Mitsubishi Corporation (8058) June 3, 2026 Capital Markets Day Transcript

Good afternoon. This is Nakanishi, the President and CEO. Due to the impact of Typhoon, today's Investor Day will be held in a video conference format. Thank you for your understanding. While our regular earnings briefings typically focus on current performances and near-term results, today we would like to provide a more comprehensive update on our strategies and initiatives to drive medium- and long-term corporate value. We remain deeply focused on continuous value creation. This slide outlines our value creation framework, which is also described in detail in our integrated report. Starting with the top section, under Corporate Strategy 2027, we have established gross and underlying operating cash flow and capital efficiency and ROE as our primary KPIs. With respect to underlying operating cash flow, which serves as our earnings base, I am pleased to note that we are seeing stronger alignment and awareness across the organization, and we continue to accelerate the execution of our Enhance, Reshape, and Create initiatives. To increase our ROE, we are strengthening baseline profitability and improving ROA while maintaining a strict focus on the disciplined and effective use of leverage. Finally, turning to our goals of elevating gross expectations and reducing our cost of capital. We're actively working to deepen the market's understanding of our strategy and gross potential through proactive investor engagement and enhanced disclosures. It has been one year since we announced Corporate Strategy 2027. At the time, following the announcement of U.S. tariffs, uncertainty in the macroeconomic environment was particularly high. In that context, we set out a strategy to strengthen and accelerate initiatives centered on our core businesses where our confidence is strong, as well as new domains with clear growth potential. Since then, the global landscape has continued to evolve. We are navigating through rising geopolitical risks, increasing complexity in the path towards decarbonization, and structural shifts in industries and lifestyles driven by the expansion of AI. As a result, we are even more keenly aware of the growing importance of ensuring a stable energy supply, securing critical mineral resources, strengths in food supply change, and addressing increasingly diverse customer needs. Against this backdrop, we will leverage our high-quality asset base we have built over many years, together with our extensive downstream touchpoints, and utilize our integrated strengths to address global challenges while achieving sustainable growth. As mentioned already, in this evolving macro environment, I would like to highlight several areas where we believe we can leverage our strengths to drive value creation. In mineral resources, we will ensure a stable operation and supply of high-quality steelmaking coal while further strengthening our initiatives in critical minerals for electrification. In copper, we are steadily growing equity production towards FY2030. We plan to commence production at Copper World in Arizona, U.S. in FI 2029. Also, we have agreed on a joint mine plan for the Las Bronces Copper Mine in Chile, part of the Anglo-American Sur copper business in which we have an interest, and the adjacent Andina Copper Mine owned by Cadelco and plan to increase production as a result. We are also conducting feasibility studies across other critical mineral projects. Turning to the energy value chain, in January, we announced the acquisition of shale gas assets in Hainesville, which spans across Texas and Louisiana. Building on competitive upstream gas, our aim is to capture the growing demand for gas within the U.S. industrial and power sectors. In addition, we are evaluating the supply of LNG to international markets using LNG facilities owned either by ourselves or by third parties. We also hold LNG interests on the west coast of Canada, providing supply optionality across Asia, Europe, and other regions. We believe this flexibility is one of our key strategic strengths. In food and bio-based businesses, we are capturing expanding demand for protein while contributing to global food security and advancing initiatives at the intersection of food and energy. For example, in Hawaii, we are engaged in biofuel production. Our presence across both food and energy has enabled us to move early into new bioresource value chains. Going forward, we will continue to leverage our expertise in grain procurement and trading, together with a global network. While much of what I have covered so far has focused on upstream, we are also actively strengthening our downstream businesses through our C2B value chain approach. We are taking a market-driven approach, enhancing services that directly address consumer needs through channels such as convenience stores and supermarkets, while strengthening linkages with other consumer-facing businesses, including food products, logistics, and urban development. At Lawson, we are advancing service diversification and improving operational efficiency by leveraging KDDI's capabilities, and we are beginning to see tangible results. At Mitsubishi Shokuhin, which we took private last year, we are accelerating business development both in Japan and overseas by leveraging our extensive networks with the aim of unlocking synergies across the entire value chain. Finally, in addition to the initiatives in mineral resources, energy value chain, food and bio-based businesses, and the C2B value chain, we are steadily advancing and has reshaped initiatives in the core business domains where we have long-held strengths. Finally, let me share our view on our mid- and long-term growth. We are building a business portfolio capable of delivering a sustained average annual growth rate of approximately 10% or more in underlying operating cash flow. Based on a bottom-up assessment of all ongoing and pipeline projects, we have developed underlying operating cash flow projections through FY2028 and beyond. This gives us a high level of confidence in our ability to sustain this growth trajectory and reinforce our earnings toward FY2030. With respect to ROE, we have consistently stated that 12% is a milestone, not an endpoint. From FY2028 and onward, we will continue to strengthen our existing businesses while proactively managing our portfolio through capital recycling and new investments. Furthermore, we will utilize leverage appropriately while maintaining financial discipline, accelerating value creation that transcends traditional industry boundaries. Through these efforts, our goal is to achieve sustainable growth and continuously improve our capital efficiency. Thank you for your attention.

My name is Yoshihiro Shimazu, CFO. Let me briefly introduce myself. Most recently, I served as general manager of the Corporate Accounting Department. Prior to that, I held roles within the machinery and living essentials segments, was seconded to Mitsubishi Motors, was stationed in China, and worked in the Corporate Strategy and Planning Department. I assumed my current position as CFO this April. Thank you for joining us today. Today, I will outline the operating model that enables the delivery of our targets for Corporate Strategy 2027. Under Corporate Strategy 2027, our aim is to simultaneously achieve high gross and capital efficiency. First, with respect to gross, our goal is to sustainably deliver an average gross rate of over 10% in underlying operating cash flow. This target has been assigned to all business segments since the launch of Corporate Strategy 2027. Turning to capital efficiency, we have set a corporate ROE target of 12 percent or higher by FY 2027. To support this at the operational level, we have introduced an approach where specific ROE targets are set for each business segment calibrated to their respective sector fundamentals. I will cover this in more detail later. In terms of financial soundness, we maintain an upper guideline of approximately 0.6 times for the net DE ratio. At the same time, we have implemented a cash flow management strategy requiring each business segment to maintain positive free cash flow, thereby empowering segments to independently optimize their portfolios, including asset replacement. Ultimately, this ensures we optimize our use of leverage while maintaining our financial soundness. I will also walk through the ongoing monitoring and follow-up processes that support our value creation framework. Let me now turn to our operating model for achieving our corporate ROE target. As mentioned earlier, we have established ROE targets for each business segment for FY2027 to support our overarching goal of a 12% or higher corporate ROE. We have not previously explained this capital efficiency approach in detail, so I would like to take this opportunity to do so. For each business, we determine a risk-adjusted cost of equity based on industry benchmarks while incorporating business-specific risk factors. We then calculate a weighted average to arrive at the risk-adjusted cost of equity for each business segment. The corporate weighted average is then regarded as our overall risk-adjusted cost of equity. The required excess return, defined as the difference between the cost of equity and the ROE target, is allocated to each business segment and set as the specific ROE target. As each segment works to achieve and exceed its target, the company as a whole is structurally aligned to achieve an ROE of 12% or higher. From a management perspective, we conduct tailored monitoring and follow-up at the business level to maximize these excess returns. The diagram on the right illustrates this target setting concept. While targets are managed at the business segment level, the five business domains presented earlier can be mapped, as shown here. For each domain, the risk-adjusted cost of equity is derived from an industry-specific cost of equity that incorporates business-specific risks. Against this baseline, we aim to maximize excess returns through our core strength, such as our foresight, expertise, and value creation capabilities. Our portfolio spans businesses with diverse risk-return profiles. Some generate higher returns in favorable market conditions, while others provide stability during downturns. Ultimately, through a combination of operational improvements, asset replacement, and capital reallocation, we are steadily enhancing our overall corporate ROE. As I mentioned earlier, achieving both segment ROE targets and a corporate ROE target requires each business to generate returns above its risk-adjusted cost of equity and deliver additional excess returns. To support this, we apply rigorous investment screening and ongoing monitoring. I would like to explain about this process. First, about the individual investment or financing decisions. At the time of each investment or financing decision, we assess not only quantitative criteria, such as the ability to achieve returns above the risk-adjusted cost of equity, but also qualitative factors, including strategic rationale, a value add-as, Mitsubishi Corp, and exit strategy. Decision-making authority varies depending on the size and characteristics of each investment. For large-scale investments involving significant risk capital, decisions are made through comprehensive discussions among senior management across business segments. Next, going to the monitoring process. After an investment is executed, we conduct annual reviews of each investment through a formal business plan process. In these reviews, we evaluate KPI performance, future growth prospects, risks, and holding strategies together with the corporate functions. In particular, for businesses that fall below their risk-adjusted cost of equity, exhibit slowing growth, or have reached maturity, we conduct a detailed review of strategic alignment, improvement plans, and holding policies. Since the launch of Corporate Strategy 2027, approximately 20 companies have been identified for divestiture based on these reviews. As mentioned earlier, our segment OROE approach and cash flow management strategy have been fully implemented across all business segments. These mechanisms are designed to empower segments to independently replace businesses with relatively lower profitability or weaker strategic positioning, particularly as we pursue new growth investments. As a result, portfolio replacement activity is expected to increase going forward. The diagram on the right illustrates our overall business management cycle. At the corporate level, we hold an annual Business Strategy Committee meeting where we view medium- to long-term strategies and quantitative plans for each business segment to ensure they are aligned with a corporate strategy. These sessions are attended by senior management, including the President and CEO, as well as the heads of all business segments. Together, the committee assesses progress against business plans and actively explores opportunities for cross-segment alignment and synergies. During the Corporate Strategy 2027 period, we have also introduced additional enhanced reshape reviews conducted primarily with businesses expected to drive future growth. These involve in-depth discussions between the CEO and business segments on KPI validity, business plans, and require actions. In addition, we conduct follow-ups to monitor progress during the course of the fiscal year. In summary, operating model consists of a corporate strategy that sets overall direction, the business strategy committee, which ensures alignment captures synergies and reviews medium-to-long-term plans, enhanced reshaped reviews that support steady earnings growth. Investment and financing decisions are evaluated rigorously from both quantitative and qualitative perspectives. Following execution, performance is monitored through annual business plan reviews, complemented by ongoing follow-ups throughout the year to enable timely and appropriate actions. These processes are complemented by ongoing follow-ups throughout the year, enabling timely and appropriate actions in response to market changes.

We remain committed to this discipline management process to ensure we meet our corporate targets thank you very much so well this is kobayashi cseo so this will be the last part of the the part one so i'd like to share with you our initiatives first let me begin with our ongoing efforts to enhance corporate and shareholder value as shown here our total shareholder return tsr has increased approximately 12-fold over the past 10 years, representing an average annual gross rate of around 28%. We believe this reflects our sustained commitment to growing earnings per share EPS, while progressively increasing our dividend per share DPS. Going forward, we will continue to ensure the highly effective execution of corporate strategy 2027. We will make progress towards sustainable growth in both EPS and DPS by expanding our underlying operating cash flow, improving capital efficiency, and maintaining strict discipline in our capital allocation. At the same time, we will actively work to enhance the clarity of our growth story and our value creation process, ultimately aiming to strengthen market expectations for our future growth. In FI 2023, we established a CSEO position and revamped our stakeholder engagement model, strengthening our ongoing engagement with shareholders, investors, and other key stakeholders. The insights gained through this engagement, which include feedback on our management approach as well as critical intelligence on market trends, are shared continuously and in a timely manner across various internal forums. These forums include board of directors meetings, executive level discussions, and other interactions involving senior management, our business segments, corporate functions, and our broader employee base. Ultimately, these insights are incorporated into our strategy formulation and execution processes. Alongside incorporating stakeholder feedback into our management practice, we are continuously enhancing our disclosures to ensure the market has a clear understanding of our value creation story and growth strategies. In response to investor demand for deeper insight into Corporate Strategy 2027 and our medium-to-long-term business strategies, we provide both qualitative and quantitative information through IR events, such as today's session. Our goal is to improve visibility into the progress of our enhance, reshape, and create initiatives, as well as the impact of our executed investments. We have also expanded our disclosures through our earnings materials and other channels. Beyond financial metrics, as the scope of required disclosures continues to expand year by year, we have significantly increased the range of information we share. For example, in recent years, our greenhouse gas emissions reporting has evolved to cover not only Scope 1 and 2, but also Scope 3, alongside our broader contributions to emission reductions. While we have made solid progress in these areas, we continue to listen closely to your feedback regarding the quality and clarity of our disclosures. We remain fully committed to further improving our transparency by actively incorporating stakeholder perspectives.

As part of our efforts to improve visibility, we have introduced several new disclosures approaches in today's CEO and CFO presentations. In this section, I would like to present a new perspective on our portfolio structure. Historically, our businesses have often been categorized as either resource or non-resource. So this has been the way has been categorized. However, we believe this classification does not fully capture the true characteristics of a portfolio. For example, even within resource-related businesses, midstream LNG and upstream mineral resources have fundamentally different exposure profiles. Similarly, some food and bio-based businesses also face significant market volatility. Based on this perspective, we have introduced a new disclosure approach categorized by the degree of exposure to market fluctuations. As illustrated on the slide, the areas outlined in orange along the outer ring represent businesses with relatively low exposure. Here, our aim is to strengthen our earnings based through our company's unique value creation capabilities. Conversely, the areas outlined in blue along the outer ring represent businesses with higher market exposure, including certain food and bio-based businesses such as salmon farming to LNG businesses. For these areas, we will enhance visibility regarding asset quality, growth potential, and risk mitigation measures. While this represents a new analytical perspective, we will continue to enhance our disclosure to enable a deeper understanding of our portfolio. Finally, I will outline a roadmap to Carbon Neutral Society 2.0 announced on May 2. We have re-affirmed a policy of directly addressing the three key energy challenges, stable supply, affordability, and decarbonization. By balancing these priorities, we are advancing a responsible energy transformation. To support this approach, we have revised our fiscal year 2030 GHG emissions reduction target to a range of 30 percent to 50 percent. This update gives us agility to navigate the varying pace of energy transition across global markets. And while we maintain a goal of achieving net zero by 2050, we will pursue multiple pathways so we can pivot as the energy landscape evolves. At the same time, we will continue to conduct rigorous risk assessment of businesses with high climate exposure, including a close mounting of potential stranded asset risks. In addition, we have introduced avoided emissions as a metric to measure our contribution to decarbonization across society. Through our diverse EX initiatives, including our copper business, we aim to support the path to decarbonization. This concludes my presentation. For further insights into the board-level discussions regarding our value creation initiatives and our revised roadmap, we invite you to hear directly from our independent directors in the following session. Thank you for your time and attention.

Today we are joined by our two independent directors, Mr. Tsunayoshi Tatsuoka and Ms. Mari Sagiya. We also welcome Mr. Akitsugu Era from Brunswick Group as our facilitator, who has extensive experience in corporate governance and engagement with both Japanese and global companies. I will hand the microphone over to you. Thank you very much.

My name is Ara. So today we have the independent directors and of course some of their activities may not be so visible from outside. So we'd hope that we can enhance the visibility of the shareholders in the market. So this session I would like to pose several questions, after which we would like to entertain your questions from those participating. So without further ado, so about the Corporate Strategy 2027, I'd like to pose a question about the progress. So this is to Mr. Tatsuoka. So I believe this corporate strategy has been formulated after extensive discussion with the independent directors. So it's been 12 months. So how do you actually perceive the progress so far? So this is Tatsuoka. Thank you very much. So the progress of the Corporate Strategy 2027, so basically it really boils down to what sort of number that they're going to generate. So we shall see the outcome. So what is important? Of course, the initial discussion was incredibly important, but also we need to evaluate the progress. And also, what is the pathway that we will take? We would also need to evaluate those. So it is important that we have clarity in that respect as well. As CFO Shimazu just mentioned, there's various business management cycle or system in place. So as they address those management cycles on a regular basis, we receive the report. And based on that, we look at the corporate strategy and also the business strategy as well. So since the beginning of the fiscal year, all the independent directors will participate in terms of the engagement with the senior level management. So we also look at the micro perspective as well. So that is how we have been monitoring. So both the vertical axis and the horizontal axis, we have been evaluating the progress. Thank you very much. So there are various opportunities to assess the progress then. So if possible, if you can share with us, so in terms of portfolio or the resource allocation, are there any specific areas that you have interest in? So from the perspective of portfolio, so the portfolio, the company's portfolio, the monitoring, that is conducted on an annual basis. So the various axes to perceive that. So there could be a capital efficiency, as we talked about in the part one, or we could perceive those from the perspective of risk management, or how they're trending in terms of the segment, or by country, or by currency, for instance. So it's quite multifaceted in the way we monitor. So from various perspectives, we need to perceive the progress. So it is multi-tiered, shall we say. And that is how we check the current state. And on an annual basis, discussions have been conducted. Thank you very much for that. So, Ms. Sagiya, could we hear your thoughts? So this is Sagiya. It's exactly as Mr. Tatsoukas mentioned. So for the Corporate Strategy 2027, so the formulation and the announcement that is merely a starting point. And so for the Mitsubishi Corporation, we have the ROE target, and we need to manage the business. And so there has been some concrete sharing of the information with the independent directors. And as the FOH Shimazu mentioned about the business strategy meeting, he mentioned that was in as one of the forums. So in terms of the discussions conducted within the management, so in terms of the opportunities and what sort of comments were raised, those information are also shared with the independent directors. So basically the general, the spirit is everything will be shared with independent directors. So through those information exchange, we have full visibility in terms of the management, the initiatives, and also we explore whether we can add anything from the independent director's point of view. And that is exactly the venue for the board of directors. But aside from that particular forum and various business segment and business headquarters, we are given the concrete, the explanation of the current state. So we've been able to have a fairly detailed monitoring process. Thank you very much for that. That was very concrete in details. We appreciate that, especially for Ms. Aguia. So your background, you have been involved in a lot of digital businesses. So from that perspective, how do you perceive the current initiatives by Mitsubishi Corporation for digital, actually two years ago? So I had the opportunity to speak in one of the forums, and I still remember the question that was raised from the flow. So Mitsubishi Corporation, can they really do the DX, a digital transformation? So that was a pretty big picture that was raised from the flow. and back then how I responded to that so actually was almost immediately after I have been assigned a job on the independent director and so I have actually conducted an interview with the various levels of the management to understand what is the current state of the the DX so depending on the departments I was able to fear that the different perspectives reside depending on which tier or which department they are. And of course, the AI Solution Task Force was announced at the same timing of the Corporate Strategy 2027. So there's been heightened knowledge and experience as other companies engage in DX. So going forward from the AI perspective, they have been able to focus the areas that they need to invest and the direction they need to take. For instance, value enhancement from the investee or the portfolio companies. And that includes AI utilization. So I think it has become much more full-fledged within the Mitsubishi Corporation. So there's definitely been an evolution. Thank you very much. So again, you've talked about the historical discussions, and there has been some kaizen or improvement. So thank you very much for being able to understand that.

There's a lot of things that I want to ask, But I think we have more time. So some additional question to Sagiya-san. So I think basically not to make a decision to continue, but it's also important to conduct a decision about to terminate or withdraw from the business. I think you had something that you said. And I think basically Mitsubishi Corporation has been this stance to conduct a kind of a cyclical or the business. So I think basically it has a kind of a strategy. So in terms of the businesses that have the investment, it has a big impact on the businesses and profits, But there's some businesses that are still in the nurturing level that I have to follow up. So it's a value-added cyclical growth model that Mitsubishi Corporation takes under this stance. And Mr. Shimazu has mentioned it. So can Mitsubishi Corp actually offer value and enhance and grow the product? I think you have to make a decision. But I used to work at an IT company, so DXAI, with these companies that have this type of feature. The technological cycle is rapid, and then a lot of technologies come and go. And I think the cycle will be shorter than Mitsubishi corporations. Basically, the decisions will have to be made in two to three years' time. So I did say that maybe you have to make that kind of cycle shorter to make a decision. So the change of the timeline, the difference in the timeline, I think from the investor's point of view, that's very important. Thank you very much for that view. So from this point, I would like to switch gears a bit. I would like to talk about the carbon neutral roadmap 2.0. So, we have conducted a revision, and the independent directors included, I think, a lot of discussions have been made, and it has been disclosed last month. So, what is the thing that was discussed, Mr. Tatsouka, what are the things that you have discussed? So the initiative that Mitsubishi Corp is taking in this area, so I have been at the position of the independent director for a long period of time. So before the 2.0, even before we have filed this roadmap, from my perspective, it has been very solid in terms of the figures, in terms of scope 1, 2, 3. We have been very advanced in looking at the numbers in terms of taxonomy. It has been conducted. and scenarios. There were multiple scenarios referring to various discussions out there in the market. We had looked both at the risks and opportunities, and the process has been compiled. And I think that has led to the previous roadmap. And I think basically we have put into action what we had decided in this roadmap. So we revised this roadmap in terms of deliverables, this is the 2.0 roadmap in itself. And I would just like to talk about what type of mindset I had when I was engaged in this discussion. One was that, so as I said in the text of 2.0, as the supply stability or the economy and the environment, this harmony of three would be important. And I have been engaged in the energy policy for a long period of time. So these three E's, the three ideas, how are this going to be enhanced? And that has been a challenge. I have been looking at this area for a long period of time. I think right now it is the most difficult environment when these three values are at odds with each other. We have the ocean-grinning situation, the mid-East situation, middle-East situation. So, you know, you have to be realistic. And in this context, how are we going to create this world that you envision? So it's not a linear path that we used to think. So in the roadmap, it says that multiple pathways. I think basically it's more like a long and winding road that we are looking at going forward. So that's the image that I have. And from that perspective, I have been engaged in this revision of this roadmap. And the second point is that Mitsubishi Corporation's business model is that it's not the case that we are conducting a manufacturing industry in a specific country. We do business with all around the world. It's a global company. So in terms of the environment issues framework, basically from the mid-90s, the cap was set in terms of emissions by each country. But this was not really compatible with a company that conducts business globally. So how are we going to take this into account and consider about our path? and these three values at odds with each other, and each of the countries will have to think what they have to do in each of the countries. So Mitsubishi Corporation has various businesses under its umbrella, and that is a strength. So each of the regions offering, each of the economies offering solutions. We have to, of course, we have to consider that. But that said, from a long-term perspective, just emitting a large amount of GHG and then, I think, not recycling, that is not sustainable. So I think in the long term, the direction is unchanged. So we have to show that at the same time, what should we do as a global corporations. So that is the responsible energy transformation. And that is what we are focusing on. And I think that has basically been represented in this responsible EX, this word. Another point I want to make is that Mitsubishi corporations related to carbon emission is scope 1 and 2. That's not that large. But then actually what we offer, deliver it to our customers, and that emits carbon. The scope 3 is large. Of course, the scope 1 and 2 should be reduced, but for scope 3, I don't think that we should leave it to other people, meaning that the society overall should be able to reduce the burden of carbon for the society overall. So that is an important mission. So, for instance, in terms of the level of – do we try to reduce the emission? So in terms of the emission contribution to the environment, I think we have to consider that. It's not, you know, greenwashing. But in terms of scope three, so there is, externally, there will be the risk for the stranded asset. So monitoring the risk of these type of assets, I think you have to be very careful and look at that. And that is how I have been engaged in this discussion about the roadmap. Thank you very much. Thank you very much for offering us various perspectives. So, yes, I do understand that now we are in unprecedented times in these three values that answers each other.

So I would like to pose a question from my end, because this is such a unique opportunity. So independent directors' role. So, you mentioned how there's been a solid information provision from the company. So, what is the distance you have with the executive, the officers, or the execution of the company? So, of course, supervising, but monitoring. So, you cannot, you need to, of course, be involved, but do not, but you cannot be overly involved. So, Mr. Tatsuoka, could you start from there? Sorry. It's just our eyes met, so sorry, Mr. Tatsuka, if you can start, please. So that is quite a tough question to answer. So I have had experience as independent directors elsewhere, so it really differs depending on the company. But my thought, basically, it's hard to actually have the appropriate distance, and that is the wording that you used. Personally, I believe it's essential that we understand, deeply understand the business of the company that is that forms the basis of my role and of course we need to have a trusted relationship to engage in discussions but at the same time it needs we need to have a sound sort of attention or sound distance otherwise such productive discussions will not take place another point so at this sort of a relationship with certain level of tensions. What does that mean? So let's just say we propose some issues. So the executive side, they need to have the capability to listen. And they need to be motivated to listen and also appreciate the ideas so they can internalize those ideas. So that is how we can have a virtuous cycle. So this may be off track in terms of my story. So a couple of years ago when I first started my job, with Mitsubishi Corporation. So some of the past, or incumbent, the independent director says, they said they will actually show us the living room, the salon, but they won't really show us the kitchen. That was a comment I received from the independent directors back then. So I didn't quite feel that way. But I think the scope of business is so wide that it is rather challenging to understand. Basically, we don't know what exactly they're cooking in the kitchen. That could be the reason why for that comment. But we've already some explanation about the pre-briefing of the BOD meetings, and also there is a continuous engagement with those in the field. So there has been a heightened frequency, and a lot of time has been spent to really deepen our understanding of the business. And because of that, we were able to have a much in-depth, trusted relationship. And based on that, we can actually propose the ideas and issues to them. And that has been well received by the management side. So they don't just listen. They intend to internalize those ideas. And so I think it's just a matter of whether we have that sort of relationship. From that perspective, I believe there is a very positive cycle that is working. So personally I feel we are in a good state. So actually we are reaching the end of our session. So my thoughts, my takeaway, so depending on the changes in the environment, there has been a definite thought process and the BOD is not afraid to actually change the system or the mechanism. Those were my impressions. So, of course, the time frame is different for each of those projects. So those changes have been taken into consideration in hopes of engaging in the management on the long-term basis. So I was able to feel that those in-depth discussions are underway at the BOD meetings. So thank you very much.