Earnings Call: Q2 2021

Nov 6, 2020

Thank you very much for viewing Honda Motor Company Limited's live broadcast of financial results announcement for the Q2 of the fiscal year ending in 2021. My name is Watanabe from Corporate Communications, the moderator for this announcement. First of all, I'd like to introduce the attendants attending today. We have Mr. Seiji Kureishi, Executive Vice President, Representative Director. Good to see you, everyone. And then we have Mr. Kohei Takeuchi, Senior Managing Director. Good to see you, everyone as well. This financial results announcements with the COVID impact, we have no audience on-site, and this is going to be a live broadcast. Thank you very much for your understanding and cooperation. So first of all, we'd like to have Mr. Kuraishi, Executive Vice President, to explain the financial results for this term. The COVID-nineteen, which spread around the world since the end of the fiscal year ending in March 2020, continues to rise around the globe even today, bringing serious damages to the economy. However, in the Q2 of this fiscal year ending in 2021, economic activities have been reopened in many markets with resulting gradual recovery in demand. In some markets, the 2nd wave of the pandemic has arrived, and the situation remains unpredictable. But Honda will continue to be thorough in its actions to prevent infection and proceed to supply products to the market in a timely manner. Now I would like to present to you the outline of the financial results for the Q2 of the and the full year forecast for the fiscal year ending in 2021. Starting with the unit sales of Honda Group cumulative to Q2 of this fiscal year, it was 6,300,000 units for motorcycles, 2,045,000 units for automobiles and 2,453,000 units for life creation business. Next, I'd like to explain the situation in each of the main markets. First, to look at the Japan market, the total market is showing a moderate recovery from the impact of the COVID-nineteen since May. However, due to the last minute demand before the consumption tax hike in the previous year, the total demand was considerably lower than compared with the same period last year. Honda's unit sales undercut last year's number. But looking at these unit sales by model, N Wagon and new fit surpassed the sales in the same period last year, meaning a recovery in the second quarter. Inbox series are set number 1 in new car sales for the first half of the fiscal year ending in 2021. Our outlook for the total market demand for the fiscal year ending in 2021 remains unchanged from the previous forecast, and it is expected to be lower than previous year. Due to the market slowdown, Honda expects to see lower sales compared to the previous year. But in view of the recent sales results, we have revised our forecast upward from the previous forecast. In the U. S. Market, the total market demand has been gradually recovering since May due to the phased easing of regulations and economic activities and reopening of the Dido business. But demand was lower than the same period last year due to the decline in the fleet market. Honda's unit sales were lower than the same period last year, but we are seeing recovery at a better than market pace, mainly with CRV and Civic. And Civic maintained the lead in this segment with its high product features. Also, at the end of September, a new TLX was launched as well. Total market demand for the full year ending in 2021. Beginning with the second half of September, COVID-nineteen cases have been increasing again in number, mainly in the Midwest. So the outlook remains uncertain. The forecast is for lower demand compared to the previous year. Honda expects to see lower year on year results in the face of this uncertainty of the market. Next, looking at China. In addition to the resumption of economic activities, consumption stimulus measures were taken, so the total market exceeded the same period last year. Honda has favorable sales of models such as Breeze, Bezel and XR V. And also in the second quarter, we launched 3 models, namely Civic Hatchback Fit and MVIX Hybrid, which actually bring brought us better than market growth. From July to September, our single month sales results marked record high numbers in the consecutively for those 3 months. For calendar year 2020, the total market demand exceeded that of last year from April to September. But as the market took a huge decline due to COVID-nineteen in January to March, the impact of which could not be fully recovered. So the total market is expected to be lower than last year. Honda, with the launch of new models and running factories at full capacity to increase supply to the market is aiming to exceed sales higher than previous year. We have revised our forecast upward from the previous forecast on the basis of the recent sales situation. Now turning to motorcycles. The impact of COVID-nineteen differs significantly from one country region to another. In China and in the U. S, due to the trend of using motorcycles instead of a public transport added to the heightening outdoor leisure demand, the market has almost fully recovered. On the other hand, in Asia, the largest market, in addition to the impact of COVID-nineteen, due to the tightening of loan screening criteria in Indonesia, the market contracted in Asia year on year. Honda, despite strong sales in China and U. S. And in India and Brazil, we started production in June and we see steadily recovering sales. But still, we saw its sales fall below the same period last year. The total market demand for the fiscal year ending in 2021, we expect that even though the recovering trend continues in many markets, Indonesia will still see continued decline in personnel spending due to the tightening of loans. Therefore, no prospect for rapid decline that the market will be lower than the previous year. Honda expects lower sales in Indonesia and some other markets, but higher sales in markets including India, Brazil and the U. S. So on our forecast on a global basis is for sales equivalent to the previous forecast. Now moving on to the outline of the 6 month results for the fiscal year ending in 2021. The Q1 brought us very, very challenging situation with the impact of COVID-nineteen. But with this environment of living with COVID, we have proceeded with solidifying our existing businesses further. And at the same time, we have made a fundamental review of our business activities across all areas to secure a strong resilient business constitution that support future growth. As a result, our better control of SG and A expenses and cost reduction, those brought us a turnaround from the Q1, bringing an operating profit of JPY 169,200,000,000 for the 6 month. Profit for the period under review was due to the contribution from profit from investment based on the in the for the fiscal year ending in 2021. For unit sales, we have increased our automobile forecast for from the previous forecast considering the favorable sales in China and other markets and also increased our Life Creation business forecast in view of the strong sales in North America. For operating profit, incorporating the business constitution reinforced in the first half, we are estimated JPY 420,200,000,000, an upward revision of JPY 220,000,000 from the previous forecast. Though the future of the market remains uncertain due to the COVID-nineteen, but with our initiatives to curb SG and A expenses and to reduce cost further, Honda will aim to enhance its business characteristics further. Profit before taxes due to the increased investment profit share due to the equipment equity method are expected to be JPY 660,000,000,000. Once again, the unit sales and income statement are as shown. Next, about the dividend. Forecast for the full year dividend for the fiscal year ending in 2021 is due to the operating profit and the increased investment profit based on equity method compared to the previously published forecast, dividend buy per share is increased by JPY 24 to JPY 6.38 per share. And for the end of second quarter, it will be JPY 19 per share. Next, I'd like to hand over the microphone to Mr. Takeuchi, Senior Managing Director, Chief Financial Officer, to present the details of the financial results and forecast. Thank you. Now I, Takeuchi, am going to explain. Starting from the with the FY 'twenty one second quarter financial results consolidated, HONTO Group unit sales of motorcycles increased in Pakistan, Philippines and Brazil but decreased in Indonesia and India. Unit sales of automobiles decreased in Japan and Indonesia and at the same time, increase was recorded in China and United States. Income statement. Sales revenue, there was an increase in sales revenue in Financial Services Business on one hand, decrease, however, in Automobile Business and negative effects of FX translation. So it resulted at the JPY 3,651,300,000,000 operating profit. Although there was a decrease in profit attributable to decreased sales revenue and model mix, Operating profit stood at JPY 292,900,000,000 due mainly to a decrease in SG and A and cost reduction effects. Next, to explain change in profit before income taxes. Profit before taxes for the Q2 FY 2021, owing from the total reduction of SG and A and other the efforts to cut down on costs, but JPY 345,600,000,000, which is up by JPY 45,600,000,000 7,000,000,000, which was up by JPY 56,000,000,000 year on year. Operating profit, JPY 282,900,000,000, up by JPY 62,800,000,000. Performance by business segment. Operating profit in the Motorcycle business was JPY 68,400,000,000, and given decrease in cost down the cost and benefits and SG and A expenses, but due to these long wear sales revenue and modem exchanges was JPY 68,400,000,000. Change in the overall situation was quite noticeable. Next, turning to financial services, JPY 93,200,000,000 Life Creation TO Business and Others. Sales fluctuation and term exchanges, so the number that you see here. For others, please note that for aircraft, mid end aircraft, the engine losses, which are categorized in others. And also in Life, our creation business was JPY 8,100,000,000. So summing up, the operating profit for Automobiles and Automobile sales portion of the Financial Services was JPY 214,600,000,000. FY 21 6 months profit and loss is as shown here. To explain, profit before tax was down by JPY 307,100,000,000. Operating profit because of the cost reduction in SG and A expenses, which was offset by sales revenue decline, was JPY 169,200,000,000, down by JPY 30,300,000. Turning to the second the quarter, 6 months total, JPY 57,900,000,000. Cash and cash equivalents at the end of the second quarter was JPY 2,626,500,000,000. Net cash stood at 1,843,900,000,000 yen Now to explain about FY 2021 consolidated forecasts. For the Honda Group's unit sales of motorcycles, the same as previously forecast at 14,800,000 yen automobiles. The upward revisions for China and Japan means the further increase by 100 1,000 units at 4,600,000 units. Life Creation Business, up by 190,000 units at 5,500,000 units. FY 2021 consolidated business focus, as you see here, Changes from the previous fiscal year actuals due to the decline in unit sales and also on the big quarter of the sales mix change and FX negative impact, We had positive benefits coming from the reduced SG and A and other costs. So JPY 420,000,000,000 operating profit is planned. And now vis a vis the previous forecast made for the full year, increase in the unit sales and also the cost reductions such as for SG and A and others, JPY 220,000,000,000 in upward revision for operating profit. Finally, FY 2021 CapEx, depreciation and amortization and other than the expenditure as you see here. And that completes my explanations to you. Thank you very much. Thank you. And with that, we conclude the FY 2021 Q2 results presentation. Now from this point onwards, we are going to receive questions from the members of the media. As we announced to you previously, we are going to receive questions through the Zoom system. We are going to resume at 15:40, 3:40 p. M. Japan time. Thank you. So until then, please wait. We are going to break for a moment. Now we are going to move on to questions and answers. As we announced to you prior to this meeting, we are going to receive questions through the Zoom system. If you have a question, please use the hand icon on the screen. And in the interest of time, may I suggest that we limit your questions into 2 questions per person. If you have a question, please use the hand icon. Okay. Then we'd like to take questions from reporter Hanada from Nikkei Newspaper. Mr. Haneda, could you turn on your microphone to ask the question, please? Mr. Hanado? Okay. Sorry, but because he is not responding, so we'd like to proceed to the next reporter. Okay. Then we'd like to take the next question from Yomiri Newspaper. Reporter, Shimozato, please. Okay. This is Shimozato from Yomiri Newspaper. Can you hear us okay? Yes, I can we can hear you. Refer to Pages 1316 in the material. For the Q2, sales are among the factors that contribute to the sales, the impact from our new the COVID-nineteen, how much of an impact was there from COVID-nineteen? And also for if you're looking at the first half of the fiscal year, you have a negative JPY 488 point 2,000,000,000. How much of that is due to COVID-nineteen, would you say? Thank you very much for the question. To answer the first question, this was for the Q1, I believe, the factors that contributed the fluctuations in sales, how much of an impact sorry, for the second quarter, how much of a COVID impact from COVID-nineteen? And the second question was for the first half of the year fiscal year, this JPY 488,000,000,000 of that total decline, how much of a impact from COVID-nineteen? Okay. Then let me answer that one. Well, looking at the Page 13, this is I think you're referring to the year on year results comparison. If you look at the volume mix, it's about the JPY 40,000,000,000 minus. So this is coming from motorcycle. From a year on year on year comparison of the this is consolidated number, this was a 76,000 decline in automobile and then JPY 240 1,000 decline in motorcycles. But if you ask me if that's all coming from COVID-nineteen, that's difficult to say. So most, I believe, is due to the COVID-nineteen. However but if you ask me, is this all the reduction in unit sales, are they coming from COVID? But if you look at the total, this is and then all this the total, this is coming from JPY 40,000,000,000 decline due to this. And if you look at the 6 month results, the year on year comparison with the last year, it's about JPY 500,000,000,000 decline. If you look at the motorcycles, this JPY 2,300,000 units and point 640,000 units decline in Automobile. So those declines are included in here. As I explained, the results are the same. So of course, there was no COVID last business fiscal year. So was it all due to COVID-nineteen? Of course, the factors are all mixed in. Does that answer your question? Thank you very much. So let us move on to the next question from Nikkei Newspaper. Mr. Hanada, the floor is now yours. Thank you very much. And sorry, I'm not being able to ask properly a few moments ago. Please wait. It seems that there's signal interference. Changes in the business environment is my broad question. Well, so long as the automobile business is concerned, had expected ban on the sales from the gasoline and the running in the automobiles. And they're all in 2015, the target to get rid of the carbon oriented activities in Japan. So what do you think of those expectations at Honda? And also, in the U. S. Presidential election, how the environmental regulation or the productionism may change or not so going forward as a result of the presidential election in the States? Thank you very much. And these are two questions. Number 1, in Europe and United States, the prohibition to sell gas from the Mugi Automobile's running automobiles and Japan's announcement to get rid of from the carbon oriented business activities in 2,050. And the second question has to do with the outcome of the U. S. Presidential election. How do you consider that, that may impact the future of the environmental regulation and the protectionism? Thank you. Well, of late, yes, on top of the Prime Minister, Mr. Lee Sukka's declaration, the U. S, U. K. Or Europe or the French, the conventional handling and gas ring the operated vehicles are likely to be shifted to the new types of the fuel. And so the interest is becoming higher in higher towards the electrification tail for automobiles, among others. At present, Honda's view is that the intent the reference to the HEV, the vehicles electrification, they all that sort of move for the engine technology. And so that our aim is to electrify twothree of our global automobile unit sales in 2,030. That's for Honda. And all regions and different regulations, all the penetration of those mandates will be witnessed. Not to mention the appetite and changes from the customers in the regions. So for each and every region, whatever would be characteristic of Honda, that is going to be a point of emphasis. That means the deal line with GM in the States, that we see the agreement in China. So these are the exemplary arrangements. And of course, we regard that the inclusive of the electrification or the promotion of the AGV vehicles, we also like to the check-in terms you consider. Our President said, Mr. Hachiko, that we are going to aim for the realization of carbon neutrality by 2,050. So that means that we have to accelerate further. We have moved towards a different electrification. And of course, this is sophisticated energy power units and all other elements that would need to be enabled will be the areas that we are going to prioritize our resource orientation. To become carbon neutral, everything would have to change. So things that we need to do will be not only on the Honda alone, but also together with other members of the community. So energy related research activities, we are engaged in further activity at Honda so that in order to realize our goal of being carbon neutral, we would like to lead the community at launch. And as to the outcome of the presidential election in the United States, Well, after all, the official result is not announced yet. The sooner, the better to hear the official announcement of the outcome of the presidential election. Of course, the different relationship and the relations between the two countries to be preserved and strengthened so that we can continue to provide our very proud vehicles into the states. So at the same time, we also hear the protectionism may be tightened up. And I really do hope that it's not going to hinder our business activities going forward. Thank you very much. Mr. Hanada, you had the second question. Is that correct? Yes, sir. Please go ahead. Mr. Hanada, with your second question. That's right. The profitability of Automobile business, in the reform of the Automobile business, what is the progress to date? You're working together with GM and also the resulting income reductions or the results in the Life Creation business? Okay. So GM relationship, how do we stand? And how we have been able to reproduce the outcome of that? The profitability of Automotive business has been mostly in our mind. Now progress with General Motors, as has been announced already, that's basically what I am able to say, only that because although we are in discussion with GM from various angles, there's nothing further that I can explain to you right now, right here. In any case, so that we can accelerate the electrification of the automobiles, it is my belief that this relationship with GM is quite conducive or by joining hands with GM. What we have been doing over the years, which is to make investments in the area of the gasoline, the running automobiles, what further utilization of those technologies that we would like to consider further? And I believe that we will be able to do so, particularly, and I know that we are working closely with GM. And the Board that we have established to reduce emissions, That's something that we are holding. And because we are together with GM in these activities, we should be able to do more. Now we have Mr. Inagaki from Asahi Newspapers. This is Inagaki from Asahi Newspaper. I hope you can hear us. I have two questions. You said there was a recovery from China and U. S. But for the full year, how are you viewing this? And also, there were some restrictions on the economic activities and production stock. So how do you view that? And then for the total market and then also your company's results, That's my first question. Thank you very much. I believe that your questions, how do you view the recovery in total market demand in the States and the Chinese markets for the Q2? And also, you want to hear the analysis of the total market and Honda's results if this is a reaction after the Q1? Thank you. The Q1 was a very challenging situation for all of us. And then we are seeing a recovery in Q2. And then, of course, they could be there is uncertainty about the second wave of COVID-nineteen in the second half, but we believe that we will have 4,600,000 units planned. This is higher than our previous one. So the unit sales is growing focusing on China. And then we will have only 4% decline in unit sales year on year. To look at China first, well, this is where it all started. So it was the impact was huge. However, in the Q2, now the sales full sales environment has recovered and also CRM MMC CRMMC, Fit FMC. So the product lineup has been strengthened and then marketing activities have been reinforced. So we are seeing good visits to the dealers, and also we are seeing good sales. And that's why it led to good overall sales results. For the calendar year, because of those new models, new vehicle launches, we will see we hope to see year on year better sales results for China. For North America, if you look at North America, well, actually, with the easing of the economy, the Q2 is seeing a recovering trend. And then for the future, unless there is assuming that there will be no major changes coming, our forecast is that we will get about 80% compared to last year, so JPY 14,000,000 or so. And then for the second half of September, we are seeing new cases of COVID. So we still cannot really predict the future going forward. However, we will closely be monitoring the situation and take speedy actions together with the dealers. In Honda, the sales is recovering. In September, we've taken some initiatives incentives, so we saw better results year on year on year, month on month. But for the Q2, Q3, we hope to aim for the second half of the year. We hope to see better results compared to last year. Thank you. Okay. So if you have a second question, Mr. Inagaki sorry, additional question. The recovery in the States, This is because the people were unable to make purchases because of their activities are restricted, and then those demand came back. That was the additional question. And then if we look at Page 13, if we look at Page 13, the cost reduction effect, you say, and then SG and A control, I believe, we have good effects. But I'd like to hear more details about it. If you did something like reduced like business trips or something like that, I'd like to hear the actual details about what you did. Talking about the second quarter, the first one is, as you say, the production because of the lockdown, production was suspended. And so overall, the inventory level was just simply short where we saw a shortage in inventory. And then now into the Q2, we started seeing sales growth. That is one of the factors. However, at the same time, on the other hand, we made some efforts initiatives in our sales activities. And then mentioning, so we've done some incentives. They have like a $4,000 over $4,000 incentive, but we provided about $1800 incentive. So it has been lower. So the selling expenses has been reduced. And then that's because we were getting short on inventory, so we did not have to spend that much on incentive. That's one thing. So I think I can hand over to Mr. Takeuchi for cutting cost. For year on year, compared to 3 months from we had about JPY 3,000,000,000 cost reduction additional. So this is goes back to precious metal and other raw materials, it's actually going up. This was like JPY 10,600,000,000 over JPY 10,100,000,000. But so this we're comparing are 3 months 3 months. So this is we are seeing the cumulative results from the cost reduction. And then the selling price differences, so we have about JPY 50,000,000,000 plus due to the selling price adjustment and the incentive. And SG and A, of course, business trips are cut down. One big factor is within the SG and A. In North America, we have a major finance operations to sell automobiles to make it easy for customers to buy automobiles. So we have credit losses. Depending on the defaulting, we have to book provisions for allowance for the credit defaulting, but that's gotten better. So this is our JPY 17,000,000,000 plus. So that way, we have been able to reduce cut expenses. So this led to a total of JPY 52,000,000,000 better results actually improvement. Okay. Thank you very much. So moving on to the next person from NHK, Mr. Tsuboi, please. Yes. Tsuboi from NHK. Is it audible? Yes, we can hear. Thank you. Listening to all the discussions and to presentations, once again, let me ask the following. 2nd quarter recovery, Is that in line with your recovery like in China and United States and there was some recovery yourselves? Was that part of your original expectation? And also, the 4 year forecast and the upward revision, fine. But in the United States and Europe, the number of positive cases is right once again. I think you used the expression of not being uncertain or opaque or whatnot. So what sort of second strategy that would you deploy after all? So the first question has to do with the Q2 recovery, whether or not it was part of our expectation or exceeding our expectations. So please let us respond to that first. Okay. So the Q1, whether or not we were able to have the clear expectation or not? Well, frankly speaking, what we the actuals exceeded our expectation. China, that was the end of the Q1, 3 months period, was getting better. But in the United States, we really could not see through the situation at all. So in that respect, I would say that what actually happened in the Q2 for our actual results exceeded our expectation. Now the most recent raise in the number of positive in the patients of the coronavirus, whether or not it is so much that it that is starting to affect our business operations negatively, not so, I'd say. However, it is also true that some of the dealers, some of them are though temporarily shutting down their doors. And so they temporarily have the closure of the dealer activities. This sort of means that they were to work against our performance going forward. So we have to see what happens. We also would like to respond to your second question. So that is reporter Yokoyama from Toyo Keizai. Can you hear me okay? Yes. Yes. Thank you. As announced already, the production results for September, you're seeing higher results compared to the last year. Now that your production is coming back and the demand is is demand recovering? And then the inventory situation in North America, are you still have a shortage in inventory? Or do you have enough in inventory? That's all the things I'd like to ask. Okay. For the September production results, so is your production ready? And then is the demand coming back? And then the second question was the situation inventory situation in North America. Okay. If you look at the September, most recently, for North America, we are back to 90% back to usual. On the other hand, there is some depending on the model, the inventory level is short on some models. So we are making some additional production as well. The inventory is like 52 days' worth of inventory. And so currently, we are at the standard inventory level to which we are finally coming back to. But depending on the level sorry, the model, it varies, but we are almost back to a standard inventory level. Okay. Thank you. Okay. From Automotive News, Mr. Okamura, are you there? Yes, I am. Okay. Listening to you, Mr. Kuraiishi, you talked about relationship with GM, saying that there's nothing further that you can explain to us today. But what sort of expected synergy for cost reductions further per annum by how much further? Or leaving those on the cost benefits and they can be diverted into investments in other areas. What sort of synergy would you expect altogether? And also, North American market is very important for you. And there, with an alliance with someone like GM, the your power control or the authority, I wonder whether you would end up considering your authority or the power to the GM? Is that ever a concern that you have in the North American market? Okay. Again, thank you very much. We received a question relating to the relationship with GM. What will be the expectable synergy in the areas of cost reductions? And how those that can be used in other areas? And also, thereby because you have the alliance agreement with GM in the North American market, is there any possible concern, this or the less power of influence or whatever that you may have? Okay. As to the cost reduction benefits, expectable. What I said was that we signed on to the memorandum. And then what we are doing right now is that we are engaged in discussions as to the contents and the substance within that in the MOU memorandum. So I really cannot say anything more definitive. However, it is for sure that Hondur certainly regards that there is going to be the understandable, acceptable benefits to accrue. But that's it. I cannot quote any number per se. By the way, any concern about net power control, the influence or whatnot? This is a business relationship with not the capital injection. It is not the capital the injection. It is not the capital participation. Rather than it is really the basis of on the basis of the dual patients. So we know that what we are not interested engaged in in the North America and America North American market, we will not do after all. So in that context, I would say that because we are working more and more in direction of electrification of cars with the GM, our mainstay is the hybrid and the category of vehicles that we have the meeting of minds. So we regard that we can come out so called win the beneficiaries from this relationship. Certainly, we have any concern whatsoever that we have to concede on the power of control. Thank you. Okay. Going into the next question, next reporter. Mr. Mizutori from Daily Automotive News. Mrs. Mizutori from Nikkan Automotive Newspaper. Yes, we can hear you. Thank you. I have two questions. First question is concerning the domestic market. Earlier, you talked about the for Europe and U. S, you said the growth was better than your estimation. But I believe you upped your estimate by 10,000 units. So for the 2nd quarter, was the domestic market better than expected? And then may I continue on to my second question? Yes. So for the R and D cost, so you said you reduced the full year estimate by JPY 40,000,000,000 or so for R and D cost. Would that have an impact on product development? At the May, I believe Mr. Hachigo mentioned possibly launching Level 3 by the end of the year. So if there's any impact, please let me know. Thank you. Thank you very much for the question. The first question was for Japan domestic market. So total demand and also Honda situation, that was the first question. And the second question is about the R and D cost. So for the full year, we reduced it by JPY 40,000,000,000. So would there be any impact from that? Thank you. Okay. Speaking about the Japanese market, well, for the full we are seeing a recovery from July to September. And then the most recent minivan sales is recovering. So compared to the 630,000 units, now we are upped by 10,000 units to 640,000 units. So of course, the market going forward is still uncertain. However, we would like to keep a close watch on this. And then for R and D cost, so because of the COVID situation, there is a bit of a delay in development of new models. But on the full line 4 year plan, we are still on plan. This JPY 40,000,000,000 reduction is triggered by the COVID-nineteen. We have been doing the review of our operations across, including R and D as well. And then some of the timing of development might have been a little bit delayed. So this spans across automobile, motorcycles and power equipment. So we are for any future plans future activities for seeding for the future, we will still be continuing for the investment for future technology. Okay. I am sorry, but I have to say that the next question is going to be the final question from Mr. Higashimoto, please. Sorry, Mr. Higashimoto. Thank you very much. And this is Higashimoto from Kyodels. Can you hear me? Yes. About U. S. Presidential election. Just an added question. You said that it is premature to say anything about the future in the U. S. The official results are not out yet. However, the past 4 years under President Donald J. Trump, how would you summarize that 4 year period? And there was a tax cut. So for companies who have been really focusing on the U. S. Market, there must have been benefits that you enjoyed. So what is your review over the past 4 years under President Trump in the United States? Okay. The review of the past 4 years under President Trump. I don't think it is totally appropriate or that we are in the position of you are answering that big question in the name of one private sector company. And so I would have to refrain from saying anything. Thank you very much. So ladies and gentlemen, because of the time availability, we were not able to probably undertake all the questions that you may have unless otherwise. And so if you have anything further, please address those in the 2 corporate communication. And with that, we would like to close today's time together with you. And the presentation materials, please take a look at the words uploaded and our web page. Thank you very much for your attention and participation. The forum is now closed.