索尼 (SONY) 2006 Q2 法說會逐字稿

Good day ladies and gentlemen, and welcome to the Second Quarter 2006 Sony Corporation Earnings Conference Call. My name is Michelle and I'll be your coordinator for today. [OPERATOR INSTRUCTIONS]. I would now like to turn the presentation over to your host for today's call, Mr. Jonathan Bates, from Sony Investor Relations in Tokyo. Please proceed, Sir.

Thank you very much for that introduction Michelle, and thank you all for joining us today, October 26, 2006 for the discussion of Sony's results for the second quarter of the fiscal year ended March 31, 2007.

I'm Jonathan Bates at Sony Investor Relations in Tokyo. We are joined this evening in Tokyo by Takao Yuhara, Corporate Executive and SVP Investor Relations Sony Corporation, and by Robert Wiesenthal, Group Executive in charge of corporate development and M&A, Sony Corporation, EVP and CFO Sony Corporation of America.

Thank you very much for joining us Mr. Yuhura and Mr. Wiesenthal.

Hi, this is Yuhara is on the line, and thank you very much to joining us today.

Thank you very much for joining us Mr. Yuhara and Mr. Wiesenthal. In just a few moments I'm going to give a brief summary of today's announcements. Then Mr. Yuhara and Mr. Wiesenthal will be available to answer your questions.

Please be aware that statements made during the following remarks and Q&A session with respect to Sony's current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Sony. These statements are based on Management's assumptions in light of the information currently available to us, and therefore we should not place undue reliance on them.

Sony cautions you that a number of important factors could cause actual results to differ materially from those discussed in the forward-looking statements. For additional information as to risks and uncertainties as well as other factors that could cause actual results to differ, please refer to today's press release which can be accessed by choosing investor relations at the bottom of the page at www.sony.com. With that I'm now going to turn to our announcements.

Consolidated sales increased 8% enabling us to register record second quarter sales. However our operating income decreased significantly as a result of two one time factors. Firstly a JPY73.5b one time gain in the prior year's second quarter, from the transfer of a portion of Sony's Employee Pension Fund to the Japanese Government. And secondly, a JPY51.2b charge recorded in the current quarter for charges relating to the recall and global replacement program for Notebook Computer Battery Packs that use Lithium Ion battery cells manufactured by Sony.

Excluding these two one time factors and restructuring expenses our consolidated operating income would have improved over the previous year. In the electronics segment excluding the pension benefit in the previous year, the recall and exchange expenses associated with the batteries in the current quarter and restructuring expenses, operating income improved significantly over the previous year, due to factors including an improvement in cost of sales and increased sales.

Improvements in the Bravia LCD TV and Cyber-shot Digital Camera businesses are especially noteworthy. Our equity affiliate Sony Ericsson is performing tremendously well with sales, profits and unit shipments reaching record levels. Sony Ericsson's income before tax margin was 15% fuelled by strong sales of mobile phones using the Cyber-shot and Walkman brands.

Moving back to our consolidated results. Loss before income taxes deteriorated JPY121.5b to JPY26.1b as a result of JPY20.8b operating loss, and the recording of a foreign exchange loss.

In the previous year's second quarter there was a gain of JPY20.7b from the sale of a portion of Sony's equity interest in Monex Beans. JPY19.7b in equity in net income of affiliated companies was recorded during the quarter, an improvement of JPY22.3b over the previous year. JPY21.8b in profits was recorded from Sony Ericsson and JPY1.6b in profits was recorded from SLCD. While JPY2.2b in losses were recorded from Sony BMG and JPY2.8b in losses were recorded from MGM. Both the amounts of the losses recorded for Sony BMG and MGM improved year on year. As a result of these factors net income decreased JPY26.8b year on year, to JPY1.7b.

Next turning to our forecast for the year, please note that the numbers are unchanged from the ones announced on October 19. Our forecast for capital expenditures, depreciation and amortization as well as research and development expenses are also unchanged from our July forecast.

Now I would like to turn to the results of our business segments starting with Electronics. Sales in the Electronics segments increased 12%. LCD TVs, VAIO PCs, and Cyber-shot digital cameras, which had strong sales in all regions, contributed to the increase in sales. Operating income decreased 71% to JPY8.0b. The reasons for the decrease in profits were the absence of JPY64.5b in pension transfer gains for the segments recorded last year, and the recording of JPY51.2b in expenses for the Notebook Lithium Ion battery recall and replacement program.

The largest profits contributing products were in order of magnitude, camcorders, digital cameras and broadcast and professional equipment. Next products which had the largest improvement in profits were digital cameras, LCD TVs and CRT TVs. Digital cameras had both an increase in sales and profits due to strong sales in all regions, especially the U.S. and Europe due to strong consumer acceptance.

LCD TVs had a large increase in sales in all regions due to the continued success of the Bravia line. Profit performance also improved significantly over the previous year due to the increased sales and cost reductions. Profit performance of CRT TVs improved due to fixed cost reductions, resulting from restructuring initiatives.

As discussed during our first quarter results announcements, we plan to continue disclosing details of our television and semi-conductor businesses. Firstly, overall sales of the television category for the quarter were approximately JPY255b, an increase of 46% year on year. Operating loss was approximately JPY10b, an improvement of approximately JPY24b year on year. Despite the increase in competition LCD TV trended basically to flat. And there is no change to our forecast for the TV category to be profitable in the second half of the fiscal year.

Secondly, overall sales of the semi-conductor category for the quarter were approximately JPY160b, an increase of 13% year on year. Operating loss was about JPY7b an improvement of approximately JPY9b year on year. We expect to record a slightly larger operating loss in the semi-conductor category this fiscal year than last fiscal year. Last year's loss by the way was JPY34b, due to the decline in utilization ratio of our production facilities for PS3 semi-conductors. A decline which resulted from the change in timing of the launch of PS3 in Europe.

Electronics inventory days per sales for the quarter increased to 58 days, as a result of an increase in LCD TVs and PS3 semi-conductor inventory. Although June and LCD TV inventory was slightly above expectations, due to lower World Cup sales than originally anticipated, the level came back in line during the second quarter.

The overall inventory level at September end is slightly high, but this level contains LCD TV components including panels for the year end selling season, and we believe if necessary -- this level is necessary in order to avoid sales opportunity losses in the fast growing LCD TV market.

Next I'm turning to our Games segment. Sales in the Games segment decreased 21%. Approximately 60% of sales came from hardware and accessories, two thirds in the previous year and the remainder was from software. Hardware sales decreased as a result of lower PS2 and PSP unit sales compared to the same quarter of the previous year. We also engaged in a strategic price reduction for PS2 in Europe and Japan, following on the heels of the April price cuts in the U.S.

Demand for PS2 continues to be strong, and it is trending slightly better than our forecast announced in July. PSP production shipments for the first half of the fiscal year were flat year on year. However, as announced on October 19, we have changed our annual PSP shipments forecast from 12 million to 9 million units. Although sales from PSP software increased, overall sales of software decreased due to decreased sales of PS2 software.

Combined profits for PS2 and PSP businesses was relatively unchanged year on year. However, the segments recorded an operating loss of JPY43.5b due to the recording of expenses for the launch of PS3, including approximately JPY54.5b in inventory write-downs mainly for semi-conductors, and continued pro-active investment in research and developments for the PS3 business.

Revenue in the Pictures segment increased 12% a 7% increase on a U.S. dollar basis. The sales increase was primarily due to a greater number of theatrical releases in the current year's second quarter, combined with higher theatrical revenue per film. Major releases that contributed to revenues included Talladega Nights and Monster House.

Despite this increase in revenue an operating loss of JPY15.3b was recorded, an increase in loss of JPY8.7b year on year. Motion picture operating income was adversely affected by higher total marketing expenses, resulting from a greater number of theatrical releases, and the theatrical underperformance of Zoom and All the King's Men.

Television operating income declined in the current quarter due to production and marketing expenses associated with new network and made for syndication television shows. However, for the full fiscal year we expect to record an increased year on year profit in the Pictures segment, due to the home entertainment release of successful films released in theatres during the first half of the year, such as The Da Vinci Code.

Financial Services revenue decreased 4% due to a drop in revenue at Sony Life. Revenue at Sony Life decreased because although revenue from insurance premiums increased, valuation gains in the general and separate accounts decreased. Operating income for the segment decreased 39% to JPY24.6b primarily as a result of reduced profit at Sony Life.

Operating profit at Sony Life dropped because although insurance premium revenue increased, valuation gains on convertible bonds in the general accounts decreased.

All other sales decreased 16% year on year. This decrease primarily reflects the sale of a portion of our retail businesses in the first quarter. Operating income decreased 14% primarily because a gain from the pension transfer was recorded at Sony Music Entertainment Japan and several other businesses within All Other in the previous fiscal year. Excluding this impact there was a significant increase in operating income within All Other.

That concludes my opening remarks. With that, I would like to turn you over to our operator for the Q&A session.

Thank you Sir. [OPERATOR INSTRUCTIONS]. And our first question comes from the line of Jason Maruicio of Arete. Please proceed.

Yes hi there. Three quick questions. In the Pictures business can you help us understand the mix between the movie releases that you had versus DVDs, and what are the levers that might come into effect in the next couple of quarters that would get margins up there.

Second, can you help us understand the yields on Blue Lasers at the moment? What is Sony's current capacity and if you can alleviate that strain by sourcing externally?

And finally, can you help us understand in the inventory the split between finished goods and raw materials, and maybe clarify the earlier statements from the Japanese call on what normalized inventory levels should be.

It's Robert Wiesenthal why don't we start with the question on pictures. And you asked about levers that would bring margins to where they should be for the remainder of the year. Obviously it's very difficult to take a look at the pictures business in any one given quarter. This quarter we had a number of very large films that were out there with very high box office numbers such Talladega Nights, Open Season, Monster House, The Middle Man. And in DVDs those are obviously not out there, and our economics are dependent not only on theatrical release but also on DVD. So right now you're getting the hit of those marketing costs. So in the next quarter when we have Talladega Nights and Da Vinci Code hitting video you're going to start getting that flow back of the real thick margin cash flows that will get us to where we need to be. And I would say that we're on track in terms of our own internal budgets of where we should be for profitability for pictures thus far.

Hi Jason, this is Yuhara. I'd like to answer the question about Blue Laser issue. As you know we have the mass production line of these Blue-ray diodes internally and we have no plans to outsource because of the vast quantities. And as you know this is the most critical devices for this PS3 and therefore we are watching very carefully about the [inaudible] quantities to absorb the diode -- Blue-ray diodes. Unfortunately, I cannot disclose the current yields on the Blue-ray diode, but we are making every effort to meet with the set the production shipment quantity of the [PS3].

Secondly, the inventory as you know taking the example of LCD TV because this we see that inventory amount is rather big. So as you know we have the inventory more on the raw materials, because we have basically meeting with the high demand on the holiday seasons in all over the region and we have this in raw materials [inaudible]. And inventory results which is the normalized inventory should be about eight weeks, so that is what we are considering as adequate inventories for this LCD TV.

Okay. Great. Thank you very much.

Thank you very much for your questions today Jason.

And our next question comes from the line of William Drewry of Credit Suisse.

Thank you. Just two questions please. One I'm just wondering back on the DVDs, just wondering we've heard from a lot of the studios that the pricing for library sales for DVD, which is obviously an important part of the business has actually been stabilizing, there was a lot of worry in the market that had them declining precipitously over the last 12 months or so. So I'm just wondering what you're starting to see in that channel, if you're seeing library pricing to firm up and how that business is turning for you.

And then just on the Electronics side, I just wanted to see what your current thinking was on the pricing on LCD TV if, going into the fourth quarter the pricing trends have been in line with your expectations. Thank you.

Okay, Bill, I'll take that question on DVD pricing. Obviously over the past 18 months library catalogue has been challenged but we have noticed some stabilization in the market, there's been a lot of specific promotions with retailers by all the studios that have helped library products. And I also think overall in terms of the general DVD market there is a lot of strong new release products coming in the fourth quarter, so people may be pleasantly surprised in terms of overall DVD sales. But we've noticed it too and obviously we're looking forward to the introduction of Blue-ray to both help library products and new release product, it'll be a real shot in the arm and obviously that has a very strong pricing element to it.

Bill on this the LCD TV price assumption, as you know the price is particularly lowering in the U.S. market. As you know competition is very, very tough in this region. So we anticipate that the price will be lowered around 25 to 30% towards the holiday season, but we will say this, you know price erosion has come relatively earlier than what we expected, say maybe one month earlier than what we expected. However, it is very important we have inventories for this holiday season. We would like to take adequate action for the LCD pricing particularly the main market in the United States.

The Q4 it is maybe too early to say, but as you know in this LCD TV we plan to ship six million for the year, which is just more than 2.1 times year on year and then 40% of this TV should be sold during the third quarter. Then still the fourth quarter remained at the high level of the [earlier] shipping plan but we should accomplish this, even quarter four as well.

And Yurara-san if I could just ask do you feel in LVD TV that your pricing competitiveness is as good as any of your peers, in other words you have not lost any price share to any competitors have you?

It should be all right, and we have, as I said, 25 and 30% could be the current the price deflation which is within the expectation so far. And moreover we are going to sell [inaudible] over TVs, particularly for this third quarter, which brings the average prices flat year on year. Then as you can see we could have a better chance of those TVs which have a better cost structure.

Excellent. Thank you very much.

You're welcome. Thank you.

Our next question comes from the line of Daniel Ernst of Hudson Square Research. Please proceed.

Yes good morning, and good evening [inaudible] thanks for taking the call. Two questions if I might? First on LCD -- just coming back to the LCD pricing question, just to clarify I think you said that as the shift up to larger size TV sales you actually experience a flat basket price, the blended price of per unit that you sell. And then given that, and given that the actual like sales size TV to size TV is down 25 to 30% now, what are you seeing on the production side. Are you getting a 25 to 30% reduction in the price to produce each of those TVs now that you have the Gen-7 fab fully running, and then what does that do when you launch the Gen-8 production next year?

And then second question on the PSP. Given that PSP software sales were up and that software -- good software generally drives the hardware demand what's behind your pullback and assumptions for the hardware forecast for the year.

Yes Daniel. First of all regarding the LCD TV, the TV pricing. As you can see that we have developed worldwide the platform of LCD TV, which expected to 30% cost reduction, including the reduction of a number of components in the devices, which is applied for all the LCD TVs in this year and also 70 LCD production line which give us the largest size of LCD panel with very competitive price, competitively known transfer price. And also next year we are going to go have an 8gGof the panel production starting I wish September or October time next year, and we have -- this is early to say, but this is very good the supply for the next holiday season. Holiday season year 2007. So overall the more we have [inaudible] LCD TVs and we have the bidder, of course, to these products for these LCD TVs. That is the cost structure for this.

Maybe Daniel could you just recap your question about PSP.

Yes. On the PSP so the software sales for the PSP were actually up, and given that generally software sales, or good software sales, help drive hardware demand, what's behind your reduction in forecast for PSP hardware sales?

It's right the PSP software was increased compared to the last year. However, the PSP hardware and the software is lower than what we have expected. In other words, it's lower than our April forecast. So therefore in order to meet with the driving demand expectation for the year, we did devise the total production quantity from 12 million to 9 million. And we are going to adjust the inventory by taking growth action.

I understood. But just to clarify what do you think is behind that reduced demand for the PSP? Is the product just in decline? Is there something that can be done to revise sales? Or is what matters working down the inventory and making lower assumptions for the product overall?

Well, we are just -- we have started production -- the programming based on the 12m. But honestly, at the moment, the PSP inventories are slightly higher than our expectation. And therefore we are just going to adjust this. And obviously we are the -- preparing the wider use of PSP for the future and also, you know, deducing a number of softwares, and we are always looking at the PSP's business expansion.

Okay, thank you.

There's two things to add to that on PSP. Clearly there -- on the software side, any real killer title will galvanize the sales. There have been a number of titles that have been terrific but not the one title that defines the product.

Additionally, as you probably know, there are a lot of features such as wireless and network capability that are just starting to be tapped right now. As those features start to be utilized in terms of services that we're working on, there'll be a lot more usability of the device and taking a lot more advantage of the functionality. We think that will help sales and that's just going to take time.

Understood, thank you.

And our next question comes from the line of Jon Greenhill of Lazard. Please proceed.

Thank you. I just wonder if you could clarify on the electronic inventory again please for me that you mentioned a portion of the buildup was due to PlayStation 3 semi conductor. I wonder if you could just quantify that? Say how much of the inventory is in that semiconductor. Sorry the PlayStation 3 semiconductor. And how much that was up year-on-year?

Just to clarify it, Jon. Your question is about the proportion of inventory made from semiconductor inventory within our electronics division?

Yes.

Okay. In this electronics inventory as we mentioned that there was the semiconductor for PS3 in [inaudible] segment. So if we take this, the semiconductor out, the day supply will be from 58 day, which is in this chart to 50 days. So that is what we are looking at this. Okay?

And then what would it have been in Q2 last year, had you taken out semiconductor inventory?

Q2 last year? You know the -- this was not in last year because these inventories are just for the PS3, starting in the --

But that was [inaudible] last year?

Last year, no. We have not started yet for this -- the semiconductor production for this PS3.

Okay. Thank you very much.

And our next question comes from the line of Evan Wilson of Pacific Crest. Please proceed.

Hello. Thanks for taking the questions. I have three.

First, relative to the equity affiliates, trends are clearly very strong at Sony Ericsson. I also think that the releases that came out in September for Sony BMG were well received.

What's going on with no increase in terms of the equity affiliate guidance? Is there something on the profitability of those two units? Or any other pieces of the equity affiliates that have changed in the last quarter or so?

And then on BMG overall, could you comment on overall what you think the total music market will grow this year and next?

Second question, just simply on the PS3. There have been some comments in the media recently from the Sony Computer Entertainment Group, kind of wavering on confidence around your PS3 target of 6m, that's in the fiscal year. I hoped you could touch briefly on that.

And then third on the LCD TVs, we've talked a lot about pricing. Could you also give your assumptions for market share this holiday season relative to last year? Thanks.

Let me actually ask -- answer to your first question about the equity affiliates issue. Yes, Sony Ericsson Mobile is, you know its operation is doing very well. And we are expected this momentum will be continued. So therefore you could explain -- you could expect the -- much more profit from this Company.

However, those increase will be offset from Sony BMG rapidly by this, Sony BMG, which is lower than what we have made a forecast in April time. And also some other affiliate company is showing the lower performance forecast than has been forecast.

So therefore, taking those all, the performance forecast will just remain at same amount of profit from equity affiliate as it was forecasted.

Okay.

I think in terms of Sony BMG, I mean obviously it's been extremely challenging on two fronts. Number one, year-to-date, just to use the U.S. market as a barometer it's been down 15% year-to-date. And in fact if you look at July, August and September, it's even a little bit worse than that.

We also had some slippage in terms of releases that have come in a little bit late. And it's just a difficult market overall.

And I think that over the next year, the digital sales account for about -- over 10% of the recorded music market. That's up significantly. So that is a fair amount of upside for us. But even when you take into account the overall global music market declined about 4% in the first half of '06.

So it's been a difficult market. And we expect it to continue to be difficult until the trajectory of digital really gets to a point where we have meaningful profits from it. Right now, it just doesn't have the scale but it does have a lot of growth and we do have a lot of focus on it.

This -- the PS3 of 6m, the shipment target. And as you know, we haven't touched on our critical components and devices. However, we are making every effort to meet with the -- this 6m production shipment. That is what we are doing at the moment.

And also the -- you were talking about LCD TVs?

Yes. The market share in LCD.

The market share, right? Which is about 16 -- [15%] by unit share. That is what we are anticipating for this fiscal year. And the market share [inaudible] should be more. We are aiming just around 20% of the worldwide market sales.

Thank you very much.

Okay. You're welcome.

Our next question comes from the line of Ben Atkinson of Gagnon Securities. Please proceed.

Yes, thank you. First question is on Sony Life. What was the growth year-over-year in new policies and premium revenues?

Yes, it's about 9%. That is our expected increase of new policy. And which is about 5% or 6%, the revenue increase from -- the insurance year-on-year.

Okay. SG&A in the quarter was up substantially, year-over-year. Could you help us understand why -- what are the components of that big increase? And what's kind of a normal level we should be thinking about for SG&A?

As you know, we have made a provision of [inaudible] ion battery recall and also our voluntary worldwide replacement program.

Okay. So the JPY51b is in SG&A?

It's [JPY1.2b]. So that was included in SG&A as service expenses.

Okay.

So taking this and you know the -- our SG&A level is more or less same as same period of last year.

Okay. I guess I'm not getting there then because I'm looking at JPY300b in the second quarter of 2005.

The other point is -- that's right, Ben. Last year -- again this is complicated. But we have had 'daiko henjo'?

Okay. So the daiko henjo came out of this.

Daiko henjo is a reduction of SG&A in the last year.

Okay. Daiko henjo in the last year, okay.

That's right.

So what should we think about it on an operating basis then for a kind of normal level? Something around the JPY400b level for SG&A?

It's about 20% against the sales. That is what we anticipating. Therefore, at the most JPY400b. JPY370b or JPY400b, that is what we are anticipating as an adequate level of SG&A.

Okay, thanks on that one. Now the JPY54b inventory write-down in the gaming segment.

Yes.

Could you help us understand there. So let's say I'll use a price of a 100, that the gaming division buys a semiconductor component from the electronics division. And it pays a 100 or it paid a 100.

You're taking things that you've bought from the electronics division and then writing them down within the game division. Is that what's happening here?

That's right. Yes.

Okay. And can you help us understand again, just the thought behind this. And what are the implications then for -- so that's the first question. Just help us understand what the reasoning behind accounting for things this way is.

This is accounting -- the provision. And if you assume that the total production cost, based on the total -- the cost of device and component everything. Then this is obviously higher than our expected sales price. You know sales price is already set.

Yes.

So this, you know, the negative will be written down. When we just put -- recording as inventory. So that total amount is JPY54b during the second quarter. You know we did the same manner in first quarter to JPY16b in the first quarter. It is the same accounting procedure.

Okay. So --

Ben I think we're going to have to limit the questions per person.

Okay.

So thanks a lot for calling in today.

That was my last one there. I wondered if you could just summarize there, how much of the losses on the devices -- on the PS3s will be coming out this year, have you already written off? And how much of future losses should we expect?

This year as we just indicated the loss of the segment whole is just around JPY200b. And obviously we have made -- we could have the profit from existing platform. So therefore you could imagine that the -- so much of the expected loss, cut from the PS3 business for this year.

And in the future and second year, we would expect a big swing of the PS3 business from current loss making. We couldn't -- I cannot commit and say that much, much improvement would be expected in the second year.

And our next question comes from the line of Luc Mouzon of BNP Paribas. Please proceed.

Yes, hi. Good afternoon. Could you hear me?

Yes, we can hear you.

Okay. Just getting into your 4.6% EBIT margin on electronics, which is excluding this battery recall cost. Looking into the sub category, will you consider the dynamics there as especially due to TV? Is that because TV is close to breakeven or jumping back from very negative number?

Or do you add some other explanation, looking once again, just at the product segment category?

Luc, just to recap your question, I think you're asking about some of the factors driving up the EBIT margin within electronics, right?

Yes. From the product point of view. Because I have seen your presentation and the operating income swings in fact.

Okay. So which product categories basically had a positive impact?

Exactly.

This mainly contributed by the digital still cameras and also the digital still -- digital video cameras. Also video recorders. And also VAIO is doing pretty well. And lastly the broadcast equipment that has also contributed to this [plus] margins for --

Sorry. Just to follow up. Which means that the TV sub segment itself is still on at operating level, loss making excluding restructuring costs.

Yes. In this forecast, of course we have expected the big -- the margin improvement on the TV business. But at this point in time, we would say we would expect the breakeven or the small profit from TV business for this fiscal year. So therefore those -- the profit margins as I said mainly contributed in other segments -- the products as I said before.

Okay. And just briefly on the first half, you had a very positive foreign exchange rate impact. I think maybe on the set component. How do you expect that to move over the second half? And that's my last question, sorry.

Well, it's about the JPY30b for second half. That is what we have expected as [forwards going] from this ForEx rate.

Thank you.

You're welcome. We are running short of actually our allotted time today. So I'd like to make the next question our final question.

And our final question comes from the line of Colin Sebastian of Lazard. Please proceed.

Thanks. And just a quick follow-up on the PlayStation 3. I wonder if you can comment on what the timetable is for converting the cell chip over to 65-nanometer technology.

And is that something that could create a bottleneck in the supply chain at some point? Thank you.

Thank you, Colin. Concerning this 65-nanometer, we are going to change in the next springtime. So therefore we are expected to use this 65-nanometers for next fiscal year.

Okay, thanks.

You're welcome.

Thank you very much for calling, Colin. And thank you to all our callers today.

With that I would like to conclude today's conference call. And thank you again for joining us.

Also thank you to Mr. Yuhara and Mr. Wiesenthal for joining us today.

Lastly, I'd like to take this opportunity to remind everyone of our Investor Relations contact information. In Tokyo, Investor Relations can be reached at 81-3-5448-2180. In New York, [Sam Levinson], Justin Hill and [Mickey Amura] can be reached at 212-833-6722. And in London, [Shinji Tomita] is available at 44-207444-9713.

Again, thank you very much for joining us today. That concludes today's call.

Ladies and gentlemen, thank you for your participation in today's conference call. This does conclude your presentation. And you may now disconnect. Have a great day.