TOPPAN Holdings Inc. (7911.T) Earnings Call Transcript & Summary

[Interpreted] Welcome. I'm Kurobe, CFO. Thank you very much for taking time out of your busy schedule today to attend our financial results briefing for the fiscal year ended March 2024 or fiscal 2023. Today, I would like to present our full year results for the fiscal 2023 and our outlook for the fiscal year ending March 2025 or fiscal 2024. First of all, let's take a look at the overall performance for the full year of fiscal 2023. Please take a look at Page 3. For fiscal 2023, the company's consolidated net sales increased 2.4% to JPY 1,678.2 billion; operating profit decreased 3.1% to JPY 74.2 billion; ordinary profit increased 2% to JPY 82.8 billion; and profit attributable to owners of parent increased 22.2% to JPY 74.3 billion, respectively, year-on-year. As for net sales, semiconductors Japan SX packaging and textbook-related businesses grew. The weaker yen also contributed to the increase in sales. Despite the increase in net sales and effects of the weaker yen, operating profit did not reach the previous year's level due to onetime costs that arose in association with transition to a holding structure, but it exceeded the revised plan. The profit attributable to owners of parent exceeded the revised plan due to a gain on sales of investment securities, and ROE was 5.4%, reflecting the share buybacks of JPY 44.9 billion. Please take a look at Page 4. I will explain the key points of profit by segment. Let's see Information & Communications. In Erhoeht-X, BPO contracted due to impacts from onetime projects handled for the government sector in the previous year, but all other priority categories saw growth. In existing fields, game cards and textbook at the timing of version revisions performed well, resulting in an increase in overall segment sales and profit. In Living & Industry, packaging in Japan performed well with contribution from SX products. In overseas packaging, strong performance of products for food as well as the contribution of new consolidation through M&As led to increased sales. The manufacturing problems at overseas bases reported at the previous briefing ended during the fourth quarter. As for overseas décor materials, the market environments were weak both domestically and overseas, but we focus on environmentally friendly décor sheets and other high value-added products in Japan and secured the same level of sales as the previous year including overseas. As a result, the entire Living & Industry segment achieved higher sales and double-digit profit growth. In Electronics, sales increased for FC-BGA substrates over the full year, capturing demand for high-end products such as AI servers, although the business was affected by inventory adjustment mainly for general purpose servers in the second half. Photomasks performed well, taking in demand for the Asian market. In display-related products, demand slowed down for TFT-LCDs for automotive applications, but anti-reflection films centered on use for PCs recovered and remained firm. Although there was a onetime increase in expenses, such as higher amortization costs, overall segment sales and profit increased. Next, Page 5, on details of the changes in operating profit. The operating profit of JPY 76.6 billion for fiscal 2022 includes JPY 2.9 billion of profit added due to the change in accounting year of our semiconductor subsidiary. So the actual operating profit, excluding this effect, was JPY 73.7 billion. With this JPY 73.7 billion as a starting point, in fiscal 2023, the first factor contributing to lower profits was a JPY 7 billion increase in infrastructure development costs including replacement costs for legacy facilities. On the other hand, in priority businesses, Erhoeht-X saw growth in each priority category and minimized the impact of the loss of large public sector BPO seen in the previous fiscal year. As for other priority businesses, Japan SX and overseas living added JPY 1.4 billion, mainly in flexible packaging despite the manufacturing problems overseas. Semiconductors increased by JPY 12.3 billion due to strong sales of FC-BGA substrates and photomasks, each listing profits. In the cyclical businesses, profit increased due to textbook-related business despite a decrease due to absence of U.S. elections seen in the previous year. In existing businesses, anti-reflection films and other products contributed to boost the operating profit. As a result, operating profit, excluding amortization and onetime costs, expanded to JPY 87 billion. However, due to an increase in photomask amortization costs and onetime costs associated with transition to a holding structure, final operating profit for fiscal 2023 was JPY 74.2 billion. Page 6, please. In addition to segment-by-segment earnings trends discussed earlier, I would like to explain the major changes in the statement of income from the previous fiscal year. SG&A increased by JPY 27.5 billion due to an increase in personnel costs resulting from wage and head count increases as well as onetime costs in connection with transition to a holding structure. In the extraordinary account, there was an extraordinary income of JPY 74.1 billion through sales of investment securities, while an extraordinary loss of JPY 23.4 billion was also recorded in impairment losses mainly related to flexible packaging manufacturing facilities in North America, digital business-related assets and contract filling-related plants. These measures were taken in response to the slower-than-expected market pickup and the termination of businesses due to a structural reform, and we will improve profitability over the mid to long term through these measures. For your reference, Page 7 shows quarterly changes in main items on the income statement; Page 8, main items on the consolidated balance sheet; and Page 9, the status of cash flows. You can check them at your leisure. Next, I will discuss the full year results for each segment. Please see Page 10. First is the Information & Communications segment. The full year net sales increased 1.4% year-on-year to JPY 900 billion, and operating profit rose 7% to JPY 45.6 billion, increasing both sales and profit. If you look at each subsegment, in Digital Business, the Erhoeht-X additional content, security and manufacturing distribution DX priority categories grew. In BPO, there was progress in producing results of areas of focus such as government and quasi-public sector projects, which helped to largely cover decline in large-scale projects handled in the previous year. In Secure Media, there were decreases in sales and profit due to the impact of cyclical orders in the overseas financial printing business in the previous year. In Communication Media, there were increases in sales and profit due to contribution from textbook-related cyclical orders. Please see Page 11. These are the results of Erhoeht-X, a growing DX business. In FY 2023, sales were JPY 280 billion and profit margin was 7%. Expansion was seen in priority categories other than Hybrid BPO, but sales growth was flat overall due to the impact of large-scale onetime BPO projects in the previous year and profit decreased slightly. The results of each category are as described. The Erhoeht-X business is expanding. On the other hand, scaling up is taking longer than initially expected. Larger projects take longer to make decisions because they affect the clients' business. To address this issue, we will accelerate the scaling up of orders by strengthening frontline personnel and improving internal systems. Next, Living & Industry. Please see Page 12. For the full year, net sales increased 3.2% year-on-year to JPY 537.4 billion and operating profit rose 17% to JPY 27.4 billion, securing increases in sales and profit. As for the subsegments, in Japan packaging, sales and profit increased due to growth of SX packaging centered on flexible packaging and improvement in profitability. Overseas growth was flat due to manufacturing issues in India and Indonesia and slowdown in the barrier film business in North America. Japan décor materials saw strong performance in nonhousing markets, but a decrease in housing markets. Profit increase was secured due to cost reduction. As for overseas décor materials, despite a decrease in profit over the full year due to slow market conditions in Europe, North America and China, recovery is seen with profit increase in the second half. Next, I will discuss the Electronics segment. Please see Page 13. The full year net sales increased 4.4% year-on-year to JPY 266.5 billion and operating profit increased 3% to JPY 49.5 billion. As for semiconductors, despite the softer market for FC-BGA substrates in the second half, business expanded favorably over the full year. Market recovery is expected to be seen in the second half of FY 2024. The business is expected to return to stable growth, including catering to demand for AI-related applications. The Photomasks business was affected by an increase in amortization costs due to standardization of useful life but demand remained strong throughout the fiscal year. As for displays, due to the impact from market conditions for TFT-LCDs, the business struggled for automotive and other applications. On the other hand, profit increased overall by taking in demand for value-added anti-reflection film products for PCs and monitors, increasing profit. Next, the outlook for the fiscal year ending March 2025. Please see Page 15. For the fiscal year ending March 2025, we are forecasting consolidated net sales of JPY 1,720 billion, up 2.5% from the previous year; operating profit of JPY 88 billion, up 18.5%, or net profit of JPY 88.5 billion, up 6.9%; and profit attributable to owners of parent, JPY 55.5 billion, down 25.4%. The exchange rate is set at JPY 140 to the dollar. Next, Page 16. I would like to discuss changes in operating profit versus the prior year. If we add back the amount of onetime costs due to special factors that will disappear in the fiscal year ending March 2025, the actual operating profit for the last fiscal year is JPY 81.3 billion compared to operating profit of JPY 74.2 billion for the fiscal year ended March 2024. With this as a starting point, we estimate that the yen's appreciation will have a negative impact on operating profit of JPY 5.4 billion. On the business front, we expect to increase profits in Erhoeht-X marketing DX which is steadily growing. Japan SX, which sees growing environmental needs and overseas living centered on sales of packaging in Europe and Asia, where environmental needs are also strong and décor materials where we have a strong presence in the global market. As for semiconductors, we expect a decrease in profit this year due to an increase in amortization costs associated with capacity expansion and higher development costs. These businesses and growth areas will drive earnings, and we aim to achieve double-digit operating profit growth for the entire company. In the cyclical business, despite a decrease in textbook orders, we expect an increase in profit from U.S. election-related orders, which did not exist in the previous year. The entire company is united to achieve goals, and we would appreciate your continued support. This is all for the full year outlook. Now President Maro will give an update on the progress of the medium-term plan.

[Interpreted] Thank you very much for taking time to join us today. I am Maro, the President of the company. I will discuss the progress of our medium-term plan. The TOPPAN group's management philosophy is under the purpose of breathing life into culture with technology and heart to achieve sustainable growth based on the medium- to long-term goal of becoming a leading provider of solutions to social issues worldwide through DX and SX. As we enter year 2 of our medium-term plan in this fiscal year, we have reconfigured the plan to ensure that we will achieve a 5% ROE in fiscal 2025, even in an increasingly uncertain social and economic environment. The left side summarizes the review of year 1. In the external environment, needs for digitalization and environmental friendliness are consistently developing, but growth is slower than initially anticipated in some areas. Next is the internal environment. Challenges for scaling up Erhoeht-X business have been clarified, though the business is yet to reach our expectation. Overseas living struggled from the impact of inflation in Europe and U.S. and headwinds from temporary impacts, such as water damage and machinery failures. The semiconductor-related business generally remains strong, but we need to keep an eye on market trends as we engage in business activities. Based on this, we have reconfigured our medium-term plan with 3 axes: profitability enhancement; bolstering of shareholder returns; and capital optimization, in order to ensure that we achieve our target ROE of 5%. First, as for profitability enhancement, we will reassess plans and measures for growth businesses and intensify structural reforms of low-profit businesses. To bolster shareholder returns, we plan to conduct additional share buybacks worth JPY 100 billion this fiscal year. As a result, total payout ratio in MTP period is expected to be 100% or more. With these, we have reset the MTP target figures. We have revised our forecast for net sales and operating profit for fiscal 2025 to JPY 1,830 billion and JPY 100 billion, respectively, with operating profit revised from our forecast of JPY 110 billion announced last year. The details of the revision are shown on the next page. As for equity, as I said, we will conduct JPY 100 billion share buybacks this fiscal year. We will continue to implement flexible returns in consideration of the progress of profit to control equity. With this revision, we hope to enhance the degree of certainty of the plan and achieve a 5% ROE in fiscal 2025, while aiming for 8% or more in the next medium-term plan. Next, I will discuss the main reasons for the revision of the operating profit plan for fiscal 2025 from JPY 110 billion to JPY 100 billion. The breakdown by segment of the revised operating profit is as shown here. In Information & Communications, revisions were made due to delay in scaling up of Erhoeht-X. Based on last year's sales activities, we have reviewed the lead time from proposal to a decision on order receipt. In many cases, when the client decides to introduce a large DX-related project, it takes a considerable amount of time because it involves management decisions. In addition, market growth is slower than expected due to delays in the introduction of government cloud computing in local governments, and metaverse market has also slowed down in its expansion more than expected. In light of these circumstances, we have reevaluated the feasibility of our original plan. In Living & Industry, we have revised the expected demand for SX packaging due to delays in environmental regulations in Europe and in light of the status of recovery in the décor materials market. As for Electronics, we have revised the plan, reflecting updated semiconductor-related market trends and reviewed exchange rates and forecasted increase in profit. Based on the result in year 1 of the medium-term plan, we have revised our assumptions on market trends and the degree of certainty of the original plan so that they would be more in line with the actual status, thereby increasing the probability of achieving the plan. Next, I will explain profit growth towards fiscal 2025. As shown in the profit mix graph at the top, we will achieve operating profit of JPY 100 billion in fiscal 2025 by transforming our business portfolio and creating a business structure that earns the majority of its profits from growth businesses, that is, Erhoeht-X, Japan SX, overseas living, new businesses and Electronics. Next, I would like to discuss the transformation of our business portfolio. As explained on the previous page, we will promote profit growth mainly from the growth businesses positioned as businesses for proactive expansion on the upper right; and for the business requiring review, on the lower left, we will work on improved profitability and efficiency, including the termination of these businesses. We'll have a good idea as for the future of those businesses, subject to such consideration, before the end of the current medium-term plan. Now let's move on to the plan for each segment. First is the Information & Communications segment, where we aim to achieve JPY 959 billion in net sales and JPY 55 billion in operating profit in fiscal 2025. As for the segmental mix in the operating profit, changes are shown in the graph on the right. The existing businesses of Secure Media and Communication Media will decrease, while the Digital Business and BPO, i.e. growth businesses, will be increasing profit significantly. Our medium-term strategy is to achieve high growth by driving the Erhoeht-X business to support clients' digital transformation as a valued co-creation partner, and we will work to expand profit by scaling up Erhoeht-X and maintain an improved profitability through structural reforms for existing businesses. Next is strategies by priority category for Erhoeht-X. In marketing DX, which is expected to be expanded the most in Erhoeht-X, we will provide support-type service for digital infrastructure transformation, or DX, and customer experience transformation, or CX, to create continuous business model to support growth of our customers' businesses. Here, I will describe the marketing DX business model. As shown in the figure, the strategy of marketing DX is to provide CX services that facilitate the transformation of the customer experience from number 1 to number 11, with the customer data held by the customer at the center and to provide support-type service for the entire marketing process of the customer. For example, a client may start transactions with us with number 3, advertising DX, which is the distribution of web advertising to its member customers and then expand to number 1, brand DX, or number 4, sales promotion DX, by supporting the integration of customer data IDs. Like this case, the basic strategy for scaling up on marketing DX is to increase the number of services ordered and the size of projects with customer data operations at the center. In fact, the number of such projects has been increasing since Q4 of fiscal 2023, and average customer unit price has been gradually going up. On the other hand, outsourcing the operation of customer data is an important business decision for clients, and such decision process tends to become prolonged. The number of clients to whom we provide services from number 1 to number 11 is currently increasing. And we hope to gain their trust by ensuring that these services are properly carried out and to lead them to a continuous business based on the operation of customer data. Let us return to Page 9 to resume the discussion on the strategies by priorities category for Erhoeht-X. As for secure (sic) [ Security ] business in Japan, we secure earnings base through development and operation of DX solutions for finance. We also expand earnings by driving priority solutions to become de facto standards. Overseas, we will expand business in government ID, smart card and IoT domains. For Hybrid-BPO, we will continue to strengthen our efforts to cater to needs for outsourcing and support for efficiency improvement for routine administration of central and local government agencies and operations of financial institutions. In digital contents, we will expand business by supply and digital contents to growth markets. And in Manufacturing and Distribution DX, we will continue to strengthen and expand sales of NAVINECT and PROMO CORE. The target figures for each category have been revised as shown in light of the current situation. And Erhoeht-X, as a whole, aims to achieve net sales of JPY 400 billion and profit margin of 10% in fiscal 2025. Effective this quarter, Erhoeht-X's earnings have been aggregated on a financial accounting basis. We have made effectively a JPY 6 billion downward revision from the previously announced fiscal 2025 profit targets we calculated on the financial accounting basis. Next, I will discuss how we intend to scale up the 3 priority categories, which account for 80% of Erhoeht-X's net sales in fiscal 2025. In the figure, the vertical axis represents the unit price and the size of projects per case. The horizontal axis represents the number of projects. First, as for Marketing DX, the market development to date has enabled us to secure a number of projects, although most of them are small in value at the moment. Going forward, we will focus on increasing unit prices by driving integrated orders. To this end, we are expanding our menu to support a wide range of areas of our clients' marketing processes and strengthening our response capabilities and cost competitiveness through the use of AI. As for secure (sic) [ Security ] business in Japan, we will focus on increasing the number of companies adopting AIRPOST, EngagePlus and payment solutions, i.e., our priority products, and the number of times they are used. To this end, we will strengthen our efforts to target companies with large customer bases and expand transaction volume. Overseas, we will capture the growing demand related to government IDs and smart cards, especially in emerging countries, and work to increase the number of countries adopting our services and expand the number of items ordered. As for Hybrid-BPO, we successfully handled large-scale national government projects and are now capable of handling projects with higher degree of difficulty. Currently, BPO orders for routine operations at central government agencies are expanding. Moving forward, we will continue to work to win businesses with central government agencies while extending our services to a wide range of local authorities to increase the number of clients adopting them. Although the overall average size of projects shown by the vertical axis is expected to decline, as the number of projects for local governments increases, we will scale up our business by expanding the number of projects. Next is Living & Industry, where we aim to achieve net sales of JPY 589 billion and operating profit of JPY 42 billion in fiscal 2025. As shown by changes in operating profit on the right, we aim to increase operating profit in Japan and overseas packaging and overseas décor materials. Our midterm strategy is to make a contribution to a decarbonized and circular economy centered on providing SX products and services addressing environmental needs. We are also shifting to high value-added products and aiming for global business expansion as well as implementing structural reform of low-profit businesses. Next, let's take a look at how we will grow Living & Industry earnings. First, the packaging business. As described in the specific activities, for flexible packaging, we will expand business and improve order mix by expanding market share for high value-added SX packaging matched to needs of markets of each region and achieve higher profitability. As for barrier films, we will expand sales by bolstering lineup of products for mono materials and enhance cost competitiveness by optimizing the global supply system. In response to the current weak yen, we will increase production in Japan. As for film manufacturing, we will continue to increase production capacity in Indonesia and India in order to strengthen competitiveness of flexible packaging and barrier films through in-house substrate film manufacturing and enhanced functionality. Next is the décor materials business. As described in the specific activities, we will expand our market share and develop overseas markets by offering a wide variety of décor sheets and high value-added products. And in emerging markets, we will expand production bases in response to market expansion and strengthen sales capabilities through collaboration with local partners. At the same time, we will focus on creating cost synergies by combining TOPPAN's production technology and INTERPRINT's procurement capabilities. We aim to increase the overseas net sales of Living & Industry products to 46% in FY 2025. Next is Electronics. In Electronics, we aim to achieve net sales of JPY 309 billion and operating profit of JPY 52.5 billion in FY 2025. As shown in the graph of changes in operating profit, amortization cost due to standardization of useful life and the effects of foreign exchange rates almost offset each other, resulting in an increase in profit in the semiconductor-related business. Our medium-term strategy is to maximize business value by supplying key devices centered on semiconductor-related products. As for the semiconductor-related FC-BGA substrates, we will expand orders for high-end products by enhancing production capacity, and we will also work on to develop next-generation packaging technology. For photomasks, we will increase supply capacity by strengthening cooperation amongst manufacturing bases and accelerate technical development and capital investment for cutting-edge masks. Next, our efforts in new businesses. One of the themes of Electronics' sensor solutions is to make a profitable device business that has a competitive edge in the ToF sensor technology. To this end, we aim to develop a world-class ToF sensor and build a mass production line in collaboration with an OEM manufacturer. As for displays, we aim to expand automotive applications of light control devices using display technologies. With metaverse, we are cultivating a market by building our own metaverse platform. Last year, we won large projects for manufacturers and municipalities in the domains of marketing, tourism and urban development. For BtoC, we are expanding in the entertainment domain, such as games and events, through alliances with JP UNIVERSE and others. In the health big data business, we collected medical record data for 1.5 million patients from 56 hospitals for data analysis business and launched a business using the health big data for pharmaceutical companies in FY 2023. In biotech, clinical research has started in Japan and overseas for the social implementation of personalized cancer care based on 3D cell culture which will contribute to earnings from the next medium-term plan onward. We will promote business development that contributes to earnings from the focused themes in the medium-term plan and create new pillars of business. Next is generating synergies across the group. The main purpose of a holding company is to leverage outstanding technologies and human assets accumulated by each business division as well as relationships with customers and suppliers across the entire group. We will make a horizontal linkage in our vertically divided organizational structure and create synergies by expanding sales of products to each other's customers and developing new products by integrating our resources. Last fiscal year, we launched a synergy project between TOPPAN Edge and group companies, and we plan to augment this project across group companies. Regarding synergy effects, we have already generated JPY 4 billion in net sales in FY 2023, and we will continue to strengthen our efforts to generate synergies that lead to more than JPY 15 billion by FY 2025. In addition, we will launch a new health care project and global secure (sic) [ security ] project this year. In each domain, we will promote new product development, cross-selling and cost reduction through joint procurement. Next, I would like to discuss the progress of structural reforms. In Information & Communication, we have completed the consolidation of Tokyo area production bases for publication and commercial printing at Kawaguchi, Sakado and Numazu, and we also plan to downsize the production system in anticipation of future market contraction. We reorganized the group sales structure of the publication business in April and consolidated sales departments at Tosho Printing. In Living & Industry, we are advancing reorganization of bases as planned in the folding carton business. Consolidation at Mito Plant will be completed during FY 2024 plan, and Sagamihara and Sendai plants will move towards closure. In addition, we will withdraw from the bottled pouch filling business and the alcoholic beverage filling business and review profitable commercial products. In Electronics, production at Kochi Plant ended in FY 2023 for front-end processes of the TFT-LCD business. We will continue to execute structural reforms and businesses in order to transform the portfolio. Next, our financial strategies. I will first explain our cash allocation policy to maximize enterprise value. As for the basic allocation policy stated in the upper-left corner, there is no change from what was presented last year. However, in order to increase the profitability of achieving ROE, in FY 2025, we will focus investment on growth fields and accelerate a business shift, assess low profit and underperforming businesses, and drive structure reform and implement flexible share buybacks considering the total payout ratio. We will solidify these 3 approaches. Allocations are shown in the chart on the left, and we have reviewed the figures for investment in growth, asset sales and shareholder returns based on the approaches to be strengthened. As for capital policy commitments, we will conduct JPY 100 billion of share buybacks in FY 2024. With the concentrated share buybacks, we forecast a total payout ratio of 100% or more for 3 years in the medium-term plan. In addition, we will continue to reduce strategic shareholdings to less than 15% as a percentage of consolidated net assets in FY 2025. Next is the investment strategy. The total investment for the 3 years in the medium-term plan from FY 2023 to FY 2025 has been revised from JPY 400 billion to JPY 450 billion. Investment will be strengthened mainly in the semiconductor businesses, which will lead to earnings growth in the next medium-term plan. Next is the reduction of strategic shareholdings. In consideration of capital cost and financing, we divested approximately JPY 100 billion of strategic shareholdings in FY 2023. Shareholdings of 62 companies were reduced, including partial divestments. As of end March 2024, the ratio of strategic shareholdings to consolidated net assets was 24.8%, partly due to the rising stock prices but we will further promote the reduction, aiming to achieve less than 15% in FY 2025 and less than 10% from FY 2026 and onward. From here, I will discuss our SDG-related initiatives. In our efforts to reduce environmental impact, we have revised upward our target for the renewable energy ratio for FY 2030 to 25% in order to ensure achievement of emission volume targets. In addition, as part of our efforts to preserve biodiversity, we declared support for recommendations of TNFD last year. Next, our efforts in human capital and diversity. We made general improvements from the previous year for each indicator. We have also enhanced systems such as an internal job posting system and employee stock compensation plan. As for efforts focused on human rights and governance, we will continue to implement human rights due diligence in our 172 companies worldwide and strengthen sustainable procurement efforts. On the governance side, the Board of Directors' effectiveness has been examined and analyzed by an external firm since March 2023. For this year, we will review the composition of the Board of Directors and plan to invite a female director as a new outside director to further strengthen the independence and diversity of the Board of Directors and its supervisory function. The new structure will be proposed at the 178th Annual General Shareholders' Meeting. In the current fiscal year and beyond, we will continue to practice sustainable management and create social value through the reduction of environmental impact, human capital and diversity and sustainable production. We are generally making good progress with regard to SDG-related medium-term targets. The SDG midterm targets are set in conjunction with the medium-term management plan and the targets for FY 2025 and FY 2030 have been reviewed based on the actual performance and status. Through DX and SX, we will solve social issues worldwide to realize a sustainable and fulfilling lifestyle. Finally, let's see our company's recognition. Our ESG initiatives are highly regarded by society, and we have been included in ESG investment indices and received awards from various organizations for our efforts. We will continue to practice sustainability management and contribute to enhancement of corporate value and the realization of a sustainable society. This will conclude the presentation of the progress of the medium-term plan. Now as we have already announced, we will be holding an IR Day on Friday, June 14, from 10 a.m. to 12:30. We hope you will join us for this year's strategy presentation, which will focus on the growth domains, Erhoeht-X from Information & Communications, overseas business from Living & Industry and FC-BGA substrates from Electronics. Thank you very much for your time today. [Statements in English on this transcript were spoken by an interpreter present on the live call.]