Fujitsu Limited (6702) Earnings Call Transcript

And it is time, we would like to begin. Before we begin the explanation of the midterm management plan, CEO Tokita will talk about the recent system failure.

At our company, we had reiterated, repeated information security incidents and systems quality [indiscernible] that our company and our group companies of late, and we have caused much concern and inconvenience to our customers and related parties, so I would like to once again offer my deepest apologies. Regarding information security, there were unauthorized access to project, web and information security incidents in the cloud services. We have cost inconvenience and concern. We apologize for that. And there were a series of troubles for affiliate [indiscernible] delivery system, and we ended up undermining the trust that residents have in the public administrative services they use. As announced yesterday, we have asked each municipality to conduct across the board system checks with system shutdowns. We sincerely apologize again for the inconvenience caused to many people by the service outage. Regarding cause analysis and measures to prevent recurrence. As we announced on May 19, we have newly appointed CQO, Chief Quality Officer who will establish a mechanism for systems quality control. In a decision, the Risk and Compliance Committee, which I chair, will make decisions on specific measures, including various policies and responses to individual events and proudly implement them. We will continue our efforts to restore the trust of our customers and society that was damaged by this incident and realize our company's purpose of making the world more sustainable by building trust in society through innovation.

And once again, we would like to commence medium-term management plan of Fujitsu Limited. Thank you very much for your attendance despite a very busy schedule. The presenters for today are Takahito Tokita, Representative Director, CEO; and Takeshi Isobe, Director and Corporate Executive Officer, SEVP, CFO and the moderator will be Nomoto from Public Relations IR. As for how to proceed today, CEO Tokita will speak for about 25 minutes on midterm management plan, followed by CFO Isobe, for about 10 minutes on midterm management plan, segment revision and financial plan. It will be followed by a Q&A session. From 4:10 p.m., there will be Q&A session for media and from 4:40 p.m., we have time for investors and analysts. For the Q&A session, anyone is able to view. If you would like to ask questions, there is a need for you to participate through Zoom webinar. Please confirm by the e-mail, which is sent to you in advance. Now we would like to begin. CEO Tokita, the floor is yours.

Thank you very much for taking time out of your busy schedules to join us today. During the recent financial report for fiscal year 2022, I share with you a review of our midterm management plan, which concluded in fiscal year 2022. Today, I would like to explain our new medium-term management plan, which will end in FY 2025. So I will give a brief summary of the previous medium-term management plan up to fiscal year 2022 and share our future vision and explain our new medium-term management plan and targets up to fiscal year 2025. First, this is Fujitsu Group's purpose, which is to make the world more sustainable by building trust in society through innovation. All of our corporate activities are designed to achieve this purpose, which gives meaning and [indiscernible] to our existence and what we aim to be. Now Fujitsu Way, which all Fujitsu Group employees must abide by, sets out the 3 important values of aspiration, trust and empathy as well as code of conduct, which are all anchored in our purpose. The Fujitsu Way serves as the basis for our actions and judgments and is also a promise to our customers and society, so we are making efforts spread this to all our employees around the world. I will now revisit and summarize our performance in the previous 3-year medium-term management plan. In 2021, we announced Fujitsu Uvance, which is designed to [indiscernible] to achieving a sustainable society through purpose-driven business activities. Fujitsu Uvance is not just a collection of solutions, but a framework for resolving societal issues, through cost industry cooperation with customers and partners, which is the business model we aim to establish. We are focusing our investments and resources on 7 key focus areas and Fujitsu Uvance and 5 key technologies that support them within Fujitsu Uvance, our new businesses, I mentioned based on social issues. Here are some examples of supply chain initiatives under that. To ensure sustainability in supply chain, issues to be addressed include reducing environmental impact, ensuring a stable supply of materials in the event of an emergency as well as optimizing over supply chain operations. In response to this, Fujitsu provides support to visualizing and enabling reductions in CO2 emissions generated throughout the supply chain as well as to simulate the impact of hazardous scenarios. With proposals for workarounds, these solutions leverage Fujitsu's own technologies, including explainable AI. Now I would like to summarize the performance results in the previous MTMP. Profitability aggressively improved over the past 3 years. And in fiscal year 2022, we achieved a record high operating profit margin. For our nonfinancial indicators, we achieved both the customer Net Promoter Score and DX promotional Index targets. During this last medium-term management plan, we have identified 7 strategic priorities and work on them to advance 2 pillars of value creation and internal transformation. As part of our efforts to rebuild our global business, we launched Fujitsu Uvance with globally -- global standard offerings and achieved a revenue of JPY 200 billion during fiscal year 2022. We strengthened approach to customer problems solving by reskilling 8,000 out of 11,000 sales representatives. We strengthened our foundations for our future global business expansion by now having over 30,000 employees in a global delivery center in Japan Global Gateway. We also established rich alliance as a first step to developing and expanding a standard approach to consulting through Fujitsu for internal transformation, we have been working on digital transformation across all areas. The results of these efforts are reflected in the digital promotion index coin, which has reached the level of a global company. We launched OneFujitsu programs, establish data-driven management on a global scale as well as reforms [indiscernible] resources management and adopt more flexible working sales such as work life shift. As a result of these measures, productivity increased and operating profit per employee increased by 60% compared to fiscal year 2019. I will now describe Fujitsu's ideal state. We have established 3 areas of materiality contribution that are essential to achieving our purpose. These are solving global environmental issues developing the digital society and improving people's wellbeing, so there are 3 areas. We have also identified 11 key issues to focus across these 3 areas including addressing climate change, maintaining information security and contributing to healthcare and well-being for an improved quality of life. Fujitsu will contribute to society by fully leveraging our capabilities, including our leading-edge technologies and diverse talents, and we will develop and create future technologies and offerings to sell these societal issues I have described. Next, I will explain the concept of value creation for 2030. We have newly established a vision for 2030 as a technology company that provides digital services that contribute to sustainability, cost industry and realizes net positive for stakeholders, including society customers, shareholders and employees. Fujitsu defines net positive as Fujitsu with existing society must address the materiality of solving global environmental problems, developing a digital society and improving people's well-being in addition to maximizing financial returns and making a positive impact on society as well through technology and innovation. We have set financial indicators and indicators for the 3 materiality items that meet the 2030 levels and geared our activities, outputs and outcomes to achieve our vision and purpose. By investing capital and pursue materiality in line with our key strategies, we will continue generating outputs and outcomes in both financial and nonfinancial terms and invest them as inputs to improve our value proposal -- value proposition. This is the positioning of this medium-term management plan. During the 3 years of this medium-term management plan, we will work to transform our business model and business portfolio, provide reliable support for our customers' modernization needs and improve the profitability of our international businesses, including shifting our focus to being a services business. Next, I will explain our key strategies and major initiatives for the new medium-term management plan ending fiscal 2025. In this medium-term management plan, we have set four key strategies to realize Fujitsu's ideal state for 2025 and maximize the value provided to stakeholders while also looking to our ideal state for 2030 and beyond. First is our business model and portfolio strategy. Second is our customer success and regional strategy. Third is our technology strategy. And fourth, is our people strategy or resource strategy. I will explain the activities for each strategy. Firstly, our business model and portfolio strategy. Fujitsu has worked to transform its business model and portfolio. We will change our business segments in fiscal year 2023 to reflect the current business conditions. Technology Solutions segment that we've conventionally had separates into 2 categories: Service Solutions and Hardware Solutions that consists of hardware provision and hardware maintenance businesses. Service Solutions consists of Global Solutions centered on Fujitsu Uvance and the services business delivered in each region. By simplifying our business structure in this way, we will focus efforts and investments in growth areas and strengthen the management of our business portfolio. I will now explain more about Service Solutions, which will drive our company's future growth. This segment consists of on cloud digital services centered on Fujitsu Uvance and traditional on-premise services. In the 2 years up to fiscal year 2025, we are targeting an approximately 20% increase in revenue and approximately a twofold increase in the adjusted operating margin. On cloud digital services, will increase revenue and profit targeting high-growth profitable business. We are focusing on further expansion of our consulting capabilities, enhancing strategic partner alliances, developing leading-edge technologies for business implementation and developing our people to provide digital services. For on-premise services, we aim to increase profitability by improving productivity through delivery standardization and expanding modernization that will lead to a shift to the cloud. For these services, we provide a number of infrastructure systems to support our customers' businesses. Across the entire company, we will continue improving quality and strengthen security to ensure the stable operation of customer systems and eliminate unprofitable projects. This is a model for building long-term engagement with customers. To maintain and further improve customer engagement over the long term, we have redefined the business model to build customer relationships according to each stage of the business model. In each of the phases of consulting, delivery and modernization, we will work closely with our customers to meet their business challenges, continuously provide optimal solutions and provide long-term support for them to realize DX, including modernization and cloud shift. We will enhance customer engagement by connecting these 3 assets, which have tended to be fragmented in the past. In the current medium-term management plan, we will enhance our approach to consulting to provide effective solutions that are more appropriate to our customers' needs. I will now explain the second of our key strategies, which is the customer success and regional strategy. Enhancement of consulting through management challenges of customers and to social challenges related to customer business, we will be facing together with the customers and to strengthen consulting to propose solutions through digital technology, led by horizontal domain of Fujitsu Uvance, and technology consulting and Fujitsu Uvance vertical domain business managing related business consulting from both of them, we will be supporting customers and to provide support to achieve what they aspire to be. We will be implementing reskilling and by FY 2025, we are trying to increase the number of consulting SKU headcount to 10,000 people with technology and business combined. Next is Modernization business. We are succeeding the existing assets of customers, and from both the technology and business, we will be working on consulting capabilities. And through mainframe and the core systems configuration, we have developed engineering capabilities for a long time, and we have a global delivery structure with the organization of dedicated staff for modernization, we will be proposing optimal solutions by leveraging our unique strength. We will be demonstrating Grand Design for the future ideal state, and we will be providing the implementation of modernization and visualization of business and assets totally, and we will be supporting green transformation, DX, GX and optimization of the information system. These are the major efforts by region. We will be aiming at enhancement of profitability and continue to strengthen service business in Japan. We will support modernization of customers in all industries originating in Japan to customers who deploy global business. We will be strengthening structure to provide support and global standardized services. In other regions, centering around Fujitsu Uvance, we will be expanding the provision of global solution and service. Fujitsu Uvance ratio in overseas service revenue will be increasing to 2.3 fold in FY 2025 compared to '22 to 45% and to accelerate the transformation quality of overseas business. We will also enhance the alliance with strategic partners. With Microsoft, as the only global SI partner domestically, we will strengthen strategic partnership. With AWS, we will be starting from collaboration in industries with strength, we will lead in offering development and talent development, and we will expand to company-wide collaboration with SAP. ERP data provided by SAP and Rise with SAP, which is offering for processor cloud and migration. We will be basing on practicing this internally and to VAs as a global technology partner to expand business. With ServiceNow, we have concluded enterprise training agreement and toward the acquisition and the strengthening of the ServiceNow-related skills, all the employees will be able to receive education limitedly, and we have introduced systems to challenge on the acquisition of qualification. Within FY 2023, the number of ServiceNow certification order to be expanded to over 10,000. Furthermore, we became the recipient of a worldwide elite segment partner of the year 2023. We will be strengthening business expansion globally even further. With Salesforce, we will be starting from the joint solution development in manufacturing the healthcare areas, and we will try to expand our business and to strengthen further alliance. As the points that would relate to all our business activities and to have stability in customer business, I will be speaking about our efforts. In system troubles and security incidents, we are causing inconvenience and concerns. And once again, I would like to take this opportunity to express my apologies. Once again, we will be strengthening company-wide governance, strengthening information security and we will be improving the quality of system as the 3 pillars. We will be implementing them with speed and to measure effect, and we will have the permanent measures to improve management. Next, I will come to the third point of the focus strategy, which is technology strategy. As the key technologies to support Fujitsu Uvance, we identified 5 items: computing, network, AI, data and security and converging technology. We are conducting research and development with a focus. Going forward, by having AI as a core, we will be strengthening 5 core technologies, and we will be implementing in business as added values. Innovation through technology will be changed to added values. And I would like to cite the examples to deliver our efforts to customers and society. The one on the left is the combination of AI and key technology and 1 of the example of R&D and the demonstration project to deliver greater value. The top left represents a combination with computing. The company is working together with the Tokyo Institute of Technology, Tohoku University and [ Riken and we have started the development of learning method to enhance performance of large-scale deep learning represented by ChatGPT. We will be contributing to the enhancement of our research capability with AI, which can be used by companies and academia. The bottom left is the combination with converting. We will be able to reproduce to predict the change in the behaviors of people and to make it verifiable as the technology of a digital rehearsal technology. In the aisle of white in the U.K., this technology is used for the operation of shared e-scooter and it is used for the verification of measure to enhance the convenience of the users and the reduction of CO2 emission. The one on the right is an example of our value provision model originating from technology. As we announced the other day, the advanced AI technology can be tried with the application to the new business by using the elemental technology of Web3 and Fujitsu Kozuchi AI platform, Web3 acceleration platform will be the center to combine with the other company's technology and OSS and this will be implemented in hybrid IT, which is one of the horizontal area of Fujitsu Uvance. With this application and the services of the vertical area of Fujitsu Uvance can be combined, and by providing this as the offering, we will be implementing society -- implementation with the customers. Next is the resource strategy, the fourth focus. We will be achieving globally for the talent portfolio aligned with the business. We will define job role, which will be consistent globally. We will visualize a human resource portfolio, and we will be promoting talent planning globally, reskilling and upskilling will be implemented to enhance resources in growth area. We will continue to enhance productivity and to strengthen management foundation. With talent and digital technology, we will be enhancing the management foundation supporting business. Human resources and as the -- human resource management as a part of the effort for achieving the talent portfolio along with the business portfolio, we will be implementing measures to focus more on autonomy by focusing on career development. Also for digital technology centering around the OneFujitsu program, we will be promoting the strengthening of the data driven management. Based on the experiences those are acquired internally, we will be delivering to customers as values. We have the similar kind of agenda as many of the companies do. Our practices can be offered as references to customers so that we can promote the DX as an entire society. This concludes the explanation for our focused strategies. Next, I would like to touch upon the corporate goals for FY 2025. The details will be covered by our CFO, Isobe, later on. This is the financial target for FY 2025. Revenue is JPY 4.2 trillion and adjusted operating income is JPY 500 billion with adjusted operating margin of 12% [indiscernible] our targets. As the driver for growth, Fujitsu Uvance is set, and we will be targeting for the profitability enhancement in the Service Solution. Cash generation capability, core free cash flow will be JPY 300 billion. For the capital efficiency, EPS, CAGR will be set from 14% to 16% as our target. Next, to enhance the enterprise value, I would like to talk about the financial strategy. We will be focusing on the concentration to Service Solution to accelerate cash generation speed. To do that, we will be focusing on 4 focused strategies, and we will do the optimum allocation by continuing investment on growth. In the previous midterm management plan, we were able to create a base cash flow of JPY 650 billion on a 3-year basis. But in the next 3 years, we are targeting for JPY 1.3 trillion, which will be double that amount. Lastly, I will talk about nonfinancial targets for FY 2025: environment, customers, productivity and talent. In these 4 areas, we have set KPIs, and we will be addressing to achieve them. As the KPI in environment, GHG reduction amount compared with FY 2020 in Scope 1 and 2, Fujitsu Group will reduce 50% and in Scope 3, in supply chain, we will be targeting for the reduction of 12.5%. With respect to customers, we will continue customer Net Promoter Score, the trade convention or KPI will be continued, and we will be aiming to increase by 20 points compared to 2022. For productivity, operating income per employee, we will be aiming for a plus 40% versus FY 2022. In talent, the traditional KPI employee engagement will be continued, and we will be targeting for the achievement of the global score 75. As the indicator for diversity leadership, the female representation globally will be set as KPI. And from 14% in FY 2022, we will be targeting to expand to 20% in FY 2025. In 2030, we will be targeting for the achievement of 30%, and this is broadcasted to determine this figure. Furthermore, the efforts in nonfinancial area, how much it would contribute to financial area will be analyzed quantitatively for both the financial and nonfinancial areas that we will be targeting to achieve our targets. Fujitsu has already specified the purpose, and we have been promoting various types of transformation in order to achieve them. Over 3 years, up to 2022 business organizational structure, HR system, internal system and to the mindset of employees and to corporate cultures, we have seen tremendous change. Along with the new midterm management plan, we will be promoting transformation, and we feel that we are ready to deliver the change. This time, we have specified new vision and materiality. Towards 2030, Fujitsu will try to solve a global environment issues toward the future where people and nature can coexist and the development of digital society where stability and prosperity of the world can be achieved and enhancement of people's well-being by formulating the [indiscernible] foundation, which is human-centric and we will be concentrating our management resources to the 3 materiality in order to build the stronger foundation. As a sustainable company, we will be delivering this midterm management plan. With this, I would like to conclude my explanation. Thank you very much for your attention.

Next, Isobe will be making his presentation. CFO Isobe, the floor is yours.

Now let me explain the financial plan under the medium-term management plan. Now before discussing the financial plan, however, I would like to provide some supplemental information on the changes to our business segments. First, I will present an overview of changes to the segments. CEO Tokita touched on this, so I'll go over just the main points. The major change is that existing Technology Solutions are divided into 2 categories: Service Solutions and Hardware Solutions. In the previous Technology Solutions segment, the hardware sales and hardware maintenance services that have been a part of the solution services and international regions, excluding Japan subsegments are separated out to create the New Services Solutions segment. By separating out all hardware, including hardware sales conducted by sales companies such as Fujitsu Japan as well as the hardware and maintenance services that have been included in the previous Solutions and Services segment, the new Service Solutions segment will just include systems integration and other services businesses. There will be 3 under this. The first is Global Solutions, which will create and provide uniform global value delivery business centered on Fujitsu Uvance. It is the cornerstone of our business portfolio transformation and is positioned as a driver of growth in a medium-term management plan. Second segments are the regions, and these businesses provide services depending on the region and location of the customer. Please note that Uvance's implementation is also included in the regions. Regions are divided into Japan and overseas according to major market segments. The Japan region is a business backed by a strong customer base. This region is positioned as a cash cow in the current business portfolio and Fujitsu's business in this area will continue to play a leading role in digitalization and modernization of Japan. In essence, we aim to further improve profitability through steady business growth and enhance the delivery. In the overseas regions, there are still many issues to be resolved. During this medium-term management plan period, we will move forward to ensure a shift in our business structure by implementing a uniform global strategy. The Service Solutions segment consists of the 3 segments I just described. The other new segment is Hardware Solutions. It includes hardware sales and hardware maintenance business that have been part of the previous solution services and international regions, excluding Japan segments, and consolidate this business with the previous system platforms such as segment, creating a [indiscernible] on hardware business. Eliminations corporate includes the common part of the previous Technology Solutions segment as well as research laboratories and company-wide research and development activities that did not belong to any individual segment and also company-wide DX investments. The following page shows the segment changes. Since I just explained this, I will omit further explanation. The following page is a reclassification table of revenue and operating income. The all segments are on the left-hand side of the page, and reclassification amounts are on the right, and the new segments are next to the amounts. I will deal away with the details. That concludes the overview of the segment changes. Next, I would like to discuss the financial plan. First, I would like to present the highlights of the consolidated financial plan revenue, adjusted operating income and core free cash flow. The period within the dotted line box is the period of this midterm management plan. The term adjusted operating profit is being used from now on. But this is the same as the previous term we called operating profit. Excluding special items and restructuring, it is operating profit, excluding onetime gains and losses from business restructuring, M&A and institutional changes. It represents the recurring profit from the business. In fiscal 2025, the final year, the current medium-term management plan, sales revenue is projected to be JPY 4.2 trillion. Adjusted operating profit is targeted at JPY 500 billion. Operating profit margin is projected at 12%, and absolute value of profits is projected to be approximately 1.5x that of fiscal 2022. Core free cash flow generated by this business growth in fiscal year 2025 is projected to be JPY 300 billion. There was a negative impact on cash flow in fiscal year 2022, mainly due to an increase in inventories, resulting from advanced procurement of parts and materials. By addressing these current issues, we plan to double our ability to generate cash flow compared to fiscal 2022. The following pages describe the characteristics of this segment and new segments. Let me briefly explain. At the top are the consolidated totals. The figures I mentioned earlier with adjusted operating profit for fiscal 2025 projected to be JPY 500 billion, an increase of approximately JPY 180 billion from fiscal year 2022. The drivers that support this growth are in particular, the revenue or profit from Service Solutions sales revenue fiscal 2025 is projected to be JPY 2.4 trillion, representing an average annual increase from fiscal year '22 of 6.5%. Adjusted operating profit is projected to be JPY 360 billion, 2.2x higher than in fiscal year 2022. We aim to achieve an operating profit margin of 15%. Let me supplement information for each subsegment. First, Global Solutions. This business is the driver for the growth of the service businesses and cornerstone of our portfolio transformation. Sales revenue is expected to expand significantly by developing value-delivering businesses centered on Uvance. Also, as we are currently in the upfront investment phase, the adjusted operating profit margin is very low at about 1%. Uvance entire lineup will be available in 2023 however, and sales revenue, therefore, is expected to expand significantly as the business develops. We aim to achieve a 10% profit margin in fiscal year 2025. The next reason in Japan is the cash gap backed by a strong customer base. We will further improve profitability. Sales revenue growth is expected to average just under 7%, and Fujitsu will continue to play a leading role in Japan's digitization and modernization through its business in the region in terms of profits. In addition to steadily expanding businesses with healthy margins, we will continuously improve profitability by pursuing more sophisticated delivery, and we aim to achieve an adjusted operating profit margin of 19% in fiscal year 2025. We plan to transform the business structure of overseas region over the medium term. By achieving a transformation and business portfolio through a uniform global strategy, we will firmly establish the starting point for sound growth. The next page shows the other segments. Our plan calls for us to ensure that the Hardware Ubiquitous and Device Solutions can maintain the same level of profit as fiscal 2022. At the bottom of the table, we plan to increase our investment in business growth, although we expect to see a decline in approximately JPY 20 billion in earnings from elimination and corporate. We will expand growth investments in advanced R&D centered on AI and our internal digital transformation for data-driven management. This page summarizes our plans to expand operating profit in Service Solutions, which is our growth driver. The last figure is the adjusted operating profit from fiscal 2022, which is the starting for the changes we are projecting through fiscal 2025. One is the increase in revenue and average growth rate over the 3-year period is projected to be 6.5%. The higher gross margin will be projected to be JPY 150 billion in higher operating profit, increased largely from expansion of Uvance, which has generated revenue of approximately JPY 200 billion in fiscal 2022. Fiscal '25, we aim to increase the sales to JPY 700 billion or 30% of total revenue in Service Solutions segment. The next item 2 is approximately JPY 80 billion in higher operating profit due to improved profitability. In addition to improving the gross margin by more than 1% per annum, we will improve profitability by developing value-delivering business such as Uvance. Number 3 is as a result of the expansion of the investments for business growth. Operating profit is expected to decline by JPY 30 billion. We will expand our investment, focusing on the development of Uvance offering and human resources. As a result of these efforts, we aim to achieve adjusted operating income of JPY 350 billion in fiscal 2025. Next is our financial strategy, the plan for capital allocation. We will be trying to optimize our capital allocation with the aim of consistently expanding our corporate value. First of all, the base cash flow, which is the source of the capital to be allocated, projected to greatly expand. Under the previous capital allocation policy, the total capital allocation for the 5 years from fiscal 2022 was over JPY 1 trillion up to fiscal 2024. Over 3 periods, we are planning for a base cash flow of JPY 1.3 trillion, which is going to be a significant increase from the previous year. This figure is in comparison with the 3 year actual from 2020 to 2023. This will be the scale of [indiscernible]. In addition to the expansion of our cash flow by the growth of business, we are also expecting to have the improvement of working capital efficiency and the cash from the sale of noncore assets, and the allocation is on the right-hand side, JPY 700 billion for business growth investment and shareholders' return of JPY 600 billion as a balance. We will be leading to further sustainable growth in business. This would include organic growth investment and a further transformation -- business transformation, risk-related funds. On the other hand, the shareholder return is an important allocation to enhance our corporate value and we will be expanding greatly by looking at the capital efficiency and the financial foundation. These are related to shareholders' returns. There is no change from our plan. For dividend, we will be responding to a growth of the profit, and we will be continuing to have the increase in dividend steadily and stably. We have 7-year consecutive years of increase in dividend up to last year, and we will try to do so over the next 3 years. We will also be flexible and agile by looking at the situation in the share buyback. Already in 2022, we have conducted a share buyback of JPY 150 billion. In the next midterm business plan after 2023, we were expanding cash flow, and we are also planning to have the similar level of share buyback. As a result, in terms of the return in total from 2020 to 2022, the total amount was JPY 350 billion, and there will be tremendous increase to JPY 600 billion scale from the 3 years starting from 2023. With the background of the increase in cash flow generation capability and the profit from the sustainable business triggers, we will be achieving improvement of our capital efficiency and a strong financial condition. On the slide, we have the image of JPY 200 billion, but we will be flexible in financing and also in the share buyback, so there could be possible increase or decrease. This is just simply to show the overall allocation policy over the 3-year period. The last slide is the summary of what I explained so far, which is a summary of financial KPI. With the strengthening of our business growth and profitability, adjusted operating income in FY 2025 will be set as JPY 500 billion. The driver for that will be Service Solution. Adjusted operating income will be JPY 360 billion, and the margin will be 15%, the middle is cash. And with the improvement of the working capital efficiency, we will be strengthening cash flow generation capability. Cash -- core cash flow for FY 2025 will be double that of FY '22 to increase to JPY 300 billion. The 1 at the bottom is our capital efficiency by allocating the expanded cash flow EPS in comparison with FY 2022 will be targeted at 16% on average from 14%. ROIC is also considered as an important indicator and our important target on a midterm basis will be ROIC 15%. These are the financial plans. Even after FY 2023, in order to achieve the sustainable improvement of the corporate value, we will be committed. That concludes my explanation. [Statements in English on this transcript were spoken by an interpreter present on the live call.]