Welcome to the Nissan Financial results for the Third Quarter of Fiscal Year ’23 Investor and Analysts session. This is Julian Krell speaking, Head of Investor Relations. Thank you very much for joining. The presentation material can be found on the Nissan IR website. Please be informed of the disclaimer included on the last page of the document and read it carefully. Thank you. For today's quarterly financial results presentation I’m joined by Mr. Ma, CFO. Mr. Ma will start with the highlights of the third quarter and then he will continue with the financial results followed by the outlook. We will conclude this call with a Q&A session. I’m now handing over to Mr. Ma. Thank you very much for your time.

Thank you, good evening and good afternoon to everybody. So welcome to the third quarter result for the nine months ending December 31st 2023. So before addressing our results I want to express my condolences for everyone impacted by the Noto earthquake. And obviously our thoughts are with the families, friends and communities affected. I also want to thank the entire Nissan team and partners for delivering steady results in the phase of challenges. So let me begin with our third quarter highlights. Nissan delivered significant improvement on several measures. Net revenue up 22%; operating profit rose 65%, net income more than double versus last year and we have been very encouraged by a rising consumer demand for our products. And we have enhanced shareholder return by restoring interim dividend and buying back shares. For the nine month period, global retail sales rose by 1.2% year-over-year to 2.44 million units. Excluding China, we achieve growth of 20% as demand improved in key regions including Japan, North America, and Europe. Unit sales in Japan rose by 8.4%, in North America by 30%, and in Europe by17%. This all helped offset the challenging market condition in China where retail sales declined by 35%. In terms of production, global output remain flat, however excluding China, production rose by 21% to meet the rising consumer demand. During the latest quarter, global retail sales decreased by 2.7% to 819,000 units while excluding China unit sales increase by 15% and production rose by 13 % amid demand for new models. Globally, quarterly production volume were 843,000 units. Though the third quarter volume was lower, our counter measures to improve logistics capacity and start of new model deliveries to dealership have already shown a positive impact on our sales performance in January. Therefore we are confident to increase our sales performance in Q4. This slide shows our key financial performance indicators on both an equity basis and on a proportional basis. On an equity basis, net revenue increased by 22% to ¥9.17 trillion for the nine month period. On the same basis, operating profit for the period increased to ¥478 billion with a solid operate margin of 5.2% and an improved Automotive segment profit of ¥241 billion. Net income total to ¥325 billion and free cash flow for the Auto business rose to ¥182 billion. Net cash was at a healthy ¥1.33 even after the restoration of interim dividend and the share buyback. On a proportionate basis, including contribution from our China operation, net revenue rose to ¥9.8 trillion. Operating profit was ¥487 billion representing operate margin of 5%. Given the fast changing market condition, this is a solid performance. Turing to the home market of Japan, retail sales increased by 8.4% to 336,000 units. The main driver was a demand for the Serena, X-Trail, Sakura and DAYZ, especially the e-POWER versions of these models. The proportion of electrified models sold in Japan is more than half our sales at 53% and net revenue per unit increased by 133%. Production volume increased by 28.4% to 551,000 units and Nissan has continued to win awards for innovations including Japan's Technology Car of the Year award for Serena. In North America, overall sales increased by solid 30% to 917,000 units. In the US, total sales increased by 25% to 663,000 units, this reflects a stronger demand for the Rogue, Kicks, Sentra and Versa. North American production increased by 33% to 913,000 units. Net revenue per unit in the US declined by 6%, this was mainly due to model mix as the market move to more affordable segments and an increase in sales expense aimed at keeping our relative competiveness in the phase of escalating incentives by our competitors. We are confident that Q4 will experience increase in sales led by the new model year 24 Rogue and Sentra as well as improved availability of models like Versa and Kicks as we improve logistics capacity. In Mexico, the company's fourth largest market, Nissan remains the leader for the 15th consecutive year. Turning to Europe, retail sales increased by 17% to 244,000 units, this improvement was driven by demand for our Qashqai, X-Trail and Juke, especially for the electrified versions of these cars. As a result, the share of electrified models were nearly half our total sales in Europe at 48%, net revenue per unit increased by 8%, and production volume increased by 18% to 244,000 units. Turning to China, the competition continues to be intense. It’s a 26% fall in nine month retail sales at 547,000 units. We have responded with focused actions to help mitigate some of the industry challenges and enhanced Nissan's competitiveness including adjusting our incentives. In the fourth quarter of the calendar year, unit sales rose 19% year-over year to 247,000 units. Production also rose by 33%. The stronger fourth quarter performance meant that the calendar year retail sales reached 794,000 units which is in line with our previous forecast. Nissan Sylphy has continued to be a top selling ICE model in the segment for four consecutive years with cumulative sales of more than 5 million units, net revenue per unit for the period decreased by 8%. Well we are encouraged by the good sales in January and we will continue to execute plans to strengthen our China performance. Turning to our nine-month financial performance. Net revenue increased by ¥1.67 trillion to ¥9.17 trillion. Operating profit increased by ¥188 billion to ¥478 billion representing an operating margin of 5.2%. Non-operating income which includes equity method company, total ¥62 billion. Our results were impacted by extraordinary losses of ¥98 billion which included impairment cost associated with restructuring in India. Despite that, net income increased by ¥210 billion to ¥325 billion. This slide shows the variance factors in the third quarter year-to-date versus last year. Foreign exchange had a negative impact of ¥6.4 billion. Although the US dollar remains strong, this was offset by emerging market currency and the effects of a hyperinflation in Argentina. Raw material costs decreased mainly due to steel and aluminum over the nine-month period our sales performance had a positive impact of ¥312 billion. This reflects the strong volume and pricing actions partly offset by normalizing selling expenses across the industry. Monozukuri cost had a negative impact of ¥80 billion which reflect the retroactive payment to suppliers, inflationary pressures, logistics cost and regulatory expenses. Other items had total negative impact of ¥82 billion. This include effects of normalizing used car prices and net credit losses in sales finance as well as other items. In this environment our operating profit improved to ¥478 billion due to our steady focus on Nissan NEXT strategic plan for long-term sustainable growth. Now we’ll turn to the outlook for the current fiscal year. Based on our retail sales performance in the first nine months of the year, we have adjusted our outlook. We are managing the business by executing a strategy with discipline and have therefore adjusted downwards our forecast for retail sales volume to 3.55 million units. This reflects challenges including intensifying competition and logistics issue in most of our key markets. In China, sales reach 794,000 units which is in line with our previous expectation. Nissan continues to focus on meeting customer demand with new our models to improve sales efficiency while addressing logistics challenges and intensifying competition. In the fourth quarter of the fiscal year, we expect to see good improvements versus previous quarter. Although the markets remain competitive, we are taking appropriate action to navigate the challenging conditions and we are on the right track. We are keeping our guidance unchanged for net revenue, operating profit, and net income. This reflects the underlying strengths of our business achieved during Nissan NEXT plan. However we also recognize the uncertain environment in which we are operating and we are taking necessary actions. We are currently evaluating the full impact of the Noto earthquake and geopolitical issues around the Red Sea. While we continue to assess these issues, we are keeping our guidance unchanged. In summary, these results have been achieved against a background of market volatility and fast changing industry conditions. The strategic actions during our Nissan NEXT plan have made our company more agile and resilient. With these strong fundamentals we are better positioned to navigate challenges and aim for long-term sustainable growth. We are also pleased by the strong reception of our new product as we continue our transition to electrification. To maintain that progress we are finalizing a new mid-term plan which we will announce before the end of March. Thank you for your attention. I will now be open to any questions. Thank you.

Thank you very much. We’re now starting the Q&A session. [Operator Instructions] Okay, Bank of America’s Nihonyanagi-san, go ahead.

Yes, hello, thank you for the presentation. I am Nihonyanagi, do you hear me?

Good evening.

Okay, hello. Thank you for the opportunity. I have two questions. North American sales performance in the fourth quarter, are you sure you’re hitting the sales target or not? That’s what I want you to confirm on? Because for the logistics issues, in the second quarter, I heard that the risk of the logistics will be reduced. I think you commented that the risk of logistics will be smaller. In the third quarter, what were the specific challenges that you faced? From outside incentives seems to be largely increasing. If supplies are short, you wouldn’t have seen the necessity to increase the incentives. So could you elaborate on US market in particular, what is happening in US market? Whether it’s a logistics or a competitive landscape? Could you elaborate on US market mainly and then make sure that you are confident about the fourth quarter. And the second question, Automotive free cash flow, could you elaborate on this as well? Inventories are rising. So in third quarter, it’s turning negative. But in the fourth quarter, or in the full year, how will the free cash flow become? Will this be better? Am I right? Is there any concerns or things that I have to pay attention to, in particular? These are the two questions.

Thank you, Nihonyanagi-san. So a very good question indeed. So, first of all, we are very confident of our Q4 sales in the US. What happened in Q3 was several factors. As mentioned in the media session as well, the main issue was the lack of logistics capacity from Mexico to the US market. We were originally planning to have even more but it was not enough and therefore but we have secured more capacity for Q4. In addition to trucks and train, the real rate, we have now also secured ocean freight from Mexico to go in Atlantic to the US and Canada, so that we can have even more delivery. So that is first, it’s fairly much resolved for Q4, much, much improved. I won’t say it’s perfect. Everything is done but it is much more improved versus Q3. That’s the first thing. Then as you clearly identified, we also have rising inventories at the end of Q3. The inventory has peaked out in January and it’s already on the way down. And as mentioned before, it’s partially because of logistics, we couldn’t get the cars out or they got to the dealers too late to be retail. So therefore we had a little bit more in the pipeline than we expected at the end of Q3. So the question also that you have was about the incentives in the Q3, so what happened was that we had faced in Q3 much more aggressive action by our competitors. And I think you know which one I am referring to, but they had gone very quickly and we had to adjust within the quarter several times our incentive strategy, just to make sure we remained competitive. On top of that, we had a little bit more model year 23 vehicles than we intended. Originally, we didn't think that the market would change so much, as you guys saw in the US market, more were shifted to hybrids or other markets. And also, they were moving more into affordable segments. So we had already ordered and produced and shipped to the US many more model year 23 Rogues. And the market has shifted, especially in the segment where Rogue is, you saw there was a big increase in hybrid sales. So we ended up with a little bit more model year 23 Rogues than intended. And we said before always that we're going to be focused on quality of sales. And obviously, quality of sales is not just about raising price and keeping incentive low, but it's also doing the right thing at the right time. We did not want to wait to take care of this issue until later months. So we quickly adjusted our incentives on the model year 23 Rogue and also some of the Ariyas to make sure that we do not have an aged inventory problem going into Q4. So that strategy or that enhancement of some of our offers, and those offers are mainly in APRs. So we tried to funnel these customers into our sales finance company. So we did more support on the interest rates for both retail and leases. So that seemed to have worked. And that's why we had a big incentive increase temporarily in Q3. So I believe you can see also in the details that for the single quarter of Q3 versus Q2, North America incentive increased by maybe ¥50 billion or ¥60 billion. I believe half of that was this kind of one-off where we had to provision more to take care of the model year 23 inventory. To give you an update on this situation, it's been progressing well. We are consuming and selling down those stocks as we plan and already the new model year 24 Rogue is already being and already in the dealership. So the reason I'm confident on Q4 volume is because the Q4 volume has the new model year 24 Rogue, which has refreshed exterior and also better connectivity solution with Google built in. We also have a new model year 24 Sentra. We have improved logistics and deliveries from Mexico. So you can probably look at industry data and see that our January dealer stock and company stock are very healthy. So we have plenty of cars to sell and the sales in January was going as planned. So that's why Q4, on top of that, we have these new models. We took care of the model year 23. Our competition was already in November selling model year 24. So we were a little bit late in the model year transition. That's what really happened in Q3. Obviously, this will not repeat again in next year. We will make sure we address this problem. And then on top of this, Q4, the sales volume, seems big if you just compare versus Q3. But as I mentioned, Q3 is a little bit low because of logistics and also model year 23 slow sales in the beginning of the quarter. Then we ramped up. But on top of this, in Q4, we have also many contracted sales with very good commercial fleet and also rental orders that we signed early in the year that we're going to be delivering in Q4. And to anticipate your next question is, wouldn't that hurt our profitability? No, I don't think so because those contracts, we were able to secure pretty good. So there's no deterioration versus our retail sales in terms of profit per unit. Actually, some of the deals on the fleet is actually better. So that's why, given all of this, I'm sorry for a long answer, but given all of this, we do see that Q4 sales in North America and particularly in the US, we should be able to do pretty well. And also in January, we already saw that some of the competitors who increased the incentive aggressively in November, December, they sort of pulled back a little bit while we kept it. We kept our strategy. So that's why we think we are very much encouraged by the pace that we have right now. For your second question about Auto free cash flow, it's very simple. In Q3, it's inventory. As I mentioned, it's just two issues. One is the logistics. Two was that we typically produce more in Q3 as historical seasonality, we sell much more in Q4. But to produce all the cars we need to sell in Q4, we don't have enough capacity within Q4 to produce and sell. So we actually intentionally, historically, we always build our production in Q3 to make sure we have healthy inventories for Q4 sales. So the reason, if you look at the Q3 standalone free cash flow, if you go back many years of Nissan history, usually Q3 free cash flow is lower or sometimes negative because of this phenomena. So there's no other issue within the free cash flow other than the inventory being higher. So for year-end projection, as I mentioned, the inventory already peaked out in December, January, and it's already being consumed for sales in February and March. So, Nihonyanagi-san, two -- sorry, very long answers to your two questions, did I address all your points?

Yes, that was very clear. Thank you, Mr. Ma.

Okay, moving on to Goldman Sachs Securities, Yuzawa-san, please.

Yes, this is Yuzawa from Goldman. Do you hear me?

Hi, good evening.

Yes, hello. You elaborated on the U.S. operations. So now, another important market, China, could you update on Chinese situation? Because of the circumstances, all the car makers were increasing the production volume, but looking at the competitive landscape today and for the MTP, how are you going to revive the Chinese operation? Could you give us a clue on this? That's the first question. And the second question, in the Renault's agreement, you bought back 5%. What was the background here? And the remaining 23% that Renault holds, how will it be addressed? And Ampere IPO, this was canceled, right? So how will this affect your strategy in the investment in Ampere in relation? This is one big question for Renault relations. Thank you.

Sure. So for China, as you saw, the market situation in China is very intense. The price war, to be honest, is a bit crazy. And we made sure we were disciplined and making sure that we were not just blindly following in the first three quarters. And then -- but just doing business as usual doesn't work in this environment anymore. So we changed and updated our strategy to be much more tactical and more focused strategy in Q4. We started actually in September. So instead of trying to fight head-to-head with all the Chinese local brands which brought all these new brand new battery EV or plug-in hybrids, et cetera, which we currently don't have products yet, but they will come. So instead of trying to fight them in those very fierce battle markets, we turn our focus on markets where customers still prefer very much more ICE or the confidence or, how do I say, the trust with established brands. So we intentionally went straight to those markets that were much more receptive to us. And then we also make sure that we provide competitive offers to those markets. So that's what we did. So we focused not so much on the big cities like Shanghai and Beijing, where it is just very crazy competitive with a bunch of new energy vehicle. But we went to more tier two, three, four, five cities where Nissan brand is very much valued still and has a very high reputation. So we focused very much on those cities. So we had targeted offers for each of the different provinces. And then also we made sure that we wanted to be competitive, especially as people buying cars for Chinese New Year. So, by the way, Happy Chinese New Year, it’s actually happening today, tonight. So what we did is typically Chinese customers, especially lower middle class, like to buy new cars right before Chinese New Year to drive the new car back to the home in countryside or the homes outside the big cities. And they already heard a lot about the difficulties with having EV for long trips and also severe cold weather. So they really flocked to our cars because they viewed our cars as much more dependable, fuel efficient, safe, and also a very good feature. So we intentionally took advantage of this and we focused very much on strategy for this kind of sales. So it seemed to have paid off and we are working and it's working so far. Going forward, obviously, the battle for the car sales in China continues. We still see continued escalation in some of the office buy, especially the newcomers. And they keep trying to buy market share and gain market share via just spending a lot of money. But for Nissan, of course, we want to stay relatively competitive. So we will make sure we enhance appropriately, but not too much. But make sure that we are targeting the right audience. And as mentioned previously by Uchida-san, we have already pulled ahead our plans for four new energy vehicles, the first one of which will be launched later this calendar year. So I cannot give the exact timing yet, but it will come later this year as a Nissan brand. So that's our strategy for midterm. And for long term, we already started very seriously on working on a much more detailed offering, a comprehensive offering for the China market. And I think Uchida-san will touch upon this a little bit more when he unveils the mid-term plan. So that's for China. For the second question about the share buyback and Ampere situation, so we bought back roughly 4.9 some percent, almost 5%. And this was in December, this was obviously decided by Renault. Any share sell down from the trust is all up to the discretion of Renault, as they see fit. So but we always maintain if they want to sell, we're willing to buy, which is exactly what we did. So when they approach us and say, hey, do you have any appetite for some share buyback? I said, of course, how much? So immediately we jumped on it and we made sure we bought back. And we, within a few days, we also canceled our shares to improve the shareholder return. So that is for December. How much or when Renault will sell in this year or next year? I have no clue. This is completely up to Renault. It's up to them to decide. And when they feel ready and they want to do, they will inform us and call us and we will be ready. Depending on how much they want to sell, we will decide appropriately at that time. So for the Ampere IPO, obviously, I think it's pretty apparent the condition for IPO is not so good these days. So I completely understand their reasons for not going forward with IPO. But as I mentioned previously, actually our relationship with Renault has improved and is getting better. And all our collaboration project with them are progressing as planned. And we are very much looking forward to the compact EV, which Uchida-san I think unveiled, well, he showed a concept version of it a couple of months ago in London, I was with him. But that compact EV will be developed by Ampere for us according to our specs. So therefore, we are very much looking forward to it. That project is on track. And I think that will, I cannot tell you the timing of it, but it will come soon. So we will hopefully have that ready for sale in the European market. In terms of Ampere and what our initial intention with that is, as we said many times before, Ampere is a good investment opportunity as it helps us and complements our strategy in Europe. We already have a good lineup, X-Trail, Qashqai, Juke, LEAF, and we will have refreshed models like just like we showed recently with the new e-POWER, X-Trail, Qashqai and hybrid and Juke. But going forward, there are more things that the Renault Group or Ampere might be developing for EVs. And it's a good way to collaborate to help us meet the very fast electrification trend in Europe. So we are, of course, working with them and there are actually more potential projects in the pipeline. So as our position always been, if it makes sense, it complements and enhances our strategy. Of course, we are interested. So our position has not changed. And if there are some decision or further progress, we will let you know. I think that's all I can say at this point in time. But the collaboration and relationship with Renault Group and Ampere is actually progressing very, very well.

Thank you.

Okay, moving on to UBS Securities, Takahashi-san, please.

Takahashi of UBS Securities, thank you very much for this opportunity. First of all, North America, personnel expenses, your peers, competitors in 2024 is going to increase costs significantly. GM, more than $200 billion, they've already made that announcement. Amongst the suppliers, Mexico personnel expenditure increase percentage is higher for some competitors than the United States. You produce in Mexico, I know that the absolute dollar value is low but what about the percentage of increase, if you can give us any indication on that point? Secondly, Renault, you purchased your share back. And regarding the cancellation of the shares you've bought back, do you have any policy regarding cancellation of those shares? You don't put them in treasury. Your basic chance is to cancel. So if there are no any specific conditions, you cancel them rather than put them in treasury. Is that the right understanding? Thank you.

So, thank you, Takahashi-san. So, first of all, I think you saw in the news, we of course make sure that we are maintaining a competitive package for our valued employees in North America. And as a result of the situation in the US, we, I believe a couple months ago, we announced that we will increase 10% wages. So that's already happened. In Mexico, we are following a similar policy of maintaining competitiveness. So we will make sure we move in line with the market to make sure that we are taking care of our employees. Exact percentage, I don't remember, Takahashi-san. I want to come back to you on that one. But all I do remember is we are fairly competitive, so that I have no worries about. But in general, globally, not just US and Mexico, but globally, the inflation is high, including Japan. So I think you have to assume that there will be inflationary pressure on labor costs everywhere. Secondly, about the shared buyback. So, of course, when we buy back, we do want to -- we want to eventually, our ultimate goal is to improve shareholder return, either via dividend, share buyback, or through improved performance, which increases our share price, so all of these things are various levers for us to improve our shareholder return. So it's not automatic or for sure, we don't have a set policy that we will cancel automatically everything that we buy back. But and as I mentioned before, in response to Yuzawa-san's question, when Renault do want to sell, depending on how big they want to sell, if they want to sell a lot, then we have to think about what to do. But if they continue these kind of increments, of course, we have the funding available and the cash available to take it on. So to answer your question directly, there's no set policy but obviously, our aim is to improve shareholder return over the mid and long term. Is that okay for you, Takashi-san? Clear?

On the first point, operating profit, how is that going to be impacted in the next fiscal year? Is there going to be any reduction from the previous year and if you have any numbers that you can share with us?

Oh, for next year? No, right now we are working on the plan for next year. So it's not finalized yet. But I think you should have the confidence that what we did in Nissan NEXT, where we are focusing on reasonable profitability. We will try to continue that for the next few years as well. And we've done a lot to change the business practices and culture within Nissan. As you know very well, we do not want to blindly chase after volume or market share. But we do want a good balance between volume and profitability. And this is what we're trying to do now. And now that the market is different than it was a couple of years ago, this how to balance and what to balance is what we're going to be discussing for our plan for next year. So I think we will be showing the plan for next year in the May announcement when we announce the full year result and also the next year outlook. So please wait for us to share more of those details to you at that time. Thank you.

Thank you so much.

Thank you. Anyone else with additional question? Any more question from the floor? Oh, yes, Mizuho Securities, Ishiyama-san, please.

This is Ishiyama. Do you hear me?

Yes, we do. Go ahead.

Thank you for the opportunity. I have two questions. The first one is about the financials. Could you elaborate on them further? In the third quarter Q2, in the operating profit is there any one-off items which you can unveil? And for the full year guidance, operating profit remains unchanged. But the ForEx assumptions and volume have been changed, so operating profit, what are the positive contribution? In OP variance, what are the changes? Is there any numbers that you can give us? This is the first question. And second question is about the sales volume in US and China. You elaborated about the Q4. How about Japan and Europe? The fourth quarter sales target seems to be too ambitious. So what's your confidence? What's your perception or assessment here? These are the two questions.

Okay, Ishiyama-san, thank you for the question. And I think I captured three or four. But anyway, I will try to answer all of them one by one, so it's very clear. So Q3, I think, is temporarily a little bit lower than it should be. As I mentioned, we had to take care of the model year 23 inventory, which was larger than we expected. So we put some more incentive to sell down those stocks. That one-off portion of that is probably around ¥30 billion, in my opinion, I don't think that will be repeated in Q4. That's number one. Number two, as also mentioned in the step chart that you see on the screen right now, we had a lot of costs in Monozukuri that is for what we call inflation or other things. What this means is, in December, we had a finished discussion with our supplier. How much of the inflationary costs increase, we're going to share with them. So that they incur is going to be passed on to us, etc. So we settled those inflationary costs in support of our suppliers. So of that amount, it's about ¥40 billion or ¥50 billion on a gross basis. Of that, about ¥20 billion, I would say, is really not just for Q3 but for the first half as well. So I would say probably about ¥20 billion is not belonging just in Q3, but it should be looked at over the full nine months. Then that's the above OP too, kind of a one-off, I would say, the incentive additional provision to sell down. And then also these kind of retro adjustments for inflation or other price adjustments that's covering the full nine-month period, not just the three-month period. Then below OP, we had a couple of items. I’m not sure if you picked up on it, but we actually booked the impairment for India in the amount of roughly ¥54 billion. As we are progressing with our good collaboration with Renault, we have decided to restructure India operation. We have several entities and joint ventures together with Renault in India. We decided to rebalance them and also take care of some legacy issues. So we decided to impair as part of this restructuring change about ¥54 billion. Obviously, that will be not repeated again in Q4. Finally, probably somebody will pick it up, so I may as well mention and highlight this. But in Q3 also, given the interest rate decline in China, and then also we want to have, making sure that we have plenty of cash here in Japan, in case more shares sell down by Renault or other investor need it. So we moved some cash from China to Japan in the form of dividend. So we took a big dividend from China to Japan. But in the past, we didn't do that because in the past, we just left the cash in China because there was much higher interest rate in China that we could get income on. So but as we did this, we changed our dividend policy. So as changing the policy, we triggered from a tax point of view, having to book deferred tax liability for the undistributed dividends as well, or retained earnings. So this was a little bit extra tax expense for the quarter, but this is purely because we are opening up the possibility of moving cash in and out of China a little bit more. So these are, I would say, four items in Q3 P&L that slightly distorts or makes it look a little bit lower than actually normally the trajectory would be. So as you can understand from these four factors, going to Q4, I will not have a repeat of the incentives because I already have all the model year 24 in the dealerships now. And the sell down of model year 23 is going very well. The retro adjustment for supply already done, so if we do anything more, it will only be for one quarter's worth. So it will be not big as we had in December. And then I will not do another impairment in Q4 for any operation. And then we already took the tax liability, deferred tax liability for the undistributed China retained earnings in Q3. So I won't have a repeat of these factors, of these negative factors. On top of that, actually, as I mentioned, we will have improved sales because we have now all the new model years which has refreshed exterior interiors. We have more availability. We took care of all the logistics issues. So we actually have this vehicle ready to be sold and available for dealer to sell. We have updated our sales strategy so that we are now relatively competitive vis-à-vis our competition in the marketplace. And I would say lastly, some of our sales in the US, as I mentioned, is already confirmed via contracts, contracted order that we're going to be delivering. So to be quite frank, I think Q4 is already set up for being a good quarter. So Q3 is a little bit low, but Q4 will be on a good trajectory. So your question about my confidence or the Q4, I think I'm pretty good in for that. And I think I just gave you all the one-offs for Q3. This is why we're keeping the full year guidance at ¥620 billion. As you notice, we updated the Q4 yen rate to ¥145. And I think yesterday was ¥147 anyway, or today. I forgot to check today. So we might have a little bit upside on that one. So even though the volume has come down, the retail we adjusted down by almost 150,000 units. As you know, what drives the financial is the wholesale. The wholesale drop or wholesale adjustment that we did from the previous guidance is only 75,000 units. So only less, half of the retail drop, which means that the financial impact is not as big. And on top of that, because we know the situation and we understand, we learn from our Nissan NEXT, all the good principle and management practices, we are keeping a very good focus on cost and control it as much as possible. Of course, there will be inflation and other costs, but all the other costs we are watching very carefully to make sure we don't have a huge escalation in fixed cost. So a combination of FX, cost control is enough to offset the volume drop versus the previous volume guidance. So that's how to understand the ¥620 billion. Finally, you asked about the sales volume other than US and China, which is Europe and Japan. The situation is very similar. In the Europe market, I think the increase on Q3 to Q4 is almost 40,000 units increase. Half of that is where we are readjusting and updating our strategy. So we are making sure we are competitive in our offerings in terms of price or incentive. Also, we pumped in more in marketing. So we’re intensify marketing. So that's about half of the 40, 000 units and then about another 8000 or 9,000, maybe 10,000 units is because annually in UK, the license plate change in March. So usually we get a bump from that since we are very strong in the UK market. And lastly, the last 10,000 units roughly is because we have improved supply of the EVs, the LEAF and the Ariya as we got deliveries, which was a little bit held back in the Q3. So Europe, no issue for the growth in Q4 versus Q3. Similarly for Japan, we have the new model year 24 notes and days. And based on what I've seen in January sales, they're going very well. The new Serena e-POWER, we're getting more supply of that and it's very, very popular. I’ve already sold several of them to my friends and other colleagues. So I know they're very hot demand and then we also have improved supply of Ariya and Sakura. So therefore, Japan is also poised for a very good Q4. Sorry, very long answer, Ishiyama-san. I tried to address like four or five questions you had embedded in your two questions. Does that answer all your concerns?

So many questions, I'm sorry about this. Another one, quick follow-up. One-off items, the supplier costs ¥20 billion. This is a nine month, it's ¥20 billion for nine months. Am I right? Understanding this right?

The actual number is much bigger. I'm just isolating, of that bigger number how much should have been more belonging to first half? It's about ¥20 billion that should have belonged more in the first half, not in Q3. That's what I'm trying to say. But we could not book those in first half because we had not yet agreed and settled with our suppliers. So does that make it easier to understand?

Yes, that was very clear. Thank you.

Are there any other questions? If not, the session is closed.

So thank you very much for the participation today. And of course, the Nissan IR relations team remains at your disposal for any follow up questions. Thank you. Bye-bye.