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

First, I, Saito will explain the overall strategy for the Information & Communications segment. First, I'll explain the business overview. The Information & Communication business has a business scale of JPY 900 billion in sales and JPY 45.6 billion in operating profit in FY 2023. There are 4 subsegments: digital business and BPO, which are positioned as growth business; and secure media and communication media, which are mainly existing printing business. Products, services, and sales and profit margins by segment are shown here. The 2 subsegments of the growth business are our DX businesses, which we've branded as Erhoeht-X and expanding with 5 focused solution categories. Next, I'll explain our plans for the Information & Communication segment. The medium-term strategy is to achieve high growth by promoting Erhoeht-X to support our customers' digital transformation as a value co-creation partner. In the digital business and the BPO in sub-segments of the growth business will expand earnings by scaling up Erhoeht-X. In the existing businesses of secure media and communication media, we'll work to maintain and improve profitability through structural reforms. And for the Information & Communication as a whole, we aim to achieve JPY 959 billion in net sales and JPY 55 billion in operating profit in FY 2025. Regarding operating profit, we've revised down the operating profit target for FY 2025 by JPY 7 billion from the JPY 62 billion target disclosed in May last year. The background to this is while we're working on scaling up Erhoeht-X, our proposals are being well received by our clients, but there are many cases where our clients need to make a decision to introduce a large DX-related projects, and we're finding that it may take a considerable amount of time before such a decision is made. In addition, market movements have slowed down more than expected in some areas, such as delays in government cloud adoption by local governments. And in light of these circumstances, we've made revisions mainly in Erhoeht-X. The revised operating profit of JPY 55 billion is shown is as shown in the operating profit changes. Digital business and BPO are driving profits, while secure media and communication media are expected to decline in profits. We expect a 2-year profit increase of JPY 16.2 billion for the digital business and BPO, JPY 5 billion for Erhoeht-X marketing DX, and JPY 7 billion for the security business, and JPY 3 billion for the digital contents, and JPY 1.5 billion for manufacturing and distribution DX, respectively. In BPO, we expect a profit increase of JPY 2.1 billion, and here too we expect the growth in Hybrid-BPO of Erhoeht-X. Today, I'd like to explain the strategy for the 3 drivers of profit growth within Erhoeht-X: marketing DX, security business, and Hybrid-BPO. Before I go into details, I'd like to explain the outline of the strategy for the 3 priority categories. In marketing DX, we'll build a sustainable business model by providing support for our customers by accompanying them by combining DX, which transforms the digital infrastructure, and CX, which transforms the customer experience. In security business, we'll continue to make key products such as AIRPOST and EngagePlus, the de-facto standard in Japan. Overseas, we'll focus on expanding our business in the areas of government ID, IC cards and IoT. In Hybrid-BPO, we'll continue to strengthen our efforts to streamline routine and financial affairs for central and local government ministries and agencies and to meet with outsourcing needs. Erhoeht-X as a whole aims to achieve sales of JPY 400 billion and a profit margin of 10% in FY 2025. Finally, I'd like to talk about how we'll scale up the 3 key categories we're focusing on this time. As for marketing DX, we'll focus on increasing the unit prices by promoting comprehensive orders through expanding our menu of services to support a wide range of areas in our customers' marketing process. In the security business, we'll expand in our transaction volume by multiplying the number of the companies adoption of our key products, AIRPOST , EngagePlus, and payment solutions will expand the amount of transactions. Overseas, we'll work to expand the number of countries adopting our products and the number of items ordered, taking advantage of the increasing demand for government IDs and IC cards, especially in emerging countries. As for Hybrid-BPO in the public sector, we'll continue to strengthen orders for BPO for regular subsidies projects from central government ministries and agencies, while expanding horizontally to wide-area local governments and expand the number of clients adopting our products. In the financial subsector, we'll increase the number of cases and improve added value by standardizing solutions. This concludes the explanation of overall Information & Communication business. Now, I'd like to move on to the explanation of marketing DX strategy.

Next, allow me to explain the marketing DX. First, I'll explain the market trends and our company's challenges in achieving our medium-term plan. As a market, there is a strong need for DX in the marketing field. But only 60% of domestic companies have achieved DX results. And it is said that Japan is lagging behind in providing DX for customer experience, CX, and employee experience, EX compared to Europe and the United States. The DX needs of clients have also changed from simple digitalization to business transformation support, and there are cases where DX consulting is provided, but does not lead to business transformation. Considering the fact that there are a few DX partners with industry knowledge and that DX companies such as System Integrators are moving to strengthen their CX departments, we believe that both clients and competitors are beginning to redefine DX. Next, TOPPAN marketing DX medium-term plan. The sales plan for FY 2025 is JPY 70 billion, with a profit margin of about 10%. There is a need to scale up from the actual performance of JPY 25 billion in FY 2023. Next, we've summarized our own challenges in scaling up our business. We've provided marketing DX services to about 1,000 companies and received a certain level of evaluation, but our business scale has not extended, remaining limited to transaction in the digital field. In addition, there are issues such as a limited expansion of trading opportunities through intercompany collaboration triggered by the holding company. And the need for negotiations with the management for business transformation, which requires a long lead time until a deal is concluded. Since FY 2023, we've been pursuing a strategy to strengthen our business model and scale our business by anticipating market needs and our mission this fiscal year is to accelerate this. Here, I'll explain our marketing DX business strategy. Anticipating the market needs explained earlier, we've integrated our DX digital marketing organization and CX organization to organize the Business Transformation Center since FY 2023. This is an organization to support the customer-centric management transformation practiced by the growing companies, such as Amazon. As shown in the diagram below, our concept is to accompany and support our clients' business transformation for the long term by integrating DX, EX and CX taking advantage of TOPPAN strength. Our clients have given us positive feedbacks, and we're seeing an increase in the pioneering projects. I'll explain this business model from the perspective of our company's challenge of business scale. Please here look at the yellow shaded area at the bottom of the slide. Our former Digital Marketing Organization was highly acclaimed for its services that combine the DX and EX. However, because we're limited to digital business, we had issues with the speed of business scale. Therefore, we merged our -- the functions with the CX organization, which is skilled in customer experience design. We're now able to expand our digital marketing exit strategies to the entire marketing value chain, combining online and real-world activities such as advertising, sales promotion and in-store and this has expanded our business opportunities. In addition, by integrating the 3 Xs as a service provided, we're able to support the growth of our clients' entire business and ensure continuity. Next, we'll introduce our business scale strategy to achieve our midterm management plan. The strategy for scaling up is to focus on 5 industries and accelerate our efforts by using the business transformation scenarios tailored to the characterization of each industry, adding JPY 15.5 billion to our results for FY 2023 to achieve JPY 40 billion this fiscal year. This scaling strategy is one, the average customer spending, two, the number of customers and three, productivity. One, the strategy for scaling up the average customer spending is to evaluate business transformation support from DX alone. Two, the strategy for scaling up the number of customers is to strengthen the customer contact points at all TOPPAN. Three, the strategy for scaling up productivity is to speed up the expansion of human resources. The details of these 3 strategies will be explained on the next page onwards. The first is the strategy for scaling up in average customer spending. In order to increase the annual transaction volume from a single client, we're promoting the shift from DX alone to business transformation support. What we're promoting is comprehensive orders by fusing DX and CX. Starting with customer data involved in the DX support. We're accompanying and supporting our clients' business transformation by integrating CX strategies for the entire marketing process of our clients. We've strengthened the CX Services 1 through 11 that correspond to our clients' marketing processes. By using customers' data as the basis, we can expand our involvement to other processes regardless of which process we enter, making it possible to continuously enhance our multiple services. In addition to commission-based revenue, we'll increase fee-based revenue, which is mainly used in digital marketing operations in order to increase our profitability. In this way, the fusion of DX and CX will lead us to higher profitability in integrated orders, which will become a scale strategy for customer unit price. Here are 3 examples of transactions, where the clients who are progressing to our integrated orders. The first is an example of strategy and step for comprehensive orders, where Company A is a retail company and the Company B and C are the contract-based service companies. There is a value chain process around the data, and in a state where the transactions and operations are aligned increased by numbers. I think you can see that our involvement in the value chain is expanding as we get involved in data operations. In the lower right of each box, we indicated how much sales growth is expected in FY 2024 compared to the actual annual transactions as of FY 2022. You can see that the business is expanding as a result of the integrated orders of DX and CX. In addition, as stated at the bottom, we aim to achieve a high profitability by increasing the ratio of fee-based revenues. For CX type transactions, which are mostly commission type, we'll increase the ratio of fee-type revenue with higher profit margin by driving the application of DX. And furthermore, by strengthening the high-level functions such as consulting and project management, we'll raise the profit ratio. The second is the scale strategy to increase the number of customers by strengthening customer technology using all TOPPAN's resources. We amplify opportunities to expand the sales by rolling out business sales functions to regional divisions and expanding the products that are our -- as entry points. In addition to the Information & Communication business division, we deploy business sales functions to TOPPAN's Living & Industry divisions, and regional divisions and TOPPAN Edge. We developed sales staff, the business sales specialized in marketing DX and deployed to 5 business divisions to expand orders creations, opportunities nationwide since fiscal [ 2012 ]. Business sales are also functioning as OJT for sales staff responsible for customer accounts. In addition to expanding sales offices, we also work to expand the range of products and services that can be used as sales leads. In addition to strengthening DX and CX services, we're also expanding hybrid DM and store DX through manufacturing collaboration, including seeing the product types from 53 last year to 66 this fiscal year. The third is the strategy to scale up the production capabilities. Human resources are critical to the marketing DX business. In addition to strengthening the human resources recruitment, we're also promoting measures to speed up the expansion of human resources that do not rely on recruitment. At the end of FY 2023, we had 950 marketing DX-related human resources, and we'll expand this number to 1,700 in FY '25 through the following measures. In terms of resources expansion through M&A and capital alliances, we acquired Cocolable, a company with a proven track record in growth marketing in advertising and EC development. Fusion, a company with an established reputation for CRM design and operation, and NEWSTANDARD, a brand development company to enhance capabilities. In addition, as shown in the middle table, we'll strengthen DX human resources by deepening cooperation with group companies and effectively utilizing resources. We're promoting group synergies and improving productivity through the conversion to AI employees, which has been contributing to earnings since the previous fiscal year. Lastly, I'd like to talk about 5 industries and business reform enhancement. We've targeted for industries where we've a track record business transformation and strong customer network. We've developed As-Is/To-Be scenarios for business transformation in the 5 industries of retail, manufacturers, contract-based services, content and infrastructure to standardize the integrated products. For each of these industries, we set our target sales of FY '25 and strengthening our strategy. Please see the bottom. In manufacturing BX with well-being as a transformation theme, we began business alliance with integrate company limited, a pioneer in the field. We'll strengthen our consulting function and accelerate the speed of closing contracts through management level approach. We will scale up the size of marketing DX through these strategies. Next, I'll explain our business strategy for Hybrid-BPO. First, let me give you an overview of the business. TOPPAN's Hybrid-BPO is being rolled out by leveraging strength in business infrastructure, in the information field, including operation, now design, personal information management, and handling know-how and security management capabilities cultivated in business support, where we work in close proximity to the clients' business processes. We're targeting government and finance back office work in proposal-based DX offering business combining to DX services of all TOPPAN Group. For FY '25, we're targeting sales of JPY 150 billion and a profit margin of 10%. In the BPO business environment as a whole to address working population decline, changing work style and increasing business speed, the trend of focusing resources on core operations continues and the market for outsourcing for non-core operations in Japan is expanding for all industries. Due to the need to accelerate the social implementation of the policies, there is an increase in policy implementation business and routine auxiliary business with subsidies added to the policy-related business and back office work is expanding. And while the peak for the scale of government administration services being pushed back due to the delay in the widespread standardization of local authority system. And in finance, outsourcing needs for highly specialized specific operations such as inheritance, will increase in banking and securities. There is an increasing trend toward compliance with legal systems such as FATF and continuous customer confirmation as well as iDeCO and other operations due to customer needs. In terms of infrastructure development of business scale, we're creating new strengths by combining the assets of TOPPAN and TOPPAN Edge by adapting a holding company structure. The first of these infrastructure improvements is the company-wide sharing of sales, design and operational know-how. The know-how acquired by Tokyo-based divisions in highly difficult operations will expand to regional divisions through training and human asset collaboration. And we'll strengthen the development and securing of talent by introducing job-based human asset management to raise the level of sales and design resources. The second infrastructure improvement is the development of infrastructure for base and system collaboration. We'll drive sharing of nationwide business bases and systems to expand capacity and enhance functions and cost competitiveness. Next, I'll explain the market environment and growth strategies for government BPO. First, the market environment for government BPO. Please refer to the figure. The figure shows the annual government BPO market size estimated for FY 2023. On the left is the central government agencies, on the right is local government. The upper row is continuous BPO and the lower row is onetime BPO. As you can see, the policy-related projects in the green shaded area accounts for the majority and demand in the outsourcing is expanding centered on policy implementation business. Although there is a firm need for outsourcing administrative services of municipalities in the orange shaded area, the scale of the business is not expected to be maximized until '26 or later. Next, market trends and growth strategies. We'll significantly grow policy implementation projects for central government agencies, where demand is expanding and aim to increase share of routine auxiliary operations, where the business scale is large despite the market size staying flat. For local authorities, we cultivate a new policy-related project for prefectures by leveraging know-how from central government policies -- projects. Next, I'll explain the challenges on competitive differentiation for each project type. First, policy implementation. In the policy implementation business is the projects that use subsidies to support the target companies and organizations to implement new policies promptly. In contrast to benefits where the details of support are predetermined, the details of the systems and the screening is necessary for determining the criteria on which to access the appropriate scope and type of assistance and there are cases in which the screening is atypical and difficult and design is changed due to the status of the application. In addition, since applicants are not familiar with this type of a project, it is necessary to provide assistance in resolving any deficiencies in the application and to support the project executions. The key differentiation of the system and screening design capabilities based on the ability to understand policies, ability to respond to design changes with seamless system for the sales, design and operation, and also communication type front office that supports the applicant closely separate from the screening center. Next, routine auxilliary operations. For policies that supports strengthening of the national economic or environmental infrastructure, such as support for SMEs or expansion of energy saving, routine auxilliary projects are implemented over a long time spans. These are routine auxiliary operational projects, and in addition to very large-scale projects implemented by the central government, prefecture governments are also developing similar projects that take local characteristics into account. Key differentiations are follows: quantitative screening know-how accumulated in large-scale projects for COVID countermeasures, such as standardization of application or flexible capacity control and also expand central policy information and business know-how acquired by Tokyo-based divisions to regional divisions and to take in connected projects. Next is government administrations. Government administration is a services provided to local governments on behalf of their residents, such as free childcare and nursing care services as well as admin work for the employees like payroll payments. The need for local governments are shifting from traditional simple administration services to business transformation that include both efficiency and resident services. The differentiation here is our ability to provide consulting services that not only replace part of the workflow, but also improve business flow efficiency through BPR, formulate the scope of work to be outsourced to review the entire work and implement the DX. That's all for BPO. Akiho is going to explain the financial BPO.

Next, I'd like to -- I'm Akiho from TOPPAN Edge Corporation. I'll explain about financial BPO among Hybrid-BPO. This is the environment for financial BPO. In response to the changes in the social environment such as a shrinking workforce, diversification of services and compliance with laws and regulations, financial institutions are stepping up efforts to improve operational efficiency and reduce costs through outsourcing in order to focus their core operations. As noted in the middle, we see the challenges facing financial institutions, such as operational reforms and human resource shortages as a market opportunity for us. And we believe the size of this market is on the rise. Please go to Page 28. Next, I'll explain our growth strategy. The financial market often has outsourcing needs that are common to the industry as it relies on the guidelines and the systems of the financial services agency. We've been working to standardize our outsourcing specifications for several years in response to these needs. As you can see in the figure, we've achieved the level of operational efficiency and cost reduction required by financial institutions by incorporating digital technology into shared operations as well. Please go to Page 29. On this page, I'd like to explain the operations we're targeting based on the strategy I just explained. There are 2 major areas. The first is the expansion of BPO services with standardized specifications shown on the left side. This is an area of business that has been outsourced in the past, but we intend to expand the scale of this business through standardization. Our strength includes the ability to provide the services combining staffing and the business process improvement, proposal, BPR. We offer digital services, and we've the know-how of standardization backed up by the hundreds of individual projects we've been commissioned to handle each year. As shown in the bottom, we expanded a number of standardized projects to about 10 as of last fiscal year, and we can finally reach the stage of accelerating the horizontal development. The second is, as indicated on the right side, we aim to capture demand in operations requiring expertise that were previously handled in-house and started to be outsourced. This is an area that has begun to be outsourced in recent years, and we're strengthening our structure before the market growth, with a view to collaborating with our administrative subsidiaries. We expect that these target operations will account for more than 80% of the growth in the sales of the financial BPO business, and we intend to steadily turn them into actual results. Please see Page 30. Lastly, I'd like to explain the service model for specific highly specialized operations. Firstly, on the left is inheritance BPO. We provide full support for operations related to the administration inheritance, including scheme for inheritance reception function, call centers and handling of on-site administration. On the right side is the foreign exchange and tax and public funds BPO. We provide shared services for foreign exchange tax and utility bill processing. By incorporating AI-OCR, we realized an overwhelming reduction in man hours by leveraging TOPPAN strength in providing combined services, established a unique position against our competitors. And we're currently working on more than 50 inquiries. We'll continue to meet the market needs and -- which are expected to increase in the future. Next, I'll explain the security business. We'll expand our overall security business from JPY 70 billion in sales and profit margin of approximately 2% in FY 2023 to JPY 105 billion in sales and profit margin of approximately 8% in FY 2025. The 5 areas to be addressed are listed on this page. Today, I'd like to explain the customer communication and global security services with services to be forecasted by us. First, let me talk about the security business in Japan. Please go to Page 34. This is the overall picture of security business in Japan. Over the years, we've cultivated trust and confidence in our information management and processing technologies through working with the financial institutions and being trusted with various types of notifications from local government. Armed with our advanced security technology and operational infrastructure, we support the improvement of corporate operations and DX of customer contact points through a combination of various services of the group. Our security business in Japan consists of 3 major services listed here. Customer communication is a service that takes the procedural DX as its starting point, providing a variety of outputs by combining data collected by AIRPOST and other services, such as EngagePlus, through our data management services. Payment services provide users with safe and secure payment services through our payment platform, Thincacloud. IoT will provide product management DX using RFID and other technologies, and office DX using facial recognition technologies, and will lead the transformation of corporate business processes by also linking with each business of Erhoeht-X. Today, I'll discuss the customer communication procedures DX in detail. Please go to Page 35. On this page, we'll explain customer communication service model. We offer services that support safe and secure customer communications that improve the business efficiency of our clients and the convenience of customers. The services we provide are in 2 main categories. As you can see, the information gathering service enables a traditional procedure with each financial institution separately, but also allows multiple procedures with all the institutions at once by providing, for example, AIRPOST as a service. On the right, the information distribution and browsing service by providing multiple distributions of browsing services, the combined distribution tailored to customer needs and web viewing, this service enables efficient and effective communication of information. Please go to Page 36. Next, I'll explain the market environment in customer communication. As you can see, the market size is expected to grow to JPY 180 billion in FY '28. Currently in the market, increased smartphones ownership rate is seen and a corresponding increase in the need of digital notifications. In addition, postal fees are scheduled to increase in FY '24, and we see the resulting increased needs for digital notification as a business opportunity for us. Furthermore, with iPhone's compatibility with RCS this year, the RCS base is expected to expand quickly to 90 million users. Our targets and competition are shown in this page. Please go to Page 37. Next, I'll explain the competitive advantage. Firstly, as mentioned in Circle 1, we've a customer base for data printing service. Existing notification from 1,800 companies amount to 3.2 billion per year, and we've the brand power of the top share in Japan as well as our infrastructure to process large volume data through dedicated lines with our clients. And also, there is early entry in RCS market, as noted by Circle 3 and a leading edge through patent strategy, et cetera. Please go to Page 38. Next, I'll explain our strategy for scaling up. Our revenue model is based on an increase of the number of users due to an increase in the number of adapted companies as well as the synergistic increase in the number of transactions due to an increase in the number of services provided and an increase in profitability due to a lower cost ratio and higher profit margin as a number of transaction expense. As shown in the bar chart, the forecast for the number of transactions in our services indicate that the digital shift will accelerate and the number of digital notification is expected to exceed the number of paper notifications in FY '28. We pursued 2 strategies described for scaling. The first is to strengthen the sales force for DX services by reinforcing the sales structure through DX-specialized sales and our current companies with a particularly large customer base. Second, to increase the number of services offered, we aim to increase the number of times the services are used by linking them with other services that match the lifestyles and life events of the customers. We view customer communication as the area with the highest sales growth rate among all security business in Japan, and as an area that will contribute to higher profitability and profit margins. Please go to Page 39. Next, I'll like to explain AIRPOST use cases. Currently, we've started a joint study with the Regional Banks Association of Japan to realize the Life Infrastructure Platform concept, aiming to improve the convenience for consumers by providing a one-stop online services for various procedures such as address the changes associated with life events. We participated in the system vendor and AIRPOST was adopted as the engine. The service provided by TOPPAN Edge are listed at the bottom on this page, in addition to AIRPOST. Now we're expanding this initiative to the nationwide scope, we believe that we've finally taken the first step toward the de facto implementation. We'll continue to work with the Regional Banks Association to increase the number of companies that will adapt the system and also to expand its functions continuously. Please see Page 40. Finally, I'll introduce a case study from Mitsubishi UFJ NICOS Company Limited as a use case for EngagePlus. This is an example of how EngagePlus and web-based forms can be used to provide optimal information to customers in addition to traditional pay plan notifications. The cost reduction impact and effect is about 30% reductions in mailing cost, a reduction in workload for NICOS and the improvement for convenience for customers. TOPPAN Edge will continue to expand the sales of digital notification services from the customer communications starting point and contribute to Erhoeht-X expansion and the entire TOPPAN Group. Now Mr. Ikeda is going to explain the global security. He's the Managing Executive Officer.

Thank you very much for your patience. This will be the last part of our presentation. Now, I'd like to explain the Global Security business. This will be the first time that we explain the Global Security business. Please go to Page 42. We're currently expanding our business based on the security technology with a competitive advantage that we've cultivated since the analog era. We already have a large number of achievements, and we're now aiming for significant growth mainly in global services. Please see Page 43. We've 3 basic strategies. Government solutions with passports and digital IDs, smart card solutions with credit card and cash cards and IoT solutions with RFID and NFC. And currently, we're developing our business in 2 main areas: Government and smart cards. The number of countries is listed for 2023 results and the target number for '25. Today, we'll focus on government solutions, which are currently experiencing significant growth and focus among these solutions. Next is the market trend. By 2030, the world population is expected to reach 8.6 billion, up from current 7.9 billion. The population is expected to grow significantly, especially in Southeast Asia and Africa. Now let me go to global market size. IC cards, government systems and IoT will be the large market, growing from about JPY 6.2 trillion in '22 to JPY 11.8 trillion in 2030. Please go to Page 46. Business strategy. In order to provide advanced security solutions, it is essential to provide total services, from consultation to system development and authentication, as shown on the left. In 2018, we began to align our solutions and technologies, and through acquisitions, business partnerships, and the establishment of JVs, we're now ready to serve all areas of the market. Next is a target area. The green dots shown are TOPPAN Group's locations. Since becoming a holding company structure last year, we've been promoting cooperation and pursuing synergies among the group locations. Currently, we're focusing on an area called the Global South circled by the dotted line. The Global South is expected to become a huge market by 2050 when about 1/2 of the world's population is expected to be concentrated there. Next, target products. The Global South, especially in African countries, is rapidly digitizing with national IDs. Until now, it has been impossible to accurately grasp the population and provide adequate admin services. But now all countries are working on digitization based on national IDs, creating a great opportunity here for us. We believe that TOPPAN's technology and solutions can contribute to the development of African countries by providing services such as birth registration, ID cards, election systems, passport and visa issuance. From here, I'll explain specific examples. First, the case of Ethiopia A joint venture company was established to manufacture passports with 51% equity interest in the TOPPAN Group and 49% by Ethiopian government organizations. With capital of JPY 2 billion, the project is expected to be operational in 2026. Due to the nature of the business, the contracts are long-term based and expected to total several tens of billions of yen. Nextly, in Namibia, we developed and offer a system to digitize the corporate registration application process, and we offer the service. In the Ethiopian case, on the right, the passport joint venture led to a good relationship with the government and the production of textbooks for Ethiopian middle and high school students. We received a strong request from the government for local production as well as inquiries from other African countries as well. We believe that we're contributing to the spread of education in Africa countries, including the digitization of education in the future. In South Africa nextly, we sell national ID cards, biometric registrations and authentication kits. We've also established a joint venture with a local company to participate in local public tenders. On the right is example of passport and national ID card issuance system in Zimbabwe. Next is a case study of an election solution. African countries are facing major challenges in their election systems, and we've started to provide a full ecosystem from voter information registration kits to ballot counting to solve these problems. As noted on the right, we've already received many inquiries and have high expectations. Now starting from Page 53, we've track record of business activities. And also, Page 54 is also track record and results. As you can see, we've already accumulated many achievements, and we're aiming for sales of JPY 50 billion and operating profit in double digits within 5 years. This concludes the explanation of Information & Communication segment. [Statements in English on this transcript were spoken by an interpreter present on the live call.]