 is what I would to ask about. For example, debt equity ratio at the end of September, 0.48x. Of course, in-separation has increased the equity, stock hold equity. But at the end of March, if you use JPY 123 to the dollar or JPY 124 a dollar, it will be probably 0.5x or so. So for contingency, we -- you would like to have some buffer. I do understand that. But optimal leverage on Slide 3. How do you -- how are we supposed to interpret this? Of course, on the right cycle, the stronger shareholder returns is also linked. So can you talk about the optimum leverage and your thoughts on that?

Thank you for your question. In our company, for the management environment, we'd like to be more sensitive. And there are various observation points around the world, and we summarize them. And how much aptitude that we should see to be respond is responsible to the changes. And around the world, there are a business environment that we are faced with. And this -- the degree of amplitude and forecast for the future is becoming increasingly difficult. And to that end, a certain level of cash standby and stability has to be assured so that we can have a sound operation on the balance sheet so that we can respond to contingency, if something happens. And based on that assumption, capital allocation is shown here. And for each fiscal year, with the earned cash and also cash inflow with the portfolio reconfiguration. As I said, like asset divestment, mainly through these there is cash that has been made available, and we look at that. And also, we have to ensure stability at the same time. and we invest in quality projects and improve shareholder returns. And we have to hit the right balance. So in familiar areas of businesses, where we know better, we would like to have the projects that have immediate results, and that has been given priority for investments. So our confidence in our acumen and also cash generating power and quality of the ads, we will take all these into consideration, to enhance the portfolio. And in that sense, there is a risk level that we can control to some extent. If there is some risk level or the project itself are quite excellent, then we may be flexible, to some extent, to expand the business foundation. And that is also well within our option. And for shareholder return for the 3-year period of MTMP, a certain percentage for core operating cash flow has been communicated to you, and we have to ensure that we would carry them out. And as a result, of all these efforts, leverage may be within allowable range with a certain level of flexibility, we will seize the numbers down to a certain range.

Thank you very much for the presentation today. I would like to also ask about the cash flow allocation. You talked about leverage earlier. And it is showing the cash flow allocation. And as for the leverage, you said that you will look for quality projects. but including your company, looking at the trade companies, the free cash flow is to become positive. Therefore, our net debt will not increase basically, and the equity will be accumulated and the ROE will go down if you leave it. So you said you will look for quality projects. But in your scale, good projects and to increase leverage means it was going to be a large-scale project. But if it does not appear, the ROE may decline. So the free cash flow after shareholder returns is going to become positive. When are you going to change that perspective? And when will that change be introduced? That is my question.

Thank you very much for your question. Of course, from free cash flow and after deducting the shareholder returns, it will become positive. And in this area and in this environment, of course, we have to look for the discipline that is required. And in MTMP, I believe that policy is very important. But at the same time, in the management environment in which we see a lot of opportunities, we do see possibilities of seeing larger scale acquisition in projects, and we have not maybe realized some of them in the past. However, that is a possibility we'll be seeing going forward. So opportunities will arise going forward. And if we see such opportunities in the future, of course, we will have a balanced perspective. And within the permissible range of debt, we will be flexible. But we have to look at the quality of the assets. And from that asset, how much of the profitability will be able to secure in the future, that is something that we need to consider going forward. So in the dialogue that we have with all of you, we do say that there is flexibility. But the neutrality of the cash flow in 3-year period, I believe that needs to be maintained. And as for shareholder returns, of course, capital efficiency needs to be enhanced, and that is something that we need to think about together. MTMP and afterwards, that is the time access that we need to be sensitive. And of course, to the ROE, we need to have we need to avoid the ceiling in a long-term way so that we need to think about the enhancement of the earning power. So monitoring will continue. And if I say, we will take initiatives. So chronologically, we will have communication with the people concerned so that we will be able to make the decisions. Of course, it is very important to have a stable access going forward to make such decisions very much.

In the ineterest of time, this is going to be the last question that we can take for this session. The gentlemen in front row, please.

I have a question. In President's presentation, it was mentioned that portfolio reconfiguration would increase. But for this fiscal year, JPY 500 billion sounds huge. But at what scale are you going to be able to run this cycle? Because currently, the exchange rate is lower. So I think it's easier to sell assets. But if the yen starts to appreciate, do you plan to maintain that low of scale? Or do you have such possibility in sight? Can you talk about the scale and the environment?

Well, thank you. Of course, when we sell the assets, we have to find a partner to sell to. And in the business environment change, we have to consider the context. So it's very difficult to forecast the macro economic figures. But the degree of reconfiguration is being and that's what we feel. For example, JPY 100 billion plus per year used to be the cash inflow. But now we are looking at JPY 500 billion this fiscal year. So the level has been enhanced. I think that understanding is quite appropriate. And well, if there is a buyer that can add more value to the assets that we can, we know that this is a level that we can add value to, and we may have to monetize that once or the multiples that we can sell at is higher than we bought. If that is the case, and that is quite pleasing to us. So we have to combine all these different cases. And our profitability model does include this reconfiguration. So asset reconfiguration is something that we have to be doing flexibly agilely. And at the same time, we have to build up 1 at a time. So that is how you're supposed to look at the whole exercise. And to add more around the world, there are many investments that we are making. And we are creating business clusters with excellent partners, and that is expanding. For example, in Asia, in Indonesia, we are working with CT Corp. And what we announced is the Metro Pacific or MPIC in the Philippines and there's a long history in the mobility in North America, Penske Group is the partner for us. And with all these projects, we have been establishing new business foundations. As you know, in Brazil, gas distribution business, so PETRONAS used to be a partner. But now the value chain from sugarcane, there is one of the largest players. We are working with that player, [indiscernible] Group. And there are various opportunities that are emerging from these partners potentially. So we would like to structure our footfall in these. And if there are good opportunities for investment or there are already those in the pipeline. So the cash out for the strategic initiative and also cash in. So we would like to have this expansive model. And the activity level is being enhanced. So the cash level is now being enhanced as a basis. Thank you with that, like to conclude this session.

Next, let us move on to the panel discussion. Panelists, first of all, is our President and CEO, Mr. Hori. And we have Mr. Takeshi Uchiyamada, External Director; and External Audit & Advisory Board member, Yuko Tamai; And Representative Director, Executive Vice President, CHRO, Mr. Yoshiaki Takemasu. The facilitator is Ms. [indiscernible], Diversity Committee member. I hand it over to Mr. Tose now.

Good afternoon. I'll be the facilitator. I am [indiscernible], Diversity Committee member. I'd like to talk about the human resources management is with a panel discussion. So we have panelists on the stage. In September this year, we issued the capital -- human capital report empowering people to build brighter future. So we would like to talk about the background behind this report. And I'd like to first call upon our CHRO, Mr. Takemasu.

Yes. We have a long history. And through this industry, we have respected the human capital very much. And doing so for us, means to put the people or human talent in the center of our management. As you are all aware, we have a wide-ranging businesses in the different sectors and the industries and our business is global. As a result, our activities from outside, relatively speaking, it's difficult to understand to some extent. So this time, by issuing this human capital report, we wanted to communicate to the wide-ranging stakeholders about the human capital and the human resources strategy so that people, the stakeholders can deepen understanding toward us. So based on that to the investors, we have been continuing to focus on the human resources and this leads to the improvement of the sustainable corporate value. And that is something that we'd like you to understand more and deeper. And this human capital report could help to deepen your understanding. And in making this human capital report the various employees, which who are working actively, and we took up those talents. And in the past several years, we have been focused upon the training program that we have internally and also with external entities. And also some of other major changes that we are making and some of the human resource-related policies we have been implementing. So the current status as well as the future direction. Those are the things that we like to understand. And as much as possible with the management data, we wanted to introduce all of those in an easy-to-understand manner. So we were quite cognizant of all of those factors. And in the Executive Committee, we have had discussions and ultimately, we had an approval by the BOD and managed to issue this report. Now at the same time, through the preparation to issue this report, there were several improvements that became evident. And concerning those from the users, we expect some feedback to come or some requests to come in. And based on those feedback, we would like to make further improvement on the content. At this time, Frankly speaking, we wanted to try to issue this report so that we can get further feedback. And of course, the potential improvements that we need to make will be done through the interactive communication, and we are hoping that this report would help you to give us your feedback. Now in 2026 is going to be the last year of the midterm management plan and we are trying to enhance our capability of the management as a group. So in order to realize so as a HR policy, there are 3 things. One is the diverse and strong individuals need to be developed and posted. And for that, we need a further inclusion being implemented. And lastly, on the global scale. We have to be able to position the appropriate talent at the appropriate job. So for us, the value of human capital to maximize that value and to improve those capabilities. And through doing so, we wanted to improve the corporate value in a sustainable manner. And that is the one of the most important measurement challenges for us. And through investing in the human capital, we believe that we can develop and force the employees and those employees who are developed will make a major vision to improve the corporate value in a sustainable manner. So through the improvement of the corporate value we can make further investment for the human capital. So that kind of a virtuous cycle is something that we would like to realize through updating the content of the human capital report so that we can show what we have been doing in easy-to-understand way.

Thank you very much, Mr. Takemasu. So I'd like to call upon Mr. Uchiyamada and Mr. Tamai. I'm sure that you have worked as a director for other companies. So as an external directors, could you talk about your thoughts on the characteristic of the human resource strategy and some of the issues that we might have. Start with Mr. Uchiyamada.

Thank you. When you look at or when I was looking at meeting company from outside, I overheard that Mitsui impact human capital and makes much of it. And now I am inside and engaged in the development of the human resources and so forth. I started to hear more about the -- how it is done. And as it was explained by Mr. Takemasu, the 3 pillars of the human capital strategy, the fostering of the human capital and inclusiveness and appropriate allocation of the human capital and utilization. So those are working very well, and that's how I feel.

So with regard to human resource development strategy in the open manner, the discussions are on day within the company, and the result has been not just carried out by the shared by all employees, not just at the job discussion level. And it's not just about human resources or talent. The executive top management and younger employees. There is direct communications in various occasions, and this is being promoted proactively. So the thought about human resist development and also bird's eye view from the top management has been directly shared was the younger employees, and there are so many opportunities given. And Mr. President Hori is promoting this proactively currently. And as a result, many younger employees are given business opportunities and many scenes where they are shining and quite successful. And that information is increasingly frequently seen in various occasions. So company -- the company is placing priority to human [indiscernible]. Who actually pointed out quite rightly. I would like to just make some supplementary comments. As for the talent strategy and the features of the company on human resources, in my part you is that inclusion as part of diversity and inclusion Well, diversity promotion has been done by various companies. All the companies are actually promoting this. But the company has actually taken out or taken up the inclusion specifically and promote that, and that characterize Mitsui & Co. And suppose that, as Mr. Uchiyamada said, is the internal communication amongst the employees. And it's not just in headquarters, corporate, but between the group companies, the same goes the same is true. Sometimes I visit the group companies as an auditor. And [Foreign Language] meeting is what I hear a lot. It's not -- it's a Japanese word, but the foreign nationals are also mentioning this word, [Foreign Language] discussion. And the communication is really good, as demonstrated by that. And also, diversity between the generations is a challenge as in other companies. Depending on the generations, the lifestyle and the philosophy and expectations on the company and the work is different. So you have to incorporate that in coming up with the human resources strategy because top management and management is specific centered into certain age group. So you have to incorporate all these different age groups. Well, thank you very much. In last year's Investor Day and the external directors Q&A, as Dr. Kobayashi said, that's an area for improvement. There are many excellent mill and foreign employees, but they have failed to reach the top management level on the executive side, and you have to work harder. That's what he said. So the D&I, diversity and inclusion, what are the progress that you have seen since then? Mr. Hori, would you like to comment on that?

So Kobayashi, who's a former external auditor, all the external directors are asking about progress in D&I. And they are quite appreciative and give us support and guidance at a quite high level. And we are aligned as a top management. We are building up one case at a time. And for the past year, especially as for the women leader candidates, the mentoring has been making progress, more than 20 individuals in this ground. And out of them, 9 have been assigned to M1 or general manager level. And also managing offices, female managing offices amongst the new university graduates are being hired, is the first female Managing Officer that was born this year. But we need to expand the talent pool to increase the layers in the pool. And same goes for global employees. In our case, those who are hired in Japan are dispatched to overseas as an expats, and that has been the case the history. But those that are higher in other countries can be we transfer to some other countries as experts. This has been institutionalized, and they are increasing examples of them.

And thank you very much, Mr. Hori. After the shareholders meeting this year, Ishiguro-san, Casanova-san and Ton-san have become the new external directors. So the ratio of female and foreign directors has increased. So how do you think the D&I contributing to the Board? Mr. Uchiyamada, as the Chair of Nomination Committee, would like to comment?

There are 6 external directors, and 4 of them are female and 2 are male directors. And excluding myself, other 5 external directors are non-Japanese foreign nationals. And they working and living outside of Japan. So I'm the pure local Director. And after June, what has immediately changed was that after the Board of Directors, we will chat, and that dialogue will be held in English. And I am facing difficulties. But jokes aside, after the June Board of Directors meeting, the scope of discussion has changed with improved diversity of the members of the Board of Directors. For example, discussion related to sustainability or about the reconfiguration of portfolio for the future. And as was mentioned earlier, the utilization of human capital or female or non-Japanese employees to be empowered. These are the areas in which we have seen expansion in all the scope of the discussions held. And improvement of diversity has been taken up and requested by the Nomination Committee to the executives. So the external directors will be proactive and seeing improved diversity. And that, as a starting point, we hope it will be expanded to the directors and employees within the company going forward. Thank you very much. So the current D&I issue used to accelerate women empowerment. So from your point of view in order to create a workplace for women, it shouldn't be feeling unnecessary stress at the workplace. And of course, at Mitsui, there is a good system and organization. So I think we need to work on the operation about the awareness, the utilization of the systems of it should be offered in a comfortable and manner so that it is going to lead to a better performance of the female workers. I think that is very important. And the second point is something very positive. So in the work that they're working, I think they need to feel worthwhile, and they need to be aware that they're growing through the work that they conducting, I think that is something that they need to fill through the work offered at the workplace. Thank you very much. I'd like to ask CHRO Takemasu.

At Mitsui, there are many HR initiatives, including human capital strategy. Operation-wise, how much has it penetrated in-house and has the awareness of understanding employees improved in that area. As I mentioned earlier, next year, we are going to have a greater transformation of HR initiatives. And some of you may be feeling concerns or are becoming very considerate of what may happen. But at the HR and also general affairs are working so that we [indiscernible] approaches when it comes to the new system, so that it will be understood in a correct manner, the line managers and managers of the front line are going to be very proactive in introducing those system. So we want to put our focus on providing training and education to those people who are concerned as well. And when we talk about transformation beta, it would mean that we will be able to offer a wider scope when it comes to their future careers and the expectations of the company that with this revision of the system, each of the employees to ask [indiscernible] CEO, Hori to comment.

Our human resource strategy, D&I initiative, how is it linked to the improvement of the value of the company? And what are the points that you want to focus on going forward? .

Yes, thank you very much. So vis-a-vis, the various social issues, we have to provide solutions. So the team of Mitsui who can provide such a solution have to have that way kind of way of thinking. So professional background, first of all, is something that we need. We have to have a diverse proportional background. And in terms of the different races, agenda, nationality and age, we have to be able to come up with the various ideas. We need a diverse group. I think that could give us a lot of ideas. So we have to respect each other, and we have to really focus on the inclusion. And especially in the developed area and the global self so-called global south market. We have to have both practices in order to come up with the different solutions. So experiences in the different countries, getting together and others. We need a combination of all of those. We need to create the teams in a very manner so that, that would help to improve our added value. So in that sense, D&I will be the source of the corporate value. And I think that other panelists also discussed the important policies and measures. And based on them, we want to enhance those areas.

Thank you, Mr. Hori. So Other panelists, thank you very much. Now I would like to take questions. So if you have any questions, please raise your hand and wait for the microphone, and give us your name and affiliation before asking your question. You can also tell us to whom you want to ask your questions, too. So I would like to limit a number of the questions to 1 question per person. We might not be able to take all the questions due to the shortage of time. We have simultaneous interpretation, and we will ask all the people who are asking questions to be brief in asking questions. So any questions?

Narita from Nomura Securities. I have a question to Mr. Takemasu, I think that we are talking about qualitative matters. So in terms of quantity matters, I think you have an engagement survey internally. So I think that through various measures, are you seeing the increased engagement? Could you talk about some trends? And at Mitsui, are there any areas where the satisfaction is low? So based on the result of the survey, if you can talk about this.

Yes. Thank you, Mr. Takemasu.

Yes, thank you for your question. About the engagement survey, the result of it, actually, the head of each line and evaluation of that head is directly linked to that. So engagement survey is a very wide ranging survey. There are a lot of items to be checked. And as a result of those, of course, that we should avoid being happy or unhappy about the results. We have to really look at the trend of the scores. How did it change year-on-year. So that's where we are focused upon. So for the head of the line managers, the evaluation of them will be impacted from this result. And for the important jobs, for example, when we have the important items that requires the approval of the Executive Committee member, we will have the evaluation. And one of the information that we use is this survey results in order to get the approval about the potential measures in HR, human resources. So you asked about the survey. It's difficult to explain briefly because engagement survey score, there are differences depending on the region. For example, in Japan, the result of the survey in Japan and also the survey outside of Japan and also Western countries and Asia could be very different, including the assumptions for the survey. So I think if you are only asking about Japan, So I think if you are only asking about Japan, then in the past 3 years, relatively or comprehensively speaking, the engagement score in major items have gone up. But for us, one of the biggest challenges is the next year, the score of the next year. As I said, there will be a major revision of our HR measure, which will be introduced next year. And understanding of the front line and this it takes route, there will be -- have a negative impact on the engagement score. So as I said, to make sure that this would take route fully at the front line is something that we are working on. Thank you. Next question?

The gentlemen at the second row, please.

[indiscernible] have this question. This human capital report I looked at it. And the parent company's turnover rate is about 1.14% for the whole company. This is an absolute number. So maybe this is something that you cannot avoid or you have to be resigned to that? Or the smaller, the better. There is an argument for that. So is there any room for pushing this down, 1.79 for women and 1.25 for men? So the turnover rate is higher for women, and that has been the case for the past 5 years. So is there any thoughts, awareness about this issue?

Thank you for the questions. Takemasu-san, please go ahead.

Thank you for the question. So I actually share the same sense of crisis and also the fear. So the turnover rate for women is a bit higher. And the women's employment is one of the priority management issues and in the hiring of new graduates, close to 40% is female. However, on the other hand, those who are leaving our company, who are female employees, is something that we have to keep an eye on and track of. Otherwise, the representation of women and the managerial level is not going to go up in terms of quantity as well. And when women leave the company, we do the exit interviews for those who voluntarily leave the company, every single one of them. HR conducts this interview. And through these interviews, what we found is that the reason for retirement of women is not just about the job itself. But the way you work, the working environment in our company. If there had been a bit more improvement, we could have retained this person. There are many cases like that in the past. So about the turnover rate, how we look at this, we believe that this is an extremely important index. And in the management committee meeting, we are having discussions in order to reduce the number as much as possible. Thank you. Tamai-san, would you like to make some comments?

Well, if I can add something, and what I said is a bit related to this, but there's some deficiency in the system or institution, and you have to fill that gap. But the -- when women are in doubts about staying on with the company or leaving the company. If there is some voice from the superior to ask them to stay or if there is a help provided by the colleagues, and the women can stay and it has stability, and that's what I've seen in many other companies, not just Mitsui. So communication and people asking and talking to the people who are wondering about leaving is really important, and that is the commentary some times make in a company, but I'd like to closely watch is how things will play out in the future.

Let's move to the next question. The person in front row, please.

So I think there was an exchange of in the previous question, but from the conceptual discussion, how you can grasp the benefit of investments. I think [indiscernible] has given this guideline. And it appreciates the initiatives by the company. But how to grasp the benefits and effect of the human capital resources and investment. What sort of KPIs do you use as you build up the track record that will be become more necessary? In terms of data, what sort of level are you aiming for? For example, are you going to compare yourself to industry peers? Is that the perspective you have? Or as a company representative of Japanese companies of listed companies, you would like to produce some tangible results or you can actually disclose that number. There are risk perspectives that you can use, but you started out on this initiative, but as you grasp the benefits and the results and in fact, how do you -- how are you going to measure that Mr. Hori.

Well, there are various KPIs that we have in mind. But what we have to be cautious about is that the output from every single employee is reflected in the competitiveness and productivity. How closely should we watch that is important. In the group companies, they are employees hired, and they are in line with the business model of that affiliate. And so the number is set in accordance with that. But in the parent company, on a standalone basis, the productivity of these people is different in nature. So KPIs should be different. And in our company, in the parent company, there are people who are engaged in trading operations, but there are others that are providing services for the whole company. The KPIs for those two different groups should be different. So we have to distinguish between these different types of jobs and environments. So within -- we're not looking at the same industry or trading companies as a peer. But rather than that, we're looking at the businesses that we are in and benchmarking within those businesses and the profitability of the parent company and assets that is run and managed and how operational leverage is being reflected in increasing the assets. So that is what we're looking at. So it's a very complicated system. But as a top management, that is what we are closely watching.

But you often talk about per capita or something. But then that is 2 rough number, and you may lose sight of the whole picture.

So that is what we are closely watching. This is a very important theme. So we will continue to look at this in various opportunities of engagement. So that is my answer to your question.

Thank you, President Hori. Any other questions? Person in the front rows, please.

I have a question to Mr. [indiscernible]. The human resource system is going to be significantly changed next year. And this was the press announcement and business and administrative staff distinction will be eliminated. That's what you said. But as far as I look at this, you have to have a sufficient communication and engagement. That's what you said, but I'm not sure if you need that much level of communication because in human resources system, relatively speaking, objectively speaking, I think things are working well for you. But you are intending to make this huge transformation. And you have to convince people and persuade employees. I think you are in the process of doing that. So in the next fiscal year, what is it that you're going to change? So it's something that is more than what has been press released is something that in your mind. So please share that with us.

Thank you much for the question. So anything that is not written in the press release, so I do not know where to start, but you may have felt that we are over conscious about what we need to do. But the transformation of the system will start next year, and it may have an impact on the engagement score because that change in the awareness of the employees, that is expected, and that may be the reason why. And as was mentioned, we do have administrative staff and also their career tracks as well. So there are differentiation of different tasks that is expected from the staff. And as for the administrative staff, of course, they may not have a career path. And of course, they may have some different ideas when it comes to dispatching them overseas. Of course, in the past, before we had equitable gender recruitment. That kind of idea has been followed and introduced in the company. But of course, the differentiation of the career and the administrative staff is remaining. However, there may be some transfers between the different segments. And that is some kind of a proactive offering that we have been offering. So we have lowered the hurdle so that people will be able to try out in different segments. But without differentiation, not only for those working in administrative but in the career [indiscernible] staff as well. I think the administrative staff have the awareness, and they still feel that there is a hurdle. And that has become the hurdle to overcome. So that has become the hurdle for the company in improving the productivity of the company. So those people in the career tracks, of course, there are many people who are working the operation areas, and they are taking on the burden in the operation of the company. And as a trading company, of course, we have the distribution and logistics business, which is very large for our business. So they take the core roles when it comes to those businesses. So their experiences should be utilized further and their ability needs to be entertained more so that the productivity of the company as a whole will be enhanced, and that is a fact. And this system as formation is being introduced for that purpose. I hope I answered your question.

Thank you very much, Mr. Takemasu. It is almost time, so we'd like to make the next question, the last question for this session. Any other question?

So I'd like to ask a question to Uchiyamada-san, please. In 2019, you became the external Director of the company, so it's been about 4 years. So given green light to investment within the Board of Directors meeting, has that changed from the year that you were appointed? And now, of course, a number of projects and also the quality of the discussion may have improved dramatically. But what are the changes that you've seen ever since you become the external director, that is my question.

Thank you very much for the question. Would you be able to answer these questions, Mr. Uchiyamada?

As for the characteristics of the company, the number of projects that is taken up at the Board of Directors meeting, of course, it makes up a majority of the discussion. And because there are so many numbers, we had revised the recommendation criteria. And at the Board of directors meeting, we have the prioritized project in which we take up the priority projects and focus on them. And the remaining candidates will be taken up as the management committee meetings. So at different intervals, the projects will be considered. And of course, the report of all of those projects will be given to those meetings as well. So the recommendation criteria have been revised. And at the Board of Directors meeting, the higher scale and higher cost projects are now being focused. And in reality, the time allocated for each of the project has been lengthened. And some say the time allocated at the Board of Directors meeting is not enough. So we will have a pre-explanation session in which the outline of the projects will be explained before the meeting, and time is allocated for that purpose. So external directors not in [ vote ] in each and every project every day. However, at the Board of Directors meeting, of course, we need to make resolution on those the items, so we take time to study each and every projects. And of course, we need to really understand the total strategy in order to understand the individual projects. So we ask the company to provide us with the portfolio strategy. And we ask each of the business domains to explain to us in order of their strategies so that our background understanding is enhanced so that we'll be able to work on each of the projects that come up.

Thank you very much, Mr. Uchiyamada. So with that, we'd like to end the Q&A session. Thank you very much, everyone, and thank you so much to the panelists. Now we would like to take a break. We would like to begin at 04:20. Thank you very much. [Break]

Thank you very much for waiting. I would like to resume the session. Next, is the session on the progress on activities towards a decarbonized society. We have representative Director, Senior Executive Managing Officer, Chief Strategy Officer, Mr. Makoto Sato.

Hello, everyone. I am Sato, CSO. I will discuss our climate change response focusing on mainly on the progress that we have made since last year's Investor Day. We have set two goals to half our GHG impact by 2030 compared to 2020 and to achieve a net zero emissions by 2050. This is our path to having our GHG impact by 2030. We expect our GHG impact in FY March 2026, the final year of the current medium-term management plan or MTMP, to be 27 million tonnes. The calculation for these uses the emission or 37 million tonnes in FY March '23, the final year of the previous MTMP as the starting point. We then have the increase in emission of 3 million tonnes and subtract the decrease in emissions of 7 million tonnes and reduction contribution of 6 million tonnes. Emissions reduction contributions were approximately 4 million tonnes during the previous MTMP and are forecast to be about 7 million tonnes during the current MTMP for the total about 11 million tonnes. And now based on the asset divestment of thermal power plants, as well as from the consolidated subsidiaries switching their consumption to renewable energy sources and increasing their energy efficiency. Promotion of the reduction contribution in light blue include the launch of the new renewable energy power businesses, such as high loan offshore wind power project and the start of the operation in our next-generation fuel business and our forecast to be 26 million tonnes during the current MTMP. We continue our efforts toward having our GHG impact by 2030. This page shows our initiatives in the next-generation fuels business initiatives in this area are highly important for realizing the decarbonized society but selecting from among various pathways, we will create a global portfolio and simultaneous advance multiple businesses from both supply and demand side. As highlighted, we have many projects connected to our next-generation fuel business. I will introduce the progress of the next generation of fuel business in this fiscal year. Together with the European energy, we invested in the world's first e-methanol production business, we also concluded the joint venture agreement with the Galp within hydrotreated vegetable oil and sustainable aviation fuel production businesses, and we invested in Terreva and renewable natural gas producer as well. This investment come to over JPY 60 billion in total. Going forward, we anticipate significant demand for low carbon e-methanol produced by combining green hydrogen with CO2 derived from biomass. This is a good example of collaboration between the Chemicals segment with its track record in methanol production in the U.S. and Saudi Arabia and our Machinery & Infrastructure segment. Multiple segments collaborate on next-generation fuels initiatives, and I believe that connecting the cross-industry expertise and wide network, we have cultivated over many years will enable development of new businesses that are unique to us. The next-generation fuels business also has an important role in terms of income. In the MTMP, we said that ROIC or ROIC target for global energy transition of over 9% for FY March 2030. Within this, in the next-generation fuels business, we are aiming for nearly JPY 500 billion in investing capital and ROIC of around 12%. I believe that next-generation fuels are the business area where Mitsui can leverage its strength, and therefore, we would like to create, grow and expand this business cluster across multiple projects in this sector. Next, I will explain the initiatives related to the creation of clean ammonia value chain. We are advancing efforts toward final investment decision on the multiple clean ammonia production projects. This year, we have made particular progressing initiatives of value chain creation. We are supplying fuel to an ammonia pilot project of JERA. We are conducting ammonia floating storage and regasification unit, the feasibility study with Fukui prefectural government and for Hokuriku Electric Power company and also conducting a joint study of hydrogen and ammonia supply chain concept in Osaka coastal industrial zone with IHI Corporation, Mitsui Chemicals and Kansai Electric Power. Together with the domestic and overseas partners, we will build the value chain with the initiatives that are unique to us leveraging our leading share in ammonia trading for import to Japan, our track record in natural gas and LNG development and production and our strength in shipping business. Now I will explain our steel portion, gas and automotive value chain initiatives from a GHG perspective. These are the areas where we can make significant impact. Last week, we enhanced a scope 3 GHG emissions disclosure, which covers from Category 1 to 15 on our sustainability website. Initiatives throughout the entire value chain are necessary to reduce Scope 3 emissions. Together with our partners and customers, Mitsui is advancing initiatives in every industry in a broad range of businesses from upstream to downstream to reduce emissions across the whole of society. First, in the steel production value chain, we are working to reduce carbon emissions in mining as well as steel production specifically, we're conducting a study on direct reduced iron production in Oman. We're conducting a feasibility study with Kobe Steel and steadily progressing discussions with raw material suppliers and customers. For the future, we are looking into switching into hydrogen reduced iron and utilizing carbon capture utilization and storage or CCUS and see this as a sector that can potentially contribute to a significant reduction in GHG emissions. Next is the gas value chain. As my colleague, Toru Matsui, explained at last year's Investor Day, Mitsui positions its natural gas and LNG business at its core, while advancing initiatives towards a decarbonized society. Within this business, we are leveraging the technical expertise related to sub-surface structure contributed from the oil and gas production business as well as our partner network to proactively drive the carbon capture utilization and storage or CCS and CCUS business. Specific examples include a joint survey with Cameron LNG Partners and our work at Storegga in the U.K. Storegga is an operator of Acorn CCS project, which was selected by the U.K. government in July to start operation by 2030. The value chain also includes transportation. Tetsuya Daikoku will touch on this later. But through Mitsui's strengths in the shipping business, we're advancing the supply of next-generation marine fuels and greater marine fuel efficiency through AI. Mitsui is also undertaking initiatives towards realizing a decarbonized society in the automotive value chain. In 2017, we invested in CaetanoBus, which manufactures and sells electric buses. Some of those electric and fuel cell buses use battery systems of Forsee Power and hydrogen fuel supply systems of Hexagon Purus. Moreover, batteries are reused as storage batteries to manage energy demand in the business handled by the mobility house. And we are also in the business of recycling metal products and lithium-ion batteries used in automobiles. Mitsui is an investor in all these companies. And by combining our strong relations with partners, together with the businesses of our investees, this will accelerate the creation of a value chain will achieve decarbonization. Through our investments and efforts in the value chain, we're keenly aware of the growing importance of climate change. Beyond these efforts, we recognize that business and human rights as well as natural resources and governance play an important role in sustainability management. We have identified natural capital as a particularly high priority business field and are conducting impact and dependency analysis related to risk and business opportunities through [ LeapAnalysis ]. On that basis, we will determine the direction of our initiatives taking the actual situation into account. And our initiatives related to respectful human rights, we believe it is important to continue to steadily conduct due diligence and to respond conscientiously to suggestions for improvement and other matters according to the survey results. In the social field, we have issued our first human capital report empowering people to build brighter futures. Last but not least is governance. Portfolio reform is important in responding to climate change, and we are strengthening collaboration between sustainability committee and portfolio management committee and carefully selecting investment projects from a comprehensive perspective, that includes factors such as profitability and climate change. It was not only climate change but sustainability in general at the center of management. The Board of Directors is responsible for overseeing Mitsui's sustainability management efforts. The Board of Directors determines the evaluation method for the directors and auditor Supervisory Board members remuneration system introduced last year, which includes ESG elements among its management evaluation indicators regular reports related to sustainability initiatives as well as the results of discussions were reflected in Mitsui's activities. We have the offices -- officers in charge. We will continue the steady implementation of sustainability management in our business operation under a profit governance system, starting to contribute to the development of city as a whole, and mites further growth. That concludes my explanation. Thank you very much for your attention.

Thank you, Mr. Sato. Now I would like to take questions. We'll bring the microphone to you. So please raise your hand and give us your name and affiliation before asking your questions. If you are participating online, please use the raise hand function. So I would like to limit the number of the questions to one question per person.

On Page 4, the next-generation fuel business, I have a question. Here, ROI, the JPY 500 billion and JPY 60 billion and ROI of 12%. So this new energy of fuel, it's become a red ocean. So ROI is low. That has been the understanding. But in your case, how do you achieve this high ROI in this area? Specific strategies, I'm sure, are confidential. But how do you create this environment where you can have a high ROI.

Thank you for your question. Well, I think you're asking for our secrets, and I cannot just say that it's confidential. But as I mentioned in my presentation, and on the playing field, I think a strong position in ammonia, methanol, Mitsui traditionally has been very strong in these business areas. And national oil company and a power company, utility company, we have had a very strong relationship in energy segment. So we also have a very strong positioning. So it's not just trading, but in chemicals we have a CFO industries and the manufacturing, the biggest ammonia manufacturer. We have built the network with that. So by combining those, I think that we can improve our profitability. And also, there are a lot of projects like that. And out of them, if I may say, we can choose that. So we have that choice. And also in order to improve the product profitability further, we can negotiate and talk about the conditions. And if you only look at a single business, I already mentioned the ROIC number. But if you look at the left-hand side, right-hand side, for example, on the side of the ships or SAF or aviation, in those areas, the is a business network and including the trading, we have -- we can build the businesses. So chain and cluster, through both of them, we can make sure that we can generate profitable profit. I hope that answers your question. I can only give you a vague question, I'm afraid. Thank you.

Are there any other questions? I see a hand in the middle.

I have one question. Page 5, clean ammonia. Clean ammonia is promoted by the Japanese government and thermal coal-fired power can be utilized fully. And this is a wonderful solution, among others. But the mixed firing is used. So coal-fired thermal power could be extended in life. That is one of our tools that is used. So what are the discussions that are ongoing in your company? How did you decide to promote this? And if there is such criticism from society, how would you respond to those comments?

Thank you for the question. It's not just our company, but the position that Japan is in is actually the origin of this question in my view. So this is extremely important issue. And there you have to seek consensus and agreement and buying from around the world, and it is quite difficult. And Japan and Korea, South Korea, and other Asian countries that are developing, there are coal-fired thermal power plants that are existing already and also in order to have energy security and the power supply stability they have to build those thermal power plants, and that is the reality. Then there are countries like South Korea and Japan where there is already thermal coal-fired thermal power. Are we going to be able to switch over to nuclear overnight, that is another totally difference issue. So there's a gradual process that is needed. So LNG and gas-fired thermal power is quite similar in nature, and this coal-fired thermal power that are existing. You could reduce the GHG emissions. And of course, if nuclear fusion becomes a reality, that could change the society as a whole, but it takes time. So by while ensuring the stability of electricity supply, reducing GHG is also and put 100% ammonia firing and also mixed firing, both are important. And clean ammonia in Asia and other, including South Korea, of course, there is this application for firing in thermal power. But as a fuel in mobility, the dual fuel include using ammonia is being used and ships are running already. And so there is this application and traditional fertilizers and chemicals. Of course, cost would be totally different in level. So you can't substitute, replace them overnight. But for other applications, the clean ammonia is now being gradually demanded and replacing the existing ones. So maybe I'm deviating from the question that you asked. But as for the thermal power, in electricity transition, energy transition, it is necessary, and that's why we're promoting clean ammonia.

Next question.

So in the presentation, you talked about the steelmaking and how you apply this. And value, together with the Kobe Steel, including the hydrogen, you have been doing the demonstration, feasibility study. So you will be entering into the cultivation stage. So hydrogen-based, the alloy. And I think that some of the projects are already going on in Europe. So Middle East is what you are starting with the natural gas. So scalability and considering the future, if -- when you have a hydrogen infrastructure, I think you can go to the next step. So in the business development, natural gas and hydrogen from the initial stage to the next step, how do you include them in your vision? Maybe it's a bit premature, but if you can talk about the direction, at least.

Yes, thank you for your question. Last year in the Investor Day, I talked about the green steel or there was a question on that. And I wanted to talk about that then. But because of the confidentiality agreement, the announcement was a 1-year delay. So in Oman, the natural gas and the [indiscernible] method is being utilized. And initially, as the direct reduction of steel and compared to the blast furnace, the CO2 emission can be lowered. And when you start from the zero or scratch, in comparison to the blast furnace, then it's down. And that's how we are proceeding with this. As I mentioned in my presentation, of course, that the CO2, which is generated through the CCS and CCUS, we try to avoid to emit that in the air. So we do that in combination. So it's not right after the production. It's not that CCCs will start a little bit later. But that's what we are going to do. And MIDREX itself, as you know, the 100% hydrogen, the hydrogen reduction that technically has been established already. So in Europe, the hydrogen reduction using MIDREX is being done. So to start with that right away or to use the conventional and then convert that to the hydrogen. So that's the difference. So our approach is that, first of all, we will go with the conventional natural gas reformed gas and we start production, and then we ramp up. And then after that, we would just convert to the hydrogen reduction. So we will be using or we'll need the clean hydrogen then. So of course, that needs to catch up. And when that is available, we will switch to the hydrogen. So that's in our view. So CCS, CCUS it's been -- it's included in Oman. And also the further steps is also considered in our plan.

Thank you very much. Any other questions? [indiscernible] in the front row.

I have a question on Page 3. So as Mr. Sato said, in front of you, there are a lot of different pieces in pipeline, and you have to select get to choose and you are in a very advantageous position but I may need to learn more, but a glance, what would give you the highest ROIC? I don't know. I have no idea. So maybe everything would give you the higher ROIC. But if you look at the future portfolio transformation in your company, how do you select and also this regard the pipeline. PAT, JPY 60 billion in 2026. At what timetable are we going to recognize that?

Thank you for the question. So green business, including business investments. When it comes to that, people may wonder, the profitability may be lower, may not catch up or may come later. This is a general idea and general criticism that we face. In certain area, that is really true. But when it comes to fuel related business, sooner than later, the cash return will come. Because already, as I have been saying, on the heavy oil base, the ships are already sailing. And those people who are engaged in logistics and shipping because of regulation, they have to change. So there is a demand to a certain degree. And of this demand, given -- you have to be a first mover and then you can have a first mover advantage. From 4 years ago, we have established ES business unit. We've been approaching this area from early on. So we are a first mover. E-methanol was one of the examples. I think this is going to be the world's first case. So being a first mover and also demand is steadily increasing for a longer period of time and cost curve can be reduced by forming projects in that way, you can ensure profitability. But the timing of profitability, of course, it varies from project to project. It's mixed. But as I said, at March 2030, where I mentioned the ROIC. But so you can actually have this visibility until that time as we form the projects. Does that answer your question? One request. Of course, there are, of course, cross-segmental profitability, not in the segmental manner. So you have to divide up the profitability between different segments. So please avoid invisibility to the outside investors. Well, I'll tell that, the CFO, Shigeta. So in our company, the boundaries between business units are quite low and blurred. And the teams and multiple business units in the projects other than this already. And in those cases, as you said and as you rightly estimated, we have shared the profitability and profits. But in the financial results, we have divided up the profits and the profits are recognized and posted in each of the segments. And this will change -- will not change unless CFO change his mindset. So we will make sure that it will not be ambiguous, and it will be continuously reported so that it will be easier to understand. Of course, we have to -- we may have to consult with stakeholders and we have to fill the accountability and responsibility to explain. Thank you for the question. As an IR division, we would like to be mindful of that.

So that concludes the Q&A for this session. Thank you, Mr. Sato.

We'd like to go to the initiatives aimed at enhancing base profit, steady execution of post-merger integration, turnarounds and exits. And the represent Director, Senior Executive Managing Officer, CFO, Tetsuya Shigeta, will make presentation.

Good afternoon. I'm Tetsuya Shigeta, the CFO. Today, I will speak about our initiatives aimed at enhancing base profit. In the current medium-term management plan, we are aiming to improve base profit by JPY 170 billion. From the next slide, I will touch upon specific examples of turnarounds and post-merger integration or PMIs, which are necessary for ensuring returns from new investors. On this slide, I will explain the main progress made in efficiency improvements and turnarounds. With regard to taking loss-making businesses and making them profitable. The time turns significantly FY March 2022, in the market for the coffee business. And in both FY March 2022, in March 2023, loss were in the single-digit billions of yen range. Specifically, inventory and forward positions were reduced, increasing resilience to market fluctuation and also continuing to reduce the cost of inventory and hedging. These measures have already reduced working capital related to the coffee business by approximately JPY 100 billion at present compared to end of FY March 2022, which also contributed to an improvement of ROIC. Combined with the improved conditions in the coffee market, losses have been eliminated as of the end of the first half of this fiscal year. We will continue to improve our earnings and maintain a stable supply chain. Furthermore, we are proceeding to exit from unprofitable businesses. And although it is an accumulation of small losses the total amount of losses in FY March 2023 for companies from which we have now exited was JPY 2 billion. Taking -- talking of turnarounds, one specific example is MBK Human Capital, which achieved a turnaround from losses of approximately JPY 400 million in FY March 2019 to a profit of approximately JPY 4.1 billion in FY March 2023. MBK Human Capital is a temporary staffing business specializing in health care in the U.S. and mainly dispatches nurses, doctors and therapists. Mitsui made an investment in the business in 2014, but performance deteriorated in 2018 due to changes in the operating environment and intensified competition. In September 2019, we began a management reform of the business. main point in this example is that we appointed a new CEO from within Mitsui, and we initiated the reform as a global Mitsui team. Through the reform, we appointed leaders from within the business. Instead of bringing in talent from the outside, working as a Group -- global Group Mitsui employees then speedily worked as want to turn around the business. Specifically, we implemented reforms such as reforming managerial accounting, altering organizational and evaluational systems, resetting strategic initiatives and fully utilized our expertise in health care and temporary staffing, where we have worked for many years and business management for labor-intensive business, developed at Aim Services. Furthermore, in the process of determining the risks Mitsui can and cannot take, we utilize locally rooted risk management expertise on legal and tax affairs, internally accumulated in our local offices. It is an example of turnaround achieved by skillfully combining human and intellectual capital. The profit in FY March 2023 was approximately JPY 4.1 billion. And EBITDA margin used as a KPI has grown to be in the top class range within the industry. While working to address the issue of supply and demand gap for health care specialists, we're targeting around JPY 10 billion of annual profit by improving the earnings of similar companies, we will acquire utilizing our experience from business turnaround. Furthermore, the insights obtained in this turnaround will lead to successful turnarounds in other cases for our global group in the future. I will introduce an example of a successful PMI with -- so Belgium, which is a key site in Europe in the agrochemicals business cluster. In 2021, we obtained a stake in Belchim Crop Protection, which was integrated with Mitsui's European sales company, Certis Europe in 2022 to form Certis Belgium. So this VMR is divided into the 2 phases of acquisition and subsequent integration. In explaining this, it is important to cover the accounting fraud that was discovered when we were considering the acquisition of Belgium. Mitsui decided to purchase the company under bank control due to it being insolvent at the price that could be inadequate to explain. We executed the PMI by dispatching personnel from Tokyo head office and affiliated companies by reducing working capital and leveraging Mitsui's network to refinance the company from day one, of the PMI, we succeeded in resolving a debt default situation, which had been caused by a breach of financial covenants under a loan agreement, significantly reducing the financing costs and improving the finance structure. During the integration, we proceeded with the consolidation of sites and organizations, while paying particular attention to merging the corporate culture of Belgium acquired from the founder and existing subsidiaries Certis Europe, realizing sales synergies and cost synergies with understanding and cooperation from stakeholders, such as shareholder partners like Japanese Crop Protection companies. At the same time, we work to build processes such as the strengthening of internal controls and we're able to complete the PMI successful this summer. As shown on the right side of the slide, performance has steadily improved since 2021, and the FY March 2023, profit after deducting onetime factors was approximately JPY 2.5 billion. We aim for stable earnings in the range of JPY 3 billion to JPY 4 billion from FY March 2024. The final example I will present is a case of Nutrinova for which we are beginning to fully implement the PMI. As previously announced, Mitsui acquired a 70% interest in Nutrinova from Celanese, a U.S. partner in the methanol business, in September 2023. This case was a carve-out of an existing business and a case that is contributing to earnings immediately without any significant PMI risk. By effectively utilizing this human and intellectual capital, as shown in the slide, and steadily proceeding with PMI aimed at early stable operation of the business. We aim to realize mid-single-digit JPY 1 billion profit by FY March 2026. We also aim to improve profitability as a business cluster, including in adjacent areas by aiming to pursue synergies with Mitsui's existing businesses such as fragrances and sugar alcohol and to expand sales channels utilizing Mitsui's existing sales network. While working to improve the quality of individual businesses day-to-day, which is constantly endeavoring to improve portfolio quality throughout the year. Future Mitsui's approach is how we review the holding policy for all investments in the asset portfolio review in the middle of every fiscal year. Through this review, we identify around 30% in number of investment projects and 10% in terms of book value that we consider the feasibility of exits, including profitable assets and listed companies. For example, we actually completed the exit of around 120 investments in FY March 2023. Based on these figures, I think you can see that recycling has become common practice for us. Furthermore, we have also strengthened the 5 review points stated on the slide, properly addressing the justification of holding on to business that are not performing well, leading to active strategic risk cycling. Mitsui emphasizes efforts aimed at obtaining stable and additional cash inflow by replacing assets through a portfolio review. As explained by the CEO earlier, the asset recycling of Mitsui's businesses has become common practice. And looking back over the past 5 years, we have realized cash inflows on average of JPY 250 billion. Through the evolution of the asset portfolio review and the establishment of ROIC, which was introduced in the previous MTMP. We have been steadily increasing our focus on portfolio reconfiguration and pushing for further efforts towards making strategic and profitable asset sales. In addition, we will continue to reduce the number of listed shares of companies that have become less significant for us to own. This slide looks at cash inflow from a slightly different perspective. Over the past 5 years, Mitsui's average rate of recovery of cash from equity accounted investees has been over 80%. We apply core operating cash flow as a key performance indicator. Therefore, regardless of what form the investment takes, we are extremely mindful of cash recovery. One of the reasons we have maintained a high rate of cash return from equity accounted investees that are not subsidiaries was simply the fact that Mitsui's functions and strengths are appropriately applied on the business front line, and Mitsui's voice is reflected in management. Each business unit and corporate unit will continue to work as one with the business front line to improve cash management of affiliated companies and aim to maintain and expand core operating cash flow through dividends. This graph shows a trend of Mitsui's ROE and ROIC the equity cost has a range of sources, such as those based on the CAPM-based calculation, analyst calculations and figures from financial information providers. I think the important thing is to be aware of cost and capital figures, major changes according to the current operating environment and to expand the equity spread. When considering investments for growth, which we are actively pursuing under the current MTMP, we are always conscious of the upper range of the cost of capital and we continue to consider the significance of keeping existing investments in light of the rising trend of cost of capital. Just as I have explained today, by presenting turnarounds and PMIs as examples of initiatives aimed at enhancing base profit, we will continue to try to provide the explanations that are easy for everyone to understand and we would like to provide a deeper understanding of Mitsui's business model by improving management and transparency through dialogue. We also assure that the suggestions and comments received through dialogues are provided as feedback within the company to be utilizing improving management by building up such efforts, we will reduce the cost of capital. And along with this, by improving capital efficiency through the day-to-day efforts on the business front line and in management, as we have introduced today, we will enhance corporate value. That completes my part of the presentation today. We will now move on to Q&A.

[Operator Instructions]

One question, please. Maybe I should have asked this question earlier. But you're talking about next-generation fuel that you're engaged in. But going forward, as you make investment and reconfigure the portfolio. So roughly speaking, what would be the volatility of your business, would that be reduced? Ammonia could become a business to compensate for the price difference. So unless there is a subsidy, it will not spread. So compared to the conventional business, the volatility may be reduced. So there are many potential projects that you make investments. So as in the eyes of a CFO, how are you looking at this future volatility of the business of your company?

Thank you for the question. So KPI of the business performance. The volatility of KPI should be reduced as much as possible and make it stable as stable as possible. Of course, would lead to the reduction of capital cost, as I mentioned, and so we would like to enhance the stability and that's what we're working on. And we're talking about next-generation technologies and next-generation fuel and energy. And as part of that, of course, there are things that are inherently uncertain and also monetization or contribution to profit could be further down the road in some cases. But in order to make this contribute to profit stability, you have to take up something that is immediately expected to produce results. That's combined with the ones that are longer term, maybe I'm divvied from the ammonia issue, but LNG and natural gas is something that we still continue to work on because due to the energy transition, the LNG position as a transition fuel is appreciated. And so in existing business and the business that are under development, it should be completed successfully to cover the short term and midterm because they can become a profit pillar. So that we can compensate for those projects that will have to wait until down the road to monetize -- to do the monetization, so we can buy time. And those that have -- are uncertain. And if there are some projects that have to assume several different scenarios, but we are not going to reduce our investment hurdle bar, because of that, of course, there is uncertainty incorporated and inherently, but that would not make us and force us to reduce and lower hurdle for investment. And getting back to the question that you asked. By combining all these different projects, KPI, core operating cash flow, PAT stability of these KPIs is something that we have to ensure, and we will work on that. Thank you.

On page 2 of the material, you talked about the efficiency improvements and turnarounds. March '26 you're aiming for JPY 920 billion. So the profit will be increased by JPY 170 billion. Can you talk about the details. Efficiency improvements and turnarounds, you have given very good examples. And so we -- if we accumulate them, maybe we will reach it. But it's JPY 40 billion improvement. How much progress have you seen so far? And Mr. Shigeta, by aiming for this JPY 40 billion, what are the challenges, issues that you need to overcome? So with MTMP starting, what is your perspective at the moment? That is my question.

Currently, the numbers have been accumulating. And what was a limit is the small-scale accumulation, and we have been able to improve about JPY 2 billion. When it comes exits from unprofitable businesses, this has been promised. And in the second quarter, it was very difficult to do the calculation, tally the results. And today we have expressed what we have at the moment on this slide. But I do understand that we need to give detailed explanation of the situation. So we will continue to respond. So please give us more time. That will be my response. But -- so making loss -- making businesses profitable and also by improving those efficiencies. So this drastic improvement or conducting recycling. Those are the initiatives. And of course, the significance of it is being understood within the company. And of course, when it comes to important businesses or loss-making businesses, that has not been ignored. But from the previous MTMP, we have introduced ROIC. And in the different businesses, we have different risk levels, but we are becoming very conscious of it, and we do have a track record that we can look at. So as to -- how to respond and what the majors to be taken, we are aware that we need to work on them further. So we are feeling very good response so far. So this JPY 40 billion of efficiency improvements and turnarounds, we believe it can be accomplished. And so there are no concerns about not meeting them at the moment or giving up on them. However, this strengthening resisting businesses of JPY 70 billion, some are going to continue to improve. So we would like to evaluate them further, but making loss -- making business profitable or executing from unprofitable businesses. So by revision -- making revisions and improving efficiency in the existing MTMP, we believe that we'll be able to accomplish the target we have set for ourselves.

The capital cost reduction is something that you're working on, and you have been proactively explaining. And this is the first time that I heard that. And in these initiatives, how to hit the balance and also how to look at the timetable. That's what you have explained also. But what about the project risk and country risk exposure? You are disclosing this as a data, but the projects that you have been making progress after investments. Reviewing the efficiency is something that you can do flexibly. So of course, impairment check is something that you are strictly doing. That's what I understand. But in some cases, country risk could change and what is required as every time may be heightened and it may be added uncertainty to reach the required target and you may need some measures to take in the actual resources project, there may be some projects that may be taking more time than expected. So whether you should post or charge the impairment loss or not other than that, you have to be more flexible in reviewing the project. So in order to -- I think this will lead to enhance the credibility of the projects and enhance the effort to reduce capital cost. So can you share with us your thoughts on that?

Thank you for the question. Before answering the question, I'd like to say that the business performance, stability and the future potential and reproducibility and sustainability of business models and growth potential for the future. These have to be explained so that you can be sold and convinced. I think that would help reduce the cost. And that is what we would continue to welcome. That's what I would like to say, first and foremost. And for example, well, answering the question about the country risks. Traditionally, there is a certain range of countries that we are willing to take and we will take within that. So in the most recent example of Russia, sanction -- international sanction, valuation of international rules in terms of LNG, I think this is something that is totally different, but there are different forms of the country risks, and we can take. And we would like to take on challenge as far as we can. But the country risk premium, if that is heightened, you have to look at the individual cases in the end in the higher-risk areas, there are not so many projects. But project-based valuation is something that we do every year or on a regular basis, in some cases, on a quarterly basis, we're repeating this process. So of course, the impairment loss could be -- should be done in an accounting process. But ahead of that or at the same time, we have to look at review the significance of holding onto that asset. And at the entrance, you have to make sure that you have exit. That is what we are quite meticulous about. And the assumed exit strategy is that being still secured. That is revisit on a yearly basis, and that is going to lead to the review of significance of holding onto the assets. So risk premium -- higher risk premium. If there is those cases, and we will repeatedly review that. So that is how we are working on this. Does that answer your question?

Any other question? Because of time constraint, we'll make it the last question. Thank you very much.

Well, I wouldn't ask this question normally, but this week, in the automotive sector, there has been some elimination of the cost sharing among the different companies, and that has been focused. But on Page 7, you talk about reduction of cross shareholding going forward. We do understand this, not only your company, but other trading companies are trying to diminish the significance of holding. But this is JPY 410 billion when it comes to the book value. So of course, in stages, you'll be reducing the cross shareholding. But what is your message as the CFO going forward?

Thank you very much for the question. So March '23, 105 is a number that we have had. And the number is decreasing. And I went and had a look. And there has been reduction by 6. So there it is now in the 2 digits. The bigger policy is that, of course, when it comes to cross shareholding, of course, a number of it is going to be reduced further. But before that, we need to have a quantitative level check that should be done as well with non-listed shares as well as listed shares, we'll be looking at dividend, interest rate and also the profit from distribution. Of course, that will be considered. So of course, the quantitative level will be considered and if anything does not clear that level, then we did immediate revisions. So of course, the capital cost should also be considered in conjunction. And if it is at the level, of course, there are some that is at around that level. But the minimum condition is that it does clear that level, but I may be repeating myself, but as a whole, with the increase in capital cost, we are going to make the hurdle higher, and we are going to reflect your voices so that we will continue to reduce the listed shares with -- the significance of holding within management scope. So this effort will continue. Thank you very much.

Thank you very much, Mr. Shigeta. With that, we'd like to end the Q&A session. Thank you very much. So this is the last program of the day, presentation of Mobility Business Strategy by Representative Director, Senior Executive Managing Officer, Tetsuya Daikoku.

I am Tetsuya Daikoku. And from this fiscal year, I have been in charge of Energy Solutions Business Unit, Infrastructure Projects Business Unit, Mobility Business Unit 1 and Mobility Business Unit 2. This will be the last presentation today. Today, I will explain our strategy in the mobility field. Businesses in this field have continued to steadily grow over decades by responding to changes in industry structure and meeting the diverse needs of customers. Recently, there have been concerns about heightened geopolitical risks and the associated slowdown of the global economy. But even in such a business environment, we have globally and organically combined businesses and continuously strengthened our earnings base. As you can see in the mobility field, we handle various types of mobility, including land, sea, air and space. For all of these, each business shares the common strength of providing services that respond to changing times, a wide-ranging customer base and network and engaging in co-creation with leading partners. In the field of mobility, Mitsui is creating large-scale mobility infrastructure that supports industry across the globe. In this field, core operating cash flow and profit for fiscal year March 2023 exceeded JPY 130 billion. First, I will explain the basic strategy and policy in the mobility field, we have laid out 3 basic policies, namely execution of business cluster strategy, strengthening the value chain and portfolio management, which enable us to create and strengthen a sustainable earnings base. Today, I will explain mainly the automotive and ship businesses who are presenting specific examples. 11 years earning base, we are also taking on next-generation businesses, such as decarbonization initiatives, which I will explain later. To begin with, I will describe our first basic strategy of execution of business cluster strategy. For this example, I will speak on land mobility, which includes automotive and construction and mining machinery. In May this year, we explained this as an example of the business strategy and the Industrial Business Solutions, which is one of the 3 key strategic initiatives of our medium-term management plan. Here, we have continued to create and expand business by leveraging the strong relationship with partners spanning decades, starting with trading there over 100 affiliated companies worldwide, which form a geographically and functionally diversified business portfolio. Going forward, by not only clustering these businesses, but also developing adjacent businesses and generating synergies between existing businesses, we aim to provide solutions with high added value as business clusters. From the next slide, I will use our automotive business cluster in North America as an actual example to specifically explain our process of business cluster formation. Even in the North American automotive market, which is our largest and most competitive in the world, the Penske business continues to have an overwhelming presence. Penske Automotive Group, or PAG, and Penske Truck Leasing or PTL, have both transformed and expanded their business through M&A and have steadily executed the enhancement of operations, incorporating the latest technology through digital transformation. As a result, PAT is not only one of the largest dealer groups, mainly handling premium brands of passenger cars in the U.S., but has a very diversified portfolio operating in 9 countries, including the U.K. and Australia. In addition to the diversified product lineup with trucks and used cars, et cetera, in addition, PTL has exhibited its strengths to maximize customers' vehicle utilization rates by providing full maintenance service leasing through its own maintenance workshops and now manages around 440,000 vehicles, showing an overwhelming presence in the U.S. The company is continuing to grow by seeking to differentiate without using up on investment in maintenance technology, digital technology and human resources. We will strengthen downside resilience by deepening such operational excellence efforts of each group company and also utilize Mitsui's global network to actively lead development of adjacent businesses and overseas expansion and promote the formation of business clusters to further solidify our earnings base. The second basic strategy is strengthening the value chain. Here, I would explain this using the ship business as an example. We have not had many opportunities to provide a comprehensive description of Mitsui's ship business in the past. So I'd like to provide a detailed explanation here. The former Mitsui & Co. before the war played a role as an export agent for ships built by Japanese shipyards, starting in the 1900s. And the current Mitsui ES and Mitsui O.S.K. lines are also originated from the former Mitsui ship division. Just after the establishment of the current Mitsui & Co. in 1947, we engaged in the ship business and established a subsidiary Orient Marine in the 1980s. Since then, we have provided a wide range of services other than selling new ships, such as secondhand ship brokerage, charter arrangement and operational and technical support of ships we have sold. Furthermore, in addition to the asset investment and ship ownership that we have been engaged in since the early days, we have strengthened the joint ownership of ships and related joint businesses with the leading shipping players in the Japanese shipyard since the 2010s. And we have approximately 350 professional personnel globally. And our #1 Japanese trading house in terms of the industry-leading organizational and information capability as well as our track recording making deals. We're also steadily implementing development of the businesses related to the decarbonization including environmental-friendly ships and are maintaining and expanding our business base, combining 3 aspects of trading and services, asset investment and business development. Our ship business covers a variety of customers and partners in value chain and provides complex services shown here. And asset investment and business development. We participate in the investment opportunities, jointly adopted with the influential partners to realize well-timed investment and recycling amid the volatility of the shipping market conditions. As a result, we have continuously and steadily enhanced the base profit. Through both flow and investment and ROIC has constantly been at the high level between 8% to midterm percentage range. Furthermore, through the maximization of the value provided, such as Mitsui services and functions, we are constantly endeavoring to grow the Japanese maritime cluster, thereby indirectly contributing to the stable supply of various materials to Japan, over 90% of which depends on the marine transportation, further strengthening the value chain. Now I'll explain the third basic strategy portfolio management. This is an initiative to enhance the portfolio value through airports, combining -- to combine the 3 aspects of the business across the strategy. I just explained as well as strengthening the group management capability and strategic recycling, we have improved the quality of the geographically and functionally-diversified business portfolio by implementing the business cluster strategy and proceed to maximize the added value provided by 2 stakeholders, strengthening of group management capability as an initiative to promote the autonomous management of each group company by measures such as strengthening the governance through the Board of Directors of each group company. By doing this, we will realize improvement of enterprise value of group companies forming business clusters. However, we will decide to withdraw from and proceed with the strategic recycling of businesses that do not match our business cluster strategy or are deemed to be difficult to further increase corporate value by our group, while determining the appropriate timing. These have already produced results to some extent and some of the recent achievements that we have made in 2022 and '23 are shown here at the bottom. We aim to achieve the profit in the range of JPY 150 billion by FY March 2026 by enhancing business portfolio value through these 3 business strategies. We also aim to constantly generate ROIC in the excess of 8%. Finally, I would explain the businesses aim to realize a decarbonized society as initiatives, leveraging our track record and expertise in the field of mobility. The projects shown here are actual examples of initiatives in 2023. We will respond to the demand of various stakeholders in the value chain and also realize complex value provision. In combination with the functions of other business units, aiming for further promotion and utilization of next-generation fuels such as hydrogen, electricity, methanol, ammonia and biodiesel. Although, not shown on this slide, we aim to support the future of Japanese logistics and work with diverse shareholders and partners such as preferred networks engaged in AI development and Mitsubishi Estate to proceed with development and proof-of-concept of trunk line transportation services, utilizing Level 4 autonomous driving technology. Please refer to our integrated report. That concludes my presentation. Thank you very much for your attention.

Thank you very much, Mr. Daikoku. Now we'd like to move on to the Q&A session. The microphone will be brought to you. So please state your affiliation and your name before you ask your question. [Operator Instructions]

In the Mobility, of course, expanding this revenue, we have been following this segment and the profit is expanding and it is very positive. And you're aiming for JPY 150 billion going forward. And of course, the performance is improving dramatically, but it is high profitability, and it is supported by the economy and also supply shortage is also helping that as well. So what is going to happen going forward is a concern. In that kind of situation, you are going to expand investment. But what about the strength of not having the profit go down further? Even if the economy goes down, what is the actual ability of the segment to keep the profit high?

Thank you very much for your question. As for the downward support during the COVID-19 pandemic, that is what I want to talk about. In 2020, so March '21 fiscal year, in the first half, this mobility area was the most impacted business area of the company. So in the early COVID-19 days, it was very difficult. And of course, there were group companies that went into the red, loss-making. And with COVID-19, we were not able to travel. And what we needed to do, we needed to make efforts every day. So each group companies individually, of course, they reduced SG&A. And of course, they try to compress the balance sheet. So they made steady efforts. And by accumulating such efforts as a result, we were able to enhance the downward pressure support. And of course, the business superiority or priority had been rebuilt. And during the COVID-19 period, it was redone. And we looked at the businesses in which we felt that it was difficult to continue. We made decisions to exit. And these were the efforts made in the past 3 years. And of course, and a few such efforts. Of course, the economy recovery and when the tailwind is there, of course, we were looking at different businesses, and mobility field became very important and its impact, its importance was realized. And as for the first half of the year, from the start, we thought that we will see normalization. However, there are variations or regions and products, and there may be backlogs and back orders in some of the markets. And during COVID-19, of course, the competition became more difficult in some of the areas. So these are the efforts that we are making. And the business is improving considerably. So we feel that this business portfolio itself, of course, we are seeing quality improve. And in that kind of situation, as I mentioned earlier, the 3 basic policies. So of course, improving the value chain and also the portfolio management that I talked about, these are the areas in which we are working on. Of course, there are different things that we need to work on. But I think we are more focused on working on such endeavors. So this is something that I want to continue to do, execution and business cost strategy, strengthening the value chain and portfolio management is what we are doing. And of course, we are working on new businesses. And through operation, we are going to improve them. And if we see growth in the market, then we will see growth. But if the market goes down, it will be difficult. And I'm sure you're concerned about that. But these are what we have on our mind. And at the same time, we will continue with our efforts to make endeavors in the policies. So we are not just making anything from green, but we are combining adjacent businesses, and we are making bolt-on investments. So organic growth and inorganic growth will be thought about in combination. And of course, by doing so, of course, we may be exposed to market conditions, but through such endeavors, of course, we will not only be dependent on the market moves. So in May, when we made the announcement, we said there are 3 business clusters, but we are going to increase it to 9. So this is a very aggressive target. But if we are able to realize our target, then the base profit is going to be -- the foundation of the profit is going to be made bigger. And of course, we are going to see different functions and will be strong against vulnerability. We'll be able to cover even if the market go down. Thank you.

Any other questions? No other questions?

A follow-up question. On Page 9, you mentioned JPY 150 billion. And earlier, as you mentioned, the business clusters to increase it to 9. So create, grow, extend would take time. So looking at this slide, JPY 150 billion profit. I think that the core cash -- operating cash flow will come down. So selling of the assets probably is included into this JPY 150 billion profit. So from 3 to 9 business clusters, so you would have a big size. And in terms of the timeframe, it will be not really in the MTMP, but the longer perspective. So through the normalization, maybe the performance will come down. So it's not going to keep growing in a medium manner. So could you talk about the timeframe?

Thank you for your question. So 9 business clusters. It's a very ambitious number. As Shigeta mentioned, some of the business clusters focus on the carbon neutral or next-generation areas. So in the process of creating those clusters, the earnings or the growth, some of them will be -- will have a high growth or others will probably have -- or it could go up to 2030, but not really during the next MTMP. So it will be the combination. So there will be plus and minus. And so as a result, if you combine all of them, this would be the size. And as it was explained, it's the sale of the asset included. So JPY 150 billion does not include the onetime or extraordinary numbers. So no, potential sale are not included. And as Shigeta explained earlier, the new business opportunities are increasing and when the market conditions change or in the past, I think that accumulating the portfolio was how we expanded the balance sheet. So rather than that in the medium to long term, there will be a strategic recycling or the revision. So adding and subtracting will be conducted.

So in the initiatives I mentioned, decarbonization is something that you mentioned as well. In the explanation given earlier, so as a company, you'll be working on net zero. And as a mobility group, how you will relate to this is going to be very important because you may be exiting from some of the businesses. But in the existing businesses and creating businesses, in the trucks or vessels, you'll be trying to reduce capitalization. But net zero initiatives. And as the Mobility division, how are you going to make the contribution, is my question, if you have any perspective on the contribution rate, please explain.

Yes. Yes, as you have mentioned, of course, there are different roles that we can play. As you have mentioned, in the existing businesses, of course, carbon neutral is something, which is a matter of fact that we need to work on. And as was mentioned earlier, next-generation fuel energy is an area in which Mitsui can play its strength. So instead of working as one segment, I think team Mitsui or one team -- as one team, we need to work on it going forward. So carbon neutrality and GHG reduction is going to be very important when it comes to transportation, I mean, there will be a lot of room for reduction in the transportation area, and we need to change what we can do. So we need to make sure that we take on initiatives in automotive and these areas. I think, for example, in automotive and in vessels, et cetera, we need to work on these areas. And by taking all such initiatives, we believe that the energy business or fuel business or energy team project, which is in the upper stream, these can be made feasibility. So I think we need to play a role of a demand creator. So we talk about next-generation fuel or carbon neutrality, but the horizontal barriers are being eliminated, and there are many projects that we can work on together. So the position of the mobility business is going to be very important. It is not very clear into the future. But by making such projects feasible, I think we need to create a demand before we go into production. Thank you very much.

Thank you very much. If there are no other additional questions, we have passed already the given time. So with that, we'd like to end this session. Mr. Daikoku, thank you very much for the presentation. So with that, we have completed all the program for today. In the online live streaming, it seems that there were some technical issues, and we would like to apologize for that. And at the very end, we would like to ask you to participate in the survey. You will see the QR code on the screen. And from this QR code, you can go to the survey. And please give us your feedback, and we will be sending the e-mail to ask for the feedback. And with that, we'd like to end the Investor Day 2023 of Mitsui & Co. Thank you very much indeed for your participation today. [Statements in English on this transcript were spoken by an interpreter present on the live call.]