I would now like to give you some more specific details about each of our main overseas businesses, beginning with our Australian soft drink business. As you know, Schweppes Australia became a wholly owned subsidiary in April 2009, so 2010 was its first full year as a consolidated subsidiary. The company's 12-month profit contribution added 1.3 billion yen to our earnings.

 

However, in local-currency basis, Schweppes annual sales were basically level with the previous year, as demand was negatively affected by unfavorable weather conditions, whereas a very hot summer in 2009 had boosted sales in the previous year. As a result, Schweppes' operating income increased just 4%, falling short of plan.

 

The company continues to face adverse external conditions in the early part of 2011, with Australia suffering from floods and other extreme weather. However, Schweppes plans to increase profitability and raise its operating margin to 8% by cultivating its brands and developing highly profitable sales channels.

 

Last August we announced an agreement to purchase 100% of the issued shares of Australia's No. 3 soft drink maker, P&N Beverages. Schweppes and P&N combined would give us about a 30% share of the Australian soft drink market and provide a firm foothold in that market.

 

At present, we are still waiting for Australia's Competition & Consumer Commission to make a final ruling on the deal. Once approval is received, we will begin preparations to integrate Schweppes and P&N so that we can realize synergies by merging their product portfolios and improving overall SCM efficiency. The integration of these two companies will help us accelerate our growth strategy in the Oceania market.