Terumo Corp
TSE:4543
Earnings Call Analysis
Q3-2024 Analysis
Terumo Corp
The company has made significant strides with the Rika device, achieving a deployment in 30 centers, covering around 10% of its partner CSL's footprint. The full deployment is expected to continue over the next 12 to 15 months, with projections suggesting completion by the summer of 2025. The device has already been involved in over 700,000 donor collections as of January. However, specific pricing details couldn't be disclosed.
There was a mention of a one-time expense amounting to JPY 1.8 billion. Looking ahead, the company is set to reach a breakeven point in fiscal year '25. This forecast hinges on various ongoing developments, including the aforementioned Rika device rollout.
The company is actively engaging with other customers, suggesting a diversification and potential growth in customer base. There's also a note of caution regarding foreign exchange (FX) impact, particularly a declining margin assumption from Q3 to Q4 due to FX changes.
MCS revenue showed a minor decline, and there were implications of complex pricing dynamics in China, such as VBP and anticorruption initiatives. However, overall impacts on the company from these factors seem to be anticipated and not significant. There was also a clear distinction made regarding the taxation boundaries of Puerto Rico in comparison to the U.S..
Key factors for future growth include improved inflation rates and cost reduction initiatives, such as the VC square program. These elements are expected to contribute positively to the company's financial health. While some concerns were raised around the VBP in China and potential negative impacts on the Neuro business, the executive response suggested a generally positive direction going forward.
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[Interpreted] Good afternoon, everyone. Thank you very much for joining us, taking time out of your busy schedule to attend Terumo Corporation's financial results briefing for the third quarter of fiscal year ending March 31, 2024.
So today's proceedings will begin with an overview of the financial results by Mr. Muto, Group Executive Officer and CAFO followed by the Q&A session. So in total, we have 45 minutes.
For those of you who would like to raise a question, please be sure to call in to the conference call. So there will be no question reception features for the live streaming. If you experience video audio problems during the live streaming, please use a screen switching button at the bottom of the screen first. If the problem persists, please connect to the conference call system. If there is a problem with the via streaming itself, please notify us via e-mail.
Before we begin, we would like to make a few remarks in our presentation today. We may make forward-looking statements based on our current expectations. However, all such statements are subject to risks and uncertainties. You should be aware that actual results may differ materially from those discussed in the forward-looking statements.
So I'll let us begin with Mr. Muto. The floor is yours.
[Interpreted] Hello. I am the CAFO, Muto. I will give an overview of our earnings results for the third quarter of the fiscal year ending March 31, 2024.
Here are the highlights of this earnings report. Q3 exhibited highest ever results across all past quarters in both revenue and operating profit. For Q3 YTD revenue operating profit were highest ever for the period, maintained strong sales performance globally, with double-digit growth in revenue, operating profit, profit for the year, 6% Y-o-Y when excluding FX.
Q3 YTD operating profit grew 9% when excluding FX, positive impact from our price increases and profitability improvement measures as well as ease of inflation resulted in strong progress towards the annual guidelines. So we have upwardly revised our annual guidance due to continuing positive impacts from yen depreciation on our business performances. Both our revenue and profit set new records for being highest ever.
Next slide, please. Here are the P&L results. Revenue was driven by the TIS and Vascular Graft businesses of the Cardiac and Vascular Company and by the Blood Center business of the Blood and Cell Technologies company, all of which grew in the double digits. Operating profit saw the expected effects of price revisions and group-wide cost reductions. As we continue to strengthen the North America sales force to expand therapeutic devices there. Continuing from Q2, the gross profitability and adjusted operating profitability of the three months of Q3 were improved year-on-year.
I will explain this in detail on the next slide. Next is the profit variance analysis comparing the three months of Q3 against the same quarter of the previous year. In gross margin, a onetime expense was the impairment booked for the stoppage of use in some production equipment belonging to Blood and Cell Technologies. However, the easing of inflation impact and expected positive effects of cost reduction and business mix improvement canceled this out.
In price, the effects of the expanded price policy revision of the second half began to appear. SG&A increase continuing from the first half advanced as planned as we strengthened our sales force in North America toward expanding therapeutic devices, such as Neurovascular products and stent grafts. With these Q3 results, Q3 YTD profit variance items are each progressing as planned.
The next slide explains this. Here is the Q3 YTD adjusted operating profit variance analysis. G/P increment by sales increase progressed better than expected. Thanks to strong performance by Cardiac and Vascular, and Blood and Cell Technologies. Due to the Q3 circumstances I just explained, gross margin turned positive after having been negative in the first half. SG&A increase factors were the same that I just explained. The FX breakdown is JPY 6.6 billion positive inflow and JPY 2.6 billion negative in stock.
Next slide, please. The variance analysis chart on the left of the slide is the annual guidance for the profit variance that we announced in May 2023. The gross margin results from Q1 to Q3 and outlook for Q4 are shown on the upper right bar graph of the slide. Continuing the upward trend of improvement for each quarter, Q4 is anticipated to reach an even larger positive number due to the previous fiscal year, including the impact of onetime expenses.
The breakdown of each item is shown on the lower portion. The three items shown are inflation, profitability improvement, and mix improvement and others. Plasma Innovation business booked onetime expenses in Q3, but it was exceeded by the positive factors of easing of inflation impact, freight cost reduction by global tender, and reduced production costs, resulting in overall progress as planned. Next slide, please. Here is the revenue by region. In the main markets of the United States and Europe, therapeutic devices, including Neurovascular products and stent grafts continue to be strong. In addition, emerging markets, including Asia countries and the Middle East drove the growth rate.
In Japan, negative factors, including the reduced sales of the sort of Nutrition business and return to normal of thermometer demand continued, but Cardiac and Vascular and Blood and Cell Technologies drove the group as a whole above the previous year. In China, access products of the TIS business became subject to volume-based procurement, resulting in Q3 impact from distributors holding off on buying. The application of new prices has been postponed and is expected to happen in March or later. In Asia, tenders in which the Blood and Cell Technologies company participated occurred in the first half and Q3 instead of Q4, causing a drastic increase in revenue.
Next slide, please, we will try to explain by company. I will now explain the results by company. First, Cardiac and Vascular. Revenue grew 8% when excluding foreign exchange. The Vascular Graft and Neurovascular businesses in Americas and Europe regions led strong global performance. In profit expanded cost reduction effects, combined with increased sales to results in growth and next part with the Medical Care Solutions.
The TMCS is Terumo Medical Care Solutions company in revenue, although we have seen a continuous negative impact by the return to normal of infection prevention products demand. Hospital Care Solutions business maintained revenue increase, owing to price actions carried out as a countermeasure to inflation impact. Pharmaceutical Solution sales were also as planned. And as a whole, TMCS resulted in an almost flat growth to the same period of the last fiscal year. Profit increased in the double digits due to easing inflation and pricing provision effect.
And next part is TBCT. So in revenue, the Blood Center business received orders in Asia and the U.S. that were expected in Q4 in the first half and Q3 instead, resulting in maintaining a higher growth rate than expected. In profit, there were onetime expenses in Q3 that I explained earlier. However, the positive impact of increased sales and profitability improved that the Q3 year-to-date progress that was faster in both amount and margin than the annual guidances.
Next slide, please. The reflect -- the positive FX impact up to Q3, we have revised our annual guidance upward. Both the sales and profit of Cardiac and Vascular and Blood and Cell Technologies have been revised upward due to strong sales expansion. In Medical Care Solutions, sales were revised downward due to the return to normal of demand for infection prevention products, but profit was revised upward to reflect the positive impact of easing of inflation and global tenders for freight cost.
And next slide, please. This is the last slide. This guidance revision is primarily to reflect FX impact, but also takes into account individual quarterly and company-specific factors. On this slide, gray bars represent the new guidance based on actual rates from Q1 to Q3 as well as on revised guidance rate in Q4. Colored bars indicate new guidance based on the old guidance rate. This will allow a discrete analysis of impacts on guidance by FX and by other factors, excluding FX. I hope you find this useful.
In Q3, we showed solid progress in profitability improvement. In Q4 as well, we plan to keep showing positive effects as planned and achieve our guidance.
This concludes my explanation. Thank you very much for your attention.
[Interpreted] Yes, now we are going to start Q&A. And for this week, Antoinette is visiting Japan. So she's going to participate in Q&A session, so she is changing the seat. Please give us some time. Now we are going to start questions and answers. [Operator Instructions]
In addition to our CAFO, Antoinette is also going to answer as well as Ms. [indiscernible] Hata from IR Head. So now we would like to welcome Mr. Yamaguchi from Citigroup.
[Interpreted] Can you hear my voice okay?
[Interpreted] Yes. Thank you, Mr. Yamaguchi for joining us.
[Interpreted] So in your explanatory presentation, it was not referred to the point. So for our CSL Rika business situation and also I believe that going toward the next year, the new contract, I believe that you have entered into a new contract with CSL. Will you give us the update on the situation?
[Interpreted] Thank you very much for your question. So then since Antoinette is here, please respond to the question. So CSL business update, please?
Thank you. So we have made tremendous progress in rolling out the Rika device. We are now live in 30 centers, which is roughly 10% of CSLs footprint and we will continue deploying over the next 12 to 15 months. We have seen over 700,000 collections to date.
[Interpreted] So last time, it was [ 17 ]. So it's not the huge in accelerate matter, but we are steadily expanding and ramping. And the rollout going forward is with CSL. We have agreed that some 12 months to 15 months, as she responded. So next week we believe that there will be an announcement from CSL. So that is the time line. So meaning 2025 until summer of 2025, the rollout will be concluded. That has been agreed.
And regarding the price, we will not be able to disclose the detail to that depth. Thank you.
[Interpreted] What was it about, 700,000?
[Interpreted] Well, that was the, how much plasma collection is a cumulative plasma collection amount, 700,000.
700,000 procedures, donor collections as of the end of January. Part of that rollout is we have focused on the large centers with CSL, some of which perform almost 1,000 procedures per day. So an example would be the Brownsville, Texas procedure on the Mexico border. And we've seen devices handling in some cases, up to 16 donors in one day. So very positive progress.
[Interpreted] Thank you very much. So up to the 3rd center, it's at the border, relatively speaking, so-called border centers with Mexico. So Rika started to be deployed. So it's going to be a full-fledged deployment soon enough.
For the second question, in your explanation about TBCT, I'm sorry, it was difficult for me to hear. So how much is it? And now we're -- for the product about the -- you are talking about P&L.
[Interpreted] I'm sorry, the sound was not good. Your question was related to P&L?
Yes.
For the -- please look at the Slide under 12 of the briefly report. Rika startup, we are trying to do the automated -- fully automated line. However, we have several modules, different modules, and part of them, we had several options that we are trying to see for the automation. And we finally decided which one we are going to apply for the automation.
So we are not going to use the other options, we did not decide. And we agree with CSL what we are going to use. So we just applied for that and the write-off that we are not going to use. So that is explained in the brief report. And it is about JPY 1.8 billion. So this is just a onetime expense.
[Interpreted] Okay. That's all my questions I had.
[Interpreted] Okay. Now Mr. Kohtani from Mizuho Securities.
[Interpreted] I'm Kohtani from Mizuho Securities. I have two questions. And the first one is on the bar graph on Page -- Slide 7 on the right side. From the first half of this fiscal year, inflation and profit improvement actions are really working. And I think that this mix improvement, product mix improvement is the ones that are the output of P&L. And the very bottom, you see the red pink areas. That's what you just explained.
Yes. So looking at that, to be honest with you, yes, I think you will have even higher profit at the end of this fiscal year. So -- and also the -- and achieved the profit. So are there any other expenses that happened just for one time? And for looking at that inflation and action, could even got even better and what are the reasons you are controlling at this level? And improved mix improvement, I think it was even higher for the third quarter, but it seems like it is smaller now. What are the reasons for those changes?
[Interpreted] Yes. Thank you very much for the question. On Slide 7, actually, we had a similar graph last -- for the last time. And the inflation and mix improvement are actually the main causes. And then other parts or categories are not changing much. So mix improvements for the Q3 was blue, but now it's red. So that is the loss for this time. And it is offset with the inflation improvement because that happened earlier than what we expected. And 50% of them just are more passive. And the remaining 50% is a global tender. So actively, we try to get that lower rate. So that started to work.
For that part, for Q4, or actually it's a bit higher here, but I think inflation will have -- bring us a positive impact as we see -- as we expect. So then -- if we do not have this mix segment of the negative factors, it was higher. So looking at this for the fourth quarter, maybe JPY 3 billion that happened the last time for one time is not -- won't be happening. So it will be better for the next the quarter -- next year. So the inflation, you had a negative impact. So now it is turning to positive and then the VC square is continued, so that we're putting more positive on the factors we're contributing.
Yes, VC square and also inflation. And we struggled for the first half. So maybe it will be the positive factors for the second half or throughout the year. So I think it will look much better.
[Interpreted] My second question, since Antoinette is here. For 12 months to 15 months is the rollout timing you explained. But probably and thinking about this, the operation rate or the working rate at the plant, it won't be improved significantly unless you catch up. So when do you expect to see the profit maybe 2 years later, you will be more profitable, you will be profitable?
Yes. So I think I followed all of that. We expect to see that in fiscal year '25 where we start hitting that breakeven point.
Well, I don't know if you can disclose this, but I'm sure you've had discussions about how you will be able to roll out to other customers aside from CSL. Obviously, the slowdown is dependent on, I don't know, whether it's Terumo's fault or CSL's fault and I'm sure you've had some discussions, but has that changed that date? Or we don't know when that would be, when the exclusivity ones are, but can you comment on when that -- if has that changed at all or...
So we are fully able to serve the market. We designed a platform that can serve all customers, and we are actively working with other customers as we speak.
[Interpreted] Thank you very much.
So from UBS Securities, let's welcome Mr. Yoshihara.
[Interpreted] My name is Yoshihara from UBS. So my question is pertaining to this year's business plan. So until Q3, so against the former original plan, you were very much aligned with the original plan. Is it safe to say so? This time, you have already -- you have excluded FX and the margin from Q3 to Q4 margin assumption is that, it will be declining. So under the more circumstances, it's due to the reason that Q4, it tends to have more expense or have you incorporated some risks? Can you explain that to us?
[Interpreted] Thank you for your question. From last time, so unchanged from last time, so this time, our guidance. So I believe it was Slide 13 that we have written here, the FX. If FX was the same against the guidance, what would it be? So MCS revenue declined slightly, but for other ones are unchanged. Just the FX portion, which is in the light gray portion was upward. So for Q4, with the same margin, we're still in the conservative outlook, but basically it is unchanged.
Having said that, Q4 year-on-year since, it dropped last time, it seems much higher. However, we have not really incorporated any of the major risks among others. So unchanged from the last time.
So the second one is for the access device for China, and VBP. You have talked about that. So beyond '24 March, the new pricing will be finalized. So leading up to that day, there will be reservation of the purchase activities in the new roles, VBP, and also there are other confounding factors, so such as the corruption prevention.
Well, for China, the Neuro business is not so large to begin with, so it would not be impacting us. And as for anticorruption prevention. So this -- we are not going to be impacted. That has been unchanged from last time when it comes to our assumptions.
So what makes it complex is that TIS for the access VBP on year-on-year. So last year, it was Q3, Q4 when we had a pandemic for COVID and zero COVID policy lifted. So year-on-year, it seems like it has improved. However, there has been a conservation situation for the purchase. So looking at October to December, October dropped prominent, and improved from November, December. And then we thought it is going to be January 1, but it has been progressed to March 1. So it is resulting back to the original state of Q3 will be improved than Q4 -- Q4 will be better than Q3. So then the price and the margin impact will be reflected.
But if you ask us for the outlook, so there are about 20 [indiscernible] so it will be even later. For looking at the next year, maybe the price won't be decreased at every single province. So maybe it's difficult for us to assume. In addition to that, that will be probably the 50% of the volume in China, but remaining provinces, states, we are not sure if VBP will be applied. That's a norm yet. Therefore, we have to think about the various options and assume it. So for the next earning calls, maybe we can include that information. Did it answer your question?
[Interpreted] Thank you very much for your detailed explanation. Thank you very much.
[Interpreted] Now for SMBC Nikko Securities, Tokumoto-san?
[Interpreted] Yes. I'm Tokumoto from Nikko Securities. First question is related to C&V. Looking at the next year, it -- can we expect it will be continue to strong? I would like to ask for the overall forecast. And for the second quarter, for the C&V, they had some issues with the supply. So is it already resolved for that supply issue? And so after that, should we expect that the volume is expected to increase significantly?
[Interpreted] Thank you very much for the question. C&V, and for the third quarter year-to-date, about 88% is the growth we are achieving at this moment. And for Neuro and TIS stent graft were expected to grow significantly, especially for the stent graft, both U.S. and Japan. We haven't completely opted for every single account. And so next year, I expect it to see this kind -- the similar growth for the next year.
And for this year, we -- the raw material is not available at this moment. So we struggle with operations, so that's what's happening with SOFIA for the neurovascular products, and it is continuing. The TIS North America Access product also have 2-point lower because of the supply issue. So taking all those into consideration, maybe for the next year -- next term, we will continue to have this on the strength, and we will see some recoveries for the areas we are struggling at this moment. So we can expect further growth.
[Interpreted] So for -- it may be too early to ask you about the next fiscal year, but I would like to ask you for improving and the profit and also global tenders are actually on the -- you are placing rate on that. So for the next years, negative factors for the next fiscal year and also the factors for the profit increase. Could you clarify that for the factors? Look, considering the third quarters, I think you -- we expect you have the significant growth for the next term.
[Interpreted] So it is similar to the question made by Kohtani-san. Inflation will be expected to improve. That is one positive factor. Another factor is a VC square, which is working on reducing the cost, and that will be expanded. So this will be another positive factor.
In addition to that, the CSL and the rollout is another positive factor. We do not have any revenues for TBCT because of that cost is incurring. But it won't be the profitable yet, but we have smaller, the deficit, the negative factors. So this will be positive factor.
And for the negative factor will be the VBP in China. And the neuro may have the even bigger impact and if the stent graft is impacted with that VBP, and that we have to expect it to have quite a large negative impact. But when we adapt probably, we are rather in the positive directions at this moment. So at the earnings call in May, I think I can explain even in more details.
[Interpreted] Thank you very much. I'd like to confirm. So for this access, the price, so the price revision will be provided. So with the distributors, you may -- would absorb, that is the impression.
[Interpreted] Yes. Well, the price pass-through, we know how the price revision may be. So it is as I have indicated earlier, it will not be rolled out from the -- for the whole 20 provinces. So we need to take into consideration. So we'll make a downward revision for the price.
Having said that, for this VBP, we do not -- our assumption is that we will not -- we will not expect a huge volume. I hope that answered your question.
[Interpreted] Thank you very much.
[Interpreted] Then we would like to welcome Mr. Mori from Nomura Securities, please.
[Interpreted] Mori from Nomura. So FX impact in the slides, dollar are neutral, euro, RMB, such impact, so this actual in Q -- is this going to be in the steady state? Do you expect in you FX sensitivity? So as the new year comes yen may be appreciated. So when it comes to sensitivity, will you explain to us about the situation?
[Interpreted] Regarding the sensitivity -- yen sensitivity, so we do not expect a huge change structurally speaking, from this. Having said that, regarding the FX, as I have explained, for the stock and flow, so it will impact flow for sensitivity-wise. And for stock, it has to do with the finance and inventory and some of the revenue. So impact may be impacting our stock and vice versa for yen depreciation, so for flow as well. And for stock may be impacted reversely. So when it comes then, we are certainly aware that we would like to explain this in detail when it comes out.
[Interpreted] And also for the U.S. federal election and the general election has been taking place in the U.S. So what happens if Trump is reelected, can you talk about the U.S. policy? When it's going to be Republican administration?
That is a difficult question to answer. I think there is concern in the market in general about the policies that might be enacted in the effect on inflation, but I think there are many other wiser people who could address that specifically.
[Interpreted] By the way, in the U.S., it needs to be manufactured. If it comes to that, you have to factor in the U.S. and also Puerto Rico. That's considered to be U.S. land?
[Interpreted] Yes. Well, Puerto Rico, when it comes to the policy that is behest by the U.S. So we consider Puerto Rico can be considered as part of U.S., but then the taxation-wise is separate.
[Interpreted] That's all from me.
[Interpreted] Next person is from Morgan Stanley, MFG Securities, Mr. Hayashi.
[Interpreted] I'm from Morgan Stanley. My name is Hayashi. I have two questions. The first question is rather the confirmation about the accounting. For the loss is about JPY 1.8 billion. This is based on the cost of the sales, I think. So that's what I wanted to confirm.
Yes, right, this is cost.
Then if that is the case for the GP will be even higher. Then in calculation, it will be 54%. So maybe first time in 2 or 3 years this is the high level. But for the third quarter, this is the actual capability or ability you can achieve. Yes. For the second point, yes. For TBCT orders, so that you are -- and recognizing sales for the Asia and the U.S. earlier than you planned. So there's no explanation on the reasons why you were able to sell it earlier than you have planned. So and maybe the business is very strong, that could be one of the background. So that's what I was guessing. So could you explain the reason why you was able to sell earlier than you planned?
So two drivers for those tenders. One is our whole blood automation platform referred to as Reveos, has been very positively received around the world and as customers experience the safety and the throughput, we are seeing earlier adoption particularly in areas where there's uncertainty around the blood supply in different parts of the world.
The second piece is our therapeutic systems business is growing double digits. It is the primary platform for the collection of cells and that those cells are the starting material for many of the CAR-T therapies that are publicized today. So we're seeing tremendous growth in both the use of the platform and new ideas coming in for other ways to apply that.
[Interpreted] Okay. Thank you very much. I understand. That's all my questions I have.
[Interpreted] Okay. So we would like to welcome Mr. Barker from Jefferies Securities, please.
[Interpreted] This is Stephen Barker. So I have two questions for Rika. So according to Antoinette's explanation earlier, so per device, 16 donors collection. Has that -- the volume has increased, so where is the 16 donors, is it higher?
[Interpreted] Barker, I'm sorry, okay, you were -- your sound was very disrupted. So please ask in English.
Three questions. One for -- one is about Rika. So according to Antoinette, you mentioned that the machine can handle up to 16 cases per day. How does that compare with the [indiscernible] you were using previously?
So that figure is representing the volume in that specific center. So it is a combination of the throughput. Rika is demonstrating a 30% improvement over previous collection times. And in this case, because it is a high-volume center, that device -- that specific location is showing of 16x per device, but the capability is driven by the inputs around the donor population.
Right. Okay.
[Interpreted] And then on the second part of the question is on nomogram.
Yes. So we cannot comment on something that's active with the FDA. We did have a clinical trial completed with CSL and are awaiting FDA clearance.
Okay. Thanks very much. That's all.
[Interpreted] Any other questions? Now from Mizuho Securities, Mr. Kohtani.
[Interpreted] Since Antoinette is here, I have additional question about Rika. Actually, Rika is droving attention. But how about Reveos. In the U.S., you received PMA. And what is the current situation? I think you mentioned it may be impacting on the sales currently. So Reveos already had a JPY 10 billion sales overseas. I think you already have the solid foundation. And in the U.S., once they use that for the whole blood production workflow, is much easier.
So I think it could be expanded significantly, but in the U.S., Red Cross, us doing demo are trying -- trying that, and it may take some time to roll out. But could you share that the timing and the situation of Reveos in the U.S.? And when do you expect to have the sales of the Reveos in U.S.?
So as you referenced to Reveos has been in global use for some years with very positive results. We are deploying Reveos first to the Blood Centers of America and that will be happening through fiscal year '24 in the early stages. There is an adoption period as blood centers get used to the new technology.
What about the U.S. Red Cross?
We're in discussions with them. We would like for them to adopt our technology, and we believe there's interest, but nothing committed at this point.
Thank you.
[Interpreted] Then Tokai Tokyo Research Center, Mr. Akahane, please.
[Interpreted] Hello. So I have two questions. So some of the track record and the forecast for the sales activities. In the water flow chart, I'm looking at Slide 5. So according to this Slide 5, we saw the global price and also the reimbursement rate or the NHI reference. So and gross profit wise, it's going to be JPY 5 billion. In comparison to cumulative and the previous Q2 in comparison, there has been much impact of the price and also the gross profit margin. So it was zero for Q2. The cost-down initiatives that have now become much more evident in Q3. This is on year-on-year basis. It will be difficult to compare. So the SG&A improved, but revenue also improved. And that is...
So as you say, regarding the price for MCS and the price increase that started from October 1 in Q3, we can expect higher volume there. Then for Q4, that is going to be a full contribution, meaning Q3 improvement will be reflected on Q3. And for next year, it's going to be doubled throughout the year. The price increase is continuing for Q4. Until next Q3, then it's -- this will run its course. So Y-o-Y basis Q2 looks higher, for the first half then. So that's also incorporated into the next year's guidance.
[Interpreted] Thank you very much and crystal clear. Thank you.
[Interpreted] Thank you very much. Now we -- it is time to close. Any comments from Muto-san?
[Interpreted] Yes. So this is the last one for me. So for -- since I took CAFO position immediately, the COVID started. So I struggled in the beginning with my new position. But CAFO responsibility improved the corporate value. I think I was able to do what I could do. And for GS26, we are in the middle of the GS26, but each company is now having the environment they're able to deliver. And for the corporate profit improvement, we already prepared the path to achieve it. So we would like you to expect us to achieve it.
And thank you very much for your cheers to me after today. Thank you very much. That's all for me.
[Interpreted] Okay. So we would like to close Terumo's 2024 third quarter's earnings call now. Thank you very much for your participation.
[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call]