The Information Technology business performed exceptionally well throughout the year, with revenue increasing by 14%. The Life Care business also delivered solid growth, with revenue up 7%. The strong performance of these two core businesses drove steady growth in both consolidated revenue and profit.

FY25 was also a year in which we laid the foundations for future growth. For EUV mask blanks, we decided to invest in additional production capacity to meet growing demand. For HDD glass substrates, visibility into customer acquisition improved significantly. Optical Solutions (formerly Imaging) also delivered strong growth, driven by a sharp increase in demand for new product lines, including CUPO polarizing glass for optical transceivers used in data centers and lenses for wearable devices.

The Life Care business also delivered stable mid-single-digit growth on a constant currency basis. In the eyeglass lens business, sales of MiYOSMART remained strong, and we also launched the next-generation MiYOSMART iQ in China, one of our key markets. While profitability remains an area for improvement, we will continue driving revenue growth and reducing costs, with the goal of achieving a 20% profit margin from ordinary operating activities (hereinafter “operating profit”).

Revenue increased by 9% year on year, while profit before tax rose by a significantly higher 26%. This was mainly due to the recognition of more than 30 billion yen in one-off income in the third quarter, resulting from a combination of several factors.

The first related to a joint venture for intraocular lenses used in cataract treatment that we had established in China. We had previously recognized a long-term financial liability based on the estimated consideration for the future acquisition of an additional equity interest. As the final actual acquisition price differed from the original estimate, we recognized the resulting gain of 23.5 billion yen as a onetime benefit. The second factor was business divestments undertaken as part of our business portfolio management. We recorded gains totaling slightly over 7 billion yen from the sale of certain products within the endoscope business and a text-to-speech software business included in the Other segment. As a result of temporary factors, profit before tax increased significantly faster than revenue in FY25.

We expect both the Life Care and Information Technology businesses to maintain positive momentum, supporting continued revenue and profit growth at the Group level.

In Life Care, while uncertainty remains in the Chinese market for endoscopes and intraocular lenses, we expect stable revenue growth across the business, supported by the continued expansion of MiYOSMART iQ in China, the launch of MiYOSMART in Japan, and the ongoing rollout of new contact lens retail stores. In the endoscope business, where structural reforms began in FY25, we will continue streamlining costs with the aim of gradually restoring the business's operating margin to its benchmark level.

In Information Technology, we intend to sustain the growth momentum carried over from FY25, supported by demand for mask blanks used in manufacturing semiconductor chips essential for AI inference, HDD glass substrates benefiting from continued investment in data centers and an expanding customer base, and CUPO polarized glass products that support faster and higher-capacity data transmission.

We have decided to construct a new plant in Singapore for EUV mask blanks and another in Vietnam for HDD glass substrates. The rationale for the two investments differs: the EUV facility is intended to meet increasing demand from existing customers, while the HDD facility is designed to support growth in our customer base. However, both plants are expected to commence operations at roughly the same time during FY28.

Phase 1 investment is expected to total approximately 42 billion yen for EUV and 50 billion yen for HDD, with the bulk of the cash outflows occurring from FY27 onward. In both mask blanks and HDD substrate businesses, equipment is depreciated on a straight-line basis over three years. As a result, depreciation expense is expected to increase from FY28, when the new plants commence operations, broadly in line with the scale of the investments. While the higher depreciation burden will temporarily put pressure on profitability, we expect to absorb the impact through continued growth and maintain an operating margin of around 50% in the Information Technology business.

We consider the impact of the current situation in the Middle East from three main perspectives. The first is its impact on revenue. In the fourth quarter of FY25, sales of intraocular lenses to the Middle East declined. However, as the region accounts for only a small proportion of HOYA's overall revenue, the impact has been limited.

The second is rising energy prices. Higher energy costs have also affected logistics and business travel expenses, and we expect these to continue rising. Through rigorous cost management, we will continue to minimize the impact across the Group.

The third is the impact on raw materials. While supply concerns and price increases have emerged for certain raw materials, the overall impact remains limited. Under our Group-wide management framework, we will continue to secure a stable supply while advancing the selection and qualification of second-source suppliers.

Taking these factors into account, we believe the direct impact on HOYA remains limited. That said, external factors such as higher raw material and energy costs are unavoidable. We will continue to manage these appropriately through pricing actions and further improvements in cost efficiency.

We have updated our capital policy, with the key objective of reducing our cash and cash equivalents to an appropriate level. As we have consistently stated, our basic approach remains unchanged. While we maintain a relatively high level of cash to prioritize investments for future growth, we have no intention of accumulating cash unnecessarily. At the same time, we remain committed to delivering solid returns to our shareholders.

Based on this principle, we returned more than 260 billion yen to shareholders last fiscal year through dividends and share buybacks. However, the continued depreciation of the yen increased the yen value of our foreign currency deposits. As a result, our cash and cash equivalents rose to approximately 570 billion yen at the end of FY25. We recognize this as an important management issue.

Taking these factors into account, we reassessed what we consider to be an appropriate level of net cash. In addition to maintaining working capital equivalent to approximately two months of sales, we believe it is essential to reserve a flexible fund pool for swift decision-making on growth investments and M&A. Based on this approach, we have determined that the optimal level of net cash at this stage is approximately 460 billion yen. Accordingly, we intend to reduce the excess cash of approximately 110 billion yen over the next three years, primarily through share buybacks.