UACJ Corporation (5741) Earnings Call Transcript & Summary

I would like to begin with an explanation of the fourth medium-term management plan. The title of the fourth medium-term management plan is Value, Connect and Lightens the World. I will explain about this title later. First, on UACJ group philosophy. This was redefined in February of 2020, contribute to society by using raw materials to manufacture products that enhance prosperity and sustainability. This purpose expresses our determination to contribute to the realization of a sustainable and culturally rich society by leveraging our technologies for extracting the functions and characteristics of materials or skill and means as the source of our competitiveness. In terms of our values, we have established the UACJ Way as a set of guiding principles for moving toward our stated philosophy. And we provide opportunities for employees from various backgrounds to actively and continuously engage in conversation through philosophy dialogue meetings and other means. In April, we also started an activity titled [ Tsunagu ] Dialogue Meeting to communicate the advantages of aluminum from employees to the outside world with an eye to expanding aluminum recycling. I feel that we are definitely starting to move in the direction of thinking about what value each of us can provide to the society and put it into practice. And here, is a review of the UACJ group's sustainability and materiality in the midst of major environmental changes. A future where the earth can continue to be beautiful and bountiful is the direction for environmental sustainability. A healthy and harmonious society where everyone can feel happiness is for well-being. The direction that the UACJ Group should aim for, that is the guideline for moving towards what the UACJ considers to be Lightens the World, is oriented towards north and south, top and bottom of this compass. Here, I would like to explain the thoughts behind the fourth midterm management plan: Value, Connect and Lightens the World. First, on value. This shows our determination to transform ourselves from a mere materials manufacturer to a material plus alpha corporate group that adds value and generate profit. We aim to increase revenue by tackling various social and technological issues head on with originality and ingenuity and then give back to the society. There are 3 thoughts behind Connect: to connect customers and business partners with UACJ in a circular loop; to connect the value creation of new business and business models, together with various stakeholders; and by connecting people to people and people within the group and expanding cooperation to become a corporate group where each and every employee can feel fulfillment and happiness. And lastly, Lightens the World. Reducing environmental impact on a global scale through the group's unmatched skills and techniques, this is the reflection of the corporate philosophy of wanting to contribute. With these thoughts, we have developed the fourth midterm management plan, Value, Connect and Lightens the World. We will also value the connection with our shareholders and investors and develop activities that are unique to UACJ group. In formulating our fourth midterm management plan, we first considered how we can contribute to changes in the world and the social issues that emerge from these changes. This slide shows the major trends in the world, a changing world. In addition to measures against the climate change in recent years, new trends have emerged, such as tighter sustainability laws and regulations and resource depletion. These changes have resulted in a significant shift in environmental awareness, especially among people and companies. All over the world, companies and individuals alike are becoming more and more aware of the need to reduce environmental impact. Once again, let us look at the market environment surrounding our company. On the left, we have described the market environment. Aluminum, which is our product, is used in a wide range of fields and domains, many of which are expected to expand further in the future. Furthermore, we believe that the growing environmental awareness, I mentioned earlier, will also contribute to a significant increase in global demand. To summarize our business opportunities, they are: expansion of can stock, automotive-related and other existing product areas; expansion of a circular economy in aluminum, conscious of shifting away from plastic; promoting supply of value-added materials and products through increase of adoption of advanced materials in aircraft and others. With these backgrounds in the fourth medium-term management plan, our company aims to transform from a provider of materials to a value-adding materials company. To this end, we have identified 3 key policies. The first point is strategies for growth and added value, to maximize revenue and improve profit margin through value creation and expansion. Specifically, we will strategically address the 4 areas shown here, starting with the promotion of recycling. The second point is operational resilience. It is to strengthen the muscular and flexible organization. Based on speedy management developed through structural reforms and ROIC conscious management from the third medium-term management plan, we will flexibly respond to changes in the business environment and improve asset efficiency. The third point is strengthening the business foundation. In order for us to continue to create added value and maintain stable business operations, we need a solid business foundation to support. To this end, we will make further efforts to enhance the value of our intangible assets, including our human capital and brand. Today, I will mainly focus on the first point, strategies for growth and added value. Under the first major policy, strategies for growth and added value, we defined 4 priority areas as value-added material strategies. First, promotion of recycling. Representing the beverage cans industry, we have been working to become the heart of the aluminum circular economy. On the other hand, aluminum is used in so many applications other than beverage cans. In this medium-term plan, we will further strengthen our efforts to recycle beverage cans and expand the scope of recycling to other products besides beverage cans. We will build a circular economy for aluminum and, at the same time, expand the use of aluminum as an environmental material. In the second area, expand materials plus processing business. We're considering the automotive field, which we have been working on, as well as the air conditioning and heat management fields. From the viewpoint of environmental impact reduction, there are still many opportunities for aluminum as a means to reduce GHG emissions over the entire product life cycle. To ensure that we capture this target, we will expand our business by combining our materials and processing. Third is contribute to supply chain stability in advanced fields. We will focus on high performance, high value-added products that require a stable supply in Japan. We are targeting batteries, semiconductor manufacturing equipment and aerospace and defense applications. As the largest aluminum manufacturer in Japan, we will actively participate in Japan-wide efforts to provide high value-added products and services. The fourth is the expansion of new business areas. We will further strengthen and expand our businesses in the 3 areas selected under Vision 2030, mobility, lifestyle/healthcare and environment and energy. Here, I would like to talk more about the recycling. For number 2 and number 3, I will cover the last part as the creation of added value. This slide here shows how UACJ group can contribute to solving the social society's challenges through recycling. The social issues that we can contribute through aluminum recycling would be, for one thing, in Japan, for -- and Asia regions. By promoting the resource recycling of aluminum, we can contribute to strengthening the resilience of the supply chain in the region. By recycling, we can -- this will lead to the product -- reduction of CO2 emissions throughout the product recycled -- life cycle and reduce the usage of virgin metal. This will curb the mining of bauxite, and therefore, this will lead to nature positive. In this way, through the collaboration with the entire supply chain and by reducing the environment impact through the aluminum resources, materials, we aim to achieve a transformation of the business model involving the entire supply chain. Then I would like to talk about the business model transformation in recycling. This shows the aluminum recycling loop, which is compared to a human body. In the middle, there's the heart and the blood that's pumped out from the heart.will go through the artery in the body and then comes back to the vein. The left-hand side just shows the conventional state, and the right-hand side, the -- shows the future of our aspiration. There's 2 major differences between the 2 charts on the left and the right. The first is the size of the artery and the vein in the recycle loop are significantly different. The left-hand side shows that there are so many virgin metal in the recycle loop. And the PIR, PCR, which are the scraps generated from the production of products and the scrap derived from used products, those recycled materials coming back from the vein is quite thick -- quite thin. And also, the used materials, used products will not be recycled and used for other applications, and therefore, they are, in many cases, off the recycling loop. On the right-hand side, the state for the future. By maximizing the use of PIR and PCR, we would like to make the artery and the vein thicker. And by minimizing the scrap that gets off of the recycling loop, we can curb the proportion of virgin metal. The second one is the size of the recycling group. In the future state that we envisage to be, you can see that the recycling group is visibly larger. In order to realize this kind of transformation, we would like to improve the recycling rate and expand the usage of aluminum. Here, I would like to explain the typical application, a case of recycling promotion activity for aluminum. In the recycling loop in the previous chart, as I said, in Japan, as you can see on the left-hand side of the loop, using this recycling loop in the left-hand side as a measure for recollection, not only the can manufacturers, but we are seeking a collaboration of other companies in other industries and started the building of the new collection group. And also in light of the UBC usage expansion in the future, we have established a joint venture with Yamaichi Metal. And we are in the progress of introducing the UBC processing facility within the Fukui Work. And on the right-hand side of the loop, of course, we would like to develop easy to recycle materials. And we also started to offer brand products called UACJ SMART balance, which are certified of its GHG emissions by customers that fall under Scope 3 by a third party. By presenting the environmental value of reduced GHG in the form of a third-party certification, we aim to communicate the value in an easy-to-understand manner to customers with the aim of creating opportunities for use. Also, in markets like Thailand and North America, where the collection rate is considered to be lower compared to Japan, in these markets, we would like to involve the government and associations in order to promote activities to improve the collection rate of aluminum cans. In this way, to the business rollout in the upstream and downstream and also by expanding the recycling group, we would like to become a company that can be selected by consumers. In the recycling promotion that I have explained, out of the total growth investments that is planned under the fourth medium-term management plan, we will allocate 1/4 of the budget, i.e., 2024 the recycling activities. And in the fourth year of the -- in the final year of the fourth medium-term plan. In 2027, we expect to increase the business profit by JPY 8.5 billion in relation to recycling. And let's skip this slide. And besides that, key policy number 3, in order to reinforce our foundation, we have decided to reinforce our branding, and these are the initiatives here. Of course, it is very important for us to expand the usage and application of aluminum. By raising the recognition of aluminum and gaining the understanding of the end consumers, we believe the expansion of application can be promoted. To this end, we have decided to launch this ALmitas+ brand. ALmitas+ represents and carries the meaning of adding, tasu in Japanese, which is adding fun and excitement and also fulfilling, mitasu in Japanese, to enrich the sense of satisfaction. We have already launched ALmitas+ SMART and ALmitas+ mass balance brands, and we will continue to increase the brands going forward. As a result of rolling out these initiatives, we aim to achieve these financial targets that's shown here as part of the fourth medium-term management plan. In 2027, in the final year of the fourth medium-term management plan, we aim to achieve JPY 1.050 trillion of net sales and JPY 60 billion business profit and JPY 100 billion in adjusted EBITDA. Based on the foundation that was strengthened under the third medium-term plan, under the fourth medium-term plan, we would like to further boost the profit level. The details will be explained by Mr. Kawashima under his presentation for the financial strategy. As for the shareholder return policy under the fourth medium-term management plan, we will aim to achieve a payout ratio of over 30% of the net profit and continue stable dividend payments. This will also be covered in the next part in more detail. Now by steadily implementing the key policies under the fourth medium-term management plan, we would like to increase the EBITDA to JPY 100 billion from 70.9 billion -- JPY 79.8 billion under the third medium-term plan so that we can lead to further growth of the company. Last but not least, this shows the value creation processes for UACJ to continue to grow after 2030. We will basically aim to solve the challenges of society. And also in order to deliver value to society, we will leverage 6 different capitals and create value and deliver value to the customers and thereby deliver results for the company through this cycle by challenging the social issues and leveraging our capital of the company and driving growth. We hope to achieve this. By continuously delivering social value, we would like to show you a picture that we will continue to grow as a company. That is how we would like to implement the Value, Connect and Lightening the World under the fourth medium-term management. So please stay tuned. That's all for my presentation. Thank you very much for your attention.

[ UACJ ] Financial Strategy. This is Kawashima. Thank you very much for attending the IR Day that explains our midterm plan in your busy schedule. I will talk about numbers and enterprise value. As the President mentioned, to earn (sic) [ Value ] and Connect and Lightens the World, that is what we aim to achieve. And I would like to explain from financial perspective, Page 1. In the third midterm management plan, what has been achieved. This is completed. So I would like to review the third midterm plan and the fourth midterm plan. They are completely different. In the third midterm plan period, we were engaged in structural reform and also right before launching the works and plants in Thailand. So our third and midterm management plan was focused on the structural reform and also achieved the results. Those were the targets. As a result, in September end of 2019, we announced the structural reform, and that was completed in 2.5 years. And the launch of Thai factory was implemented. And also during the time, various things happened, such as energy prices surged as pricing -- price setting structure needed to be restructured. And during this 3-year period, the business foundation was strengthened to a completely new level, to develop into a robust structure so that our company was able to get to the starting line. So the business profit right before the start of the third midterm plan was just JPY 14.6 billion, and there was a JPY 45 billion EBITDA. But at the final year of this period, business profit was JPY 43.4 billion, and EBITDA was JPY 79.8 billion. This was achieved thanks to the changes in the business foundation and also the market. For financial strength, we were able to achieve onetime debt-to-equity ratio. The capital accumulation was realized. So going forward, to make profit is now possible. So that is the stage we are in. Given this situation, the fourth midterm management plan, what is the point of this plan? The definition of how we make profit is -- shall be defined. How much profit are we going to generate? We will be conscious of the capital cost and how are we going to generate the results, and that is our message. Next page, as the President mentioned, I'm not going to repeat the numbers. But the fourth and mid-term plans numbers, these are not targets but achievable numbers. And how fast we can achieve them? And what can we do to realize that? And on the following page, this is about the financial strategy, a summary of the fourth midterm plan. The business profit is JPY 60 billion, and final profit is JPY 30 billion. And this time, net profit, JPY 30 billion, and our capital costs, how are we going to handle this? And as I have said during this 3- to 4-year period, ROIC was placed at the core of management. So how can we achieve through these indicators? So what does it mean to generate profit? That is to be clarified both internally and externally. So our capital cost is 9%. We would like to reduce it to 7% as soon as possible. How to reduce this beta value to market? We are going to do our presentations, and we need to gain trust. And when we look at cash allocation, the operating cash flow is JPY 220 billion. And in terms of EBITDA, it is slightly below JPY 400 billion. There's tax and operating cost that gives us to JPY 220 billion, out of which we will invest JPY 160 billion. Half of them will be growth investment by increasing growth investment, by spending JPY 70 billion to JPY 80 billion on growth. The current JPY 43 billion of business profit or EBITDA of JPY 80 billion is to be grown to JPY 100 billion. This is investment. So fourth MTP and fifth MTP will cover this growth, and partially, it will be under fifth MTP. So our starting line target is not the JPY 100 billion. How are we going to allocate our cash? In the third MTP, we made huge investment before that. So to -- how are we to leverage our investment. We suppressed the investment in the third MTP because the investments were already made upfront. But this time, we are in a phase of growth investment. We are targeting profit growth. And according to think tanks, the material of aluminum, the consumption in 2023 is 32 million ton. Towards 2030, it will grow to 38 million tons. There will be an increase of 6 million tons. Partially, they will be cans, and we have to leverage on our capabilities. This year's base, right now, our sales of the flat rolled was 1.2 million. We have more capabilities, and we have capacity in U.S. from representatives of the U.S. We are to talk about how strong we are in the U.S. And how much spending we will make on recycling? And going to Page 4, here, we show the allocation of the investment fields. And through this, we intend to strengthen value. Next one, this is about the portfolio. In this way, we would like to develop our portfolio. Just one thing, TAA only. This will go from the right to left, because the year ended, they achieved a very favorable performance. So this growth rate -- high growth rates will continue. So we're not foreseeing a bad future. So -- however, because of the market environment, market in itself will expand. However, there will be some differences in how the profit will be generated. So that's the reason why it will move towards the left-hand side. But for us, we would like to achieve a growth higher than the WACC level of growth. So that is what we mean by value of. Now this was also mentioned by the President, JPY 46 billion increasing to JPY 60 billion, so recycling and also the advanced materials and materials. So with all these efforts, we'd like to achieve a profit of JPY 60 billion. Of course, cost, we will have to take into consideration human resource costs and inflation and so the raw material and energy cost increases. But of course, we would like to mitigate that through cost reduction and achieve JPY 60 billion. In order to achieve JPY 32.9 billion of increase, investment will be very important. So that's the reason why we have decided to go for that allocation that I mentioned earlier. And the next page. So PBR 1x, so higher. Where are we going to make money? The areas where to generate value would be the PBR. PBR is 0.8 right now. I think we can further improve the value. I think because this is a company that can generate EBITDA of JPY 100 billion, so therefore, the nominator and denominator will have to be something we have to work on. We have to be aware of the ROE. And of course, we have to reinforce our disclosure so that we can gain the understanding of investors. And then after making profits, what to do about this earnings that we have made? We would like to return them to the hands of shareholders, as you can see on Page 8. As Mr. Tanaka mentioned, we would like to achieve at least dividend payout ratio of 30%. That will be the minimal level. And so the profit generated for the term will have to be plowed back to the hands of shareholders so that they can enjoy them. That is what we like to achieve. And at the same time, if you go to the next page, this is the TSR, total shareholder return. We would like to raise the share price of the company. Through the last 12 months, we have been able to successfully raise the share price 222% over the last 5-year period, but we would like to further increase and improving the cash flow and, of course, increasing the stock value of the company. So this is the target from the financial perspective. That's all for myself. Thank you very much for your attention.

I'm Hashimoto. I will talk about the midterm management plan of the Flat Rolled Products Business. The title is to become the world's #1 comprehensive aluminum sheet business. I will cover this later. First, I will talk about the overall Flat Rolled Products Business, and I'll start from the third and midterm management plan review. There are 3 major policies, these 2 circles show the successes. Executions were led to certain results. First is the completion of structural reforms. Phase III facilities capital investment in UATH and also Fukaya plant, downstream process discontinuation, those were successfully covered, and new cold rolling mill at TAA, continuous finishing line for auto panel materials at Fukui Works, each was launched and achieved profitable operation. Major policy 2, strengthen foundations for growth, including large facility launch, leverage 3 country supply network of Japan, Thailand and the U.S., captured global demand for can stock of 610,000. As for major policy number 3, promote global sustainability. In Japan, we are promoting business alliance with Toyo Seikan and cooperation with Yamaichi Metal in Thailand through tie-ups with local companies and the government. We are promoting horizontal recycling of can materials. In this midterm plan period, we believe the results will bear fruit. And last year and the year before was when these were started. In addition, the Fukui Works and Rayong Works,becoming the first Japanese aluminum rolling mills to obtain ASI certification. For the third midterm management plan, these projects were completed in line with the plan. Next is our aim to becoming the world's #1 comprehensive aluminum sheet business. #1 refers to -- not to volume or the amount of valuation, but how much value we can expand and create. That is the meaning of being #1. In order to do so, we need to cover a broad demand, and the customer supply chain needs to be covered. There are 2 major viewpoints of being comprehensive as shown here. First is the vertical axis, the product line and territory. We have comprehensive product line and also a variety of customer base and applications, and we can deploy broadly in the global markets. We have 3 countries, japan, Thailand and the U.S., where we have production capacity. And also, we have supply bases in China and Europe to establish global supply system. Second point is comprehensive ability to create synergies with other businesses. As the UACJ group, we have the ability to create new solutions and synergies in the market through collaboration with businesses outside the Flat Rolled Product Business, on our human resources, technology and assets. We aim to become #1 through these measures. This is the image. The foot of the mountain shows our customer base, production technology and manufacturing quality, the UACJ Way and others. On top of that, as I have explained, there are 2 comprehensive strengths. The core is research and product development capability. And by promoting reduction of environmental impact through our -- we are committed to being the world's #1 comprehensive aluminum sheet business capable of creating solutions and added value for social issues in cooperation with our customers. And we need to expand and strengthen the top part of the summit. In order to achieve this, there are 3 basic policies that we consider important. First is shift from quantity to quality, enhanced profitability, asset efficiency and to optimize the sales portfolio. We also need to expand sales areas and strengthen new development. In addition, we will improve quality to ensure that production can be -- can respond flexibly to higher or lower demand in key segments. Second is shift from goods to services. As shown here, we are to provide environmental solutions as, such as EcoEnd. I will cover this later. At supply chain level, we will reduce CO2 emissions, promote horizontal recycling, and we will promote ALmitas+ SMART mass balance. The 3 -- third is evolution of 3-country supply system. We will strengthen our ability respond to customers and changes in demand through 3-country supply network between Japan, Thailand and the U.S. and by expanding the compatibility of production items at our domestic and UATH-Rayong plants. We plan to sell more than 1.42 million tons in fiscal 2027, up from 1.19 million tons in fiscal 2023, at our 3 manufacturing facilities in Japan as well as in Thailand and U.S. And total -- this number is total of our 5 major plants, and we aim to achieve business profit of more than JPY 56.6 billion in fiscal year '27 from JPY 46.3 billion in fiscal year '23 for the 3 countries. This is the demand outlook on global basis. Along with the reduction of environmental impact, IoT and the spread of generative AI, global demand for aluminum sheet is expected to increase year-by-year. The right-hand side shows that in a table format. First, horizontal can-to-can recycling of can materials is progressing, taking advantage of aluminum's recyclability, the replacement of beverage containers with this -- with aluminum is expected to continue around the world, particularly in Europe and the U.S. On the left-hand side, you see the sales volume of the 3 polars. Because in 2021, there was the significant increase in the -- during the COVID era, and -- but thereafter, we have seen adjustment of inventory. But then we believe this demand decline has already bottomed up. So we expect to see a gradual recovery of demand from this fiscal year onwards. In 2027, the last year of the fourth medium-term management plan, we aim for 1.42 million tons or higher. As a result of that, for the total of the Flat Rolled Products Business, we expect to achieve more than JPY 60 billion of business profit from our division. Of course, as Mr. Kawashima mentioned earlier, in 2023 and 2022, we see a volume decline. However, for 2023, we have conducted a price revision, and the business profit achieved a significant improvement as a result of also structural reform and the growth strategy implementation. All these are delivered results and has resulted in a significant improvement of business profit in fiscal 2023. And on the extension of that, we would love to achieve further increase throughout this medium-term period. The next page shows the UATH and also domestic works' strength. The numbers here are the track record of 2023, the sales volume for each works in 2023. Fukui has been producing mainly the can stocks as well as auto materials and leveraging their significant competitiveness, leveraging our volume. They are timely, delivering high-quality products. Nagoya Works is engaged in a wide variety of production, and they are the starting point of value creation at UACJ. Fukaya is specializing thick plates, and they are delivering high-precision thick plates to both Japan and overseas for aerospace and defense materials. UATH mainly is working on can stocks and including auto as well as air conditioner. They are the center of global supply and raising their presence. TAA is producing approximately 500,000 tons per annum in North America, mainly for can stock, and they are a key supplier for the can stock in North America, as you may be aware of. From here, I'd like to talk about the Flat Rolled Products Business in Japan. The sales volume in Japan, as I mentioned, in 2023, there was a decline up to 2023. But from here onwards, towards 2027, we expect to see an increase. So 620,000 is the target for fiscal 2027. As you can see on the right-hand side, in each segment, based on this policy, we would like to move ahead based on these policies. And the -- especially, we will see there will be a significant growth for the battery foil as well as the semiconductor manufacturing equipment-related demand. Especially thick plates, we expect to see a significant growth. Also automotive panels as well as AC fins are expected to see a volume growth according to our projection. From next year, I would like to specifically talk about each field, just briefly. As far as can stock is concerned, of course, the domestic market is expected to see a decline in demand because of the decline in population. But because of the recyclability, the can ratio will likely improve. And demand is growing in the Western markets, such as Europe and the Americas, we are going to supply -- increase their supply, and therefore, by doing so, we would like to maintain the volume or further expand the volume. Automotive, we expect to see a continuous increase in Japan, too, because there will be new applications associated with electrification. And by expanding a closed-loop cycle, we expect to see a gradual increase towards 2027. Next, for the battery market. As you can see from the chart here, in association with the electrification of the automotives, battery market is expected to grow significantly. Especially in Japan and Europe, we will consider them as a target market because the -- there's a strong demand for high value-added materials. We would like to focus on battery foil and also focus on the profitability, and these battery manufacturers are going global. So we would like to respond to the global needs and capture the demand and, thereby, expand the volume. As for thick plates, thick plates, as you can see from this chart here, the demand for semiconductor manufacturing equipment has seen a bottom in 2023. So we expect to see a recovery from 2025 onwards. A significant increase in demand is expected. For air conditioner fins, the air conditioner and heat pump demand is likely to increase, so we expect to see a constant growth. We would like to work together between Japan and Thailand so that we can achieve a optimal supply structure for the global markets and establish aluminum recycling scheme together with the air conditioner manufacturers. And finally, I would like to talk about the initiatives for environmental impact reduction. These are the 2 themes that we are working on globally. The first one is ALmitas+ SMART mass balance adoption and, thereby, reducing environmental impact. This is the guaranteed environmental performance material, and by using this, we would like to support the customer needs for environmental impact reduction. This product is already adopted by some of the customers. And we are receiving some inquiries from other demands, and we are in negotiations with them. The other one is the horizontal recycling promotion, especially for the horizontal recycling of aluminum cans. We are working together with Toyo Seikan and developed what is called EcoEnd. So for the lid of the cans, we are expanding its utilization, and we will aim to reduce greenhouse gas emissions by 40%. We plan to launch this product this fiscal year, within this fiscal year. Also, we have established a joint venture company with Yamaichi Metal for the used beverage can materials. And from 2 years from now, we will start the operation of this joint venture. And in UATH, with the new furnace, we would like to promote the regional recycling in the ASEAN region. For horizontal recycling, not only can stocks, but we are also implementing various measures in various areas as PIR and PCR collection in automotive sector, as well as for home appliances, so that we can further improve the collection rate, the recycling rate. That's all for myself. But with the aluminum demand increasing in many areas, we would like to enhance our capability to resolve social and environmental issues and our global response capability so that we can make contribution to society and maximize our earnings.

Thank you, Mr. Hashimoto.

Thank you, and [Foreign Language]. I hope I just said good morning. So as I laid in bed this morning with a little bit of jet lag, I was reflecting kind of bigger picture on why today really matters and why am I so passionate about this company and about this industry? And really, what I'd like to impress on everybody, I mean, what was going through my head is that we are living through -- we truly are living through a transformational era right now, and I'll dial in just a little bit about it. But I think it's worth context setting when we listen to the value proposition of UACJ group in total, and then I'll talk about Tri-Arrows. But when we think about transformation, societal transformation, aluminum truly is central to that. It's integral to the success of what we're trying to do. So let's talk some specifically about what that means. Consumers, now more than ever, are showing a preference to get away from single-use plastics. And there's a lot of press that's happening around plastics, in some of the environmental impacts as well as biological and human impacts of plastic. Aluminum is central to that. Electrification. It's happening. Rates of growth, timing can be debated, but electrification is happening. There is record-setting infrastructure that's being put in place globally around the world, certainly in North America, and that's everything from automotive and vehicles. It is wire and cable for transformation grids, charging stations. So electrification is happening. It's a macro trend that's going to continue to happen, at least for the next decade. Decarbonization. Recycled aluminum is 95% less greenhouse gas intensive than primary aluminum. Decarbonization is a global issue that we're all -- every one of us in each one of our businesses in each segment of our industry, we're trying to find solutions for. And again, aluminum is critical to this. We've got strong trade enforcement right now. The North -- in North America, specifically, there's a heavy belief in rules-based trade and commerce. And that is a macro trend that's going to -- it has bipartisan support in the United States, and it's favorable not only to Tri-Arrows Aluminum, it's favorable to the UACJ group in the way we work very closely, both with our domestic industry in Japan as well as with Thailand. I'd like to emphasize to everybody in this room the diversity of products that UACJ produces, from sheet extrusions, but every segment of our industry and of our society. And lastly, ingenuity and talent. I never expected to be here when I was a child, on a stage like this in front of people like you and executives like this. But I can tell you how inspiring it is when I think about the ingenuity and talent of the engineers and the leaders in this organization, and the leaders that are not just here today, but the leaders we're building. So when you see the success that are -- that I'm happy to brag about and talk to you guys about, but when you see that success, you also have to know there's a generation and 2 generations that are coming behind us. They're going to do, hopefully, better than anything I've been able to accomplish. So I've got a tremendous amount of belief and confidence in the future. I'm passionate about our industry and passionate about the UACJ group. None of that was in my presentation, but I really felt it was important to share with you. So with that, let's go on. Try -- there we go. Next slide, please. So Tri-Arrows Aluminum, we're headquartered in Louisville, Kentucky, Central Midwest of United States. We are -- we've got 1,500 people in our manufacturing environment. We've got 70 in our corporate headquarters, which is in Louisville. Most important thing to know about Tri-Arrows Aluminum and Logan Aluminum is that we are a global low-cost producer, and we have gotten there through world-class productivity. We sell over 490 kt on -- annually into the North American market. Our business is focused on can sheet. We are preferred supplier. We sell -- I'll talk about this in a moment, but we sell to every can maker and every brand in the market. And we have -- and Logan itself is a joint venture. And then that joint venture is a production joint venture, but it's focused on safety. It's focused on quality. It's focused on efficiency and sustainability, and really, it's built around long-term partnerships. We look to work with people that are going to be there for the long term. Next slide. So quickly, our mission is to create value, value and opportunities for growth, those -- through picking our partners, as I mentioned, and those that are really forward-thinking and those that are dependable. Our strategy -- and I want to focus a bit on this today. You'll hear it. Our strategy, of course, is going to be to be a supplier of choice into the can sheet market, preferential in the eyes of our customers. But internally, when I look at the work we're doing in our company, it's about making sure that we're expanding our infrastructure and our organizational competencies so that we have, what I'll call, readiness for growth. I use the word ikigai here. It's a term that we use around our corporate philosophy at Tri-Arrows. I may have the meaning slightly wrong, but -- and on the U.S. side, it means, for us, reason to be, when we come to work, kind of like I'm speaking to you today. This is our passion. This is what we do. And we built all the principles around that, and those principles are how our teams work together as we solve the best solutions for our customers and to the best economic solution for our parent company. Next slide. Okay. So big picture. North America can sheet market is coming out of a period of destocking. 2023 was a period in which there were kind of inventory adjustments that were happening, and what we're seeing now is demand has actually improved. In fact, we're seeing new orders in the first quarter that are the strongest we've seen since 2022, so very, very healthy outlook on the market. I think we're kind of back to kind of a normal cycle, and what we're looking forward to is seeing growth this year. In fact, first quarter of the calendar year, so part of our FY '23 results, but the first quarter of our calendar year, we're actually seeing shipments in the industry for can sheet that are above expectations. We've got strong trade protections from a market perspective against nonmarket-based economies. We've got -- the broader inflation fears that maybe a year ago we've been talking to you about, those are subsided. That's good for growth and investment. Macro trends with consumers and consumer preferences are fully intact. You can't pick up the newspaper in North America without reading something that speaks to the advantages of aluminum directly or indirectly. And lastly, there's an industry-wide focus on improving scrap availability because of awareness of the importance of recycling. So now I'll dial back -- that's the market. Let's talk a little bit about Tri-Arrows Aluminum. So we're focused highly right now on asset optimization, broader organizational goals of readiness, like I said before, being poised to take advantage of market opportunities. It's one of the things I'm most proud of, of our business is that we're agile. When we see opportunity, we move very quickly, very swiftly to take advantage of it. Our business has a cost advantage position. That needs to be fully understood by everybody in this room and our owners. And everything we're doing is to defend that cost position, and it gives us quite an advantage in the marketplace. Our production is sold out with a broad customer portfolio. Again, it's intentionally constructed because we're looking for folks that want to do business with us and work the way we work over time. And lastly, we have a leading sustainability position. I'll talk about this in a moment, but we're advantaged relative to our competitors and peers in the market. That's an important value prop. It's a value proposition that our customers today more and more are leaning in towards. Next slide. All right. So some key accomplishments, I'll try and work through these quickly as my time goes down. We're really creating an evermore durable company that's prepared and -- to compete and to provide value over the next decade. We're developing a true culture of connectivity. And the point I want to make here is -- and when our department, when we make a decision, it is linked through every department in our business in advance to understand what that means to us economically from a short-term perspective and a long-term perspective. It's a culture. The next thing is going to be around we've got tremendous efforts to invest from an information infrastructure, information platform, data, data analytics, data lakes. These are the things that we're doing so that we can have -- drive the best business outcomes and also, again, focusing on rapid decision-making. We've got integrated work systems across our functional areas, just to streamline work. We've got continued debt reduction that is -- well, continued debt reduction as well. We've got ample liquidity that we're watching relative to meeting our working capital needs, strengthened governance framework. We're demonstrating exceptional cost controls, managing to less than inflation. We're executing sales agreements now through 2028 and, again, with the preferred supplier status as we do that. We've managed our capital investments. We've got several that I'll reference here today. But important for everybody here, those are on time and on budget. And lastly, we're realizing gains not just by spending money on capital investment, but also through continuous improvement activities, where we're really focused on asset optimization and continuous improvement. Next slide. All right. So here's what we've got. I'm really proud. We've had 6 years now, 7, there's a year before this, of continued consecutive year-over-year growth. And I'll call out, as you can see there, '22 and 2023 were exceptional years. So I'd kind of like to talk to about it with folks because there are kind of 2 tiers there. There's the base tier around just total asset optimization, putting in a strong manufacturing cost environment, looking at efficiencies, looking at optimizing material mix, things like reducing prime, reducing high-cost hardeners like magnesium and just maintaining full production. On top of that, we've been real fortunate. Over the last couple of years, as you saw, there was some inflation that was moving through the economy. And in a world of inflation, we actually got a tailwind on that, partially because of the cost controls and our ability to manage through it. And as well, what we have seen the last several years has been a historically advantaged scrap market. And so where scrap market changes on a year-over-year basis, the last 2 years, we've been able to capitalize that and it's driven significant earnings. But even without that, take a look at the trend. It's a solid year-over-year growth trend for the last 6 years. Next slide, midterm plan. Its focus for us right now is going to be delivering on steady returns and positioning our business to take advantage of future opportunities. Our priorities are the framework by which this business is going to be ready to adapt, to respond and, most importantly, to win in ever-changing marketplace. So in the second midterm plan, we saw a lot of capacity investments. There was over $425 million invested in our business from our parent company. Thank you very much. Third midterm plan, we saw a lot of tailwinds that hit our business. I just mentioned some of them, from a pricing perspective, from a -- both on input cost and input mix. Fourth midterm plan, we're going to continue on that growth trend, and we're also going to be really focused on delivering steady cash returns to the parent. Next slide. So can sheet, long-term demand. Real important, everybody here to understand that the market is healthy. In fact, it's as healthy as it's ever been. The destocking is over. We're seeing strong growth in 2023. We're seeing a strong growth that's driven by sustainability, preference on packaging. But long-term growth prospect is about 3%. That's where we see growth happening. That's where our customers and suppliers both kind of see the market growing. It's important to understand there's going to be some variance year-over-year. That's why I put some graphs showing what did '22 -- '20 to '21 and '21 to 2022 look like. So there's some timing gaps there. But overall, that period is 3% as well. So that's the growth rate, and it's wonderful to be in a market that is growing. Next slide. So our manufacturing strength. We're going to be focusing from a manufacturing perspective, over the midterm plan, on maintaining that low-cost position through couple of different ways. We're going to debottleneck our operations, number one. And number two, we're going to focus on continuous improvement. Our hot mill production is fully loaded over the fourth midterm end. So we're going to be selling out all our production. We've also invested some growth capital over the midterm plan, and I can talk about that as we look at 2 particular areas. One, increasing coil capacity. So we're going to have a 13% production gain by 2026 in our coil capacity. We're also putting in place new technologies. These technologies improve the reliability and the capability of our equipment. We're increasing recycling capacity, significant increase in scrap processing capacity. The production gains that we're going to get from that are going to support the ingot production, and the ingot production is going to fulfill the needs of our coil demand. So we'll -- as well, we'll have improved reliability as well as utilization. And then continuous improvement. As we increase capacity across the hot mill and increase capacity in terms of ingot production, we're also needing to look through our entire process, so things like finishing, cold mill, coating, slitting operations, so making sure we have optimization for the full system. Next slide, please. Sustainability and environmentally focused. We have got a strong focus on sustainability over our midterm plan. Our Scope 1 and Scope 2 emissions are industry-leading. We're going to be -- we are investigating and supporting new technologies, things like hydrogen and electric fork trucks, oxy burner fuel that's more efficient and as well as looking at heat -- studying some heat recapturing use inside the plant. We've got partnerships in place for dross processing that are actually decreasing our footprint by colocating next to the facility, and it's going to allow us to cost effectively be using different scrap types. And then, of course, we're looking to aggressively improve and increase amount of recycled content in our package. Right now, it's a little over 76%. Next slide. Sustainability, North America scrap focus. This is one of the challenges that we're facing. But the point here is that we are working in multiple ways to go ahead and drive and improve the recycle rate in North America. North America has about a 45% recycle rate today. We're throwing away close to $1 billion of metal every year. And across the industry now and across the supply chain, there's focus on how we can make sure that -- those valuable inputs are taken and use and put back to work in industrial manufacturing. Again, recycled metal is 95% less carbon intensive than use in making primary. So some of the things we're doing is working with -- on a federal level, on a state level with legislation, and we're doing that in partnership with various associations. We're supporting new scrap sorting technologies. We're cultivating a coalition of partners, all the way from brands down to scrap traders, and we're developing financial and operational models for recycling that we can implement in different markets. Next slide. So summary and outlook. Look, guys, we're relentlessly focused on building an evermore durable company that is going to identify and realize long-term value creation. And that's what our goal is, long-term value creation. The North American can sheet markets destocked in inventory. Demand has returned. We are a growing market. We are a growing company. TAA is going to maintain our focus on production, cost management and recycling. Our investments have positioned us to withstand the current and future market challenges. We remain a preferred supplier, supplying coil again to every can maker and to every brand in North America. And we are prepared and we are positioned to compete and to win in this wonderful market. Thank you.

The -- or the entitled becoming part of the world's #1 comprehensive aluminum sheet business. He will talk about the UATH fourth medium-term management. We would like to invite Managing Executive Officer of UACJ Corporation, President and CEO of UACJ Thailand Company, Tetsuya Yamada. Okay, let me speak in Japanese. To become part of the world's #1 comprehensive aluminum sheet business, I would now like to share with you UATH Thailand's fourth medium-term management plan. In April this year, I was appointed as the Head and President, CEO of UACJ Thailand. My name is Tetsuya Yamada. Please bear with me. Just briefly, I would like to explain the overview of UACJ Thailand. As you can see from this slide, we have 1,310 employees altogether. We are providing aluminum sheets to many places around the globe. And the strength of the company, there are 3 major points. Leveraging all these strengths in the fourth medium-term management plan, we will like to achieve a production scale of 340,000 tons. 340,000 tons per annum. So let me just briefly look back the history so far. As for investment, as you may know, we have divided into 3 phases, Phase 1, 2 and 3. Up until 2021, we have made sizable investments in these 3 different phases. As a result of that, in 2021, we were able to achieve 321,000 tons per annum. That was already achieved in 2021. However, in the last 2 years, due to the post-COVID economic slowdown and because of the inventory adjustment at the customers, the volume has declined over the last 2 years. However, in 2023, we believe that demand decline has already hit its bottom, so we believe we can expect a V-shape recovery in the years ahead. Next. So as a result of the third medium-term management plan that we have finished and also in the fourth medium-term management plan, in the third midterm plan, we established a structure to achieve an annual production of 320,000 tons, and that was a very major theme for us. And we were able to deliver results almost in line with our actual initial plan. In the fourth midterm plan, we would like to leverage this and improve the profitability of the company. That will be the vision that we would like to achieve. That is going to be a major challenge for us. And in parallel with that, we would also like to -- we have also worked for the reduction of environmental impact. The can-to-can route was something that we have made efforts for and not only customers, but we have also approached the government of Thailand. We have implement these measures for the entirety of the society of Thailand, and these efforts will be continued in the fourth medium-term plan period as well. So in light of that, I would like to share with you the basic policy for the fourth medium-term management plan. First and foremost, as the only company with mills in Southeast Asia, we would like to enhance our economic value. And also we would like to play a role to become a player to maximize the production capacity of the Flat Rolled Products Business division. So in a nutshell, we would like to make a transition to the phase to start collecting the investment that we have made in the past. So from here, I'd like to talk about the mainstay products of our company, including our recognition of the market conditions. First and foremost, I would like to start with the main product, can stock. The major target area will be ASEAN and Asia, including Oceania and India. As you can see from this slide, these markets are expected to expand as a can market in the future. Therefore, we would like to catch up with the demand in these areas. That's going to be a very important theme that we have to address. And next is about the heat exchanger for automotive. Due to electrification, the heat management is going to be increasingly required in the future, and therefore, our technology, I think, can be fully utilized for those demands. As for the air conditioner fins, we have struggled in the recent years. However, air conditioner, even in the developing markets, they are a part of the life infrastructure for people. So mainly in the emerging markets, we believe air conditioner adoption will continue to increase. The next page. So in light of these trends, we have developed the sales target as well as the business profit target for the fourth midterm plan, which is already presented here on the slide. We would like to achieve a V-shaped recovery and increase the production level from previously 320,000 to more than 340,000 tons. And in doing so, we would also like to improve the raw margin in parallel and also solely pursue cost-reduction measures. And by doing so, we would like to achieve a significant improvement in the business profit. I would like to add some more on the can material. Our strategy, a basic policy, is to build up a capacity of 340,000 tons per year. We have target areas. And on top of that, we have Middle East and Africa, where we would like to expand our sales. We have already implemented various measures to that end. Along with that, the selling price revision will be done tenaciously. And in addition to price measures, the materials that we provide through recycling can contribute to the environment. Our products have high-value add that we will communicate to the customers so that, that point will be understood. From here on, I would like to talk about initiatives to reduce environmental impact, and there are 3 major points here. First, above all, recycle ratio has to be maximized. And in March of this year, last major CapEx was made to build side well furnace. This construction was completed, and from April, the operation has started smoothly. With this, in order to strengthen the recycling, we have all the necessary facilities ready now. So on full scale, we are going to improve the recycling ratio going forward. What do we need to achieve that? That is explained on the following page. First of all, we call this a can-to-can journey. The meaning of doing the recycling and the value of recycling, together with the feature and characteristics of aluminum, we are to raise the awareness within Thailand. That would be the necessary basic activity. And in Thailand and also in ASEAN regions, we are to communicate and spread and promote this meaning of the recycling. Those would be our base activities. Next page. This talks about Scope 2-related topic. As you know, in Rayong Works, most of the buildings' rooftop has photovoltaic power generation system. From 2022, power generation has been started, and it is smooth. As shown to the right-hand side, the power generation is as planned. In FY '23, when sales declined, through this power generation, we were able to reduce CO2 emission by 12,592 CO2. In terms of intensity, it constitutes roughly 5%. So this is quite an impact for number. And this facility's maintenance will be conducted so that we can continue with this. Next page. This is the initiative towards nature positive. This is one example. The utilization of water resources is our focus. What we have done until now is to eliminate waste. That was the perspective in introducing various measures. Those measures led to significant fruits, achievements. And going forward, we will deploy Kaizen improvement activities, which is our strength, so that the effective use of water resources is further promoted. In addition to water resources, we will manage the waste -- wastewater as well. And that initiative was recognized in Thailand. And at Amata City, we were able to receive Amata Best Waste Management Award 2023 Platinum award, which is the highest level, and we got this award for 5 consecutive years. And this has been a great source of motivation of our staff in Thailand. Lastly, in promoting these measures, we need to develop human resources in Thailand, and our staff in Thailand will lead the business operation. And that is necessary. We are to be deeply rooted in Thailand, and Thailand entity is one of the core entity of UACJ group. And we would like to present the presence of Thai entity to the global market. This concludes my explanation. Thank you.

I'm David Cooper. I'm the President and CEO of UWH. I've been with the company for about 20 years, President since 2014, I believe, and CEO for about the last 3 years. Next slide, please. So we are a Tier 1 automotive supplier of aluminum extruded fabricated parts. We make sunroof guides, which was kind of our entry into the automotive market years ago. We also do now a lot of structural parts, bumper, crash management systems, rocker panels, crash boxes, quite a few components inside the battery, whether it be the side frames or the internal components. We also do, in some cases, many parts of the -- parts structure, like, for example, as a Corvette, we make 30 parts for. They get welded into the body. You can see some of our customers there, both traditional and EV. We have 6 plants in North America, 2 in Michigan, 1 in Flagstaff, Arizona to serve the EV market. Sales office in Troy, 1 in Paducah, Kentucky and a totally awesome plant in Mexico, probably our best-performing plant, 1,300 employees. Last year results, $288 million in sales and $22 million in EBITDA, which was quite an improvement from the past several years. Next page, please. So we are a vertically integrated supplier. We start with billet. We extrude it. Then we do all types of fabrication, machining with conventional machining centers with lasers, welding, adhesives, and then we assemble it into the final product to ship to the customer. Our strengths, we are superior, I believe, the best in aluminum extrusion process control. We have been doing precision machining for about 50 years. So we're good at that, too. We also have added a number of leading-edge technologies to lower costs and improve our capabilities. And the whole team together does an excellent job on quality. We measure in parts per million. That just meant if we shipped 1 million parts to all of our customers, we would expect to have about 20 that would be rejected. So we have world-class quality. Next page, please. This page kind of depicts our growth journey since the acquisition by UACJ. We've grown since 2017 at about 14%, which is very difficult to do organically in an automotive business. You have to put in the investment well in advance as well as hire the staff and the engineer -- launch engineering and so forth. So you end up with lots of cost put in upfront before the revenue is realized. So we ended up suffering through some disappointing profitability for the past several years. We were affected by COVID and chip shortages, just like everybody else. But we did manage to build new plants, put in 2 new press lines, and that's quite a task to get to the level of growth we're expecting. Next page, please. Some successes in our extrusion area last year. In many areas of our business, we sort of had a plateau in sales. So you'll see -- you'll hear this again. But we were able to restructure, reduce some of our fixed costs, indirect labor, some reduction in salary, people. We, of course, reduced downtime, which we do every year, work on containment plan for storm water. We reduced our billet inventory. All of our plants were tasked with improving our working capital management to try to pay down debt, and we did a great job of that last year. Reduced scrap by about 20% in the extrusion area, and we've been working with one of the BIG3 to develop a new crash alloy. Next page. So we kind of -- we grew at 14%, and now we've kind of reached a plateau. The adoption of electric vehicles is -- it's not quite as aggressive as expected, although it's still growing quite in a healthy pace. So we had to look at our business and try to reduce costs, which we did successfully. Salespeople did -- were able to get some price increases through on some of our lower-margin business. Our plants did a wonderful job on Kaizen, so did purchasing. Purchasing reduced significantly in purchase costs and also freight. And in all of our plants, in our headquarters, we did some reorganization. We closed one of our plants, eliminated our chill room function and did some -- a few early retirements. So ended up with significant reduction in our fixed cost, and we're able to improve our EBITDA, as I showed you on the prior slide. Next page. Okay, so here's who I consider to be our competitors in this vertically integrated automotive structural part supply business. I feel like we are the most capable overall. We're not the biggest. I think we are the best in extrusion, especially in structural extrusion, and we're as good as anybody in fabrication and assembly. We are agile and fast and flexible, and we've been that way for a long time. That's how we ended up being able to react and respond to this EV business. Those EV customers are quite different. And this is what I'm most proud of, this group of people in all these plants all over the country and down in Mexico. It's a stable team. We've been working together for a long time, very talented, very smart, honest, sharing. Everybody works together, and a result, we end up with some pretty good performance. Next slide. About 6 years ago, when UACJ bought us, we were -- there were some doubt as to whether we could handle these major new automated welded bumper lines for Honda. And -- but our team executed flawlessly, and our plants operate the machines flawlessly. So we ended up getting a 1 of 6 Honda Suppliers just last month that were awarded multiple Supplier Awards for quality and delivery. And that's on the most complex line we've ever put together. So that's just the kind of thing our team can accomplish and will continue to accomplish in the future. We have had 0 PPM at General Motors for 12 consecutive years. So next page. So a bit about our EV market, what's going on there. It's not growing as fast as every -- but expected. But as I'll show you, it's still growing significantly. The pace of adoption in the U.S. is affected by, number one, the price of the vehicle. They tend to be higher priced, at least the vehicles that have launched now. There's doubts about infrastructure. Can I get to a charger? And also, we have interest rates weighing on sales in many of our areas. However, the OEMs continue to invest in new plants and launching. There's quite a bit of EV investment included in the UAW contracts, and our government is still working to promote adoption of electric vehicles. Next page. So in spite of what you hear in the news about the slowdown, 2023 was 7.7% electric vehicles, which is almost a 60% increase year-on-year. There are a number of program launches coming down the pipe. 22 EV program launches in '24 and so on. Next page, so this curve just shows bull case/bear case scenario for EV adoption. Down at the beginning where you see today, you have early adopters. That's me. I have a Tesla Model S with full self-driving. I love it. I charge it once a week in my garage. When you finally get one, I think you'll see what I mean. It's really a pleasure to drive. It's clean. It's quiet. It's fast, and it also drives me to work and makes all the turns and everything. But I'm an early adopter. So how quickly this will happen, the adoption? It's going to happen. Whether it's slower or faster, I don't think any of us know for sure. Next page. We did ask for some forecasting from Plante Moran, and you can see that some of their forecasts have slowed, but only slightly. So we're still seeing that by 2027, we'll have 23% EV vehicles in the U.S., up from 7% right now, and 35% by 2030, so still significant growth. We're in a good spot. Next page. Regardless of how fast EVs are adopted, all types of vehicles need lightweight. The -- whether it's combustion engine or a hybrid, they need to be lighter, and that's where we come in. So in 2020, 13% of the vehicles were aluminum. By 2040, expect to be 2026 -- or 26% aluminum. So we're going to have significant growth. We're going to have under capacity, and we're going to be in a good position to serve that market. Next page. Okay, so as we grow through the midterm plan to up to nearly $380 million, we expect our business profit to grow from where it is last year at $2.6 million, up to $33.7 million. The vast majority of that improvement comes from adding top line without adding a lot of cost. So we have tremendous amount of contribution margin that comes through because we not have to add a lot of those upfront costs like we did before. We do anticipate some inflation and depreciation, but Kaizen improvements in our plants. So that's what we expect. That's our -- what our team is committed to, and we should be able to make that happen. Next page. Some examples of what we are doing this year in the Kaizen area. We are going to try to get $3.5 million of transfer business from the new antidumping regulations. We're expecting purchasing and our plants to continue to generate cost savings and also going to be doing some hold ons on added headcount until we get the top line coming back up again. Next page. As we progress and we let some of the old sunroof track business die off, we are seeing an increase -- or we're going to -- sunroof business is going to drop from 14% to 4%, and that'll be replaced by higher-margin structural business. Next page. So quite a bit of sales activity right now coming to us, most of it EV. And so while we do have concerns about slowing in the adoption rate or less than we were expecting, we do have a lot of good things going on, too, lots of new launches. And the new antidumping and countervailing duty investigation has given huge duties to Mexico and China. Just last week, there was a job for a major Japanese OEM that we had walked away from because we were concerned about capacity, and it went to a Chinese supplier. And they came back to us last week and asked us to look at it again because of that duty. So it just so happens, we have the capacity now, and we're comfortable going after that. So we're not seeing any concerns on getting the top line growth that we're looking for. Next page. Last year, in the environmental area, we did reduce our Scope 1 and 2 emissions per ton shipped by 32%. A lot of that was through scrap production. We are doing a lot of reporting for our customers that require it. We're going after the ASI, Aluminum Stewardship Initiative. Scheduling, we've done self-assessment, and we're scheduling audits for the plants. And then we're finalizing our CO2 reduction plans, and I'm happy to report that we've signed up for a 100% renewable energy electricity starting in 2028 in Michigan. So last page, takeaways. UACJ, we have a fantastic, stable team of bright dedicated people. Our top line growth at pause in 2023 allowed us to focus on productivity and quality. Our quality, our agility and our process capability are well known by the EV OEMs and are being recognized by the traditional OEMs now. And automotive structural extrusion is expected to grow significantly in the future. We're in a good position to take advantage of this growing market. Thank you.

This is Kumamoto. I'm responsible for corporate strategy. I would like to provide this presentation. Moving on to the next page. In the third midterm plan, the results and the numbers were already reviewed by Kawashima finance presentation for the third midterm plan. But when it comes to management strategies, because I'm in a position to have a lot of conversation with our employees, in retrospect, all the things that we have done in the past or the tradition of the company, that kind of perception or those thoughts were abundant for now. So in order to have a more reasonable conversation as to what we have to do in the future, those are -- I think what you're thinking is now permeating into the entire company base. And I think that is leading to the results that we aspire to achieve in the future. So Value, Connect and Lighten the World. This term, Japanese kasegu, is translated as value in English. How to derive this value? How to translate that into profit as a result of offering value? In my position, this is reflected in the share price, and we'll improve our share price as a result of that. So -- but as a step before that, how to make money and raise the value of the company? In this regard, what we are sowing as a seed in the fourth medium-term plan, I would like to share those cases with you citing some examples in my presentation. The slide that you see here, as it was mentioned in Tanaka-san's presentation at the outset, we would like to expand the material plus processing business and also contribute to supply chain stability in vast fields and also have the collaboration between the different business units and teams. To these additional alpha part, we would like to deliver value. And those are the keywords. And how to realize them? It's about exerting the capabilities to the fullest because that could be construed as the comprehensive capability of the company. So we would like to have a mechanism that will allow people to exert the maximum capability. So we thought about things from that angle. To be more specific with you, this is something I would like to explain to you. So the Extrusion & Metal Components Business division and Aerospace & Defense Materials Business division,and within the Flat Rolled Products division, we have created a new organization called Casting supervision department. So I would like to highlight them during my presentation. So the approach that we adopted is that we looked at things from 2 different axes. One is the process axis, the means of processing. So I think this is the technique for processing. And the other axis is the customers axis. We looked at things centered on customers, in other words. So when it comes to the Flat Rolled Products division, it's about processes, what kind of production method and methods we have. That's the centerpiece of our thoughts. But then in the Extrusion & Metal Components, we have the process and the markets. Those were considered and combined on an equal proportion to each other. And then Automotive & Parts (sic) [ Automotive Parts ] division, this was an organization that is rather market-driven because we consign the production internally. So we -- this is a unit that is focused solely on customers. And the last piece is the Aerospace & Defense Materials Business division. This is a hybrid of materials and the processes. So I would like to come back to this topic later. But relatively speaking, this is combined in a more market-oriented fashion. Now let me go to the next page. For the -- for Extrusion manufacturing sites, we have 4 locations across Japan. As for Metal Components manufacturing sites, we have 6 locations across Japan. These sites are responsible, for example, when it comes to Metal Components manufacturing, the bumpers material, the reinforced bumpers and also the side frames that you see at the bottom picture there. Those are responsible for those kind of materials. When it comes -- that's for the Extrusion. As for the Metal Components, the architectural honeycomb panels, those components as a result of processing are handled by these sites. So these are the material business, and those -- we are going to hybrid and combine them all together. That is the approach that we have considered this time. We would like to develop this to material plus alpha role model. First, this is the image of expansion of the basis of our business. This chart shows 2040 to 2050, the material part of the extrusion. We have a certain presence in the market so we will not discontinue this immediately, but we will grow this business as well. For the processing area, there are various types of processing that we do, and we will also grow this area. And the blue part above all, we need to multiply this area to grow. In this midterm plan, our thinking is to multiply this by 1.5x. The end of this midterm plan is around the center of this chart. So the business size is to be increased to 1.5x the present scale. The business profit-wise, this should be higher than JPY 6 billion. That is the scale we are envisioning. Next page, please. This is Aerospace & Defense Material business division. Currently, the business work in this domain is already been done. We have a sheet for aerospace application, is also handled and forged product, and molded products are also being supplied. In the center, I have described that the products related to aerospace and defense shall be offered to customers on one-stop basis. That is the purpose in reshuffling the organization. Information security and quality management, the nature of these areas are different from general purpose products so the required level is different. So we are preparing right now. The official launch will be from October 1st of this year. So what would be the scale of this business or profit scale we are to target. This chart does not have numbers. So this is just an image. In other materials of the midterm plan, we show that at the time of FY '27, business profit or turnover-wise, above JPY 10 billion is our target; in 2030, to grow that to JPY 20 billion, to double that. That is the target we are setting. Next page, please. This is -- well, as of end of March, we changed our organization to be implemented as of April 1st, and we made this announcement. And I believe this measure is quite important. As Mr. Hashimoto explained and also explained by Tanaka-san, we want to broaden the loop of recycling. Each part is to be enlarged so that we can be the heart of the circular economy. This is exactly the heart of the ecosystem or recycling. How can we utilize recycling to manufacture alloy? It says flat-rolled products, slab and billet, for extrusion. How are we going to link that to these materials? That is important. We have 3 bases for flat-rolled products and 4 locations for the extrusion. We have testing facilities in the past. They belong to each work. Each activities were independent. But there is a horizontal overarching organization for casting supervision -- which is Casting Supervision department, newly established, and production technology shall be shared or mutual sharing of the capacity. And how can we share the scrap material information? And what would be the reaction when those are presented to the customers? Such information are to be controlled, managed centralized. Through this centralization, we would like to further promote recycling. That is the scheme we have in mind. Lastly, speaking of recycling, I have another topic that I would like to share. Next page. As shown on this page, this initiative is done together with Sumitomo Realty & Development and Toyo Seikan Group Holdings. So it's a 3-company collaboration. What is unique about this initiative? The can you have at hand, there's a triangle mark that indicates aluminum. Currently, Japanese recycling policy obligates the manufacturer of beverages and seller of the beverages to work on recycling. That is the policy and the structure of the regulation. I have no intention to deny such scheme. But in this case, we have partner, which is Sumitomo Realty and Development, they have vending machines in their properties where they sell drinks, and they are saying that they're going to collect the cans. So who collects the cans? Now we have a broader-based players in this scheme for the collection of the cans. From that perspective, we believe this is a good example of where the base of the recycling is further broadened. Thank you very much.

Now we would like to entertain questions from the audience. All right. The first question will be from SMBC Nikko Securities, Yamaguchi-san.

This is Yamaguchi from SMBC Nikko. Let me ask this question in Japanese. In the previous medium-term plan and the structural reform program before that were very easy to understand. In the end of September 2019, the share price started to increase immediately because it was so easy to understand because you worked on cost reduction and profitability. And back then, the overseas business was struggling, but you had shown a picture that the overseas sales will grow. So it was very easy to understand. And when you look at the factors behind the changes in the presentation of Mr. Tanaka on Page 11, you say that there is -- you are going to achieve JPY 8.5 billion by promoting recycle and JPY 10.5 billion in material expansion, which is not really ringing a bell to me. Of course, I want to achieve this. You want you to achieve these numbers, and investors like are also trying to support you achieve these numbers. But the recycled material cost is likely to increase. And will you be able to pass on the incremental cost? That is a concern that we have. And when it comes to the materials business building blocks, I think the basic assumption is that you are going to expand -- expecting a demand increase. So it was very difficult for me to conjure up concrete image. So when I saw this material, this didn't really ring a bell. That's my impression at least. But after listening to your presentation, I want you to achieve these numbers. So that's my very rough reaction, I think, that we'll see from the investors. That's my first point. My second point is about TAA. I was speaking Japanese. Let me speak in Japanese. There's a concern that I have that you've been increasing your earnings over the years, and I've seen that from the material that you presented. But listening to your story regarding the marketing -- market environment by [ pole ] and if you look at those financial indicators, not that growing that much and actual CapEx has been coming down rather. So -- but on the other hand, the beverage can manufacturers, when I hear their presentation, they say that people are reducing the opportunities to drink at home. So the demand outlook seems to be declining. So therefore, they are becoming more cautious about the future investments. That's what we hear as news. But when it comes to companies like Steel Dynamics and Novelis, they are raising their capacity. So are you really sure? Can we stay reassured about the TAA's growth prospects? But you said that you have a very strong tie with customers. But when it comes to pricing and also for the competition of acquiring scraps, are you really okay? Can we be reassured about that? So if you can elaborate on those points, that would be appreciated. So if you can comment on them.

Yamaguchi-san, thank you very much for the question. You asked 2 points. The first is about the medium-term plan, the fourth medium-term plan on Page 11, the details behind that. And the other one is the TAA market environment in general in the United States. Those are the 2 questions. I would like to answer the first part, and the second part will be answered by Henry because Henry is here with us. So Henry will answer the second part, if that's okay with you. Okay. Regarding the first question regarding Page 11 of the presentation, the materials plus alpha. This time around, we have singled out recycling and also the automotive area. But actually, the angles are based on the priority areas from our viewpoint. So of course, the rolled products and also the extrusion and also the processing contribution is also factored in here. Of course, the business expansion effects are also factored in. That's another approach. And of course, including here, the environment eco-friendly materials. By having a customer recognition of eco-friendly, we can also seek some additional premiums. So all these details are included as elements here, although the details are not shown. But as a basic angle, we are just saying this on the promoting recycling expression here. But other than that, for automotive and also for aerospace, sheet products as well as other elements are included there as a building block. But all these important elements are the angles that we use here. So we'll try to make it easy to understand on ongoing basis, and we'll try to devise greater ideas to make it more easy for you to understand in the future.

I would like to add another comment. In the presentation today, actually, after the -- based on the materials that we use for the 13th -- on the 13th, on Page 56, we have the conventional waterfall chart that you are familiar with. The TAA's contribution, [ UAH's ] contribution and domestic contribution, those waterfall chart is already presented on Page 56, if you can compare that slide with this one, I think. As for the first part, the strategy commented by Mr. Tanaka is one thing that you can refer to. And if you compare with the waterfall chart on Page 56, I think you shall have been able to have a better idea. Thank you.

All right. So then the second point regarding the market environment, Henry-san, if you can comment on that.

Absolutely. It's being translated. I'll make some general comments. And then if you want to reply back, if I'm not dialing into your specific question, no problem. I think I heard, first, a comment about confidence in growth or how we're seeing growth. Yamaguchi-san, I would put that in context because 3% growth is something that I definitely very confident of, and it is demonstrated. It's what we've seen over the last 3 to 4 years, coming out of a period that was really flat to declining for several decades. Comments you made around, I think, some of the can makers and maybe beverage companies, 2 things have been happening in that space that I think help frame up maybe some of what you heard there. The first was that for North America, specifically, keep in mind that the industry was actually constrained at the point of can making as we went into COVID. So the -- I think a lot of the comments there are really being made about the pace of capital investment relative to new can lives. So all of the conversations we're having now are about pace. Pace of investments in can-making, pace of investments relative to new supply coming along, pace of growth and what growth expectations are from a demand side. And these things are never going to happen perfectly coincided. But can-making was constraint. Investment went in there as -- were assumptions of growth rates that were higher than today. Some of those were as high as 10%, and some were in the 4% to 6% range. And the reality is COVID kind of blurred the lines there because so much consumption happened off-premise. And then you began to see rapid expansion in areas like seltzers and some other drinks. And those are more normalized now, but normalized at a grade of growth. So very confident in the numbers. In fact, my hopes are that these are conservative. Again, we've already seen, in the first quarter of this year, growth in sheet that was above expectations and above what we would expect from an overall year perspective. So confident in those. And hopefully, I gave you some context. Did I answer that question?

Yes.

Okay. Good, probably in too many words. Some other question. I think you're asking about market, maybe some other concerns?

Yes. [indiscernible] started the competition. And Steel Dynamics tried to enter this market, and another source expanding at rapid pace and not only for the products [indiscernible] brands, but also on the scrap. And you're expecting a minus growth of the earnings start of this year. Maybe you don't talk that in the scrap benefit between selling price minus split as selling product price minus scrap price. But anyway, could you explain that part?

Say the last part, you said I was saying -- what was it you were saying out?

Yes, better benefit, this product price minus scrap prices.

Yes. Absolutely, that's right.

You didn't factor in this year's earnings outlook, right, to some extent, to some extent.

Well, this year's earnings, meaning FY '23, got exceptional merit from scrap. We do have scrap merit when we look at FY '24 in there when we planned it for this year. So a lot of that, though, can also move around the volume of scrap that's being consumed. And a lot of the metal benefit gets complicated is also related to the U.S. transaction price. So we're seeing a higher U.S. transaction price. That's certainly very supportive, number one. And then number two, we can optimize increase volume, [indiscernible] real specific. How much scrap can we consume? And some of these investments is about it. So you can make up in volume what you are losing in price in a tighter market. So upside, there is further upside relative to how we use -- view metal value. When it comes to the new rolling mills, I think it's always good to go back and put in perspective the fact that our market has been in deficit in terms of sheet. And when you look at the fundamentals around what this market needs, if we're going to be producing vehicles that have aluminum and an auto body sheet in it as well as on the extrusion side, if we're going to continue to see growth relative to consumption of -- into beverage packaging, we need more sheet. We've got to have more sheet. And so when I look at the investments being made, to me, they make perfect sense. And I believe, from a macro perspective, it's actually positive for our business. One thing to keep in mind is all these investments, and some of which have seen their costs increased, it's capital guys, right? So they're going to have to get a rate of return on that capital. So when you think about pricing in general, the economics for what -- where those prices set really got to have to be governed by what those justifications were, right? So those kind of things also, I think, work to our advantage, are supportive of what our business strategy is. Did that makes sense? Did I answer?

Yes. Yes.

Okay, good.

Thank you very much, Yamaguchi-san. And Henry-san, I have another question in North America on scraps. How stable is the procurement of scraps in North America? Can you comment on that as well?

I can comment on this. Question was around the stability of scrap, and I think it was really around the stability of probably both multiple fronts, maybe it's on pricing, maybe it's on the volume of scrap, maybe it's on efforts to increase the volume of scrap. So the scrap that's there today, it's -- that scrap is stable in the market. We're -- I'm talking right now about the broad use of recycled metals, whether those are used beverage cans, whether it's automotive scrap that can be segregated out into its respective alloys, whether we're looking at old painted siding, which is used in building product applications, all of which we actually use making can sheet as we blend to make chemistries, all of which we're doing to seek the most economically advantaged mix of scraps to make our product. Scrap's fungible. We talk about it as used beverage cans, but the reality is it's metal with chemistries that we're blending to achieve a chemistry to hit the properties of our products. So we're going to source whatever is most economically advantaged. We do definitely need to work on expanding scrap supply. There's no question about it. When I look historically, even if the markets that we're in today, we're advantaged. I can tell you that the -- we're significantly -- and the pricing we have today in the market is significantly better than what it was when we did the economic justification for our cast center. So when you look at where we are today, it's still historically advantaged. I think that investment was put in place in maybe 2016. So -- but the question is going to be increased demand. And I think the way I'd speak to it is there is a large consortium. There is alignment across the industry, whether you're talking from beverage makers, associations, can makers, industry around what can we do to increase the amount of supply and recapture that in. So it's not going to be one trick, it's going to be many to help us get there. But there's a lot of positive movement in momentum, and that's where we're spending a lot of our time and energy right now because it's a pretty -- it's a critical input to our process. But I guess to answer your question more specifically on the stability, the amount of attention that this is getting in our industry gives me confidence that we're going to see results because it is a coalition not just of one part of the value chain, it's all the way through the value chain, all having the shared objective. The brands that we're selling to, they want to be able to say it's recycled product. That's what they need to say because that's what consumers want. So the sheet rollers, we need to be able to source it. So the scrap and the metal traders, they need to be able to find it. The alignment -- when you can align an entire industry value chain, you're going to get movement. I'd like to overperform.

Are there any other questions? All right. The next question would be Morgan Stanley MUFG. Shirakawa-san, please begin your question.

Well, this is Shirakawa from Morgan Stanley Securities. I have 2 questions. The first is a question for Mr. Tanaka. In your presentation on Page 11, my question also relates to this page. Regarding the breakdown of the growth investments and the breakdown by each field, I just wanted to have a more detailed breakdown for TAA and domestic for the recycling, if you can give a further indication as to which area will this be use for. And for the business profit, you are expecting an increase from JPY 43.4 billion to JPY 60 billion in 2027. As for the time horizon, these investment effects, will they be skewed towards the latter part of the medium-term plan? But then this -- next year and the year beyond that, what are the effects from these medium-term investments? Those are the 2 -- my first question. My second question is about Thailand. I want to know about Thailand. You are expecting a volume increase. That's what I understood from your presentation. But I just wanted to know if there's any changes in the composition of volume, such as the heat exchanger and air conditional materials. Will there be any difference in the product mix? And also for the can stock body or component, are there any changes that you're foreseeing? And my next question is about the -- in the presentation for Thailand, on Page 4 of Thailand. The capacity of -- production capacity is that you're going to leverage that, and you said that you're going to have some support for domestic production. I didn't understand that point. So if you can elaborate on that point, that would be appreciated.

Thank you very much for the question. Well, first of all, regarding the first question, on Page 11 of my presentation, regarding the breakdown of JPY 22 billion for the growth investments, I cannot give you all the details, but I covered this on Page 10. This is the recycle loop centered on cans. For example, the UBC processing facilities. This is in progress right now in Fukui Works, so we have this UBC processing facility. And also a new one was also introduced in Thailand. So those are included to some extent here. And also, for North America, shredder, UBC shredder facility, that kind of CapEx is also included. And those are the major breakdown of the JPY 22 billion here. And as for the recycling, when will this manifest as an effect of investment? Well, after investment is done, after it starts to operate and kick in, this is the benefit that we can expect up to 2027. So in the first 1 to 2 years, this is still the start-up period of the facility. So I think towards the third and fourth year, we should see a ramp-up of profit as a result of that. And thereafter, further expansion is expected after 2027. Although we don't have the picture beyond that, but we expect a larger profit in the years beyond. Now as for the second question for Thailand, Mr. Yamada, if you can comment on that.

Regarding the product mix, the first question, we aren't foreseeing a major change. The can stock will be the centerpiece and also the heat exchangers for automotive and air conditioner fins, those were the major account for the bulk, and the proportion there will not be significantly different. We're expecting overall growth, but the product mix will not change that much. As for the can stock, are there any changes within the can stock? That was the second question. As you know, the China mills are now emerging. So we are affected by that significantly. In that environment, bare end, those are uncoated end materials. I think those are the area that there are not so many players from outside coming in. So I think there's still significance for us to continue supplying those products. So given the overall trend in industry, what makes sense for us most? To be more active. We will try to find that the right area and make a transition to those focal areas, and that's what we like to achieve going forward.

Comment, which is that the Thai facility has been really an integral partner to us in North America. And so when we look at continuity in our supply chain and our ability many times to adjust and adapt to demand that our customers have, we use production from Thailand. And so the relationship there between Thailand and North America is a good strong one. And so when I look over the midterm plan, we look at maintaining that relationship.

And Hashimoto-san, regarding the support from domestic Japan to Thailand.

Yes, I would like to add another comment here. Well, regarding the product mix, Yamada-san already answered that question. Basically, the product line, the heat exchanger, the capacity is already given. So therefore, the balance will not change significantly. As Henry mentioned, the exports to the United States may slightly increase or decrease. But over the long run, when the new mills in North America is established, from 2026 onwards, we are expecting a gradual decline from Thailand. But as I mentioned earlier, we would like to focus on the local markets as well as the ASEAN region, including India and Oceania, such as Australia. So we are working on this already. So the regional mix may change slightly for the can stock. As for the sales destination of can stock, that's a change that we are foreseeing. As for the capacity and utilization of domestic capacity to support Thailand, as I mentioned, the demand is likely to change in the future. So we would like to flexibly respond to that by making -- preparing the right structure. So we would like to increase the supplementary relationship between Thai and Japan. We are exporting, to some extent, from Japan. So we can also make it possible from Thailand to export to other destinations for cans, also for the heat exchangers and air conditioner fins. For each of them, by having this compatibility, we will decide whichever is more optimal. And depending on the circumstances, we'll select the right site. And also, the demand in Japan is likely to increase in the future. So in order to support that demand, to some extent, the -- we will also like to look into the possibility of domestic support in that regard. That's what we're working on right now.

The 3 polar operation is what we had and positioned at the beginning, so Thailand, Japan and North America. And so we also have this 1 plus 4 mill, 2 mills in Japan, 1 in Southeast Asia and North America, too. So those are operating in parallel with each other. So we like to come up with the optimal product mix from Fukui and Thailand. The proportion will not change that much. But if the capacity increases and the gap is now becoming smaller, so that's the reason why we have a better compatibility, which will be beneficial to us. So the 1 plus 1 will not -- will be 3.5 instead in the future. So in the third midterm plan, we launched this system. And in the fourth medium plan, this will become more functional and operational. So that's the reason why we can expect plus alpha. That's what we like to achieve.

Thank you very much, Shirakawa-san. We would like to move on to Mr. Matsumoto from Nomura Securities.

I'm Matsumoto of Nomura Securities. I have 2 questions. First question is to Henry. At TAA, on your material, I don't know what -- which page what the fix -- here, you talk about by 2080 -- 2028, you talk about sales agreements. What is the portion of agreement already reached through 2028? Various companies are expanding their capacity. And is there any disadvantageous contracts due to that? That is my first question. My second question for UATH. On Page 8, according to your material on 2025, the plan says that the volume will increase. Is that due to market recovery or your own effort? Do you have visibility? U.S. is not likely to expand. So if you could talk about the background. Those are my 2 questions.

Thank you. First question, Henry, can you reply?

Can certainly reply. So I think I understood your question in 2 parts. So I'll answer them in that order. And then if I miss, ask again. The first part was pretty specific. You wanted to know the percent of the contracts that we've gotten completed and where we are relative to the contracting strategy. So 2025, contracted all the way through. Through 2028, probably have today about 1/3 that's locked down, but we're -- I expect there -- with discussions ongoing, there's probably -- we'll be close to 2/3 done, 66-ish percent, I think, in the -- in next several quarters as those supply negotiations go through. So I think it's pretty advantageous position to be in, frankly. Second part of the question, I believe, was saying, "Hey, look, are these disadvantaged agreements because there's new mills coming on?" Is that correct? And answer to that's real clear, absolutely not. There's 2 things that happened with -- these aren't -- we talk about them as rolling mills, but they're very, very large industrial complexes with highly complex integrated operations between machine centers. One of them is a brand-new entrant into the marketplace that's very, very competent in steel and outstanding at building equipment, but they're going to have a natural commissioning and ramping period. So ADI has talked about 2025 having coil to the market. That'll probably happen. But I am -- but they are a new entrant into the market, right? So I think they still have to prove themselves in that spot, and that puts us into one of our key value props, which is reliability of supply. Tri-Arrows is more than any of our competitors. We are known, if you will, when you talk to our customers about reliability of supply. It's why they come back to us. We're here for them. We carry the right amount of finished goods. That's why I talked earlier about having enough liquidity in place to manage working capital. So we're not disadvantaged at all on that front. And the other project is [indiscernible]. It's coming, and it was -- the project was delayed a little bit over time. And so I think what you're going to see and what our customers see for certain is that there is -- they see for certain that there is uncertainty about when the supply is going to come into the market. You've got to get through the commission. You got to get through the ramp. You've got 2 mills that are be going through this process. And so when you have that component but you're planning your business, you're going to go to and lean towards what's reliable, what's proven and what's right in front of you. And fortunately, that's the business that we built. So any of the deals that we're doing today, none of them are disadvantaged at all relative to the new agreements or the new mills that are being built. Did I answer correctly?

Yes.

Good.

Thank you. The second question, UATH 2025 volume increase. Hashimoto-san, can you reply?

Yes, I will reply. Page 8, looking at this page, '23 and '24 is lower and '25 is increasing. And if I showed '21 and '22, it is higher, so similar to '25 level. As was explained for the U.S., small increase has changed. And also U.S. and Asia and in various areas, inventory adjustment was completed. And in the past, from latter half of '23 to '24 year or so, there was inventory adjustment period. And for FY '25 and FY '26, Asia region, including India, we will acquire new customers, and volume and the share will increase. So that is added on top of that. That would be the image.