Kazumi Tamaki: Let us get started. Welcome to the earnings briefing of AGC Inc. for the third quarter of fiscal year 2025. I'm Kazumi Tamaki, General Manager, Corporate Communications and Investor Relations, serving as moderator. Today's attendees are Shinji Miyaji, Executive Vice President, Executive Officer and CFO; and Tomoyuki Shiokawa, Executive Officer, General Manager of Finance and Control Division. We will first have CFO Miyaji, provide an overview of the financial results for the third quarter, followed by a Q&A session. We are planning to finish at 3:45 p.m. Your cooperation is appreciated. Without further ado, I ask CFO, Miyaji, to start his presentation.

Shinji Miyaji: Thank you. This is Shinji Miyaji, the CFO. Please turn to Page 3. The highlights. Net sales for the first 9 months totaled JPY 1,512.1 billion, down JPY 22.1 billion year-on-year. Positives included an improved product mix and pricing policies for automotive glass, increased shipments and pricing policies for Performance Chemicals and pricing policies for architectural glass in Europe and the Americas, while negatives included a PVC price decline, decreased shipments of EUV photo blanks and European architectural glass and the impact of last year's Russian business transfer. Operating profit was JPY 94.8 billion, up JPY 0.8 billion on effects of profit improvement measures in displays and others despite the adverse impact of the aforementioned factors as well as higher raw materials and fuel costs. Net income attributable to the owners of the parent was up JPY 145.9 billion at JPY 39.5 billion due to the aforementioned positive factors and the nonrecurrence of last year's loss on sale of shares related to the Russian business transfer and large impairment losses in biopharmaceutical CDMO. Operating profit for the third quarter exceeded JPY 40 billion for the first time in 3 years since Q2 of 2022, following profit improvement measures such as pricing policies for European architectural glass and automotive glass. Full year outlook remains unchanged from that announced in August. Page 6. Net sales and operating profit were as explained earlier. Profit before tax included profit increasing factors mentioned earlier in relation to the net income attributable to the owners of the parent as well as impairment losses and foreign exchange losses in biopharmaceutical CDMO during Q2. Page 7. By segment, Architectural Glass, Electronics and Chemicals saw a decrease in the sales and profit. Automotive posted higher sales and profit. Life Science posted lower sales but improved profit. Page 8. I will explain the factors behind year-on-year variance in operating profit. Sales volume, prices, product mix resulted in a positive impact of JPY 10.9 billion. While there was a decline in the selling price of PVC and in shipments of semiconductor-related materials and architectural glass in Europe, there were positive effects from improvements in the product mix and pricing policies for automotive glass and for architectural glass in Europe and the U.S. in Performance Chemicals. Raw material prices differences resulted in a JPY 8.1 billion decrease and cost and other differences, a JPY 2 billion decrease. As a result, operating profit increased by JPY 0.8 billion to JPY 94.8 billion. Page 9, please. Next, balance sheet. The total assets amounted to JPY 2,874.2 billion, down JPY 15.5 billion from the end of last year. The D/E ratio was 0.42x. Please turn to Page 10. This is the cash flow statement. Operating cash flow was JPY 164.7 billion. Investment cash flow, negative JPY 126.4 billion. Consequently, free cash flow was JPY 38.4 billion. Page 11, please. I will now explain CapEx, depreciation and R&D expenses. CapEx totaled JPY 174.1 billion, depreciation amounted to JPY 132.6 billion, and R&D expenses of JPY 44.1 billion. Major capital investment projects are listed as shown. Next, I'll move to the segment-by-segment presentation. Please turn to Page 13. First, Architectural Glass segment. Sales were JPY 320.8 billion; operating profit, JPY 10 billion. In Asia, sales decreased by JPY 3.8 billion to JPY 109.7 billion due to lower prices in Indonesia and other regions, coupled with reduced shipments. In Europe and Americas, sales decreased by JPY 5.2 billion to JPY 209.2 billion due to lower shipments in Europe and transfer of Russian business in February of the previous year. The effects of our pricing policy began contributing from the second quarter onward. Operating profit decreased by JPY 4 billion due to the revenue decline factors that I mentioned earlier and rising raw material and fuel costs. Asia accounted for about 30% of operating profit, while Europe and Americas, about 70%. Please turn to Page 14. Automotive segment sales increased by JPY 10.6 billion to JPY 385.6 billion, and operating profit increased by JPY 12 billion to JPY 23.4 billion. Shipments decreased in Europe, but increased in Japan. To counter rising raw material and fuel prices and manufacturing costs, we implemented structural reforms and productivity and product mix improvements and pricing strategies. Please turn to Page 15. The Electronics segment sales reached JPY 259.7 billion; operating profit, JPY 36 billion. The Display segment saw sales increase by JPY 4 billion to JPY 136.2 billion, driven by higher shipments of LCD glass substrate. The Electronics Materials segment experienced a JPY 11.1 billion decrease in sales to JPY 122.2 billion due to lower shipments of EUV mask blanks, compounded by the impact of yen's appreciation. As a result, operating profit decreased by JPY 400 million. In operating profit, 70% was represented by electronic materials and 30% by displays. Please turn to Page 16. Next, Chemicals. Net sales, JPY 431.3 billion and operating profit, JPY 39.7 billion. Essential chemicals sales were down JPY 20 billion at JPY 284.6 billion on a declining prices of PVC. Sales in Performance Chemicals, up JPY 11.4 billion at JPY 143.6 billion on increased shipments and higher prices of fluorine-related products for semiconductors and transport applications. Profit breakdown was Essential Chemicals, about 30%; Performance Chemicals around 70%. Page 17. Life Science. Net sales, JPY 96.1 billion and operating loss of JPY 16.2 billion. Sales were down despite increased shipments on expanded biopharmaceutical CDMO capacity due to the nonrecurrence of last year's onetime revenue from the contract project settlements and production issues at the Boulder site. Despite effective fixed cost reductions in biopharmaceutical CDMO, profit improvement was only JPY 0.5 billion, seriously affected by aforementioned revenue-reducing factors. Page 18. Strategic Businesses. Net sales were down JPY 2.2 billion at JPY 363.3 billion year-on-year. Despite growth in Performance Chemicals and Mobility, affected by a temporary slowdown in electronic shipments and the nonrecurrence of onetime revenue from contract project settlements in Life Science. Operating profit was down JPY 7.2 billion at JPY 40.7 billion, strongly affected by declining electronics shipments. Page 20. The full year forecast remains unchanged from August. Page 21. No changes to the full year forecast by segment either. Page 22. Comparing the fourth quarter forecast to the third quarter by segment, Architectural glass expects increased shipments in Japan with the demand increasing for renovation to energy-saving glass. Asia also expects increased shipments on a recovering demand. South America expects shipments to remain strong. Europe expects flat shipments quarter-on-quarter affected by the continued weak economy. In automotive, shipments to increase in Japan, but decrease in Europe and the Americas. We'll continue working on pricing policies and structural reforms. In electronics, display expects a slight decrease in shipments of LCD glass substrates. Electronic Materials expects shipments of semiconductor-related materials to be flat quarter-on-quarter. Optoelectronics expects decreased shipments due to the entry into the adjustment period. Page 23. Next, chemicals. Essential Chemicals. Although regular facility maintenance is planned in Southeast Asia, shipments are expected to increase driven by a gradual startup of the expanded facility in Thailand. Performance Chemicals. Shipments of fluorine-related products for semiconductors and transportation applications are expected to remain firm. Next, Life Sciences. Contract sales for small molecule pharmaceuticals and agrochemical CDMO are expected to increase. For biopharmaceutical CDMO, the loss is expected to narrow due to sales increase at a site in Denmark and the structural reform of the Colorado sites. Turn to Page 24, please. There are no changes to the full year outlook for strategic businesses. Page 25. There are also no changes to the full year outlook for CapEx, depreciation and R&D expenses. Please turn to Page 26. With regard to shareholder returns, the dividend forecast remains unchanged as a stable dividend policy targeting at a DOE of about 3% remain unchanged. Please turn to Page 28. I will now explain the 2 organizational changes announced today together with the earnings results. So let me go over the details. The first is one aimed at improving the profitability of the Chemicals segment. As shown on the left of the slide, the chlor-alkali business was previously categorized as essential chemicals, while the business centered on fluorine-related products was categorized as Performance Chemicals. Starting from January 2026, next year, the entire chemical chain in Japan from upstream electrolysis to downstream performance chemicals products will be integrated into a single SBU, strategic business unit, in order to optimize the overall business and improve profitability. That is shown on the right of the slide at the bottom. The essential chemicals business in South Asia, on the other hand, will become an independent SBU, strategic business unit to accelerate its profitability improvement. So going forward, from next year onward, the subsegment structure for the Chemicals segment in our earnings announcements will also align with this organizational change. Now please turn to Page 29. The second organizational change is to accelerate productivity innovation. As you can see in this diagram, up until now, the Information Systems division handled IT infrastructure development, while the digital and innovation promotion division focused on business process innovation using digital technologies. And these functioned as separate entities collaborating on digital initiatives. Now as you can see in this diagram, as a superstructure, we are establishing a new digital and innovation management division to oversee these functions. As you can see on the right bottom corner, our company has been selected as a DX stock fifth time 4 years in a row, and our DX initiatives have been rated highly externally as one of the most advanced companies. In this regard, through its organizational reform, we will pursue synergies and strategies and technologies and human resources. Furthermore, we will advance digital solutions as business innovation under a unified digital strategy to enhance corporate value and strengthen competitiveness further. That concludes my presentation. Thank you for your attention.

Kazumi Tamaki: We will now take questions. If you wish to ask questions, please push the Q&A button and type in your questions. We will first go over the questions we received in advance. The first question. The actual results for the third quarter, how it compared to the projected results. Miyaji would respond.

Shinji Miyaji: For the third quarter, sales on par with our projection for operating profit, a bit stronger than our expectation. That is overall for the company by segment, the situation was as follows. First, architectural glass sales or slightly lower, but operating profit was slightly higher than projection. Especially since the second quarter, in the -- in Europe and the Americas, policy -- pricing policies and cost reductions measures have proven to be effective. As a result, operating profit was better than our projections. For automotive, sales and operating profit were both better than our projection for sales. Improvement in product mix based on our strategy of volume to value, we saw effect. And we also implemented prices, reflecting that. And this strategy proved to be effective. And as a result, both sales and operating profit were better than our projection. Electronics, overall, sales were slightly better than projection, whereas for operating profit, slightly lower than our projection. For sales, some did better than others. But for operating profit, in particular, in display, we saw a temporary cost increase, and we had some impacts in foreign currency with higher Asian currencies. So as a result, operating profit was slightly lower than our projection. For chemicals, sales were slightly lower than our projection. Operating profit, slightly better. Especially in operating profit, Essential Chemicals and Performance Chemicals, both saw the effect of cost improvements, resulting in slightly better results than expectation. Life Science sales slightly lower, operating profit on par with our projection. For sales in small molecule pharmaceuticals, sales were not that exciting. But for operating profit, both biopharmaceuticals and small molecule pharmaceuticals were on line with our projections.

Kazumi Tamaki: Next question. Earlier, you talked about outlook for the fourth quarter qualitatively. But once again, if you compare this to the third quarter, how do you expect the fourth quarter to play out? Can you give us more details? That was the question.

Shinji Miyaji: So for the fourth quarter outlook, in terms of sales revenue, those will be on par with the third quarter probably. But in terms of operating profit compared to third quarter, we are going to see a decline probably. So that's the overall outlook. By segment, as I said earlier, for architectural glass, both sales and operating profit will be in line with the third quarter. In our view and for Japan and Asia, demand is expected to increase. But in Europe and others. Because of seasonality partially, there will be a decline. So overall, both sales and profit will be in line with the third quarter. As for automotive business, in U.S. and Europe in the fourth quarter, because of seasonality, we're expecting a decline. There is going to be increase in shipment in Japan, but because of the shipment decline in Europe and Americas, we are going to see a decline in both revenue and profit. As for Electronics, sales are expected to be as the same as the third quarter, but we're going to see a decline in profit. As for electronic materials, in terms of sales, especially after electronics materials are going to -- has already passed the peak in shipments. So in the fourth quarter, we are expected to see some decline. And as for LCD glass substrate, the demand is a bit weaker compared to third quarter. So operating profit will be affected by that decline. And operating profit is going well in Opto electronics, but the display, but for -- this cannot cover the electronic material decline in profit. And as for Chemicals, we are going to see increase in revenue but decline in profit. Especially in Thailand, there will be a production facility that will come online. And so there will be shipment increase. And as for fluorine products, in the fourth quarter, demand is a bit stronger. So we're expecting the sales to increase. But as for operating profit, in essential chemicals, there will be scheduled maintenance -- turnaround maintenance, and there is going to be a slight dip. So there is going to be a decrease in profit. And Life Science, we're expecting increase in both revenue and profit. In terms of sales, the sales are expected to increase in the sites in Copenhagen and operating profit will also increase accordingly. And fixed cost in sites in Colorado will improve. And so costs will be declined. The full-scale effect will be from the next fiscal year, but there will be a slight effect that will be already materialized in the fourth quarter.

Kazumi Tamaki: The next question for EUV mask blanks on quarter-on-quarter or year-on-year basis. What is the situation, is the question. And compared to the plan, how were the situation in the third quarter?

Shinji Miyaji: Here again, not much change in our stories. In 2020, we saw a big growth in this business. But this year, rather in 2024, we saw a big growth in this business. But for this year, due to the demand situation for our main clients, we expect the shipments to decrease. For 2026 onward, we expect sales to increase -- start to increase again. But as far as this year is concerned, not very exciting. We don't disclose the season-by-season changes, but the overall story remains unchanged. In Taiwan and others, our clients there, and we are continuing to expand our customer base, and we are seeing the effects of that.

Kazumi Tamaki: This, once again, EUV mask blanks question. In major customers, there are various news headlines that are being heard. So compared to 3 months before, is there any change in your outlook for demand? That was the question.

Shinji Miyaji: So EV manufacturers, as you know, all those that you already know. And in each in those manufacturers, there is various capital policies that are announced and there's subsidy provided by the government. So basically, this has been favorite -- favorable for us. And there is also a lot of news and in-house production is going to start up in foundries first. And so the demand that we initially assumed is now coming to materialize. So there are slightly less concern with a little bit of less visual thinking.

Kazumi Tamaki: Next question. Also on EUV mask blanks. Other than your main customer, how is your market share increasing. And what about the situation of certification in state-of-the-art areas, including 2-nanometer?

Shinji Miyaji: It's very difficult to give you the details. But regarding our market share, other than our main customers, we have yet to see a rapid increase in our market share. 2 nanometer, 1.4 nanometer, we are developing those to be certified. We will continue our efforts in these areas, and we are seeing the effect to a certain degree. For this year, with this factor in mind, sales are not growing that rapidly either. So starting next year, we would like to supply to new customers as well as increased supplies to existing customers.

Kazumi Tamaki: Next question. With regard to image sensor glass filters, was there any entry by competitors? And from the next fiscal year onward, what will be your outlook for shipments, inclusive of the competitive landscape. That was the question.

Shinji Miyaji: So for glass filter for image sensors, there are a lot of different manufacturers that have been around. And we are targeting at super high-end products or customers that are producing those products. Those are the main customers. So in that sense, whether there are competitors or not, well, there are many competitors in image sensors, but as for super high-end segment, there is very limited competition. So that has not changed. But I'm not saying that there's no competitor whatsoever. So we keep providing cutting-edge products to lead and get ahead of the pack and to secure the dominant position. And that exclusive strong position has not changed.

Kazumi Tamaki: Moving on to Life Science. What is the effect of the sale of the Colorado sites? Where are you on that? And once the sales materialize, what impact would it have on your results?

Shinji Miyaji: The Colorado site sales, we are working towards that. But so far, there is nothing that we can make any announcement on. Quite a number of companies are showing interest in this site itself. So we will continue to pursue early sale. But this is November already. So it seems not very likely that we will have the sale complete by the end of this year, meaning it's going to be next year that is a more likely scenario.

Kazumi Tamaki: Next question is for biopharmaceutical business. Can you explain the status by site?

Shinji Miyaji: By site. Well, what is easiest to understand is Colorado. It is going to be closed and the redundancies have been announced. Headcounts declined. And the cost is expected to decline further to the end of this year, and this is going to be a contributor for the next fiscal year. That will be easiest to understand. As for Seattle, in the past, there were some production disruptions, but major -- many of those have been resolved. So in terms of production, there's much less concern now. So we are now striving to obtain demand or orders, and we are seeing some results, and there is an obvious increase in inquiries. But as I've been saying all along, it takes time to move to the full-scale production. So the full-scale recovery is not expected until 2027. So overall, what we can say is that in Europe, in Copenhagen, we have increased the production capacity and there were some problems that we faced, but those have been now resolved. So in terms of manufacturing products, there is no concern. So we have to get orders, win orders and produce products. We are totally focused on that now. And as for animal cells, that is how we are. But in Heidelberg microbes and the Milan genetic sales, they are all performing quite well. So there's no concern and apprehension and things are going well. So animal cells have to be restructured, and we have to increase the capacity utilization, and we're striving for that. And the order taking is increasing steadily. But when it comes to really solid performance, we have to wait until 2027.

Kazumi Tamaki: The next question is for Life Science business overall. Sales is behind and operating profit is on track it appears compared to the full year forecast. Is the demand tracking behind your projection? If that's the case, why is it that profit is doing well.

Shinji Miyaji: Well, we can't really say that profit is doing well. But so far, we've been able to do what we have been planning to do, assuming to do. Up to third quarter, the first 9 months for small molecule pharmaceuticals, slightly below our projection. But this is a real seasonal business, lots of sales in the fourth quarter, so we're not concerned. So overall, we are seeing steady progress, both for small molecule and biopharmaceuticals. So next year is going to be very important. As for the Life Science business as a whole, if you look at the third quarter actual results, cost and other contributors turn out to be negative on a year-on-year basis. So was there any particular onetime factor like withdrawal costs. So what is the breakdown of this item. So in comparison to the third quarter last year, in 2024 third quarter, there was a onetime revenue I think this was cancellation fee. There was a onetime revenue in quite some amount. So there's no such thing that was a big factor.

Kazumi Tamaki: The next question is about the Boulder sites. The production issues continued, but how about the third quarter. Did you continue to see the production issues in the third quarter?

Shinji Miyaji: For our Boulder sites operation, since we decided to discontinue our operation there, the third quarter is already preparing for that. So it's not really production issues. It's just that preparation for the business withdrawal took place during this period.

Kazumi Tamaki: The next question is about Chemicals segment. Essential Chemicals and Performance Chemicals, both seems to have improved in profitability. What was the factor behind this?

Shinji Miyaji: Well, yes, this is about a comparison to the last fiscal year, right? So in comparison to the previous year, is it the question. The question is about the comparison. So improvement, is it from the second quarter in what comparison to what, I'm not sure. But this was a question that was pre-received. So there is no specification about the time period. So as compared to the second quarter, I would guess, on an annual basis, there's a decline in profit. So probably profitability has increased from the second quarter. So in comparison to second quarter, so what has improved? Well, more or less, Essential Chemicals improved more, especially outside of Japan, shipments have increased and cost has declined. Cost was reduced in the Essential Chemicals, both in Japan and overseas. As for Performance Chemicals, cost has decreased. In Japan, essentials and performance chemicals, utility charges have declined. But as compared to the second quarter, profits have increased.

Kazumi Tamaki: Next question is on Essential Chemicals. The capacity increase in Thailand, what is the current status? By the end of the year, you expect full capacity operation. Does that remain unchanged?

Shinji Miyaji: Yes, we have started the operation, and we expect full capacity operation at the year-end. So things are proceeding as planned. And the impact is, as explained earlier, for this year, profit-wise, no contribution, but steady ramp-up.

Kazumi Tamaki: Next question is about Chemicals segment. From next year, there's going to be organizational change. What is the purpose behind this once again?

Shinji Miyaji: Well, the same slide is now shown here. So previously, our subsegments were divided as shown on the left, but this will be changed to what is shown on the right. So we start with electrolysis and with electrolysis, chlorine and caustic soda are generated and using chlorine as a feedstock, chlorine and other Performance Chemicals products are produced. And the whole thing is called chemical chain. And in Japan in the upstream, the chlor-alkali business. And in the downstream, there's Performance Chemicals products, and they belong to different business headquarters, business units. So it's not about optimization of chains, but it's about optimization of business units. So they are byproducts to each other. So if you look at the Japanese chemical chain as a whole, you can further -- there's further room for more optimization. So we have changed our gear to have optimization of the total chain. So rather than upstream and downstreams looked at separately, we look at volume of caustic soda and chlorine and optimize them in the whole chemical chain. And Essential Chemicals, Southeast Asia will be separated out because they had been a totally independent business separate from Japanese essential chemicals from the beginning, but they were in the same SBU with the Japanese Essential Chemicals, but Southeast Asia business is self-complete. So as a strategic business unit, it became independent and profitability improvement initiative that is underway has to be accelerated in this regard.

Kazumi Tamaki: Next question for automotive. The situation in the third quarter. 3 months ago, you were expecting a decline in revenue and profit from Q2 to Q3. The actual was a double-digit growth in profit. What were the differences?

Shinji Miyaji: So we're talking about quarter-on-quarter. It's not double-digit increase. The profit increase from Q2 was JPY 0.8 billion, I think. For automotive, in the second quarter, JPY 7.4 billion, up to JPY 8.3 billion in the third quarter. So JPY 900 million or JPY 0.9 billion. So it's not really double digit. But, especially in Japan and Asia, we continue to see strong business. That's one big factor. And North America is recovering somewhat. So combined -- those 2 factors combined was better than our projection. And therefore, Q3 was better than Q2, but not a big jump.

Kazumi Tamaki: We are running out of time. So this will be the last question. So for architectural glass, in Europe, demand has been sluggish, but prices seems to have increased significantly. So what was the factor for this? Was there any supply capacity decline? And also, you haven't seen signs for bottoming out in Asian market. Can you tell us your outlook for demand in Asia?

Shinji Miyaji: So there's a question about Europe and Asia. As for Europe, last year, we have to go back to the end of last year. There was a severe winter weather and gas prices surged. And we have not been able to recover on that immediately from the gas prices and the spread has worsened significantly because of that late catch-up. So the gas increase or cost increase passed on to the product price has been implemented, and that result has been reflected in the second quarter onward. On the other hand, in order to increase price, you have to look at the capacity. And so our company and whole industry, including our company, has taken some supply reduction. And from the second quarter onward, there were some effects from maintenance of prices. So as you know, the European economy has been quite weak, so we cannot expect too much from the demand increase, but prices are expected to be maintained at a relatively higher level. On the other hand, for Asia, demand is not strong, especially in Thailand, industrial structure is not that favorable. So it's a bit difficult. In Indonesia, there is going to be a gradual recovery. But compared to the past, there's an industrial structural issue that still remains. And so in terms of architectural glass, the profit improvement in Southeast Asia is a challenge for us.

Kazumi Tamaki: It is now time, so we're going to end the Q&A session here. For the answers, we couldn't respond, the IR personnel will come back to you later. If you have any further questions, please call us in Japanese at 03-3218-5096, that is for questions in Japanese. And if you wish to communicate in English, please send to us at this address and please fill out the survey sheets that you will see after you leave. Thank you very much. Have a good day.