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Operator: So hello, everybody, and thank you very much today for attending Terumo's financial results for the third quarter of the fiscal year ending March 31, 2026. Today, before proceeding, I would just like to give an overview. And Mr. Hagimoto-san, CFO of Terumo will give an explanation followed by time for question and answer, making a total of 45 minutes for today. For this webinar, there is simultaneous interpreting available via the Zoom where you may listen to English or Japanese in either direction. Please do use the globe button at the bottom to choose English or Japanese. The materials displayed on screen will be English only. If you require English disclosure materials, please refer to Terumo's web page. If there are any problems during the -- we will let you know by e-mail if there are any problems with connection throughout. Also, there is just one disclaimer before beginning. All of the explanation that we are about to give is based on current results. And all of these -- they are based on assumptions using information available to us at the time. Accordingly, it should be noted that actual results may differ from those forecasts or projections due to various factors. So with that, I would like to hand over to CFO, Mr. Hagimoto, for an overview of the financial results. Thank you.
Jin Hagimoto: Hello. This is Hagimoto, CFO of Terumo. Let me walk you through the highlights of our financial results. Thank you very much for your participation today. So this is the highlights of our financial results for the third quarter of the fiscal year ending March '26. First of all, the highlights, strong earnings results exceeding guidance. So for revenue with the highest ever results, both for the quarter and the third quarter year-to-date. We had strong sales led by North America with 9% growth excluding the FX impact. In particular -- revenue reached record highs, both for the quarter, in particular, demand growth in North America remained strong, resulting in a year-on-year increase of 9%, excluding FX impact. With regard to profits, operating profit -- adjusted operating profit and profit for the year all reached record highs on a Q3 year-to-year basis. Although we recorded certain onetime expenses from the first half of the fiscal year, our globally implemented pricing measures and appropriate cost control enabled us to deliver results that exceeded the pace assumed in our '25 guidance -- fiscal '25 guidance. Please note that the start from -- started from this quarter, the consolidated results with the Leverkusen plant and OrganOx, both of which were acquisitions announced earlier this fiscal year. Next slide, please. So moving on to our P&L performance. Revenue reached a record high of JPY 831.6 billion on a Q3 year-to-date basis. The expansion of global demand continued with the Cardiac and Vascular Company and the Blood and Cell Technologies company serving as the main drivers. Operating profit and adjusted operating profit also achieved growth exceeding that of revenue, reaching record highs of JPY 144.9 billion and JPY 173.5 billion, respectively. While the tariff impact began to materialize partway through the second quarter and continued to affect results in the third quarter as anticipated, we were able to offset these impacts through ongoing pricing measures and disciplined cost control, resulting in progress that exceeded our performance forecast. On a stand-alone Q3 basis, the operating profit margin declined. This was mainly due to the recognition of onetime expenses in the second half of the year, as explained during our second quarter earnings announcement. Next slide, please. So this is the year-on-year OP variance analysis for quarter 3. I will explain the Q3 year-to-date results on the next page. However, there are 2 major movements to highlight for Q3. The first is the impact of tariffs. In this chart, the tariff impact is included within gross margin and pricing. And as a breakdown of the gross margin effect, the tariff impact amounted to a negative JPY 4.2 billion. At the same time, pricing measures contributed a positive JPY 3.5 billion, partially offsetting the negative impact from tariffs. The second point is the recognition of profit and loss from newly acquired businesses. The Leverkusen plant recorded a loss of JPY 1.6 billion, while OrganOx contributed a profit of JPY 0.5 billion. Regarding the Leverkusen plant, we will take a disciplined and cautious approach to capital expenditures for production line preparations and proceed step-by-step as the certainty of customer contracts increases. Next, this slide shows the quarter 3 year-to-date OP variance analysis. Overall revenue growth driven by the continued expansion of demand made a significant contribution. The GP increment by sales increase was driven primarily by overseas TIS, mainly in North America as well as Global Blood Solutions, particularly in the plasma business. With regard to the gross margin pricing measures in the Cardiac and Vascular Company made a significant positive contribution to profit. However, as the impact of tariffs became more pronounced, this positive effect was partially offset. So while the negative effect from tariffs increased in quarter 3, on a year-to-date basis, the positive effect from pricing more than offset the tariff impact. SG&A has increased due to business expansion and remained largely in line with our assumptions. R&D expenses decreased slightly year-on-year. This was due not only to the impact of impairment losses on capitalized R&D recorded last year, but also to a review of R&D priorities and a disciplined focus on selective themes. Going forward, we will continue to invest in priority areas. As for foreign exchange, the impact was negative both on a flow and stock basis compared with the previous year. Next slide, please. I will now explain the performance by company. First, let me start with C&V, the Cardiac and Vascular Company. Revenue increased 8% on a local currency basis with strong performance continuing globally, particularly in North America. By business segment, growth was driven by TIS and Terumo Neuro contributing to revenue growth for the company overall. TIS was primarily driven by North America with solid performance continuing across all product categories. Volume growth contributed more significantly than pricing measures. In Terumo Neuro, strong growth continued in both China and Japan. The profit margin improved to 26%, supported by various initiatives, including pricing measures, profitability improvement and a review of unprofitable regions. However, due to negative impact from foreign exchange on a stock basis, the profit margin for Q3 on a 3-month basis declined year-on-year. Next slide. Pharmaceutical Solutions drove both revenue and profit growth for the company overall. This was led by domestic CDMO business as well as the strong performance of projects overseas. On the other hand, revenue declined in the Hospital Care Solutions and Life Care Solutions businesses. In Hospital Care, revenue decreased due to the impact of the business transfer in Q1 of the previous year as well as supply issue affecting the product. This supply issue has now been resolved, and the business is on the recovery trend. In addition, pricing measures implemented since April are progressing steadily. With regards to profit, earnings increased supported by the efficiencies of pricing measure and disciplined cost control. Regarding the acquisition of the Leverkusen plant announcement in May last year, this has been included in our consolidated results starting from Q3. On this page, figures and presented -- figures are presented excluding the acquisition impact to illustrate trends in the existing businesses. Performance, including the Leverkusen plant is shown in the bottom right of the slide. As mentioned briefly in the profit variance analysis section, the P&L impact related to this acquisition in Q3 has no impact on revenue, while the impact on profit was negative JPY 1.6 billion. We are currently working on production line start-up and production transfer. Since the acquisition was announced, we have received a significant number of inquiries from pharmaceutical companies overseas, particularly in Europe and the United States and are actually promoting the business to secure new projects. Next slide, please. Revenue increased significantly driven by strong growth in plasma innovations within Global Blood Solution. As the rollout of the Rika to existing consumers has already been completed, our focus in the plasma businesses will shift toward acquiring new customers going forward. In addition, our core business constituted to perform well, supported by the successful award of a tender for the [indiscernible] for whole blood collection system in Asia during Q3. The Global Therapy Innovations revenue increased as demand for cell collection -- associated with cell and gene therapy expanded, particularly in North America. Profit increased driven by improved profitability resulting from expanded sales of Rika as well as ongoing disciplined cost control. We have implemented production at -- adjustment related to Rika from Q3. However, due to efficient operation in production lines, the impact has been smaller than initially anticipated and profit margin has improved. Looking ahead to the next year, production adjustment may be implemented as needed, but we expect the impact in our P&L to be limited. Next slide. Following the completion of its acquisition as a wholly owned subsidiary on October 29, 2025, OrganOx has been included in our consolidated results starting from this Q3 earnings announcement. Results from November and December are consolidated with Q3 revenue of JPY 2.9 billion and adjusted operating profit of JPY 0.5 billion. This illustrates the growth trend, we are also disclosing Q3 year-to-date performance on a year-on-year basis. Revenue increased by 50% year-on-year and the profit margin improved significantly from 13% to 21%. This was driven by increase in number of liver transplant procedures as well as expansion of OrganOx consumer base. Looking ahead, the market for organ preservation using normothermic medicine perfusion (sic) [ normothermic machine perfusion ] or NMP is expected to continue expanding. Next slide, please. In the Americas, demand continued to expand, and we achieved double-digit growth on local currency basis. All companies delivered strong growth with TIS, Pharmaceutical Solutions and Global Blood Solutions serving as key drivers to leading global revenue growth. In Europe, TIS and Terumo Neuro continued to deliver stable growth. In addition, strong performance of projects that drove a significant increase in revenue in the Pharmaceutical Solutions business. In Japan, the CDMO business performed well with Pharmaceutical Solutions contributing to revenue growth. With C&V, Terumo Neuro continued to achieve double-digit growth. In China, revenue increased as Terumo Neuro continued to grow, supported by expanded market access resulting from VBP in Asia strong performance of TIS revenue growth and C&V. Next slide. With less than 2 months remaining until March, the full year outlook for the fiscal year is now coming into view. What I would like to reiterate is that our business based on our existing operation is steadily progressing towards the achievement of GS26 in the next fiscal year, supported by strength of our underlying fundamentals. In the current fiscal year, we are -- we recorded acquisition-related costs and other onetime expenses. The main item of onetime expenses that can be reasonably anticipated at this point are outlined on the Page 18 of this presentation. These initiatives reflect our commitment to improving profitability as we work toward achieving GS26. And the structural reform, we believe are necessary. These measures include initiatives to optimize our workforce overseas, which are expected to result in annualized cost savings of approximately JPY 3 billion from the next fiscal year. We position all of these costs as strategic investment aimed at supporting future growth. We continuously review our business portfolio and conduct strategy reviews to drive growth. While the business environment is constantly evolving, we will actively manage these changes to achieve final year of '26. That concludes my presentation. Thank you very much for your attention.
Operator: [Operator Instructions] Otaka-san will be joining from the head of the management as a part of the management team joined with Hagimoto. Kohtani-san from Mizuho, you will be the first person to ask.
Motoya Kohtani: So this is from Mizuho. Can you hear me okay? Yes. So on 18 -- Page 18, you were talking about the amortization. This is JPY 2.6 billion. And I think at the beginning of the period, it was JPY 4 billion. And if I look at the related costs in quarter 3, I think you said these were supposed to amortize in the first part of the fiscal year. So that amount seems to have -- has been brought ahead to the fourth quarter for the amortization fees. And so it looks to me for next year, I think the goodwill for next year also taken into consideration. So I'm just looking has the evaluation of inventories changed and the goodwill costs seem to be -- over the long period, seem to be slightly down from what was originally planned. But it seems to me that those costs seem to have swelled slightly.
Unknown Executive: Kohtani-san, thank you very much for your question. So as your understanding is correct, this is pre-PPA, and we -- these were -- these amortization costs for the current fiscal year are JPY 4 billion, and they had been shared provisionally tentatively. But for the final amortization and depreciation expenses, we used an external organization to reevaluate these and the result of that external evaluation was that the -- we had previously expected them, so they are below our initial expectations. And it says at the bottom of here, the inventory step-up of inventories. This was when we made the purchase, these were reevaluated. The costs were reevaluated under the IFRS rules. So the inventory period had -- they've been distributed across the inventory period. So there's no impact on cash flow. But on the PL, they have to be recorded on the -- so they are JPY 4 billion and JPY 7 billion for next year. But for -- they will not, however, be from...
Motoya Kohtani: Okay. So for these -- in these 2 years, these fees will occur. But after that, there will be very lower good rent -- goodwill fees. So it will be in the black in terms -- we will be getting closer to being in the black in terms of amortization?
Unknown Executive: Yes. We had expected it to be JPY 9 billion, but it was actually JPY 65 billion in terms of those amortization fees that came with the purchase of OrganOx, but we expect that to be lower than previously predicted.
Motoya Kohtani: And secondly, a final question. The -- I just wanted to ask about the -- at the Rika -- share of Rika, I think, probably will be about JPY 50 billion of total revenues. And I think there are some supply chain issues. But if we look at this now, I think it will be about JPY 30 billion, JPY 40 billion in terms of the portion of revenue. So is this the effect of deploying Rika later has had some effect, I think. So could you give me this JPY 50 billion that you had previously predicted for Rika? Why is that late? Why is that late to come online? So also I think MAYUMI a [ completer ] product is also late in deployment. So could you just let me know on that front?
Unknown Executive: So for Rika, the revenues for Rika we haven't disclosed those at present. But when it comes to the -- there was some late deployment -- there wasn't any late deployment of Rika. So as I explained last time, it has been extremely efficiently utilized. And so the -- is lower than our initial assumption for the portion of net sales. But there is no particular -- no, there is no delay in the deployment of Rika. And we are currently improving the product and deploying promotions to increase customer inquiries -- acquire customer take-up. So there's nothing particular to add regarding Rika, but it is proceeding on plan steadily. So the -- and comparatively, it is not a particularly large-scale customer in question where we are expanding our promotions. And so we are looking forward to further development. And so this is one pillar of our growth pillars -- one of our main growth pillars and the development is proceeding as planned. Thank you very much.
Operator: The next question will be Tokumoto-san from SMBC Nikko Securities.
Shinnosuke Tokumoto: Yes. This is Toto speaking. I hope you can hear me.
Unknown Executive: Yes, we do.
Shinnosuke Tokumoto: Okay. My first question goes back to Slide 12 about your projection beyond -- on and beyond next financial year. And there are some -- you are also reducing some costs, also saving some labor cost, personnel costs. But can you just once again share any projects that you are planning to implement for the next financial year? I mean, passing the prices over to customers, you talked about that will be implemented, but inflation is not going away. I think -- can you talk about is this becoming more difficult. You also talked about profit improvements overseas. But can you share any other projects locally or in any regions that you can share?
Kojiro Otaka: Well, thank you very much for your question. Let me pick up your question about price point and our programs overseas. And my colleague, Hagimoto-san,CFO, may jump in if necessary, but let me just start off. First on pricing point. We are just passing the prices based on the inflation based on our terms in agreements. And we will continue to do that as we've been doing already and go beyond next financial year. We are also getting some impact from customs and we are actually putting surcharge as the -- to absorb the impact of the tariffs. So we will continue to work on those price initiatives beyond next financial year. And you also asked me about the restructuring in overseas. We have in Q4, P18, Slide 18, as it shows on the QA, we are planning to have JPY 1 billion in onetime costs for project reduction severance of the people. This is onetime cost in FY '26, and we are expecting the positive impact to continue beyond FY '26.
Jin Hagimoto: Let me just add one comment. We -- within FY '25, we are running several different projects, and we will also have some positive impacts from pricing initiatives. We, of course, are managing that. But the price programs, I cannot share -- disclose any specific numbers, but market is going inflation and we are increasing prices based on, if not higher than inflation. So we will be passing the prices because we are delivering added values. And as a company, we are just looking at having more values added so that we can increase the prices faster than the inflation. We'll continue to do that. And on the other hand, there are kind of reduction negatives like restructuring projects. These are the initiatives that we are running for this year as well as last year as onetime costs. And but our programs in FY '26, the very final year of GS26, we are making sure there's not going to be negative ripple effect at the end of the year in FY '25 and '26. So all those negatives that we need to deal with, we need to consume, including the onetime negative cost, we wanted to have them just done it and done it all at once.
Shinnosuke Tokumoto: Okay. I just want to clarify about restructuring, JPY 5 billion in overseas. And this is some number that we didn't see in Q4, but you just added as you have made the decision to implement.
Unknown Executive: Well, I've been -- we've been talking all through about necessity to go through the restructuring, but we have more precise numbers. So we decided to post it here.
Shinnosuke Tokumoto: Okay. Understood. So I think Germany, Leverkusen, you also mentioned about that. But can you just share about what kind of approaches you are getting? There's going to be some time before the production lines go up running. But after negotiation, what will be the timing in which you will be starting to recognize revenue from that plan? I think that's one of the assessment points for assessing value for your stock. So can you talk a little more about the recognition of Leverkusen plant?
Unknown Executive: Well, we do have signed an NDA with them. We are being discussing with multiple different potential customers. For PS business, as you can see on this slide, in this financial year, we are just a mid-digit growth. This growth is substantially very good. And we are getting good reputation for stable supply reliability. And for revenue, is that going to be profitable? We would like to share those perspective and deliver those targets in the next midterm plans.
Operator: Next, Citigroup, Yamaguchi-san from Citigroup Securities.
Hidemaru Yamaguchi: Yes. Can you hear me? This is Yamaguchi from Citigroup. Well, for quarter 3, if we look at quarter 3 alone, the gross profit ratio seems slightly down. But the product mix, is the tariffs the biggest impact on this on the product mix or...
Unknown Executive: Yes. So on the right-hand side, are you referring to gross profit? Well, OrganOx, the purchase of OrganOx has also had an impact. But the weakening yen in quarter 3 has also had an impact as well -- so the -- it's one -- this has affected the gross profit rate by 1 point, I believe. But the tariffs, I think these 3 impacts have been impacting the gross profit ratio.
Hidemaru Yamaguchi: Also -- sorry, the CFO was just talking about these one-off costs. So the next he says OrganOx. You've already explained that. But apart from other for these one-off costs, these -- in next year, do you think there will be any other significant one-off costs or one-off losses?
Unknown Executive: Yes, I think your understanding is largely correct. Of course, in the -- included the balance sheet, we -- having made all the necessary investments, we believe that this is what we can expect to harvest. But we do want to improve profitability. Initiatives for improving profitability will be implemented in this period. So for '26 financial '26 as the final year of GS26, we hope to end in a clean manner. That's all from me. Thank you.
Operator: Next question is Yoshihara-san from UBS Securities.
Tomoko Yoshihara: It's Yoshihara from UBS Securities. I do want to ask a question about Rika. And in the second half, you are planning to do production adjustment, but the impact was not that big, if I understood correctly. But your customers, if we are hearing your customers' comment, market was soft, market share also shifted quite a bit. It seems like you are also getting some headwinds and production also, you mentioned about production may be adjusted next year. But I know this will be very difficult for you to make a comment about your customer, but can you share a little more details about this Rika business and how you see it's going to go? And also, you talked about the acquisition of new customers and when this business has just started. You were looking into potentially a very big customers who are not your customer back then. But you also talked about having approach -- approaching to small to midsized customers. Has something that changed in terms of the target customer base? Can you talk about that, please?
Unknown Executive: Well, thank you very much for your question. So CSL or any other competitors may make some comments, but we will refrain from making any comments about what's represented by the competitors. But we are just competing -- making some progress so we can compete with CSL. And in next financial year, we are expecting to see -- we are not expecting a shrinking revenue from innovation. So we are expecting very stable revenue source. And your question about expansion of customer base, I'm sorry, maybe this was not clear in our explanations. But our approach to big potential customers, nothing has changed. So it will be incremental on top of it to expand our opportunities working with small to medium-sized customers as well on top.
Tomoko Yoshihara: My second question is not directly related maybe to your financial performances, but your fundamental, I think, is quite doing well. But you are also having some challenging time over the last 1 year. Can you share examples of contentious discussions you may be having within that top management team. If there's none, that's also fine. But are you also looking into -- because there could be an option for you to buy back some of your shares back. Can you just talk about that as an option?
Unknown Executive: Well, thank you for your question. I will refrain from any comment about share buyback in this meeting. But we are not happy with the stock price of today. That's how we see it also. And how we, including OrganOx, right, or -- so we want to send the message that people will hopefully be understanding that we are making investment for the better future. So we will continue to run those programs in the future as well. And we -- the share prices are decided with many different factors. There is no single answer, no solution, one bullet to increase the share prices. But I think we can maybe send our message more clearly, loudly so that we get to have a chance to explain why and what we are doing. And so this is actually a big topic within our top management meeting because we are -- we will be performing well. We will be hitting the target in GS26, but we also need a good job communicating with the people in the marketplace.
Operator: Next, Morgan Stanley MUFG Securities, Hayashi-san, please.
Ryotaro Hayashi: This is Morgan Stanley, Hayashi. Can you hear me okay?
Unknown Executive: Yes, we can hear you fine.
Ryotaro Hayashi: So my first question is regarding TBCT. And I believe that from your data, I have calculated that in the third quarter, the net sales apart from FX impact are about 20% up in terms of revenues. And I think with the Rika production adjustment with that in mind, in quarter 3 that has been taken into account. But your production lines is what I'm talking about are able to absorb that negative impact or able to manage that negative impact you were saying. So I just would like to hear some more details about what kind of response, what kind of effect that's had on how are you going to absorb that drop in. I think that you have already taken into account the production adjustments. But the Leverkusen plant I think revenues could go up possibly. Could you give me some color on that, please?
Unknown Executive: First of all -- so thanks. In terms of net sales versus revenues, first of all. The Rika has contributed significantly to the increase in revenues. But for the other elements, for other products, those are also having favorable sales. Particularly in Asia, we have secured a tender in Asia, which has contributed greatly to increased profits, increased revenues. And the effect of those increased revenues and the production adjustment in terms of yield and improving production -- yield and production, I think, will bear out positively in our operating profit from now.
Ryotaro Hayashi: But I think in November, in your explanation in November, you were saying that the quality was too high and there were -- on the business side, you were talking more about the business side -- it's -- I feel it's slightly different -- there's a bit of a disparity with what you explained in November. What in November, what were you predicting? And this time now, why is the minus lower? Is it to do with Rika?
Unknown Executive: Yes. So let me add into that. So regarding the -- you're referring to the consumables for the Rika business. Well, the net sales and the forecasts, those come down, then the inventory level, I think, will -- we don't need to create that beyond need. So we would do some production adjustment. However, of course, for the actual distribution of the accumulation of inventories, that does bring down profits. But in terms of activities to increase productivity, then the production cost, if we're able to bring that down. So that's why we didn't have such a big minus in our revenues this time, that would be...
Ryotaro Hayashi: Right. So the net sales for Rika has gone to plan, but the margin has the -- any negative impact on the margin has been brought down to a minimum. Is that correct?
Unknown Executive: Yes. Well, what fluctuates is the -- if we look at the PSI, then these -- to keep the stock at a certain level, we have adjusted production. So overall, the structural impact is -- has been absorbed as offset by our higher production efficiency and production adjustment.
Ryotaro Hayashi: Understood. Okay. My second question is to do with OrganOx. And I think there are 3 companies involved in OrganOx. In the third quarter, then the JPY 2.9 billion sales, that is -- is that in line with your initial predictions, forecast? I think for the full year, JPY 9 billion a year is what you were predicting. And in quarter 4, I think that has I think -- are you on target in terms of the pace for OrganOx's results?
Unknown Executive: Yes. Well, thank you. In November and December, those 2 months have passed. Compared to the previous year, it is a very high level of growth on a year-on-year basis. But in the -- what we were initially expecting in quarter 3, we have gone perhaps beyond that slightly. But sorry, it's gone down compared to our prediction due to a slowdown in donors, available donors. But the demand remains extremely strong for OrganOx. So I think it is -- the growth trend is on target, and it was a slight depression in quarter 3 due to a lack of donors.
Ryotaro Hayashi: So in quarter 4, it will go back to the original trajectory. Is that what you're expecting?
Unknown Executive: Yes, that is our prediction. It will return to the expected trajectory for quarter 4.
Operator: The next question is Tony Ren from Macquarie.
Tony Ren: Can you guys hear me?
Unknown Executive: Yes, we can hear you well.
Tony Ren: Okay. Perfect. So my question is also about OrganOx on Slide #10. So based on the data on this slide, I calculated that the revenue increased about 46%, but the adjusted operating profit increased about 136%, so more than doubled. Did you do any cost improvement over there? Did you try to reduce any cost in manufacturing, SG&A or R&D-related expenses there?
Unknown Executive: So thank you very much for your question. So this is a result of the sort of OrganOx organic growth. So we did not do any specific approaches at this point in time. This was all activities that was already planned by OrganOx prior to our acquisition. So what we do believe is that, as we mentioned earlier, OrganOx's business structure is a very highly profitable structure. And as the revenue grows, there is room for profit improvement. What we want to also materialize is that the overall capabilities that Terumo as a group has by combining those kind of skill sets or the manufacturing capabilities of OrganOx, some of the technologies that we have with Terumo, we do hope that we can also accelerate this kind of growth in the profitability.
Tony Ren: Okay. So it is a matter of growing the revenue base and therefore, able to cover the fixed cost.
Unknown Executive: Yes, exactly.
Tony Ren: Okay. Perfect. Yes. My second one, very quickly, I just want to go back to the CSL, your customer CSL situation, right? I mean, obviously, we know that they had a lot of changes this week. Are you foreseeing any future impact because of the changes at your largest blood plasma customer in the U.S.?
Unknown Executive: So obviously, we cannot comment on CSL's specific situation. But from our point of view, we do believe that the demand for Rika and the disposables that sort of our revenue stream is not significantly impacted. So our understanding is that we will continue to provide the Rika disposables to CSL. There may be some discussions about the volume in the future. But at this point in time, we do not see significant changes in our projections.
Operator: Nomura Securities, Mori-san, please.
Takahiro Mori: This is Mori from Nomura Securities. Can you hear me? Well, there are 2 questions I'd like to confirm. First is regarding the Rika. So the profitability of this compared and the growth trajectory, I would like to know whether that will change or not. But -- so this is regarding the -- there is no change to our projections and our initial projections have not been changed for Rika's growth trajectory. Secondly, in your explanation, you talked about achieving GS26. You made several references to that. But what items need to be achieved for GS26 to be achieved? What are the criteria for achievement in order to fulfill GS26?
Unknown Executive: Thank you very much for the question. So we have our financial objectives, 3 financial objectives. These are since these were announced in December 2021, which would get double-digit growth for revenues in the late double digits. Secondly, would be the profitability rate, 20% of operating profit ratio of which. And the third is ROIC, 10% ROIC. That is the -- excluding the impact of M&A. But I think for ROIC of 10%, we want to achieve that as another key pillar. And so it's not that if one of those is okay. All 3 of these financial objectives needs to be achieved for us to deem that GS26 has been achieved.
Takahiro Mori: Right. So within segments and the profits within each separate segment, if you want to -- GS26 needs to be achieved across segments. Is that correct?
Unknown Executive: Yes. Depending on the business segment, then there are some variations, but we have all company financial targets as overall, which need to be achieved for us to declare GS26 to be achieved.
Operator: Next question goes to Saito-san from JPMorgan Securities.
Naoko Saito: I am sorry about that. My name is Saito from JPMorgan Securities. I hope you can hear me.
Unknown Executive: Yes, I do.
Naoko Saito: Sorry about that. So just wanted to talk about the slide, you analyze the operating profit ups and downs. I wanted to ask some detailed questions on the price and the expected price revenue. You talked about custom tariffs and prices in details. But the other things -- the other include the impact from inflation that you discussed back in Q2. You talked about some COGS impact, negative impact because of inflation. So I would say majority of the impact was coming from M&A transaction. Just wanted to see if there are all those details included in this analysis.
Unknown Executive: Well, thank you for the question. Depreciation -- COGS from depreciation and M&A is adjusted values. So that's JPY 591 million and JPY 439 million actually includes M&A adjustments. So that's not counted in that JPY 103 million, which is about the impact from revenue increase. Revenue increase is also getting impact on tariffs, inflation, product mix are all encompassed within that JPY 103 million.
Naoko Saito: Okay. You also mentioned about product mix. Is there any specific business that you saw quite a big change in product mix, especially for Life Care and Pharmaceutical Solutions, the factories are using -- you are using Japanese factories. Are the margin structures changed or not changed? Can you just add a little more comment about those?
Unknown Executive: On your question about Life Care, there is not much of a big change on profitability structure. For Pharmaceutical, the revenue is growing. And as it goes up, we can just absorb fixed cost as a leverage. And so that would be the part in which we are seeing the positive impact. Well, the other -- this might be way too much in details. But on -- the plasma business is expected to grow. Then the revenue, if you look at JPY 103 million, the impact will count on driving that JPY 103 million up higher. So if you look at the business structure as a whole, that mix impact will be negative. So there's that kind of structural details.
Operator: So we will end Q&A there as that is the end of the allotted time. That marks the end of today's presentation. Thank you very much for your participation. Here, we close the event. [Statements in English on this transcript were spoken by an interpreter present on the live call.]