This time, the SGA ratio is divided between Positioning Business and Eye Care Business, but what is the overall plan?

The overall SGA ratio will remain unchanged from the plan of 42% in FY2025 as explained in Q3. In FY2024, we will aim to achieve this plan by the effects of the structural reforms in Positioning Business implemented in FY2023 and continued cost reduction.

What is the breakdown of the +6.8 billion yen change in the sales volume, product mix for Positioning and Eye Care Business in the “FY2024 Operating Income YoY Breakdown” slide?

Positioning Business is 2.5-3.5 billion yen and Eye Care Business is 3.5-4.5 billion yen, taking into account the effect of new product launches and the expectations for a market recovery in the second half of the year in Positioning Business.

It is projected that sales in Positioning Business in FY2024 will increase 5% year on year. What else, other than new products, will result in the large recovery in the second half in a situation where in FY2023 landings were weak and the agricultural market conditions are worsening?

We believe that the launch of new products will have a significant effect. Regarding market conditions, considering landings in Q4 of FY2023, we expect sales remained soft in the first half of the year, and a recovery in the second half of the year. In Eye Care Business, we plan to launch new products in the latter part of the first half, and we expect the sales growth in the second half.

Mid-Term Business Plan 2025 remains unchanged. Operating income for FY2025 is 28 billion yen. The plan is 10 billion yen higher than the FY2024 outlook, which is a high hurdle. How do you plan to achieve this plan?

160 billion yen of the planned 250 billion yen in sales in FY2025 are Positioning Business, and much of this sales growth will be due to new products. We also aim to achieve this goal by continuing to reduce expenses and lower the SGA ratio.

The FY2023 results show sales are down 7 billion yen and profit is down 10 billion yen compared to the previous year. In FY2024, you plan to increase both sales and operating income by 7 billion yen. What is the status of your efforts to flexibly control SGA expenses in response to the business environment?

Since FY2022, the impact of the special factors related to the situation in Russia and Ukraine has been significant, and this recovery has been costly. The primary reason for promoting One POB is to improve the efficiency of the sales organization and development investments, and we hope that by making the organization more lean, we will be able to manage SGA expenses more flexibly.

In the “FY2024 Operating Income YoY Breakdown” slide, you put the effect of structural reforms in Positioning Business at 6 billion yen, but what is the specific breakdown of this?

More than half of it, 3-4 billion yen, is due to structural reforms implemented in FY2023 Q4 that will reduce personnel costs and various expenses. General cost reductions and the reorganization of offices will continue in FY2024 as One POB.

A year ago, you said that infrastructure was relatively stable even during the market downturn in the US, but sales declined in the FY2023 results, even excluding foreign exchange. What happened to demand for housing and infrastructure as a summary of the year?

Since infrastructure in the U.S. was budgeted, we had assumed that ICT construction-related business would also remain strong. However, we were not able to offset the impact of the decline in housing starts with the infrastructure-related business, which we had originally expected to cover. This is because the period of holding off on purchases prolonged due to rising interest rates in the U.S..

What is the long-term outlook regarding upfront investments?

Screening Business in which we have been investing to date is in an investment payback, with sales nearly doubling in the past five years and the operating income ratio improving to close to the 10% target already. We are planning to increase human resources in areas that require further development, such as the recent partnership with Microsoft Corporation.

The partnership with Microsoft is strong, but what specific business model do you envision will be accelerated?

We have expanded Screening Business to major optical chain stores and drugstores. From there, we plan to leverage Microsoft’s customer base of primary care doctors to expand from eye care to broader healthcare encompassing more disease areas, while starting with eye exams.