[Interpreted] I am Aoki from Dentsu Group IR Office. Thank you very much for participating in the conference call to explain the Half Year Results of Fiscal Year 2020. We will be referring to 2 presentation materials titled Second Quarter 2020 Business Updates and FY 2020 Half Year Results. You can find them on the Investor Relations section of our website. Please have them ready for the conference call. And the conference call will be held concurrently for both the investors from Japan and abroad today. Let me introduce the hosts of this conference call. Joining me from Tokyo is Mr. Toshihiro Yamamoto, Representative Director, President and CEO of Dentsu Group, Inc. This is Yamamoto. Nice to meet you. Mr. Hiroshi Igarashi, Director and Executive Officer, Dentsu Group Inc., and CEO of Dentsu Japan Network. Hello. This is Igarashi. Mr. Yushin Soga, Director and Chief Financial Officer, Dentsu Group Inc. This is Soga. And from London, Mr. Nick Priday, Director and Deputy CFO, Dentsu Group and CFO of Dentsu Aegis Network. We will first receive presentation from Mr. Yamamoto on Q2 2020 Business Update, and then from Mr. Soga on FY 2020 half year results. We will then receive questions from the participants. The call should take around 1 hour, 18:00 hours, Japan time. Mr. Yamamoto, over to you.

[Interpreted] Again, good afternoon and good morning. Thank you for joining us for the Dentsu Group First Half 2020 Earnings Call. This is Yamamoto speaking. Please refer to the handout Q2 2020 business update and flip the cover page. I will begin from the page titled, Accelerated consumer change leading to faster digitalization. The pace of change across the world has continued at unprecedented speed. Satya Nadella, CEO of Microsoft says, the world has experienced 2 years of digitalization in just 2 months. As consumers leverage technology to better navigate the COVID-19 disruption, we are seeing faster digital adoption and seeing higher demand for digital transformation from large clients for the development of meaningful brand experiences. For corporates to be engaged with customers, employees and partners, they must engage with them at deeper levels. It is essential to leverage data and utilize technology, hence driving structurally higher levels of technology investment across the economy. This is evidenced by continued growth in areas such as digital transformation, CRM and digital solutions business in the first half of the year. Through our diverse capabilities based on data and technologies, the Dentsu Group is well placed to support our clients and help them win, keep and grow their best customers in the new digital world. Going on to the next page titled, Diverse capabilities going beyond marketing. Like many of the greatest leaps in business and technology, major transformations take place in bursts during a short period of time, driven by pivotal events. And we are now at such turning point. In this time of change, we help our clients to fast track business critical transformations through end-to-end commerce solutions that integrate true digital transformation, technology services, data analytics, MarTech, creative consumer experience and media content. This true digital transformation will drive growth for our clients. Revenues from our digital capabilities reached 52.7% in the first half at a consolidated level, with Japan at 32.2% and DAN at 68.5%. This is the first quarter in which this ratio reached over 50%, supported by our fast growth areas such as digital solutions. Through offering integrated solutions that include digital, we can solve bigger problems our clients are facing, and bridge the online and offline customer experience. Through our powerful alliances with technology software companies, we can deliver true integration in marketing with data-driven creativity that communicates at the individual level, while driving results at scale. Next page please. Please refer to the page titled, Integrated Growth Solutions. In order to deliver against our strategy of Integrated Growth Solutions, we have begun to roll out 1 global team. Our global sales, solutions and client management team will connect the Dentsu Japan Network or DJN, and Dentsu Aegis Network or DAN operations seamlessly. We will operate as one team that will deliver globally consistent solutions committed to the business outcomes of our clients. Driving client growth will be a measure of success. On a practical level, we are starting to create 4 regional hubs in Tokyo, New York, London, and Singapore with 12 key priority markets identified. Through connecting and integrating our own capabilities within the group, we can deliver holistic solutions that serve our clients to drive their top-line. These solutions will connect our capabilities in creative, media and consumer insights by leveraging our experience in data and analytics, implementing MarTech solutions to deliver digital transformation for our clients. Moving on to the next page, please refer to the page titled, Beyond Marketing. Moving Beyond Marketing addresses the deeper investments, transforming how a company operates to become completely consumer-centric. Our offer responds to the shift that organizations are making to integrate their consumer strategy, data and technology stack and organizational approach to deliver a total customer experience across every encounter they have with a brand. This drives innovation of customer marketing experiences that drives competitive differentiation and measurable business results for our clients. We offer our clients tailored solutions and not a one-size-fits-all approach. And this is what allows our clients to stand out in their marketplace. Our global presence enables us to drive transformation relevant to each local market. What drives our differentiation versus our new competitor set is our innovation, creativity and rich consumer insights in solving these problems. I would like to share some examples of how we implement integrated growth solutions within our clients’ businesses. Next page please, please refer to the page titled, Integrated Growth Solutions, Consumer-centric DX. The first example is a DJN project with a blue-chip insurance company. The project team, driven by Dentsu Digital supported the transformation of the client into a consumer-centric digital innovation company. The Dentsu Group redesigned the consumer journey by leveraging the customer data gathered across the organization, through the process we recognized and aided collaborations across divisions within the client’s organization to develop integrated brand experiences. In order to conduct a true digital transformation, we encouraged the transformation of the clients’ organization from a traditional vertical organization into horizontally linked flat teams centered around the consumer, delivering true process transformation. We transformed not only marketing outputs, but also the operational processes within the clients’ business. Please turn to the next page titled with On & Offline Commerce. The next case is about our technology-led creative work for a fashion retailer client Adidas in the United States. adidas Originals tasked us with launching their new product line of iconic NMD shoe. Adidas wanted to reconnect with true fans of the brand and avoid resellers buying the new products in store and reselling at a profit. To reestablish the brand value and reconnect it with fans, we offered a solution that intentionally downsized our fan base to crystallize the enthusiasm. Posters were hidden around major cities with locations shared on social media. Fans who found the posters could skip the in-store queues and click straight to purchase. Fans could explore the new Adidas products in an immersive, interactive, augmented reality before clicking through to a mobile optimized e-commerce site guaranteed access to the shoe. This approach grows brand value along with creating a connected consumer base driven by hyper targeting. Please go to the next Page, last example, building a D2C model. The final case is about how Dentsu in Japan have supported a ready-to-drink coffee brand, BOSS of Suntory in Japan. We supported the transformation of the business from a B2B to B2C business, creating direct consumer relationships with data to support membership programs and improve supply chain management in real time. Consumers can order their drink via an app and collect their personalized – personally named drinks from a locker. Dentsu Inc. and Dentsu Isobar in Japan design the user interface and the total customer journey to realize the concept our client was incubating. Our client is now looking to scale the model, and the Dentsu Group in Japan is eager to support the client as the partner. Please go to the next Page, titled accelerating our transformation. As well as supporting our clients through their own transformation. We recognize the need to continue to transform our own business. 25% of our consolidated revenues now come from high growth advanced technology solutions, CRM, and digital transformation for our clients. In the first half of the year, these businesses grew showing positive organic growth in midst of the challenging environment as demand for these services remained strong. These skills combined with our rich consumer insights’ makes the Dentsu Group offering truly differentiated beyond marketing. The accelerated buyout of Merkle shares announced in March positions us well. Merkle is a key pillar in the delivery of our data-driven tech enabled client offering. Client needs are also changing, clients looking for integration within their own organizational structure to reduce silos, connecting sales, marketing and commerce to improve the speed of decision making. As a group, we recognize this trend and developed our strategy of integrated growth solution to support our clients by helping to solve bigger problems. To support effective delivery of these solutions, we must accelerate our own transformation to deliver what our clients need to succeed. Next page, please. Accelerated transformation of Dentsu Group is the title of the page. In this context, we yesterday announced a comprehensive review of Dentsu Group’s operations and capital efficiency. The comprehensive review and accelerated transformation plan is the key to the future growth and profitability of our group. It will not only respond to the economic challenges caused by the pandemic, but also focus on long-term structural growth opportunities particularly in digital solutions and CRM then we can enhance our competitiveness of Integrated Growth Solutions, which drives customers’ business growth. We are well-placed to seize these opportunities having just finalized the full acquisition of the world leading digital agency Merkle. This review across the regions will support the focus strategy of integrated solutions aimed at simplifying the business for both clients and operations, structurally lowering operating expenses, enhancing the efficiency of our balance sheet and maximizing long-term shareholder value. We are determined that this review will benefit our clients, partners and our shareholders and result in a world class organization that is the most attractive to work in for the most talented people in our industry. We plan to update the market on this review with the full year results. And last page, please. I would like to take this opportunity to say, thanks and thank you, to all our stakeholders including our 66,000 employees. Thank you.

[Interpreted] Thank you. Mr. Soga will now make a presentation using a file titled FY 2020 half year results.

[Interpreted] This is Soga speaking. I would like to now present to you the results for the first half of 2020 of the Dentsu Group. Going on to Page 1. The group has continued to react at pace to the challenges presented by the COVID-19 pandemic with a number of cost measures introduced. The group is currently tracking ahead of the targeted 7% reduction against the budgeted consolidated cost base due to cost actions taken in response to COVID-19 and planned savings in the International business. We are planning for a slow recovery scenario in the second half of this year, as we refocus the business and opportunities within CRM, digital media and digital solutions, supporting our clients through Integrated Growth Solutions. As Mr. Yamamoto announced, we have launched a comprehensive review which will lead to an accelerated transformation plan for the group. This review across all regions will support the focus strategy of integrated solutions aimed at simplifying the business for both clients and operations, structurally lowering operating expenses, enhancing the efficiency of our balance sheet and maximizing long-term shareholder value. In the first half of 2020, Dentsu Group delivered organic revenue decline of 8.9% both the Japanese business and the international business started the year well, but the impact from COVID-19 was felt towards the end of the first quarter and throughout the second quarter. The Japan business saw organic revenue decline of 4.6% in the first half. Client spend on advertising was weaker due to the impact of COVID-19, although the digital solutions business maintained momentum with ISID, Dentsu Digital and Dentsu Live, all posting double-digit organic growth. The International business saw organic revenue decline of 12% in the first half. Q2 organic growth at minus 20% came in line with expectations. All 3 regions posted organic revenue decline impacted by the COVID-19 pandemic. Moving to margins, our margins remained robust, despite the top-line pressure due to swift cost actions taken in response to COVID-19 with both temporary and permanent measures. The group operating margin improved 270 basis points over the first half of the year. In Japan margins fill only by 10 basis points reflecting a continued focus on reducing operating expenses and temporary cost actions in relation to incentives. In the International business, margins improved 400 basis points year-on-year in the first half attributed to COVID-19 related cost actions, some of which are temporary, as well as the plan savings announced in December 2019, which remain on track. Next page, on summary, I would like to highlight the digital domain or the percentage of revenues generated from the digital activities, which is now over 50% across the consolidated group for the first time. The International business report 68% of revenue from digital activities and 32% in Japan. This demonstrates the speed in which we are expanding our capabilities in fast growth areas, such as digital solutions, CRM and data. The other notable figures on this slide relate to underlying operating profit, which has increased over 14% year-on-year due to improved margins as mentioned previously. Please note that accounting standard related to the bonus compensation for the Japan business was updated to make it possible to compare the figures year-on-year, the pro forma based figures are adopted for 2019 causing minor gaps for employees reported in the quarter financial statements and reported summaries. On to the next page, Slide 3 shows the factors contributing to the year-on-year exchange – change in revenue less cost of sales. Currency impact was negative by JPY 10 billion due to further appreciation of the yen. Acquisitions positively contributed by JPY 9.4 billion in the quarter. And finally, the organic performance saw a negative contribution of JPY 39.8 billion reflecting the organic revenue decline of 8.9% for the group. Moving to the underlying operating profit on the next page. Underlying operating profit increased JPY 52.7 billion in the first half, an improvement of 14.6% year-on-year. The fall in revenue less cost of sales of JPY 40.5 billion or 9% year-on-year reflects the slowdown felt across the group due to COVID-19. The group has taken a number of cost actions in the first half to mitigate the impact of the organic revenue declined due to COVID-19 such as the temporary removal of incentives reduction in the executive officers compensation in the second quarter, a reduction in other operating expenses related resulting in year-on-year improvement in underlying operating profit. The group is tracking ahead of the targeted 7% cost reduction against the planned fiscal year 2020 consolidated cost base. Next page on Page 5. Once again, we show the increased disclosure with Japan business. This helps to demonstrate the diversification of our revenue base in Japan and allow us to highlight the strong performance of some of the highly specialized companies within Japan. In total, the organic growth for Japan was minus 4.6% in the first half. The advertising market particularly traditional media felt sharply, although our internet or digital media sales were not as badly affected. A particular note on this slide is the exceptionally strong performance from Dentsu Digital, ISID and Dentsu Live, all of which reported double-digit organic growth in the first half. In Japan, we continue to diversify away from the traditional media as we look to deliver sustainable, less cyclical revenue growth, strengthening the collaboration amongst our brands Dentsu Inc., Dentsu Digital and ISID, which will lead to integrated solutions that allow us to support the digital transformation of our clients. The margin in Japan fell 10 basis points year-on-year, a resilient performance in light of the top line pressure seen within our group and across the industry. The actions started from February include tightly managed operating expenses and personnel costs achieved by improving efficiency through remote working and other initiatives. On to the next page, Page 6. The International business saw organic revenue decline across all 3 regions. In EMEA, all markets performed in line with revised expectations, lower client spend impacted all markets across the region although Germany, Russia and Switzerland delivered positive organic growth in the first half. In the Americas, the U.S. market delivered 6.9% organic revenue decline in the first half showing greater resilience due to the higher exposure of CRM. Towards the end of the second quarter, we saw a slight increase in media spend from a number of clients, the scale of the pipeline of media opportunities for new businesses becoming more meaningful in the second half across the region. In the APAC region, excluding Japan, the regions’ revenues continue to be impacted by reduced clients spend due to COVID-19 throughout the first half although a number of midsize markets were better than expected, including Taiwan, Thailand and Indonesia. China continued its strong new business performance reported in the first quarter with new accounts won across all 3 lines of business in the first half. In Australia, the new leadership team has delivered performance improvements in the first half of 2020, despite the macro-environment challenges. This includes client growth and retention, strengthening media and technology partnerships and improved staff engagement levels. Across the lines of business media spend from our largest clients showed greater resilience through the first half, although spend varies across sectors. The creative line of business saw client delays to new product launches, but towards the end of the second quarter saw an increase in demand for technology that creative projects. Within CRM, demand remains for technology services and technology enablement driven by the continued shift to direct-to-consumer model. Margins remain robust in the international business. Costs saving initiatives include voluntary temporary salary reductions and removal of incentives. We recognize the effort made by DAN employees. We have also implemented reduction in discretionary spend, hiring freeze and review of contractor roles. The International business also benefited from the planned cost savings announced in December 2019. Please turn to the next page, Page 7, moving to the reconciliation from underlying operating profit to statutory profit. The major items include share-based compensation, representing an existing incentive scheme and scheme granted to Merkle employees, following the accelerated buy-out of the remaining Merkle shares in March. The accelerated buy-out delivered EPS accretion for the group in 2020, as well as securing the expertise and knowledge of the senior management team. We also recorded planned business restructuring costs, which was announced in December 2019. Impairment losses relate to the first quarter announcement with no additional losses in the second quarter. Statutory operating profit increased by 50% year-on-year. Please turn to the next page, Page 8, looking at statutory profit to net profit. Finance income increased year-on-year due to the revaluation gain on earn-out liabilities caused by lower performance in some acquired companies. Furthermore, finance cost decreased because we recorded revaluation loss on Merkle put-option liabilities in the previous year. This resulted in a net profit attributable to owners of parent of JPY 15.7 billion for this year, returning back from deficit position in the previous year. Please go to Page 9. Our cash flow format has been renewed from this quarter. In the new format, we establish underlying operating profit and cash flows from operating activities, which are covered on this page, and then end with change in net debt on the following slide. Cash flow from underlying operating profit was JPY 53.7 billion, was more than offset by seasonal change in working capital of JPY 64.6 billion, leading to net cash flows from operating activities showing negative JPY 21.5 billion. On a year-on-year basis, the underlying operating profit was plus JPY 7.7 billion. And due to a decrease in income tax paid, the net cash flows from operating activities increased by JPY 33.7 billion year-on-year. Please turn to Page 10. Cash flow from operating activities were negative JPY 21.5 billion as explained on the previous page. After reflecting payments from investing and financing activities, net debt increased by JPY 68.2 billion for the period. Please go to the next page, Page 11, showing the situation regarding net debt. As I explained on the previous page, our net debt increased JPY 68.2 billion year-on-year, resulting in a net debt to EBITDA average of 1.65 times. But Dentsu Group remains well capitalized with a strong balance sheet JPY 576 billion of unused credit lines and JPY 422 billion of cash. The group credit rating is AA minus from Japan’s Rating and Investment Information, Inc., R&I. Last page, concluding. We continue to plan on the basis that the downturn will continue, but at a reduced rate with a gentle recovery next year. The comprehensive review announced yesterday by Mr. Yamamoto will allow the group to focus on long-term structural growth opportunities whilst lowering our operating expenses. It will also include a review of our capital efficiency, enhancing the efficiency of our balance sheet over the medium- to long-term and seeking ways to maximize long-term shareholder value. In light of this announcement, while the interim dividend per share is confirmed at JPY 47.5, the comprehensive review and transformation plan we have announced will look at balance sheet and cash efficiency. This will include future dividend policy. Accordingly, the quantum of the final dividend and the long-term dividend policy will be decided pending completion of the review, details of which will be shared at the full-year earnings announcement. That review is aimed at improving long-term shareholder returns and delivering a stable, progressive dividend will be a key part of the review’s objectives. Across the group, the impact from COVID-19 continues to cause a slowdown in demand for services. This continued uncertainty still facing many markets combined with the possibility of further economic restrictions means that Dentsu Group will not be providing detailed FY 2020 guidance at this stage. The group still expects the second quarter to be the weakest of the year with the second half of FY 2020 to show a modest improvement in the rate of organic revenue decline versus the second quarter. The decline in the revenue will likely exceed the running rate of cost savings in the second half of our fiscal year 2020. This completes my presentation.

[Interpreted] Thank you very much. We now would like to proceed to the Q&A session. [Operator Instructions] The first question is [Sam Pierre-san from Bank of America, Sam Pierre-san] [ph], please.

Yes, good morning or good evening, everyone. Thank you very much for taking these 2 questions please. They are for, Nick, I believe. I think in your Q1 call, you mentioned that Q2 would be down 15% to 20%. Eventually, it was down 20%. So is it fair to assume that trends have deteriorated within Q2? And then my second question would be, can you give us the same range, perhaps of guidance for Q3 for Dentsu Aegis Network? Many thanks indeed.

Thank you for the – thanks for the question. So as you rightly said, we guided that the second quarter would be down between 15% and 20% for the International business. And these results are consistent with that guidance, albeit at the low-end of that range. In terms of whether or not the trends got worse during the quarter, I think that’s not really true. We’re not going to break it down month by month. I don’t think that’s helpful for extracting or extrapolating the trends going forward. We’re just in line with what we guided to, albeit at the low-end of that range. Looking forward to Q3, we’re not going to provide the same guidance in terms of a range for the third quarter, other than to reiterate what we said at the end of Q1 announcement, which was that we do still continue to expect the second quarter to be the floor in terms of the quarter-on-quarter trends this year. Thank you.

Thank you very much.

The next question is from Nomura Securities, Mr. Nagao. Nagao-san, please go ahead.

[Interpreted] Nagao from Nomura Securities. Hello, I have first question, which is a situation regarding the United States. Now, the first half of the year was minus 6.9%. That was the level of the drop. But for the second half, because there is going to be an increase in the pipeline, the range of reduction will be smaller. Is that what you said? If you could elaborate on the situation there? That’s the first question. The second question is, based on Page 12, Mr. Soga’s presentation material, which is regarding the improving efficiency of the balance sheet and the maximization of long-term shareholder value. And, please explain the specific measures taken to these objectives.

[Interpreted] Mr. Nagao, thank you very much. With regards to the first question regarding United States, I would like to ask Nick to respond. And for the second question regarding the balance sheet, I would like to ask Mr. Soga to respond. So, Mr. Nick Priday, if you could respond, please.

Yeah. Thank you. In terms of the pipeline in the U.S., it has expanded, but it will take time to impact revenues. So we don’t necessarily believe that that has a very positive impact in the short-term. But it does show that our clients are becoming more comfortable with pitching virtually. That’s become a necessity over the last few months, and that is a reassuring sign. But I think it does take time to impact revenues. Thank you.

[Interpreted] And with regard to the second question, myself, Soga will respond. And Nagao-san asked about the balance sheet, as well as maximization of shareholder value. Now with regards to specific measures, the management is currently undergoing deep discussions at this stage. And as I explained in my presentation in the New Year and we are currently scheduled in February, but when we announce the full year results for FY 2020, we intend to give the detailed explanation. At this point in time, that is the situation that we have. Thank you.

[Interpreted] Thank you.

The next question is by Ishihara-san of Daiwa Securities. Ishihara-san, please go ahead.

[Interpreted] Thank you. This is Ishihara of Daiwa Securities. Thank you for the presentation. I also have 2 questions. First of all on the balance sheet, this will be somewhat similar to the previous question. You are going to sell off and dispose off surplus assets, and use the proceeds for other purposes. But at the moment, is it necessary to inject more investment in growth areas or are you planning to reinforce shareholder return? So that’s my first question. Second question, since September, the global CEO will come into play. But to the global new incoming CEO what are your hopes? What’s the biggest expectation you have towards the incoming CEO – global CEO?

[Interpreted] Thank you very much, Ishihara-san. I will ask Yushin to respond to the first question. And the second question will be responded by Nick and myself, Yamamoto.

[Interpreted] Thank you very much. This is Yushin speaking. Let me take the first question. As I said, there is in-depth discussion underway with regards to the comprehensive review. We are not yet at the timing to explain the specific measures that will be implemented. But, of course, investment into growth areas is important and shareholder return policy is very important. And maximization of corporate value is a major challenge. So, those items will all be covered in the comprehensive review. So we solicit your kind understanding. Thank you.

[Interpreted] Thank you very much. Then going on to the second question, let me first make a comment. This is Yamamoto speaking. As you have pointed out, on September 1, Wendy Clark, the new CEO of Dentsu Aegis Network, will be appointed. What do we expect out of her? Wendy Clark was at – the global CEO at a major global advertising company, and her skills as the global CEO is well-known and renowned. So we have high hopes. In addition to the aspect as such, previous to that, Wendy used to be the chief person responsible for marketing at a client company. So she knows what clients are truly seeking to companies like ourselves. And more importantly, she understands well that what they will be expecting from us. She intuitively understands that and feels that. And I think that’s going to be a major contribution to the group. And this is mostly due to her personality and the way she works, but she places much weight on communications with clients. And at the same time, communications with employees is one of her priorities. That’s her working style, and this is going to be a major element in this pivotal period, because we want to respond to the emerging needs of our clients. And in the context, we are placed in as such, there is going to be a major strength and contribution. That concludes my response. So could Nick as the representative of DAN make additional comments. Please go ahead, Nick.

Yes, of course. I just want to echo the comments made by Yamamoto-san. I think it’s an exciting time to have the first female leader of a global marketing agency business. So I think that’s positive. And I think as Yamamoto-san said it’s hugely complementary to our focus on client and integration. Given Wendy’s experience and her personality, I think it’s really quite pivotal hire. I think Wendy’s exceptional experience on the client side and strong understanding of the complexities of running a global advertising business will be hugely beneficial to us and help us really accelerate our focus on integrated growth solutions and really building out our capabilities to best serve our clients. So I think it’s an exciting time. We very much look forward to Wendy joining our company next month.

[Interpreted] Thank you. The next question is from SMBC Nikko Securities, Maeda-san. Maeda-san, please go ahead.

[Interpreted] Hello. I also have 2 questions. And Mr. Yamamoto gave a presentation, and the business transformation that the company is aiming for become a little bit more clearer to me. But by seeing this make advances, the customer base, will you work on expanding and deepening the current customer base? Or do you intend to expand the new customer base? Is that the kind of direction? And by doing this, I think you end up competing against different competitors. You have competition with the current mega agencies of the world, I’m sure the competition against them will deepen. But the differentiation against competitors, how do you see this? And how do you expand your customer base? How you intend to make this deeper or expand? If you could explain on this point? The second question is more a short-term question. You talked about cost reductions. And in the first and the second quarter, you have actually done quite an advanced the cost reductions. But in the second half of the year, do you have only limited scope to reduce costs? Or can we expect a significant cost reduction in the second half like you have done in the first and the second quarter. And this is what I wanted to confirm. Thank you.

[Interpreted] Thank you very much, Maeda-san. With regards to the first question, I will respond. And with regards to the second question, I’ll ask Soga-san to respond. Now first question, the direction that we are heading towards, how will this change our customer base. And you’ve asked for which, but the answer is both. For the Japan business and International business, the situation is not different, and there are some differences, but for both, simply put, we will go for both. Within our current customer base, what we can provide to the customers, what they can contribute to the customers. I think the breadth of what we can provide will expand. So for the existing customers, we will keep more broad and deeper solutions. In other words, what they really want, we are able to provide an integrated service, which they seem to want. So our current customer base will deepen in that sense. And the fact that we are able to provide services of that nature, we can also approach potential new customers who are not our customers at this point in time. So the new services that we will be able to offer in the future will enable us to expand our customer base to include new customers. So we will try to realize both. That is the objective.

[Interpreted] And what will enable differentiation? And the – within the advertising, the main companies. I think there are 2 points related to competition, first is data technology or digital transformation?

[Interpreted] Those capabilities I think we are quite strong in that area, Dentsu Digital in Japan and ISID in Japan. These are the group companies within Japan. And what they offer will be certainly one of these capabilities. And on a global basis or on an International basis, we have Merkle, which we have acquired 100% stake just recently. And we have the capabilities provided by Merkle. But that – those capabilities can be integrated with our other capabilities. And we have the track record and experience, being able to do that. That’s the first point. And the second point is integration, digital transformation or other capabilities. In other words, broad – particularly in the case of Japan business, we have quite a broad range of capabilities. And so for the customers, something that used to exist independently in the past will be integrated going forward. So the breadth of what we offer and experience and track record of being able to integrate others would certainly be a source of the competitiveness for us. And against non-advertising agency competitors, we through the advertising work, have developed creativity. We try to use ideas to give solutions to resolve our challenges, including execution. So those creativity, the execution, and they will lead to the growth of our customers. This is the kind of concept. And I think that will also be a quite important point. So that is a response to the first question. As for the second question, I would like to ask Soga-san to respond.

[Interpreted] This is Soga. Thank you very much for your question. And regarding the second half of the year and the first quarter and the second quarter, we worked on reducing costs. And in the second, the half – quarter, from June, the cost reduction was most significant. Do we have the scope to reduce even further cost reduction in the third quarter onwards, it may be difficult. In order to respond urgently, we have implemented some cost control measures. Whether we have scope to exceed that, it may be difficult to do so. However, as I have explained before, we have a strategic review. I talked about strategic review. And in the strategic review, we will work structurally lowering operating cost expenses. And the cost controls that we have been doing this year, a lot would be temporary. But under the COVID-19 environment, we need to significantly change our business structure. We are aware of this. And so towards the second half of the year and also next year onwards, we need to work towards revising our cost structure on a more permanent basis to achieve the cost reductions. I hope you understand this point as well. Thank you.

[Interpreted] I apologize, but because of the time constraint, I would like to ask that you only ask one question at a time from the next person.

[Interpreted] The next question is by Kishimoto-san of Mizuho Securities. Kishimoto-san, you have the floor.

[Interpreted] This is Kishimoto speaking. Then let me go to my 1 question. On organic growth, you said the degree of decline next year will be mitigated. In other words, in the first quarter, there will be a higher bar for year-on-year comparison. So are you expecting that for the first quarter, the number will be negative? Or depending on how the trend unfolds, do you think that there could be positive growth for Q1 already in the next fiscal year? What’s your thought on organic growth for next year?

[Interpreted] Kishimoto-san, thank you, I will hand over the question to Soga-san. Soga-san will respond.

[Interpreted] This is Soga speaking. Organic growth, I thought I gave you the year-on-year comparison, but the benchmark is pre-COVID-19 and whether there would be positive growth. So if you’re talking about next year, 2021 against 2020 will be positive organic growth. But if the comparison is against the pre-COVID-19 benchmark, for example, if it’s a comparison with 2019, the growth will be negative. That’s what I had meant to say. Thank you very much.

[Interpreted] Next question is – of [Camata-san from Vendi Japan] [ph].

[Interpreted] Thank you. I will ask one question. I want to ask about the labor costs. In the first half of the year, how much the personnel costs did you reduce? And you said that the company will become an attractive company in the future. So how do you intend to retain talents in the future?

[Interpreted] [Camata-san,] [ph] thank you very much. I will ask Soga-san to respond regarding personnel expenses.

[Interpreted] The reduction of personnel expense in the first half of the year, well, in FY 2019 and the budget that we had internally, and against those we have achieved more than double-digit reduction in personnel expenses. And the related question, the second question, how do we intend to retain people? There is a significant relevance to this, because what we’ve done is on a temporary basis. And so, I explained this before, but the direction our business will be heading towards, we need to make sure our business will face in the correct direction. At the same time, non-personnel expenses, in other words, we need to achieve efficiency of the business overall, and that will reduce costs, and we will need to focus on that. So reduction in personnel expenses will only be on a temporary basis. And by combining these, we want to retain important talent within our group.

[Interpreted] Thank you very much.

[Interpreted] At this juncture, there are no other participants wishing to ask questions. We are approaching the time to close. We would like to finish the first half earnings presentation. Again, thank you for joining us.

[Interpreted] Thank you from Yamamoto.

[Interpreted] Thank you from Soga and Igarashi.