Sony Corporation (SNE) Q3 2014 Results - Earnings Call Transcript

Sony Corporation (SNE) Q3 2014 Results Earnings Conference Call February 4, 2015 8:00 AM ET

Executives

Casey Kuester - Sony Corporation, IR

Kenichiro Yoshida - Chief Financial Officer, Executive Vice President, Corporate Executive Officer, Director, Member of Nominating Committee and Member of Compensation Committee

Steven Kober - Chief Financial Officer and Executive Vice President

Hiroki Totoki - Senior Vice President and Corporate Executive

Kazuhiko Takeda - Vice President & Senior General Manager, Corporate Control

Analysts

Daniel Ernst - Hudson Square Research, Inc.

Richard Kramer - Arete Research Services LLP

Atul Goyal - Jefferies

Samuel Ow - Aco Research

Ben Lu - Moon Capital

Operator

Welcome to the Sony Corporation Conference Call for overseas investors for the third quarter ended December 31, 2014. My name is John, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Casey Kuester.

Casey Kuester

Thank you very much for that introduction, John. And thank you all, for joining us today, February 4, 2014, for a discussion of Sony's forecasted results for the third quarter ended December 31, 2014. We hope you have all enjoyed music from One Direction hit album 4, while you were on hold.

I am Casey Kuester in the Investor Relations department here in Tokyo. And with me on the conference call today is Kenichiro Yoshida, CFO of Sony Corporation; Kazuhiko Takeda, Vice President and Senior General Manager of Sony's Corporate Control Department and [indiscernible] Vice President and Senior General Manager of Sony’s Finance Department.

Thank you, all, very much for joining us. In just a few moments, we will review today's announcement, and then we'll be available to answer your question. Please be aware that statements made during the following remarks and Q&A session, with respect to Sony's current plan, estimates, strategies, press release and other statements that are not historical facts are forward-looking statements about the future performance of Sony. These statements are based on management's assumptions in light of the information currently available to it and therefore, you should not place undue reliance on them.

Sony cautions you that a number of important factors could cause actual results to differ materially from those discussed in the forward-looking statements. For additional information as to risks and uncertainties, as well as other factors that could cause actual results to differ, please refer to today's press release, which can be accessed by visiting sony.net/ir. Let me remind you that a webcast replay of the investor meeting held earlier today, along with the slides presented at that meeting and our detailed release, are available on our Web site for your access.

Also as the originally announced in January, the finalization of our financial results was delayed due to the impact of the cyber attack at our consolidated subsidiary Sony Pictures. Due to that we are presenting forecasted results for the picture segment and for Sony on a consolidated basis. However, we are presenting actual results for the other segments which were not affected by the cyber attack. Sony plan to file its finalized results by March 31.

Before turning to Yoshida for some remarks please allow me to briefly give an overview of our forecasted results for the quarter and for the fiscal year. In the third quarter consolidated sales are expected to increase 6.1% year-on-year to JPY2557.8 billion. Consolidated operating income is expected to be JPY178.3 billion, almost double the same quarter of the previous fiscal year. Net income attributable to Sony Corporation stockholders is expected to be JPY89.0 billion. For the full fiscal year the forecast for consolidated sales have been revised upward by JPY200 billion from the October forecast to JPY8 trillion. After taking into account the relatively favorable third-quarter results our operating income forecast has been revised upwards as well.

We expect to record operating income of JPY20 billion although we expect income before income taxes to be a JPY5 billion loss and net income attributable to Sony Corporation stockholders to be a JPY170 billion loss. In the mobile communications segment fiscal year sales are expected to decrease JPY30 billion from the October forecast due to decrease in unit sales primarily in Asia-Pacific region despite the impact of an increase in sales from the depreciation of the yen. We have revised downward our operating results forecast in the segment by JPY11 billion. This is primarily due to the negative impact of the appreciation of the U.S. dollars and the decrease in sales.

In gaming network services we have revised before year forecast for sales upward by JPY90 billion. However we’ve only revised our forecast for operating income upward by JPY5 billion due to the unfavorable impact of the appreciation of the U.S. dollar in the segment and the fact that we’re expecting to record approximately JPY10 billion for the cost associated with the replacement of our music distribution platform and losses related to the sale of Sony Online Entertainment as well as other restructuring charges. We have not changed our sales forecast for imaging products and solutions although we revised our forecast for operating income in the segment upward by JPY1 billion due to the favorable impact of foreign exchange rate and cost reduction.

The forecast for sales in the home entertainment and sound segment has been revised upwards by JPY10 billion due to the favorable impact of foreign exchange rate and the forecast for operating income has been revised upwards by JPY3 billion due to cost reduction in audio and video. In regards to the TV business although Sony has recorded a cumulative profit due the third quarter of JPY22.1 billion, we recorded a JPY16.6 billion operating loss in just the fourth quarter of the previous fiscal year. So we are being relatively cautious in forecasting this category’s result. In the devices segment we upwardly revised our full-year forecast for sales and operating income because the demand for image sensors for mobile devices remained strong.

We also recently announced approximately JPY105 billion in additional investments in image sensors to increase our total production capacity for image sensors from its current level of 60,000 wafers per month to 80,000 wafers per month by the end of June 2015. In the picture segment we have revised upwardly our sales forecast for the fiscal year by JPY30 billion due to the impact of the depreciation of the yen but we have revised downward our forecast for operating income by JPY4 billion mainly due to decrease in media networks sales and expenses associated with the cyber attack I mentioned earlier. In the music segment we have slightly revised our full-year forecast for sales and operating income upward mainly due to the favorable impact of foreign exchange rate and an increase in recorded music sales in Japan.

In financial services Sony Life continues to expand its policy amount in force and results in the current quarter exceeded expectation causing us to raise our full-year forecast in the segment. Financial services revenue is expected to be JPY50 billion above the October forecast and operating income is expected to be JPY14 billion about the October forecast.

Now I would like to turn the mic over to our CFO Kenichiro Yoshida for some brief remarks.

Kenichiro Yoshida

Thank you, Casey. I just wanted to mention a few key points before return to Q&A. First, as we have already announced are finalized financial results has been delayed due to the impact of the cyber attack at Sony Pictures. It is unfortunate that we can only show the latest forecast for the picture segment and for consolidated Sony as of today. We expect to be able to file our finalized results by the end of March. Second, I would like to take a moment to talk about our view on a recent performance. As Casey mentioned earlier we expect to record over JPY135 billion in the third quarter this year. Excluding the impairment charge that we recorded on our mobile business we expect to have recorded approximately JPY335 million in operating income on a nine month basis. This is about JPY 200 billion improvement year-on-year.

Our restructuring is progressing and we believe that a little more than 30% of the JPY200 billion is due to the benefit of restructuring. However, even though our results for the third quarter have improved significantly compared to the last year, our 7% operating margin for the quarter was no better than our recent historical average of 6.7% . We are also currently focusing on JPY142.5 billion loss in fourth quarter including JPY92 billion in restructuring related costs. Due to these factors I can’t say that we have finished our turnaround yet and we must continue to follow to do with our restructuring.

Third, I would like to touch on the target for the mobile communications segment that we announced today. In the fiscal year ending March 2018 we aim to achieve JPY900 billion to JPY1.1 trillion in sales and an operating income margin between 3% to 5% in this business. We also decided to reduce headcount by a total of approximately 2100 people in the mobile business including the 1000 people we already announced by end of fiscal year ending March 2015. Restructuring charges related to the headcount reduction are expected to be around JPY30 billion. Through headcount reduction and other cost saving efforts, we expect to reduce annual operating expenses from the fiscal year ending March 2017 by more than JPY90 billion compared with the current fiscal year.

Lastly, I would like to inform you that we will be holding a corporate strategy meeting on February 18 in Tokyo. At the meeting our CEO will explain our strategy after moving out over our current restructuring phase.

Back to you Casey.

Casey Kuester

Thank you, Yoshida san. I am now going to turn things back over to John so we can start the Q&A session. Thank you for your attention. John, would you please queue up the questions?

Question-and-Answer Session

Operator

Thank you. We will now begin the question and answer session. [Operator Instructions]. Our first question is from Daniel Ernst from Hudson Square.

Daniel Ernst

Good morning and good evening. Thanks for taking my questions. I have three categories. First, on the television business I know you said, you wanted to be conservative in your outlook and certainly for this fiscal year and going to the March quarter that makes sense, but the given the dramatic swing back to profits for TVs how does that change your strategic view of that division which I think many people had thought that maybe you might exit televisions, any thoughts on the longevity of the TV business at Sony? And then second, in the games category where you continue to excel the last few months since a large price reduction from your competitor at Microsoft, roughly $500 for the Xbox to roughly $350, their sales have been slightly ahead of Sony’s recent in the West; and a few thoughts going into this second full year of the new comps or cycle, whether price reductions were part of the plan? And then also on the games business related to content, where the launch of the Sony View, the commercial launch of your over-the-top television services was? Third given the relative success under difficult circumstances for the interview on Digital, what your thoughts were about further digital releases bringing movies and the impact on the box office window?

Casey Kuester

Thank you for your question, just to recap. You had three points, the first of which was the recent performance of the television business changed our strategic view of that business. Also the second question was about our pricing strategy in the game business versus our competitors and the third was regarding content whether or not our experience of the interview has changed our opinions about opening windows for films. So with that I’ll turn it over to Yoshida.

Kenichiro Yoshida

As for the first question about the TV, currently we have no plan to exit from the television business. As you know, currently television business is most advertised, however, the profitability is volatile. So, although we have no plans to exit we’re always seeking a alternative just to have a joint venture with other companies. That is my answer for the first question. And for the second question about the game; we have that Xbox plus now. However, we have currently no plan to reduce the price. However, we think the PlayStation team is now doing at the airport to promote the PlayStation 4 such as giving a coupon or a free gated downloads, such kind of thing etc. And as for the start point, you’re right, there is an intended window or a change in the movie industry and we should carefully study the revenue stream from the on-demand streaming revenue. And that has a lot of indication to business in the future; that is my answer.

Daniel Ernst

Great. Thank you for the color. Also an update on when we might conduct the commercial launch of Sony View, the television service for play station?

Casey Kuester

Your question is when will PlayStation view be commercially launched?

Daniel Ernst

Correct.

Kenichiro Yoshida

Currently as you know we are doing a segment of advertising New York City and followed by Chicago and Philadelphia. Current trend to start the PS View type is by the end of March of this year.

Operator

Our next question is from Richard Kramer from Arete Research.

Richard Kramer

I wanted to ask questions one at a time to make it a little bit easier. The first one, and a bit confused about the mobile business, the aim seems to be to get back to our level of profit which is roughly close to the amount of charges that you seems to be suggesting overtaking this year and equally the guidance even for this year in units implies a very steep decline. Can you tell us what the plan is in terms of managing through this coming period, maybe a bit more specific about how you plan to reduce the costs in a way that allows you to lose one third of your revenue but still sustain a business over time it will be profitable? And then I will get on to my next two questions.

Casey Kuester

Just a recap. Your question was about how we view cost reduction in the mobile business and how we’re going to adjust that business in potential future drops in revenue? Thank you very much for the question. As you may know this year initial unit target was 50 million units and now we reduced that to 40 million units. So this year the initial phase we actually increased the operation in a large scale. So what we have to do is to review the so-called operation incentive by increasing fix cost, marketing cost, R&D and headcount. Those costs adjustments take some time and the sales reduction is much earlier than the cost reduction. So currently what we have to do is to reduce the breakeven point by reducing the operating benefits.

Richard Kramer

Maybe I’ll ask the next two since Casey is recapping them. The next one is are you suggesting now the downside of mobile, your overall electronics business restructurings would be completed by the end of this current fiscal year and if we look at several divisions in electronics, the current levels of margin are above your long-term targets; for example in imaging and very specifically devices, so do you need to revise those long-term targets or are you suggesting that the market will be a more difficult as you see it in the future? And then I guess the last question is that we started to see some impact of foreign exchange on the top line, but as we know the impact on the bottom line specifically and in cost of goods sold and component sourcing tends to be somewhat delayed. Can you give us a sense of both hedging and your cost exposure in the electronics business to dollar-based FX costs and how that might affect numbers going forward? Is it one of the reasons why we can read into the guidance that operating profit will be under pressure in a number divisions in Q4 due to your FX thinking?

Casey Kuester

Thank you for your question, just to recap. Your first question was about whether or not we are truly finished with restructuring in electronics outside of mobile in this year and in light of our current relatively favorable performance whether or not we are going to need to adjust our midterm targets in electronics business? And your second question was about our exposure to Forex, that to U.S. dollar, in terms of how we hedge as well as what kind of cost exposure we have to the dollar as well?

Kenichiro Yoshida

We will begin with the last question IP&F. majority of the IP&F is digital imaging product. And as you may know digital imaging is a shrinking market. So in forecasting or in making a plan of mid-term, we are quiet conservative that this market is getting tough. However, although the market itself is shrinking actually our productivity is going up. So in the future we may defend the current target of the midterm plan, however we just have finished the midterm plan, so right now we have no plan to change the target or the margin. And as for the FX impact on profitability, I ask Takeda san to explain.

Kazuhiko Takeda

This is Kazuhiko Takeda speaking, thank you for asking about foreign exchange impact. You’re quite right that we will have a negative impact on the appreciation dollars. Then because of the other sharp decline in the other currencies, so we do not have much action to take at this point in time because our hedging policy is just to make one month ahead in our regular rolling and hedging policy. So therefore what we can do is that try to increase the sales in local currency in the area of other than dollars currency territory. And also try to seek for the alternative source in India production components. So by doing that I know we can try to eliminate the impact from the appreciation dollar.

Kenichiro Yoshida

I would like to add some -- some of the hedging policies briefly. As though Takeda mentioned that we are normally hedging one month before the booking month and the booking month and the settlement date is normally two months after the booking month. So therefore we are normally hedging for three months.

Richard Kramer

And can you comment like maybe finally on the devices business, again it has margin which are substantially above your long-term target and it’s a business I imagine would also be very much effected by foreign exchange, could you comment about the profit outlook again because it’s implied that there would be a decline, a sharp decline in the margins in Q4 there.

Casey Kuester

Just to recap, your question is regarding our devices segment and in light of the favorable performance whether or not we’re going to be able to maintain this current margin going forward?

Kenichiro Yoshida

As for device, actually foreign exchange fluctuations were current international situation is positive to the device segment. The recent projection is 2.; One is we currently -- some restructuring, as there are the seasonality of smartphone segment and must be -- as I mentioned at the brief conference we have some kind of downward or the vision of phobia, so yet quite conservative in forecasting—in the financial forecast.

Operator

And our next question is from Atul Goyal from Jefferies.

Atul Goyal

Thank you very much Yoshida san. First of all congratulations for a wonderful set of results, this was in a very difficult condition, especially what Sony faced given the hacking issue. So it’s quite remarkable. Like the company state, so with this focus and discipline, so congratulations. I’ve got to questions, first is about your adjusted profits and the second one is about if you could please comment something about mobile phone strategy even though more detail might come out later but something along the lines that you have mentioned about TVs. The first question is about the adjusted profits. Now you mentioned JPY335 billion of operating profit in the first nine months excluding the non-cash goodwill write-off but if you were also to adjust the losses and the write-offs on discontinued business of PC, what are the first nine months numbers look like and are these the record profits of all time or are these record profits of last 20 years excluding one, that’s the question on the adjusted numbers for the first nine months. The second question is you previously mentioned about TV that you would actively consider all options including the partnerships et cetera, when I spoke to you earlier you had mentioned that just a breakeven is not the target in fact return on equity, return on -- generating enough return to cover your cost of capital is an important issue. Now along those lines, do you think you are also will be open to considering the joint venture and partnerships and smartphone business. So those are the two questions about adjusted profits and smartphone versus TV partnership. Thank you.

Casey Kuester

Thank you to all of your questions. Your first question just to recap is that earlier we talked that we had approximately JPY335 billion recorded in first nine months excluding the goodwill impairment and your question was if we take out the PC exit cost as well, what kind of performance is that and is that the record number and the second question was about our mobile strategy and whether or not breakeven is the appropriate target and whether or not we are still considering perhaps other strategic partnerships or other option in this business.

Atul Goyal

Yes, thank you very much Casey.

Keinchiro Yoshida

Thank you very much for question. As for the nine months period, PC exit created the cost is approximately JPY30 billion. So if you add that amount, the adjusted profit would be JPY365 billion. I don’t that is the record number one or not but probably not. In 2000, I think we had more operating profit than that and as for the mobile strategy, we are not currently targeting a breakeven but we want to have a 3 to 5 operating profit, is the our target but we do not deny the future of PC to have a joint venture or partnership with the company because that is a possible alternative. At this moment we don’t have any concrete plan. Thank you very much.

Atul Goyal

Thank you. Can I ask one more follow-up question the first part? In the total adjustment that you did, you taken out the PC costs which were the exit costs but there also ongoing losses from this discontinued business. I think that’s about JPY15 billion to JPY20 billion. So all in all is it close to like JPY380 of operating profits in the first nine months. Or if my estimates wrong about the ongoing losses in the PC business, just trying to understand that if we clearly take our these two things which are, one is mobile related and the other one PC related, what is the numbers look like. So I am trying to getting understanding on that one. Thank you.

Casey Kuester

Just to recap, your question is what were those nine month numbers look like if we not only remove the PC restructuring cost and the exit cost but also the ongoing operating loss as well.

Keinchiro Yoshida

With regard to the JPY30 billion associated to the exit cost of PC and that includes both restructuring costs and the operating loss incurred in this year. So total 30 billion. Is that help for you.

Atul Goyal

Okay. Got that. Thank you very-very much.

Operator

Our next question’s from Samuel Ow from Aco Research.

Samuel Ow

A couple of questions; the first one is on your game business. I understand that you’ve revised up your sales bump here by JPY 90 billion, while operating profit was revived up by only JPY5 billion. Could you talk about the reason why the op was only revised up by 5 and not bigger? And also here if you look at the amount of one-off cost involved this year, what kind of profitability do you think you will be able to make next year. And my second question is on your cost reduction. Can you possibly talk about the progress of your cost reduction whether the scale and the pace is in line with your expectation or whether you’ve managed to find more opportunities to reduce your cost by a larger scale and at faster pace.

Casey Kuester

Thank you for your question, just a recap. Your first question was about our game segment and how in our recent announcement, we revised our sales upward by roughly JPY 90 billion, but we only revised our operating income forecast up by JPY 5 billion and what the GAAP there is. Also what potential profit level there is for game going into next year considering we have these one-off cost that we’ve talked about recording later on this year. And your second question was about how the progress of our cost reduction efforts are progressing and whether or not there is any more opportunity for cost reductions.

Kenichiro Yoshida

As for the first question there are a couple of reasons. One point is the currency. As you know basically PS4 is that determines the cost. So that our appreciation is creating a significant impact and also as you may know we recently announced project -- our recently announced the projects of Sony Online Entertainment, that will incur some loss from that deal. And third point is -- again this is also announced. We decided to change the music service platform to connect one to 45. So the cost of the platform change is the third one. Also, we are expecting some restructuring cost in game segments. Those are three reasons why we are quite conservative in this operating profit forecast. And for the second question about the next year label, although since we are going to announce the offshore results of the next fiscal year at the time of annual financial results, I know that this is scheduled late April or early May, we cannot comment on the specific number of the op neither. However, since this platform appears full as well as the number of the subscriber for the PlayStation network is quite a momentum, so I’m quite optimistic in this business. That’s the second point. And the third point is about the progress of cost of the year. We already announced that the overall restructuring in both sales company as well as the headquarter and business segment, though at this moment our cost reduction effort is on schedule and as I mentioned in the nine-month period we actually recorded almost JPY200 billion of the improvement excluding one-time growth of mobile segment will be write off. Among the JPY200 billion of these improvement, approximately, I believe it’s 30% of due to the custom income. So our progress in custom activity is on track. And I think in the future current restructuring is so-called CEO initiated finished restructuring phase, now our CEO is saying that we should change the year to the finished restructuring phase to the continuous custom phase. So still we think we have more opportunity to reduce cost.

Samuel Ow

Great, thank you very much. Can I just ask one follow-up on the game business. How much of your costs in this current fiscal year would you consider to be one-off, please?

Casey Kuester

Just to recap, your question is how much of the cost that we are recording in the game segment this year, would we consider one-time costs?

Kenichiro Yoshida

Approximately JPY20 billion is one-time cost.

Operator

[Operator Instructions] And we have a question from Ben Lu from Moon Capital.

Ben Lu

I wanted to get a little bit more clarity into your semi division. I think recently, you guys increased your CapEx for image sensors. Can you talk through a little bit about your outlook for your image sensor business? I know you gave a fiscal 2017 target at your Analysts' Day a few months ago, and you just recently raised your sales target by about JPY40 billion for this fiscal year. Can you talk about what is the outlook for that and what is the rationale behind the recent investment? Thank you.

Casey Kuester

Just a recap, your question is about our investment in image sensors, and our outlook for the business and what we’ve used, kind of the trends for sales in this business, and the reasons for investment going forward?

Kenichiro Yoshida

As you know we recently announced the additional capital investment for the image sensors approximately JPY100 billion. But it is basically for sensors and sensor packing production. And current the -- basically there is a strong demand in mobile sensor. As you know mobile market itself is quiet for fertile market, however, market itself is still going and also the need for high-end camera is increasing. Also in the future it is said that, you have a DS camera demand is expected. So those are our expectation for the market. So that’s why we’re quite positive and optimistic for the recent investment. Thank you.

Ben Lu

Great and as a follow up to that I think you guys are already giving out target of about let’s called 1.4 billion through device sales of which Eyeball chart, image senses about 55% of that or 630 billion sales versus 450 billion that you guys are targeting this year. So we are talking about pretty impressive growth over the next three years. Can you talk about what the split of, let’s call a resolution by 30 megapixel and above or what do you think is the penetration of the dual cameras, just wanted to get a little more clarity into how you eye that you are image sensors sales down in four fiscal ’17, special things that you guys just raised out about 20 billion this year. Thank you.

Casey Kuester

Thank you for your question, just to recap you are asking about more detail in terms of where we think trends within semiconductors, specifically image sensors are going to go going forward, for example in terms of megapixels what kind of adoption right there will be for dual camera and how we think that will affect us.

Ben Lu

The system target, specifically between what you think the penetration is for dual cameras by fiscal ’17 what do you think will be mix of megapixels whether it’s 8, 10, 14 et cetera and basically what do you think the SP trend buyer.

Kenichiro Yoshida

Thank you very much for the question. For the image sensor, there are several aspects of the functions. Of course number of pixel is one of the important aspect features but at the same time but sensitivity is also very important as well as the speed, speed to capture or speed to shutter. So those functions are also important. So growth in image sensor, it’s not just a number of pixel, it’s only parameter to complete within the market. I hope this is the answer for your question.

Ben Lu

Okay I was hoping that you guys gave a pretty large type fiscal ’17. I was hoping you have a little bit more details into how you arrive at that forecast whether it’s – can you talk about there is going to be more dual cameras in the future, may be you can talk about what do you think the penetration of dual cameras will be by fiscal ’17. I know you talked about this, this is just more important than obviously just resolution to all sensitivity but I think image sensors are already down, so I think pretty sensitive levels, so I was just curious if you give little bit more clarity specific you know how you get that number, or maybe you can just talk about what’s your sales target for ’17 what do you think is the split between smartphones versus your own mode of businesses. I know you guys are targeting to go into as well. Thank you.

Kenichiro Yoshida

Thank you very much. Again, what I can say is rather penetration of dual camera and more demand for high end image sensor and other applications including like auto or medical and IOT but still the largest portion is by far the in mobile. That's what I can say right now. Thank you.

Ben Lu

Okay and then my last question is also on your device business. Once you gave any update on the camera module side of the business, I know that you didn’t raise—I don’t believe you raised the sales for camera modules and I think you are targeting about 250 billion of sales for camera modules in fiscal ’17, I think Eyeball in your chart, it looks like probably around 30 billion to 40 billion for fiscal ’13 that you were talking about significant factor increase in camera module sales, just curious how you plan on growing your camera module sales that much.

Casey Kuester

Thank you for your question. Just to recap, you would like to know why we believe that we can increase our camera module sales and if we have any granularity as why we think that going to increase.

Ben Lu

Yes because it is almost that connect increase in four years.

Kenichiro Yoshida

Thank very much for the question. Basically Sony was not a big player in the module business. And actually, we are quite new-comer in this area. And recently we are expanding our module production facility and we will continue to increase the capacity of the module particularly for the [indiscernible] idea. So that is the main reason why we are aggressive in forecasting the module sales. Thank you.

Operator

And we are running out of time, I’d like to turn the call back over to Casey Kuester for closing remarks.

Casey Kuester

Thank you, John and thank you everyone for your question. This concludes today's conference call. Good night and thank you all again from Tokyo.

Operator

Thank you ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.