Nippon Telegraph and Telephone Corp

TSE:9432

Earnings Call Transcript 2020-Q3

[Natsuko Fujiki, executive]

We would now like to start the briefing of NTT's Fiscal Year 2019 Third Quarter Results. Thank you very much for attending today despite your busy schedules.

I am Fujiki from the IR office and will be facilitating today's session. First of all, I'd like to introduce the attendees for today's briefing. Mr. Shimada, Representative Director, Senior Executive Vice President; Mr. Hiroi, Member of the Board, Senior Vice President, Head of Finance and Accounting Department; Mr. Kitamura, Member of the Board, Senior Vice President and Head of Corporate Strategy Planning Department. Moreover, persons from Corporate Strategy Planning, Finance and Accounting, NTT East/West and NTT Communications are also attending today.

Today's briefing will be based on the presentation material that is posted on our company IR website. On the first page of the presentation material, the disclaimer is stated. So please go through them.

Today's briefing will be streamed real-time on our company's website and later available through our website.

Today's schedule, first of all, Senior Executive Vice President, Mr. Shimada, will explain the outline of the results, followed by taking questions from the floor. Mr. Shimada, please go ahead.

[Akira Shimada, executive]

Thank you very much, Shimada here. I would now like to share with you the financial results for the 9 months ended December 31, 2019. Please turn to Page 4 of the material, Page 4. Let me first start with the operating revenue and operating income. Operating revenue increased, but operating income declined. Operating revenue was JPY 8.862 billion (sic) [ JPY 8.862 trillion ], and this increased JPY 67.5 billion. This is -- we reached the record third quarter levels. And therefore, 3 years in a row, both domestic and overseas revenue increased. As for operating income, it was JPY 1.450 trillion. Profits represent JPY 76.7 billion decline year-on-year.

On top of the drop in DOCOMO's income from decline in mobile communication service revenue because of the cost reduction related to consolidation and reorganization of global business, operating income declined year-on-year. We're making efforts so that we can actually exceed the annual plan.

As far as the net profit is concerned, it is JPY 796.9 billion, which represents JPY 4.8 billion increase year-on-year. As far as net profit is concerned, while operating income declined due to valuation gain from consolidation of NTT and its subsidiary firm, we realized increase in net profit year-on-year.

As for overseas sales, it was $14.7 billion, representing $0.7 billion increase year-on-year.

As for overseas operating income margin, it was 2.5%, representing 0.6 point decline year-on-year. As for our operating income margin is concerned, overseas operating margin went down due to growth investment for digital offering, dealing a shift toward high-value-added and high-profit-margin services and increased costs related to brand reinforcement. But we see slight improvement compared to the second quarter. As far as the quarterly profit plan is concerned, we do not disclose this. We were making efforts. Actually, we're exceeding the plan.

Please turn to Page 4 -- Page 5. As far as operating revenue is concerned, and operating income, I would like to explain, if I may. With regard to mobile communications segment, this was announced by DOCOMO, there was decline in operating income. With mobile communications restructuring and cost reduction action exceeds our plan and we're making efforts so that we can actually see the annual target. As far as regional communication business is concerned, the upside -- there is the upside is that there is no longer the copper-wire-related loss, which was recorded in fiscal 2018 and achieved increase in operating income year-on-year. This is in line with our initial target, and we're making efforts to achieve the annual plan -- and exceed the annual plan.

As far as long distance and international communication business is concerned, while there is a robust growth -- there's drop in operating income from costs related to reorganization in our global business. A change in the target might be somewhat challenging. However, we want to bring forward the time lines for such a reform at NTT Ltd.

As far as telecommunication business is concerned, while there is robust growth in the size of the business, both domestically and outside Japan, operating income was flat due to increase in growth in investment as well as restructuring-related expense for EMEA and Latin America. We're making efforts so that we can achieve the annual target.

As for Page 6 onwards. So we talk about topic. Just 1 highlight that I would like to make, and please turn to Page 7. Today, we announced the collaboration with Tokyo Century Corporation on leasing and new fields. This is covered in the press release. And the -- we're going to transfer leasing business to a joint venture with Tokyo Century. That represents JPY 1.3 trillion in assets and liabilities of JPY 1.2 trillion. This is going to be transferred to a joint venture with TC, which means that we'll be able to strike JPY 1.2 trillion worth of liabilities from our balance sheet. And at the same time, we're going to be acquiring 10% of Tokyo Century stock. That was already announced as well. So that's all for my presentation. Thank you very much.

[Natsuko Fujiki, executive]

Thank you very much. Then, we'd now like to take questions from the floor. As we have indicated, we will take questions from those who have already registered beforehand and those who are connected to the phone conference system. I would like to invite the operator to explain to you how we can accept questions from now on.

[Operator]

[Operator Instructions] From JPMorgan, Mr. Tanabe.

[Jun Tanabe, analyst]

Tanabe from JPMorgan. Just 1 question. I would like to ask this question. With regard to NTT Ltd., it's about the status of NTT Ltd. If we focus on third quarter alone, it seems that you're in the positive territory. So as you have pointed out consistently, I think they are actually trending toward the guidance which you have consistently said. But if you could give us an update as to the status of NTT Ltd. against your internal plan. And also, there is a -- fourth quarter remains and you have to achieve 4 -- JPY 8 billion in order to achieve the full year target. What is the outlook for achieving the full year target as you head toward the fourth quarter? I would appreciate your insight. And also, if you can give us the qualitative assessment, what about the -- how do you see the progress of the integration so far? So update on the status of integration.

[Akira Shimada, executive]

Shimada here, Senior Executive Vice President. I would like to respond to your question. So let me respond to the question cited by Mr. Tanabe. As you pointed out, Mr. Tanabe, compared to the second quarter, the third quarter is now in the positive territory. We are seeing profit. On a cumulative basis, we still have JPY 1.3 billion deficit. But it seems -- as the numbers indicate, in the third quarter, we're seeing improvement. But then having said all this, it doesn't mean that all the expenses are reflected evenly from quarter-to-quarter. Let me share with you the current situation for this quarter. So transition to NTT brand and also reorganization. This is in line with the plan. Around the world, NTT brand mark is now going to be deployed.

Now what we're tackling right now is this, 3 things that we're tackling. The first and the biggest point is actually streamlining and rationalization. We want to make transition to high-profit, higher-margin business. Of course, we had to recruit talent, but at the same time, it's important to add people with skills. We have to streamline people with outdated skills. And also at the same time, we have to address overhead as a result of integration because we want to slim down overhead as a result of integration. So in fiscal year 2019 and 2020, over the 2-year period, we have the plan to address the situation.

So I think 2,500 will be the subject, if you will, for streamlining, that is the plan. And also for 2019 -- for fiscal year 2019, we want to bring forward the delivery of this plan as much as possible. And our understanding is that this is something that we'll tackle in fourth quarter. So we want to implement 75% of the plan by the end of the full year. So therefore, there's going to be temporary costs that will be reflected in the fourth quarter, it is likely.

Now up until the third quarter, I would say that JPY 11 billion cost was incurred up until the third quarter for reorganization purposes, and also during the fourth quarter, perhaps the same level of costs could possibly arise.

And also at the same time, on top of this, the second point that I would like to share with you. So we want to make transition to high-profitable business, high-margin business, such as -- and we're trying to structure an expert sales team that can handle such high-profit, higher-margin service. And also, we are also carrying out educational programs, training programs, so that people can switch to these different set of skills. And so we are revisiting ways in which we actually measure the employee base. For SD-WAN, for example, network service is very well received by our customer base. We have such services. So we want to reinforce that furthermore.

And the third point, data centers that -- it makes tremendous contribution to the profitability. We see a very strong appetite for data center. So therefore, that's being the case, we want to bring forward the time line for CapEx in data centers so that we can reinforce this program this year. So that being the case, the progress of CapEx is quite advanced. So Frankfurt, Berlin, Madrid such places in Europe, and also in the United States, Virginia, Phoenix, and also Mumbai in India. In these places, we want to reinforce our data center business. So these 3 points. It's important that we implement this in a steadfast manner as we have planned. And by doing that, then we believe that we'll be able to achieve a recovery.

[Jun Tanabe, analyst]

If I could just clarify and confirm. It's about the cost. So costs required for reorganization purpose. You mentioned JPY 11 billion up until the third quarter. You're mentioning that JPY 11 billion for the fourth quarter as well?

[Akira Shimada, executive]

Well, I cannot give you the accurate numbers.

[Jun Tanabe, analyst]

With regard to streamlining and rationalization, to what extent are we going to -- are we able to implement by the end of this full year?

[Akira Shimada, executive]

This will dictate the cost. It could be that some of that program will actually take place in the following year. But we hope that we'll be able to do as much this fiscal year, so that we'll be able to contribute to a turnaround in the next fiscal year.

[Jun Tanabe, analyst]

So there's is a possibility that there could be a large -- one-off large expenses during the fourth quarter?

[Akira Shimada, executive]

Well, if things progress in a smooth manner, it is likely that similar level of costs were -- could be reflected and recorded in the fourth quarter.

[Operator]

Citigroup Securities. Mr. Tsuruo.

[Mitsunobu Tsuruo, analyst]

My name is Tsuruo from Citi Securities. The first question is that -- let me confirm the progress up to the third quarter against the internal plan, the progress on a company-wide basis, how is it? As 1 division, as you have explained, NTT Ltd., NTT Communications division seems like they're slightly struggling. However, the overall progress, how is it? The reason why I ask this is because looking at the operating income of the third quarter, it was 5% decline. Full year, it's close to the 9% decline. That's the guidance. So it seems that the progress, even though there is a reduction in the profit, how is it right now?

[Akira Shimada, executive]

This is Shimada speaking. As you, Mr. Tsuruo, pointed out, the progress is going at a satisfactory level. DOCOMO -- the current new rate shift, as DOCOMO has already announced, overall, it is progressing satisfactorily. Actually, it's slightly behind than the initial expectations. And due to that, we are having a positive profit or upside.

And regarding NTT East and West, the cost reduction is progressing as planned, and we are expecting a further increase in profit. And as you have pointed out, of course, this is a plan that, regarding NTT Ltd., through rationalization, we would like to front-load it, and there are some costs related to that. And for NTT DATA, as they have already announced, fiscal year 2021 EBIT margin, they are aiming for 7%, and they're strengthening their businesses. Therefore, they would like to put importance on the midterm. Therefore, this fiscal year's costs related to measures to be implemented, they'll likely implement that or respond to the new businesses and also replace the personnel and they want to strengthen the foundation. And thinking about that, it is a tough situation. But hopefully, we like them to bring it up to their planned numbers. So at this point, they are progressing at a satisfactory level.

[Mitsunobu Tsuruo, analyst]

And my second question and regarding this year, we have already passed the 10-month plus. So regarding the next fiscal year, put aside the numbers. Well, having said that, you have a midterm target already set. But looking at the various results, positive and negative factors, if you can summarize that for me.

[Akira Shimada, executive]

Well, the business plans are going to be established moving forward from now. So it's hard to share with you details. However, regarding NTT DOCOMO, this year is the bottom. And from now on, they're planning to increase. And regarding NTT East and West, they are aiming for further increase in profit. Therefore, these areas are quite stable.

As for the global business, for NTT Ltd., well, as I have mentioned before, this year, they would like to accelerate the pace of the rationalization. Therefore, next fiscal year, the burden they have to bear is going to be reduced, is what I think. However, in order to roll out a new business, they will have to have an appropriate hiring of new talent; therefore, still, there are some risks that exist. Regarding NTT DATA, if they are able to fully prepare this year, I believe that next fiscal year onwards, they'll be able to have a stable growth. Therefore, an overall picture, I believe we'll be able to be on the growing path.

[Operator]

Next from Daiwa Securities, Mr. Ando.

[Yoshio Ando, analyst]

Ando here. I would also like to ask 2 questions. My first question is this. Well, with regard to the fourth quarter -- up -- the progress of profit up until the third quarter when it comes to regional communication business seems to be quite high, so progress to plan is quite strong. But you have not revised your projection for the full year. Do you believe that you'll be able to end the full year on such a strong note for the regional communication business? If that is the case, then what are the factors? And what do you actually envision for the results in terms of the end of the full year?

[Akira Shimada, executive]

Shimada here. Yes, with regard to regional communication business, primarily the NTT East and West, as far as these -- this segment is concerned, in principle, we believe that the current trend will continue as we head toward the end of the year. But at the same time, there are several expenses that are being incurred, reflecting our policy. For example, in relation to urban solutions, we have to actually take down certain buildings in order to spur urban solutions. So inclusive of that, we have to consider the outlook. I think we have to take on what is needed so that we can drive and create the base for future growth. But as far as the overall general trend is concerned, we believe that the current trend will continue. I've responded to your question, hopefully.

[Yoshio Ando, analyst]

So you talked about the current trend. Do you believe that the strong trend will continue? Is that -- do we -- is that what you mean?

[Akira Shimada, executive]

Yes, I think the positive trend, the positive situation will continue. That is what I meant.

[Yoshio Ando, analyst]

My second question is about the global business. I know that through reorganization of the internal structure, you're trying to reorganize the situation. But when you consider your strength is in the managed services and also data centers, the competitive -- so the perspective of competitiveness of your strength, has that perspective really changed? Do you believe that competitiveness has actually strengthened? So can you talk -- how do you intend to respond to this changing situation, being mindful of the state of your competitiveness in these areas?

[Akira Shimada, executive]

Thank you very much. First, with regards to network-related services. SD-WAN will be the core of our global business going forward. And so the differentiation of our technology in this segment and also the operational capability in this area, these are very highly received by our customer base. So that being the case, I believe that we are indeed more than sufficiently competitive in this area. In terms of managed services, we have high expectation for potential growth. But then in order to realize scalability, we need talent that can support that. So we need to recruit such talent. And also, we need to secure human resources. That, I believe, will be the key factor from now. But as things stand, we are very much in line with our plan.

As far as competitiveness of our data center business is concerned, well, Equinix and -- there are global -- we are competing with them globally with players, as Equinix and so forth. And so that being the case, we are carrying our capital investment at a very brisk pace -- well, they're carrying their capital investment at a brisk pace. So we need to catch up with them. So this year, we have indeed increased our investment in this area. But at the same time -- well, we need to expand our footprint. At the same time, we need to improve the capital efficiency, investment efficiency to facilities, for example, translating some of the buildings into REITs and include, if possible, sell-offs. We also need to transition to a different model.

[Operator]

[Operator Instructions] Nomura Securities, Mr. Masuno.

[Daisaku Masuno, analyst]

This is Masuno speaking. Can you hear me?

[Akira Shimada, executive]

Yes, we can hear you.

[Daisaku Masuno, analyst]

I have several questions. First of all, I'd like to ask from NTT East and West. NTT East, looking at their actuals, the system integration business is doing quite strongly, performing quite strongly. So if we go into the fourth quarter like this, and if they can come out with a profit level as they did last fourth quarter, I think it's a satisfactory performance. But for the fourth quarter, there's always some measures to be implemented. But is there something unique about NTT East? Or is it all right to just think that it is going to go as planned? Please comment about NTT East first.

[Akira Shimada, executive]

This is Shimada speaking. First of all, regarding NTT East, we're not thinking anything unique or special. However, as I have mentioned before, the -- removing the real estate property. And this year is the Olympic and Paralympic games. So there will be some costs related to responding to these games. Of course, this is not going to be a large increase in costs. That is our understanding.

[Daisaku Masuno, analyst]

Okay, then next about NTT West. Looking at the cumulative 9 months profit, it has already reached a high level. And the fourth quarter, they made a loss last year. So based on the company's plan, if they don't make a large loss, I think that they are performing in a satisfactory level. So any comments on NTT West?

[Akira Shimada, executive]

Well, NTT West, they have a disposal of the real estate or property is what I have heard. But other than that, I understand that there is nothing else.

[Daisaku Masuno, analyst]

Understood. So regarding NTT East and West, next year, they will continue cost reduction, and you will be expecting a satisfactory level of profit. But are there any drivers for the 2 for next the fiscal year?

[Akira Shimada, executive]

This Shimada speaking. Well, basically, regarding NTT East and West, for the fixed-line communications business, it's going to continue to decline. So we need to work on further promotion of improving efficiency, and we are working on the digital transformation projects now. So responding to the improving the efficiency of the personnel side, by surely implementing automation, we'll be able to reduce the cost. Of course, the new agriculture or forestry or e-sports businesses are something we are taking on a new challenge. However, these are not immediately going to provide us with a large profit. The initial years are not going to be like that. So first is to steadily progress in cost reduction.

[Daisaku Masuno, analyst]

Okay. I think you're going to stack up the cost reduction by the shares of procurement or the integration of the system of NTT East and West. And as the government council is discussing the universal service being able to partially provide that wireless or mobile, what is going to happen in the future?

[Akira Shimada, executive]

For the system side, the NTT East and West, by integrating them and having it shared, we'll be able to achieve digital transformation. And that is going to surely provide us with certain outcomes. Utilizing wireless system for the fixed-line service for disaster measures, if we can use this as a disaster measure, it is going to contribute to a quite of a large cost reduction. However, the discussions regarding that relates to the revision of the law itself. So it is going to take a certain amount of time. So this year, let's say, there is a revision of the law. And after that, there are some government ordinances that still need to be revised also or established. Therefore, to see the actual result of this, we believe that it's going to take several years still.

[Daisaku Masuno, analyst]

And is it the shared procurement and regarding that?

[Akira Shimada, executive]

Of course, we'll see some benefits generated from this. It seems that there are some criticism towards this. However, to begin with, when the regulations were established initially, the environment has been totally changing. So for the wholesale provision of the service, they'll be able to reduce the cost. So we would like to be able to surely that to be used.

[Daisaku Masuno, analyst]

Okay. And regarding the global business, you have some integration costs that appeared, and it's about 50% -- 75% would be completed this year. Next year, there's about 25%. So there's JPY 11 billion and JPY 11 billion, total JPY 22 billion of structural reform cost. That's JPY 22 billion in total, but this cost part next fiscal year is going to be quite reduced is how I think. So I just wanted to confirm that with you.

[Akira Shimada, executive]

Shimada, again, speaking. You are right. This fiscal year's structural reforms, it's not just streamlining or rationalization, but we'll be able to surely expect the benefit from rationalization. Whether that's going to go into fiscal year 2022, this is something we need to look into the details to the year-end. But for sure, just the personnel side, fiscal year 2021, it's about $250 million worth of benefit. And for the other cost reductions, already, we have achieved about -- we already have a plan of JPY 100 million. So what we see for the near future is that as for FY '21, will be USD 350 million worth of cost reductions will be surely completed.

[Daisaku Masuno, analyst]

Can I confirm, the $350 million, so that's including -- that the JPY 22 billion that you're spending this year is going to be removed from that, okay? So in net terms, there is about $120 million worth of cost reduction that we can expect.

[Akira Shimada, executive]

Yes, you're right.

[Daisaku Masuno, analyst]

Okay. Understood. And last question, regarding investment growth area, you were talking about the data center business previously. And it seems that the demand is quite strong. So turning that into a REIT. Around when are you going to start to do that? First of all, I'd like to ask about this point.

[Akira Shimada, executive]

Putting the data centers into the REIT or selling the REIT, the data -- selling the data center is something we are thinking of, but in order to further grow, not just using our own capital but also use a third-party capital so that we'll be able to accelerate this business than originally planned. These are the measures that we can think of. So it's either structured into a REIT or sell them, constructing the data centers and when we have a full data center with customers, turning that into a REIT or selling it is where we'll gain the most profit for the development cost that we have spent. And we already have such a property.

[Daisaku Masuno, analyst]

So at what timing this will be done?

[Akira Shimada, executive]

Well, we cannot lose again to our competitors, so we need to think of our positioning in terms of the competitiveness and think of the appropriate party to sell or structuring it into a REIT. So in these terms, we are already in a situation to be able to do that next year, but we would like to cautiously consider this.

[Daisaku Masuno, analyst]

Okay. Lastly, the improvement of ROIC or securitization of assets at DOCOMO starting from next fiscal year [indiscernible], you will be securitizing the receivables. And also the lease liabilities, you'll be working on off-balancing it. Are there any other assets that will come under the scope of DOCOMO's receivables, finances and leasing business? Anything other than those 2?

The data center turning into a REIT. I think that could be considered but are there any cluster of assets that will fall under this scheme?

[Akira Shimada, executive]

We'll see -- just speaking of what we hold now, as you, Mr. Masuno, have pointed out, data centers and real estate, especially the real estate business overseas, we have been selling them and gaining developing -- development profit. So that type of real estate business will become one of the candidates.

[Takashi Hiroi, executive]

Sorry, sorry. This is Hiroi speaking. If I may add, within our company, there are some unnecessary expansion of the working capital and their assets that we're not using. So those types of assets, if we sell them, and it's not that we are gaining a lot of revenue from that, they're just pressuring the cash flow, so we would like to sell them off quickly so the credit card of DOCOMO -- credit card receivables of DOCOMO. And of course, I don't know how this receivables -- the securitization program is going to become, but that is expanding. So these things will become a candidate.

And in the business, there's a long-term fixed assets but generating revenue. But if we remove them, there are some assets that have a negative impact on the profit side. Therefore, the assets that have liquidity is something that we would like to determine and sell off the ones that have a low level of revenue. And that is the precondition or the assumption that we make for this.

[Daisaku Masuno, analyst]

Okay. So urban development from 4 or 5 years ago, Boston, London, cities in overseas like Australia, they're doing something like that. They have assets. So if you can make a profit out of that, those properties, and if it matches the conditions that you have just shared with, that you might be working on that?

[Takashi Hiroi, executive]

Well, already the property in London, we have sold that off. And we have gained capital gains from that. So we have been doing such a thing up to now and we would like to further accelerate these type of efforts going forward.

[Operator]

[Operator Instructions] Next question from UBS Securities, Mr. Takahashi.

[Kei Takahashi, analyst]

Takahashi from UBS. I would like to ask 1 question, if I may. So it's about NTT Ltd. You talked about streamlining and rationalization costs. So you talked about the cost involved. On the other hand, what about this progress of yourselves? How do you see the current sales figures? And also as you head toward the full year target, what is the current situation? If you could please share us -- if you could please share with us your update and your thoughts.

[Akira Shimada, executive]

Thank you, Shimada here. As far as sales is concerned -- well, as far as this fiscal year is concerned, there has been significant impact from the foreign exchange. So our overseas sales volume has increased by JPY 39.2 billion. However, there is an impact of foreign currency in the order of JPY 61.5 billion. So if you exclude that impact, the operating revenue should have increased by JPY 100 billion. So as far sales are concerned, they're very robust and very strong. That is how we see it.

[Kei Takahashi, analyst]

So has there been any -- has there been any, if you will -- gap, if you will, in terms of how you forecasted the competitive landscape?

[Akira Shimada, executive]

Well, as far as the competitive landscape is concerned. Well, how can I put it? Have we made any -- if you miss projections, if you will, in terms of the -- how the competition played out. But as I mentioned earlier, with regard to the data center business, we have seen even greater appetite. There has been greater inquiries -- there's been greater inquiries with regard to the data center, and the competition against the backdrop is responding to those increase in interest. So it's important that we match our delivery in line with the demand out there. So with regard to sales and with regard to order-taking is concerned, I think we still have a very positive environment.

[Operator]

Next question from Daiwa Securities, Mr. Ando.

[Yoshio Ando, analyst]

I know that this is my second round. Just 1 question, if I may. It's about the equal pay -- equal work, equal pay that is going to be introduced. So in your company, how are you responding to the introduction of this new system? And how do you see the potential impact on the costs? If you could just share with us some thoughts about this, I would appreciate it.

[Akira Shimada, executive]

Thank you very much, Shimada here, let me respond. So equal work, equal pay as far as how we respond to this matter is concerned, actually, as far as 2 years ago, already at that stage, we have had significant discussions with our labor union. And actually, for example, every fiscal year, for each fiscal year, with regard to welfare, welfare and benefits, we've actually tried to equalize those that are offered to regular workers and the nonregular workers. And also when it comes to the end of the year, with regard to benefits, we are trying to discuss and revisit these issues together with the members of our labor union.

Actually, when it comes to the core matters or the core section, for example, housing and such, right now there have been discrepancies in the court precedents and the court decisions. So therefore, it's just that there's a gap as to how -- there's a gap, if you will, in terms of the court decisions up until now. So the -- so once the government issues this direction that we need to reorganize -- but is there likely -- so that we can prevent sudden increase in cost as a result of introduction of equal pay -- equal work and equal pay is the point that we try to absorb the costs and also in line with the reduction in the personnel, we try to absorb any relevant costs. So it's the point that we are trying to -- we make efforts to absorb such increase. So just because equal work, equal pay is introduced doesn't mean we don't expect significant surge in cost out of the blue.

[Operator]

[Operator Instructions]

[Natsuko Fujiki, executive]

It seems that there are no more questions. So with this we would like to conclude the briefing session of the fiscal year 2019 third quarter results. Thank you very much.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]