Sekisui Chemical Aktie

Thank you very much for taking the time to join us today despite your busy schedule. My name is Shimizu, and I assumed the position of President and CEO in March this year. Let me express my sincere appreciation for your continued support. On Page 1, I will begin by outlining today's main points, focusing in particular on the messages we would like to emphasize. First, the results for FY 2025. In FY '25, net sales increased by JPY 11.5 billion, reaching JPY 1,309.3 billion. Operating profit was significantly impacted by weak market conditions, both in Japan and overseas, resulting in JPY 106.5 billion. However, we continued our efforts to shift toward high value-added products and made steady progress. Ordinary profit increased to JPY 117.2 billion, supported largely by FX gains and net profit was JPY 75.2 billion, primarily due to impairment losses. ROE marked 9.1%. Regarding our Perovskite

Solar Cell business, which I will explain in more detail later, preparations for future growth are progressing steadily. For FY 2026, we are projecting growth for both net sales and operating profit. While the market environment remains challenging, we set the OP target at JPY 115 billion, striving to achieve this goal 1 year behind the original timeline in the midterm plan. We will continue to shift toward high value-added products and accelerate growth.

We forecast net profit of JPY 76 billion and ROE of 9%. The impact of the Middle East situation has not been factored into our plan, and we will explain our approach later. Turning to shareholder returns. As announced in January, we set the year-end dividend at JPY 40 per share, delivering an annual dividend of JPY 80 per share. For FY '26, we plan to increase the annual dividend by JPY 1 to JPY 81 per share, marking the 17th consecutive year of dividend hikes. On share buybacks, we conducted an additional buyback in the second half of FY '25, repurchasing 14 million shares. As a result, the total return ratio reached 92%. For FY '26, we have set a buyback program of 4 million shares or up to JPY 12 billion. Page 2 illustrates our track record of shareholder returns as well as our plan for FY '26. So, please have a closer look at your convenient time. As we define our shareholder return policy for each midterm plan, we will explain the new policy in May together with the announcement of the new midterm management plan. In FY '26, we will remain committed to both profit growth and dividend hikes, and we aim to achieve 17th consecutive year of dividend growth. We will continue our proactive shareholder returns. Turning to Page 3. I would also like to mention our Perovskite

Solar Cell business, which is positioned as a key growth opportunity. We recently announced the launch of this business, having established the manufacturing technology for 1-meter wide panels using existing production equipment as well as the installation specifications tailored for metal rooftops. We have begun concrete discussions with municipalities and business operators listed here regarding product supply. While production will be limited this fiscal year due to existing capacity, we will prioritize expanding supply capacity through the launch of a 100 megawatts production line in FY 2027. That concludes my presentation. Thank you very much.

My name is Nishida. I will now explain the results for FY '25 and the plan for FY '26. The actual foreign exchange rates were as shown on Page 4. Page 5 shows an overview of FY '25 results. As Mr. Shimizu explained earlier, both net sales and ordinary profit reached record highs. Operating profit was JPY 106.5 billion, slightly below both the previous year and our January forecast. Ordinary profit increased due largely to FX gains, while net income declined due to the impairment losses. Both profit items exceeded the forecast, mainly due to higher FX gains.

Page 6 shows net sales and operating profit by segment. Housing and UIEP recorded profit growth, but this was not sufficient to offset declines in HPP and Medical, resulting in growth in net sales, but a decline in profit on a consolidated basis. Compared with our January forecast, the impact of sluggish market hit hard, particularly on the industrial field of HPP, resulting in shortfall vis-a-vis the guidance on a group-wide basis. I'll explain the details of each segment later. In other segment, as shown in the breakdown, we continue to invest in next-generation businesses such as Perovskite Solar Cells.

Page 7 shows the first half and the second half results by segment. In the second half, all segments achieved OP growth compared to the first half. On a year-on-year basis, the Housing segment made a significant contribution to profit growth with record high profit.

Next, Page 8 shows the FY '25 results analysis. On the left, net sales increased by JPY 11.5 billion year-on-year. On the right, OP was significantly impacted by volume and mix falling well below the forecast, which could not be fully offset by fixed cost reductions, resulting in a decrease of JPY 1.5 billion year-on-year. In the second half, we secured profit growth owing to improved spreads between selling prices and raw material costs.

Page 9 shows the plan for FY '26. The FX assumptions are as stated. The FY '26 plan does not reflect the impact of the worsening Middle East situation, and I will explain this impact separately later.

Page 10 illustrates the earnings guidance and shareholder returns for FY '26. As mentioned earlier, the plan calls for growth in net sales and OP. Ordinary profit is expected to decline due to the absence of FX gains recorded in the previous year. We plan to raise the annual dividend by JPY 1 to JPY 81 per share, marking the 17th consecutive year of dividend hike. We have also set a share buyback program of 4 million shares and will cancel 25 million shares of treasury stocks to minimize the holding of treasury stocks.

Page 11 explains the impact of deteriorating situation in the Middle East. In terms of challenges for procuring raw materials and components, we expect the impact in the first quarter to be minimal. Regarding rising prices of raw materials and components, we estimate an impact of approximately JPY 14 billion in the first half. But in principle, we will fully pass on these costs through pricing. The status of selling price pass-through initiatives is shown on the right. In sum, the business plan we present today does not reflect the impact of the worsening Middle East situation, and we will update our outlook on the impact on a quarterly basis going forward.

Page 12 shows the outlook for market conditions. The global automobile production volume in the upper left trended slightly below our expectations in the fourth quarter of FY '25. For FY '26, we expect the volume to be at the same level as the previous year. The smartphone shipments at the bottom left was slightly below the previous year's level in the Q4 of FY '25. As expected, we believe this continues through FY '26. Regarding the number of visitors hold a housing at the top right, in the second half of FY '25, it fell below the previous year. For the full year of FY '26, we assume it will be flat to the previous year. Below that is new housing starts. We expect a slight recovery in FY '26 Y-o-Y, but the long-term gradual downward trend is unlikely to change. For the domestic naphtha price at the bottom right, our plan assumes JPY 65,000 without factoring in the impact of the projected rise due to the worsening condition in the Middle East. We will pass through cost if raw material procurement prices rise.

Page 13 shows the FY '26 plan by segment. The OP is set at JPY 115 billion, with all 4 segments expected to achieve higher sales and profit, aiming for record high profits at the company-wide level as well as in the HPP and UIEP segments. We will launch the Perovskite Solar Cells Business and will focus on development for further growth.

Page 14 shows FY '26 plan by segment, first half and second half. We aim to achieve higher sales and profit across all segments and company-wide in both first half and second half with all segments to reach record high profit in the second half.

Page 15 shows FY '26 plan analysis. Net sales are planned at JPY 1,408.4 billion, up by JPY 91.1 billion (sic) [ JPY 99.1 billion ]. The right is OP. We aim to secure profit growth through sales volume and product mix, mainly in HPP and housing. While we anticipate increase in fixed costs such as labor, we plan for an JPY 8.5 billion increase in OP by securing spread cost reduction and favorable ForEx.

Page 16 shows trend in consolidated performance. In FY '26, we returned to an OP growth trend and reached record high. For EBITDA, we expect to reach a record high in FY '26 following the record set in FY '25. ROE for FY '26, we expect it to remain flat due to the worsening of nonoperating income and expenses such as ForEx gains and losses, but we will continue to work on improving capital efficiency. Next, I will explain FY '25 financial results.

Page 18 shows the changes in consolidated subsidiaries and their impact on financial figures. Regarding the consolidated P&L on Page 19, I will explain items from ordinary profit downwards. Ordinary profit was JPY 117.2 billion, up by JPY 6.3 billion. The result was stronger year-on-year than operating profit, mainly due to improvements in equity earnings and ForEx gains from the weaker yen. The year-on-year difference in FX gains and losses was due to the yen weakening by about JPY 10 against the U.S. dollar from the beginning to the end of FY '25. In both fiscal years, we recorded over JPY 14 billion in gain on sale of investment securities as extraordinary income following the reduction of strategic shareholders. Major extraordinary losses in FY '25 included JPY 14.9 billion related to the completion of the demonstration and withdrawal of Sekisui Biorefinery and JPY 6.3 billion due to the revision of future plans for the Diagnostics business in the U.S. and pharmaceutical enzyme business in the U.K. And net income decreased by JPY 6.8 billion to JPY 75.2 billion.

Next is the balance sheet on Page 20. Total assets grew by JPY 97.1 billion, but excluding impacts from ForEx and new consolidations, the increase was JPY 35.7 billion. Inventories increased by JPY 40.1 billion with a JPY 30.5 billion increase in the Housing segment. On an actual basis, excluding new consolidations, the increase was JPY 19.3 billion due to the expansion of land inventory for sale and the progress of the Town and Community Development business. Inventories other than housing remained almost flat, excluding FX impact. The breakdown of JPY 58.7 billion increase in Property, plant and equipment is as shown, including a JPY 34.2 billion increase at Sekisui Solar Film, where the Sakai plant is under construction. Now moving on to Page 21. Net interest-bearing liability grew by JPY 79.3 billion to JPY 47.6 billion. The combined increase in retained earnings and treasury shares was a slight JPY 4.8 billion, but net asset increased by JPY 45.8 billion due to other factors. The JPY 29.9 billion increase in ForEx translation adjustment was due to the increase in the yen-based net asset of overseas subsidiary as yen weakened. The JPY 12.7 billion increase in remeasurement of the defined benefit plans was due to an improvement in the net defined benefit asset liability driven by a higher discount rate following the rising interest rates as well as improved pension investment yields. ROIC, ROE, equity-to-asset ratio and D/E ratio are shown here. ROE dropped by 1.2 points (sic) [ percent ] to due the decline in profit and increase in net sales mentioned earlier.

Page 22 shows the consolidated cash flow. Cash flows from operating activities was JPY 78.3 billion, down by JPY 40.9 billion year-on-year. While cash-in from profit increased slightly, there was an increase in working capital due to the rise in inventory in the Housing business, a decrease in advances received and shorter payment terms. In investing activities, CapEx payments were JPY 112.9 billion, while there was JPY 17.1 billion in proceeds from sale of investment securities and JPY 21.6 billion in proceeds from subsidies for capital expenditures.

Free cash flow, including dividend payment was a cash outflow of JPY 26.4 billion. This combined with a JPY 36.4 billion outflow for share buybacks led to an increase in net interest-bearing debt. Page 23 shows depreciation, CapEx and EBITDA by segment. We are taking an active approach to capital expenditures, which in FY '25 reached about 1.6x the amount of depreciation. EBITDA, the source of funds increased by JPY 2.9 billion to reach a record high.

Page 24 shows plans for depreciation, capital expenditures, R&D expenses. We plan for CapEx of JPY 110 billion in FY '26, up by nearly 20%, including a continued investment in the solar film Sakai plant. That's all from me.

Yes. My name is Asano from High Performance Plastics Company. This page illustrates the performance trends of our company since FY 2016. For the mobility field in FY '25, despite the slowdown in the auto market impacted by the weak EV growth, net sales increased year-on-year, driven by steady growth in high-performance interlayer films and securing business on the back of strong semiconductor-related demand. However, profit was down due to the one-off costs related to raw materials. In FY '26, while considerable uncertainty will remain in the global market, we will continue to focus on expanding sales of high-performance products in each strategic field, aiming for growth in net sales and profit and renew the previous record highs. Next, on Page 27, the analysis of the FY '25 results. Although EV growth slowed in the automotive market, interlayer films for head-up display applications remained firm. And together with strong demand growth in aircraft and semiconductor-related applications, volume and mix in mobility and electronics increased year-on-year. On the other hand, for general purpose products, both in Japan and overseas, weak global market conditions led to volume decline, particularly for consumer-related products. Furthermore, despite the greater fixed cost reduction against the January forecast, company posted sales growth but profit declined year-on-year. As such as the initiatives weighed on, resulting in higher net sales but lower profit Y-o-Y. However, excluding the one-off costs related to raw materials in practice, we achieved year-on-year profit growth, which leads us to believe that the underlying business is growing steadily. Next, on Page 28 and the plan for FY '26. Global market conditions are expected to remain highly uncertain this year. That said, we will continue to focus on expanding sales of high-performance and strategic products across each strategic field to improve volume and mix across all segments, while offsetting higher fixed costs through CRO initiatives and FX gains, thereby aiming for higher net sales and profit year-on-year and achieving new record highs. Lastly, I will explain the status of the 3 strategic fields using Page 29. In Electronics, the smartphone production unit is expected to decline year-on-year due to the shortage of memory. But for the display market, given the shift to larger screen sizes, we expect the market to be firm. And for the ship market, we expect the market to expand further driven particularly by strong demand for AI servers. We will accelerate our efforts to acquire new customers and expand the applications in this field. In mobility, although the auto market is expected to remain sluggish, the number of vehicles adopting head-up displays continues to increase, and we will strive to simply capture the associated demand growth while also expanding into new areas such as recovering aircraft demand and growing drone markets.

In the Industrial segment, while demand for consumer-related products is expected to recover from the second half onward, we will particularly focus on expanding strategic products such as sensor businesses addressing labor shortages and care materials with antibacterial and anti-allergy functions as well as further promote labor saving and environmentally friendly products. This concludes my part on HPP. Thank you very much.

I am Yoshida from Housing Company. Now please refer to Page 31. Let me start with the review of our business performance. In FY '25, although the slump in new housing market continued due to rising prices and interest rates, urban areas remained relatively steady, leading to growth in apartment buildings and high-end detached houses. Orders in the renovation business expanded, resulting in net sales of JPY 536.2 billion and OP of JPY 37.2 billion for the entire company, achieving an increase in net sales and a substantial increase in OP. We believe profitability has improved, allowing us to return to a stable growth trajectory. For FY '26, while we do not expect a recovery in new housing market conditions, we aim for OP of JPY 40 billion, marking the third consecutive year of profit growth by strengthening our product strategy to increase sales volume and through growth in the renovation and residential businesses.

Next, please see Page 32 for the FY '25 result analysis. Regarding the net sales in the graph on the left, we achieved sales growth in the housing, renovation and residential segments, resulting in a total increase of JPY 12.2 billion for the Housing Company. Next on the right is the analysis of OP. In the Housing business, although the number of units sold decreased by 265 units Y-o-Y, OP increased by JPY 2.2 billion as unit prices rose through expanded sales of high value-added products. In the renovation business, marginal profit increased due to strengthened sales capabilities, leading to a JPY 2.6 billion profit increase. Overall, the housing company's OP increased by JPY 5.7 billion, slightly above the forecast announced in January.

Next, let's look at the FY '26 plan on Page 33. Regarding net sales to the left, we are planning a JPY 45.8 billion increase for the entire Housing Company with continued sales growth across all segments, housing, renovation and residential. In the Housing business, we expect to see contributions from architect planning, which will be consolidated starting this fiscal year. Next on the right is OP. In the Housing business, despite anticipated impacts from rising components prices and higher fixed costs for strengthening our structure, we plan for JPY 1.7 billion profit increase, offset by higher sales volume and an improved product mix, particularly in the second half alongside the effect of new consolidation. The renovation and residential businesses are also planned to achieve profit increase by offsetting fixed cost growth with marginal profit. The other decrease of JPY 0.5 billion is due to the impact of establishing a new company in Canada. For the entire housing company, we plan an OP of JPY 40 billion, an increase of JPY 2.8 billion. Finally, Page 34 for the status of each business. To the left top-hand side is new housing orders. In FY '25, both order value and number of units slightly exceeded the January forecast with the order value growing to 104% in the second half. As shown in the type of construction breakdown in the middle, apartment buildings remained steady in both units and value, contributing to the increase in unit prices. In FY '26, while we do not anticipate a market recovery, we plan to increase order value by targeting a recovery in detached houses, particularly in rural areas. One of the measures for this is the product strategy described on the right. To meet the needs of each area, we'll strengthen our product lineup across a wide range of price points. Following the launch of the high-end ELVIA last October, we launched Grand To You FR this month, our lowest-priced 2-story product. We aim to increase the number of orders by expanding sales, particularly for subdivision lots in rural area. Next, regarding the renovation business at the bottom left, orders expanded in FY '25 due to growth in the large-scale renovation projects. In FY '26, we'll continue to aim for further growth by expanding internal sales renovation based on periodic inspections and strengthening the structure for external sales renovation. To the right is the residential business. In the real estate business, the number of rental units under management increased steadily and the purchase and resale business also grew. The effect of consolidating Benhouse since January are emerging and will accelerate growth in FY '26.

Lastly, in the Town and Community Development business. Although net sales decreased in FY '25 due to a gap between condominium completions, we expect a substantial increase in FY '26 as the number of completed projects rises. We'll also proactively continue to prepare for new projects. That concludes my presentation for the housing company.

Yes. My name is Hirai from UIEP. I will start my presentation. Page 36 shows the performance trends. In FY '25, net sales were JPY 240.4 billion with OP of JPY 23.2 billion and operating margin of 9.7%. While weak market conditions persisted, net sales remained flat over last year, and we secured profit growth by maintaining spreads, achieving a fourth consecutive year of record high OP. For FY '26, we are projecting net sales of JPY 255.4 billion and operating profit of JPY 25 billion, driven by growth in overseas sales, expansion of prioritized products and continuous spread management. Page 37 shows the analysis of performance in FY '25. Net sales were in line with the previous year and OP increased by JPY 0.3 billion.

Looking closely at the analysis of OP on the right, volume and mix factor had significant negative impact compared to the previous year. While positive growth derived from pipeline renewal and Performance Material, shortages of labor and strict overtime regulations in the construction industry extended project timelines and declines in CPVC in India impacted negatively. However, this was offset by spread expansion mainly in domestic operations. On the other hand, the expected recovery in the Indian market did not materialize in Q4 and results unfortunately fell below the January forecast. Page 38 shows the FY '26 plan. We are guiding for net sales growth of JPY 15 billion and OP growth of JPY 1.8 billion. Referring to the OP analysis on the right, the expected fixed cost increase due to investments in human capital and capacity expansion will be offset by significant increases in volume and mix, mainly in pipeline renewal and performance materials as well as by securing margins focusing on piping materials. We aim to achieve fifth consecutive year of record high profit. Currently, due to the worsening situation in the Middle East, we are hearing supply concerns and price hike requests from suppliers. Regarding supply, we are evaluating alternative raw materials in case procurement of existing materials becomes unstable. To deal with price hikes, we will pass them on promptly without delay. Page 39 outlines the status of the three strategic fields. First, the Pipe Systems at the upper left. The plan calls for growth in net sales in both the first and the second half. Market conditions for pipe products are expected to remain intact, and we'll focus on expanding prioritized products and securing margins. For CPVC, we'll focus on expanding new compound products and broadening sales areas. Next, the Building and Infrastructure composite materials at upper right. We also project sales growth in both the first and the second half. For fire-resistant and nonflammable materials, we will accelerate sales growth by expanding applications. And for FFU, we will strive to expand adoption not only in Europe, but also in the U.S. The lower left shows infrastructure renovation, where we also plan for growth in both halves. And Aqua Systems sales decline will be covered by pipe renewal. For pipe renewal business in Japan, we will capture renewal demand based on the nationwide base. And overseas, we will focus on acquiring new orders through strengthening marketing. For Aqua Systems, although sales is expected to decline due to delay in large plant CapEx, we will step up the effort to grow the sales of water storage panel tanks and capture renewable demand. In the growth areas indicated at lower right, we will expand sales of prioritized products, particularly fire resistant materials and pipe renewal. For overseas sales by region, we will drive solid growth in each area, focusing on CPVC, pipeline renewal and FFU. Sales in growth-driving businesses were somewhat sluggish in FY '25, but will return to a growth trajectory in FY '26. This concludes my presentation. Thank you very much.

I am Yamashita. I will now explain the Medical business. I will begin with the review of business performance on Page 41. In FY '25, due to a decrease in the demand for infectious disease testing kits in the U.S. and the impacts of the market slump in China, net sales were JPY 93.7 billion and OP was JPY 11.1 billion, resulting in a decrease in both sales and profit. For FY '26, while we anticipate the difficult market condition for overseas diagnostics to continue, we plan to increase net sales to JPY 97.3 billion and OP to JPY 12 billion by strengthening new customer acquisition in domestic Diagnostics and the Pharmaceutical Science businesses as well as improving profitability. Next is Page 42 for FY '25 result analysis. As shown in the bar chart on the left, net sales were JPY 93.7 billion, a decrease of JPY 5.5 billion year-on-year. Furthermore, as indicated in parentheses, net sales, excluding infectious disease kit decreased by JPY 1.7 billion. OP on the right was JPY 11.1 billion, a decrease of JPY 1.7 billion from the previous year. In the overseas diagnostics business in the U.S., the early end of the infectious disease outbreak led to a significant drop in demand for testing kits, while the market slump in China caused by medical cost containment measures also continued. Despite substantial and earlier-than-planned fixed cost reductions, including the consolidation of operations in the U.S. and China, results fell short of the January forecast, ending in a drop in both sales and profit. Next, I'll explain the overview of the FY '26 plan on Page 43. As shown in the bar chart on the left, we are planning for net sales of JPY 97.3 billion, including ForEx impact, which is an increase of JPY 3.6 billion from the previous year. OP on the right is planned at JPY 12 billion, up by JPY 0.9 billion from the previous year. While difficult market condition will persist in overseas diagnostics, especially in China, we aim to increase both sales and profit by expanding our market share through new product sales in domestic diagnostics, securing new projects in the Pharmaceutical Sciences business and continuing to drive profitability improvement. Finally, Page 44 shows the status of each business. First, for the domestic diagnostic business at the top left, we successfully captured immunology testing demand in FY '25 and work to increase our market share. FY '26, we will expand our market share by promoting the sales of new product. For overseas diagnostic on the right, net sales decreased significantly in FY '25 due to the drop in infectious disease demand in the U.S. and ongoing impact of China's medical cost containment measures. Although difficult market conditions will continue in FY '26, we will promote sales of Chinese blood coagulation devices launched in China in the second half of '25. Regarding the Pharmaceutical Science business at the bottom left, the Drug Development Solutions business performed steadily in FY '25. We'll continue to focus on securing orders for new projects in FY '26. Lastly, at the bottom right is the sales trend for infectious disease testing kit. In FY '25, demand decreased significantly due to the early end of the infectious disease outbreak. We expect demand to remain difficult in FY '26 to be flat with FY '25, but we plan to increase sales through the sales of new genetic testing kits. That's all from me.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Yes. Thank you for taking time out of your busy schedule to join us today. So I will begin my presentation.

Page 1 shows the currency assumption. In Q3, the yen was JPY 6 weaker than expected at JPY 154 against the dollar. For Q4, the revised October plan called for JPY 148, but we revised the assumption to JPY 156 in the current forecast. As stated, the sensitivity to FX is an uplift of JPY 500 million in OP for every JPY 1 depreciation against the U.S. dollar.

On Page 2, the left half of the table shows the Q3 results. Net sales increased to JPY 330.1 billion, reaching a new record high. The blue asterisks indicate record highs. Operating profit was JPY 27.5 billion, and ordinary profit was JPY 31.8 billion, both declining year-on-year.

Although we do not disclose the plan by quarter, the results were generally in line with our internal plan. Net profit decreased partly due to the impairment loss of JPY 14.9 billion. This was booked in the Biorefinery Business for the dismantling of the Kuji plant in Iwate after completing the demonstration experiment as scheduled.

We set up an additional share buyback program of 10 million shares for JPY 30 billion for the second half of this fiscal year. As of Q3, we made progress as described on the page, and we'll continue in order to complete the 14 million share buyback for the full year.

Next, Page 3 shows the results by segment. The left table illustrates that the Q3 net sales and OP grew in HPP and Housing out of the 4 segments. We do not disclose the quarterly plans, but the 2 segments are performing slightly better than planned. However, it was not enough to offset the decline in UIEP, Medical and Other segments and resulted in sales growth, but profit decline on a consolidated basis.

The right table shows the results from Q1 to Q3. In HPP, the impact of the onetime charge of roughly JPY 2 billion recorded in the first half remained. The breakdown of the other segment is also shared on the slide. The perovskite solar cell business is progressing as planned.

Page 4 is the market outlook. The automobile production in Q3 was slightly higher than expected, but remained below the previous year. We expect similar trend in Q4 and year-on-year decline. Bottom left, smartphone shipments were slightly above the forecast in Q3, but are expected to slow down year-on-year in Q4.

Top right is the trend of visitors for Housing. Exhibition visitors have dropped significantly, and overall customer traffic was also below last year's level. We expect Q4 to be sluggish as well. Below that is the new Housing starts, which are expected to remain weak. Bottom right, domestic Naphtha price is generally in line with the October forecast and is expected to remain unchanged in Q4.

Page 5 is the forecast for the second half. As shown at the bottom of the table, we are guiding for consolidated net sales of JPY 698.1 billion, up JPY 29.4 billion year-on-year; and operating profit of JPY 64.6 billion, up JPY 5.3 billion from the previous year. By segment, we expect sales to grow in all segments, except for Medical, and OP to increase in all segments.

The right side of the table shows the comparison with the October plan. Sales are expected to exceed the plan, but OP will be in line. With UIEP being slightly challenged by the sluggish domestic and overseas markets, we plan to offset that with other segments on a consolidated basis.

Page 6 is the guidance breakdown by quarter. In Q4, as indicated on the right, we expect growth in net sales and OP in all 4 segments and on a consolidated basis. Compared against the by-segment forecast, we expect Q4 to be generally in line with the October plan on a consolidated basis despite some shipment timing issues, some being pushed forward from Q4 to Q3 and vice versa.

Page 7 is the forecast analysis for the second half. On the left, net sales are expected to be JPY 698.1 billion, up by JPY 29.4 billion year-on-year.

On the right is the OP waterfall chart. We expect a JPY 6.4 billion year-on-year improvement stemming from the volume and mix factor. However, due to the weakness in the domestic and overseas markets, the positive impact will be smaller than the October forecast. With better raw material prices, fixed cost savings and positive FX benefit, we expect a year-on-year OP growth of JPY 5.3 billion in total.

Page 8 shows the full year forecast for FY '25 by segment. As you can see in the middle column, we expect growth in both sales and OP in the 3 segments, excluding Medical, as well as on a group-wide basis. Net sales are expected to grow by JPY 30.1 billion year-on-year to JPY 1,327.9 billion with OP of JPY 110 billion, up by JPY 2 billion from the previous year. Both sales and OP are expected to reach new record highs.

By segment, we expect a significant profit growth in Housing. As explained earlier, we revised the October forecast for UIEP to reflect the impact of market conditions, yet we still expect the profit to grow year-over-year.

Page 9 is the earnings forecast and dividend outlook for FY '25. We project net sales to grow to JPY 1,327.9 billion. Both operating and ordinary profits are expected to increase to JPY 110 billion and JPY 112 billion, respectively. And net sales, OP and ordinary profit would all reach new record highs. Net profit is expected to be JPY 72 billion, also in line with the October plan. We plan to pay an annual dividend of JPY 80 per share, up by JPY 1 from last fiscal year to achieve 16th consecutive year of dividend hike.

Page 10 illustrates the consolidated performance. EBITDA shown at the top, is projected to reach JPY 168.6 billion for FY '25, which would also be a fresh new high. As noted in the comments, we have achieved steady growth despite changes in the external environment. Although we would be short of the targets of the medium-term plan, we are making steady progress in preparing for the next medium-term plan starting next fiscal year.

From Page 11 onward, I will go through the segment details. First, the analysis of the second half outlook for HPP. As indicated on the left, net sales is expected to grow by JPY 17.8 billion year-on-year to JPY 244.1 billion. Looking at the OP waterfall chart on the right, the volume and mix factor will have a positive impact of JPY 4.5 billion from last year. And despite being smaller than planned, we would still enjoy year-on-year improvement.

The improvement in raw material prices and lower fixed costs also contributed to the OP growth of JPY 2.1 billion as planned. As shown in the bar graph below, we aim to achieve a second half OP of JPY 33.4 billion and to renew the previous record highs for the second half and the full year.

Next, on Page 12, the status of 3 strategic fields. First, Electronics. In Q3, the LCD saw steady progress in both smartphone market and panel demand for TVs and other applications. For the Q4, we anticipate a slowdown in the Chinese smartphone market. However, we will offset this through steady growth in non-LCD primarily focused on high-performance semiconductors.

Moving on to the middle section, the Mobility. While we -- while the design film remains sluggish due to the partial stagnation in the EV market, we are achieving steady growth, particularly in HUD application, head-up display applications. Additionally, SEKISUI AEROSPACE CORPORATION is seeing robust production rates for aircraft and steady progress in expanding into non-aerospace applications, making better contribution to earnings.

In the Industrial on the right, market stagnation persists, particularly in Europe and the U.S. However, we are making steady progress in securing new orders for sensors and care material products. We continue to focus on expanding sales of labor-saving environmentally friendly products.

Page 13 is Housing. On the left side, net sales is projected at JPY 280.8 billion, up by JPY 10.4 billion year-on-year. Right side is the analysis of operating profit. In the Housing business, although the number of houses sold is decreasing, we anticipate increased profit due to improved mix.

The renovation business is also steadily expanding its order intake. For the company total shown on the far right, we project a significant increase of JPY 3.8 billion in OP as planned, resulting in an OP of JPY 20.7 billion. Furthermore, OP by business segment is as detailed in each respective section.

Next, on Page 14, the upper left shows the status of new housing orders. Due to the prolonged slump in market conditions, the number of units, particularly in regional areas has struggled to grow. As shown in the bar graph, growth in the number of units was 95% in both third quarter and the fourth quarter.

On the other hand, regarding order value, driven by the expansion of high-priced detached houses and apartment buildings in urban areas, as shown in the graph, we anticipate a 3% increase in both Q3 and Q4 in line with our plan.

Regarding building types in the middle section, apartment buildings have shown significant growth in both the number of units and order value. Below that is the balance of orders as of the end of the period. We anticipate entering the next FY with an order backlog of JPY 160 billion, same as the previous year. The renovation orders in the upper right is showing success with comprehensive proposals centered on periodic diagnostics leading to large-scale orders.

Regarding the real estate business in the lower left, it's progressing steadily. Notably, Ben House, whose shares we acquired last year will be newly consolidated starting this fourth quarter, contributing to sales and profit.

In the town and community development business in the middle, we'll make steady sales of the currently available inventory while further expanding purchasing routes to support new projects.

The bottom right outlines the major M&A in the investment and investment announced thus far, aiming at further growth in the Housing segment. While each investment is not large, we'll continue to strengthen investment in growth areas.

Page 15 is UIEP company. The bar graph on the left shows net sales at JPY 130.5 billion, projected to increase by JPY 3.5 billion from the previous year.

Next, please refer to the analysis of OP on the right. Regarding the volume mix, pipe systems has fallen significantly below October plan. This is due to continued weak domestic housing market, extended nonresidential construction periods and impact of the weak Indian market. As a result, we are revising our OP forecast from the October plan. However, we expect an increase of JPY 1.5 billion year-on-year to achieve a record high OP of JPY 15.9 billion.

Next, Page 16, 3 strategic fields. Top left, pipe systems is facing some challenges. Domestically, construction site delays due to labor shortage have become the norm. In India, the market downturn persists and CPVC prices are declining. And so therefore, we are making -- we are slightly struggling. And regarding CPVC, we will continue to focus on expanding sales, including in regions outside India.

Top right, building and infrastructure composite materials, fire resistant and nonflammable materials are expanding new applications and performing well. FFU sleepers are also expanding driven by increased adoption in Europe.

Bottom left is infrastructure renovation. We are seeing an increase in larger-diameter pipeline renewal projects based on the result of nationwide surveys on aging sewer pipes. While subject to municipal budgets, we aim to expand orders.

Bottom right shows KPIs. Prioritized product sales are steadily expanding. For overseas sales, while India faces challenges, will drive solid growth in Europe and North America. Sales for growth driving businesses are as stated.

Page 17, finally, is the Medical business. The bar graph on the left shows net sales of JPY 50.2 billion with a projected year-on-year decrease of JPY 1.1 billion. While challenging conditions persist in the U.S. and China for overseas diagnostics, we have accelerated profitability improvement measures, achieving greater than planned progress in fixed cost reduction.

As shown on the far right of the table, OP is expected to increase by JPY 100 million as planned, reaching JPY 6.9 billion, as indicated in the bar graph below.

Page 18 is overview by business. Top left is Diagnostics in Japan. In the third quarter, the early spread of infectious disease has driven performance to exceed plans, though this is not disclosed. In the fourth quarter, we'll continue capturing testing demand focusing on immunology.

Top right, Diagnostics overseas. In the third quarter, in addition to delays in the outbreak of infectious disease in the U.S., growing impact of efforts to curb health care costs in China affected performance. We expect market conditions in China to remain weak in the fourth quarter, but we'll focus on capturing infectious disease testing demand in the U.S.

Lower left is Pharmaceutical Sciences. In the third quarter, our Pharmaceuticals and Drug Development Solutions made steady progress. In the fourth quarter, we'll ensure steady shipment of existing orders.

Lower right is infectious disease testing kits. For the second half of this fiscal year, we expect performance to be largely in line with plans and on par with the previous year.

That is all from myself. Thank you very much.

I am Keita Kato, President and CEO. Thank you very much for joining us today despite your busy schedule. Please turn to Page 1. Here are the key points of today's presentation and the messages that I wish to convey. Let me start with the first half results. We started the first half amid an uncertain market environment, partly due to the impact of the U.S. tariff policies. Despite this, we believe our efforts and preparations eyeing next fiscal year and beyond, including our focus to shift toward high-performance products progressed largely as planned. However, the deterioration in certain markets, particularly the auto sector was greater than anticipated, resulting in operating profit falling short of the July forecast.

For the second half, we continue to anticipate growth in net sales and each profit lines. The full year guidance was revised up based on the first half results. While operating profit will fall short of the target set for the final year of our midterm plan, we expect to achieve record high profits. We will return to steady growth trajectory in the second half and step up our efforts in development and preparations aimed at sustainable growth for next fiscal year and beyond. Later, I will also talk about the Perovskite Solar Cell business. And last item on this page is shareholder returns. In the first half, we repurchased and canceled 4 million shares. For dividends, we plan an annual dividend of JPY 80 per share as previously announced, achieving a hike of JPY 1 per share and 16th year of consecutive dividend increase.

Furthermore, at today's Board of Directors meeting, additional share buyback initiative was approved. Our intention is to maintain sufficient cash for future growth while actively returning profits to shareholders. This will bring our total return ratio for the current fiscal year to approximately 100%. Page 2, please. I'd like to share some information on our Perovskite Solar Cell business, which we position as a key growth theme.

This October, the acquisition of Sharp Sakai Plant and machine installation were underway as planned. The schedule for the production line buildup remains unchanged from what was presented at the previous results briefing, with plans to commence operations of a 100-megawatt production line in FY '27. We also plan to start product sales within this fiscal year. At the Expo 2025 Osaka, as noted in the lower left, we confirmed full power generation during the event period and Nighttime LED lighting using our film type solar cells installed on the bus terminal roof. We will continue our efforts on development and production line launch to advance to commercialization. Now that concludes my remarks. Thank you very much.

Yes, I am Tatsuya Nishida, Head of Corporate Finance and Accounting Department. I will walk you through the first half results. Page 3, the actual effects for the first half are as stated. Page 4 is the overview of the profit and loss. In the first half, net sales reached JPY 629.8 billion, setting a new record high. OP, however, was significantly impacted by deterioration in some markets, resulting in a profit decline to JPY 45.4 billion, falling short of the July forecast. Ordinary profit increased to JPY 49 billion year-on-year, benefiting from improved foreign exchange gains. However, net profit decreased to JPY 31.7 billion, impacted by the absence of last year's stock sale gains. The interim dividend will be JPY 40 per share, an increase of JPY 3 as guided in July. Page 5 shows the segment results for the first half.

Although the Housing Company achieved higher profit, it was insufficient to offset declines in HPP and Medical business, resulting in sales growth, but profit decline for the group. Compared to the July forecast, the slowdown in certain markets within the Mobility segment of HPP had a significant impact, leading to results below expectations for the entire group. The segment details will be provided later. The breakdown of the other segment is as shown on the slide, and we will continue to invest in next-generation business such as Perovskite Solar Cells. Page 6 shows results for Q1 and Q2. While July forecast is not shown here, the Housing segment exceeded both plan and forecast in Q2 as well as Q1. Moving on to Page 7, analysis of the first half results. Left shows net sales, which increased by JPY 700 million year-on-year to JPY 629.8 billion. The right shows OP analysis. The significant impact of stagnation in the part of auto market and continued downturn in domestic and international market led to a substantial deterioration in sales volume and product mix compared to the July outlook.

While we try to secure spreads between selling price and raw materials to control fixed cost, OP fell below the July outlook, resulting in a decline. Page 8 is revised second half plan. Now starting with exchange rate assumption. It is set at JPY 148 for dollar. This assumes a slightly stronger yen compared to the initial assumption. Page 9 is outlook for market conditions. Top left, number of global automotive production in Q2 was slightly below the previous year as expected. For Q3 onward is expected to stay below the April assumption. Bottom left, Smartphone Shipment in Q2 were in line with the previous year as expected. Q3 shipments are expected to be slightly below expectations, but on par with the previous year, while Q4 is expected to slightly exceed the previous year. Top right is number of visitors for housing. In the first half exhibition, visitors dropped significantly and overall visitors remained below previous year level. We don't expect recovery in the second half, and it will remain below the previous year's level.

Regarding housing starts, while some said second half of last year have seen a surge in demand, we expect the downward trend to continue. Bottom right is Domestic Naphtha. We anticipate Q2 to be in line with expectation, yet fall below expectations from Q3 onward. Page 10 is second half revised plan by segment. For the second half, we plan net sales of JPY 693.4 billion and OP of JPY 64.6 billion, aiming to new record highs, respectively. It's a JPY 5.3 billion increase in profit year-on-year, and we plan to secure profit growth across all 4 segments. The other segment is as stated. We'll continue planned investment in the second half. Page 11 is second half revised plan analysis. Left side is net sales, which is projected at JPY 693.4 billion, an increase of JPY 24.7 billion. Right is OP. Although volume is significantly lower than the April plan, product mix improves due to larger sales of high-performance products, resulting in substantial Y-o-Y increase.

High Performance Plastics and Housing will continue to drive its growth. We stay focused on improving selling prices, securing spreads through favorable raw material costs and controlling fixed cost. The revised plan is JPY 64.6 billion, up by JPY 5.3 billion year-on-year. Page 12 is revised full year plan. By segment, we plan growth in revenue and profit in 3 segments, excluding Medical business. Company-wide net sales is planned at JPY 1,323.3 billion, up by JPY 25.4 billion Y-o-Y and OP plan is JPY 110 billion, an increase of JPY 2 billion year-on-year. Page 13 is a summary of the revised full year plan. We aim for record high profits in both OP and ordinary income, JPY 110 billion for OP and JPY 112 billion for ordinary income.

Net income is expected at JPY 72 billion. Dividend will increase by JPY 1 per share as planned to JPY 80 annually, marking the 16th consecutive year dividend growth. Furthermore, we conduct another share buyback of 10 million shares, making total amount of share buyback of this fiscal year to be 14 million shares. Finally, consolidated performance on Page 14. Although this revision makes it not possible to reach our midterm target, we believe our earning power is steadily strengthened as evidenced by the continued expectation of record high EBITDA. Looking ahead into the next MTP, starting next fiscal year, we'll continue to focus on readiness and growth. Thank you.

I am Akira Asano, Company President of HPP. Let me update you on HPP's business. First, on Page 16. This shows the trend of the company's performance since FY '21. For the first half of FY '25, while both the Electronics and Industrial business performed solidly, Mobility was impacted by slower-than-expected growth in the EV market and recovery in Europe. As such, results fell short of the July guidance. For the second half of FY '25, we expect continued strength in the electronics and industrial fields. In Mobility, growth in head-up display wedge films is projected to continue, and we project year-on-year growth in both net sales and profit, aiming for record high profits for the second half and the full fiscal year.

Next, on Page 17, I will explain the performance for the first half of FY '25 and the year-on-year change. While both the Electronics and Industrial business performed firmly, Mobility was impacted by the slowdown in EV market, resulting in sluggish trend for designed interlayer film. As such, sales volume and product mix contribution did not expand as much as the July projection. Furthermore, to settle dispute related to resin sales in Europe, we recorded a total onetime expense of JPY 2 billion in the second quarter, including the JPY 1.3 billion projected at the time of the Q1 results. While selling price factor improved largely as forecast in July, fixed costs such as investments in development and human capital increased. Net sales grew by JPY 2.4 billion year-on-year to JPY 223.5 billion, and OP declined year-on-year by JPY 1.5 billion to JPY 28.4 billion.

However, excluding the JPY 2 billion one-off expense, operating profit actually increased year-on-year. We, therefore, view the overall business as expanding steadily. Page 18 shows the analysis of the revised plan for the second half of FY '25 and factors behind the change compared to the previous year. We expect continued solid performance in the Electronics and Industrial fields. In the Mobility field, we anticipate further growth for NHPP films, particularly the head-up display wedge films. Furthermore, aircraft-related demand, which is on a recovery trend is expected to continue growing through improvement in selling price, raw materials and control over the fixed cost, we project sales to be up by JPY 14.1 billion year-on-year to JPY 240.4 billion and OP to increase by JPY 2 billion to JPY 33.4 billion, marking the third consecutive year of record high profit for the second half and the full year.

Lastly, on Page 19, let me explain the trend in sales and KPIs for the 3 strategic fields. First, in the electronics field, the smartphone and semiconductor markets remain robust. We anticipate continued growth in the second half of FY '25, following the trend in the first half. We'll continue to focus on expanding market share and winning new business in the non-LCD field, mainly driven by advanced semiconductors. For heat-release materials, expansion into the electrical equipment application, primarily for chip testers is progressing, and we will pursue further sales growth. In the Mobility field, while the slowdown in the EV market is expected to persist, leading to continued weakness in designed films, sales expansion of NPP films, particularly for head-up displays, is projected to continue.

In the aircraft business, Sekisui Aerospace is expected to make profit contribution throughout the year, driven by steady progress in customer production rate recovery and securing new businesses. In the industrial field, although the domestic market remains stagnant, we anticipate steady growth in the second half due to progress in improving selling prices and the steady expansion of labor-saving environmentally friendly products, including sensors and care materials. We'll continue to focus on maintaining the spread while expanding our strategic business. This concludes my explanation. Thank you very much.

I am Yoshida, President of Housing Company. Now let me offer you the presentation of our company. Please refer to Page 21. First, here is the first half results and the revised second half plan. Regarding the first half, despite weak new housing market conditions, we increased revenue through improved product mix in the Housing business and expanded orders in the Renovation business. OP achieved a significant increase, surpassing the July forecast driven by higher sales and reduced fixed cost. For the second half, we plan for an increase in net sales exceeding April forecast through higher unit price by expanding sales of high-end products and growing the renovation business.

Now Page 22 is first half result analysis. The left graph shows net sales. Housing, Renovation and Residential business secured revenue growth. Overall, it increased by JPY 5 billion to JPY 258.6 billion. To the right, we have OP analysis. For the Housing business, although the number of units sold fell short of the forecast by -- of 60 units, this was offset by improved product mix, cost reduction and fixed cost control, resulting in a JPY 0.9 billion increase in profit. In the Renovation business, marginal profit grew, thanks to strengthened sales capabilities, resulting in a JPY 0.7 billion increase in profit. Overall, we achieved JPY 16.3 billion OP exceeding the July forecast by JPY 1.7 billion. Page 23 is revised second half plan.

On the left is net sales. For the Housing business, we do not anticipate a market recovery in the second half and are planning for sales to be on par with the previous year. On the other hand, the Renovation business is expecting a continuous growth. And overall, we plan for revenue to increase by JPY 3.4 billion to JPY 273.8 billion. On the right, OP. We plan for an overall increase of JPY 3.8 billion to JPY 20.7 billion. In the Housing business, we plan to offset the impact of reduced sales volume and rising material cost through improved product mix, cost reduction initiatives and fixed cost control, resulting in a JPY 2.5 billion increase in profit. We'll strengthen product strategy per region.

For urban areas, we launched our high-end flagship model, ElVIA today. We'll intensify proposals targeting affluent customers. For the renovation business, we plan to increase profit by JPY 1.6 billion through expanding orders by enhancing periodic diagnosis and strengthening proposal capabilities while also promoting workload labeling by improving progress management. Finally, Page 24 shows our KPIs by business. First, upper left is new housing orders. In the first half, both order value and units progressed almost as per July forecast. In particular, sales of high-priced products like apartment buildings expanded nicely, securing the similar order value as the previous year. For the second half, while we do not expect market recovery, we plan to achieve a 3% growth in order value year-on-year by strengthening orders for high-end products.

Next, in the middle section is the breakdown by building type. Detached housing struggled in both rebuilding and the new construction, but we expect apartment buildings to remain steady heading into second half. Regarding the end of the period order balance below, the first half saw an increase of JPY 6.5 billion Y-o-Y as order amounts were secured at the same level as the previous year. For the second half, we'll focus on securing order backlog for the following year by achieving our order targets. Next, on the right is the orders by unit price and the price range. We are seeing upward trend in unit prices on the back of increased value added in detached housing and strong performance of 3-story apartment buildings.

The ratio of high-end products over JPY 50 million is also steadily increasing. In the second half, we'll focus on the sales expansion of ELVIA and continue aiming to increase unit prices. Next, in the lower left, the renovation business. Efforts to secure and strengthen sales personnel have borne fruit, leading to growth in orders originating from periodic inspections or diagnosis. Installation renovations centering around openings are also progressing steadily. For non-Heim owners, we'll further grow sales capacity by increasing dedicated personnel to sustain growth in the second half.

To the right is the residential business. In the real estate business, we'll expand our operations by increasing the number of dwelling units under management and expanding brokerage services while strengthening preparations for buy and sell and asset businesses. Finally, the Town and Community Development business. While sales progress has been delayed for some projects in suburban areas, we will focus on selling the properties up for handover this fiscal year while also continuing to strengthen the preparation for new projects. That concludes my presentation.

This is Yoshiyuki Hirai, Company President of UIEP. I will start my presentation on Page 26. This is a recap of the FY '25 first half results and the plan for the second half, which was revised. In the first half, despite maintaining spreads with new pricing, the impact of the sluggish market was significant, resulting in decline in net sales to JPY 112 billion and drop in OP to JPY 8.1 billion. For the second half, while challenging conditions such as longer construction periods due to labor shortages will persist, we plan to achieve higher sales and profit with sales of JPY 135.1 billion and OP of JPY 16.7 billion by expanding sales of prioritized products in overseas business.

Achieving this plan would result in full year OP of JPY 24.8 billion, marking the fourth consecutive year of record highs and operating margin reaching 10% for the first time. Next on Page 27 is the analysis of the first half results. As noted on the left, net sales were JPY 112.1 billion, down by JPY 1.4 billion year-on-year and falling short of the forecast by JPY 2.8 billion due to reduced construction site operations in Japan caused by the intense heat and sluggish Indian construction market overseas. The OP waterfall chart on the right shows a significant decline in both volume and mix due to lower sales that I explained earlier. Furthermore, as communicated in July, we recorded repair costs for specific products as one-off charge. We also made steady progress in expanding sales of prioritized products and getting acceptance on new pricing.

While striving to control fixed costs, the OP fell short by JPY 400 million. Nevertheless, excluding the onetime repair cost of JPY 500 million, the result exceeded the previous year. Next, Page 28 shows the analysis for the revised second half plan. On the left is the sales projection of JPY 135.1 billion, a year-on-year increase of JPY 8.1 billion. Growth will be driven by key products in our growth driving businesses, fire-resistant pipes, fire-resistant and nonflammable materials, pipeline renewal products and FFU or sleepers for the overseas market. As shown on the right, OP is projected to grow by JPY 2.3 billion year-on-year to JPY 16.7 billion. We expect the market to remain largely unchanged from the first half. While FX will be unfavorable for the chlorinated PVC business, we will rigorously maintain spreads and grow volume, focusing on key products from the growth-driving businesses. Lastly, on Page 29 is a snapshot of the 3 strategic fields.

For Pipe Systems at top left, the plan calls for sales decline in the first half and the sales growth in the second half. The first half was challenging for pipe materials due to chronic labor shortages and longer construction periods caused by extreme heat, while CPVC faced intensified competition from subdued construction demand in India. For the second half, we aim to expand sales of prioritized products and increase market share with new CPVC formulations. [indiscernible] in Thailand for the CPVC resin compound is scheduled for completion in January 2026. In the building and infrastructure composite materials at upper right, a lot of sales growth in the first half and concrete growth in the second half are projected.

In the first half, fire-resistant nonflammable materials and overseas FFU performed steadily, but construction materials faced challenges due to lower housing starts. In the second half, for fire-resistant nonflammable materials, we'll focus on new customer acquisitions and launching 3 new products. For railway sleeper FFU, we aim to expand adoption primarily in Europe and the U.S. Infrastructure renovation at bottom left is expected to achieve sales growth in both halves. Aqua Systems saw steady progress on large-scale plant equipment projects.

Pipeline renewal will focus particularly on securing projects in Japan arising from the results of special inspections. Bottom right are the growth areas and sales of prioritized products grew steadily in the first half, owing to firm trends in fire-resistant earthquake-resistant polyethylene pipes. With successful design-in activities, we expect further growth in the second half. Overseas, sales declined in the first half due to challenges with chlorinated PVC in India, but we aim for recovery in the second half with new compound products. In the West, we anticipate growth driven by FFU. Sales for growth driving businesses are as stated. That concludes my explanation. Thank you.

I am Yamashita. I assumed the position of President of Sekisui Medical in July this year. Now I will explain the overview of Medical business. First, Page 31 shows the performance trends and the second half revised plan. For the first half of FY '25, actual sales was JPY 44.3 billion and OP was JPY 4.5 billion, indicating a Y-o-Y decrease in both sales and profit. In the first half Diagnostic business, demand for test kits remained sluggish due to delayed timing of infectious disease and the worse-than-expected deterioration of overseas market, resulting in performance below the July forecast.

For the second half of FY '25, we anticipate a slight drop in demand for infectious disease testing in Japan and the U.S. compared to our April projections. We also expect that China market to stay sluggish. Consequently, we have revised down our second half sales forecast to JPY 50.3 billion and OP to JPY 6.9 billion from the April plan. Next, Page 32. I will explain the result analysis for the first half. Sales was JPY 44.3 billion, down by JPY 3.6 billion year-on-year. OP was JPY 4.5 billion, a decrease of JPY 1.4 billion. Analysis of OP is shown to the right. For domestic diagnostics, demand for test kits decreased due to the delayed timing of infectious disease. For overseas diagnostics, the termination of a U.S. government project that existed last fiscal year, combined with the delayed timing of the infectious disease impacted result.

In China, the health care cost containment measures also had impact on result. The Pharmaceutical Science business remains solid, but some projects have shifted to the second half. Again, under such circumstances, we've controlled fixed cost, however, on revenue and the profit side, we've seen decline falling below the July forecast. Page 33 is the revised plan for the second half. For the sales, we have revised the plan to JPY 50.3 billion, down by JPY 1 billion from the previous fiscal year.

For OP, we have revised the plan to JPY 6.9 billion, an increase of JPY 100 million. Regarding the analysis of OP, domestic testing demand centered on infectious disease has declined slightly. And for overseas diagnostics business, the U.S. has revised downward its forecast for infectious disease outbreaks compared to the April plan, while China continues to be impacted by health care cost containment measures. For Pharmaceutical Science business, we expect profit growth due to steady sales of key APIs and the carryover of the project delayed from the first half. We plan to control fixed costs in the second half to secure profit growth.

Finally, Page 34 shows overview by business. First, regarding the domestic diagnostics in the upper left, demand for testing kits in the first half fell short of expectations due to the delayed spread of infectious diseases. In the second half, we'll continue to capture testing demand, focusing primarily on immunology items. Next, overseas diagnostics in the upper right. The first half was significantly impacted by the delayed timing of the infectious diseases in the U.S. and the deterioration of China market.

For the second half, we'll focus on sales expansion of new infectious disease products in U.S. and controlling the fixed cost while prioritizing cost reduction in China. Finally, pharmaceutical science in the lower left. In the first half, sales of key KPIs and contract testing exceeded last year's result. We'll continue to focus on new business acquisition in the second half. That concludes my part in Medical business.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Yes, this is Shimizu. Thank you for joining us today despite your busy schedule.

I will present the FY '25 first quarter results and the outlook for the first half. Page 1 shows the FX assumptions and actual results. The Q1 assumption was JPY 152 against the dollar but the actual was JPY 145, JPY 7 appreciation versus the plan. For FX assumption for the second quarter, we are assuming JPY 145 to the dollar.

Page 2 shows the overview of the Q1 financial results. In the first quarter, net sales increased by JPY 6.3 billion to JPY 305.1 billion, with operating profit up by JPY 1 billion to JPY 21.2 billion. The blue stars indicate renewed record high figures. The ordinary profit was down due to the FX impact and net income decreased due to smaller gains on sales of cross shareholdings.

Page 3 shows the Q1 breakdown of net sales and operating profit by segment. In Q1, sales and OP grew substantially for the Housing Company, both achieving record highs at first quarter numbers. The performance of the Housing business offset the decline in sales and profits of all other segments, enabling us to achieve a growth in sales and profits for the group as a whole. The JPY 900 million drop in operating profit for the HPP company in Q1 was caused by the one-off expense related to a raw material transaction in Europe. When adjusting for this, profit in effect grew for HPP. We have not disclosed our quarterly profit forecast but consolidated OP is trending slightly above the plan.

Page 4 is our outlook for market conditions. Auto production globally in the first quarter was in line with our April forecast. We expect production in Q2 to be slightly below the outlook. Q1 smartphone shipments were slightly above the expectation, and for Q2, we expect it to be slightly below our forecast. The upper right shows the visitors for the housing business.

In Q1, both showroom visits and requests for information were down year-on-year. Although not indicated in the table, campaigns and referrals led to some increase but the overall level was slightly below the previous year. As shown by the chart below, new housing starts continue to decline and the outlook for the first half is in line with the original projection. Domestic naphtha price is below our assumption, and we expect this trend to continue in Q2.

Next on Page 5 is the outlook for the first half. As shown at the bottom line of the table, total net sales are expected to be JPY 639.2 billion, up by JPY 10.1 billion, with operating profit of JPY 48.9 billion, an increase of JPY 0.2 billion. Both figures are expected to be record highs.

By segment, we are aiming for record high sales and OP in the HPP and UIEP segments. Details of each segment will be explained later. The right side of the table shows the latest forecast against the plan. Despite the net sales projected to fall short of the plan, OP is expected to be on track. We believe that the direct impact of the U.S. tariff in the first half will be minimal. In other segment, we are making progress as planned in strengthening our production capacity for perovskite solar cells toward achieving 100 megawatts of production by FY 2027.

Page 6 illustrates the by segment outlook for the first and second quarters. As indicated at the bottom of the table, the consolidated operating profit in Q1 grew by JPY 1 billion and is projected to drop by JPY 0.8 billion in Q2. By segment, the Housing Company was significantly affected by the impact of leveling after the business fluctuation. Operating profit for HPP was down in Q1 due to the one-off expense. But in Q2, we expect profit increase owing to growth in the mobility field, including interlayer films for head-up displays and the aerospace applications, expansion of spreads and reduction of fixed costs.

Page 7 highlights factors affecting the outlook for the first half. Shown on the left, we expect net sales to be up by JPY 10.1 billion year-on-year. On the right is the analysis of factors affecting OP. The impact of volume and mix will increase by JPY 5.5 billion year-on-year. However, the contribution is expected to fall short of the plan due to stagnant market conditions in some areas of HPP and Medical Business.

In cost reduction, et cetera, on top of the temporary expense for HPP booked in Q1, additional costs will be incurred for repairs of specific products in UIEP in Q2. And as such, the contribution will be less than planned. Despite some negative FX impact, we expect total OP to grow by JPY 200 million year-on-year, in line with April outlook, owing to better margin and fixed cost reductions.

Using Page 8, I will explain the first half guidance and dividend. As mentioned on the previous page, net sales are expected to be JPY 639.2 billion, with OP of JPY 48.9 billion, both figures achieving record highs. Ordinary profit is expected to be up by JPY 1.6 billion to JPY 49.7 billion. Net profit is projected to decrease by JPY 7.8 billion year-on-year to JPY 35.1 billion due to lower gains from the sale of cross shareholdings. We intend a dividend hike of JPY 3 to JPY 40 per share as planned as interim dividend.

Starting from Page 9, I will explain more details for each segment. Starting with the first half outlook and analysis of the HPP company. The bar graph on the left shows sales of JPY 225.4 billion, an increase of JPY 4.3 billion. Due to the impact of a slowdown in certain markets, particularly in the mobility sector, sales are expected to fall short of the plan. On the right side is the analysis of OP. The volume mix contribution will fall short of the plan but will still increase by JPY 6.3 billion year-on-year. Despite the negative FX impact, we aim to achieve the first half guidance calling for OP of JPY 30.9 billion, a growth of JPY 1 billion year-on-year due to improvement in raw material prices and fixed cost reductions.

Next, I would like to move on to Page 10 for 3 strategic fields for HPP. And regarding electronics, we've seen firm large-scale display and smartphone trends in the LCD fields. We've seen an impact from inventory adjustment in certain semiconductor processing materials in the non-LCD field. However, we saw continued steady growth in other products such as functional foam tapes and heat release materials for semiconductor inspection equipment. In the middle is the mobility. This segment has been affected by the stagnant EV market. Sales of design interlayer film were particularly sluggish. However, sales of interlayer films for HUDs grew steadily and are expected to exceed 130% on sales volume basis in the first half.

Aerospace hit the breakeven in the second half of the previous fiscal year and is contributing to earnings this fiscal year exceeding the plan. In the industrial on the right, domestic and overseas demand for construction and consumer goods is still sluggish but we'll continue to focus on expanding sales of gross products by firmly maintaining the spread of sales price improvement that we have been working on since last year.

Page 11 shows overview of the first half of FY 2025 forecast for Housing Company. First quarter had seen increase in the number of new houses sold and unit prices in the housing business as well as increased order in the renovation business. On the left, net sales are projected to grow by JPY 5.9 billion to JPY 259.6 billion. As shown in the analysis OP on the right, the number of houses sold will decrease by 210 in the second quarter but the total OP in the first half is expected to increase by JPY 1.4 billion as planned, achieving the forecast of JPY 16 billion.

Next, Page 12. Left top shows the status of new housing orders. Although the market is still sluggish, the value of orders is growing steadily, thanks to expanded sales of high-priced products such as apartment buildings. As shown in the bottom bar graph, the number of orders received in the first quarter was 95% year-on-year but the value of orders received in the upper line represents 100% of the previous year's level.

For the second quarter, we expect 96% in terms of volume and 101% for the value. And the total order amount for the first half is expected to be in line with the plan. Regarding the order by type of construction, apartment buildings, in particular, are growing steadily. The order backlog at the end of the fiscal year is expected to be JPY 160 billion, the same level as at the end of March.

The red line on the upper right shows the increase in unit price per building. The unit price has been rising due to not only an increase in the installation rate of solar and storage batteries but also due to an increase in the ratio of apartment buildings or higher value-added housing. Below left is the renovation orders. Steady progress in strengthening the sales training has ensured that maintenance demand from periodic inspections has been captured and growing. Sales in the real estate business in the middle of the bottom also grew steadily. The town and community development business in the lower right also performed well with new sales of projects starting as planned.

Page 13 shows overview of the first half 2025 forecast for UIEP Company. Despite continued weak domestic housing and nonresidential market conditions, by entrenching new prices, we project the net sales to increase by JPY 1.5 billion to JPY 114.9 billion and operating income to slightly increase to JPY 8.5 billion, expecting to make a record high number in the first half.

Page 14 shows 3 strategic fields for UIEP company. Pipe Systems in the upper left. In the piping materials, market remains sluggish but we project the growth in the second quarter on the back of an increase in prioritized product sales. CPVC, chlorinated polyvinyl chloride, despite the prolonged weak market conditions in India, a major demand center, we work to expand market share through new products.

Upper right, building and infrastructure composite materials. For fire-resistant and nonflammable materials, we are continuing to acquire new customers. For FFU railway sleeper, we work to expand applications mainly in Europe. For prefabricated baths, we will focus on capturing nursing care and renovation demand. Bottom left is infrastructure renovation. For the pipeline renewal, surveys of aging sewer pipes are progressing, and we'll work to acquire new orders, although the contribution will not be seen until the second half.

In the Aqua System, we continue to focus on large-scale plant equipment and facilities as well as water storage panel tank orders. Right bottom are indices for priority initiatives. As for the prioritized product sales, we expect growth mainly in polyethylene pipes and fire-resistant pipes. For overseas, although we are affected by the sluggish Indian market, we expect growth in Europe, mainly in FFU.

Page 15 is Medical Business. In the Medical Business, sales of mainstay pharmaceutical ingredients grew but the diagnostic sales are projected to drop by JPY 2.1 billion to JPY 45.8 billion due to sluggish demand for infectious diseases testing kit in Japan and overseas and deteriorating market conditions in China. Right slide shows the analysis of OP, which is affected by a decrease in demand and shipments of infectious disease testing kits in the U.S. and the worsening of Chinese market due to measures to curb medical expenses. Despite efforts to control fixed costs, we've made downward revision of OP plan. We forecast JPY 5.3 billion, down by JPY 0.7 billion Y-o-Y.

Page 16 is overview by business segment for Medical business. Top left is domestic diagnostic business. We launched the new coagulation devices in Q1. We work to expand sales of reagents. Top right is overseas diagnostics business, whose results were lower than expected in U.S. and China. As a response to preferential measures for made in China products, we plan to launch new coagulation devices manufactured in China in the second half.

To that end, we'll make steady preparations in the second quarter. In the Pharmaceutical Sciences business, we are observing firm trends in mainstay pharmaceutical ingredient and drug development solution orders. Bottom right shows the sales of infectious disease testing kits, which are usually sluggish in the first quarter. We expect the sales to fall slightly short of the plan in this first half as well. We'll continue to focus on sales expansion, and that's all from myself. Thank you very much.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]