During FY2024, we faced a macroeconomic outlook marred by the policy direction of the new US administration, economic stagnation in China, and mounting geopolitical risks amid the protracted conflicts in Ukraine and the Middle East. Nonetheless, our businesses in Japan and North America performed well, culminating in our highest ever net sales and profit. Operating profit topped ¥80 billion, with an operating profit margin of 12.2%.

In Japan, we focused on passing on price increases in a way that would protect both our profit margins and sales volume. We also achieved strong sales in core products such as heavy-duty shutters and doors for commercial buildings and condominiums, in strategic products such as partitions and entrance products, and in our service business. As a result, both sales and profits rose. In North America, we gained a larger share of the market through our sales promotion efforts, resulting in revenue growth. We also achieved huge growth in operating profit by maintaining sales prices and implementing cost reduction measures such as improving productivity. In Europe, we continued to struggle amid a deteriorating business environment, and revenue and profit decreased on a local-currency basis. In Asia, revenue increased thanks to the robust performance of our business companies in Hong Kong and Taiwan, but operating profit decreased because of cost increases.

We expect revenue growth in each sector, but revenue is likely to decline on a yen-basis because of exchange rates. We expect growth in operating profit, with an even higher operating profit margin.

For FY2025, we expect increased sales volume and successful price adjustments, but revenue is likely to decline on a yen basis owing to unfavorable exchange rates. We expect profit growth with cost reduction efforts in the North American business and other areas. Operating profit margin is forecasted at 12.4%, higher than the previous year's figure. In Japan, we have strong prospects for revenue growth, with the brisk construction of factories and warehouses presenting an opportunity to grow sales volume and pass on cost increases. We also expect growth in operating profit on the assumption that we will absorb cost increases with further increases in sales prices. In North America, we expect revenue growth on a local-currency basis with proactive sales efforts in the residential and non-residential markets, which we assume will trace a moderate recovery path. Operating profit is likely to increase on a local-currency basis given that we will pass on the costs of tariffs and other cost increases and implement productivity improvements and other cost reduction efforts. In Europe, the market landscape will remain adverse, but we are confident that we can increase revenue and profit by implementing sales promotion efforts and passing on cost increases. As for Asia, we expect growth in revenue and profit as a result of sales growth and cost reduction in the East China and Vietnam businesses.

Goal: Strengthen and expand a foundation toward becoming a global leader in high-performance entrance solutions to meet the changing needs of society due to climate change and digitalization.

Financial targets: ¥750 billion in consolidated sales, ¥100 billion in operating profit (before goodwill amortization), 13-14% operating profit margin.

FY2025 marks the first year of Mid-Term Management Plan 2027, our latest three-year plan. The plan sets out the following quantitative targets: ¥750 billion in consolidated sales, ¥100 billion in operating profit (before goodwill amortization), and 13-14% operating profit margin. The plan also includes qualitative measures; it affirms our ongoing commitment to the following core policies: 1) Strengthen and expand core businesses in Japan, North America, and Europe; 2) Grow Asian business with solid profits; 3) Expand business through disaster preparedness products, climate change response products, and smart products and services; 4) Increase productivity and expand production capacity through digitalization and manufacturing innovation; 5) Enhance sustainability management and human capital management. These five policies are defined as basic strategies for strengthening and expanding the foundations upon which we will become a global leader in smart entrance solutions. Our entire corporate group will work as one to achieve this goal.

Whereas our previous dividend policy used a benchmark payout ratio of 40%, our new dividend policy uses a benchmark dividend on equity (DOE) ratio of approximately 8% to ensure a more stable dividend. Dividends will be of a level similar to the case where ROE remains at least 18% and payout ratio trends at 45%.

We have two basic capital policies. First, we place importance on balancing financial stability with capital efficiency so that we can invest in boosting our prospects for sustainable growth and return profits to shareholders as necessary. Second, we keep a close eye on cost of capital and stock price with a view to increasing our corporate value over the medium and long term. Our new dividend policy uses a benchmark dividend on equity (DOE) ratio of approximately 8% to ensure a more stable dividend. Under this policy, the annual dividend for FY2024 will be ¥106 per share, ¥12 more than the previous annual dividend. The annual dividend for FY2025 will be ¥124 per share, ¥18 more than the previous annual dividend. In our dividend decisions, we place priority on ensuring sufficient free cash flow for strategic investments and consider cash positioning in relation to buybacks. Mid-Term Management Plan 2027 sets a benchmark for total shareholder returns (dividends plus buybacks) of ¥125 billion, more than the free cash flow expected for the three-year period. We will press further ahead in our efforts to become a global leader, delivering even greater corporate value.