Operator: It's time to begin the consolidated financial results briefing for the Third Quarter of Fiscal Year 2025 by Mitsubishi Electric. I would like to introduce to you today's presenter, Executive Officer and CFO, Kuniaki Masuda. Masuda-san, over to you.

Kuniaki Masuda : Hello, ladies and gentlemen. This is Masuda from Mitsubishi Electric. Thank you very much for joining our financial briefing to discuss our overview of Mitsubishi Electric's consolidated financial results for the third quarter of fiscal '25. Page 3 is the executive summary. The third quarter of fiscal year '25 saw the impact of weaker yen, compounded by sales growth in the Infrastructure and Life segments and the results of ongoing efforts to improve profitability and efficiency in each business. Our revenue for the quarter amounted to JPY 1,356.7 billion and operating profit JPY 126.8 billion, both reaching record highs for our quarter 3. Even excluding a gain on the sales of shares in MD LOGIS CORPORATION, operating profit was the highest ever recorded. Both revenue and operating profit for the 9 months through Q3 also reached record highs. For the entire year of FY '25, our forecast for revenues is JPY 5.4 trillion, up JPY 10 billion from the previous forecast, while operating income of JPY 400 billion remains unchanged. We will continue our efforts to improve profitability and efficiency to secure our business performance. Page 5 shows the results of our group for the 3 months of Q3. Revenue increased JPY 112.8 billion year-on-year to JPY 1,356.7 billion, a record high, surpassing the quarter 3 of fiscal year '24. Operating profit increased JPY 40.3 billion year-on-year to JPY 126.8 billion, a record high, surpassing the same quarter last year; and the operating profit margin improved 2.4 percentage points to a record-high 9.4%. This operating profit includes a gain of approximately JPY 24 billion from the transfer of shares in MD LOGIS, excluding which the operating margin improvement is 0.6 percentage point at the margin of 7.6%. Profit before income taxes includes approximately JPY 5 billion of equity method earnings from the transfer of shares in MD LOGIS. Both profit before taxes and net income for Q3 have reached record highs. Page 6 shows the results for the first 9 months of the year. Revenue of JPY 4.3 trillion, operating profit of JPY 303.5 billion and operating margin of 7.6% are all record highs for the cumulative 3 quarters. Page 7 shows details of changes in revenues and operating profit for the 3 months of Q3. The effect of the exchange rate is an increase in revenues by JPY 27 billion and an income by JPY 7 billion. The increase in operating income of JPY 33.4 billion due to volume changes includes a gain of approximately JPY 24 billion from the transfer of MD LOGIS shares. Cost increases in parts and materials as well as logistics cost deterioration of about JPY 10 billion, and composition of the business was negatively impacted by the reduced proportion of the FA Systems business. Still, we have managed to post increase in operating profit year-on-year, excluding MD LOGIS share sales and ForEx impact. By business segments, the Industry & Mobility segment saw a year-on-year decline in both top and bottom lines, but this was offset by efforts to improve profitability and efficiency in the Infrastructure, Life, and Semiconductor & Device segments. Similarly, on Page 8, we show the changes in revenues and operating profit. For the first 9 months of the year, the effect of exchange rate is an increase in top line of JPY 111 billion and JPY 31 billion in the bottom line. The increase in the cost of materials and logistics was compensated for by price improvement and other profit improvement efforts. Page 9 shows the consolidated income statement for the 3 months of Q3. Cost of sales ratio improved by 0.5 percentage points from the same period last year. The deterioration in the Industry & Mobility segment was offset by improvements in other segments. SG&A expenses increased by JPY 24 billion from last year's Q3 due to factors such as increase in approximately JPY 5 billion in currency translation due to the weaker yen as well as an increase in personnel expenses and R&D investment. Other profit increased by JPY 23.2 billion year-on-year due to a gain of approximately JPY 24 billion from the shares of MD LOGIS. Financial incomes and expenses improved mostly due to the impact of foreign exchange. The JPY 8.5 billion improvement in share of profit of investments accounted for using the equity method includes the mark-to-market impact of the equity investment and MD LOGIS, which amounts to about JPY 5 billion. Please refer to Page 10 later. I will skip over to Page 11 to explain the consolidated statement of financial position. Assets increased JPY 67.4 billion from the end of the previous fiscal year. Inventory increased by JPY 82.2 billion. Since there was an increase of JPY 23.4 billion in currency translation, actual increase is JPY 58.8 billion. While inventories in the build-to-order business increased due to progress in construction, the balance in the mass production business decreased from the end of the previous fiscal year in the air conditioning and home appliance business, FA Systems business and Semiconductor & Device segment. Inventories decreased JPY 2.7 billion from the same period last year. And excluding the JPY 49.5 billion increase in yen value due to the impact of ForEx, inventory decrease was JPY 52.2 billion, indicating a steady progress in optimization of inventory balance. Total equity increased JPY 177.1 billion from the end of the previous fiscal year. Of this amount, equity attributable to Mitsubishi Electric's shareholders increased JPY 170.9 billion from the end of last fiscal year to JPY 3,910.3 billion, largely due to a JPY 248 billion increase in net profit, which was partly offset by a decrease due to dividends to shareholders. The ratio of equity attributable to stockholders was 2.1 percentage points, the increase, 62.7%. Page 12 shows consolidated cash flow for the first 9 months of the fiscal year. Inflow from operating activities increased by JPY 109.1 billion year-on-year to JPY 308.1 billion due to net profit and a smaller payment in trade payables. Cash flow from investing activities was an outflow of JPY 133.9 billion, JPY 65 billion smaller year-on-year, due to the transfer of shares of MD LOGIS this year. Resulting free cash flow was an inflow of JPY 174.1 billion, an increase of JPY 174.2 billion year-on-year. Page 13 shows the revenue and operating profit by segment. In Q3, Infrastructure, Life and Business Platform saw year-on-year increase in both revenue and operating profit, while Industry & Mobility saw decreases in both. Semiconductor & Device decreased in revenue, but increased in OP. Same situation as the first 9 months as seen on the next page. On the following pages, each segment will be detailed. Numbers for each subsegment are listed on the supplementary information on Pages 23 and 24. Please skip to Page 15. I'll start with Infrastructure segment. And the 3 subsegments within this segment saw year-on-year increases in both revenue and profits in Q3. Public Utility Systems business had higher orders, revenue and operating profit year-on-year, thanks to strong performance of the UPS business for overseas data centers as well as solid transportation business in and out of Japan and the public utility business in Japan. OPM improved significantly due to changes in the project portfolio with many highly profitable projects in Q3. In the Energy Systems business, demand for power stabilization remained strong due to growing renewable energy and construction of data centers, particularly overseas. Helped by profitability improvement initiatives, orders, revenue and operating profit all exceeded the level of the prior Q3. In the Defense & Space Systems business, orders, revenue and operating profit in both sectors exceeded the same period of the previous year. OPM improved significantly, thanks to changes in project portfolio such as resolution of duration in difficult development projects in the space sector and faster progress in construction following improved contract terms in the defense sector. Although OPM will not stay at this level because this is due to temporary factors such as the changes in project portfolio, orders did increase year-on-year and is also expected to grow significantly for the full year. We expect to see a steady increase in revenue and operating profit going forward. Page 16 shows Industry & Mobility segment. In the FA Systems business, we had an expected weak investment in decarbonization sector, such as lithium-ion batteries, but the situation is proving to be tougher than expected. Meanwhile, demand has increased continuously in some markets such as CapEx for smartphone AI and machine tools. And orders were higher year-on-year, showing a recovery. But demand for high-profit models has not recovered to the expected level. And due to changes in the product mix, revenue was flat and operating profit was lower than the previous year. We will continue to make efforts to underpin company performance, including price and cost improvements. In the Automotive Equipment business, both revenue and operating profit for Q3 were down year-on-year due to weaker demand from China and the impact of varying timing of price improvements. Last fiscal year, price negotiations resulted in significant improvements in Q3, but this year, many customers are still negotiating. We will continue to push it forward, aiming to conclude the price in the fourth quarter. Please turn to Page 17 for Life segment. Building Systems business saw higher orders and revenue and operating profit year-on-year for Q3, mainly in Asia, excluding China and Japan. In the Air Conditioning Systems & Home Products business, while demand in Europe was weak, revenue increased in North America, pushed by strong demand for products using old refrigerants due to refrigerant conversions, and demand was also strong in Asia and Japan. Both revenue and operating profit for Q3 were higher year-on-year. Please turn to Page 18. In the Business Platform business, demand remained steady and the Q3 orders, revenue and operating profit all grew year-on-year. In the Semiconductor & Device segment, while demand in major markets for power semiconductors stagnated, including weaker demand for sectors such as EV, air conditioning in China and factory automation, demand for optical devices for communication was solid. While revenue in the Q3 decreased year-on-year, operating profit increased due to factors such as change in product mix. Please turn to Page 19 for revenue by location of customers in the third quarter. Overseas revenue increased JPY 55.1 billion or 109% year-on-year to JPY 680.7 billion due to weaker yen, despite a decrease in demand in some regions and sectors. Revenue from Japan increased by JPY 57.6 billion year-on-year or 109%, and the ratio of overseas revenue to consolidated revenue decreased to 50.2%, lower than the previous year. Please turn to Page 21 for the full year forecast. We now expect revenue of JPY 5.4 trillion, which is JPY 10 billion higher than the previous forecast, and operating profit is expected to remain unchanged at JPY 400 billion. Revenue and operating profit by segment in the revised forecast are disclosed in the supplementary information on Page 25. Although demand in some areas of the FA Systems business is continuing to recover, our forecast was revised with the expectation that demand for the group's highly profitable medium- to large-sized controllers and servers will remain weak for the rest of the fiscal year. Meanwhile, based on the current situation, we have revised upwards our forecast for Defense & Space Systems and Semiconductor & Device. That's all for me. Thank you for your kind attention.

End of Q&A: