Welcome to the Dentsu Fiscal Year 2024 First Quarter Earnings Call. This is a reminder that today's call is being recorded. This call will be held in Japanese and English with simultaneous translation for those joining online. Please choose your preferred language from the bottom of the Zoom screen. For those joining on the telephone line, you will only be able to hit the original language spoken. [Foreign Language] Today's presentation materials are available on the Dentsu Group website. Joining me today are President and Global CEO Dentsu, Hiroshi Igarashi.

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Global CGO and Global CFO Dentsu, Yushin Soga.

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CEO Dentsu Japan, Takeshi Sano.

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CEO Dentsu Americas and Global President, Data and Technology Dentsu, Michael Komasinski.

Hello, everyone. It’s great to be with you today. Thanks.

The agenda for today will start with business update from Hiroshi Igarashi. Yushin Soga will then present the financial update, followed by strategic update from Hiroshi Igarashi. We will invite you to ask questions after the presentation. Mr. Igarashi, please go ahead.

Hello and welcome to our results. This is Igarashi. Good evening. Thank you for joining our Q1 FY 2024 earnings call today. In the first quarter, we reported 6.3% growth in net revenues due to positive impacts from acquisitions and FX, but faced 3.7% organic revenue decline with an operating margin of 10.4%. The soft start to the year was in line with our expectations and reflected client losses in prior periods. We remain confident in our ability to deliver the FY 2024 guidance of around 1% organic growth and 15% margin. We have seen momentum in new client wins in the first quarter. And from second half, we cycle out client losses from 2023 and our comparators ease significantly. Our CFO, Yushin will present our financial updates later on. Let me start with our Q1 highlights. In Japan, the company's partnership with SMBC Group was further expanded. Internationally, ICE Prospect grew its relationship with Ferrero into the US market and Dentsu creative one Lowe's. In APAC, we won CXM projects for Toyota and ASIC, as well as several creative and media projects for the Singapore government and ministries. On sustainability and ESG, we launched our new 2030 sustainability strategy. The aim of this strategy update is to respond more proactively as One Dentsu to rapid changes in the business environment and the world's perception of sustainability and to fulfill our responsibilities to society and our stakeholders. Based on this strategy, we aim to achieve sustainability for the group and society by generating future ideas to solve difficult social problems. In the industry awards and recognition, Carat North America was awarded P&G's partner of year. At Spikes Asia Dentsu Group won the Network of the Year Award and Dentsu, Inc. won the Asia Pacific Agency of the Year award with a record 35 awards including five other Grand Prix awards. At ADFEST, we took top four awards. Dentsu Group won the Network of the Year award while Dentsu, Inc took the Agency of the Year Award and other top two. I will hand over to Yushin to present the financial updates.

Thank you, Igarashi-san. Hello, everyone. This is Yushin. I will now update with our financial performance for the first quarter FY 2024 results providing the outlook for the full year at the end of the presentation. I will start with our key metrics. In the first quarter, the organic revenue decline was 3.7% which is within our expectations and reflected client losses in prior periods with a strong performance in Japan driven by strong advertising market offset by a relatively softer start in EMEA. We are confident to deliver approximately 1% of full year organic growth as we disclosed in February. The recovery in organic growth will be second half weighted with our confidence underpinned by new client wins and the easing of existing headwinds. The group operating margin was down 310 basis points on a constant currency basis year-on-year, which is also in line with our expectation. No change to our full year outlook of around 15% operating margin. Next page please. As a result, underlying basic EPS is ¥59.84. This slide shows the main items for our first quarter profit and loss. Net revenues increased by 6.3% to ¥286.4 billion despite the organic decline. Acquisitions and FX had a positive impact on reported revenue growth. Underlying operating profit was ¥29.8 billion down 22.1% year-on-year and underlying net profit decreased 31.1% to ¥15.8 billion. On a statutory basis however, we recorded a net profit of ¥5.6 billion. This slide shows the update of customer transformation and technology CT&T. Our CT&T ratio in Q1 fiscal 2024 was 30% a decrease of five percentage points. The decrease was caused by following three points. Firstly, we re-categorized some of our revenues internally out of CT&T into other practice areas as we look to ensure our services and offerings are globally consistent. This had an impact on our revenue ratio and will continue to impact throughout this year. Secondly, as we have reported over the past few quarters there has been a cyclical downturn within the CT&T domain. Finally, we have had strength in our media business particularly within Japan which affected the ratio. Looking forward, we are encouraged by higher pitch win rates in CT&T across America and EMEA. The pipeline is solid in Americas and EMEA with average deal size in EMEA plus 10%. We have also seen strong growth in strategy work year-on-year in Q1 which is often a leading indicator to greater implementation and activation work although the sales cycle remains extended. Now let's move on to the regional slide. The Japan business delivered steady growth of 2.4%. Three regions in international markets recorded organic declines in the first quarter. However, the organic performance has seen sequential quarterly improvement from Q4 of FY 2023. We expect this improvement to continue into the second half of 2024 as the benefits from the implementation are crystallized. Among our large markets, Canada, France, Italy, Poland, Spain and Thailand, and Japan reported organic growth, while USA and UK both reported revenue decline. In Japan, our largest region at around 40% of group revenues, net revenue reached a record high for the first quarter of the year, with solid growth ahead of expectations. This is mainly driven by a recovery in the advertising business with the advertising reporting positive growth for the first time in seven quarters. In particular, Internet Media achieved double-digit growth due to new client spend, plus higher client spends from a number of major clients. TV advertising also continued its recovery trend with a healthy spot market with auto, beverages and FMCG performing well. CT&T on the other hand, was slightly below the prior year with BX Business Transformation and DX, Digital Transformation, achieving steady growth on the back of strong market demand, while CX, Customer Transformation was impacted by challenging comparables from the prior year. We expect to see an improvement from Q2 onwards. For the full year 2024, growth is expected to remain robust in coming quarters. In the Americas, the performance was in line with internal expectations. In media, we are seeing the return on spending from our technology clients. This began in December 2023, and we now see this as a sustainable trend. In addition, net new business in media is robust with a number of wins in the first quarter. The media pipeline remains largely offensive. Creative is also reporting improving win rates with an increasing number of scaled wins, such as the T-Mobile account we won earlier this year and Lowe's. We will benefit from these wins later this year. In contrast, CT&T continues to face a challenging environment. The sales cycle remains elongated, but we continue to see this as a cyclical downturn and overall win rates increased almost two percentage points year-on-year. We expect to see H2 improvement due to cycling out of lost clients, higher than forecast client retention rates and the Q1 2024 media account plans yet to impact results. In EMEA, there was a mixed performance across markets with Southern and European -- sorry -- the Southern and Eastern Europe, such as Spain and Italy performing well. On the other hand, Northern Europe, UK and DACH were sluggish in the first quarter. As a result, the overall performance is slightly below internal expectations, but an improvement is expected to be seen in the second half of the year. Looking at the practices, media was broadly flat year-on-year, while creative had a slow start. CT&T was down but improved sequentially Q-on-Q and the pipeline remains strong. We have successfully expanded our business with local clients. From the second quarter onwards, our year-on-year comparables in this region will ease dramatically. We believe that the full year expectation for the region will be achievable. APAC ex Japan reported organic decline as conditions remain challenging in several markets. However, the results were ahead of internal forecast, seeing the improvements of the business. Media reported momentum in client spend in China, which has been a challenging market in recent quarters. In creative, we saw organic revenue decline due to reduction in client spend across a number of markets. However, we are also reported strong new business wins in China and India, which will contribute to the growth for the rest of the year. CT&T revenues were lower due to softness, especially in Australia and New Zealand. Full year outlook is maintained due to the cycling out of lost clients, a number of Q1 2024 wins not yet impacting results and improving win rate, for example, in China. Moving on to profitability. This slide shows a breakdown of the change in the group's underlying operating profit from the prior year. Underlying operating profit of ¥29.8 billion, decrease from ¥38.3 billion for Q1 in the previous year. The decline of net revenue on a constant currency basis in the core business was offset by newly consolidated acquisitions. Acquisitions also resulted in an increase in staff cost. As a result, the underlying operating profit was ¥29.8 billion, which was in line with our expectations. So in conclusion, we will continue to focus on organic growth for FY 2024. Q1 results are in line with our expectations and we are confident on our full year guidance of circa 1% organic growth and circa 15% operating margin. Our confidence comes from a bad outlook in the second half of the year. In Q2, we expect to see continued sequential improvement in organic revenues with a step up in terms of performance as the comparables ease significantly into the second quarter. We expect Q2 organic growth to be slightly negative with continued improvement expected in H2 to reach 1% organic growth guidance. Second half, our business will be driven by cycling out of lost accounts and easing of comparables, momentum in client wins, which will impact the -- impact from later Alicia [ph] and the One Dentsu strategy supporting the delivery of integrated growth solutions. Looking ahead, we remain confident in differentiated positioning at the convergence of marketing, technology and consulting. I will now hand back over to Igarashi. Thank you.

Thank you, Yushin. Let me now explain our group strategy. Our aim is to achieve a global structure to provide integrated growth solutions to our clients under our One Dentsu strategy. This model is centered around integrated client leads, who develop deep relationship with clients, understand their businesses and contribute to their growth by connecting the best capabilities within the group, not only in marketing but also in technology and consulting. By simplifying and integrating our offerings into an ecosystem, which makes sense to clients, we can grow our clients' businesses through integrated growth solutions. As I told you in February, we have shifted our focus from M&A to internal investments to strengthen our competitiveness and this is starting to have an impact. Our investment in the data and technology field has resulted in enhanced products, which we are using across a wide range of practice areas, particularly in media to win pitches and build strong momentum. Today, I would like to explain our efforts in the area of data and technology where we are beginning to see results from enhanced internal investment. We are re-launching Merkury, our proprietary data solution product, and actively promoting its use in wide range of practice areas not just CXM under the One Dentsu operating model. Merkury is a global data identity and insights platform that is innovative in the marketplace. In the media field, we see tangible results such as improved marketing ROI through effective targeting media planning and effectiveness measurement even in a cookieless environment. In addition by combining Merkury with first-party data or marketing platform held by clients, we are able to create more personalized customer experiences and achieve effective CRM. The results in some markets have shown a significant improvement in the effectiveness of marketing initiatives. We are preparing to leverage our strengths in these data areas in other areas, such as creative. Furthermore, the group's overall competitiveness will be strengthened by deploying this industry-leading data solution globally. The introduction of solutions utilized in generative AI is also underway. Gen CX and AI-based data analysis two support marketers by providing insights that are directly linked to actions using generative AI-based data analysis. This AI-based tool is backed by our long-standing marketing knowledge and its intuitive interface utilizing AI improves the quality and speed of marketing for our clients. The tool has been launched with a number of clients, and we see great potential. In Japan, we have launched IQ Studio, an AI-based business development support program, which is now providing services to clients. Generative AI is now a powerful to also in the area of PX. We will actively utilize AI in these innovative and intelligent ways, so that we can provide greater value to our clients. As for each of the regions, we are seeing progress and expect to see continued sequential improvements in performance. In Japan, TV and digital recorded solid growth in the first quarter and continues to support the overall performance. We also expect CT&T to continue growing strongly throughout this year. In Americas, we expect to see recovery in performance due to integrated solutions centered around Mercury, a data product that I explained earlier, which are showing a promise, particularly in the area of media. Marketing spend by technology companies continues to recover, and we expect the trend to be maintained. Our media pipeline remains solid and are largely offensive. In EMEA, we also see greater collaboration across business areas and the outstanding issue of organizational silos are now being removed, supported by recovery in spending, especially from local clients. We expect to see higher level performance this year, particularly as we experienced some onetime issues at DAC last year. In APAC, we are streamlining our organization as we proceed with restructuring plans in each of our key markets. We will aim to return to growth by executing our client strategy, which focuses on existing accelerator clients with Japanese clients in alignment with our Japan business. We are seeing improved organic growth rates and pitch win rates in India and Southeast Asia, any breach rate in China, enabling us to gain in confidence. Our basic strategy, integrated growth solutions remains unchanged. We believe that our clients' challenges lie in the area where marketing, consulting and technology converge and that this is where we see our business and growth opportunities. By adding value through the use of data and technology into our integrated growth solutions, we can become a true marketing transformation partner for our clients. Please allow me to conclude. While the market environment remains challenging, our guidance for FY 2024 is reiterated, as we are progressing in line with our internal forecast. The steps we are taking under One Dentsu are steadily paying off, and we are feeling more confident about the outlook for the current fiscal year. One Dentsu is accelerating collaborations within the group, which have led to improvements in pitch win rates. We'll continue to accelerate integrated growth solutions enhance our internal investment to further upgrading our capabilities and hone our unique competitive edge. We are continuing to prepare our strategy, to share with you later this year, as our next mid-term management plan. Thank you. And I'll now hand back to the, operator.

We will now begin the Q&A session. [Operator Instructions]. Mr. Maeda from SMBC Nikko Securities. Please unmute and introduce yourself.

SMBC Nikko Securities, Maeda is my name. Thank you very much. I have two questions. So I will -- can I ask two questions together?

Yes, please go ahead.

First is, just confirmation of numbers. In Q1, you had impairment loss of ¥6.2 billion. In the content the breakdown and was this incorporated at the beginning of the year. And if it's not factored in, then, you want -- will this impact the full year forecast. And from the Q2, will there be a possibility of such similar impairment losses? So my first question is on impairment losses. And next is regarding organic growth. So the pipeline, your win rate is rising. So your Q1 track record is my question. And once again in each area your -- is your win rate rising? Or as you mentioned, is it because of the new products? And which are the -- or maybe the clients in the industry that you are strong at, as the budget is increasing there or increasing or decreasing there? You were a bit behind last year. And so what is the reason your momentum is rising by region, if you could explain I'd appreciate it. Thank you.

Thank you very much, Mr. Maeda for your question. So two questions to your first question, first is impairment losses, so ¥6.2 billion impairment this year, so is this as assumed at the beginning of the year? And will this impact the full year forecast? And what is the likelihood of impairment loss in Q2 and onwards. So that will be from Soga-san. And organic growth, I will first give the general answer. And then the pipeline status will be explained by Americas, Michael and Sano-san from Japan. So question first question from Soga-san, please.

This is Soga speaking. Thank you very much Maeda-san, for your question. So first the impairment losses, in FY 2023, we recognized and the ones that were out of scope of what was recognized in FY 2023, in some part of Europe business, it was not a large amount but in some business we recognized this impairment losses. Was this included in the budget? Well, we do not budget the impairment losses. And so it was not included in the budget. But the amount -- because of the amount it did not impact the full year forecast. And going forward, the risk of impairment losses going forward, in terms of risks, we always recognize the risk and run the business in the way that it does not materialize. I think that is the responsibility we have on our business. As of now, a risk of a big material impairment loss or risk is not recognized at this point. But in the second half towards the second half, we are based on the assumption that our financial performance will improve. So we will operate the business in the way that this risk did not materialize. I mentioned, Europe, just earlier. It was APAC. So let me correct, it was APAC, the part that was out of scope of the APAC business. Okay, to your second question Igarashi would like to first give you the overall trend. And then Michael and Sano-san will follow.

So for organic growth, our peers pitch win rate is in fact improving rising. So more specifically, net wins. Compared to last year, we've been acquiring about twice as many accounts. So the brands that I mentioned earlier Lowe's and Papa Jones or the big accounts that we acquired and pipeline, 89% is offensive. So that is also very strong. Creative, as mentioned earlier, a large deals have been acquired. And so overall we are seeing a positive trend. In Mercury, this product is Mercury contributing to this? I would like Michael to talk about that later. But yes, it is contributing to our pitch and very – have big potential going forward. And on media, our new client wins is rising third-party convergence of first quarter new wind ranking they issue a ranking and we were one – we returned to one of the top three. This is already official. And so overall, we are trending very positively. Of course the – there is a time lag of the actual acquisition of the new clients but we are off to a great start. Now CXM is rather soft as Soga-san mentioned earlier, but the pipeline is a slight increase year-on-year. And our – of our global clients tech sector proportion is large. We've been mentioning this from the past. And so the spend recovery in this industry has been strong since December last year. And so we're seeing an overall positive trend. So first Michael, would like to talk about Americas. So Michael, please and then Soga-san please.

Thank you, Hiro. Yes so I'll reiterate a couple of the points that Hiro made and introduced one or two new points. As he said our win rates in the Americas are at a healthy level. And I would say the – a lot of the improvement in those win rates took place really over the second half of last year and into Q1. And so they're probably above our long-term norms. And so really it's now letting that elevated level of win rate sort of capture share and volume as we work through quarters and comparatives. As was mentioned, the pipeline for what I would characterize as like kind of the advertising market. So think about media creative and the marketing transformation that clients want to drive around that set of activities. That's a good steady market at this point and our pipeline reflects that. It is strong, whereas what I would characterize as the technology enablement space or broadly what we refer to as CT&T, continues to have that elongated sales cycle, which is potentially a hangover of a lot of spend from clients in 2021 and 2022 or just part of overall cutback in marketing budgets, as has been documented in a few different publications including, the Wall Street Journal just yesterday. So within the Americas right with our elevated win rate trying to capitalize on that advertising marketing transformation set of opportunities, it really is leveraging our integrated structure and our Mercury platform to provide our competitive advantage to our clients. And increasingly, we go to market to produce measured business outcomes for our clients. And I think that's where that market continues to move to.

Thank you. So San, CEO of Dentsu, Japan. So let me talk about Japan business. First quarter, was relatively strong. Thanks to the business that we've always had the auto mobile and telecommunications, they were down last year and is recovering this year. In next, food industry is strong. So that's another positive aspect. And the transportation and leisure, and distribution and logistics and retail are also strong. And in terms of domain, CT&T domain, remains strong. And for media, in the first half last year, digital was a bit struggling a week. But Q1 had double-digit growth and TV is recovering. Next, our competitors. In Dentsu, Japan companies, the pitch win rate is rising especially in terms of industry the distribution and retail and transportation, leisure the win rate were especially high in these areas in Q1. The reason is because of the Mugen AI products and our stock, the integrated proposal that we've always been strong at. Thank you very much. I hope this answers your question.

Thank you very much. So for the next question Mr. Nagao, from Bank of America Securities. Please unmute and introduce yourself Q – Yoshitaka Nagao: Thank you for pointing me. My name is Nagao from BofA Securities. I'd like to ask two questions. The first question, is regarding the strong performance in Japan right now, the advertising market, the sustainability. How are you looking at the sustainability of that market -- sorry the advertising market, in Japan? So is that based on the stand-alone events or promotion, having a greater impact? And I would assume, that was somewhat larger in terms of influence until March. But since April, the strong trend continuing. So that's, the first question. And the second question is, what Soga-san the CFO said, before the first quarter was more or less within expectations, but underlying operating profit for the full year JPY 180 billion. If we take that into consideration, then from second quarter onwards, you have to realize quite a strong return. Otherwise, it may be difficult to achieve the full year number. So from the second half of the year, not the billings, but the cost reduction the impact, the measures to improve operating margin, you still have room to implement some of these additionally. So, the measures for the second half of the year to achieve the consolidated ¥180 billion please?

Thank you, Nagao for your questions. The first question was regarding the advertising market forecast for Japan going forward. So, rather than short-term events was the first quarter impacted by those one-off events and so forth. And was the company's view in regards to the situation from April onwards. Soga-san will respond to that question. And the second question the explanation was given that the first quarter was in line with some expectations. But as for the full year, the profit ¥180 billion level from the second quarter onwards. We need to achieve quite a high target numbers. And from the cost perspective, is there anything that the company will be doing in the second half of the year from the perspective of maintain operating margin you wanted to hear some explanation. Mr. Soga will respond to that question.

Thank you very much Mr. Nagao. My name is Sano, CEO of Dentsu, Japan. As for the first quarter, it wasn't the case that there was an impact from a large event. Rather it was more based on the expansion of our normal operation. And if we look at last year, we had WBC, which was kind of a naturally popular event and we were able to gain the earnings from such events. So, in that regard, we were somewhat behind in regards to those one-off events. So, no more marketing or the other CT&T domain, we have been able to gain back some business there which has enabled us to achieve these positive results. That was the case for the first quarter. Second quarter onwards client. And they have relatively a good view on the economic outlook and where the wage level increasing leading to increased and willing to the different purchase is likely to lead to a great investment from our other client company. So, we're expecting strong situation to continue in that regard. That concludes my response. So, Mr. Soga to answer the second question please.

This is Soga speaking. Thank you very much Nagao for your question. Well, ¥180 billion of the operating profit, are we confident? Well, this is a level that we must achieve. And to explain that the result will be kind of more leaned at was the second half of the year. And myself and Mr. Igarashi also explain the ground upon which we expect this to happen. But we had minus 3.7% organic growth already in the first quarter and the momentum of the improvement from second quarter or is something that we need to continue to watch on a monthly basis. And it's not the case that we have just an optimistic view about the recovery in the second half. So, we will look at the recovery of the top line so that we can affect appropriate cost control which we are doing right now. But for this fiscal year, the main focus of the management is to focus on returning the top line recovery. And so it's not the case that if we recognize the risk on top side it's not the case that we are going to work on reducing cost immediately particularly in regards to personnel. But at the same time we have the reserve all travel and entertainment at is indirect costs. So, in regards to direct costs that will support the top line we want to control that as much as possible. And this is what we refer to as due diligence. And through that we will try to control the commitment and the guidance that we have given to the market. So, that's the kind of thinking that we have at this point in time. This completes my response.

And this is Igarashi and allow me to add a comment as well. Now, for this fiscal year, we have said we are going to focus on internal investment for us to enhance our competitiveness. Until now, we have acquired assets through M&A and we want to utilize them in an effective way. And so we want to enable that through this internal investment. And this type of cost has been identified from the start of the fiscal year. But we have a simple One Dentsu operating model. And this is a clear organizational structure that we have shifted to. And by doing this, we have been able to thoroughly review redundant the organizational costs. And the cost that we have been able to reduce there is now diverted to internal investments. So we're doing this in parallel. And so in that regard, we are working on cost reform internally in order to work on achieve that operating margin. That completes my response. Thank you.

[Operator Instructions] So for the next question, Ms. Fiona Orford-Williams from Edison Group. Please unmute and introduce yourself. Fiona Orford-Williams: Thank you. This is Fiona from Edison Investment Group. First of all on CT&T, you talked about the cyclical downturn and how you hope that's going to be changing. But do you see with the strategy work that's coming through, do you think there's going to be a structural change in the scale of the opportunities that are available in that segment? And what do you think is needed in terms of the global economy for those sales cycles to shorten? That's my first question. My second question revolves around the client leads. Have you now got your full team of client leads in situ? And what's the position on the accelerator clients? Thank you very much.

Fiona, thank you very much for your question. So thank you for the two questions. CT&T current status, the cyclical downturn and how we see it coming back and how we see the status. And will we need the structural transformation. So, we will share with you the key points of where we stand. Allow me to first explain that, especially in the Americas, this work is led by Michael. So, we -- I will ask Michael to also answer after me. And second question was on client lead initiative. Is this already -- are we sufficiently well in place well prepared. So Igarashi, I will first answer your second question too. So CT&T, unfortunately this year, the percentage is down because of the reasons Soga-san explained earlier. So I will not repeat his points, but in Japan, it is strong. In the US market, as Michael said earlier, the economy is still down. So there's a cyclical downturn. But in the Americas and in APAC, the pipeline is increasing gradually as we mentioned earlier. So the scale, the size may be a bit smaller, but we continue focusing on this area and produce good results. So we will continue making effort in this area. No change that about that. So Michael, if you could follow up on the Americas please.

Yes. Fiona, happy to take that. Yes the -- your question about how strategy pulls through projects and what we think the future of those projects looks like. So it's a true statement that an uptick in strategy work does tend to predict projects that manifest from there, right? You build a roadmap for a client and that tends to kick off a series of projects that over time can become quite significant. In terms of what drives the pace and size of those projects, I think a lot of it has to do with macroeconomic factors. We need clients to sort of be in situations where those investments in experience and customer touch points are essential for taking market share or remaining competitive relative to their peer set. I think in some ways, especially in the US, the strong macroeconomy has maybe lessened some of the urgency around some of those investments because there is strong demand in most industry verticals, maybe not all. You couple that with that sort of hangover effect or regression to the mean coming off of really heightened levels of spending on transformation in 2021 and 2022, and I think that's sort of how we end up in the situation that we're in currently. So I think potentially a soft landing or some cooling of consumer demand is actually probably net positive for CT&T because, again, what you need is for clients to look at those transformation investments as essential and not discretionary. And it feels like with a steady demand in most sectors, clients have decided to pull the advertising lever instead of the marketing transformation lever, and we just need sort of that situation to change, basically.

Thank you very much. So to your second question, client lead. So we have IGS. Integrated growth solution. As our growth driver and commit to clients' challenges. This is not just a single solution that we offer to clients. It's not that we offer a single solution and address clients' challenges. We need to combine multiple solutions and fully commit to clients' challenges. And client lead, ICL, integrated client lead is the one that leads this initiative. And we are increasing the headcount in this area year-after-year. Of course, AGL [ph], the sales, the AGL sales and marketing model, we have many AGL who commit to clients, but we also have ICLs. The number of ICL headcount is increasing year after year. And so ICL will commit to clients' challenges and offer integrated solutions to address and resolve clients' issues and challenges. Which key priority clients should we target and meet the demands of? Which area should we focus on? This is our accelerator client initiative. America's team has very fine-grained, detailed analysis in this area. And we are producing good results among our global clients. And this is the symbol of our client centricity and our uniqueness. And so we will continue focusing strongly in this area. And when we announce our financial results, we will share with you the results, the track record in this area. So I hope you could continue paying attention to this. Thank you very much.

Thank you very much. So for the next question Mr. Kishimoto from Mizuho Securities. Please unmute and introduce yourself.

This is Kishimoto from Mizuho Securities. Thank you very much for your explanation. I have one question. Now the next mid-term management plan is being established towards the second half of the year. Now so you have the registrational impairment loss. But then you're talking about the utilization of AI in Japan increasing marketing share and so forth. So basic thinking is that for the next midterm management plan for regrowth what are the possibilities? Is there a greater probability of achieving further growth. I think you are still prior to coming out with specific numbers in the next the midterm plan, but what is the regrowth are expected in the next tier period?

Thank you very much Kishimoto for your question. So for the growth expectations for the next mid-term – the term period myself Igarashi will respond to this question. Well based One Dentsu we have One Dentsu operating model. We are converting to this model and the focus on client and focus markets identify where we are approaching this in a well-balanced manner. And we want to respond to the challenges and issues of the clients. And we are seeing outcomes being achieved based on this type of initiative. In the last number of years we went through a tough -- restructuring and we have gone through and experienced those clients as well. But what we are working with right now the outcome of this everyone is in agreement and are advancing this fully committed. And so on that basis the mid-term management plan and our role aim for growth and we are going to aim for achieving organic growth. And that will be something that we intend to show as part of our plan. And from this fiscal year we started on the finance committee which is part of the Board of Directors' structure and would it be the realizability of the mid-term management plan and also KPIs to the measure of progress. The setting this KPIs are also discussed thoroughly at the data Finance Committee as well. So the perspective of the shareholders and the perspective from the market we are going to be fully mindful of those as we establish our mid-term management plan. But please wait for them to be announced.

Thank you very much.

With that I would like to conclude today's earnings call. Thank you very much for participating today. You may now disconnect. Thank you.