Masa Okuzono - IR Yushin Soga - Non-Executive Director Timothy Andree - Executive Officer & Director

Oliver Matthew - CLSA Limited Richard Eary - UBS Investment Bank Brian Wieser - Pivotal Research Group Michael Remington - Codrington Japan

Good morning, good evening, ladies and gentlemen. Thank you for joining this telephone conference for Dentsu Inc.'s 2018 Second Quarter Earnings Announcement Conference Call. [Operator Instructions]. At this time, I'd like to turn the call over to Mr. Masa Okuzono. Please go ahead.

Thank you. This is Masa Okuzono, Investor Relations speaking. Thank you for joining us today. Before starting, let me tell you a few things. Firstly, we'll be referring to the results presentation, which can be found on Investor Relations section of our website. Secondly, let me introduce the host for this conference call. Joining me today are Mr. Tim Andree, Director of - Executive Officer in charge of our International Business; and Mr. Yushin Soga, Director of - and Executive Officer in charge of Finance. Finally, we'll take your questions but in English language only after the presentations from them. The entire call should take around one hour. So Yushin, please start.

Good morning, and thank you for joining the call. My name is Yushin Soga, Executive Officer of Finance for Dentsu Inc. I will talk us through our financial results for first half 2018. Slide 1 shows our financial highlights from the first half of 2018. As a reminder, we implemented IFRS 15 from January 2018. To enable year-on-year comparisons, we have provided you with pro forma numbers throughout the presentation. Moving to Slide 2. Revenue less cost of sales increased 7.6% on a constant currency basis, driven by the third sequential quarter of positive organic growth, both in Japan and at Dentsu Aegis Network and by international M&A. Underlying operating profit fell 1.8% due to current investment to improve the group's corporate infrastructure and in working environment reforms in Japan to support future growth. The first half so far is lower than our previous forecast. Our operating margin for the first half dropped 130 basis points to 13.7%. Digital domain ratio became 45% on a consolidated basis. Moving on to Slide 3. We look at the increase in revenue less cost of sales. This was primarily driven by international M&A and organic growth. ¥16.9 billion or 4%, both the Japan business and Dentsu Aegis Network positively contributed. Japan organic growth is 4.7% and international organic growth is 3.4%. On Slide 4, we take a closer look at the Japan business. Revenue less cost of sales were up 4.7%, driven by an increase from digital activities and by more new business wins. The digital ratio for the Japan business is now 23.9%, an increase of 190 basis points year-on-year. Underlying operating profit rose 0.8%, but the operating margin dropped 100 basis points due to investment in working environment reforms. Looking at the international business on the next slide. Revenue less cost of sales was up 9.7% on a constant currency basis, with first half organic growth at 3.4%. In second quarter 2018, Dentsu Aegis Network delivered organic growth of 4.5%, the fourth consecutive quarter of improving growth. The Americas posted a strong performance of 5.5% organic growth, driven by new business wins in second half 2017, the 6.5% in second quarter and 4.6% in the first quarter. I'd like you to refer to appendix quarterly organic growth for more detail. Underlying operating profit was down 8.4% on a constant currency basis due to current investment to help the business operate efficiently at scale. These investments fall into two categories, the first one is global systems and platforms to improve efficiency across the group; second one is the investment to drive top line growth such as the growth platform, our proprietary internal system to drive revenue across the [indiscernible]. On Slide 6, we look at the change in underlying operating margin, down 130 basis points versus last year. We look at this in more detail on Slide 7. 2018 is the year of planned investment for the Dentsu Group, both in Japan and in Dentsu Aegis Network. These planned investments have lowered the consolidated margin for the Dentsu Group. The margin remains largely on track for 2018 guidance at the right-hand chart. Slide 8 shows the move from underlying operating profit to statutory operating profit. In Slide 9, the move from statutory operating profit to net profit. The major item of note on this slide is the change in finance costs. This relates to a change in put-option and earnout liabilities, an accounting loss is recorded as the value of an acquired company goes up. Slide 10 shows there is no change to the dividend for financial year 2018 from my presentation in February this year. We expect lower profit due to planned investment for 2017 and 2018, but still prioritize stable dividend. Slide 11 shows the guidance, our focus for 2018 financial performance. Yesterday, we increased the guidance for 2018 net income driven by the sale of Dentsu's shares in Kakaku.com. We announced the sale over a week ago. If we offset these gains from the sale of Kakaku.com's shares with the headwinds from the increased accounting loss from the put-options, we see the net profit guidance of ¥79.5 billion, an increase by ¥17.9 billion or 29.1%. There's no change in guidance to our revenue less cost of sales or our operating margin. Finally, in 2019, we will enter our new phase of Dentsu Group. 2017 and 2018 have seen an investment in working environment reforms. These are expected to be completed by the end of 2018. In first half 2018, we have spent ¥5.4 billion on these reforms, 41% spent as we had guided to ¥13 billion for 2018. In terms of total working hours, our target for 2018 remains 1,950 average annual working hours per employee. The level of overtime has fallen over the past two years from 30 hours per month to 15 hours per month, a proof that we are seeing new working style being adopted. We remain committed to completing the working environment reforms by the end of 2018, and 2019 will benefit from the investment we have made over the past two years. Thank you for listening. I will now hand the call over to Tim Andree, Executive Chairman of Dentsu Aegis Network, who will talk us through our strategy presentation.

Thank you, Yushin, and good morning and good evening, everyone. I am Tim Andree. I'm a member of the Board of Dentsu Inc. as well as Executive Chairman of Dentsu Aegis Network, and I'm speaking tonight on behalf of our President and CEO of Dentsu Inc., Toshihiro Yamamoto, and will be delivering the presentation he gave this morning here in Tokyo. This presentation will show how we plan to drive growth in the medium and long term as a group. If you please move to Page 14 in your packet. First, I'd like to discuss our performance in 2017 and 2018 to date. Dentsu Aegis Network acquired Merkle in 2016, a major step towards strengthening our capabilities in the field of data and analytics. Over the past 18 months, we have been improving our products, redefining our brand portfolio, implementing global systems and platforms to operate our business efficiently and effectively. In Japan, we are focused on working environment reforms and creating a modern, flexible workplace. We aim to complete the reforms this year as planned. These efforts will be the foundation for sustainable growth in the future. Please turn to Slide 15. The digital and technological revolution that our clients are facing provides enormous opportunity. As we look to 2019 and 2020, we plan to leverage the work we have done over the past two years. This will drive growth in both the international business as well as in Japan. In 2019 and 2020, we will continue our necessary transformation to ensure that we have sustainable growth in 2020 and beyond. Moving to Slide 16. The Dentsu Group is committed to creating value for all our stakeholders, our shareholders, our clients, our people and society. To address the changing operating environment, we must innovate our business to reflect the opportunity that it presents. We plan to leverage our strong existing client relationships as well as our wider customer relationships with platformers, content holders and media. By collaborating with existing partners, we can build on our core competencies and create new value by utilizing the creativity and technology that already exists within our business. On Slide 17, I'll discuss the medium-term direction for our international business. We will continue on our current trajectory with Dentsu Aegis Network's vision to become a 100% digital economy business by 2020. We have six key strategic priorities. First, build an integrated solutions offering. We start from a position of advantage. We've had a highly collaborative one P&L operating model for years. Our ability to deliver seamless, integrated services built around our clients' needs is central to our success. Through crystallizing our integrated solutions offer, we enable our network brands to operate better together, while all sharing our one vision of innovating the way brands are built. Supporting this are our investments in global and regional shared services and global platforms. Second, we're leveraging our media partnerships and content opportunities. We will continue to focus on our relationships with our global media partners, creating brand-new building solutions. Content development remains a focus. Our third point is differentiating our business with effective use of data. With the transformational acquisition of Merkle in 2016, we have the basis of a highly valuable differentiator from our competitors. The people-based marketing platform, the M1 platform, is the foundation to differentiate every aspect of our integrated solutions. Turning to the next slide. Our fourth strategic priority is focusing on high-profit and high-growth sectors to grow earnings and outperform competitors. Our lack of exposure to legacy businesses allows us to be more dynamic. We will drive market share growth, both organically and inorganically. Internal investments will support our organic growth ambitions. Our fifth point is to mitigate the cost of complexity by improving operational efficiency. A focus on business operations will reduce duplication while reducing costs, making the organization easier to operate, run and working for our people. We believe the effect of those investments will further fortify our organic growth. And last, we plan to continue to proactively pursue market transformation opportunities to accelerate our strategy through our ongoing strategic M&A. Now I'll explain the medium-term direction for Japan from Page 19. First, in the existing advertising business, which is our core competency, we aim to improve the organizational structure to further expand our market share and improve margins. Please turn to Slide 20. We plan to actively diversify our business model based around our core competency. We will expand our existing business to provide a broader range of services in response to changing client needs. We plan to establish the marketing technology domain and the business design domain. Marketing technology is a new business domain, which drives the growth of clients business in an ever more complex digital environment. We aim to become clients' partners in the areas of data strategy, consulting, focusing on how to collect customer data, and more importantly, how to utilize this data to drive sustainable revenues. Through the design and construction of cloud systems, we can advise clients on how to manage their customer data safely. And finally, create holistic customer communication and channel experiences through an integrated data planning approach. In the business design domain, we plan to offer management reform support and new business development support. The Dentsu Group possesses a wide customer network, which provides significant potential for expanding this domain. Please turn to Page 21. We will also focus on new business development and investments that go beyond our existing business. We will invest our own capital and business partnerships with our diversified customer network, comprised of clients, media, platformers, rights holders, content makers and various other organizations. We aim to create new value through connecting our capabilities with that of our customers, and we expect the expansion of those partnerships will bring new capabilities and innovation to both our group and our customers. This is the business structure transformation for the Japanese business. Please turn to Page 22. In order to do this, we will expand internal resources, while attracting and retaining new talent. We will increase our investment activity, including M&A, to strengthen our capabilities. On Slide 23, you'll see that as I explained in 2019 and 2020, we are focused on growth and evolution in our Japan and international businesses. These years will be the key phase for implementing business transformation throughout the Dentsu Group for the years beyond 2020. Please go to Slide 24. The Dentsu Group has a client base that spans more than 145 countries and more than 11,000 clients. That number jumped significantly when we consider the various media owners, content owners and platformers that we define as our diverse base of customers. The rapidly changing environment is driving all of our customers' needs for transformation. At the same time, the position of our growth stages differs for the Japan business and the international business. It is through this diversity within our group that we will create opportunities for the Dentsu Group to grow further. Dentsu and Dentsu Aegis Network have differing strengths and are therefore complementary. It is through these differences that we can create a unique competitive advantage. Our vision is for our business to become one organic group, greater than the accumulation of its parts. The concept of a metanational organization is one we believe can bring growth to the group. This concept manifests utilizing resources gained in different parts of the world and using them for the benefit of the entire group rather than creating value by solely depending on the advantages rooted in any one specific country. We see this transformation as the answer to achieving continuous growth in and after 2021. Please turn to Slide 26. As we announced yesterday, we have begun the analysis of potential changes to the group holding structure. Amid a rapidly changing world, we plan to steadily grow our corporate value, change and expand our business domains and to accelerate our decision-making. These changes are likely to occur in January of 2020. As decisions are made, we will provide more details to the market. Please turn to Slide 27. Today, I explained the medium-term direction for 2019 and 2020 to take the entire group to a new growth phase in the post-2020 years. On Slide 28, we show our new guidance until the end of 2020. First, we expect a three year CAGR of organic growth of 3% or higher through 2020. Second, annual improvement in operating margin with 2018 seen as the bottom. And third, we will continue our study dividend policy as well as consider returns that track earnings or cash flow performance. In closing, I'd say that the Dentsu Group will play a leading role in the creation of value for all our stakeholders and wider society. We ask for your continued support going forward. Thank you very much. Now I'll turn the microphone back over to our operator, and we look forward to entertaining your questions.

[Operator Instructions]. The first question is from Oliver Matthew, CLSA.

A question on the holding company formation. Could you explain a little bit about why that is necessary from a structural point of view? Is it to enable you to consolidate some of the existing businesses or is there some tax implication? I don't quite understand why you need to have a different structure to pursue the same strategies you're all talking about.

The announcement is that we're looking to study the change in the group holding structure, and the benefits of this would be to speed our decision-making, to clarify and improve overall governance and to create increased capability to cross-sell and cross-promote the businesses across the group. So the idea is the new structure would allow us to maintain and enhance the overall pace of continuous growth in the group. It's at a very early stage. Many decisions have yet to be made, and we will keep the market apprised of our plans as we continue the feasibility study of this.

Okay. Could I have a follow-up question on digital in Japan, please. It seems that you're making some good progress with digital in the Japan market. Could you talk about some of the initiatives that are ongoing?

Let me respond in Japanese. This is Yushin speaking. On digital business in Japan, as you have rightly pointed out, there is healthy growth and progress. You may know this already, but digital business at Dentsu was rather behind against competitors. CyberAgent and Hakuhodo are our competitors. But since last year, under the concept of people-driven marketing, we've been using first-party data to provide databased digital marketing solutions. And as a result of such initiative, especially since the beginning of this year in Q1 and Q2, we've seen healthy numbers being recorded. Four years ago or five years ago, when digital business began or began to bloom in Japan, the so-called media business was the central business in the digital arena. As in other countries, performance-based digital marketing in Japan is now growing at an extremely fast speed. Until last year, we were not able to capture the growth momentum. But as I said, since we began to commence the people-driven marketing, marketing using people data or personal data has been growing healthily. And in Q1 and Q2, we were able to record healthy numbers.

Our next question comes from Richard Eary from UBS.

I'm just interested in terms of the guidance statements that you've made today in terms of the 3% organic growth or higher. I just wanted to know whether you can expand on that in terms of breaking that down across international versus Japan, media versus creative. And why you're so confident that you can see an acceleration of what is obviously higher than industry growth than we're seeing in the moment? Is it driven by market share gains, for example? The second question is just on the comments about continued improvement in margins in 2018. Can you elaborate in terms of sort of what margin expansion you expect to be driven? Is this driven by top line growth or is it driven by cost out simplification? And if it's the latter, can you just explain in terms of numbers or basis points what you expect to happen?

Thank you, Richard, for the questions. This is Tim Andree. Relative to the organic growth at 3% or better, we're not providing breakdown of guidance by region. But let me support the thinking behind the organic growth numbers is both - across-the-board, we have good momentum in 2018. We expect that given the investments made to date, the digital profile of the business, the overall integration of the solutions, so - and what we project as our ability to continue to evolve the business and get value out of the M&A that we have been doing, we expect the 3% to be a base of performance and we have the expectation to be able to continue to lead the peer group in organic growth performance. On the margin side, we expect 2018 to really be the floor. Both Japan and the international business have been investing, obviously, in different areas, and we expect those investments as we look at 2019 and 2020 to both moderate back to more normal levels as well as the investments that we've made are of two sorts. There are investments that have gone into the systems and structures and platforms of our business that are going to make us operate more effectively in the future and will allow then for margin improvement through efficiency. And then more importantly, we've invested in platforms and structures or capabilities that will drive revenue growth, like our M1 platform, we have a whole growth platform model that's allowing us to really identify early on opportunities for cross-selling within clients. So because of a combination of those, it gives us confidence in the guidance that we've given. I invite Soga-san to add anything, but hopefully that answered your question.

Can I ask a couple of follow-up questions?

Sure, please.

So when you made the comments that you expect to lead the pay group, so - of that 3% or better, that's partly driven by asset mix, as you mentioned, digital profile post-Merkle. But is that also driven by market share gains within that 3%? Is that correct read?

I think it would - it certainly wouldn't exclude market share gains in end markets. So yes, we always expect to be able to expand the business. So that growth will be driven by the ongoing capability that we have to win business. It will be - it's not dependent on any kind of share gains in order to achieve that growth, but we do expect share gains to be a part of the mix that will allow us to outperform the peer group.

And just one final question on M&A. You touched on M&A briefly in terms of trying to obviously extract value out of the M&A you've given. As you look at the industry landscape today and you look forward, are there material M&A opportunities from here for the group both on a small level and a big level?

We use M&A to accelerate our strategy. We have a pipeline of M&A that's based on either adding innovation and high-growth sectors or adding scale in high-growth geographies or geographies where we're currently subscale. So we have an ongoing program that we think has been very effective and, I think, a competitive advantage for us. The pipeline, as we look forward, is quite full. But obviously, there's - the pace of those things all depend on our ability to strike deals that are - and attract talent that's the most appropriate and then bring them in at valuations that are responsible. So there's no particular pace to the M&A. You saw that our - we've completed seven deals thus far this year. That's probably a slower pace than previous years, but the pipeline is full. And we'll continue to focus on the strategy we have. High-growth sectors, particularly in data, digital, mobile and cutting-edge innovation. And at the same time, where there are opportunities to scale business in important regions where we're subscale, we'll continue to do that. I have no guidance to provide you as to the size or scale of any of those transactions. We generally don't talk about the pipeline in specific terms, but I can confirm that M&A will continue to be used as it has been as a means of accelerating our strategy.

Our next question comes from Brian Wieser from Pivotal Research.

I had a couple of quick ones. First, I mean, Den is clearly outperforming peers in the U.S., especially. I was just wondering to what degree M1 has been a contributing factor. It does seem to be relatively differentiated as an offering. Is there any way to characterize what percentage of your clients are using that product? And then separately, I was curious if GDPR had any impact either negatively or positively? Publicis say that it did have some negative impact in Europe, but I can also see that marketers are thinking more clearly about the need to have better data strategies, and so I can see long-term opportunities coming from it as well. Just curious if you could comment on that?

This is Tim Andree, again. GDPR was implemented in May. And no, other than the first few days where we saw a little bit of a slowdown, I would say that GDPR had no impact on our performance in the first half. I credit that to the fact that we were very, very well prepared. We have been for months preparing the organization, working with clients, working with publishers to get the organization ready for the expectations and the demands of GDPR. And also, because of the product that we're dealing with, our data strategy really has the focus on high-quality, high-fidelity data. And so therefore, the publishers we're working with generally have both the means and the similar focus to keep very high-quality data and the protection of data and have the means to prepare for GDPR. So in that respect, I know you mentioned that Publicis saw some impact, but we'll differentiate ourselves from there. We did not see any impact from GDPR. In regard to M1, M1 is clearly - and I'm glad you said that. It is far ahead of the other offerings in the industry. And I think if you look at our U.S. performance, I would say our new business performance and our overall U.S. performance has been - there hasn't been a new business win, particularly in the media area that hasn't been touched by and that M1 hasn't been a part of and central to. So we think it's a source of competitive advantage for us. It really is a lead of - I believe we have an advanced lead over any other product in the market. And I think at any given time, we - while we don't break out the financial impact of M1 specifically, but at any given time we'll have 30 or 40 - 30 to 40 clients using the M1 platform. So it's becoming a rather robust tool that's being widely used and highly valued by our clients.

[Operator Instructions]. Our next question comes from [indiscernible] from Goldman Sachs.

Firstly, the sort of changes to the group holding structure which you announced, given that you already have the single P&L structure, I mean, what do you think would be the additional benefit from doing this and what sort of investment do you think this would require? And also, given that some of your peers are already trying to do this and it's taking them more than 2, 3 [indiscernible], what makes you think you can complete this by 2020? And then second, your 2Q organic growth was clearly stronger than peers. Do you think that was driven by some market share gains? And if so, in which geographies? And - or do you think it's just a general improvement in the industry growth as well? And then on the - just looking at the performance of different client segments, have you seen any change there either in terms of maybe FMCG, autos or so on? And maybe sort of breaking that down by market as well.

So let me, kind of, try to take them in some order the - first, let me - I'm sorry, I have to turn on my mic. Let me take these in some order. Thank you for the questions. In regard to the announcement, we are studying the group holding structure, and it's at this time only a feasibility study. The way you phrased the question sounded like we announced that we're changing the structure. We're studying it. And as I mentioned in the previous question, our purposes are really to improve the speed of decision-making, while strengthening governance to respond to the overall changing environment - business environment and then obviously, to continue to push growth. The one P&L model that you recognized, yes, we - that's a separate issue, and we've been operating a one P&L model in our international business now for 10 years, and the Japan business has always been operating at a one P&L model. And the reason that we've been able to do that and our competitors have had more difficulty is because our international business, in particular, is relatively low legacy. It's relatively new, recently built. And when you have that situation, you can create a system and a structure that isn't built on a legacy business that really focused on internal competition in the past. We never had that. And Dentsu in Japan has been in business since 1901, and it has always been an integrated operation. It had never kind of unbundled. So that's something that's both essential in our DNA, something that we really know how to do and that's something we're doing now and really won't have any change to that made from the study that we've announced on our group holding structure. The Q2 performance was - and your questions about there, as we mentioned in the last analyst calls, we expected there to be an uplift in performance in organic because of the record new business wins we had in the second half of 2017. I think that's largely what we've seen that's been driving our performance overall. And I'm trying to remember the third question, it's the - you asked about just what sectors?

[Indiscernible] client segments.

Yes, the segments. So for us, the FMCG segment, we've seen some return to growth overall. And in the past, that sector was being a little bit more conservative and we're seeing all of the clients starting to push towards a little bit more long-term planning and we're seeing a little bit more confidence as they go into future budgeting periods. Also, what we're seeing is the slowdown, particularly in FMCG in the past, while media held up pretty well, it was the campaigns, the project-based businesses that tended to slow. And we're seeing that business come back in the first half, and we see that as a real positive sign and a sense of confidence. Other sectors that have been strong for us have been luxury. Overall, while autos have been kind of a mixed performance as a sector, for us, overall, automotive has been quite strong. Food and beverage and technology sector has also been strong. So across-the-board, we're seeing clients - our three largest sectors are automotive - well, FMCG, automotive, and then financials, in that order. So across-the-board in some of our largest sectors of client business, we're seeing an uptick in spend, and we're expecting that new confidence to carry us forward into the second half and on into '19. Hopefully, I covered all three of your questions.

I just wanted to follow-up on the new business point. I mean, going into the second half, there's obviously still quite a few accounts under review. I mean, how do you think about the opportunity there? And whether do you think this could actually be a headwind or it is time to win some of those?

No. Actually, thank you for the question. As we look to the second half opportunity, new business pipeline is actually larger than the second half of 2017 when we had such a wonderful result. So we have bigger opportunity compared to last year, and the second half is about 85% offensive opportunity. We're not defending as much business as, for example, we did in the first half of this year. So I think our opportunities in the second half are plentiful. And as long as we maintain our win rate that has been quite strong, we have high expectations for continued performance in new business in the second half and on into '19.

Our next question comes from Michael Remington from Codrington Japan.

Can you hear me?

Yes.

I think these questions are for Soga-san. And the first one is about the cash flow statement. In the investment cash flows, there's a very large figure for investment in securities. Looking at the Japanese [indiscernible] there's ¥54.4 billion being invested in investment securities, and this is not acquisitions. And looking at your [indiscernible] which you published yesterday, these appear all to be Level 3 equity, in other words, unlisted equity. Couldn't you make any comments about this very large deployment of capital into unlisted equity during the second quarter?

Thank you for the question. This is Yushin speaking. This cash flow, as you have rightly pointed out, is not the direct mandate that we are engaged in. It's a different type of investment. In case we acquire majority or investment for 100% investment, that's the mainstream. But in addition to that, we do have some minority investments. And these are minority investments in two separate companies. And therefore, we refrain from giving the list of companies we do minority investments into. Tim Andree explained the midterm plan post-2020. We are thinking about post-2020 or 2021 and thereinafter. And in order to ensure continued growth, we've identified 2019 and 2020 as the years of new investment. And you can take it that, that kind of investment has already begun in this fiscal year as well. So as a result of a few minority investments, this is the sum amount of investment, the amount of outstanding investment support, digital and new business development. These are the main areas that we have tried to cover. And there are several minority investments that we had done that have resulted in that figure.

And none of these investments have been disclosed. There are no individual disclosures about these investments. Is that correct?

That's correct. We don't disclose the name of the companies that we had taken minority shares into.

It is $0.5 billion, quite a lot of money. One - and also, you probably won't answer this, but the revaluation of the put-option, does that principally reflect the increase in the value of Merkle?

Yes. That's the right understanding.

Because of Merkle's performance. When are you expecting to buy the minorities in Merkle?

2020 will be the year when earnouts will expire, and it will be 2021 when we pay the final considerations.

Our next question comes from Oliver Matthew from CLSA.

A question for the Olympics. It seems that the ticketing is going to start soon. Could you talk about your role, if any, in the ticketing side of the Olympics? And could you also talk about the revenue opportunity from the Olympics that you expect in 2019 and 2020? I know you don't have specific numbers, but if you could talk about which areas you think you might see an increase in revenues, that'd be very helpful.

Oliver, our line is not so good, so we cannot hear what you mentioned, typical roles. Did you say ticketing?

Sorry, let me repeat the question. So the ticketing for the Olympics has - is going to start soon. So what is Dentsu's role, if any, in the ticketing side of the Olympics? And the second question is what kind of sales opportunity do you see in 2019 and 2020 from the Olympics?

Thank you very much for the question. This is Yushin responding. With regard to the first question for the ticketing for the Olympic Games, on a separate note, we also have the World Cup rugby next year and we have the Olympic Games in the following year. So ticketing business for us is quite significant in our view. And it's not the case that we will have the exclusive right to sell the tickets. That's not what we do, but things related to ticketing. In other words, purchasing data. And in the Olympic organizing committee, we're collaborating with them and we're creating - providing support to create a structure that will enable rational sales of tickets. And in that respect, what type of revenue volume we are expecting is not something that we have been able to calculate specifically at this point in time. Now under the Olympic Games, marketing towards our sponsors. We have made some disclosure in that area. But as for ticketing business, we have not disclosed the details of the business there. With regard to the second question, in 2019 and 2020 related to Olympic business, are you asking that it is related to ticketing business only? I just wanted to confirm that part of your question.

No, not necessarily. Just what kind of opportunities are there for Dentsu with this big increase in sporting activities?

Okay. As you know, it was the Olympic - the organizing committee, we have the exclusive - the agency, and from Tier 1 sponsors in Japan, we have been selling sponsorship. And even now today, we are seeing the several companies sponsorship return on a monthly basis. In 2019 and 2020, the level of revenue that we can expect is somewhat dependent on the sales of sponsorship going forward. So at this point in time, I'm unable to refer to specific numbers. But last month, we have now arrived at a point where we are less than two years out from the Olympic Games. And from this time two years ago until today, the sponsors that we have been able to acquire, they will now engage in activation for the Olympic Games in 2020. And also, we have broadcasting rights in countries of Southeast Asia, and we will start to sell that going forward. So clients activation and the sales of the broadcasting rights in Asia, we're trying to link them up and engaging the sales of the time slot for TV and the execution of related events, we expect to be able to engage in that type of business going forward.

There are no more questions. Mr. Okuzono, please go ahead.

Thank you very much. Thank everyone for joining us today. So hope you have a good day. Thank you.

This conference call has now been concluded. Please disconnect your lines.