7731.T - Nikon Corporation

Takeshi Matsumoto: Good afternoon, everyone. My name is Matsumoto. I took on the role of CFO this past April. Thank you for joining us today. I will begin by reviewing our results for the fiscal year ended March 31, 2025 and then share our outlook for the current fiscal year. For FY 2025, Nikon recorded revenue of ¥715.2 billion, operating profit of ¥2.4 billion, and profit attributable to owners of the parent of ¥6.1 billion. We faced a decline in sales for semiconductor-related businesses within precision, equipment and components. The increase in sales from imaging products and healthcare and a weaker yen were not enough to offset this resulted in a slight drop in overall revenue. Adding to this, we recorded a ¥27.2 billion in one-time cost, which significantly reduced our profit. Details are available on Slide 28. Compared to our previous forecast, imaging product, precision equipment and digital manufacturing, all fell short of expectations, contributing to a notable shortfall in profits. Because of this, we will revise our annual dividend downward by ¥5 to ¥50 per share, keeping at the same level as the end of last year. The ¥30 billion share buyback was carried out as planned, using funds made available through balance sheet efficiencies. The repurchase shares were canceled at the end of the fiscal year. This chart shows the changes in operating profit by segment compared to our February 6 forecast. As you can see, imaging products, precision equipment, and digital manufacturing, saw major downside and one-time costs played a significant role. Slide 5 in the yellow box highlights key financial indicators for previous fiscal year. Operating cash flow was ¥48.2 billion, marking the second consecutive year of growth. However, free cash flow came to minus ¥21.7 billion due to outlays tied to our acquisition rate and relocation our head office. On Slide 6, we present segment results compared to both the previous year and our previous forecast. Let me walk through each one. Starting with Imaging Products Business, the global market for digital camera interchangeable lens type continued to expand, especially in China, with strong demand for our new wireless cameras, both bodies and lenses and tailwind from weaker yen, revenue increased by ¥15.6 billion to ¥295.3 billion. However, sluggish conditions in cinema industry resulted in operating losses at RED, a company we acquired, and our recognition of fixed asset impairment losses at MRMC also led to a decline in operating profit by ¥5.2 billion to ¥41.3 billion. Compared to our forecast, profits fell by ¥5.7 billion due to a shift in product mix leading to lower rent sales versus a plan in addition to the impact of one-time costs, Next, on Slide 8, Precision Equipment Business, sales of FPD lithography systems for high resolution panels, increased significantly. However, that was offset by a decline in new semiconductor lithography system sales. This brought overall revenue down by ¥17.4 billion to ¥201.9 billion. We also revised our future plans for semiconductor lithography business due to changes in customer investment plans and delays in market recovery. As a result, we recorded ¥14.1 billion in fixed asset impairment losses, inventory write-downs and restructuring costs. Operating profit was limited to ¥1.5 billion. Compared to forecast, profit was down by ¥7.5 billion due to one-time cost, despite higher service income. Now on Slide 9, Healthcare Business, sales in life science solutions declined due to sluggish markets in Europe, the U.S. and China, but strong growth in eye care solutions and contract cell development manufacturing, plus the weaker yen pushed the revenue and profit higher year-on-year. However, we still came in ¥1.3 billion below our forecast due to a mixed life sciences solutions sales and the disposal of old inventory. Next, Component Business, on Slide 10, we saw growth in X-ray and CT system for aerospace application, but declines in EUV-related components, optical parts and components and encoder dragged the same down. Revenue dropped ¥11.8 billion and operating profit fell by ¥8 billion. Compared to forecast, profit exceeded expectation by ¥2.1 billion, thanks to cost controls and lower restructuring costs in industrial solution business. Now, our last segment, Digital Manufacturing Business, the overall metal 3D printer market slightly contracted mainly for small to midsized system due to market condition. However, in our focus area of aerospace and business, demand for Nikon’s SLM solutions, large format system NXG series expanded. NXG sales, which continued over half of SLM’s revenue, grew by 33% year-on-year, with approximately 75% directed to space and defense sector. This contributed to an overall business revenue increase of ¥2.3 billion to ¥23.3 billion. On the profit side, however, our operating losses widened about ¥1.2 billion year-on-year to ¥15.2 billion due to increased costs from lower production volume of small to midsized system as well as upfront investments such as in our U.S. facility and R&D. This also resulted in ¥5.7 billion profit shortfall compared to our previous forecast and the reason for which I’ll explain later, together with our outlook for the current fiscal year on Slide 22. Let’s turn to the outlook now. For FY 2026, we are assuming ¥145 to the dollar and ¥135 to the euro. We expect revenue of ¥710 billion, operating profit of ¥36 billion, and profit attributable to owners of parent of ¥30 billion. Components and digital manufacturing should see growth, while stronger yen and weaker sales in semiconductor lithography business in precision equipment will likely keep total revenue flat. We anticipate a significant ¥33.6 billion increase in operating profit driven by improved profitability in some businesses, the absence of last year’s ¥27.2 billion in one-time costs, gains from the sales of idle assets for use, R&D spending and effects from restructuring. The dividend will be ¥50 per share same as last year. Details are on the next slide. Due to the uncertainties surrounding U.S. tariffs, they are not included in the forecast. We anticipate approximately ¥10 billion negative impact on operating profit. This is a current estimate and it will be incorporated into our full year forecast at the appropriate time, pending final negotiation with economic impact and effectiveness of our countermeasures. Now, let me talk about our shareholder return policy under the midterm management plan. Given the recent performance, we have revised our dividend projections. For FY 2025, we lowered the dividend from ¥55 to ¥50 per share. And for FY 2026, we have also adjusted the original target from ¥60 to ¥50 yen per share. We also completed a ¥30 billion share buyback last fiscal year, which brought our total shareholder return ratio to 765.8%. For the current fiscal year, we project a return ratio of 54.8% and over the full 4-year plan and the cumulative ratio should be around 111.3%, roughly 15% of total distributable resources on the plan will be allocated to shareholder returns. Please refer to Slide 15 for a summary of our key FY 2026 indicators alongside year-on-year comparisons. Slide 16 shows full year projection by segment also compared to last year. The others’ operating loss improved ¥13.1 billion year-on-year. This reflects the absence of last year’s one-time costs related to our head office relocation and footprint reorganization, along with expected gains from idle asset sales and lower R&D spending as noted below. Now, let’s go into the each segment forecast, starting with Imaging Products. We expect that interchangeable lens camera market to remain steady at around 6.7 million units. We anticipate a continued favorable market trend led by mid to high-end cameras for professionals and hobbyists. We are aiming to increase our unit sales, especially when in the volume zone, such as the Z5II launch April and Z5II released last November, which incorporate advanced technology from Z 9s. We are targeting sales of 950,000 camera bodies, up 100,000 from last year and 1.4 million users, up 90,000. Due to a slight drop in speed, revenue is expected to hold steady at ¥295 billion, with operating profit down by ¥1.3 billion to ¥40 billion and due in part by stronger yen. Moving on to Precision Equipment Business, we project revenue to decline by ¥16.9 million to ¥185 billion. FPD lithography systems are also expected to dip slightly from 38 to 35 units though demand for high-resolution panels remains solid. In semiconductor lithography, orders for our new i-line stepper 2205iL should increase from 28 to 34 years, but the sales of new ARF lithography systems and service income will decline due to slow market recovery. Operating profit, however, is forecast to increase by ¥10.5 billion to ¥12 billion overall helped by an improvement in product mix in FPD and improved profitability in semiconductor lithography due to the disappearance of last year’s one-time cost and optimization of service bases. Regarding the semiconductor lithography business, we will assess future customer investment trend proceed with streamlining production support structure and lower breakeven point, thereby establishing structure capable of generating stable profits from next fiscal year onwards. At the same time, we will promote the development of next generation equipment, such as digital lithography system for back-end processes and new ArF immersion lithography system, aiming for significant new recovery in earning around 2030. For healthcare business on Slide 19, we introduced profitability in life science solutions through increased sales of high value-added products. In eye care solutions, we are working to develop new sales channels of automat use channel in Europe and expand further into Asia and other regions. In contract cell development and manufacturing, we plan to make upfront investment to support growth, but existing project remains strong and will provide stable income. Total revenue is expected to fall ¥1.4 billion to ¥115 billion due to the yen depreciation, but operating profit is on forecast to rise by ¥1.8 billion to ¥8.5 billion. Thanks to cost optimization and higher life science solutions margins. Components business on Slide 20, we plan to expand our customer base for optical parts and optical components, and expect stronger sales in the second half and as market conditions recover. In metrology equipment, our video measuring system for electronics component and semiconductors and X-ray and CT system for aerospace are expected to perform well. Furthermore, we anticipate increased demand for FPD photomask substrates for high resolution panels. Altogether, we project revenue to grow by ¥4.9 billion to ¥79 billion, and profit by ¥2.9 billion to ¥10 billion due to revenue gains, improvement in profitability resulting from restructuring and the absence of one-time cost. Digital manufacturing business, we expect the overall metal 3D printer market to stay flat for small to mid-sized system, but anticipate continued growth in the large format segment. Nikon SLM solution set a record high in orders last year, with 19% growth, with 52% growth in large format equipment. The backlog at the end of March was ¥13.5 billion, up ¥3.5 billion year-on-year. For FY 2026, we need to expand further in aerospace and defense, raising revenue by ¥9.7 billion to ¥33 billion. We also improved profitability by optimizing business management through production optimization, tighter cost control and R&D prioritization. We remain on track to make SLM profitable this year. For the whole segment, we are now targeting profitability by FY 2028, a 1 year delay from our initial plan. Lastly, concerning the operating profit of the digital manufacturing business, I will detail the variance between the previous forecast and the prior year’s actual results, as well as the year-on-year changes in our current fiscal year outlook. Last year so far [ph], came many from delays in customer deliveries of the SLM’s large format system due to customer circumstances. Small to mid-sized system also saw delays and higher production costs. Nikon’s Bed system underperformed as well. The weakened and higher expenses further impact the results. This year, profit recovery will mostly come from higher sales of SLM’s large format system and a better product mix. For small to mid-sized system, we will cut cost by optimizing production, in addition to an increase in unit sales. We will also continue to remain in expenses across other parts of the business, aiming to reduce the segments operating losses to ¥8.5 billion. To sum up, last fiscal year saw a significant profit decline, which is impacted by lower semiconductor revenue in precision equipment and components and the recognition of ¥27.2 billion in one-time costs. For this current fiscal year outlook, overall revenue is expected to be the same level as last fiscal year. However, we are anticipating improved operating profit in all segments, excluding imaging products, which is sensitive to FX. We anticipate ¥36 billion in operating profit, a significant ¥33.6 billion increase, largely due to the absence of the one-time costs booked in the last year. Although this is a final year of our mid-term plan, we foresee a substantial show for compared to our operating profit target of ¥70 billion. We strongly recognize that improved profitability remains a challenge. We are committed to the company wide effort to recover our earnings. Our Chairman and CEO, Umatate will elaborate on the progress of mid-term plan, including this plan. Thank you. Toshikazu Umatate: Good afternoon. My name is Umatate. I am the Chairman and CEO of Nikon. Thank you again for joining us today. This year marks the final year of our current mid-term management plan. Looking back the past 3 years, we made steady progress in strengthening our business strategies, in improving our management foundation. By business segment, while imaging outperformed due to the underperformance in industrial areas like semiconductor related coupled with delays in growth drivers, the numerical targets outlined at the bottom of this slide are expected to fall short of our plan, except revenue. Profitability improvement remains our work in progress, and we recognize that we have not yet fully met the expectation of our shareholders. Taking these points into account, we positioned FY 2025 as the year to build a foundation for where we want to be in 2030. We will focus on both recovering short-term performance and making investment for long-term growth. Please look at Slide 3. This slide provides a numerical overview of our progress, as shown on the left side. The first 2 years of the plan went very well. By FY 2023, we had already achieved the original FY 2025 revenue target of ¥700 billion, 2 years ahead of schedule. Our operating profit was also mostly on track. However, over the next 2 years, while imaging continued to perform well, our other segments suffered from upfront investment burdens and the semiconductor market downturn. As a result, operating profit for FY 2025 is now forecasted at ¥36 billion, well below our ¥70 billion goal. In response, we have implemented various restructuring and organization integrations. We have also prioritized how we allocate growth investments, limiting projects that take too long to scale, and focusing on three key areas professional video cameras, next generation lithography and metal additive processing. Now, let’s move to Slide 5. This graph plots the five business segments with revenue on the X axis and operating margin on the Y axis. The size of each bubble represents total operating profit. The dotted circles show our FY 2025 targets set during planning. The lighter circles reflect our latest forecast, and the darker circles show our FY 2030 goals. For the two main businesses, on the right, our strategy is to grow precision equipment through next gen lithography and customer diversification. For imaging products, we aim to stable profits by launching competitive professional video cameras and attracting new users, especially the younger generation. On the left hand side, we have our three strategic businesses. In healthcare and components which have relatively high margins, we aim to steadily grow earnings. For digital manufacturing, the goal is to beat industry growth and reduce losses quickly through metal additive processing. We need to create more value across all five businesses and reach ¥1 trillion in revenue and a 10% operating margin by FY 2030. Next, I will walk you through what each business we will focus on in the following two pages. For imaging products, we are prioritizing new user acquisition, especially among younger generations. We are also leveraging synergies with red [ph], our U.S. subsidiary to expand in the professional video camera market. In healthcare, we are working to strengthen our system microscopes and applications, while also scaling up our rapidly growing contract cell development and manufacturing business. Slide 7, in precision equipment, our FPD segment remains solid. For semiconductor lithography, we have streamlining support infrastructure for key clients, while also developing digital lithography for semiconductor back end processes and a new platform, ArF immersion lithography system. In components, we are increasing synergy from the integration of the former industrial metrology business and aiming for growth, particularly overseas. And in digital manufacturing, we will focus on expanding our presence in defense and aerospace by leveraging SLMs large format metal 3D printers. Slide 8 summarizes our efforts to strengthen Nikon’s management foundation. On the left, you will see our continued focus on human capital management and sustainability. On the right, we are investing in digital transformation, manufacturing, innovation and organizing of executive management for group companies. Slide 9 provides a summary of everything we have discussed today. Finally, this year marks Nikon’s 108th anniversary and 100th anniversary of our first microscope. Our microscope has helped visualize the invisible, supporting research in life sciences, medicine and advanced industry like semiconductors. Last year, in response to Japan’s demographic challenges, we have developed a microscope system designed to improve the success rate of artificial insemination in fertility treatments, the system we have shown here on this slide. In this way, Nikon is committed to contributing to society while also enhancing long-term corporate value for all stakeholders, including our shareholders. Thank you for your continued support and thank you again for your attention.

Yasuhiro Ohmura: This is Ohmura, Deputy CFO. Thank you for your precious time despite your busy schedule, to attend our financial results conference, today. I would like to explain our third quarter financial results and the full year-end forecast for the fiscal year ending March 31, 2025. The top half of the presentation shows the key points for Q1 to Q3 cumulative results and the bottom half for the third quarter alone. For the cumulative results from Q1 to Q3, the nine months from April to December, showed a decrease both in revenue and operating profit compared to the previous year. This was due to the impact of decrease in sales of semiconductor-related business in the Precision Equipment business and the Components business as well as the recognition of one-time costs of approximately ¥5 billion due to the relocation of the headquarters. The bottom half of the presentation, the third quarter alone, October through December results also showed a decrease both in revenue and operating profit compared to previous year, just like the cumulative results. This was due to the decline in sales in the semiconductor-related businesses, the impact of the absence of sales of G10.5 FPD lithography system recognized in the previous year and the one-time costs of approximately ¥2.1 billion including restructuring costs for the Industrial Solutions business and the impairment losses on idle assets due to reorganizing basis. Slide 4 now shows the cumulative results from Q1 to Q3. As for cash flow, although the operating cash flow for the third quarter was nearly ¥40 billion, there were large expenditures in the investment cash flow related to the acquisition of RED and the relocation of headquarters resulting in the negative free cash flow. Slide 5 shows the cumulative results from Q1 to Q3 by segment. In the yellow box, the top row of each segment shows revenue and the bottom row shows the operating profit. I will now explain details segment-by-segment. First, the Imaging Products Business, revenue increased by ¥13.7 million year-on-year to ¥235.6 billion and operating profit increased by ¥900 million to ¥43.8 billion. Sales increased, thanks to the launch of new products Z6III and Z50II, leveraging the cutting-edge technology of Z9. Sales of Digital Camera-Interchangeable Lens type increased by 30,000 units year-on-year to 670,000 units and Interchangeable Lenses increased by 40,000 units to 1.02 million units. The operating profit margin was maintained at 19%, the same level as the previous year. The Imaging Products Business continues to be a major pillar of Nikon's overall earnings, thanks to our strategy focus on mid to high end models for professionals and hobbyists. Next, the Precision Equipment Business, revenue was down by ¥29.6 billion year-on-year to ¥124.9 billion and operating profit was down by ¥11.7 billion to a loss of ¥600 million. The unit of sales of new Semiconductor Lithography Systems was 6 units, down 16 units from the previous year. On the other hand, sales of FPD Lithography Systems for high-resolution panels increased by 15 units from the previous year to 26 units. The Precision Equipment Business as a whole saw a decline in both revenue and operating profit as the increase in FPD revenue could not offset the decrease in Semiconductor revenue. In the third quarter alone, the completion of installation of some Semiconductor Lithography Systems that had already been delivered were postponed to the fourth quarter, resulting in a fall short of the plan. Slide 8, the Healthcare Business. In Life Science Solutions, sales decreased due to the market stagnation in Europe, the United States and China, but the Eye Care Solutions went up mainly in Europe and the United States and the overall revenue increased ¥4.7 billion year-on-year to ¥81.5 billion. On the other hand, operating profit decreased ¥800 million yen year-on-year to ¥2.1 billion due to the impact of the decrease of revenue in Life Science Solutions and the increase of upfront investments such as R&D expenses. In the third quarter alone, temporary logistics disruptions caused some supply delays, resulting in the postponement of sales of some products to the fourth quarter. Slide 9 shows the Components Business. Revenue was down by ¥10.3 billion to ¥49 billion due to a decline in sales of EUV related components and in quarters caused by delayed market recovery. Operating profit was down by ¥7.1 billion year-on-year to ¥3.6 billion due to the impact of the decline in revenue as well as the restructuring costs in the Industrial Solutions Business. Digital Manufacturing Business, Slide 10. Revenue increased by ¥4.3 billion year-on-year to ¥18.2 billion, thanks to the strong sales of SLM Solution’s large format metal 3D printer, namely the NXG series. Operating profit saw a reduction and deficit of ¥1.7 billion due to increased sales at SLM Solutions and the disappearance of one-time costs incurred in the previous year. Next, I will explain the full year-end business forecast. Regarding the full year-end forecast, we have revised down revenue by ¥5 billion and operating profit by ¥3 billion, respectively, reflecting the decline in the sales of related products due to the delayed market recovery in the Components Business. However, due to the improved financial income and loss in the third quarter, we will maintain a profit attributable to owners of parents at ¥16 billion. We also maintain the annual dividend at ¥55. We are currently acquiring ¥30 billion worth of share buyback and as of the end of January, we have already acquired ¥19.3 billion. The assumed exchange rates for the fourth quarter remain unchanged at ¥145 to the U.S. dollar and ¥155 to the euro. Please refer to Slide 13, a table showing the main numbers of our full year performance forecast including year-on-year and the previous forecast comparisons. The outline has already been explained. Slide 14 shows a list of full year-end forecasts by segment along with year-on-year and the previous forecast comparisons. I will explain the details segment-by-segment. First, the Imaging Product Business, please look at the bottom left of the document. We have revised up the Digital Camera related market scale from our November forecast, taking into account the trends up to the third quarter. Specifically, we expect the Digital Camera Interchangeable Lens type to increase by 300,000 units from our previous forecast to 6.4 million units and Interchangeable Lenses to increase by 400,000 units to 10 million units. The camera market continues to expand through the third quarter, mainly in China. However, there are concerns about excess inventory, especially in China. So, we will maintain our sales volume at 850,000 Interchangeable Lens Cameras and 1.35 million Interchangeable Lenses. We also maintain our previous forecast of revenue of ¥305 billion and operating profit of ¥47 billion. Slide 16 is the Precision Equipment Business. Please look at the bottom left of the document. There is no change in the sales volume of both FPD Lithography Systems and Semiconductor Lithography Systems from the previous forecast. All systems for which sales are scheduled to be recognized in the fourth quarter have already been delivered to customer factories and installation is scheduled to be completed by the end of this fiscal year. We also maintain our previous full year forecast of ¥195 billion in revenue and ¥9 billion in operating profit. On Slide 17, I will briefly explain the new platform ArF immersion lithography system series for semiconductors that we are currently developing in the Precision Equipment Business. This new platform is designed to be compatible with other companies' ArF immersion lithography systems that are widely used by semiconductor manufacturers with consideration for the convenience of our semiconductor manufacturers' customers. We are working with a major semiconductor manufacturer to jointly develop a prototype of the next generation series that combines high productivity, maintainability, and reliability so that we can deliver it in the fiscal year 2028. From 2028 onwards, we aim to significantly increase our share in the ArF immersion lithography systems market which is expected to continue to expand as 3D will be further adopted in DRAM and logic segments as well. Please now turn to Slide 18. I will now explain the Healthcare Business. In the Healthcare Business, both revenue and operating profit remain unchanged from the previous forecast in November. In the Life Science Solutions, although there are concerns about the impact of high interest rates in the United States and economic downturn in China, there are signs of recovery in the order environment, particularly in Europe and the United States, and we aim to achieve our full year plan. In Eye Care Solutions, demand from optometrist and the major change in the West is strong. We expect to incur the one-time cost of ¥2 billion in the Eye Care Solution this fiscal year. In Contract Cell Manufacturing, as we explained at the November financial results conference, revenue is expanding steadily and expected to contribute further to revenue and profit from next fiscal year onwards. Slide 19 shows the forecast for the Components Business. Due to the delayed recovery in the semiconductor and factory and automation markets, the recovery of demand for our related products, EU-related components, optical parts, optical components, and encoders is expected to be further delayed. In light of this, we have lowered our revenue forecast by ¥5 billion from the November forecast to ¥73 billion. We have also lowered our operating profit forecast by ¥3 billion to ¥5 billion. As planned, we expect to incur related expenses of ¥2.5 billion for the restructuring in the Industrial Solutions Business, a former Industrial Metrology business, and we aim to improve operating profit from the next fiscal year onwards. Slide 20 shows the Digital Manufacturing Business. There are no changes to the previous outlook for both revenue and operating profit. Due to the increase in demand from aerospace and defense industries, orders and sales are progressing smoothly, mainly for SLM Solution’s large-format metal 3D printers, the NXE series. SLM Solutions orders in the third quarter reached an all-time high on a quarterly basis, and we can expect sales to expand in the fourth quarter and the next fiscal year. This fiscal year, we aim for SLM Solutions to achieve a full-year profit on EBITDA basis. There is no change to our policy of aiming for an operating profit for SLM Solutions alone next fiscal year and a profit for the entire Digital Manufacturing Business in the fiscal year following that, ending March 2027. That's all for now, but now allow me to wrap up with the major points. In the third quarter, cumulative operating profit was ¥8.1 billion, mainly due to a decrease in sales in the semiconductor-related businesses of the Precision Equipment Business and the Components Business. The full-year operating profit forecast has been revised down by ¥3 yen to ¥19 billion due to a decline in sales in the Components Business, mainly related to the semiconductor-related business. We are currently formulating the budget for the next fiscal year, which is the final year of the four-year Medium Term Management Plan, but there will be no more one-time costs associated with the relocation of headquarters and restructuring. We expect the semiconductor-related business in the Precision Equipment Business and the Components Business to recover in the second half of the next fiscal year, but order environment is still unclear. In the FPD Lithography Systems Business, we expect the profit to improve, thanks to the expansion of high-resolution systems. In addition, we will begin a full-scale development of a new platform equipment series with the aim of significantly increasing our share in the market for ArF immersion lithography system for semiconductors, which is expected to continue to expand. Imaging Products Business remains strong and we will strive to expand sales of mirrorless in cameras, including the launch of new products in the next fiscal year. In the Healthcare Business and the Digital Manufacturing Business, which are expected to grow as orders are currently strong and we expect profits to increase in the next fiscal year. We appreciate our shareholders and investors for your continued understanding and support. Thank you for your kind attention. Q - :

Muneaki Tokunari: Good afternoon everyone. I am Muneaki Tokunari, President of Nikon Corporation. Thank you very much for taking time to join us today. I will explain the progress of our medium term management plan. Please look at Slide 3. The current medium term management plan spans a period of four years, and we now have 1.5 years to go. As stated at the bottom of the slide, our performance in areas other than the imaging products business, is behind our expectations in terms of earnings. The recovery in demand for semiconductor related business has been slower than expected, and the situation remains difficult. But we will work on measures to restore profitability, including self-help efforts from the second half of the year onwards. On the other hand, since I took office as President in April, I have also started to strengthen the management base, with the aim of achieving our Vision 2030, and we have already seen some results in our growth strategy. Today, I will report on these among others. First, I will explain the progress in each of the five business segments using Slide 4. For the figures shown on the left, I will rely on the presentation from Deputy CFO, Ohmura later and I will talk about the main business topics on the right. In imaging products business, we completed in April the acquisition of RED, a specialist manufacturer of cinema cameras, which will form the core of our future video strategy. In the components business, we have also begun restructuring of the former Industrial Metrology Business. We expect to incur one-time expenses of around ¥2.5 billion in the second half. But from next fiscal year onwards, we expect to see an improvement in operating profit of around mid ¥1 billion range. Slide 5 summarizes the progress we have made in building the management base for future growth. Among these in manufacturing, shown second from the bottom, a new headquarters building and innovation center was launched, which consolidate R&D functions and enable diverse work styles. A new building at Mito plant, which was built to expand production capacity in the components business was completed in August. Please move to Slide 6. This slide shows the progress of the five growth drivers, required to enhance future corporate value of Nikon, set out in the medium term management plan. Regarding the Contract Cell Manufacturing or CDMO for the healthcare business, the number of cell therapies moving from clinical trials, to commercialization has increased, and this has grown to become a business with close to ¥1 billion in operating profit for this fiscal year, we plan to grow it even further to make it into one of the future pillars of earnings. In the Precision Equipment Business, we have started developing digital lithography system for advanced packaging, which is expected to expand in line with the development of AI, and we plan to fully enter the back end process. Deputy CFO, Ohmura will explain these in more detail later. Please turn to Slide 7. In the basic policy on management that is conscious of cost of capital and stock price that, we announced in May 2023, we clarified our policy of dividends of ¥60 per share in the final year of the medium-term management plan, and additional share buyback of ¥30 billion, or more during its period. Based on this policy, on October 31, we announced that we would be buying back, in cancelled shares worth up to ¥30 billion, which is 8.7% of the total number of shares issued. Furthermore, in order to ensure that this share buyback will not affect growth investments, such as R&D and capital investments, we plan to use the proceeds from the sale of cross-shareholdings to fund this. As I said, we are currently challenged with our performance, but we will steadily promote the policies set out in our medium-term management plan such as improving our management base, and developing growth drivers with the aim of becoming a company that supports a society, where humans and machines co-create seamlessly expected to arrive in 2030. We ask you as shareholders and investors for continued understanding and support. Yasuhiro Ohmura: I am Yasuhiro Ohmura, Deputy CFO. I will explain the first half financial results and the full year forecast. First, the key points of the first half financial results. Revenue was ¥332.7 billion. Operating profit was ¥5.8 billion, and the profit attributable to owners of the parent was ¥2.9 billion, compared to the first half of the previous year, revenue increased by ¥1.5 billion. Although sales of semiconductor lithography systems and EUV related components decreased, sales of digital cameras and FPD lithography systems increased and together with weaker yen, the total revenue increased. As for profit, in addition to decreased revenue from semiconductor lithography systems and EUV rated components, one-off expenses for relocation of the Head Office pushed down profit, compared to the previous forecast announced in August. In addition to the downside, due to the postponement of sales of semiconductor related products, profit attributable to owners of parent was significantly behind, affected by exchange rate fluctuations, which caused the valuation of foreign currency denominated assets to fall due to ForEx conversion leading to increased ForEx losses, and losses on valuation of investment securities. Slide 10, shows the main consolidated figures for the first half that I just explained, and comparisons to the year before results and August forecasts. The free cash flow, which was deeply negative in the previous year has improved. This is because despite the costs related to the acquisition of RED and the new Head Office, operating cash flow turned significantly positive mainly due to increased advance payments received. Slide 11, shows consolidated revenue and profit and loss, for the three months from July to September. Operating cash flow for the second quarter was positive for the fourth consecutive quarter, and free cash flow was also positive at ¥7.8 billion. Slide 12 shows the results by segment for the first half. In the yellow boxes, the top row shows revenue and the bottom row shows operating profit for each segment. I will explain the details for each segment. First on the imaging products business, revenue increased by ¥14.1 billion year-on-year to ¥151.7 billion, and operating profit increased by ¥3.6 billion to ¥28.8 billion, due to strong sales of mirrorless cameras Z8 and Zf as well as the launch of the new Z6III. Sales volume of digital cameras interchangeable lens type, increased by 20,000 units year-on-year to 410,000, and interchangeable lenses increased by 40,000 to 650,000 units. The operating profit margin was 19% up year-on-year, partly due to the weaker yen. Compared to the previous forecast in August, operating profit was higher due to the weaker yen, improvements in the product mix and postponement of some expenses. Slide 14 shows the precision equipment business, revenue decreased by ¥14.5 billion year-on-year to ¥81.5 billion and operating profit decreased by ¥2.3 billion to ¥0.9 billion. In FPD lithography systems due to the recovery in the panel market, capital investments in high resolution panels increased and sales volume increased significantly from four units in the previous year to 16. On the other hand, sales volume of new semiconductor lithography systems fell significantly from 11 units in the previous year to four, due to the impact of customers cutting back on investments, and some installations being postponed to the second half. Overall, the precision equipment business dropped in both revenue and profit, as the increased sales in FPD lithography systems, was unable to offset the decline in sales of semiconductor lithography systems. The previous August forecast was missed, because the completion of installation of some systems already delivered, has been postponed to the second half. Slide 15 shows the healthcare business, revenue increased by ¥3.9 billion year-on-year to ¥55.1 billion in the second quarter. Sales of eye care solutions grew particularly in Europe, and revenue increased in the first half even when excluding the effects of the weaker yen. Operating profit on the other hand, decreased by ¥1.4 billion year-on-year to ¥1.3 billion, due to an increase in upfront investments such as R&D expenses. Slide 16 shows the components business, due to the impact of the delayed recovery in the semiconductor and factory automation markets, sales of EUV-related components and encoders decreased, and both revenue and profit decreased year-on-year. In addition, due to the delay in the market recovery, the business environment in the second quarter remained challenging, and demand did not recover. The previous forecast in August was missed, due to postponed sales of EUV-related components and reduced sales of encoders. Slide 17, shows the Digital Manufacturing Business, sales increased significantly by 42% year-on-year, due to strong sales of NXG series large format metal 3D printers from SLM Solutions. In addition to the increased revenue at SLM Solutions, the disappearance of one-time costs of restructuring recorded in the previous year, as well as the cost reductions also contributed to reduction in the operating loss. Next I will explain the full year forecast. We have revised down our revenue forecast by ¥25 billion to ¥725 billion, due to the postponement of customer investments, which has shifted sales of related products in the semiconductor, lithography and components business into the next fiscal year or later. Operating profit has been revised downward, by ¥13 billion to ¥22 billion, with the imaging product business revised upward by ¥2 billion, while precision equipment, healthcare and components businesses being revised downward by ¥6 billion, ¥2 billion and ¥9 billion respectively. The forecast for profit attributable to owners of parent has been revised downward, by ¥14 billion to ¥16 billion, but with regard to shareholder returns, the interim dividend will be ¥25 per share, and the annual dividend will be increased by ¥5 yen to ¥55 per share, as previously forecasted. In addition, as President Tokunari said earlier, we will perform share buyback up to a maximum of ¥30 billion. The exchange rates for the second half are unchanged from the previous forecast, at ¥145 to the dollar and ¥155 yen to the euro. Slide 20 shows the changes in the operating profit forecast from the announcement in August. The main factor behind the downward revision was a ¥12.5 billion decrease in revenue, due to postponed sales in the precision equipment and the components businesses. In addition, there was a total of ¥3.5 billion one-time costs for the restructuring of the former Industrial Metrology Business, which is included in the Components Business and for the Healthcare Business. Please refer to Slide 21. The main figures for the full year forecast, are shown in a table including year-on-year and previous forecast comparisons. The overview has already been explained. Slide 22 shows a list of full year forecasts by segment, including year-on-year and previous forecast comparisons. I will explain the details for each segment. First, the Imaging Products Business. The forecast for revenue remains unchanged from August at ¥305 billion. We plan to launch Z50II this month following the Z6III in June, leveraging the cutting edge functions of Z9, we will continue to strengthen our mirrorless camera product lineup. We have raised our operating profit forecast by ¥2 billion from August, based on the first half results. Compared to the previous year, we expect to see an increase in operating profit of ¥0.5 billion to ¥47 billion, due to an increase in profit from the expansion of the strong mirrorless camera business, offsetting the expected increase in expenses such as acquisition-related costs for RED, which we acquired in April and R&D costs. Slide 24, shows the forecast for the Precision Equipment Business. Please look at the bottom left. Due to the delay in the market recovery, some customers have postponed their investments resulting in the postponement of delivery and sales volume of semiconductor lithography system, is expected to decrease by seven units to 28. In addition, the sales volume of FPD lithography systems is expected to be 38 units, as installation of one unit will be delayed until the next fiscal year. Affecting these changes in sales volume, we have lowered our revenue forecast by ¥20 billion from August to ¥195 billion. Compared to the previous year, while we expect a significant increase in sales of FPD lithography systems for high resolution panels, this will not be enough to offset the decrease in sales of ArF lithography systems, and the revenue of the entire precision equipment business will decrease. Operating profit has been revised down by ¥6 billion from the forecast in August to ¥9 billion, due to declined revenue. Please refer to Slide 25. I'd like to briefly discuss the digital lithography system, for advanced semiconductor packaging applications that we announced last month. Our digital lithography systems will respond to the increasing sophistication and diversification of semiconductors, due to the progress of AI. We plan to launch this product in fiscal year 2026, targeting the large scale chiplet market for data centers, where the miniaturization of wiring patterns and the increase in package size are progressing by combining the digital lithography technology, high resolution technology for semiconductor lithography systems that we have developed to-date, and high productivity of the multi-projection lens technology, for FPD lithography systems. Please turn to Slide 26. I will now explain the healthcare business. In Life Science Solutions, we are concerned about the impact on the revenue of persistently high interest rates in the U.S., and economic downturn in China, but we aim to achieve our forecast by developing the private sector market, and strengthening our drug discovery support services. In Eye Care Solutions, we expect to see year-on-year revenue growth, due to demand from optometrist and major chains in Europe and U.S. Operating profit is expected to be ¥2 billion lower than the August forecast, due to lower than expected sales in Life Science Solutions, caused by the delay in the market recovery an additional ¥1 billion in one-time expenses related to Eye Care Solutions. Revenue from Contract Cell Manufacturing, is expected to increase year-on-year, due to expanded orders. As the third pillar of the healthcare business, it has entered a stage of sustained profit contribution. Please refer to Slide 27. I will give a brief introduction to our Contract Cell Manufacturing business. Nikon CeLL innovation, a wholly-owned subsidiary, started its business in 2015 through a strategic alliance with Lonza, the world's largest contract manufacturer, and has grown into Japan's largest regenerative medicine CDMO. In the area of contract manufacturing of cell therapies utilizing living cells, we already have around 10 projects underway either in commercialization, or clinical trials with revenue in several billions of yen, and operating profit close to ¥1 billion, and we expect further increases in both revenue and profit in the next fiscal year. Slide 28 shows the components business, although there are signs of a bottoming out in some areas of the semiconductor and factory automation markets, we do not expect to see the kind of recovery in demand that we had initially projected, due to the customers postponing their investments In the semiconductor rated field, sales of EUV rated components have been delayed, and sales of video measuring systems used in back end processes have decreased, and sales of encoders for factory automation are expected to decrease. In light of this, we have lowered our revenue forecast by ¥7 billion from August to ¥78 billion. On the other hand, sales of large X-ray systems for the aerospace industry are progressing steadily and we are also steadily winning orders, for semiconductor-related optical components by adding customers. Operating profit has been revised down, by ¥9 billion from August to ¥8 billion, due to the impact of the decrease in revenue and the recognition of ¥2.5 billion in restructuring-related expenses in the former industrial meteorology business, which is now included in the components business. The Industrial Solutions Business unit, newly established this fiscal year, has decided to implement restructurings of the former Industrial Metrology Business that has been integrated into the business unit, such as the transfer of the 3D laser scanner business, and headcount reduction in order to optimize the organization by reviewing the strategies, by product and by region. We will implement the necessary measures during this fiscal year, and expect to see an improvement in operating profit from the next fiscal year onwards. Slide 29 shows the digital manufacturing business, both revenue and operating profit remain unchanged from the previous forecast in August, due to increased demand in the aerospace and defense industries, orders and sales are progressing steadily, centered on the NXG series of large format metal 3D printers from SLM Solutions. This fiscal year we aim to turn SLM Solutions profitable, on a standalone full year EBITDA basis. There is no change to our policy of aiming for operating level profitability on an SLM Solutions standalone basis in the next fiscal year, and to turn profitable for the entire digital manufacturing business in March 2027. That concludes my explanation. In summary, the first half saw results fall short of expectations, due to postponement in semiconductor lithography systems and EUV rated components. The full year forecast has been revised down by ¥25 billion to ¥725 billion in revenue, and by ¥13 billion to ¥22 billion in operating profit. Although it is still difficult to predict the investment trends of semiconductor-related customers, or the recovery of demand for related products, we will continue to minimize the impact of market deterioration by making timely, and appropriate resource investments through close communication with customers, and we will also strive not to miss the timing of the market recovery. In addition, we will implement necessary measures such as restructuring of the former Industrial Metrology business quickly, and aim to further expand growth drivers through efficient R&D investments, leading to a recovery in business performance from the next fiscal year onwards. We'd like to ask for your continued understanding and support, from shareholders and investors. Thank you for your attention. Q - :

Muneaki Tokunari: Good afternoon dear participants. This is Tokunari present. I would like to thank you for your precious time out of your busy schedule to attend Nikon's Financial Results Briefing. I'm pleased to cover the financial results for the previous fiscal year as well as the forecast for the current fiscal year. In the previous fiscal year, revenue was ¥717.2 billion, operating profit was ¥39.7 billion, and profit attributable to owners of parent was ¥32.5 billion. Revenue grew, but profit declined year-on-year. By segment, except for the Components business, we grew in all the businesses in revenue, but the profit went down in all the businesses, except for the strong Imaging Products business. Annual dividend is ¥50 as we had forecasted. The top of the slide shows the revenue and the profit items, which I have just explained. As for the free cash flow in the center of the table, the deficit has been improved more than ¥100 billion since last year. Behind this one, first, the improved operating cash flow as well as the sale of the cross-shareholdings. Slide 5 shows the actual performance by segment. Far right hand, changed from the previous forecast we made in February, except for the Healthcare business and the Digital Manufacturing business, where we had one-time cars, we were able to go above the plan. From now on, I would like to mainly explain year-on-year changes. First, the Imaging Products business. The market here expanded, particularly in China. New Mirrorless product, Z 8 and Z F remained firm [ph] in sales, both camera bodies and lenses grew in sales volume. ASP or average selling price also rose with the help of exchange rates, both revenue and profit grew substantially. Operating profit being 16.6% landed at a high level following the previous year. Slide 7 shows the Precision Equipment business. Revenue grew in the overall Precision Equipment business as higher sales volumes in the main ArF lithography systems for semiconductors outweighed a decline in FPD lithography system sales volume due to the restrained capital expenditure at the customer side. Operating profit was down due to the big impact coming from the decline in the FPD lithography systems revenue and service revenue. In the Healthcare business, Life Science Solutions [Indiscernible] around the microscopes and contract cell manufacturing contributed to the growth in revenue. We made the progress developed in the private sector market and delivering solutions for drug discovery support in Life Science Solutions. Operating profit declined on top of the one-time cost of ¥4.1 billion incurred. Procurement cost increased and we had to make R&D and other advanced investments. The one-time costs were primarily in Eye Care Solutions, mainly for retinal cameras. We booked a provision and related sub expenses as well as the disposal and write-down of inventories. Slide 9 shows the Components business. EUV-related components and optical parts declined in sales due to the postponed capital expenditures and the lower utilization rates by semiconductor device makers. In quarter sales for robust declined due to the standard demand and the factory automation market, Photomask substrates for FPD decline in sales due to the panel market stagnation. Operating profit also went down. The last segment is the Digital Manufacturing business. This segment consists of the Industrial Metrology business and Advanced Manufacturing business, or ADM. Revenue grew, thanks to the full year base contribution by SLM Solutions in Germany, which became our consolidated affiliate. For your further information, on a standalone basis, SLM revenue was up by 15% year-on-year. This was a record high number. But operating loss expanded year-on-year. In the ADM business, though SLM made its first operating profit in the fourth quarter, but due to the intangible asset amortization cost for the SLM acquisition and increased cost, launching a base of operations in the U.S., the loss grew larger. The industrial metrology business turnout will be bigger negative results. On top of the sluggish sales, we had to bear one-time costs, including impairment of development assets and disposal and write-down of inventories due to the rationalization of unprofitable products. Next, allow me to explain our forecast for the current fiscal year. As shown in the bottom of the slide, our assumption for the exchange rates are ¥145 to the U.S. dollar and ¥155 to the euro. As for the full year forecast, revenue is ¥745 billion. Operating profit is ¥35 billion and profit attributable to owners of parent being ¥30 billion, we are expecting a growth in revenue but decline in profit. The revenue growth is coming from the firm Imaging Products business as well as the expansion in the Healthcare business and the Digital Manufacturing business, whereas we are expecting a drop in the profit and depression equipment business and the Components business due to the postponed investments at Samsung conductor [ph] customers. Operating profit, though we are forecasting growth in revenue for the five business segments as a whole in our main business areas. But due to the one-time cost of about ¥5 billion for the reallocation of the new headquarters as well as the increased corporate expenses coming from the IT-related investments, we are forecasting a drop in profit. As for the dividend per share, we can expect a profit larger than the previous fiscal year. If we are to exclude the one-time cost of the relocations of the new headquarters, so we are assuming the dividend being ¥55, up ¥5. Now, please refer to Slide 13. This shows the financial highlights forecast for the current fiscal year, including the changes year-on-year basis. Now, allow me to explain our shareholder returns policy here on Slide 14. We are increasing our dividend step-by-step, targeting at the annual dividend of ¥60 for the fiscal year ending March 2026, and there is no change as for our plan to execute share buybacks of ¥30 billion or higher during the medium-term management plan. We are working on sales of cross-shareholdings given us resource buybacks. In the previous fiscal year, we sold a total of 22 issues with a total value of ¥16.6 billion. Next, allow me to explain the revision of business segment to be disclosed for the current fiscal year. In the current fiscal year, we have integrated the Digital Solutions business and the Industrial Metrology business, which are having similar customer segments into the Industrial Solutions business we have newly created. It will be disclosed as a part of the Components business. Slide 16 shows our forecast for the current fiscal year based on this new segment disclosure. I will explain the five segments one by one using the following slides. First, on the Imaging Products business. As shown on the bottom left, we are forecasting the market size of the digital camera interchangeable lens type being 6.1 million level. While a low-end model market may become smaller, but we believe high-end cameras for professionals and hobbyists are expected to continue to expand. Nikon continues to focus on mid high-end cameras and with the mirrorless lineup expanding, we'll go for 850,000 units of camera bodies up 50,000 year-on-year. And as for Lens, we will go for 1.35 million units, up 100,000 year-on-year. We completed our acquisition of RED on April 8th, a major cinema camera manufacturer and highly appreciated in Hollywood. We will co-develop unique products and intend to expand our business opportunities in this fast-growing professional video camera market. We expect to achieve and recover the ¥300 billion level revenue for the current fiscal year. Operating profit is expected to drop due to the RED acquisition costs and increased R&D expenses, but we expect to achieve about 15% in operating margin. So, the Imaging Products business is here to enjoy a continuing firm business. Next will explain the Precision Equipment business. As shown on the bottom left, FPD lithography systems are expected to grow dramatically from 16 units in the previous year to 39 units. Investments into new IT panels are increasing, and the demand for lithography system for high-resolution panels is expanding where Nikon excels. We expect to overcome reduction in the semiconductor lithography systems by having a strong FPD and services revenue. Operating profit for the entire business is expected to be ¥15 billion, the same level as the previous year. Slide 19 shows the Healthcare business. Revenue is expected to grow in all the businesses, Life Science, health Care, and the Contract Cell Manufacturing. Operating profit is expected to be ¥11 billion, thanks to the expected increase in sales as well as the reduction of one-time costs we had in the previous year for Eye Care Solutions related business. Slide 20 shows the Components business. We are a project and a decline in sales of EUV-related and optical components due to later than expected recovery in demand. We also expect to have a slight decline in revenue for the entire business. As for operating profit, we expect it to grow due to the disappearance of about ¥2 billion and one-time cost we had in the previous fiscal year, including impairment in the Industrial Solutions business. Lastly, allow me to explain the Digital Manufacturing business. Starting from the current fiscal year, we are only disclosing in this segment, ADM or Advanced Manufacturing business. SLM Solutions, we have acquired is expected to grow in revenue, thanks to the firm orders for large format metal 3D printer NXC series. In the last fiscal year, SLM's annual orders booked grew 40% year-on-year, a record high. As of end of March 2024, the order backlog had grown to ¥10 billion level. With these effects of the increased revenue and the one-time cost in the previous fiscal year gone, the size of the operating loss is expected to contract without fail. In the current fiscal year, SLM aims to turn profitable on its own based on full year EBITDA. For the next fiscal year, SLM will aim to produce its operating profit on its own. And in the following year, FY 2027 March, will go for a profit for the entire AMD business. So, there is no change as for this policy. Now, finally, allow me to make a summary. In the last fiscal year, we grew in revenue but declined in profit. The Imaging Products business enjoyed a continued good business, but due to the slowdown of the markets in other businesses as well as the one-time costs incurred, our profit declined. As for the current fiscal year, we expect to have a firm performance in the Imaging Products, the Healthcare and Digital Manufacturing business. So, we expect it to grow revenues. As for operating profit, if we exclude the one-time costs related was the new headquarters, it is expected to go above the previous level. And one year later, as the next fiscal year is going to be the last year of the medium term management plan, we have our target of ¥70 billion for our operating profit. In regard to our forecast for the next fiscal year and the progress of the medium-term management plan, Chairman and CEO, Umatate, will explain after me. I became President in April, and I intend to further expand our shareholder returns as short as possible, and I will further improve our management fundamentals so that we Nikon can truly enjoy our sustainable growth moving into 2030 and beyond. So, I would like to ask -- for your continuing support and understanding with our investors and analysts. Toshikazu Umatate: This is Umatate, CEO. I would like to thank you for your precious time despite your busy schedule. I would like to explain the progress we are making in our medium-term management plan. Please go to Slide 2. The current medium-term margin plan has a scope of four years, and we have just reached the halfway point. However, as stated in the upper half of the document, there are no changes as for the overall framework, such as Vision 2030, financial targets, and others. However, we have reviewed our revenue structure in light of the changes in our business environment. To be more specifically, while we are to go for the upside revenue opportunities in quality of life domains such as the Imaging and Healthcare, we decided to revise down our revenue plan for the industry domains, such as the Precision Equipment. In our journey to realize Vision 2030, we are reviewing growth investments, while constraining M&A investments will expand our investments for organic growth and strengthen the management fundamentals -- this is the overall depiction of the progress in the medium-term margin plan. Now, allow me to go to the following slides to expand on details. As shown on the left-hand side of Slide 3, the first two years of the midterm plan, we continue to grow revenue. And as of FY 2023, we were able to achieve the revenue of ¥700 billion, our target in the final year of the midterm plan, two years ahead of the plan. Particularly, the Imaging Products business and the Healthcare business and the SLM Solutions in Germany, which we made our wholly-owned subsidiary during FY 2022 contributed to the growth in revenue. The bar graph on the right shows our revised capital allocation. While strategic investments including M&A are now down by ¥110 billion compared to the original plan, we now increased R&D to ¥20 billion and capital expenditures to ¥60 billion. We are going to go for our organic growth. At the same time, we will focus on shareholder returns. We are now planning to implement additional share buybacks as much as ¥30 billion or more. Now please refer to Slide 4. This shows the change in operating profit during the midterm plan. For FY 2023, operating profit was ¥39.7 billion. For FY 2024, if we exclude the costs associated with the relocation of the new headquarters, we can expect to have about ¥40 billion in operating profit. From FY 2024 to FY 2025, as shown in the right-hand side of the material, we can expect to maintain high earnings in the Imaging business with new products, and we can also expect to improve earnings in other businesses. In the Healthcare business, one-time costs will be eliminated. In the Precision Equipment business, FPD will expand its share. In the Components business, profit will improve driven by semiconductor market recovery. In the Digital Manufacturing business, loss is attributed to be reduced. So, we are now aiming at ¥70 billion in operating profit for FY 2025. Slide 5 shows the financial targets in the five businesses. This graph shows revenue horizontally and operating margin vertically and the size of the circle indicates the operating profit in the Japanese yen. The dotted circles are the FY 2025 targets when the original midterm plan was made. The colored circles show the FY 2025 target as of today. The two major businesses shown on the right, Precision Equipment will stably secure ¥25 billion, thanks to the diversified customers. Imaging Products is planning to maintain ¥40 billion level in profit by launching competitive products and acquiring new customers, including young generation. As for the three strategic businesses on the left, Healthcare business and Components business with its high operating margin, will firmly expand its profit. Digital Manufacturing business will reduce its loss and aim to generate profit in FY 2026. Now, allow me to expand on the initiatives in order to expand earnings. I will use two more slides to briefly explain business-by-business, how to increase customer acquisition, and expand value proposition. In the Imaging business, we will make efforts to expand new customers, particularly the young generation will also apply Z 9's advanced features to other camera bodies. We'll make a -- RED in the U.S. to become our fully-owned subsidiary. RED has unique customers and technologies and the professional video domain. We will strengthen our video capabilities. Healthcare. In order to further explore the private sector market, we'll expand system microscopes and applications. Now, please go to Slide 7. Precision Equipment. Here, the policy is to launch highly productive new products so that we can further grow FPD sales and expand our semiconductor customers. Components, with the integration of the former Industrial Metrology business, now for collaboration, we will run together with our customers, particularly in overseas in order to expand earnings opportunities. Digital Manufacturing, by expanding the sales of large-format metal 3D printers, we plan to fully enter defense and aerospace markets. Now, please refer to Slide 8. In order to support such business expansion on the mid to long-term basis, we believe we need to strengthen the business fundamentals. Human capital management and sustainability and strategy shown on the left, will make steady efforts to further improve them. Right side shows investment into DX and manufacturing as well as our efforts to further improve group management. Details are shown on Slide 20. We have asked Mr. Hiruta, independent external Director to be appointed as the Chairman of the Board to further improve our governance capabilities. Slide 9 summarizes the points I talked about today. In our medium-term margin plan, Nikon will actively invest into promotion of sustainability strategy and sustainable growth. We will strengthen human capital management, manufacturing and DX, and we will deploy our core technologies into promising markets. Where we'll be in 2025? We will try to become an entity providing products and services, optimized to meet our customer needs. Furthermore, we Nikon have Vision 2030. We'd like to become a key technology solutions company to support the global society where humans and machines co-create seamlessly. Through our business activities, Nikon would like to make its contribution to realize a sustainable society. Nikon would like to realize sustainable corporate values and would like to meet with expectations of the entire stakeholders. We can ask for your continuing support. I would like to thank you for your kind attention. End of Q&A:

Muneaki Tokunari: Good afternoon. This is Tokunari CFO. I would like to thank you for your precious time despite your busy schedule to attend our financial results briefing. I will explain the financial results for the third quarter of the year ending March 31, 2024, as well as our forecast for the full fiscal year 2024. The top half shows the summary of Q1, Q2, Q3 cumulative results and the bottom half shows the summary of Q3 alone. From Q1 to Q3 cumulative actuals for the nine months from April to December, year-on-year basis, though revenue increased but operating profit declined. As shown in the bottom half, as for Q3 alone, namely October through December, just like Q1 to Q3 cumulative basis, revenue went up but operating profit went down year-on-year. Slide 4 shows the cumulative numbers from the first to the third quarter of the year. As shown in the yellow layers, though operating profit and profit attributable to Owners of Parent went down year-on-year, free cash flow improved significantly. This was driven by the improved working capital and the sale of investment securities, etcetera, resulting in the positive free cash flow for Q3 alone. Over the past six quarters, we continued a negative free cash flow due to the M&A we had in order to expand our business operations as well as the increased inventory. We intend to conduct our business operations while keeping an eye on the free cash flow. Slide 5 shows the cumulative results from Q1 to Q3 by segment. Though we enjoyed growth in revenue in all the segments except for the component business, in terms of operating profit, only the imaging products business shows the growth year-on-year. Going to page 6 and onward, I will now explain each segment Q1 to Q3 year-to-date, starting with the imaging products business. First, in the imaging products business, revenue was ¥221.9 billion, up ¥37.5 billion year-on-year. Operating profit became ¥42.9 billion, up ¥1.7 billion year-on-year. Sales of mirrorless cameras, mainly Z8 and ZF and interchangeable lens mirrorless cameras grew firmly. We also made efforts in shifting to mid-to-high-end cameras for professionals and hobbies, which resulted in high ASP. Cheaper yen also contributed. Here now I would like to further explain looking into the third quarter results from October to December compared with the plan. In October through December, digital camera interchangeable lens type grew 19% and interchangeable lens grew 16% year-on-year, almost hitting the plan. As for operating profit, partly thanks to the cheaper yen as tailwind, we went above the plan. We achieved 20% plus operating profit, just like the third quarter last year. Thanks to our strategy making shift to professionals and hobbies market and mid-to-high-end cameras, this imaging products business remains as our major source of revenue for Nikon as a whole. Next, the Precision Equipment business. Revenue was up ¥21 billion, becoming ¥154.5 billion year-on-year. Operating profit down ¥3.2 billion, becoming ¥11.1 billion. Semiconductor lithography systems, driven mainly by our major ARF lithography systems, we sold 22 new systems, up 8 units from the previous year. As for FPD Lithography Systems, the units went down by 8 from the previous year, remaining at 11 units. For the entire Precision Equipment business, the ARF lithography systems grew in sales, but it was not good enough to overcome the profit decline in the profitable service business and FPD business. For your information, in this third quarter, we were able to sell 3 new FPD lithography systems for Gen 10.5. Though we had already shipped these 3 units to the customer, but due to the situation on the side of the customer, the revenue generation had been postponed. But this time, we were able to book the revenue meeting with the accounting requirements. Slide 8 on the Healthcare Business revenue was ¥76.8 billion, up ¥4.7 billion year-on-year. Operating profit was ¥2.9 billion down ¥4.3 billion year-on-year. Revenue grew on the increased sales in North America and China in life science solutions on top of the cheaper yen effect. Operating profit declined due to the higher parts prices and new one-time costs such as disposal and write-down of inventory. Now allow me to expand on this one-time cost. Disposal and write-down of inventory was as much as ¥1 billion. We had to pay our lawyers to address the reserves for the retinal diagnostic imaging system, which we booked during the second quarter, as well as the technology survey costing us about ¥500 million. We booked those provisions in the third quarter. Slide 9 shows the component business. Revenue was ¥32.3 billion. Operating profit was ¥11.6 billion. Both revenue and profit went down. In the semiconductor business, EUV-related components were almost the same level of the last year, but we were affected by lower utilization rates among the semiconductor device manufacturers, optical parts, and other consumables declined in sales. Non-semiconductor customized products and encoders declined also in sales. But October through December Q3 alone, the results were almost in line with the plan. Now slide 10 on the digital manufacturing business. This segment consists of industrial metrology business and the newly established advanced manufacturing business or ADM business. In the ADM business, revenues were up ¥14.9 billion year-on-year, thanks to the sales contribution by SLM, our newly consolidated affiliate in Germany. Operating profit deteriorated further by ¥9 billion since last year due to the operating loss by SLM, as well as the amortization of the non-tangible assets and upfront investment for the industrial metrology business, as well as increased costs driven by the cheaper yen. But on the quarterly basis, the deficit size is now showing the trend of becoming smaller. Operating loss for the third quarter declined by ¥1.5 billion from the second quarter. Next, I would like to go through the forecast for the full year. For the full year forecast, revenue for the precision equipment business is revised up ¥13 billion, healthcare business is revised up ¥2 billion, so the company total forecast is now ¥705 billion. On the operating profit side, the imaging products are revised up ¥1 billion, the precision equipment business is now revised up ¥4 billion, but healthcare business revised down ¥3 billion. Company total forecast for operating profit is now revised up ¥2 billion to ¥36 billion. Profit attributable to owners or parent remains at¥ 27 billion. Annual dividend forecast is ¥50 per share, unchanged from the previous forecast. As for our exchange rate assumption for the fourth quarter, ¥140 for the U.S. dollar and ¥150 for the euro, unchanged from the previous forecast. Now please go to slide 13. This shows the financial highlights for the full year forecast, indicating changes from the previous year, as well as the previous forecast. I have already explained the highlights. Slide 14 shows our full year forecast by segment, showing changes from the previous year, as well as the previous forecast. I will go through details by segment. First, the imaging products business. Please refer to the bottom left. As for the digital camera market scale as a whole, in light of the latest trend, we revised down from our November forecast. Digital camera interchangeable lens type, 6.1 million units, down 200,000 units from the previous forecast. Interchangeable lens, 9.8 million units, down 200,000 units. But as for Nikon, DCIL are 800,000 units. Interchangeable lens, 1,250,000 units. So no changes here. Though the market expansion pace is slowing down, we believe Nikon cameras and the lenses continue to enjoy a firm sales going forward. Revenue remains the same as been ¥275 billion, no change from the last forecast. Year-on-year basis, on top of the higher sales volume, higher ASP would contribute to the growth of 21% in revenue. As for the full year operating profit, in light of the third quarter actual performance, we have now revised up to ¥44 billion, up ¥1 billion from the previous forecast. It is going to be up ¥1.8 billion in profit year-on-year. Slide 16 shows the precision equipment business. First, please look at the bottom left. The FPD lithography systems, which is the addition of the three units of the Gen 10.5 booked in the third quarter, our full year forecast is now 16 units. As for the semiconductor lithography systems, 30 new systems, no change from the previous forecast. But the installation of the refurbished systems already delivered is to be postponed till the next fiscal year due to the customer situation. So we expect refurbished units will be 12 down 4 units. With these changes units as well as the effect of the cheaper Japanese yen in the third quarter, our revenue forecast is now revised up by ¥13 billion from our November forecast, becoming ¥213 billion. As for operating profit, thanks to the growth in revenue, is now revised up ¥4 billion from November forecast to ¥12 billion. Next, please go to slide 17. Here now I would like to explain the healthcare business. Reflecting the cheaper yen impact in the third quarter, we revised up our revenue forecast to ¥105 billion, up ¥2 billion. We expect particularly the life science solutions would grow in revenue year-on-year. We revised down our operating profit forecast ¥3 billion to ¥6.5 billion due to the one-time cost for the provision booked in Q3 and eye care solutions. Profit in the third quarter declined significantly due to the one-time cost. But we believe operating profit in the fourth quarter should be reaching the same level of the last year because the one-time cost will be reduced significantly in the fourth quarter. The healthcare business so far enjoyed a smooth growth in revenue and operating profit, but in the current fiscal year, we had unexpected one-time expenses such as eye care. Though the revenue would grow, we expect profit would decline. As for the next fiscal year, though we are still working on the budget, we believe the healthcare business will grow firmly. Slide 18 shows the forecasting for the component business. No change from the previous forecast both in revenue and operating profit. Looking at the trends of the semiconductor-related customers, there are almost no changes from the previous forecast we made back in November. We believe the fourth quarter would go as we planned. Now the last slide 19, this is the Digital Manufacturing business. There are no changes from the previous forecast both in revenue and operating profit. We are going to have some revenue coming from the third quarter both in the industrial metrology business and ADM business. So revenue in the fourth quarter is expected to grow compared with the third quarter. As for SLM, in the current fiscal year, we completed to make the company as our 100% owned subsidiary. Its orders received in the third quarter made a record high on the quarterly basis. So its business is expanding rather smoothly and there is no change as to our plan to go for profit in revenue for SLM on a non-consolidated basis in fiscal year 2025. That's all I plan to explain today but if I may now like to make my brief summary. In the third quarter, we are able to hit back the decline we had in the healthcare business thanks to the higher than planned performance in the imaging products business and in the precision equipment business. We are able to produce ¥34.4 billion in operating profit on a cumulative basis going above the planned ¥34 billion for the full year operating profit forecast. As for the fourth quarter, due to the smaller contributions to profit from the imaging products business and the precision equipment business, for the full year forecast, we are rising up to ¥36 billion up ¥2 billion. Currently, we are still working on the budget for the next fiscal year FY24. So today, I simply cannot say anything definitive. That said though, the imaging business is quite firm. The healthcare business will not have the one-time costs we had this year. We can also expect that the digital manufacturing business will have smaller loss. So we can expect to have those positive factors. At the same time, we have to assume to bear on some one-time costs as well as IT investment we need to make due to the relocation of the headquarters. So with these points considered, in May when we announce the final performance, we plan to explain not only the next fiscal year's business forecast but also we plan to look back our medium-term margin plan with the two years past and to explain our future policy. I would like to ask for your continued support and understanding with our important investors. Thank you indeed for your kind attention. End of Q&A:

Toshikazu Umatate: I am Umatate, Representative Director and the President of Nikon. Thank you very much for taking time out of your busy schedule to join us today for our earnings call. I will discuss the current business situation and the specific progress of our growth strategy. In April last year, we set out our vision 2030 as a key technology company in a global society, where humans and machines co-create seamlessly. In the first half of the major term management plan, which runs through fiscal 2025, we aim to grow our business and increase our corporate value by becoming a company that provides products and services optimized to meet our customer needs. This year, in the second year of the medium term management plan, the external environment is becoming more challenging as the FPD business is at the bottom and the semiconductor market remains sluggish for a prolonged period. We have revised downward our operating profit forecast to JPY34 billion from the OP number we shared in August. On the other hand, we made upward revision of our revenue forecast to JPY690 billion, partly due to a weaker yen. Although not shown on this slide, we have increased our first half dividend JPY5 year-on-year to JPY25 and maintained our full year dividend forecast of JPY50, which is no change from our original forecast. Our CFO, Mr. Tokunari, will explain the details of the numbers later. Although earnings are stagnant this fiscal year, we are making steady progress with our strategic development in line with our plan. This slide shows a very brief summary of our progress in the first half, the two businesses in quality of life and three businesses in industry. Both imaging products business and healthcare business in the quality of life segment are progressing well. In the Imaging Products business, we expect to achieve better earnings than last year by rolling out mirrorless cameras with cutting-edge features such as the Z8 and the ZF, and continue to expand the lineup of interchangeable lenses, including super-telephoto lenses and other high-value added products. In the Healthcare business, we are making steady progress in expanding our lineup of digital microscopes that support life science research and medical practices, as well as services related to drug discovery support services for pharmaceutical companies and bio ventures. Next, in the industry, the precision equipment and the component businesses are facing more difficult environment than previously expected, due to the sluggish semiconductor market. The precision equipment business created with FPD lithography business unit and semiconductor lithography business unit combined in April this year. We will respond to changes in the business environment by horizontally integrating each function and revitalizing the organization. The component business has been affected by the current semiconductor market conditions, but we are making steady progress in developing new customers and our long-term growth story remains unchanged. In the digital manufacturing business, we established the advanced manufacturing business and established the division's headquarters in the United States. A first headquarter in the United States for Nikon to promote the full expansion of the materials processing business. In September, we made SLM Solutions of Germany, a wholly owned subsidiary, laying the groundwork for business development in Japan, the U.S. and Europe. As you can see at the bottom of this page, we recognize the post-acquisition integration of overseas subsidiaries is an important management focus, and we will continue to improve and strengthen our management and control system. As I mentioned earlier, in the second year of the medium-term management plan, we expect a decline in profit year-on-year. While the overall performance is within assumptions of the mid-term management plan, there are some variations by segment. The imaging product business significantly exceeds the plan, but the semiconductor related businesses are progressing slower than expected. We are currently reviewing our plans for each segment and will present new numerical targets for the second half of the mid-term management plan in the spring of this year. Nikon is committed to generating diverse revenues from common core of optical and precision technology and to responding to risks in order to achieve sustainable growth. We look forward to your continued understanding and support. Now, our CFO, Mr. Tokunari, will now explain the first half financial results and outlook for the full year. Thank you very much for your attention. Muneaki Tokunari : Good afternoon, everyone. I am Tokunari, CFO. Nice to meet you all. I would like to discuss the first half results and the outlook for the full year. Firstly, the highlights of the first half results. Revenue was JPY331.2 billion. Operating profit was JPY13.6 billion and profit attributable to owners of parent was JPY9.8 billion. Revenue increased by JPY42.9 billion compared to the same period previous year. Revenue grew on the strong business of the digital cameras and ArF lithography systems for semiconductors with additional revenue of newly consolidated subsidiary metal 3D printer manufacturer SLM Solutions. On the other hand, OP and profit attributable to owners of parent decreased due to the lower revenue in the highly profitable FPD lithography systems and the components businesses, with high expenses resulting from the SLM acquisition. Compared with the forecast announced in August, revenue increased by JPY6.2 billion, partly due to the cheaper yen, but OP and products attributable to owners of parent decreased, partly due to provisions in the Healthcare business and expenses related to the structural reform of Morf3D in the digital manufacturing business. Slide nine shows the consolidated financial highlights for the first half of this year compared to the same period last year, and the previous forecast we made in August. Please take a look at slide 10. It shows the segment results for the first half. In the yellow line box for each segment, the upper row is revenue and the bottom row is operating profit. Compared to last year, revenue and profit increased in the imaging products business, while our profits decreased in other four businesses. Slide 11 shows the consolidated revenue and profit and loss for the three months from July to September. If you look at just the three months, both revenue and profit increased compared to the same period previous year. This was due to the increased revenue and profit in the imaging products business and the precision equipment business. I will now explain the first half results of each segment, starting with the imaging products business. Imaging products business revenue increased by JPY23.1 billion year-on-year to JPY137.6 billion, and operating profit increased by JPY3 billion to JPY25.2 billion. Revenue of our mirrorless cameras and lenses for mirrorless cameras was strong, led by Z8 launched in May of this year. The average selling price of both bodies and lenses were up due to a focus on mid to high-end models and the weaker yen also contributed to a 20% year-on-year increase in revenue. In addition, the operating profit margin exceeded 18%. Slide 13 shows the precision equipment business. Revenue increased by JPY12.7 billion year-on-year to JPY96 billion, yet operating profit decreased JPY3 billion to JPY3.2 billion. Revenue of new equipment totaled 11 units, out of which 9 were ArF lithography systems, a significant increase from the 2 units last year. This shows we are making steady progress in expanding our customer base. On the other hand, service revenue decreased due to lower utilization rates of semiconductor device customers. In addition, revenue of FPD lithography systems decreased significantly to 4 units from 13 units in the previous year, as this fiscal year makes the bottom of the business cycle for FPDs, such as LCD panels. In the precision equipment business as a whole, the revenue increase of ArF lithography systems could not offset the decline in the highly profitable services business and FPDs, resulting in a year-on-year decline in the profit despite an increase in revenue. Slide 14 shows the Healthcare business. Revenue increased by JPY4.6 billion to JPY51.2 billion due to strong revenue of life science solutions, including biological microscopes in North America and China. However, operating profit decreased by JPY0.9 billion to JPY2.7 billion due to provisions of JPY1.4 billion related to transactions of some customers and other reasons. Slide 15 is the components business. The components business had been growing rapidly until the previous year, due to expansion of revenues from EUV and other semiconductor related business. But in the first half of this year, revenue as well as the profit declined due to the impact of sluggish semiconductor market. Revenue declined in the first half, partly due to the delayed shipment of EUV related components and optical components as a result of production adjustment by semiconductor related customers. Demand for some consumables such as optical parts also declined due to lower capacity utilization rate at semiconductor equipment manufacturers. Slide 16 shows digital manufacturing business. This segment consists of the Industrial Metrology Business and the newly established advanced manufacturing business or ADM business. Revenue was up year-on-year contributed by the newly consolidated German SLM solutions in the ADM business. On the other hand, operating loss increased due to SLM's operating loss and amortization of intangible assets of SLM restructuring expenses as more 3D business strategy reviewed as well as upfront investments were made in the Industrial Metrology Business. Next, let me go to the full year outlook. As for the full year forecast, we have raised our revenue forecast by JPY20 billion to JPY690 billion, partially due to the FX rate as the revenue increased in imaging products and the healthcare business is expected to outweigh the decline in other businesses. The imaging products of OP forecast was revised upward by JPY2 billion and the corporate expenses, etc., was increased by JPY3.5 billion, while downward revision of JPY4 billion in the Precision Equipment, JPY1.5 billion for Healthcare, JPY5 billion for the Components Business and JPY4 billion for the Digital Manufacturing businesses were made, this making total OP revised downward by JPY9 billion to JPY34 billion. The forecast for profit attributable to owners of parent was revised downward by JPY 8 billion to JPY27 billion, but shareholders' returns, the interim dividend is increased by JPY5 from previous year to JPY25, and annual dividend forecast is unchanged to be JPY50. The FX assumption for the second half is JPY140 to a dollar and JPY150 for euro. Please see slide 19. You can see a list of full year forecast highlights compared to the previous year and the previous forecast. I already covered the outline. So I will go to slide 20. It shows full year forecast by segment, with year-on-year comparisons and the previous forecast. The details for each segment will be explained later. First the Imaging Products business. We revised our August forecast based on the assumption that the digital camera market will continue to expand in the second half of this fiscal year. As indicated in the lower left, we revised our full year market size forecast for interchangeable lens cameras to 6.3 million units up 500,000 units from the previous forecast, and for the interchangeable lenses to 10 million units up 600,000 units. Our sales volume is also revised up to 800,000 units, up 14% or 50,000 units from last year and interchangeable lenses 1.25 million, up 8% or 50,000 units from last year based on the strong sales. Due to the upward revision in sales volume and the change in the currency assumptions, the revenue forecast is raised by JPY25 billion from the previous forecast to JPY275 billion yen. On a year-on-year basis, the revenue is expected to increase 21% due to an increase in the average sales price per unit, in addition to an increase in sales volume. OP forecast is also revised upward by JPY2 billion from the previous forecast. The second half of the forecast reflects the higher purchasing prices of components and the selling expenses for the year-end sales campaign. Slide 22 shows the forecast for the Precision Equipment business. Please refer to the lower left. Since the installation of some ArF lithography systems were postponed into next year, upon customer request, the sales volume of new semiconductor lithography systems is expected to decrease by 3 units to 30 units. On the other hand, sales of FPD lithography systems are expected to increase by 1 unit to 13 units. Considering sales volume changes and others, we revised down revenue forecast by JPY5 billion from the August forecast to JPY200 billion. The operating profit forecast was lowered by JPY4 billion from the previous forecast in August to JPY8 billion due to the lower sales and an increase in R&D expenses to strengthen product competitiveness, including the development of next generation platforms. Please see slide 23 next. I will now explain Healthcare business. Based on the strong performance in the first half, we raised our revenue forecast by JPY8 billion to JPY103 billion. We revised the OP forecast down by JPY1.5 billion to JPY9.5 billion, reflecting JPY1.4 billion provision in the first half related to certain customers' transactions and others, as well as higher purchasing prices of components, even though we expect a revenue increase. Slide 24 shows component business. Future investment trends by semiconductor device manufacturers remain uncertain due to the sluggish semiconductor market. EUV related business, which is expected to grow in the medium to long term is also stagnant at present, and the timing of recovery is yet to be determined. Production adjustments by semiconductor related customers are expected to continue for some time, and deliveries of some EUV related components and optical components are expected to be postponed to the next fiscal year. Consumable business, such as optical components, is affected by lower capacity utilization rates of semiconductor device makers and expected to be lower than previous forecasts. As a result, we revised our revenue forecast down by JPY6 billion to JPY47 billion, and our OP forecast is down by JPY5 billion to JPY15 billion. Slide 25 is the digital manufacturing business. Revenue is expected to be JPY62 billion down by JPY2 billion from the previous forecast, mainly because the SLM solutions acquired into the ADM business has been affected negatively by customers' changes in their investment plans. Operating profit is expected to be a loss of JPY13 billion down by JPY4 billion from the previous forecast in August, mainly due to lower revenue in the ADM business, the negative impact effects, restructuring expenses at Morf3D, and changes in the production mix in the industrial metrology business. That's all from myself. In the summary of the first half, revenue was up partially due to the weaker yen, but operating profit fell short of the plan, due in part to one-time expenses, including provisions in Healthcare and restructuring-related expenses in Digital Manufacturing. For the full year, we revised our OP forecast downward by JPY9 billion from the previous forecast to JPY34 billion. Weak semiconductor market conditions pushed down operating profit by JPY9 billion for the Precision Equipment and Components Business combined. For the next fiscal year, although we still cannot foresee a recovery in demand for semiconductor-related products, we will continue to make efforts to minimize the impact of the market downturns by making timely and appropriate resources investment through close communication with our customers, to make sure that we do not miss the timing of market recovery. During the first half of this fiscal year, we made SLM a wholly-owned subsidiary. Although the ADM business will start the current fiscal year with loss due to the one-time cost of the acquisition, we aim to double revenue to more than JPY40 billion in FY 2025 and to return the EBITDA positive. Furthermore, in FY 2026 we plan to return to profitability in operating profit, even with the amortization of intangible assets included. There are many risk factors in the second half and into the next fiscal year, with longer than expected sluggish semiconductor market, geopolitical risks, and rising interest rates, but we will do our best to act with agility to accommodate to those changes. We appreciate your continued support of our customers and shareholders and investors. Thank you very much for your attention. Q - :

Muneaki Tokunari: This is Tokunari, CFO. I would like to thank you for your precious time despite your business schedule to attend our financial results briefing. Today, I would like to report on our first quarter results as well as our forecast for the full year. Allow me first to explain the first quarter results. Revenue was JPY158.1 billion. Operating profit was JPY3.2 billion. Profit attributable to owners of parent was JPY2.5 billion. Though revenue grew, but profit declined. So in terms of profit, we had a rather slow start. First, revenue was up JPY12.5 billion. We had a good performance in Imaging Products business and Healthcare business. Revenue from SLM Solutions in Germany, a Metal 3D Printer and Manufacturer that became a consolidated subsidiary in the fourth quarter of the previous year, also contributed to the increased revenue. On the other hand, operating profit and profit attributable to owners of the parent declined mainly due to the impact of lower sales of highly profitable FPD Lithography Systems and EUV-related components as well as increased expenses associated with the acquisition of SLM Solutions. In the yellow box on Slide 4, we show the main consolidated numbers for the first quarter. And to its right, we show the change year-on-year. Though revenue was up by 8.6%. All profit items, which were firm in the previous year were down more than 70%. Free cash flow, as described in the text in the bottom, improved JPY2.5 billion year-on-year, thanks to the increased advances received and the sale of investment securities. Slide 5 shows performance by segment in the first quarter. In the yellow box, the top number in each segment is revenue, and the bottom is operating profit. Year-on-year basis, while Imaging Products business and the Healthcare business with good sales grew both in revenue and profit, but Precision Equipment business and the Components business declined both in revenue and profit. Now allow me to go through the actual first quarter performance by segment, starting from Imaging Products business. First, Imaging Products business, revenue was JPY74.4 billion, up JPY13.2 billion year-on-year. Operating profit was JPY15.3 billion, up JPY1.7 billion year-on-year. Sales of mirrorless cameras were strong, particularly, Z 30, launched in July last year and, Z 8, launched this May. Average selling price rose due to the shift towards mid to high-end cameras, revenue grew significantly, up 21% year-on-year. Operating profit margin following the previous year shows more than 20%. Slide 7 shows Precision Equipment business. Revenue was JPY37.3 billion, down JPY4.1 billion year-on-year. Operating profit was negative JPY3.6 billion, down JPY7.5 billion year-on-year. As in the Components business, which will be explained later, this business was affected by the deteriorating semiconductor market. To be exact, highly profitable service revenue declined significantly due to the lower utilization of Lithography Systems at semiconductor manufacturers who are our customers. Also, sales of FPD Lithography Systems were limited to 2 units, down from 7 units in the previous year as this fiscal year happens to be the bottom of the LCD panel business cycle. In addition, high R&D and other expenses also contributed to the year-on-year declines both in revenue and profit. Slide 8. Healthcare business remained strong with higher revenue and profit year-on-year. In Life Science, sales of biological microscopes were strong in North America and China, and Eye-Care Solutions were firm in sales of retinal diagnostic imaging systems in North America. Slide 9 shows Components business. Components business has been growing rapidly over the past several years. But in the first quarter, both revenue and profit declined year-on-year. In EUV-related components, due to the production adjustments by customers, delivery of some products was postponed to the second quarter or later. In addition, demand for some consumables such as optical parts for light sources declined due to lower equipment utilization at semiconductor manufacturers. Sales of optical parts and optical components other than EUV-related products fell short of the plan. Slide 10 shows Digital Manufacturing business. This segment consists of Industrial Metrology business and the newly created ADM, Advanced Manufacturing business. Revenue for Industrial Metrology business was flat year-on-year, but thanks to the sales contribution by SLM Solutions, which became a consolidated subsidiary in the ADM business. On the other hand, operating profit posted a loss due to SLM Solutions amortization of intangible assets and onetime acquisition-related expenses as well as upfront investment costs in the Industrial Metrology business. Next, I would like to explain our focus going forward. The upper part of the slide shows the forecast for the first half and the bottom shows the forecast for the full year. The overall picture is that in response to the weak first quarter results, we have revised down the first half forecast, but we have unchanged our full year forecast for operating profit and the profit attributable to owners of parent. Please refer to the top half of the page. Revenue for the first half is now revised downward by JPY10 billion and both operating profit and profit attributable to owners of parent are revised downward by JPY5 billion. Imaging Products business in light of the firm performance in the first quarter, revenue and operating profit are revised upward by JPY10 billion and JPY3 billion, respectively. Precision Equipment business revised downward by JPY15 billion in revenue and JPY5 billion in operating profit due to the expected lower service revenue and the postponement of some system installations into the second half of the year. In the Components business and the Digital Manufacturing business, due to the postponed installations of some of the products into the second half of the year, we revised downward the first half revenue and operating profit, as shown in this presentation material. Next, as for the forecast for the full year, we have revised revenue upward by JPY5 billion to JPY670 billion as the increase in revenue from the Imaging business is expected to exceed the downward revision in the Precision Equipment business. Operating profit is revised downward by JPY3 billion for the Imaging Products business and downward by JPY3 billion for the Precision Equipment business. Operating profit for the entire company is JPY43 billion, unchanged from the last forecast. Profit attributable to owners of parent is JPY35 billion, unchanged from the previous forecast. As for the exchange rate from the second quarter onward, unchanged from the previous forecast, JPY130 to the U.S. dollar and as for the Europe, JPY145, Japanese yen depreciated by JPY5. Slide 13, please. This shows a list of key figures for the full year forecast. Please look at the far right showing the change from the last forecast. As has been already explained, only revenue has been revised upward by JPY5 billion, while profit items and the dividend forecast remain unchanged from the previous forecast. Slide 14 shows full year forecast compared with the May forecast we made last time. As you see, this table shows the first half and second half separately. The profit items are revised downward by JPY5 billion for the first half and upward by JPY5 billion for the second half, resulting in unchanged forecast for the full year. Please proceed to Slide 15. This shows the full year forecast by segment, together with year-on-year and the previous forecast comparison. As shown on the far right, compared to the previous May forecast, we have revised the operating profit focus for Imaging Products business by JPY3 billion and Precision Equipment business downward by the same amount. In the yellow box on Slide 16, we show the first half and the second half forecast by segment. We have revised our forecast for the first half and the second half to reflect the situation that delivery of semiconductor lithography system in the Precision Equipment business and EUV-related components in the Components business will be delayed from the first half to the second half due to customers' requests in the wake of the sluggish semiconductor market. The fourth line from the top shows that operating profit for Precision Equipment business being JPY2 billion in the first half and JPY10 billion in the second half. Components business showing JPY6 billion in the first half and JPY14 billion in the second half. We are forecasting both businesses and have a concentration of profits in the second half. I will now explain the full year forecast for each segment. First, Imaging Products business. Based on the strong first quarter, we have revised our forecast for the digital camera market more aggressively than we assumed at the beginning of the fiscal year, specifically as stated in the lower left of the document for Digital Camera-Interchangeable Lens type, we have revised upward the full year market size to 5.8 million units, up 300,000 units year-on-year. For Interchangeable Lens, we have revised upward 200,000 units to 9.4 million units. So we have revised upward to the same level as the previous year, respectively. We have increased our sales volume forecast in light of the firm sales of Z 8 and other new products, particularly in the first half, camera bodies up 7% to 750,000 units, up 50,000 units year-on-year. As for Interchangeable Lenses, up 4% or 50,000 units to 1.2 million units. Due to the upward revision of sales volume and other factors, the revenue forecast has been raised by JPY10 billion from the May forecast to JPY250 billion. Year-on-year basis, we expect a 10% increase in revenue due to an increase in average selling price in addition to the increased sales units. Operating profit is now up JPY3 billion from the previous forecast. While the first half results are expected to be strong. The operating profit forecast remains unchanged because expenses to strengthen sales and R&D expenses are expected to increase in the second half as the supply-demand balance normalizes. Slide 18 shows our forecast for Precision Equipment business recently due to the global slump in the semiconductor market and inventory adjustments on the customers' site. The utilization rate of our Lithography Systems at customers' manufacturing site has been declining. As a result, we expect the downturn in the Service business and the Semiconductor Equipment business to continue in the second quarter and beyond. Reflecting this, we have lowered our revenue forecast by JPY5 billion from the May forecast to JPY205 billion. As shown in the lower left, we have not changed our previous forecast for unit sales of FPD and Semiconductor Lithography Systems, but we expect a delivery of such equipment to be pushed back to the second half of the year due to customers' requests. Operating profit for the entire Precision Equipment business is now down JPY3 billion from the May forecast to JPY12 billion, mainly due to lower Semiconductor and Service revenue. As explained earlier, the breakdown of JPY12 billion, JPY2 billion in the first half and JPY10 billion in the second half. Here, allow me to explain about the recently announced export restrictions on advanced semiconductor manufacturing equipment. We believe its impact on our performance is going to be rather limited. The Ministry of Economy, Trade and Industry meeting has also said that as long as there is no concern about military diversion, business can proceed as usual. Nikon intends to proceed with business by following the appropriate export procedures. Although ArF Immersion Lithography Systems fall under the export control items, but we believe that the new NSR-S625E, which we announced in May this year is for middle critical layers and can be exported to China and other countries. Next, please look at Slide 19. Here now I'd like to explain Healthcare business. The first quarter results were favorable, and our full year forecast remains unchanged from the May forecast of JPY95 billion in revenue and JPY11 billion in operating profit. Slide 20. This is Components business. Revenue being JPY53 billion, operating profit being JPY20 billion. We maintain our May forecast for this segment as well. However, due to the production adjustment by semiconductor-related customers, deliveries of EUV-related components and some optical parts and optical components will be shifted from the first half to the second half. So operating revenue is expected to be JPY6 billion in the first half versus JPY14 billion in the second half. Slide 21 is Digital Manufacturing business. In this business segment, both revenue and operating profit for the full year remain unchanged from the previous forecast. In the Industrial Metrology business, due to the business slowdown in the semiconductor and the electronics components, some product sales will be shifted from the first half to the second half, but there is no change as for the full year forecast. Revenue is expected to be JPY64 billion, driven by full year contributions coming from SLM Solutions, which was acquired in the previous fiscal year. Operating revenue, on the other hand, is expected to be a loss of JPY9 billion for the entire business as the newly established Advanced Manufacturing business, ADM business, will start the year with operating loss. By the way, SLM Solutions announced yesterday, in Germany, its annual financial results for January through June period, showing a steady expansion of its business with both orders and sales growing approximately 20% year-on-year. That's all for now. But to summarize the financial results for the first quarter, although the company-wide revenue exceeded that of the previous year, but an operating profit and profit attributable to owners of parent got off to a slow start by segment. Imaging Products business and Healthcare business started the quarter better than planned. But on the other hand, Precision Equipment business and the Components business started the quarter below the plan due to the impact of the sluggish semiconductor market, which resulted in the postponed sales of some products. From the second quarter onward, we expect that Imaging Products business and the Healthcare business will do well, while the Precision Equipment business and the Components business continue to be affected by poor semiconductor market, and we believe uncertainties are going to continue. While finally managing risks, we will strive to achieve our goals of JPY43 billion in operating profit and JPY35 billion in profit attributable to owners of parent. Nikon plans to hold an IR Day on September [28]. Healthcare business now generating more than JPY10 billion in operating profit has grown into a major profit pillar. Advanced Manufacturing business is now expected to grow, including the acquired SLM Solutions. General managers from each business division will explain in details. We also plan to report on our sustainability strategy and have an independent outside director speak on corporate governance. Finally, Nikon's stock price book value ratio going above 1x in June and even currently being traded at around 1x. And we understand that the current stock price is formed based upon medium- to long-term growth expectations, we are getting from the capital market. In order to live up to these expectations, we will inject necessary resources for the future even in the semiconductor business, which may fluctuate in big waves, and we will continue to diversify our customer base and businesses while firmly accompanying our customers. We like to solicit for your continued understanding and support of our shareholders and investors. And thank you very much for your kind attention. End of Q&A:

Muneaki Tokunari: Good afternoon. I am Tokunari, CFO of the company. Thank you very much for coming to our Financial Results Meeting, despite your busy schedules. I have three points; action to improve PBR, which is below one, irresponsible to the request from the Tokyo Stock Exchange. Financial results for the year ended March 31, 2023 and the forecast for the year ending March 31, 2024. First on the request from the Tokyo Stock Exchange, [indiscernible] improvement of PBR, which is below one as an important management challenge. In the medium-term management plan, which started last year, we set an ROE target that is conscious of cost of equity. The ROE over the past two years was over 7%. As the FPD lithography system business cycle will hit the bottom this year, we expect a decline in ROE, but we expect recovery next year. As for the reasons for PBR below one, as PBR is equal to ROE multiplied by PER, we believe that both the lower expected ROE due to lower profits in this fiscal year and the lower PER compared to our competitors are the causes. In particular, we recognize that the challenge to quickly launch growth businesses in order to improve PER. Based on this recognition of the current situation, Nikon will promote both investment in sustained growth and shareholder returns to ensure that we achieve the financial target set forth in the medium-term management plan. Specific measures are on the material. First, in imaging products business, we will launch new products, including the new Z8 mirrorless camera announced yesterday in order to achieve earnings recovery and ROE improvement next year. In the Precision Equipment business, starting next February, Nikon will expand worldwide sales of the S625E ArF Immersion Lithography Systems, which achieved the highest productivity in the history of Nikon's lithography systems for the semiconductor market, which is expected to grow over an extended period. We will also strive to enhance disclosure of information to investors about our growth businesses in particular, rapidly expanding health care business and the digital manufacturing business, which executed the SLM acquisition. I will talk about shareholder returns later. ROE will be at a standstill this fiscal year, but as President Umatate will explain later, we feel that we have made satisfactory progress in the first year of the midterm plan. As seen in top line growth, business is expanding steadily, and we will steadily implement various measures to achieve revenue of JPY700 billion, operating income of JPY70 billion or more, and ROE of 8% or more in the final year of the medium-term management plan. Next, I will talk about capital allocation, which will be the basis of investment in sustained growth in shareholder return. In the midterm plan, the policy is to allocate between JPY700 billion and JPY800 billion of cash and deposits for distribution in the ratio shown on the right, while maintaining the equity ratio in the upper 50s as you see on the left. The areas shown in yellow are actual locations last year. For example, in the upper right, strategic investments, JPY88 billion was allocated for the acquisition of SLM solutions in Germany. The total allocation for strategic investments are indeed and capital expenditures is approximately 90% of the total, and the policy is to use capital primarily for growth. This framework remains unchanged, but we intend to flexibly implement share-buybacks in the future with additional cash and deposits to be generated from the sale of cross-shareholdings and other activities. This slide shows specific shareholder return measures. Last year, we increased the year and dividend by JPY5, because the performance was better than what was expected at the beginning of the fiscal year. From this fiscal year onward, we intend to increase the dividend towards JPY60 for the final year of the medium-term management plan. Furthermore, we will flexibly implement share buybacks of JPY30 billion or more during the medium-term management plan period, and will also continue to consider strategic investments in M&A. Now, let me talk about the relationship between corporate value, officer compensation and sustainability. Nikon's officer compensation system is designed to be linked to corporate value with more than half of officer compensation linked to performance. Specifically, officer bonuses are linked to ROE and operating profit, while stock-based compensation PSUs or performance share units are linked to sustainability related KPIs and other factors. Sustainability for Nikon means creating social value through core technologies, this is central. We are also actively engaged in greenhouse gas reduction and diversity, equity and inclusion, and have received higher ratings from external evaluation organizations than our peers. We will strive to earn the appreciation of the market by firmly implementing these medium-term management plan strategies and promoting both investment in sustained growth and shareholder returns. Now, let me talk about the financial results last year. Revenue was JPY628.1 billion, operating profit JPY54.9 billion, profit at rebuildable to owners of the parent JPY44.9 billion, which posted growth in both revenue and profits, over the previous year. All segments but the precision equipment business grew both revenue and profit. Annual dividend will be JPY45, which is JPY5 higher than the previous forecast. In the previous year, we acquired 21.45 million shares at JPY30 billion, and we cancelled all the stock including the JPY5 million treasury stock we already had. What I just explained is in table format here. The weaker yen contributed significantly to the increasing both revenue and profit as you see on the right bottom side. Side 12 is performance by segment and excluding precision equipment business, we saw increase in both revenue and profits. In particular, the imaging products business posted a 2.2-fold year-on-your increase in operating profit to JPY42.2 billion and the healthcare business posted a 2.6 fold increase to JPY11.5 billion, both significant growth with healthcare recording record high revenue and operating profit. Now, let me explain by business segment. First in the imaging product business, both revenue and profit increased significantly due to higher average selling prices for both bodies and lenses, as well as the impact of foreign exchange rates. Operating margin landed at a high level of 18.6%. Slide 14 is the Precision Equipment business. This is the only business segment out of five, which posted reduction in both revenue and profits. Revenue from FPD lithography systems declined as customers reduced capital investment in response to falling panel prices, while revenue from semiconductor ARF lithography systems were firm and increased, but overall revenue and profits declined. In the healthcare business, revenue increased 35% year-on-year and operating profit was 2.6 times. The lithography for the photo year of the medium-term management plan of JPY90 billion revenue and JPY10 billion in operating profit was achieved three years before schedule. Life science solutions mainly biological microscopes and eye care solutions mainly retinal imaging equipment both expanded. Slide 16 is the component business, EUB related components, other semiconductor related optical parts, and code for robots performed well, resulting in increased revenue and profit. On the other hand, the contracted additive processing company in the US moved 3D business was poor. We reviewed its position and recorded an impairment loss of JPY3.9 billion. From this fiscal year, 3D [ph] will operate as a subsidiary of newly established digital manufacturing business. I will touch upon the details later. The last segment is industrial metrology and others, others include a newly acquired company SLM solutions. Revenue increased due to strong sales of video measuring systems and x-ray and CT systems in the industrial metrology business and also due to newly consolidating SLM solutions. Operating profit increased despite the three-month amortization of intangible assets associated with the acquisition of SLM solutions. Next, I would like to explain the outlook for the current fiscal year. At the bottom of the space, please find the assumed exchange rate, JPY130 to a dollar and JPY140 to the euro. At the top, for the full fiscal year, we focused the JPY665 billion revenue, operating profit JPY43 billion yen, and profit at reachable to owners of around JPY35 billion, increased while operating profit declined. The increase in revenues due to the solid performance of existing businesses and also due to SLM solutions revenue to contribute for full year. Profit decline is mainly due to the FPD lithography business in the Precision Equipment business because the new digital manufacturing business starts with an operating loss. We plan to increase the annual dividend by a JPY5 to JPY50 per year and dissipating a recovery next to fiscal year. Please go to Slide 20. A list of the main forecasts to highlight in numbers this fiscal year with year-on-year change. Lower right, we expect the yen to appreciate from last year, which will have a negative impact of JPY2.4 billion on operating profit. Starting from this fiscal year, we partially changed our reporting business segments, and if you can see on the right side, we have a new segment, digital manufacturing business unit. This segment consists of industry and metrology business unit and a newly established advanced manufacturing business unit. The move 3D and other material processing business was previously in a components business and a solution to which was in others and also the material processing research and development by next generation project division will be combined to form advanced manufacturing business unit, starting from this fiscal year. Slide 22 shows our forecast for this fiscal year based on this new reporting segment. I will explain five segments separately in the following slides. First, Imaging Products business, as a digital camera market continue to shrink, Nikon will continue to focus on mid to high end models for professionals, aiming 700,000 units of sale, the same level as last year by introducing new products such as Z8. Operating profit is expected to decrease as the benefit of a weaker yen to dissipate and also due to higher sales promotion expenses with a market to normalization. Operating margin is expected to be in the 15% range well above the mid-term plan focused showing that imaging products business is solid. Slide 24 summarizes Nikon's involvement in the semiconductor manufacturing process. Nikon sells equipment, systems shown at the top of this page and provides a component shown at the bottom of this page equipment to manufacture as two integrators. The three segments of Precision Equipment, components and digital manufacturing are the three businesses in the semiconductor related area. I will now explain one of these segments Precision Equipment business. This fiscal year revenue is expected to slight increase to JPY200 billion to JPY10 billion yen while LP [ph] is expected to decrease significantly to JPY15 billion. FBD lithography system is the bottom of the market cycle and a customer CapEx is delayed and therefore as you can see lower left, sales will drop sharply from 29 units last year to 12 units this fiscal year. Although semiconductor lithography system revenue and profits are expected to grow on expanded sales to customers other than our core customers FBD sales is larger and therefore the overall profits are going to decline. Last year the healthcare business OP exceeded JPY10 billion for the first time, especially live science performed very well. Considering the FX impact, OP will be JPY11 billion this year almost the same level as last year. Slide 27 shows a component business. Robust revenue is expected for EUV related components and optical parts and components, but overall revenue is expected to be flat year-on-year due to lower sales of customized orders other than semiconductor related products. OP is to decline impacted by the [indiscernible] and the collection will upfront investment in semiconductor related component products to enter mass production phase, but the total component business to maintain high OP margin over 35%. Finally, let me talk about Digital Manufacturing business. Revenue is expected to reach JPY64 billion with the full year contribution from SLM solutions, which was acquired last fiscal year. On the other hand, we expect an operating loss of JPY9 billion for the entire business as a newly established advancement manufacturing business will start the year with an operating loss. Let me explain more in detail. The left bar chart shows the breakdown of OP for the previous fiscal year and this fiscal year based on new reporting segments. The top green color, the industry meteorology business is expected to see a slight decrease in profit due to upronding investment. Dark blue amortization of intangible assets with SLM solutions acquisition is expected to amount to JPY3.6 billion this fiscal year. Light blue shows advanced manufacturing division including SLM solutions. We focused operating loss again due to the heavy burden of research and development expenses. Yellow is the integration cost of SLM solutions acquisition and orange is a JPY3.9 billion impairment loss on 3D recorded in the previous year both at one time cost. The digital manufacturing business will start with an operating loss of about JPY9 billion in the first year but it is a business with promising future and we aim to achieve a profit at early point. The background of the 3D's impairment is shown in the upper right and a public information by SLM solution business for the list the companies shown in the lower right. According to the company's disclosure, SLM's non-consolidate performance is expected to improve steadily. Finally, I would like to summarize today's presentation. In the fiscal year, last year fiscal year, both revenue and profits increased and we almost achieved earnings forecast as it was the first year of the medium term management plan we had a very good start. In the fiscal year, as RFPD's business cycle is at its bottom, we expect the Precision Equipment business to decline and as a result the company total OP is forecasted go down as well. However, the imaging healthcare business and component business are performing very well and we expect our performance to recover in the next fiscal year and onward. Against this drop, we have decided to increase dividend this year to achieve a JPY60 per share in the final year of our medium term management plan. By increasing both investment for growth and shareholder returns, Nikon will aim for further growth with the support of a shareholder. We'd like to ask investors and analysts for your continued interest and understanding and support to Nikon. Toshikazu Umatate My name is Umatate, the President of the company. Thank you very much for participating despite your busy schedules. I will talk about the progress in the first year of the medium term management plan which started last year. On the details of the plan itself, please refer to the Investor Relations section over our homepage. Please turn to Slide two. First, I will talk about the outline of the plan. This medium term management plan covers the four years starting fiscal 2022. First, we define Vision 2030 and towards the realization of it. We identify the target where we will be in 2025 and develop the strategy and measures. Where we will be in 2025 is providing products and services optimized to meet our customer needs. We will move away from end product dependent business and strengthen solutions, which combine service and components. Of the five businesses, we will stabilize the two main businesses, Imaging Products business and Precision Equipment business and expand the three strategic businesses; healthcare, components and digital manufacturing. Please turn to Page three. The results for 2022, the first year of the plan as Mr. Tokunari mentioned, posted increase in both revenue and profits, which was higher than planned. On the right hand side, is the latest forecast in operating profit by business. The solid line in yellow is the latest forecast of total operating profit, which is a profit and losses for each business minus management based cost. There is another line in dotted line, which is the operating profit forecast as of start of the medium term plan period. As you see, for fiscal 2023, although our outlook at the time of start of the medium term management plan was that it would be difficult. It actually turned out to be slightly above the medium term management plan projection. Please turn to slide four. The revenue for the first year of the plan fiscal 2022 was higher, except for the Precision Equipment business. The year of strategic businesses, which are businesses other than imaging products and Precision Equipment business in operating profit for the first time exceeded 30%. Source of profits are diversifying. The service and components business, which is a key point to the medium term plan is also growing steadily, especially in optical parts and EUV related components. We aim to achieve growth in the digital manufacturing business following the healthcare and components businesses and achieve the target for fiscal 2025. Please turn to slide five. This is a plot of the five businesses revenue and profit. The horizontal axis is revenue. The vertical axis is operating margin and the size of the bubble is operating profit. The dotted circle is the actual numbers, for fiscal 2021, the year before the medium term plan and the circle in solid is the actual number for fiscal 2022 and the field in color circles are the targets for 2025. We have the five businesses and in the middle we have the company wide average plotted. First with regard to the two main businesses shown on the right, the Precision Equipment business fell short of expectations due to the impact of the external environment and other factors. But the Imaging Products business posted a large increase in operating profit due to profit due to strong sales of mirrorless cameras and a tailwind from foreign exchange rates. Meanwhile with regard to the three strategic businesses on the left, the healthcare business significantly outperform their expectations and generated profits that even exceeded our 25 targets. The components and digital manufacturing businesses are also making steady progress towards their fiscal 2025 targets. Thus we aim to achieve JPY700 billion in total sales revenue and promote resilient, portfolio management while also focusing on profitability with an operating margin of 10% or more. In the subsequent slides, I will very briefly review the first year progress of the two businesses in the quality of life area followed by the three businesses in the industry area. Please turn to slide six. Imaging Products business achieved a record-high operating margin as structural reforms and a shift to mirrorless products improved profitability. The contest business has started smoothly. Please turn to slide seven. The healthcare business has greatly expanded its customer base mainly in the private sector and has made a leap from turning to profitability for the first time in fiscal 2021 to more than JPY10 billion in operating profit in a single year. Based on the analysis and evaluation using microscopy technology cultivated over many years, we are aiming for further growth, including the provision of new values such as contract sales development and manufacturing. Please see slide eight. In the Precision Equipment business, semiconductors performed well with stable customers and service expansion, but FPDs were affected by a major market adjustment. In addition, as of April 01 of this year, the FPD business unit and the semiconductor business unit were merged into the Precision Equipment group. This way enable us to flexible manage the resources of the two businesses and to respond more dynamically to future market changes, while also stringing initiatives for the future, such as digital lithography systems. Please refer to Slide nine. The Component business expanded its business by supporting the sophisticated needs of wide range of customers in some collector-related fields. We will seize various opportunities such as EUV related businesses by leveraging our core competence in the precision and optics. Please see Slide 10. Lastly, the Digital Manufacturing business. In order to promote the full-scale expansion of our Material Processing business, we acquired SLM solutions of Germany, the largest acquisition ever for Nikon, and established the Advanced Manufacturing business unit as of April 01 this fiscal year. For the first time, Nikon established the business headquarters in the US, laying the good foundation for the global business development in Japan and the US and Europe. In addition, we are making progress in introducing laser radar and CT systems of the industrial meteorology business unit into customers' production in line. Please go to slide 11. This page is a summary of the year one business operations. Of the two main businesses, the Imaging business has achieved significant operating profit growth and will continue to strengthen its product line-up move mirrorless cameras among others. In the Precision Equipment business, we aim to achieve stable earnings by integrating two business to create a business structure more resilient to changes. In strategic businesses, in addition to the rapid growth in the healthcare and components business, we made a strategic progress for the future and the digital manufacturing business. For FY2023, it's a meteor of our mid-term plan, while maintaining the strong performance of the imaging and healthcare businesses, we will continue our efforts to realize our FY '25 goals while paying attention on the Precision Equipment business with market slowdown and a newly established digital manufacturing business. Please refer to Slide 12. I would like to explain the status of a capital allocation. Nikon recognize that our shareholders and society expect us to grow as a technology company and we will allocate most of our cash and deposits for distribution to growth. By FY '20, out of the total JPY700 to JPY800 billion resources, our policy is to allocate about 30% of strategic investments such as M&A and human capital, a little less than 40% to a research and development and about 20% to capital expenditures, all of which were done successfully in the first year. In terms of shareholders returns, in addition to JPY30 billion share-buyback last fiscal year, we will increase dividend and conduct opportunistic buy backs of a more than JPY30 billion. We will continue to enhance both growth investment and shareholders returns. In addition, we are also promoting human capital management and others to strengthen our management base. Please refer to Slide 15 for details. Finally, I would like to summarize. Nikon hopes to be a key technology solutions company in a global society where humans and machines co-create seamlessly for 2030. To this vision, we work together with customers to truly anticipating customer needs, cooperating with partners and deliver solutions, integrating enterprise service and components. We are committed to contribute to the sustainable society through our business and technology leading to sustainable enhancement of corporate value and meeting the expectations of all stakeholders. We look forward to your continued support. Thank you very much for your kind attention. End of Q&A:

Muneaki Tokunari: This is Muneaki Tokunari, CFO at Nikon Corporation. I do appreciate your precious's time to start your business schedule to attend our financial results briefing today. I would like to explain our financial results for the third quarter of the year ending March 31st, 2023, as well as our outlook for the full year. In the third quarter and year-to-date, revenue increased by 12.2% and operating profit increased by 7.8% year-on-year. As shown in the lower right of the slide, the effect of Yen's depreciation was a major contributor. Profit attributable to owners apparent increased only slightly by 1% due to the impact of the absence of the gain on valuations of investment securities, which was recorded in financial income in the previous fiscal year. Slide four shows the cumulative third quarter results by segment. As you can see around the percentage change year-on-year, shown on the far right, operating profit in the imaging and the healthcare businesses increased substantially in more than 2x year-on-year, and all businesses except for the precision equipment business, posted operating profits higher than the previous year. Now, I'd like to go through the actual performance using slide five and onward, I will begin with imaging products business. Revenue from imaging products business increased by JPY48.4 billion, year-on-year to JPY184.4 billion and operating profit increased by JPY22.4 billion to $41.2 billion. In addition to the effect of the year-end depreciation, average sales in price increased due to the advanced shifting to mid high-end models for pro harvest. In the area of interchangeable lenses, sales of high price lenses for full frame cameras was strong, contributing to higher revenue and profit despite the declined volume of low priced lenses. For your information, we achieved much higher results up until the third quarter due to the fact that the planned R&D and other expenses were deferred to the fourth quarter. Slide six shows precision equipment business. Revenue was down JPY29.4 billion year-on-year to JPY133.5 billion. Operating profit was JPY14.6 billion down JPY18.8 billion year-on-year. Revenue and profit from FPD lithography in the systems declined as units sold fail sharply. This is a sharp contrast to registration in the previous year when we had installations coming back so rapidly after the big impact of COVID-19 pandemic. On the other hand, sales of semiconductor lithography systems increased compared to the previous year when the investment period of major customers was in the off season and both revenue and profit increased. However, sales volume failed short of the plan due to the requested postponement coming from our customers, including the lack of utilities. Now, slide seven on healthcare business. Revenue was JPY72.1 billion and the operating profit was JPY7.2 billion showing a significant growth year-on-year. Both revenue and operating profit reached record highs and operating margin was in the 10% range. This was due to the strong cell biological microscopes and retinal diagnostic imaging systems, mainly in North America, as well as the positive impact coming from the cheaper yen, slightly shows component business with the revenues being JPY38.1 billion and operating profit being JPY13.3 billion. The segment also in post the growth, both in revenue and the profit. In addition to EUV and related components. Semiconductor related products such as optical parts and optical components, as well as importers. And the photo mask substrates for FVT expanded and operating profit margin remained in the 30% range. Now Slide 9 shows industrial metro and others. Revenue was JPY27.8 billion. Then an operating profit was JPY2.4 billion in showing growth, both in revenue and profit. In the industrial meteorology business, we had rather strong sales of video measuring systems and industrial microscopes. Next I would like to explain our full year forecast. Please refer to Slide 11. First of all, all the exchange rate assumptions and shown in the second row from the bottom are JPY130 to the US dollar and JPY135 to Euro for the fourth quarter. I will explain our full year earnings forecast based upon these exchange rates assumptions. At the top, we have revised down our full year revenue forecast by JPY15 billion from the previous forecast to JPY630 billion. Operating profit is unchanged from the previous forecast at JPY55 billion, profit attributable -- to owners of parent is also unchanged from the previous forecast of JPY42 billion. Next -- for shareholder returns, the annual dividend remains 40 year per share unchanged from the previous forecast. Regarding the share buyback, we have a purchase 17.56 million shares for JPY24.9 billion. As of the end of January, we'll continue our buyback operations up to the maximum of JPY30 billion through March 24 this year. As mentioned in the topic section, following the completion of the tender offer for shares of SLM Solutions, the company became our consulted subsidiary as of January. We are presenting our full year forecast, including the impact of this acquisition. Please refer to Slide 12. This table shows the main numbers of the full year forecast, including comparisons vis-a-vis ear near and the previous forecast. I have already and explained the outline. Slide 13 shows the full year forecast by segment along with year on year and the previous forecast comparisons. I will go through details of segment by segment. First image in our products business as the market scale is recovering, we will continue our strategy of improving profitability focusing on mid high-end cameras. We maintain our previous and forecast of 700,000 units for interchangeable lenses for digital cameras. On the other hand, the sales of interchangeable lenses are expected to be lowered by 100,000 units to 1.15 million units due to the weak plant sales of low unit price, single focal length lenses. The average sales and prices are settling in the rising, especially in the formula lesson cameras and the interchangeable lenses. And the revenue is expected to be JPY230 billion up, JPY51.8 billion year on year with no change from the previous forecast. Operating profit is expected to be the JPY42 billion up 9 JPY billion from the previous forecast based on the results through the third quarter. We are now revising up JPY9 billion from the previous forecast to JPY42 billion as significant increase as much as 2.2 times. Slide 15 shows precision equipment business revenue being JPY210 billion down JPY20 billion from the previous forecast. In -- in the systems due to the impact of the rapid pension of COVID-19 infection in China for a certain period of time. The completion of installation of one unit for large panels and has been postponed to the next fiscal year, starting from April. And the annual sales volume is now expected to be 29 units. The FB lithograph in the systems market is expected to the bottom out in the next fiscal year and due to the slowdown investment by customers and the deferred installations in response to the sluggish panel demand and we believe it'll start to recover in 2024 and beyond. In the semiconductor lithograph in the systems market, installation of 11 units is expected to be postponed to the next fiscal year by the request of our customers. This is due to the delays in the redness and among some customers due to labor shortages, supply chain disruptions, material shortages, and other factors. In light of these factors, we have lowered our full year on the revenue forecast by JPY20 billion for precision equipment business as a whole. Operating profit and has also been lowered by JPY6 billion from the previous forecast to JPY24 billion reflecting FPD lithograph in the systems and the semiconductor lithograph in the systems being postponed till the next fiscal year. We have assumed since a year ago, when we formulated the medium time plan that the bottom of the operation equipment business and it would be reached in the next fiscal year starting from April due to the supply demand cycle. But we now expect the bottom to be much deeper than we had expected, particularly in the FPD lithography business. On the other hand, there are some results that will lead to a better future. For example, more than 80% of cells of APF lithography in the systems in the semiconductor lithography business were previously concentrated in one major customer in North America. But our efforts over the past several years to diversify our customer base hub borne fruit, and this fiscal, we expect sales volume from customers other than this major customer to exceed half of our total of sales. We believe that the fact that in our customers are diversifying into other Asian countries will help stabilize the pro -- building of our ambition equipment business in the future. Please see in slide 16, revenue from healthcare business is excluded to be JPY93 billion up JPY19.8 billion year-on-year. No change from the previous forecast. Operating profit is also expected to increase by JPY3.7 billion year-on-year to JPY8 billion in line with the previous forecast. Sales both biological microscopes and retinal diagnostics imaging systems have been rather favorable on the back of strong orders. The risk in the healthcare business is parts procurement, although there is an improvement trend, we will continue to monitor the situation closely from the fourth quarter onward, and strive to ensure the stable supply of products. Slide 17 shows, the outlook for the components business. Revenue is expected to increase significantly to JPY53 billion up JPY12.2 billion year-on-year with no change from the previous forecast. Operating profit is also expected to increase by JPY5.3 billion unchanged from the previous forecast. Solid cells are expected for EUB related components optical parts and optical components for same conductor related products in quarters, and the photo mask substrate for FPD are expected. Slide 18 shows the forecast for industrial metropolitan and others, others include production subsidiaries and others. Revenue in this business segment is expected to be in a JPY44 billion, an upward revision of JPY5 billion yen from the previous focus and operating profit is expected to be JPY3.5 billion a downward revision of JPY1 billion from the previous forecast. The estimated impact of the consolidation of SLM Solutions from January to March is reflected in the latest forecast. SLM Solutions has been performing well. We have done EBITDA expected to be positive for the last three consecutive quarters, excluding 1x amount a related expense. Nikon intends to develop the materials and processing business and ask the next pillar for Nikon's growth strategy center around SLM Solutions. That is all for the explanation of our business performance and the numbers, but today as Nikon’s Director in Charge of Sustainability, I would like to briefly report to our shareholders and investors on the current status of ESG and the sustainability of Nikon Corporation. In fact, Nikon’s sustainability activities have been highly evaluated by third party organizations surpassing those of other companies in our industry. For example, Nikon has been selected for the [Indiscernible] in the climate change Soviet by the non-profit organization, the CDP for four consecutive years, since FY2019, and in the Dow Jones Sustainability Industries, one of the was a leading ESG investment industries. Nikon has been selected as a component of the DJSI -- world and the DJSI AsiaPac Pacific for the five consecutive years. In particular, this year, Nikon received the number one score in the entire world for the industry group to which Nikon belongs. In addition, Nikon shares are included in old in five of the GBFS ESG investment industries, including the Japan Empowering Women Index and in Carbon Efficient Index. Behind this high evaluations are our steady and positioned efforts to respond to societies expectations with trust in the area of the environment, social and the labor affairs and the governance. And we are getting results, if I may say so. In the current midterm management plan, we will also now take on the challenge of contributing to a sustainable society through creativity by leveraging our light utilizing and precision technologies. The recently announced Green Jet and as initiative for 787 to improve fuel efficiency and radio CO2 emissions by applying a shark skin finish to the surface of its aircraft is just one example. By solving our social and environmental issues with uptakes and precision technologies, we hope to contribute to realize a sustainable society and at same time, like to enhance the sustainability of Nikon as a company. Finally, I would like to say a few words. In summary, our business performance and app to the third quarter has been favorable in terms of both operating profit and profit attributable to owners of parent. However, in the fourth quarter, we have not changed our previous forecast of JPY55 billion for operating profit due to our own expenses and to be incurred in the imaging and the risk of the systems currently under installations to be postponed till to the next fiscal year in precision equipment business. Over the next fiscal year, there are the risk factors such as concerns about economic recession, the impact of inflation, and the reduced effect of the depreciation, as well as uncertainty in the FBA panel market. However, that enhancement transformed into a much more resilient corporate entity than in the past. In other words, the imaging business is strictly growing in the mid-high end mirror less market. The position equipment business is diverse from its customers, particularly in semiconductor business and the businesses other than imaging and precision equipment such as the component business, which is expected to generate JPY18 billion in operating profit, and the healthcare business, which is expected to generate JPY8 billion in operating profit, are firmly growing as our earnings pillars. Furthermore, now Nikon will aim for the further growth in the next fiscal year, including the launch of digital manufacturing business. Sending around the acquired SLM Solutions, we’d like to ask for the continued understanding and the support of our shareholders and investors. End of Q&A:

Toshikazu Umatate: My name is Toshikazu Umatate, President and CEO of Nikon Corporation. Thank you very much for taking time out of your busy schedule to attend our financial results briefing today. I will explain our current business situation and specific progress in our growth strategy. In April this year, we presented our medium-term management plan, which includes a vision of what we will be in 2025. Thanks to your support. We believe we are off to a good start overall. The medium-term management plan defines the Imaging Products business and the Precision Equipment business as our main businesses and sets forth a policy to stabilize earnings. Of these, the Imaging Products business is expected to generate higher than expected earnings this year, thanks to the support of customers for mirrorless cameras and other products. The Precision Equipment business is expected to be weaker than expected due to the slowdown and the semiconductor and FPD markets and the postponement of the installation of a lithography system. But we believe that this business can be expected to be a stable source of earnings in the mid to long-term as we move towards a digital society. On the other hand, the three businesses defined as strategic businesses in the mid-term management plan, healthcare, components and digital manufacturing are all performing well. The Healthcare business is expected to achieve record high sales and profits this fiscal year and the Components business is also performing well, especially in semiconductor-related component parts. In addition, significant progress was made in the Digital Manufacturing business during the first half of this fiscal year. Specifically in September to October, we announced investments and acquisition in three companies, including the proposed acquisition of SLM Solutions Group AG, a German metal additive manufacturing company. All three companies are engaged in businesses related to additive processing using laser beams. SLM is one of the world's leading metal additive manufacturers having delivered more than 750 machines to over 150 customers in the aerospace industry, including Airbus and Rolls-Royce and the automotive industry, including Porsche and BMW. Hybrid Manufacturing Technologies Global, Inc. is a U.S.-based manufacturer specializing in a detachable heads for machine tools. The company develops and manufacturers heads that can perform additive and removable processing as well as meteorology and inspection in a single device. Optisys, Inc. designs and manufactures high-speed communication antennas for aerospace applications using metal additive manufacturing. Nikon hopes to bring innovation to the world of manufacturing and to create a new ecosystem by collaborating with these investees in the area of material processing in the digital manufacturing business. We would like to report on the progress of the SLM transaction in which we plan to acquire SLM by injecting a large amount of funds equivalent to JPY84 billion. As stated in the material, the TOB is progressing smoothly in accordance with the original schedule and the acceptance period ended on November 1, with 86.17% of the share's capital secured on a fully diluted basis. We are currently in an additional acceptance period after which we plan to complete the public takeover offer during the second half of this fiscal year, subject to the approval of the relevant authorities in each country. Furthermore, in the digital manufacturing business in the area of Riblet processing, Nikon has also achieved corporation with a Japanese company in the first half of this fiscal year. Specifically, ANA or All Nippon Airways started operation of ANA Green Jet in October and Nikon started collecting data by test fitting films with a shark skin processing on the ANA Green Jet. Biomimetics is a new technology. This Riblet processing, this could be theoretically improve aircraft fuel efficiency by 2% and reduce carbon dioxide emissions. We will continue to collaborate with other companies on the further usage for Riblet processing, including for applications other than aircraft. As seen in these examples, Nikon intends to promote its contribution to sustainability through its core technologies and its business strategy as an integrated tool. Furthermore, as part of our human capital management, we have revised our wage system including an increase of up to 20% of annual salary for the parent company employees affected from October of this year. Our policy is to reward our employees’ activities more than ever and to continue to secure a diverse workforce with a high level of expertise. In this way, Nikon will steadily implement the policies set forth in our medium-term management plan to achieve growth. I would like to ask for your continued understanding and support. Now, CFO, Tokunari will explain the contents of the interim financial results and the outlook for the full-year. Muneaki Tokunari: Thank you very much for your attention. My name is Muneaki Tokunari, Executive Vice president and CFO. I would like to take this opportunity to welcome investors and analysts. I would like to explain our financial results for the first half of the fiscal year and the outlook for the full-year. First, let me give you the key points of the first half results. Revenue was JPY288.3 billion, operating profit was JPY24.4 billion and profit attributable to owners of parent was JPY18.8 billion. Compared to the first half of the previous year, revenue increased by JPY15.3 billion. Next in part to the effect of a weaker yen, revenue increased in all segments except the Precision Equipment business. On the other hand, operating profit decreased by JPY7.7 billion. This was mainly due to a significant decrease in operating profit in the Precision Equipment business, reflecting a decline in unit sales of highly profitable FPD lithography system. Compared to the previous forecast announced in August, revenue increase by JPY13.3 billion, operating profit by JPY1.4 billion and profit attributable to owners of parent by JPY1.8 billion. The increase in operating profit compared to the previous forecast is due to the fact that all segments, except for the Precision Equipment business exceeded the plan despite a downturn in the Precision Equipment business and an increase in expenses related to the SLM acquisition due in part to the effect of yen depreciation. In the yellow box on Slide 10, we list the main figures on a consolidated basis for the first half of the year. Free cash flow was negative, but this is due to factors including the acquisition of SLM shares prior to the TOB and a buildup of inventories and preparation for sales in second half and beyond as described in the text at the bottom of the slide. Slide 11 shows the first half results by segment. In the yellow box, the upper row for each segment shows the revenue and the lower row shows the operating profit. Compared to the previous year, the Imaging Products, Healthcare, Components and Industrial Metrology and Others segments achieved double-digit revenue and profit growth while the Precision Equipment business saw significant declines in both revenue and profit. Corporate PL non-attributable to any reportable segments decreased by JPY8.4 billion year-on-year, mainly due to the absence of the gain on sale of land recorded in the previous year and expenses related to the acquisition of SLM. Slide 12 shows consolidated revenue and profit and loss for three months from July to September, showing an increase in sales and decrease in profit compared to the same period last year. I will now explain the first half results by business segment starting with the Imaging Products business. First, in the Imaging Products business revenue increased JPY25.3 billion year-on-year to JPY114.5 billion and operating profit rose JPY9.7 billion to JPY22.2 billion. In addition to the effect of yen depreciation, the shift to mid to high-end models for pro/hobbyists continued, resulting in an increase in average sales price per unit. As a result, revenue increased to substantial 28% year-on-year and the operating profit margin was nearly 20%. Slide 14 shows the Precision Equipment business. Revenue decreased JPY35.9 billion year-on-year to JPY83.3 billion. Operating profit was JPY6.2 billion, a decrease of JPY21.3 billion year-on-year. 13 units were sold in the FPD lithography business in this first half, but this represents a decrease in both revenue and profit compared to the first half of the previous year when 30 units were sold after installation, which have been delayed by COVID-19, proceeded all at once. And the semiconductor lithography business revenue and profits increased year-on-year due to an increase in the number of new units sold. Slide 15 and the Healthcare business, sales of biological microscopes and retinal diagnostic imaging systems were strong, especially in North America, and the effects of a weaker yen also contributed to a significant year-on-year increase in both revenue and profit with revenue of JPY46.6 billion and operating profit of JPY3.6 billion. Slide 16 shows the results from the Component business. Revenue was JPY26 billion and operating profit was JPY9.8 billion. Both revenue and operating profit were much higher than the previous year due to increased sales of EUV-related components and optical parts & components for semiconductor-related products. Slide 17 shows the results for Industrial Metrology and Others. In the Industrial Metrology business, sales of metrological instruments such as video measuring systems and industrial microscopic were strong resulting on a year-on-year increase in both sales and profits. In addition, operating profit improved significantly due to higher utilization rates at production subsidiaries included in others. As a result, the segment reported revenue of JPY17.6 billion and operating profit of JPY1.5 billion year-on-year increase in both revenue and profit and return to profitability after last year's deficit. Next I will explain our outlook for the full-year, please refer to Slide 19. I will first explain the exchange rate assumptions at the bottom of the slide. We had previously assumed JPY120 to the dollar and JPY130 to the euro, but in consideration of recent fluctuations, we have changed the exchange rate assumptions to JPY135 to the dollar and JPY135 to the euro for the second half of the fiscal year. Combined with the first half results, the full-year exchange rate will be JPY135 to the dollar and JPY137 to the euro. As stated at the top of the material due in part to the effect of the change in exchange rate assumptions, we have revised our full-year revenue forecast upward by JPY20 billion from the previous forecast to JPY645 billion, operating profit is JPY55 billion unchanged from the previous forecast. Profit attributable to owners of parent is expected to be JPY42 billion unchanged from the previous forecast. ROE is expected to be 6.9%, although not stated in the slide. As for shareholder returns, the annual dividend remains unchanged for the previous forecast at JPY40 per share for the full-year and JPY20 per share for the interim dividend. The dividend payout ratio is 34.6%. Regarding share buybacks, we have repurchased 10.65 million shares for JPY16.1 billion by the end of October. We will continue to repurchase shares up to JPY30 billion through March 24, 2023. The full-year operating profit forecast of JPY55 billion remains unchanged between the previous and current announcements, but there is a composition change in the forecast. I will explain this in the figure on Slide 20. In this figure, the total JPY5.5 billion of FX impact, including in the operating profit of each business is shown on the right side of the slide. The left side of the slide shows the estimated full-year operating profit forecast for each business, excluding the FX impact compared to the previous forecast as of August 4, 2022. As you can see, while the three businesses of Imaging Products, Healthcare and Components are expected to exceed the previous forecast, the Precision Equipment business has been revised downwards significantly, mainly due to the postponement of the installation of some FPD and semiconductor lithography system to next year. In addition, Others includes approximately JPY2 billion of acquisition-related expenses for SLM, which were not included in the previous forecast. As a result of these positive negative factors in each business and headquarter-related expenses and taking into account the impact of FX, the forecast for operating profit of JPY55 billion has been left unchanged. Please see Slide 21. This slide lists the main figures of the full-year forecast, including the comparison with the previous forecast and the year-on-year comparison. An overview has already been given to you. Slide 22 shows a list of full-year forecast by segment along with the comparisons to the previous year and also to the previous forecast. I will explain the details for each segment later. First, let us look at the Imaging Products business. Revenue is revised upward by JPY15 billion from the previous forecast to JPY230 billion reflecting the results of the first half of the year and changes in FX rate assumptions. Compared to the previous year, we expect a significant increase in revenue of JPY51.8 billion. While the market is recovering, we will continue our strategy of focusing on mid to high-end cameras with an emphasis on profitability and maintain the previous forecast of 700,000 units in terms of sales volume. Although the planned sales volume remains unchanged, ASP are steadily improving, especially for mirrorless cameras and interchangeable lenses and revenue is expected to increase from the August forecast. Operating profit is expected to be JPY33 billion, JPY6 billion higher than the previous forecast due to the increase in sales. Compared to the previous year, operating profit is expected to increase by JPY14 billion. In the second half of the fiscal year, we expect expenses for sales enhancement in R&D to increase, but we believe that the increase in profits due to the sales growth will outweigh these expenses. Slide 24 shows the Precision Equipment business. Revenue are projected at JPY230 billion, a JPY10 billion reduction from the previous forecast. Compared to the previous year, it is expected to increase by JPY18.8 billion. The FPD lithography system market is expected to shrink from the previous year as well as from the previous forecast to 80 units due to a slowdown in investment and installation delays caused by the decline and panel prices. As for Nikon, due to the delay and parts procurement, the completion of installation of one large panel system will be postponed to the next fiscal year and the annual sales volume is expected to be 30 units. There are concerns that the FPD market will remain sluggish into the next fiscal year. In the area of semiconductor lithography business some customers continue to experience delays in preparing for acceptance of installations due to ongoing labor shortages, supply chain disruptions, and material shortages. As a result, installation of total of four units, two new and two used units is expected to be postponed from the current fiscal year to next fiscal year. As a result, we have lowered our full-year forecast for revenue by JPY10 billion for the Precision Equipment segment as a whole. Operating profit forecast is also lowered by JPY5 billion from the previous forecast to JPY30 billion, reflecting the deferral of the installation of FPD and semiconductor lithography system to the next fiscal year. This represents a year-on-year decrease by JPY9.4 billion. Although the semiconductor business is expected to see a year-on-year increase in profit due to higher unit sales of lithography system, the FPD lithography business is expected to decrease due to a significant impact of lower units of 10.5G lithography system, which has a higher unit price. Please refer to Slide 25. Due to strong orders and change in FX assumptions, we have revised upward our forecast for revenue in the Healthcare business by JPY13 billion from the previous forecast to JPY93 billion. This is a significant increase of JPY19.8 billion year-on-year, and we are aiming for another record high sales in the current fiscal year. The growth in sales and earnings is mainly due to expanded sales of new products from biological microscopes and development of the private sector market and increased sales of retinal diagnostic imaging systems. Although restrictions on procurement of parts for both biological microscopes and retinal diagnostic imaging systems on the way to being resolved, we will continue to monitor the situation closely and strive to ensure stable supply. Operating profit is expected to be JPY8 billion and upward revision of JPY2 billion from the previous forecast due to the effect of increased sales. This represents an increase of JPY3.7 billion year-on-year. Slide 26 shows the outlook for the Component business. We have not changed our August forecast for revenue, which we expect to be JPY53 billion, up significantly JPY12.2 billion from the previous year. Operating profit is expected to be JPY18 billion, an upward revision of JPY1 billion from the previous forecast reflecting the strong first half performance. This represents an increase of JPY5.3 billion year-on-year. Sales of EUV-related components, optical parts and components for semiconductor-related products as well as photomask substrates for FPD have been favorable as of now. Slide 27 shows the outlook for Industrial Metrology and Other. Others include the figures from our production subsidiaries. Reflecting the first half results, we have revised upward previous forecast for this business segment by JPY2 billion to JPY39 billion. This represents an increase of JPY3 billion from the previous fiscal year. In the Industrial Metrology business, in addition to strong sales of imaging and measuring systems, sales of X-ray and CT inspection system and others are expected to increase. Operating profit is expected to be JPY4.5 billion an upward revision of JPY0.5 billion from the previous forecast due to the effect of increased sales. This represents an increase of JPY1.6 billion year-on-year. Although expenses for R&D and strengthening of the sales structure will be increased in the Industrial Metrology business, the increase in utilization rates of production subsidiaries included in the others category is expected to contribute to the increase in operating profit. This concludes my explanation, but I would like to say a few words about the first half of the fiscal year. Thanks to the benefits of the weaker yen. Our business performance exceeded the plan at the beginning of the term. The forecast of operating profit for the full-year is based on the assumption that the exchange rate will be JPY135 to the dollar as well as to euro. Based on this assumption, we expect operating profit of JPY55 billion, the same amount as the previous forecast. However, there are many risk factors that we need to watch closely during the second half of the fiscal year and into the next fiscal year, such as the sluggish FPD panel market, changes in market conditions for semiconductors, geopolitical risks, rising interest rates, and concerns of an economic downturn. As for strategic investments as explained by President, Umatate at the beginning of this presentation, we will proceed with a consolidation of SLM in Germany in the second half of the year, post-merger integration and the establishment of a new organizational structure to create synergies with our existing businesses. In the second half of the year, we will aim to achieve our performance targets and steadily implement the various measures in our medium-term management plan, including the promotion of human capital management and DX, and preparation for the next fiscal year, which is expected to be more challenging. Q - : Muneaki Tokunari: We ask for your continued understanding and support from our shareholders and investors.

Muneaki Tokunari: Good afternoon. My name is Tokunari, CFO of the company. Ladies and gentlemen, thank you very much for coming to Nikon's financial results meeting today despite your busy schedules. Today, I will explain the financial results of Q1 of this year, and the forecast for the full-year. Let me start with the results for Q1 of this year. Revenue was JPY 145.6 billion; operating profit was JPY 15.3 billion, with all reporting segments posting profits. Profit attributable to owners of the parent was JPY 11.8 billion. Compared to Q1 of last year, revenue grew by JPY 13.4 billion. Operating profit and profit attributable to owners of the parent fell, but profits were flat year-on-year. If you excluded the effects of last year's one-time profit from land sale and the U.S. subsidiaries' pension fund change. The yellow box on slide four show the main numbers of Q1 on a consolidated basis. And to the right, you find the change from the pervious year. As you see at the bottom of the page, in text, revenue was up year-on-year on weaker yen and other factors, but profits were down mostly due to disappearance of last year's one-time profit. Slide five shows Q1 performance by segment. In the yellow box, the upper line for each segment is revenue; the lower line is operating profit. As you see, all segments posted profits. As you see on the right-hand side, the full segments, other than Precision Equipment Business, increased both revenue and operating profit year-on-year. Our corporate profit and loss non-attributable to any reportable segments declined by JPY 4.9 billion mainly due to disappearance of capital gain from last year's land sale and changes in the amount of elimination from intersegment transactions. Now, let me move on to Q1 performance by business segment, starting with the Imaging Products Business. Revenue grew by JPY 11.2 billion, year-on-year, to reach JPY 61.2 billion, and operating profits grew JPY 4.4 billion to reach JPY 13.6 billion. ASP improved through the shift we made in high-end models for professionals and hobbyists. This, combined with the weaker yen, pushed up revenue significantly year-on-year by 22%, and operating margin exceeded 20% Slide seven is the Precision Equipment Business. Revenue was JPY 41.4 billion, a decline of JPY 10.4 billion, year-on-year. Operating profit fell by JPY 9.4 billion, and was JPY 4 billion. FPD Lithography Business sold seven units in Q1, but saw both revenue and operating profits decline compared to last year, when 13 units were sold due to catch-up installations for COVID-delayed sales. In Semiconductor Lithography Business, new unit sales increased to push up revenue, but operating profits declined partly due to disappearance of the one-time service profits posted last year. Slide eight, in the Healthcare Business, biological microscope sales in North America was strong, and retinal diagnostic imaging systems sales was also solid. With a weaker yen, both revenue and operating profits grew year-on-year. This slide, slide nine, is for the Components Business. Sales of optical parts for semiconductor-related products EUV related components, and photomask substrate for FPD were strong, leading to an increase in both revenue and operating profit. Slide 10 is for Industrial Metrology and Others. In the Industrial Metrology Business, sales of CNC video measuring systems for semiconductors and electronic parts grew, resulting in a year-on-year increase in revenue. The utilization rates of manufacturing subsidiaries, which are included under Others, improved, resulting in a positive operating profit. Next, let me talk about the forecast for the full-year. For the forecast for the first-half of the year, revenue is JPY 275 billion, which is revised downward by JPY 20 billion. Operating profit is JPY 23 billion, and profit attributable to owners of parent is JPY 17 billion; both remain unchanged from the pervious forecast. Let me explain. Imaging Products is revised upward by JPY 5 billion in revenue and operating profit, respectively, reflecting improvement of products mix and positive Q1 results due to the weaker yen. In Precision Equipment, JPY 25 billion in revenue, and JPY 5 billion in operating profit is deferred from first-half to second-half since some installations of FPD and semiconductor lithography systems are expected to be delayed to the second-half upon request from customer. As a result, revenue for the first-half of this year is revised downward by JPY 20 billion, the net of plus JPY 5 billion for Imaging Products, and minus JPY 25 billion for Precision Equipment. Operating profits will not change in total. This is the net of plus JPY 5 billion in Imaging Products and minus JPY 5 billion in Precision Equipment. For the full-year forecast, as you see in the bottom-half of the page, reflecting the upward revision in Imaging Products, both revenues and profit will be revised upward. In other words, revenue is revised upward by JPY 5 billion to JPY 625 billion, operating profit is revised upward by JPY 5 billion to JPY 55 billion, profit attributable to owners of the parent is revised upward by JPY 4 billion to reach JPY 42 billion. Q1 results reflect the recent exchange rates, but from Q2 onwards the rates remains unchanged from the previous forecast, at JPY 120 to the dollar and JPY 130 to the euro. If the weakening continues in Q2 onwards, we may be able to expect an upside by taking into consideration future uncertainties, like parts procurement constraints, continued confusion in logistics networks, COVID-related restrictions in China, slowdown of the economy, raw material and other cost increases, the full-year forecast other than that for the Imaging Products Business remains unchanged from the May forecast. Annual divided forecast also remains unchanged at JPY 40. Please look at slide 13, main numbers for the full-year forecast, including change from pervious year and previous forecast are shown in this chart. I already talked about the overview. Please turn to slide 14; this is the by-segment full-year forecast, including change from the previous year and previous forecast. As you see on the far-right, the full-year forecast remains unchanged from the previous forecast except for the Imaging Products Business. I will explain the details by segment. Starting with the Imaging Products Business, revenue forecast will be increased by JPY 5 billion, reflecting Q1 performance, to JPY 215 billion. Demand for mirrorless Z Series flagship model, Z 9, is solid, and we are seeing a smooth shift to mid and high-end cameras for professionals and hobbyists. In July, we launched a new Z Series product, the Z 30. We are working on further expanding our lineup, including lens products. However, parts procurement constraints still remained. And as you see at the bottom-left part of the slide, unit sales forecast for both cameras and lens remain unchanged from May. Operating profit forecast is also increased by JPY 5 billion to reflect solid Q1 performance. With improvement in ASP, performance is strong. But on the other hand, as expenses to grow sales and R&D cost is expected to grow, operating profit forecast for the second-half of the year remains unchanged. Last month, some media reported that we are discontinuing development of DSLR cameras, but Nikon will continue DSLR business. As we mentioned at this moment, we are focusing our management resources into mirrorless camera development, but we will continue to manufacture, sell, and support DSLR cameras so our customers can continue to use our products with piece of mind. Slide 16, is -- focuses on Equipment Business. There's no change to the forecast for revenue and operating profit. Revenues are expected to grow JPY 28.8 billion, year-on-year, and reach JPY 240 billion. FPD lithography business revenue will decline, but the semiconductor lithography business will grow in volume, especially ArF lithography systems as an overall increase in revenue for the Precision Equipment Business is expected. For both FPD and semiconductor lithography business, there is no change in the unit sales forecast. Operating profit forecast for the Precision Equipment Business is JPY 35 billion. We forecast an increase in operating profit for semiconductor lithography business, but the substantial negative impact on profit of lower sales of higher-priced Gen 10.5 FPD lithography systems is forecast to push down operating profit for the Precision Equipment Business. For both FPD and semiconductor lithography systems, installation of some systems is expected to be deferred from the first-half to second-half. This is because some customers, due to shortage of manpower, supply chain disruptions, and material shortage, are not prepared to have the systems installed as scheduled. Reflecting the deferral of installation due to customer reasons, JPY 25 billion in revenue and JPY 5 billion in operating profits is to be posted in the second-half of the year, instead of the first-half. Please turn to slide 17, Healthcare Business. There is no change from the previous forecast. Year-on-year increase in revenue and operating profit is planned, with both expected to post record high numbers. For both biological microscopes and retinal diagnostic imaging systems, parts procurement restrictions continue. However, through new product sales expansion and development of academia and private sector market in North America for biological microscopes and sales expansion, not only in North America, but also in Europe and Asia for retinal diagnostic imaging systems, we aim at achieving the plan set at the beginning of the year. Contract cell manufacturing business is to achieve steady growth in revenue through progress in multiple projects. Operating profit is to increase by JPY 1.7 billion, year-on-year, to JPY 6 billion due to increase in biological microscope revenue. Slide 18 is for the component business, there is no change from the May forecast. Significant growth, both in revenue and operating profit year-on-year, revenue is to grow by JPY 12.2 billion, year-on-year, to JPY 53 billion. Operating profit is to grow by JPY 4.3 billion, year-on-year, to JPY 17 billion. Semiconductor related optical components, including EUV related components, optical parts, encoders, photomask substrate for FPD sales are all strong. Slide 19 is for Industrial Metrology and Others. Others include manufacturing subsidiaries. This business segment also maintains the previous full-year revenue and operating profit forecast. Revenue is to increase by JPY 1 billion, year-on-year, to reach JPY 37 billion. In Industrial Metrology, we expect strong sales of CNC video measuring systems and expanded sales in X-ray inspection systems. For operating profit, we expect expenses to rise due to new product R&D and measure to strengthen sales infrastructure in Industrial Metrology. But due to improvement of profit at domestic manufacturing subsidiaries, included under Others, we expect a year-on-year increase of JPY 1.1 billion, to reach JPY 4 billion for the Industrial Metrology and Others as a whole. Now, summarizing Q1, all segments posted operating profit. Companywide operating profit was JPY 15.3 billion, profit attributable to owners of the parent was JPY 11.8 billion. We posted solid profit, which means the company, as a whole, is accumulating earning power. By segment, the Imaging Products Business was hit by the lockdown in Shanghai in April and May. Sales in China, a major market for us, stagnated, but we were able to makeup for it with solid sales in other regions. Restructuring up to last year and the improved product value in products like the Z Series allowed us to achieve more profits than planned. The Precision Equipment Business is also producing solid results. The Healthcare and Components Businesses, which are positioned as strategic businesses, are also progressing as scheduled. The first three months of the Medium-Term Management Plan, announced in April, went very well. For the full-year forecast, we made an upward revision of JPY 5 billion in operating profit, and JPY 4 billion in profit attributable to owners of the parent based on higher Q1 performance. The forecast for Q2 onwards remain the same due to the respreading of COVID, higher material and logistics costs, recession, and other uncertainties in the external environment. Despite these risk factors and parts procurement challenges, capitalizing upon the strength of the company, gained through restructuring and product competitiveness, we will focus first on achieving the upward revised profit forecast that we presented today. At the same time, by steadily working on early expansion of growth areas, strengthening the human capital and sustainability strategies that are included in our Medium-Term Management Plan, we will meet the expectations of our shareholders and investors. We ask for your continued understanding and support. End of Q&A: