AGC Inc
TSE:5201
Earnings Call Analysis
Q3-2023 Analysis
AGC Inc
AGC Inc. has completed its third quarter for the fiscal year ending December 31, 2023. The briefing featured CFO Shinji Miyaji, sharing key financials and business performance insights.
AGC Inc. experienced a decrease in net sales by JPY 15 billion compared to the previous year, totaling JPY 1,283.8 billion despite an upturn in automotive glass sales and favorable foreign exchange conditions. This was primarily due to decreased sales prices for PVC and lower sales in Life Science CDMO.
The company’s operating profit took a hit, dropping JPY 56.6 billion to JPY 95.5 billion, while profit attributable to owners of the period declined by JPY 41.2 billion to JPY 57.5 billion. Although raw material and fuel prices declined, lower sales and heightened manufacturing costs across most segments impacted profitability.
Despite the downturn in the third quarter, AGC Inc. maintains its full-year forecast, consistent with the announcement made in August.
The company saw mixed results across segments, with Architectural Glass reporting increased sales but decreased profit, whereas the Automotive segment enjoyed growth in both sales and profit. In contrast, the Electronics, Clinical, and Life Science segments struggled with both lower sales and profits.
AGC Inc. reported a boost in total assets to JPY 2,987.6 billion and a debt-to-equity ratio of 0.44. Capital expenditures reached JPY 154.2 billion with R&D investments at JPY 41.4 billion, signifying a focus on future growth and technological advancement.
The Asia market saw a boost in Architectural Glass sales despite a drop in shipments, except for Japan. Conversely, the Europe and the Americas regions faced sales declines amid economic slowdowns and reduced shipments. The Automotive segment benefitted from increased global automobile production, improved selling prices, product mix, and favorable exchange rates.
The Electronics segment encountered sales declines in displays due to consolidation scope changes and pricing pressures, while Materials remained strong in certain areas like semiconductor-related products. Life Sciences faced headwinds due to reduced COVID-19 demand and delays in U.S. production line launches, affecting net sales and operating profits.
AGC Inc. is undergoing business structural reforms, aiming for a Return on Capital Employed (ROCE) of 10% or more in its upcoming medium-term management plan. This includes terminating operations in specific production lines and introducing competitive new materials.
The Essential Chemicals segment saw a decrease in sales by JPY 70.4 billion due to a decline in PVC selling prices. The performance of the Chemicals segment remained stable. A gradual recovery is anticipated in 2024, particularly regarding the impact of biopharmaceutical CDMO and biotech venture investments.
Looking into Q4, architectural glass demand in Asia is projected to be strong, although replacement demand might slow down in Europe. The Automotive segment could experience a seasonal decline in shipments. Electronics expect to slow down, with decreased shipments of LCD glass substrates due to market adjustments【26†quote_lines】.
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We'll now start AGC Inc.'s financial results briefing for the third quarter of the fiscal year ending December 31, 2023. I'm Chikako Ogawa from the Corporate Communications and Investor Relations, serving as the moderator. Today's participants are Representative Director, Senior Exit Vice President and CFO, Shinji Miyaji, and Managing Executive Officer, General Manager of Finance and Control, Toshiro Kasuya. We will first have CFO, Miyaji, go over the financial results for the third quarter of FY 2023. We will then take your questions. We are planning to end at 5:00 p.m. Your cooperation is appreciated. First presentation by CFO, Miyaji.
MiyajiThis is Miyaji, the CFO. Please turn to Page 3. These are the key points. Net sales decreased year-on-year despite higher sales in automotive glass and the impact of foreign exchange due to the decline in sales prices for PVC and decrease in sales of Life Science CDMO at JPY 1,283.8 billion, down JPY 15 billion. Operating profit decreased to JPY 95.5 billion, down JPY 56.6 billion despite a decline in raw material and fuel material prices due to the above-mentioned lower sales factors and the impact of worsening manufacturers' costs. Profit for the period attributable to owners of the period was JPY 57.5 billion, down JPY 41.2 billion. The full-year forecast remains unchanged from the announcement in August. Page 5. Net sales, operating profit, and profit for the period were as explained earlier. Profit before tax was down JPY 66 billion at JPY 99.2 billion. Next is results by segment. Please turn to Page 6. Results by segment Architectural Glass posted higher sales and lower profit. Automotive posted higher sales and profit, while both sales and profit were down for electronics, clinical, and life science, Page 7. Various analysis and operating profit year-on-year comparison. Sales volume, price, and product mix, minus JPY 42.3 billion, our sales prices of automotive glass, among others, increased sales prices of PVC declined. There also was a decrease in biopharmaceutical CDMO orders and shipments of fluorochemical-related products. The purchase price of fuels and raw materials, positive JPY 34 billion, with an improvement in raw materials and fuel materials such as natural gas. Cost reduction and others, minus JPY 48.2 billion as manufacturing costs worsened in all segments except electronics. Operating profit decreased from JPY 152.1 billion to JPY 95.5 billion, down JPY 56.6 billion. Page 8, financial position. Total assets were JPY 2,987.6 billion, an increase of JPY 173.6 billion compared to the end of December. The debt-to-equity ratio was 0.44. Page 9. Statement of cash flow. Operating cash flow was JPY 146.2 billion. Investing cash flow was negative JPY 129.3 billion and free cash flow was JPY 16.9 billion. Please note that others in financing cash flow include expenditure of JPY 50 billion for the share buyback. Page 10. CapEx, depreciation, and R&D expenses. CapEx, JPY 154.2 billion; depreciation, JPY 130.9 billion; and R&D, JPY 41.4 billion. Next, details by segment. Please turn to Page 12. First, Architectural Glass. Net sales, JPY 354.7 billion; operating profit, JPY 26.9 billion. In Asia, although shipments decreased in all regions except Japan, sales increased by JPY 9.6 billion to JPY 116 billion on higher selling prices. In Europe and the Americas, sales dropped by JPY 5.5 billion to JPY 237.8 billion on decreased shipments in Europe due to the economic slowdown and lower sales prices. As for operating profit, while natural gas prices decreased, manufacturing costs worsened affected by the delivery of products produced last year at higher costs in Europe. The regional breakdown of the segment profit was 40% Asia and 60% Europe and the Americas. Page 13. Automotive segment. Net sales of JPY 366.2 billion; operating profit, JPY 16.2 billion. Shipments increased due to the increase in global automobile production. The sales and profit increased, thanks to higher selling prices, improved product mix, and the impact of exchange rates. Page 14. Electronics. Net sales, JPY 225.4 billion; operating profit, JPY 9.8 billion. In the display business, despite an increase in shipments of LCD glass substrates, sales declined by JPY 1.6 billion to JPY 120.1 billion due to changes in the scope of consolidation and a year-on-year decline in sales prices during the first half. For your information, in Q3, the shipment volume of LCD glass substrates decreased by a lower single-digit percentage quarter-on-quarter, while sales prices increased by low single-digit percentage. In electronics materials, shipments of electronic components decreased due to the slowdown in the smartphone market. The shipments of semiconductor-related products such as EUV photomask banks remain strong. There also was the impact of exchange rates. Net sales increased by JPY 2 billion to JPY 104.5 billion. Operating profit decreased due to the aforementioned sales decreasing factors as well as the impact of higher raw materials and fuel prices. The breakdown of operating profit was Electronic Materials, 130% and display minus 30%. Page 15. Progress update on display business earnings improvement. Regarding business structural reforms, we have terminated the operation of the LCD glass substrate production line at Takasago and moving towards ending the business activities there by the year-end. In terms of strengthening our competitive through technological innovation, we are preparing for the launch of competitive new glass materials. Regarding the pricing policy revision, we are making a steady progress. Through these 3 pillars, we aim to achieve ROCE of 10% or more during the next medium-term management plan period. Please turn to Page 16. Chemicals. Sales of JPY 425.5 billion and operating profit, JPY 47.9 billion. Sales of Essential Chemicals dropped by JPY 70.4 billion at JPY 301 billion due to a decline in the selling prices of PVC and other products. Sales Performance Chemicals remained unchanged year-on-year at JPY 121.2 billion despite higher sales prices and the impact of exchange rates due to a decrease in shipments of fluorochemical-related products. The breakdown of the segment profit was 50% each for essential chemicals and performance chemicals. Please turn to Page 17. This shows that chlor-alkali market in Southeast Asia due to the slow economic recovery in China, PVC market prices remained sluggish. Page 18. Lastly, the Life Science segment net sales were JPY 91.8 billion, down JPY 14.8 billion year-on-year. Operating profit is JPY 7.7 billion. Due to the disappearance of the COVID-related special demand, reduced inflow of funds into biotech ventures and delay in launching new lines in the United States, biopharmaceutical CDMO sales declined. In addition, scheduled adjustment to improve the U.S. production facility led to the contract sales decrease. Operating profit was down also due to the upfront costs incurred associated with the capacity expansion in the biopharmaceutical fields. Page 19. Let me explain the current situation and outlook of biopharmaceutical CDMO. Negative impact of reduced inflows of bonds into biotech ventures continues. Combined with the absence of COVID-related special demand, impact have exceeded our expectations. Gradual market recovery is forecast in 2024 and onwards. Drastic measures are taken for the delay in launching new lines and progressing towards commercial operations. Despite a slight delay, we expect to normalize by the end of the year and contribute to earnings in 2024 and onwards. Page 20. Next is the performance of strategic businesses. Cumulative Q3 net sales were JPY 222.1 billion, down JPY 11 billion. Operating profit was JPY 23.9 billion, down JPY 26 billion. Major reason for the profit decline, as I mentioned earlier, is sluggish by pharmaceutical CDMO, especially in the United States. Electronics profit was also sluggish due to the adjustments in the semiconductor and smartphone markets. Page 29. It shows the year-on-year performance comparison by geographic segment. Sluggish chlor-alkali market affected Japan and Asia, while U.S. was impacted by sluggish biopharmaceutical CDMO. Page 23. This is the outlook for FY '23, which remains the same as the August forecast. Next page, this shows that no change was made from the outlook breakdown by segment. Page 25. Now the Q4 outlook by business segment. Starting with Architectural Glass. In Asia, shipments are expected to be robust with growing demand for high heat insulating and shooting glass, but demand related to covenant subsidy programs in Japan is expected to slow down. In Europe, despite concerns about economic slowdown due to the inflation in Europe, replacement demand for high heat issues in glass for energy saving will support shipments. Automotive along with the production recovery due to the normalization of the supply chain and the effects of the pricing policy pursued for some time. This will continue, but the business in some regions are expected to be affected by seasonal decline in shipments. As for electronics, despite the contribution of price policy and shipments of LCD glass substrates will decrease due to the production adjustment by LCD panel manufacturers. Q4 shipment volume of LCD glass substrate is expected to decline in high single-digit percentage point quarter-on-quarter. Shipments of specialty glass for display will increase as orders from major customers grow. In electronic materials, shipments of optoelectronics material will increase due to demand season in Q4 despite the slowdown in the smartphone market. Shipments of semiconductor-related products will increase mainly photomask blanks or EUV. Page 26. This is outlook for chemicals. Essential chemicals market prices will remain sluggish due to slow economic recovery in China. Performance chemicals demand for curing related products for semiconductor-related applications have bottomed out and shipments will increase. Demand for the products for transportation machinery application will return to the recovery trend. In life science, although sales of the small molecule biopharmaceuticals and agrochemical CDMO will remain strong. In biopharmaceuticals CDMO, the impact of the absence of COVID-related special demand and reduced impounds into bioventures will continue. Despite the slight delay in launching new lines in biopharmaceuticals CDMO in the United States, the lines will be normalized by the end of the year. Next is strategic businesses. Sales growth is expected to be sluggish and profit is forecast to decline in 2023. The business will return to the growth trajectory after 2024 along with the recovery in biopharmaceutical CDMO and expansion of semiconductor-related products, such as EUV photomask blanks. In consideration for the impact of economic slowdown in China and Europe, recent changes in life science, CapEx is changed from the initial forecast of JPY 300 billion to JPY 240 billion. With this change, depreciation is reduced from JPY 188 billion to JPY 178 billion. No changes are made for R&D. Despite lower depreciation, full-year performance outlook remains the same as the chemicals market prices worsened. Thank you. That concludes my presentation.
We will now take questions.
[Operator Instructions]
The first question. So what is the progress in comparison to the forecast made at the time of the Q2 earnings results? The progress, not very good, I'm afraid. When we made the announcement in August, we talked about JPY 150 billion operating profit. But for the second half, JPY 85.7 billion was expected, but the actual was in the third quarter, JPY 31.2 billion. So that means we need JPY 54.5 billion in Q4. Q4 is the most profitable quarter. So we expect an increase quarter-on-quarter, but I'm afraid it's not going to be strong enough. The segment profit forecasts have not been changed. But for automotive, most probably, there will be an upside, whereas for chemicals and life science, the progress is not as good as we had anticipated. And in light of the current situation at, we are afraid there is a downside risk.
Next question. The overall operating profit, the progress up to Q3 is 64%. So it's weak, but you are keeping the full-year target the same. So could you tell us how you intend to achieve the full-year target? Is there any major improvement of the earnings expected in Q4? As I already mentioned earlier, this time, we are not changing the JPY 150 billion. And based on the Q3 results, it will be quite tough but Q4, recently, chlor-alkali market changes, there are some uncertainties. And therefore, it's very difficult to forecast. So we are keeping the outlook the same. But as I said, automotive could increase further. And then other segments, it will be -- it will continue to be difficult. And chemicals and life science, when you look at the cumulative number for Q3, achieving the target could be quite difficult. So in that sense, in fourth quarter, we do not expect that the major improvement but the profit is highest in Q4. So of course, we expect some improvements. But major initiatives to improve the profit is not something that we expect in Q4.
Next question. Looks like there is a rather strong downside risk. What about the risk of reducing your dividend? Well, we do have a policy of maintaining stable dividends, and we have been maintaining a 40% or so payout ratio. So at the current moment, we are not considering decreasing our dividend.
In 2024, the outlook for each segment. Could you talk about that? As of now to explain the details of each segment is quite difficult. So at the time of the business results, well, I hope that you'll wait until the next business performance briefing. But based upon what we are feeling right now, the construction, we are not seeing the major changes. But originally, of course, there are some differences. Automotive prices and structural reform are going on so we expected a higher upside. As for display, we have done the restructuring and the pricing policy is something that we are working on. So for this year, the prices were difficult and the difficulty might continue until next year. So display we expect some recovery. But the electronic materials, EUV are finally starting up. So we expect expectations. As for the essential chemicals, chlor-alkali market condition is difficult to forecast, so we need to be careful. But as of now, the current prices are at a very low level. So it's not likely to worsen from the current level. The performance chemical, of course, we have expectations. We expect a steady growth. But the issue is life science. Bioventure the flow of the bank, what would happen to that is difficult to forecast. But for this year, the new facility starting up and unexpected facility-related issues pushed down our products. So we will be making further efforts and we expect to recover from that. So that's the very overall answer that I can give about each segment as of now.
Next question. EVR listing one. What are your thoughts on that? JPY 50 billion share buyback was announced at the beginning of the year. Any thoughts on your capital policy? We have already talked about that. ROE or PBR of AGC is low because of a strong correlation with ROA. So we need to improve on that. The equity ROE, JPY 1.6 trillion or so. And so it will be rather difficult to reduce equity dramatically. We executed a share buyback of JPY 50 billion, but that's out of JPY 1.6 trillion. So the R part will have to be improved. Practically, that will be the only way.
Next question. In Electronics, Q3, profit improved by JPY 5.8 billion. What about the display? Concerning that question, electronic materials. There is a seasonality in Q3 for Q4 goes up. So we benefited from that. That's for display. Q2, the volume is down, and lower utilization rate and the weaker yen impact. And therefore, the electronic materials were affected.
Next question. The third quarter operating profit for Life Science was significantly low quarter-on-quarter were the fact. We have a bio and the synthetic pharmaceuticals. For the latter, no major factors. For bio, no problem in Japan, meaning that it's mostly in the U.S. and Europe. One is, as has been mentioned many times, Boulder Plant, the new plant launch. In the second quarter, until the middle of the second quarter, it was operating, but in the third quarter, it did not operate at all. Another factor is the facilities, the one in Seattle. For the facilities improvement, major renovation was implemented. And therefore, the utilization rate had been adjusted, which had a big impact. In the third quarter, this has all been resolved. So this will not have an impact on the fourth quarter. But as far as the results on the third quarter is concerned, this was a big factor. For Europe, as we conducted last year, in the third quarter, we implemented the periodic repair and maintenance. So on a quarter-on-quarter basis, that had an impact. So Q3 had a combination of all bad factors. So that made it a bottom quarter.
So life science start-up issue, that's the stainless 20,000 liter tank. Is it just one line or both of the 2 lines? And this soft line or standard line when you want to start this up. Can we understand that the similar problem will not happen in the future? It is about the Boulder. It's about 40, 20,000, and both of them are not functioning right now. The small tank has no problems, but the 20,000 tank was problematic. So this time, we are currently absorbing the know-how. So when in the future, when we start up the 20,000-liter tank, we should be able to handle that. And as of now, we have no plan to introduce additional [Indiscernible] 20,000. But if that happens by acquiring and accumulating know-how, we should see any no problems in the future.
Next question. The impact of a bio venture funding, what was the size of the effects on sales of life science? And would this accelerate going forward? Well, it depends on the definition of bioventures about 25% are small bio venture capital, and this was largely affected not just in the U.S. but in Europe as well. Biotech ventures, there are quite a number of them, which were all affected. So the number of projects decreased dramatically. Currently, we don't see signs of recovery or improvement. Now would this accelerate? No, we don't think so. But do we expect a rapid recovery given the current situation, I'm afraid that's not going to happen.
Next question, the Life Science related question. So in Q3, there was a repair in Seattle and complete especially in Boulder and the planned repair in Europe. Were those factored into the corporate plan? I understand that the reason why it went down quarter-on-quarter. What is the reason behind the progress for the second half? Is the business environment worsening quarter-on-quarter? Seattle and Boulder, of course, that those were not included in our initial plan. Initially, the Boulder, as I said, 20,000 liter as we started the operation, and then we started a major contribution this year. But as of now, it is not going well, and it was not included in our plan. As for Seattle, it is operating, but we have decided that we need to improve based on the lower orders. So we have reduced the order and started to repair. So it was not included in our plan. So it was a kind of a irregular repair. And as I said, it has been completed and started -- the operation started to resume. So in Q3, those things happened. But as I said, we bottomed out the gradual recovery can be expected.
Next question, [Indiscernible] glass. The competitors are talking about increasing their price by double-digit percent. So can you give us an update on your pricing policy and the competitors are expecting the recovery in demand in next year, what about your case? Of course, we are implementing our pricing policy. And so we would like to be in line with what the competitors are doing. I can't talk about next year, but we will work on that. Demand? In terms of volume, the glass substrate volume is decreasing, and that is because the panel manufacturers are adjusting their utilization rate in order to reduce their inventory. Of course, this is not going to continue forever. So when that ends, there will be more orders, meaning more production. So during the first half of next year, currently, we expect recovery. I think that makes sense. Currently, panel manufacturers are implementing the production adjustment rather strongly.
Next question about the semiconductor materials, EUV mask blanks. In 2023, a 40% increase year-on-year was issued. Is this on track? Are you making a good progress? And the other peers are pointing out some of the recovery of the photomask. So can you expect a similar growth next year? Yes, plus 40% growth was mentioned, yes. And the growth currently is higher than that. And next year and onwards, the high growth can be expected. That is our recognition.
Next question regarding EUV blanks. There is a new player in the industry. What is the impact of that? Of course, we can't comment on our competitors directly. But currently, we don't see a major impact.
Next question. The CMP slow for semiconductors, the demand recovery. Is that something that you are seeing right now? Well, our CMP sorry, is a high-end product. So ordinary, the impact from the semiconductor is not something that we suffer. So in that sense, it's going steadily. Of course, semiconductors will grow in the longer term. So we are not that concerned. I think we can say that.
For automotive, sales price increase in the fourth quarter and the first half of next year, can we expect the price increase to continue? Yes, I can't give you the specifics. But of course, pricing policy is very important for us, and we are committed to that. So for the fourth quarter, we are expecting further progress. And for next year onwards, for the appropriate price level, we will continue to work on this.
Next question, the construction Architectural Glass. Could you give us the update? What is the current level of the demand -- decline of the demand year-on-year or when do you think that the demand will bottom out? So this is about a 3-month period of Q3. Yes, the Q3 for 3 months, the shipment volume is slightly down because of the European market, which has been weak. Also from now on, for the end of the year, the demand will decline in Europe, especially because of the cold weather, the construction becomes weaker and especially during the holiday week and they would recover from March. So to what extent do we see the recovery? We are having difficulty forecasting because of the uncertainties.
Next question, Architectural Glass in Europe, is the situation warranting the production adjustment? Currently, we're not in that state yet. With the energy conservation momentum, demand is there. So we are not implementing a dramatic adjustment.
Next question about the Architectural Glass, the demand towards the end of the year by region, what is your view -- are you talking about next year? Next year, demand? Iin Japan, the energy-saving glass and there's a higher awareness of the demand. So in terms of price, the good condition is likely to continue and also the higher function at the glass, there was a subsidy of JPY 100 billion, and next share and onwards, this subsidy is likely to continue. And in Japan, I think that the good condition will continue. As for Asia, no major changes. Well, about the Asia, again, no major changes expected. Europe, as I said earlier, is very uncertain. It's difficult to forecast -- so if the future situation continues, we can generate a certain level of profit that is reassuring, but a major improvement of the demand is not expected. In Latin America is not going to be that good, probably same as 23.
Next question. The semiconductor manufacturers appear to be getting more aggressive in adopting a glass substrates. What are your business opportunities? And what about the possibility of collaborating with your customers? And when can you expect the profit contribution? Yes, there was a big announcement by my conductor manufacturer recently. And as we have been announcing on our websites, we have been continuing our research efforts. The future is still very uncertain, but there is a possibility of this becoming a big business opportunity. And therefore I don't know whether we should call it aggressive or cautious, but we are working on it. We will continue to work on it. Of course, we do see a possibility there. Yes.
Next question about Life Science. The demand from the small, medium-sized customers are declining. So the mean that the competition is becoming more intense? I think that your capacity of -- for the contract production is increasing. So how do you try to maintain the margin? Bioventures projects are becoming fewer. In our case, same goes back, bioventure the small orders can be taken, and that's part of our differentiating factor. So with that as of now, has had a negative impact on us. Well, how do we maintain our margin that has to do with the utilization rate? Life science, we do not receive the order all of a sudden. It is based on the plan and the number of the contract manufacturing and pipeline are usually clear. So as I said, we have ended the bottom. And next year, there is no question that the number of contracts would increase. So I think that the key will be to make sure that we can capture that.
Next question about PFAS regulation. Any updates on PFAS regulations. The public comment period has ended in Europe. So I think there is a clear projection. So what's happening with regards to your customers? And what is your future projection on PFAS regulation impact? Well, we have been talking about this for quite some time. First, about PFAS, the regulated items PFOS and PFOA. For PFOS, P-F-O-S, we are not producing the fire extinguishing agents. And for PFOA, the Carbon 8 ahead of the regulations being implemented and ahead of others in the industry, we have totally eliminated this product. So the impact is very limited. So what still remains fluorinated products. They are basically for resins or things that would not be in contact with human body or that would not go into human bodies. So we do not expect impact. But of course, within our company, we do have a team established of expertise to particularly look into PFAS. Yes, public comment period has ended. Japan has made many comments. And in Germany, we understand that many public comments had been provided. And we do not expect the PFAS regulation to be passed as is being proposed today because semiconductor would be affected and many other industries would be greatly negatively affected. So I don't think that's going to happen. But should the alternative be required, substitutes be required for those that do not have alternatives, ensure the development efforts will be made. For alternatives, it's very much limited by alternatives to those that will be in direct compact with human bodies, but we are not in that part of the industry, so that doesn't affect us. But of course, we will be very cautious in addressing this. But in terms of risk as has been mentioned before, no change, no impact on us.
Next question. what do you view on the PVC and caustic soda market in the future? Caustic soda. Yes, as I said earlier, it's a very uncertain. For us the major impact is China and PVC and caustic soda demand in China. So in China, of course, the Chinese economy, especially the construction and infrastructure demand. For those areas, a lot of PVC is used. So if this industry is weak, then from China, it will flow into Southeast Asia. And also the caustic soda market when the economy is weak, the caustic soda market also weakens, and the construction industry, when it is weak in China, aluminum refinery will be weaker and that would lead to the weaker caustic soda market. So infrastructure, construction demand in China, and also the economic measures for that industry will be the major factors. And also in China, the environmental control in the past, that there was a control on the core. So supply side, supply became very tight, but from our own Chinese government what kind of measures do they take is another factor that we need to consider.
It is now time to conclude the Q&A session. For those questions that we could not respond. We will provide answer from the IR group. Once again, thank you very much for taking time out of your busy schedule to join us today. This concludes the financial results briefing for the third quarter of FY '23. There will be a feedback screen that will appear when you close the Zoom screen and your feedback is appreciated. If you have any further questions, please call us at (03)3218-5096), (03)3218-5096). Again, thank you very much for your participation.