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Operator: Good morning, and welcome to the conference call organized by Vidrala to present its 2025 full year results. Vidrala will be represented in this meeting by Raul Gomez, CEO; Inigo Mendieta, Corporate Finance Director; and Unai Garaizabal, Investor Relations. [Operator Instructions]. In the company website, www.vidrala.com, you will find available a presentation that will be used as a supporting material to cover this call as well as a link to access the webcast. Mr. Alvarez, you now have the floor. Unai Garaizabal: Good morning, everyone, and thank you for joining today's conference call. As previously announced earlier this morning, Vidrala has released its 2025 full year results together with a presentation that will be used as a guide throughout this call. Following the structure of the presentation, we will start working through the key figures released before moving on to the Q&A session, where we will go deeper into business performance. I will now pass the floor to Inigo, who will take you through the key financial highlights. Iñigo de la Rica: Thanks, Unai, and thank you, everyone, for joining the call. We know it's -- these days are quite busy for you. So thank you very much for your time. So let's begin with a quick overview of the key financial figures. For the full year 2025, Vidrala obtained revenue of almost EUR 1.5 billion, EBITDA of EUR 441 million and a net income equivalent to an EPS of EUR 6.24. A strong cash generation of EUR 200 million enabled a substantial reduction of debt to EUR 105 million, which is equivalent to 0.2x our annual EBITDA. Please note that the right-hand column provides clarity on the variation on comparable scope basis and excluding also FX and comparable scope means excluding the impact of perimeter changes following the sale of Vidrala Italy back in 2024. In addition, and to allow comparability, EBITDA and earnings per share are shown excluding EUR 13.7 million and EUR 10.2 million, respectively, related to restructuring costs in the U.K. and Ireland. Let's have a deeper look at revenue evolution. Sales for the period reached EUR 1,465.2 million. On a like-for-like basis, excluding contribution from Italy and constant exchange rates, sales declined by 5.4%, reflecting the expected combination of soft demand and price moderation in line with cost developments. Turning now to EBITDA. We apply the same analytical framework to better understand the year-on-year variation. For the full year 2025, EBITDA stood at EUR 441 million, consolidating the profitability of our business model despite challenging market conditions. Excluding FX effect, EBITDA remained basically stable year-on-year. These results translated into a resilient EBITDA margin of 30.1%, reflecting a 1.5 percentage point expansion compared to last year. Now let's understand sales and EBITDA evolution by market based on the current perimeter. Again, that means fully excluding Italy from the 2024 figures. As aforementioned, price moderation are visible over all our operating markets. Southern Europe demand remains resilient, while trading conditions in the U.K. and Ireland continue to be challenging. And in Brazil, Q4 exhibited expected signs of recovery, and we are also constructive for 2026 as we start the year. Anyway, margins remain solid across all regions, thanks to our internal measures, cost discipline and actions to align industrial capacity with market realities. Now let's take a closer look at free cash flow generation, which is our top priority and a fundamental indicator of both our financial strength and the quality of our execution. This chart shows full year cash conversion performance. Starting from EBITDA margin of 30.1%, we deliberately allocated almost 13% of sales to investments, reinforcing our operational capabilities and driving future competitiveness. In addition, 3.6% of sales was dedicated to working capital, financial expenses and taxes. As a result, free cash flow generation reached almost 14% of sales, equivalent to EUR 200.1 million, highlighting our ability to translate operational performance into cash flow despite investing at record levels. As a consequence, net debt was reduced to EUR 105.3 million, which translates into a leverage ratio of 0.x our annual EBITDA. This solid financial position provides us with the ability to continue investing with ambition, with discipline while returning flexibility to seize growth opportunities and return capital to shareholders. Overall, we have largely met the guidance issued in April 2025. Our results underscore the resilience of our business model in a challenging market environment. And notably, our ability to convert operational performance into cash has proven strong, generating value even in an unfavorable global macroeconomic cycle. Moreover, if we adjust the performance of each of our business units in their local currency to the exchange rates assumed in the guidance, namely EUR 0.84 for the British pound and EUR 6.20 for Brazilian real, our EBITDA would have reached EUR 445 million, representing only a very limited deviation of 1% versus the guidance. And now before we move to the Q&A, I'll hand over to Raul, who will summarize the key takeaways and share additional insights. Rául Merino: Thank you, Inigo. Thank you, Unai. And thank you all for your time and attending this call today. We know it's -- and you know we know it's a busy day for you, so we will try to go ahead quick and direct. Well, our 2025 results demonstrate the strength of the business we are building. Today, Vidrala, are a larger, more diversified and also a less complex company. And this is a result of mostly our deliberate intentional strategic actions. Let me remind, in the recent years, we have entered the U.K., exited Belgium and Italy, and we have started to build a long-term platform for future growth in South America through Brazil. We are now clearly focused on 3 business divisions, operating across 3 different geographies, which create clear combinations and synergies at many levels across the business. And this structure makes us today more agile, closer to our customers and certainly better positioned to capture future opportunities. We are also more efficient industrial today. We invest more and more intentionally, always with our customer in mind. We are running ambitious projects to improve competitiveness, increase vertical integration and differentiate our service proposition. Let me say our goal is quite simple: to become a trusted, reliable partner for every one of our customers. And we are also today a more global company. At the end of the year, after a long process of analysis, we announced our entry into Chile. And this makes us even more attractive to a significant number of strategic customers that will shape our future, customers that are looking for a reliable, distinctive, challenger, long-term packaging supplier. And in the end, in 2025, we delivered despite a more difficult environment. It's evident demand remained negative. But even so, we protected our margins and we reinforced our industrial competitiveness. So the message we want to share today behind our 2025 results is quite clear. Margin resilience in a tough environment, driven by mostly internal actions, a stronger industrial platform supported by the solid execution of an ambitious investment plan and an expanded geographical diversification. And above all, we achieved our cash flow targets, something that help us to reinforce our financial position, increase shareholder remuneration and be ready, better prepared for what is ahead for us in the future. These achievements frame how we see, what lies ahead and support and reflect our confidence in our future. Even more important, the trends of the last few months confirm our firm conviction. Glass may have more future today than ever. I repeat, glass may have more future today than ever. Glass is an unparalleled packaging material, the ultimate sustainable packaging material of choice, the preferred package for customers and consumers across the world, 100% recyclable, eternally. It is, in fact, the packaging of the future, if and only if we take the actions we need to take today to protect our industry. Under this basis, under this starting point, we face 2026 with confidence, a year 2026 in which our results consolidate, evolve positively and support the transition we are making toward our future, a future that belongs to us. Thank you. Iñigo de la Rica: Thanks, Raul. So this completes our initial remarks. Let's turn to the Q&A session. Operator: [Operator Instructions] And our first question comes from the line of Paco Ruiz from BNP Paribas. Francisco Ruiz: So I have 3 questions. The first one is on volumes. I mean it has been a very pure quarter in terms of volumes for Iberia and U.K. in this Q4. How do you see the start of the year in this respect and how is your view for the full year? The second question is on the payback and the cash out of this restructuring that you have announced in the U.K. If you could give us more detail on what's the total savings for this plan and if you are thinking further actions in the near future? And last but not least, you are approaching net cash position and even with the Chilean acquisition, the leverage is very low. Should we wait until the end of the year to see some announcement on shareholder remuneration or this is something that could come earlier than expected? Iñigo de la Rica: Okay. Paco, thank you very much for your questions. Just give the figures of Q4 and full year in terms of volumes, and then we can make some comments on the start of the year, okay? Just to be very clear, Iberia in Q4, our volumes decreased by 4%. Volumes in the U.K. in Q4, the figure is minus 7.9%. And in the case of Brazil, we have seen in Q4 the expected recovery following a weak Q3. And in Q4, our volumes have increased plus 5.3%, okay. Overall, for the full year, [indiscernible] also the picture of the 12 months, Iberia is flattish in terms of volumes, minus 0.1% with the U.K. and Ireland minus 5% and Brazil due to this weak Q3 is minus 0.8% in terms of volumes. Rául Merino: Paco, we know you are expecting that we deserve some level of clarity on this side. Let me say, quite clear, we expect our sales volumes to move on the positive side in 2026. And that should be driven by some external things of stabilization, even recovery and also on internal actions to recover market share. It's only the start of the year. We understand that you need more clarity. The start of the year is seasonally different in our regions. It's more seasonally stronger in South America, seasonally weak in Europe, and we are exactly where we expected to be. We are seeing some positive signs that we reflected progressively in our sales volumes across the year. Iñigo de la Rica: Okay. Taking your second question on the U.K. restructuring. So as you know, as we have explained throughout the presentation, industry-wide market conditions remain challenging throughout the year. And despite this, I would say we have acted decisively by accelerating investments to try to optimize our industrial footprint, but also to try to further strengthen cost efficiency across the business, okay? And in this sense, we are taking steps to accelerate cost control measures, drive productivity plans, particularly in geographies more exposed to competitive pressures, such as the case of the U.K., okay? So obviously, these initiatives will have a short-term impact on our results, but we truly believe that we are fundamentally reshaping the competitive positioning -- our competitive positioning for the future. Specifically, the U.K. workforce reduction plan has been recognized in our 2025 figures through a provision for the full amount that we have clearly disclosed, the EUR 13.7 billion, although you can consider that only 1/3 of the plan has been implemented to date, with the remaining 2/3 scheduled for hopefully completed in 2026, okay? And once fully implemented, trying also to get your point on the payback, once fully implemented, the plan is expected to deliver recurring structural savings of at least EUR 12 billion per year, which should have an effect on, as I was saying before, on enhancing our competitive position. Just to clarify, this is an effort aimed at improving competitiveness and protecting market share. Rául Merino: And regarding your question on potential further actions, we know or you know us, our future -- we have a firm conviction of this. Our future will be based on our cost competitiveness. So we will keep on dynamically trying to improve our cost competitiveness and attract our customers. So for sure, in the future, we will take more actions when needed. I don't know at what magnitude. You can be sure that we will do as much as necessary to remain competitive. And we have a firm conviction of what that means in each of our regions. But we don't foresee that these cost restructuring actions, whatever happens in the future, should significantly distort the expectations you have in your mind in terms of our profits and cash flow. And your last question, Paco, regarding shareholder remuneration, you know that we do consider that our shareholder remuneration policy is more result or a consequence of our targets. Our financial targets are much more focused on financial strategic targets on diversification, right investments, margin protections and mostly, and at the end, our definite target is cash flow. Should we remain achieving our cash flow targets, we will do as much as necessary to improve our shareholder remuneration. We know what is our level of the strength of our financial position. So let me say that we agree with you that is a margin for further improvement in our shareholder remuneration. Operator: And our next question comes from the line of Enrique Yaguez from Bestinver Securities. Enrique Yáguez Avilés: I have 4 questions. The first one is the expected evolution in prices for this year. Secondly, if you could provide some details about Cristalerias Toro acquisition. Whether the acquisition is expected to be closed and the size of the restructuring plan and potential synergies. Third, about the OpEx increase coming from natural gas price increases, then CapEx guidance and where it will be allocated. And finally, I don't know if you could provide some details about the impact of the Storm Kristin in Marinha Grande. Iñigo de la Rica: Okay. Thank you, Yaguez. Thank you for your question. So regarding -- so many questions, I will try to organize them, okay? Regarding guidance outlook for 2026 in terms of prices, in terms of CapEx, first of all, as usual, you already know, we will announce our official guidance at the Annual General Meeting in April, okay? However, what we can say at this stage in terms of results, free cash flow is that we do not see current levels being at risk. But anyway, regarding prices, we remind you that approximately 50% of our sales are supported by multi-annual agreements with strategic customers that incorporate price adjustment formulas. And the outcome of these formulas points to a price moderation of around 2% at the group level. That said, it will be also important to assess potential mix effect associated from our strategy to recover selectively some market shares. Rául Merino: Let me take a little bit at this point with more detailed prices. And let me invite you to make a historical analysis, okay? We have the evidence, the strong evidence that our glass prices have been adapted significantly over the last 2 years. And this is very positive if we consider how glass was positioned 3 years ago after the inflationary shock in comparison with where we are today. I mean competition is still high. We will maintain a disciplined approach to our prices. But when we see all those numbers, when we see our cost competitiveness and we also see other materials, I have the feeling that we are going evolving in the right direction. Iñigo de la Rica: Okay. And just to complete on 2026, Yaguez, going back to CapEx. Well, first of all, just to clarify that we believe our cash profile is sustainable. Obviously, investment levels currently at almost 13% of revenues are expected to ease in the medium term, not in the short term, okay, which should be easing in this medium term CapEx over sales should further support the improvements in our cash generation profile. And for 2026, CapEx should remain close to the 2025 CapEx figure, which is EUR 189 million, probably slightly lower than that, but still ambitious ranging between EUR 170 million to EUR 180 million. Then regarding the closing of the acquisition of Chile, everything is proceeding as anticipated, okay? There is no news there, and we continue to expect the transaction to close in the first quarter of 2026. A few remaining points still need to be finalized, which we expect to resolve in the very short term. And in any case, sales, EBITDA and margin figures remain in line with what we announced in December, okay? And we will take the opportunity of the guidance that we expect to issue with occasion of the AGM to include Chile and to give more visibility in that sense. Then regarding the impact of the recent or increase in gas prices in the last -- in the start of the year, please consider that at year-end, around 80% of our NAV exposure for 2026 and around 40% for 2027 was hedged through derivative instruments. This excludes Vidroporto, where, as you know, almost all our customer contracts are dictated by price adjustment formulas. And what really hedges for 2027 are now slightly above the previously mentioned figures. And then just to finalize on the impact of the Storm Kristin. At the beginning of the year, our plants in Portugal were impacted by Storm Kristin. This severe weather event caused disruptions to electricity supply and resulted in temporary impacts on our operations and consequently affecting production at both facilities. Although we expect there to be an economic impact. However, this should be largely mitigated through the group's insurance policies as well as through the support measures made available by the Portuguese government, okay? So we are not worried in that sense. And more relevant, let me take the opportunity to sincerely thank the teams for their professionalism, commitment and outstanding effort in responding to the situation and ensuring a swift and orderly record of operations. Rául Merino: And just to add on your comments, Inigo. Okay, the limited impact we will suffer under this big climate or external issue proves again the right direction and the strength of our investment plan. And finally, Enrique, on the Chile point, let me please remind that we know that this deal, this step for us will be -- will have less impact from a financial view and from the strategic sense. And we know what we want. We will need our time to take deficit actions to deploy our industrial model and everything is going as expected, okay? What that means? That means that the results we will publish regarding Chile will be the starting point for what is ahead in the future. Operator: [Operator Instructions] And our next question comes from the line of Inigo Egusquiza from Kepler. Íñigo Egusquiza: So most of my questions have been already answered. So just 2 quick follow-ups on Chile. You mentioned that you will give us more information at the time of the guidance, if I understood well. My question would be more on further capital allocation. You mentioned, Raul, there is obviously room for increasing shareholder remuneration considering your limited leverage. But the question is more on -- on more M&A. I think that the company has a very clear strategy in my personal view of growing and continue consolidating the market and probably Latin America is the priority. If you can share with us if we can expect more M&A in the near future, 2026 and 2027. This is the first question. And the second one would be on volumes. You have mentioned that you expect some stability in Europe in 2026. The question is how do you see, I mean, the industry evolving? You sounded more positive on glass future compared to other materials. And what about all the capacity shutdowns announced by the industry, if my numbers are right, almost, I would say, close to 9%, 10% of once the Europe capacity has been shut down. So obviously, this would be a positive for the industry recovery. So if you can share with us your thoughts. Rául Merino: Thank you, Inigo. Thank you very much. Well, first, regarding capital allocation, let me remind that we are -- as Inigo can add, we are today active under our share buyback program. So this is an example that we are taking seriously our shareholder remuneration policy with some specific efforts this year. And regarding your specific question of what is next, well, let us please first finalize our entry into Chile before speaking about the next step. It's too soon. But our approach remains consistent, the same. We are and we will continuously -- remain continuously exploring potential opportunities. But this year is a year to be a focus and not distract? And at the end, whatever we see, whatever you see from us, I'm sure that you won't be surprised, okay? And regarding the second question, capacity actions across the industry, capacity rationalization, it's all a matter of cost competitiveness. And capacity rationalization by its competitor in this industry in the glass space and in other substrates will be basically a matter of cost competitiveness. And we know how clear we are in our mindset regarding cost. Cost competitiveness will drive our future. And that's the reason why we are not expecting any capacity rationalization, and we hope the industry to rationalize capacity if needed. And this will help us to recover some market share. Operator: There are no further questions by the telephone. I'll now hand it back to the Vidrala team who will address questions submitted via the webcast. Iñigo de la Rica: So we have received some additional questions through the webcast. First of all, on the Chilean acquisitions, we are asked about EBITDA margins because the question says that they are substantially lower over the rest of the assets and if this is structural or we can improve, okay? As we disclosed at the time of the acquisition, it is true that margins -- the figures that we announced back in December showed EBITDA margins in the range of 17%. And part of this is due to factors specific to the asset. We should consider that a business in Chile with the scale of Cris Toro won't have the same metrics as the one in Brazil just because of a matter of scale and because of differences between the regions. But in any case, we consider that margins should improve. So we recognize that this is a different transaction in the sense that it includes a process to improve margins, to optimize margins. And this should be through costs, won't be dependent on volumes, on sales volumes. And please remember that this is a company that we knew pretty good because we were providing them with technical assistance similar to the case of [indiscernible]. In any case, in order to give more visibility, as we have said before, we should wait at least until the guidance in April where we can give more detail. Rául Merino: Just to add on this, Inigo, you can be sure that we know what we are guiding, okay? I mean, far from a surprise, we do consider current operational margins in Chile as an opportunity, part of our business plan. Iñigo de la Rica: Good. Then there is a second question on overcapacity in Europe. As you all know, the capacity closures that have been announced in the last 2 years have been very significant. We are still seeing some announcements to further close capacity in regions that are structurally uncompetitive. And this means that considering the structural capacity closures, permanent capacity closures and also the adjustments in terms of production capacity, temporary adjustment that we are all hitting, we believe that the industry is reasonably balanced in terms of supply and demand. And then there is a final question on savings in the U.K. due to the restructuring. I could say we have already answered that question through the live questions. But just to be very clear and to avoid any misunderstanding, out of the EUR 13.7 million that we have registered in our numbers, 1/3 has been already executed and I mean, in terms of cash flow. And 2/3 of that figure of the EUR 13.7 million will be executed in 2026. It's not an additional amount on top of the EUR 13.7 million. So we have now answered all the questions received via webcast. So please remember, we are always at your disposal for any further questions. Thank you very much for connecting. Rául Merino: Thank you very much. Please keep on eating and drinking in glass and see you on April.
Operator: Welcome to this Ageas conference call. I am pleased to present Mr. Hans de Cuyper, Chief Executive Officer; and Mr. Wim Guilliams, Chief Financial Officer. [Operator Instructions]. Please note that the conference is being recorded. I would now like to hand over to Mr. Hans de Cuyper and Mr. Wim Guilliams. Gentlemen, please go ahead. Hans J. De Cuyper: Good morning, ladies and gentlemen. Thank you all for dialing into this conference call and for joining the presentation of Ageas full year 2025 results. I'm extremely proud to report that we successfully completed the first year of our Elevate27 strategy, a remarkable year where we delivered a continued strong performance and raised our financial targets twice. 2025 was, to say the least, a transformational year for Ageas, giving us many achievements to be proud of. Thanks to the Saga partnership and esure acquisition, Ageas steadily strengthened its position in the U.K. market becoming one of the top 3 U.K. personal lines insurers. By acquiring the remaining stake in AG, we have full ownership of -- we will have full ownership of our core home market, further strengthening our leading position in Belgium. Both transactions fully aligned with our Elevate27 strategy of focusing on cash generative entities. In 2025, Ageas delivered outstanding growth across the group, with inflows up more than 9% at constant FX, driven by both Life and Non-Life with Ageas Re adding momentum. This remarkable performance was boosted by a strong growth in Non-Life with inflows up 16%, up in all segments and product lines. The uplift in Belgium resulted from both portfolio expansion and tariff adjustments while Asia benefited from an upward trend in all countries. Europe inflows increased with continued focus on profitability over volume and the U.K. positively contributed despite a softer market supported by esure and Saga business. The Reinsurance segment delivered an exceptional performance, mainly driven by third-party business, thanks to strong profitable growth in all business lines and aided by the inflows from partnerships. In Life, Europe inflows experienced a significant increase of plus 21%, driven by continued excellent performance in Türkiye and a remarkable growth in savings products in Portugal. Also, Belgium showed a strong performance of plus 6%, driven by excellent unit-linked sales to the bank channel, while Asia growth was realized with strong persistency rates, building on the new business that was sold in previous year in China. Our continued strong growth in Life translated in the growth of our Life liabilities of more than 6%. Regarding the net operating result, we achieved an outstanding result of more than EUR 1.655 billion above the latest guidance announced last month. This strong result was driven by a remarkable Non-Life performance reflected in the excellent combined ratio of 92.5%, partially supported by benign weather in Belgium. Life performance improved across the group with high margins in Belgium and Europe further supported by a one-off tax benefit in China. Regarding the recurring cash upstream, we received over 2025 EUR 949 million, and this is notably above guided range of EUR 850 million to EUR 900 million and up 18% compared to last year. And for 2026, we expect a significantly higher cash upstream of EUR 1.2 billion. Following the excellent results, a solid Pillar 2 solvency ratio of 211% and a robust cash position, the Board of Directors has decided to propose a total gross cash dividend of EUR 3.75 per share, a growth above 7% over 2025 and this is fully in line with our commitment. The interim dividend of EUR 1.5 per share was already paid out in December last year, and the payment of the remaining EUR 2.25 per share will be done in the course of June. Year 2025 demonstrated how quickly economic conditions such as inflation and interest rates can change and how macroeconomic events can influence the business environment. In this dynamic landscape, having diversified operations across regions and products are particularly important. During this transformational first year of Elevate27, Ageas achieved a more balanced geographical and segment distribution increasing the weight on European cash generative entities. The balance between Life and Non-Life businesses across the world is a defining feature of Ageas as a well diversified group, which keeps a steady growth in performance and a strong solvency even in volatile times. Before handing over things to Wim, let me share a quick update of our 2025 M&A journey. We closed Saga in July and esure in September, adding the missing pieces to our U.K puzzle. For esure, the integration started already at the end of 2025 ahead of plan, and we are well on track to achieve the announced annual synergies of more than GBP 100 million as of 2028. With the AG acquisition on track to close in the second quarter of 2026, another milestone approaches, further reshaping our group and accelerating our journey towards delivering on our Elevate27 ambitions. This allowed us to elevate our financial targets twice in the first year of our strategic cycle, upgrading our holding free cash flow to more than EUR 2.6 billion and the shareholder remuneration to more than EUR 2.2 billion while reiterating our average earnings per share growth between 6% to 8%. With this positive update, I now give the floor to Wim, who will walk you through the segment performance in more detail. Wim Guilliams: Thank you, Hans. Good morning, ladies and gentlemen, and thank you for joining us. As mentioned by Hans, the strong net operating result was mainly driven by an excellent insurance result in Non-Life and a solid performance in Life, further supported by a low tax rate in China. This translated into a strong combined ratio at 92.5% and a high Life net operating result of EUR 1.259 billion. Life net operating result rose sharply by 39% compared to last year. As communicated end of January '26, following a tax regime change in China, a Chinese joint venture, Taiping Life, recognized a positive one-off benefit of EUR 300 million in deferred taxes. We also delivered an excellent Life operating insurance service result, up 4% compared to last year, illustrating the quality of the business in all segments. In Belgium, the Life net operating result was up plus 5% compared to last year, supported by a solid insurance result, as shown by the strong guaranteed margin, of 102 basis points. In Europe, the Life net operating result was up plus 20% compared to last year, driven by an excellent performance in Türkiye. Asia recorded a solid increase in the Life operating insurance service results, up more than 7%, driven by a higher CSM release and a positive development in expense variance. CSM roll forward showed a positive operating CSM movement of EUR 170 million. This positive evolution corresponding to a 1.8% growth was supported by a significant contribution of new business. Looking at the drivers of the Life value new business, the present value of new business premiums in '25 was driven by the strategic shift in product mix in China. Belgium showed a significant improvement in the Life business new margin compared to last year, up 110 basis points, reaching a new business margin of 6.8%. In Europe, the present value of new business premiums showed a strong growth compared to last year of plus 17%, driven by Türkiye. Group Life new business margin stood at 7.9%, a performance influenced by the liability transformation in China to participating products. Participating products are more capital efficient and less sensitive to interest rate movements, but they typically carry lower margins than traditional products. The resulting shift in the business mix impacts the overall margin. Moving now to Non-Life. The combined ratio reached an excellent 92.5%, leading to a 21% increase in the net operating result to EUR 548 million. The strong performance was driven by all segments. In Belgium, the Non-Life net operating result rose by plus 9%, reflecting both business growth and an improved combined ratio supported by benign weather conditions. In Europe, the combined ratio improved versus last year, driven by the continued positive trajectory in health profitability in Portugal and better household performance across all countries. In Asia, the Non-Life net operating result increased across all markets, supported by an improved combined ratio. Lastly, the reinsurance combined ratio for the third-party business stood at a strong 76.5% benefiting from favorable claims development and a stable expense ratio. Regarding the balance sheet evolution. Our comprehensive equity grew strongly compared to full year '24, reaching EUR 17.5 billion. This growth was driven by strong net operating result and the capital increase for the esure acquisitions, which more than offset the impact of foreign exchange volatility and dividend payments. Our current cash position stands at a very solid EUR 1.45 billion, firmly supported by the EUR 949 million of dividend upstreams during full year '25, a strong 18% rise compared to last year. Our cash position was further reinforced by the RT1 issue completed in mid-December. To conclude, I would like to add a word on solvency and operational capital generation. As mentioned by Hans, the solvency ratio of the Solvency II scope stood at a comfortable 211%, while the solvency of the non-Solvency II scope stood at 244%. The operational capital generation over the period amounted to EUR 1.9 billion. This included EUR 1.2 billion generated by the Solvency II entities, representing a 7% year-on-year increase, while the general account consumed EUR 187 million. Non-Solvency II entities contributed EUR 892 million, a decrease compared to last year, reflecting the interest rate environment and the lower new business contribution from China, following the strategic shift toward participating [indiscernible] products. Operational free capital generation amounted to EUR 793 million. Within the Solvency II scope, operational free capital generation increased, supported by higher operational capital generation, the operational free capital generation in the non-Solvency II scope was impacted by higher consumption, capital consumption, mainly driven by the increased equity allocation in China. I've now reached the end of my presentation, and we are ready to answer any questions you may have. Operator: [Operator Instructions] Our first question is coming from David Barma with Bank of America. David Barma: Firstly, on Asia, can you update us on where the mix of business is towards your target in terms of participating products and whether the margins in the second half of the year should be fully reflecting this change of mix or whether we should see a bit more pressure in '26? That's my first question. And then secondly, on cash, with Ageas being full owner of AG, you've talked about the potential for cash pooling that could reduce some of the conservatism in local buffers. Can you give some color on what that means in practice and whether you'd be looking to run with less excess capital in Belgium going forward? Hans J. De Cuyper: Thank you, David. I think I'll give both questions to Wim, who can give you the technical details. Wim Guilliams: On the business mix, we've done a substantial change to the participating products. If you look at from a annual premium equivalent perspective, we're at 70% to 80%. But you should know that in that remaining, there's also a sizable part, which is nonparticipating, but they are very short term. They're more than protection business. You can say that we've done a major shift towards these participating products. I can understand your questions on the margins and how we have to look at them going forward? Now there has been a bit of volatility of these margins over the years. So don't take the second half as a reference. I would more look at the full year, what you see there as margins going forward as a good reference because there's a bit of a mix in the duration of the products they will be looking at. Why do I say look at the full year? You've seen that over the last couple of months, the rates in China are a bit more stable. So that has, of course, an impact on the margins you will see going forward. If they would go up or if they would go down, you know that we have now that automatic interest rate mechanism in China, but that always works with a bit of delay, so that you have to take into account going forward. Now your second question on cash fungibility, cash pooling has less to do with the excess capital from a solvency perspective. This is more a liquidity management tool, where we can say we can look at the free liquidity from a group perspective and start pulling that together. So that was also the reason why we said you can have a different view on our local -- on our GA liquid asset, total liquid assets. So we don't need to be as stringent as we are as before. Now your follow-up question will be then, what is the new level you would take into account? As in the past, allow me not to give a clear number on that because it depends a lot on the market circumstances and that is driving what we have. But we will continue having a cash guardrail. But thanks to this cash pooling, we have additional tools at group level now to take them into account to manage that cash liquidity going forward. Operator: Our next question is coming from Farooq Hanif from JPMorgan. Farooq Hanif: I've actually got 2 questions and one clarification following the answer to David's question. So just to be -- just a clarification first. What you just said, Wim, was that we should continue to forecast cash remittances as normal, but the amount of cash that you need at the holding is no longer as big a constraint. Is that the right way to think about it? So that's a clarification number one. And then on the questions, on Asia tax, I believe there are still some ongoing effects, if you could just talk about the difference between deferred tax asset, deferred tax liability, what's been recognized and what could be recognized going forward and how we should think about the tax rate for China and Asia generally going forward in the Life business? And then my last question is on the reinsurance profits. Obviously, throughout the group, you've had very good result because of weather. But in Reinsurance, the third-party profit has grown a lot as you stated in your presentation is ahead of target. So can you just explain how much of that is sustainable? How much of that might disappear with the Prima quota share? Just want to get a sense of what you think of the Re profit going forward? Wim Guilliams: Farooq, on the first one, I can be very clear, yes, your understanding is correct. So it's about cash fungibility. And in the past, we looked at the total liquid assets. This has nothing to do with the cash remittance as such. That will follow the normal evolution that you had in the past. Your second question on Asia tax. I can understand this is, of course, the major update that you've seen with that one-off deferred tax benefit. As you could read end of January, this has, of course, to do with the fact that you know we have been more conservative in the past on these DTAs, which we didn't recognize as the average of the market is. And now it has been clarified with the transition to IFRS 17/9 that that's the tax base and also the transition effect you can take into account in how you calculate the taxes. So basically, this one-off tax benefit is a bit adjusting the more conservative tax rate that we had in '23 and '24, but it has all to do with deferred tax. From now onwards, we are for tax accounting in an IFRS 17/9 world in Mainland China, that means we take the IFRS 17/9 results and that's the tax base going forward. There's always a bit of an adjustment for fair value to P&L movements on instruments, but that's less relevant for us because we exclude them from our net operating results, so you can put that a bit aside. Now on that tax base, what is creating the big deductibility is that if you invest in long-term government bonds and in some of the provisional bonds, the coupon you get on these bonds, you can deduct from the tax base. So that means that if you now look at the situation, we will be looking to a tax rate between 0% to 10%. If you ask us to give a number in that range, it will be more than 5% because that's the midrange we have. And that depends on the deductibility that we have on that IFRS 79 tax base. How will that evolve going forward? That will depend on the evolution of the portfolio, the growth of the portfolio, and of course, to what extent we will have that part of deductibility of long-term government bonds. On the Reinsurance profits and the weather, and then I will give it back also to Hans. Please remember, of course, that the Reinsurance team has done a tremendous job also to work on the diversification of the portfolio. We're no longer fully dependent on weather. Weather will stay an element in Reinsurance, but we have diversified to other types of business lines and that means that the profit signature going forward will not be only dependent on cuts and that part of the business. Hans J. De Cuyper: I can add, Farooq, 2 things. First is your question on Prima. You're right, we had EUR 7 million impact result in '25. As you know, we expect that to go on in '26, probably around another EUR 8 million. In the long run, AXA has communicated that it is their intention to take over that business. How that phasing out will happen is not fully clear yet. But I think by the end of the strategic cycle '27, you can assume that, that business will not be there anymore. On the other hand, we have now an organization that is capable to insure and reinsure these type of partnerships. And we have already, I think, signed a new similar type of partnership for not the same volume, but EUR 130 million. So that is a business that we will continue developing going forward. Last comment I want to add on Wim is, indeed the diversification. As you know, we started with predominantly property risk. We have diversified, first of all, in casualty. And now the team has done a great job in underwriting expertise for specialty lines. Eventually, the intention is to bring it to roughly to 1/3, 1/3, 1/3 in the 3 segments. So that will, first of all, stabilize results; and secondly, reduce the dependency on weather as such for Reinsurance. Farooq Hanif: Just one follow-up, if I may. I believe, and I might be wrong, that there's also a deferred tax liability benefit that you could get in Asia, am I correct? So when you give the 5% guidance, that's taking that into account? Wim Guilliams: Let's take into the -- yes, Farooq, that's taken into account. It will, of course, depend -- that's all based on the projections of results going forward. If that would be a difference, then you could have still a difference in the tax rate also at this point. That's taken into account in the assumption of the 5%. Operator: The next question is coming from Andrew Baker from Goldman Sachs. Andrew Baker: First, there's been some headlines around China government potentially planning capital injection into some of the larger insurers, including Taiping Life. If this was to happen, would you anticipate any impact on the dividend capacity from this business? And then secondly, are you able to just give an overview of the rate and claim inflation dynamics that you're seeing in the U.K. right now? Hans J. De Cuyper: Okay. On your first question, indeed, there has been some rumors about this China government capital injections. Of course, we cannot comment and we cannot act on rumors. What you will see is that actually, our solvency in China remains quite strong despite the fact that we had, I would say, a double impact from the VIR over '25 because, of course, you have the further absorption of the VIR impact, but you also had the impact on the asset valuation because of interest rates that stabilized slightly up. So that being said, I can say that a big chunk of the VIR impact has been absorbed. We have seen that the gap between the spot rate and the VIR rate as approximately halved over 2025. There is more effect to come, but the solvency is still comfortably about -- above 200%. So for us at this moment, a capital injection is -- in Taiping Life is not on the radar. U.K. claims inflation, it remains high. So in my view, there is, I would say, no room for further softening of the market. We have seen the market softening in '25. We have not fully followed that. We have put bottom line profitability above top line growth, although, of course, we do see a nice performance in top line, but that's also from absorbing the Saga and the esure business in the portfolio. Our price adjustments have been limited to approximately 2%, both in motor and property, while you have seen the market softening between 10% and 12%. Towards the end of the year, December, and that's also what we see in the pattern beginning of this year, we've seen it could be that the motor market is bottoming out a little bit, and that [indiscernible] become reasonable. But all this, of course, is subject to further monitoring and how it will go. What we do see now in the strategy of the U.K. team is we have, I would say, more dynamics to play in this pricing market because we have now access to the full, I would say, potential customer base via different brands and different distribution channels from partnership over brokerage, where our pricing used to be a lot more stable because this was about the good relationship with the brokers versus PCW and direct where the pricing often is a lot more dynamic where you immediately act on your positioning in the rankings. But I can assure you that the team is very diligent on focusing protection of the portfolio on the one hand, but definitely also on achieving bottom line performance. Operator: The next question is coming from Michael Huttner from Berenberg. Michael Huttner: Fantastic. I have so many questions, but I'll ask 2 and come back. The first one is just a bit more on China. I was really interested by your comment that the gap between the spot interest rates and the VIR is halved and solvency is above. But can you give us a little bit more granularity? It's just -- I'm sure -- just in terms of the gap on the VIR and if it were to fully close, what would it mean in terms of solvency? I mean any help -- and within that, if I may include that as a question, I saw the China cash went up from EUR 80 million to EUR 110 million. And I'm just wondering what you kind of feel for what it might be in your plan for the EUR 1.2 billion in 2026? And the second question is on Reinsurance. Excluding -- so you have this 300% rise in Prima, I'm assuming that's Prima and Triglav. Can you give us a feel for what the kind of the more normal business, what the growth is there? And in light to that, just a feel for whether at some stage, you'll be considering putting more capital in there? Hans J. De Cuyper: Okay. Thank you, Michael. There are 2 detailed business questions, so I will give them to the responsible heads of those business, Filip and Manu in a minute. But maybe first, your question on VIR and solvency, which I give to Christophe, the CRO. Christophe Ghislain Vandeweghe: Yes, perhaps to explain the solvency, you can see it a bit in the evolution on the slides that we have shared. If you see our solvency evolution on Page 22, you see that you have a big market movement in there. And obviously, the biggest impact of that market movement is exactly linked to what Hans was mentioning also the VIR impact. Now in terms of amounts, there is an FX impact in that. So you first need to deduct that. That's about EUR 900 million on the own funds and the whole capital movement that you see there, there's about EUR 300 million is basically a fix related, if you simplify it. So the fix doesn't move that much. The solvency ratio is quite neutral. But it does, of course, impact the own funds and the capital requirements. I would say most of the rest is actually linked to interest rate movements. We have different things. Hans already mentioned the rates went up during the year. So you have 1/3 of a double hit there. But of course, the equity markets also increased, so that offsets a bit. So we can expect that, given the figures that Hans already mentioned, I think the delta between, let's say, the spot rate of the Valuation Interest Rate and that average Valuation Interest Rate was about 90 basis points at the end of last year and is about 40 basis points today. So we did absorb a large part of that delta during the year. And of course, that means that we expect still a material impact to come in 2026, but by then, it will start to go down a lot. Hans J. De Cuyper: Upstreaming China... Filip Coremans: Yes. Thank you, Michael. On the dividend development that you saw over the last year, of course, it's just not entirely come from China, but China indeed increased the dividend, very much in line with the statements that they themselves made on their dividend policy. So to demystify a little bit the effect of dividend on the solvency is only around 3%, 4%, let's keep that in mind. That is not a determining factor. CTIH made a commitment and also in their public statement that they are looking at a steadily increasing EPS over time and that is the line they stick to. They also mentioned that they may relook at that as increasing the payout looking forward. But so we expect stable increasing dividend per share coming out of CTIH and Taiping Life being the main feeder of that, you can draw your own conclusion. Hans J. De Cuyper: So before I go to Manu for reinsurers on upstreaming, you mentioned the EUR 1.2 billion, Michael. Important there is that in the agreement we have with BNP on the stake in AG, we will receive the full '25 -- over '25 dividend of AG already at the level of Ageas. So that should give a lot more comfort on that EUR 1.2 billion that we have stated as upstreaming for 2026. Now Reinsurance, Manu? Emmanuel Van Grimbergen: Thank you, Hans, and good morning, Michael. So on Slide 37, you have an overview of the inflow of reinsurance and you see that by the end of 2025, the inflow for the third party is at a level of EUR 905 million, which is including the Triglav Prima deal, and that amount for EUR 630 million. So excluding that EUR 630 million, the inflow end of '25 would have been EUR 275 million compared to EUR 213 million end of '24, which is an increase of 29%. So I can give you already a quick update on the renewal of 1/1/26 and there, we -- on the business that had to be renewed on January '26, we have an increase of more than 20% of business. And your question on your capital, you know that over the strategic cycle, we decided to allocate EUR 280 million solvency capital requirement to the Reinsurance third-party business. The EUR 280 million solvency capital requirement was excluding a deal like Prima. Where are we today? Today, we are at a level of capital allocation, Solvency capital requirement allocation to reinsurance of a bit more than EUR 200 million, and it is including the Triglav deal. Michael Huttner: And other EUR 200 million, that includes your renewals, right, the 20% rise in January? Emmanuel Van Grimbergen: Yes, yes. Operator: The next question is coming from Farquhar Murray from Autonomous. Farquhar Murray: Two questions, if I may. Firstly, on the guidance for net operating profit of over EUR 1.5 billion full year '26 million, can we just walk through the bridge of the kind of full year '25, so I want that EUR 655 million? I'd have the Asia Life's tax steps, it's probably minus EUR 300 million to get to the 25% tax rate and then probably a positive of EUR 137 million to get the 0 to 10% and then a material step up from the AG minority. But I just wondered if you could give a sense of those right steps and what else are you assuming in there? And then secondly, you commented on the competitive environment in U.K. Non-Life. I just wondered if you could extend your thinking on to the Belgium business and in particular where you might expect any softness to emerge in that business or relatively stable this year? Hans J. De Cuyper: Thanks, Farquhar. Indeed, we gave a guidance of 1.5 -- well above, I would say, EUR 1.5 billion for this year. First of all, in that guidance, we do assume a tax rate for Asia between 0 and 10% somewhere, let's take approximately 5%. You are right that the starting base, of course, is the EUR 1,350 million, which is the right reference to look at. For AG and the deal with BNP, we assume here closing towards the end of the first half of the year. So we do include half a year of the impact of AG in this guidance. As usual, we also assume a normal cat nat event. So that means the promise to give guidance on combined ratio which is below 93% considering a normal cat nat here. So that means worse it could go above, better like we had last year. Last year cat nat was plus 1% impact on combined ratio, it might be even a little bit lower, but also be aware, of course, that there is already some weather events in January, mainly in Portugal. But at this moment, we are comfortable to go above the NOK 1.5 billion for the year. And as you know, in these volatile times, it is hard to give this full 12 months in advance. So we will definitely bring an update by midyear. Then the Non-Life business from Belgium. Well, I think Belgium is, I would say, today in a very attractive situation for profitability, the market as a whole, but definitely Ageas is outperforming that market on the positive side. You have seen that the results were very good, but the impact of weather in Belgium was very low, 0.4, I think, in the combined ratio, that was a very positive cat nat here. So please assume a more normalized cat nat that we always assume for the year. At this moment, no events, I think, in Belgium or no material events yet in Belgium, but the market is profitable, is very competitive, but it is also excellently positioned to compete in that market. So the sensitivity for the softening in the Belgian market, you cannot compare, for instance, with the U.K. market where your business is immediately impacted in Belgium. The persistency of your businesses are a lot stronger compared to the U.K. market. Farquhar Murray: What kind of tariffs you bring through at present, just as a follow-on? Hans J. De Cuyper: Sorry, I didn't -- I missed that question. Farquhar Murray: Just as a follow-on, what kind of tariffs expectations have you for the year? Are you going to be [indiscernible] still increasing in line with inflation probably or maybe a bit softer than that? Hans J. De Cuyper: Well, you know that in Belgium, approximately 60% of our business is immediately inflation linked. So there, I think the normal index 2% to 2.3% was inflation? . Unknown Executive: Yes, depending on the... Hans J. De Cuyper: yes, depending on the product that is already absorbed in the tariffication. The rest remains to be seen. For cat nat, I do not expect an increase because it was a very good year last year and the rest remains to be same. Operator: The next question is coming from Michele Ballatore from KBW. Michele Ballatore: Yes. So 2 questions from me. So the first one is on the Asian business about your comment on the higher exposure to equity. I'm sorry, I thought in the past, you reduced this exposure, probably I missed that, but if you can clarify this point. And the second question is about the overall pricing environment in your European business, I'm talking about Non-life, so what are you observing in, let's say, since the start of the year? Unknown Executive: Yes, the first point on the exposure in equity, maybe a few points of clarification. First and foremost, in 2024, indeed, we reduced that exposure gradually and in the course of 2025 that has been rebuilt up to the levels that we had, let's say, beginning '24, plus obviously, you had a sharp market increase. So the equity exposure certainly has gone up. Also to note that this, in combination with the shift to participating products mostly happened, obviously, in the par portfolio, where the loss absorption capacity for that type of instrument is better. That's the only clarification I can give on that. But that indeed led to a slightly higher risk charge, obviously, on these equities in the solvency ratio. Hans J. De Cuyper: Okay. If I look at the European continent, well, Belgium, we just spoke about on tariffs in Non-Life. So I don't think I should go a lot deeper there. U.K., we already spoke about as well. I see market analysts being relatively negative on motor in the U.K. I see predictions of combined ratios to 100% to 110% for the market, but be aware that the last few years, we have been outperforming that market and doing way better. But as I just said in the first question, we have seen maybe that motor business bottoming out a little bit, but that is definitely on watch for the rest of the year. As for the team, it is very clear that it is all about sustaining the bottom line. We have said that esure, we should not expect contributing to that bottom line because the esure brings over '27 will go into integration costs to put the businesses together. But we assume that we can sustain profitability in the U.K. despite the cycles we will see in tariff. Portugal, very strong recovery last year. There were 2 attention points the year before, the years before, that was healthcare on the one hand and motor on the other hand. Health care, I think we can comfortably say that profitability has been fully restored while keeping a very good persistency in the portfolio. And I think that has all to do with a very strong customer proposition that we have with Medis in the Portuguese market. Motor situation is improving. I would say we are not yet at the end. We have seen in motor, some negative impact on top line from our pricing discipline. But there, I think the market is still on the path to full profitability. The work is not fully done yet. But again, in summary, Portugal over '25, significant improvement compared to the years before, and we expect that to continue in '26. And then the last one is Türkiye. Well, you know the situation in Türkiye in Non-Life. It is very difficult with inflation. I think the solvency of that company is stable. We hang in there with that business. But overall, I would say, the profit from AKSigorta is not material in the overall European Non-Life business. And as you know, that is more than compensated by the excellent performance that we have on Ageas Life in the Turkish market. Operator: Ladies and gentlemen, I would like to return the conference call back to the speakers for any closing remarks. Hans J. De Cuyper: Thank you. Before moving to the conclusions, I want to take a moment to express my sincere appreciation to Filip Coremans for his 20 years of exceptional service at Ageas. Filip has been instrumental in shaping the group's journey and closing the Fortis settlements, which marked a historic milestone for the group. This leadership has been central to our growth story in Asia and to building the strong and valued partnerships that underpin our presence in the region. I would also like to extend my warm congratulations to Karolien Gielen on her expanded responsibilities, bringing together the Managing Director Asia activities with the business development and her leadership will create new opportunities for Ageas. To end this call, let me summarize the main conclusions. Next to our continued top line growth, our operations delivered an improved underwriting profitability, a clear reflection of the strength of our underlying business. The net operating result for 2025 was driven by an excellent performance in Non-Life and a solid Life result, further supported by a one-off tax benefit in China. The strong 2025 results lead to a total dividend per share of EUR 3.75, representing more than 7% growth over 2025 and we anticipate receiving significantly higher cash upstream of EUR 1.2 billion in 2026. The successful first year of the Elevate27 strategic cycle, upgrading our financial targets twice, increasing holding free cash flow targets to over EUR 2.6 billion and our shareholder renovation target to more than EUR 2.2 billion. And to conclude, 2025 was a transformational year for Ageas, and we are well on track with the integration of esure and the closing of the AG acquisition. With these closing remarks, I would like to bring this call to an end. If you should have outstanding questions, don't hesitate to contact our IR team. Thank you for your time, and I wish you a very nice day. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you very much for attending. You may now disconnect your lines.
Delano Kadir: [Foreign Language] and a very good evening, everyone. Welcome to TM's Financial Year 2025 Analyst Briefing hosted by our Managing Director and Group CEO, Encik Amar Huzaimi, together with our Group CFO, Encik Ahmad Fairus. I'm Delano from TM's Investor Relations team. And if you are in our distribution list, you would have received a copy of our analyst briefing presentation by e-mail earlier. Slides are also available on our IR website under quarterly results and will be shown during this session. But before we begin, I would like to kindly remind everyone to keep your microphones muted. We will only open the floor for Q&A session after the presentation. Without further ado, I would like to hand over the briefing to Encik Amar. Over to you, Chief. Amar Bin Md Deris: Thanks, Delano. [Foreign Language] and a very good evening. Thank you, everyone, for making time to attend the briefing today. As usual, I will begin with our highlights before providing a brief overview of our overall 2025 financial year performance. Fairus will then elaborate on the operational and financial details, and I will be back at the end of the presentation with some concluding remarks before we proceed to the Q&A session. Let me begin with our recent highlights, including the latest updates on our products, collaborations as well as the award we received during the quarter. In the B2C segment, Unifi continued to strengthen its convergence leadership through enhanced Unifi UniVerse campaign and integrated digital experience with attractive connectivity, including mobile alongside enriched content and Smart Home offerings. The launch of our Unifi TV 2.0 in the second half of the year have seen encouraging adoption with 1 million Malaysians downloading the new apps in less than a month. Unifi Business continue to empower MSMEs with customizable and reliable digital solutions to grow their revenue and improve productivity. This execution was further recognized through PC.com Readers' Choice and Industry Choice Award received during the year, reflecting our strong customer and industry validation across Unifi and Unifi Business. In the B2B segment, TM One continued to drive digital transformation for government and enterprises. Our participation in MyCity Expo 2025 provides a platform for us to showcase our AI-powered city management with digital solution capabilities, enhancing visibility and engagement with key stakeholders. Last quarter, we were also entrusted by Bintulu Port Holdings through an MoU to support their long-term digitalization road map, reflecting confidence in TM's mission-critical solution for large-scale infrastructure operators. We are also named ASEAN Partner of the Year by Cisco, showcasing solid execution and growing traction across connectivity, cloud, data center and cybersecurity solutions. In the C2C segment, TM Global made solid progress in strengthening regional digital infrastructure and data center capabilities. The completion of our KVDC and IPDC Block 2 expansion has increased total power capacity, supporting growing hyperscalers' demand and AI-driven workloads. This execution has translated into differentiated product capabilities, including the scaling of GPU-as-a-Service, and our TM Nxera has recently secured 280 megawatts of power, paving the way for the upcoming hyperconnected AI-ready data center campus in Johor. TM Global industry leadership continues to be recognized with dual wins at the Asian Telecom Awards 2025, providing -- proving our capabilities in advancing digital infrastructure. Overall, momentum remains where we continue with steady progress in translating strategy into delivery as we advance our aspiration to become a digital powerhouse by 2030. Before I go into the numbers, let me start with the fundamentals. For year 2025, where the underlying business remains strong, we delivered strong revenue growth, maintained healthy cash flow generation and strengthened momentum across all customer segments, particularly in the second half of the year. As TM accelerates its transition towards a more digital and technology-driven business, we remain attentive to the evolving aspiration of our workforce. During the year, we received a significant number of voluntary separation requests from employees seeking early retirement or career transition. As a responsible employer, we have accommodated this request with a fair and attractive transition package. This is a win-win for both parties in the long run. Employees can comfortably transition to the next phase of their life while enabling TM to progressively align towards our future digitalization priorities. This underscores the group commitment in ensuring responsible workforce management and upholding the social pillar of our sustainability framework. This has resulted in moderated reported EBIT year-on-year. However, excluding this one-off impact, our underlying earnings remains resilient, supported by 8.9% quarter-on-quarter revenue growth, reflecting the strength of our core operations. With healthy cash flow generation, the Board declared a total dividend of RM 0.31 per share, comprising of RM 0.27 dividend and a special dividend of RM 0.04. Together with special dividend, total dividend payout stood at circa 70% of reported PATAMI, the highest payout ratio since we first revised our policy in 2018. We are confident of keeping this momentum to ensure continued commitment and value creation to the shareholders. CapEx for year 2025 is approximately RM 1.9 billion or 16.1% of our revenue. As we continue to support key growth initiatives, CapEx spending remains within guidance. Looking ahead, TM will continue to deliver sustainable dividend, maintain disciplined CapEx and further strengthening its balance sheet to support long-term earnings growth. With that, I will now hand over to Fairus to walk you through the financial and operational highlights in greater detail. Fairus? Ahmad Bin Rahim: Thank you, Chief. Let me walk you through the reported results and the adjustments for the quarter as well as the full year. 2025 was a demanding year. Against this backdrop, TM's revenue continued to strengthen, particularly in the second half, reflecting improved execution across our key segments. Reported EBIT and PATAMI reflect the impact of the voluntary separation request from employees undertaken during the quarter, foreign exchange movements as well as selected nonrecurring items. After adjusting all these one-off items, underlying EBIT and PATAMI showed a stronger operational momentum. As shown in the presentation, underlying EBIT increased by 3% year-on-year, while underlying PATAMI improved by 10% year-on-year. This illustrates the resilience of our core operations, while reported earnings reflect deliberate one-off optimization actions undertaken during the quarter. Overall, TM delivered resilient top line growth with revenue increasing 1.4% year-on-year. This represents a stronger uplift compared with the previous year. As mentioned earlier, the underlying business remains strong, as we continue to steer towards leaner profitability over the medium term. More importantly, than the full year number, the improvement in the second half momentum and the strong fourth quarter exit provide a better indication of the underlying trajectory heading into our financial year 2026. Let me share more details in the following page. B2C performance remained resilient, delivering 0.7% positive year-on-year while navigating an increasingly competitive retail environment. Fixed broadband subscriber rose to 3.23 million, representing 1.6% growth year-on-year and 0.7% quarter-on-quarter. Net addition has been stabilized in the second half of the year, supported by effective convergence offerings and ongoing enhancements to the customer experience. Within the Consumer segment, we continue to see strong demand driven by enhanced convergence solution, including smart home capabilities and enriched content offerings. Unifi Business segment remains positive as we continue to actively push end-to-end solutions for entrepreneurs, focusing on helping them to grow revenue, cost efficiency, including productivity. ARPU remained healthy at RM 137 per subscriber. This is driven by upgrades to higher value plans with devices playing a supporting role, contributing low single digit of -- which is contributing low single digit of total Unifi revenue. Convergence offering continued to show positive momentum with FMC penetration improved compared to a year ago. This signals broader household adoptions of integrated broadband mobile content offerings. Quad-Play and Triple-Play customers grew by 8% year-on-year, supporting higher monetization potential and improving loyalty among convergence households. Looking ahead, with rising FMC penetration, stronger device bundle traction and a stabilized subscriber net adds, Unifi remains well-positioned to deliver steady, high-quality growth and remain a key contributor to overall TM Group revenue. TM One delivered a stronger quarter with momentum improving 11% quarter-on-quarter, reinforcing execution discipline in the second half of the year. Recurring revenue remained solid, contributed by a deliberate shift towards longer-term contracts. This improves overall revenue visibility and mitigate seasonality. Connectivity continues to anchor the business while the new core, such as IT services, data center as well as cloud solutions, recorded a meaningful quarter-on-quarter uplift. This uplift was partly from data center co-location from banking sector alongside higher contribution from global digital travel agency. Together, this reflects the restrengthening of the enterprise-focused data center propositions. From the product mix perspective, there's also a shift in the direction. Cybersecurity and managed solutions are gaining traction as customers opt for longer-term service-based engagements. These deliver more stable recurring revenue and provide sustainable business model. On ESG-aligned initiative, TM One has secured several strategic collaborations. This includes expansion of the smart industrial park with NCT Group, which accelerates customer position as a digital-ready and energy-efficient ecosystem. In the fourth quarter, TM One also secured a smart port digitalization partnership with Bintulu Port Holdings Berhad, supporting its transition to a fully digital and sustainable port by 2030. Looking ahead, demand across cybersecurity, cloud, data center and smart solutions continues to grow, providing visibility into TM One's 2026 growth trajectory. The performance this quarter signals the early pace of structural transition with clearer execution priorities, refreshed leaderships and a more resilient portfolio. TM One enters the year on a more stable footing to support their long-term growth vision. On the C2C, C2C delivered another solid performance. Revenue is growing 14% against last quarter, supported by consistent domestic and international demand. Revenue remains predominantly recurring. This provides stable support to the group's overall results. Domestic growth continued to be driven by ongoing rollout of mobile fiber backhaul through the -- and rising demand of fiber port or our high-speed broadband access. This initiative support stable domestic revenue base while enhancing our network utilization. International performance is stronger, driven by rising demand for high-capacity dedicated cross-border and data center to data center connectivity. Our submarine cable investment readiness continues to scale, supported by diversified east-west routes, access to open cable landing stations, enabling greater connectivity and faster capacity monetization. Demand from growing AI workloads and data traffic continues to drive requirements for scalable digital infrastructure and wholesale connectivity expansion. On data center, we see there's an improvement or increase, and this is mainly due to completion of our IPDC and KVDC Block 2 expansion, which we have achieved more than 50% immediate take-up. On the partnership with Singtel, TM Nxera continues to make steady progress and remain on track to deliver the uplift enabled by energy efficient and sustainable data center design by second half of the year. Overall, TM Global continues to build momentum in supporting hyperscalers, domestic operators, underscoring the importance of TM in supporting Malaysia's digital economy by providing end-to-end wholesale connectivity. And this reinforce our ambition to become a digital powerhouse by 2030. Taking an alternate view of revenue by product, all product categories recorded quarter-on-quarter growth, reflecting stronger execution in the second half. For the full year 2025, overall revenue performance was supported mainly by data and others, which helped offset softness in voice and Internet product and services. Data revenue grew 6.2% year-on-year, supported by strong momentum in the fourth quarter, and the growth was mainly driven by higher demand for international as well as domestic data services, consistent with stronger C2C performance. This is largely driven by improved capacity availability -- improved by capacity availability. Other revenue strengthened 10% year-on-year, supported by solid quarter-on-quarter performance in fourth quarter 2025. This was driven mainly from contribution for our data center co-location in C2C, bundled service offering and continued growth in our education arm. As for Internet revenue, we see a decline -- slight decline year-on-year due to ongoing competitive pressures. Nonetheless, performance improved with positive quarter-on-quarter and modest increase compared to fourth quarter 2024, supported by our convergence campaign, indicating signs of stabilization. As expected, our traditional voice revenue continued its structural decline year-on-year following continued adoptions of OTT-based application. However, quarter-on-quarter growth in the fourth quarter in 2025 helped partially mitigate the annual decline. Turning into cost to revenue performance ratio. The full year 2025 cost to revenue profile reflects deliberate choices. We invested in defending B2C, business-to-consumer, momentum, including absorbing higher mobile access costs. At the same time, underlying operating costs remain well controlled. Direct costs rose to 14% year-on-year, mainly from incremental revenue to support growth in subscriber as well as mobile-related costs and international outpayment in line with C2C revenue growth. Cost movement in our ongoing support to drive contract renewal enhance customer and long-term stability. As for manpower costs, there is increased 8% year-on-year, reflecting the voluntary separation requests undertaken during the third quarter and fourth quarter. We ended the year with a mid-single-digit reduction in headcount, consistent with ongoing productivity actions. The increase also reflects differences in incentive offerings compared to the prior year. As for operational costs, we see a decline by 2% year-on-year, driven by multiple items, including some reversal from our impairment on trade receivable due to better collections and credit quality. Meanwhile, our depreciation and amortizations increased 3% year-on-year, in line with the planned capitalization -- asset capitalization as well as some one-off item. Overall, TM's structurally strong operations continue to support resilient margins in a competitive environment. Moving to the next slide on CapEx. As actually my MD mentioned, our total CapEx spend was RM 1.9 billion in 2025 or equivalent to 16% of total group revenue. And this is slightly within guidance. Of this, some 30%, 1/3 was allocated for our access network, 20% for network and the remaining for our support system. Overall, CapEx intensity remained comfortably within our guidance with a 21% year-on-year uplift. The higher spending reflects selective investment to support growth initiatives, and these include investment in digital infrastructure and connectivity as well as completion for our data center and submarine cable investment. We continue to exercise strong capital management discipline with clear allocation priorities. In 2025, less than 20% of the capital was invested in sustaining and protecting our core business, while majority was allocated to value-accretive growth opportunities. This approach ensures capital efficiency while positioning the group for future demand. Now, let us move to our cash flow and balance sheet position, which will be my final slide for today. I'm pleased to report for the full year ended December 2025, TM's Group cash and cash equivalents stood at RM 2.5 billion compared to RM 3 billion at the end financial year 2024. Free cash flow circa RM 1.6 billion, lower than last year, reflecting increase in capital investment spending during the year, coupled with a moderation of in operating cash flow and scheduled borrowing repayment during the year. Despite a year shaped by one-off item and heavy investment cycle, we continue to generate healthy operating cash flow, providing continued capacity to support both shareholders' distribution and future growth initiatives. ROIC, or return on invested capital, moderated primarily due to the impact of our voluntary separation request where costs recognized this year and temporarily reducing our reported EBIT. Even with this impact, our ROIC exceed our cost of capital, indicating ongoing value creation. Importantly, this is a nonrecurring item. Normalizing this, our ROIC actually improved compared to last year, reflecting continued value creation. As announced earlier by Encik Amar, the Board approved a total dividend of RM 0.31 per share, representing approximately 70% payout ratio to our reported PATAMI. This increase compared to the last year -- this is an increase compared to the last year. Overall, TM's group balance sheet remains strong, providing sufficient headroom for future investment and maintaining the dividend commitment. This positions the group to fund future growth while maintaining a balanced financial profile. That shall conclude my financial and operational highlights, and I'm returning back the session to my GCO and Chairman. Over to you, Chief. Amar Bin Md Deris: Thank you, Fairus. Now, let me provide a brief update on our ESG activities for the year. Sustainability remains a key pillar underpinning TM's long-term competitiveness. In 2025, we continue to strengthen our position through recognized governance standards, sustainability-driven innovation and community impact with improvements reflected in our ESG ratings and external recognitions. We improved our ESG ratings and recognized as the National Corporate Governance and Sustainability Awards, or NACGSA. TM ranked seventh among 847 listed companies nationwide and received Industry Excellence Award in telecommunications and media. The recognition reinforces the progress we are making on transparency, accountability and sustainability reporting, areas we will continue to build on. TM was also named as a 3-Star ESG Lister under the UNGCMYB ESG Select List 2025, recognized by the UN Global Compact Network Malaysia and Brunei. This award is based on demonstrated impact through 3 categories, namely ESG Trailblazer, ESG Breakthrough Innovation and Purposeful Partnership, which includes our smart urban forestry solutions. In addition, our Chief Corporate Officer was also awarded the Forward Faster Chief Sustainability Officer Award for large corporate early this year. This recognition reflects not only compliance, but the integration of sustainability into how we operate and grow the business. For full year 2025, the group delivered within the guidance provided to the market, reflecting disciplined execution across revenue, profitability and CapEx. Revenue grew by 1.4% year-on-year, a low single-digit increase while reported EBIT at RM 2 billion, with underlying performance exceeded the guidance. CapEx amounted to 16.1% of revenue, all in line with the guidance previously shared. So as we entered in the final year of defend and build phase under our PWR 2030, we are transitioning to the grow and replicate phase, marking the next phase of our transformation journey. Across the group, each business segment continues to advance its strategic priorities for sustainable growth and long-term value creation. In B2C, our suite of convergence services continue to strengthen through Quad-Play campaigns. This includes expanded smart home solutions, various device offerings and enhanced unified TV, driving deeper customer value per household. B2B momentum remains encouraging, driven by continued expansion of digital solution across ICT, cloud, data center, cybersecurity and smart services. We are also strengthening partnership across enterprise and public sectors in supporting Malaysia's digital transformation agenda. C2C continues to elevate Malaysia's position as a regional digital hub by expanding core digital infrastructure and services. This includes expansion of submarine cable system capacity, open cable landing station, AI-ready data centers and GPU-as-a-Service to meet the growing hyperscalers' demand. Leveraging our network of fiber, TM continues to provide mobile backhaul for the dual network 5G rollout, delivering seamless connectivity. Meanwhile, our data center development continued to enhance the group infrastructure readiness with TM Nxera progressing in line with the initial project timeline. The TM outlook for 2026 remains positive and is underpinned by disciplined execution of our strategic priorities. Now, let me provide an update on our 2026 guidance. For revenue, we are projecting a low single-digit increase from the previous year. EBIT for 2026 is expected to be at similar level to 2025. The CapEx percentage of 2026 is forecasted to be between 18% to 20% of revenue. This guidance underscore a balanced approach that supports long-term value creation while maintaining financial discipline. Overall, we are confident that we will achieve the 2026 market guidance, supported by continued growth and disciplined execution. With that, I thank you for your attention. We shall now move on to the Q&A session. Thank you. Delano Kadir: Thank you, Encik Amar and Encik Fairus. [Operator Instructions] First question comes from [ Fung ]. Go ahead, [ Fung ], and unmute yourself. Unknown Analyst: I have 3 main questions. Firstly, can you break down the RM 325 million in normalizing items for the fourth quarter? Second question on the depreciation and amortization. I see that the cost has risen quite a bit Q-on-Q going from the third quarter to the fourth quarter. And I think, Fairus, you mentioned just now during your presentation that there are some one-off items. So can you provide more color there as to what that is and how much was that one-off item? And then my third question is on the guidance. So I see that the EBIT guidance is flat for 2026 despite the fact that you're expecting some growth in revenue. Can you provide us some color as to why you are expecting flat EBIT? And can I also clarify whether the base for the guidance, right, is it the RM 2.47 billion underlying EBIT in FY '25? And also on guidance, guidance-wise, right, any guidance on dividend policy for 2026? Are we in the midst of reviewing the policy? Or are we expecting to keep it at 40% to 60%? Yes, those are my 3 main questions. Ahmad Bin Rahim: [ Fung ], thank you for the questions. So your first question is actually what are the breakdowns for the normalizing items in quarter 4. Basically, there are 2 items. One is our separation cost. The other one is the share of ForEx loss on our operations, and the amount for ForEx loss is circa RM 30 million for the quarter. I hope that clarifies for the first question. On the -- number two, on the depreciations and amortizations, you're right, I did mention there are some one-off items, and this is pretty much some of the cleanup for the assets as well as some review of our useful life. And otherwise, actually, it should be trending as usual, and we hope to see the similar trend back in 2026 -- the next quarter 2026. Yes, back in 2026. EBIT flat despite expecting growth in revenue. Amar Bin Md Deris: Thank you, [ Fung ]. Let me just take on the dividend policy. Would there be a review of policy? I will assure you, we will make announcement should there be any announcement on the change of policy on the dividend. But we have been stating, at least maintaining, our dividend thus far, and we will certainly make announcement should there be any change in the policy. On the EBIT flat, of course, there could be expectation of increase in cost as well. In that sense, we are maintaining our guidance as EBIT flat. Ahmad Bin Rahim: And then to address you, [ Fung ], whether the base guidance is actually on underlying or reported, typically, we will go unreported. We just want to be very clear, it will be a similar level of the reported. Yes. Unknown Analyst: Yes. I see. Okay. So if I can just follow up with some questions, right? So firstly, going back to the normalizing items. Okay. So I also note, right, that in the P&L that you have other gain of RM 92 million that was booked in the fourth quarter. So is this still related to fair value gains on the tech fund? That's question number one. And you also mentioned, I think, some copper sale gains in your notes. So how much was that in the fourth quarter? So that's the first question. And then, on the D&A, just to clarify again, right, what was the -- was there a one-off in the fourth quarter in terms of D&A? And just to clarify, the run rate going into 2026, right, should we be looking at the third quarter instead of the fourth quarter D&A? And then lastly, when it comes down to the EBIT guidance, Fairus, you mentioned that we are looking at the reported EBIT, which is only about RM 2 billion, I see from the slides. So from the underlying amount of RM 2.47 billion in 2025, you are expecting it to go down to RM 2 billion in 2026. Am I -- is it fair to think about it that way? And if so, why would that be the case? Yes, those are my follow-up questions. Ahmad Bin Rahim: Actually, quite a lot of questions. I'm trying to actually dissect again. I think I'll just quickly on some of the questions with regards to depreciation and amortization, you are right. There's -- as I mentioned earlier, there's actually one-off item. And as a base, we should be looking at quarter 3 as actually the baseline. Okay. And how much is -- did you ask how much is copper gain? Unknown Analyst: Yes, I asked about how much is the copper sale gain in the fourth quarter and also whether the RM 92 million in other gains, right, that you booked in 4Q, is that fair value gain on tech fund again? Ahmad Bin Rahim: All right. So just for clarity, for the other gains, if you see in our consolidated income segment of RM 92 million, it's referring to our fair value gain, right? So there's actually a spillover from quarter 3 to quarter 4, and that is actually the number, yes, explaining the movement for other gains. And as far as actually copper monetization, it will be actually reflected under our other operating income. Unknown Analyst: Got it. Okay. And the EBIT guidance, you were saying that you are looking at it being flat, but what you're comparing to is the reported EBIT of only about RM 2 billion. So from the underlying of RM 2.5 billion in 2025, you're expecting it to come down to about RM 2 billion in 2026? Ahmad Bin Rahim: Okay. I think let's provide some colors on the EBIT guidance. Of course, I think from actually benchmarking perspective, we are looking at the same. We are anticipating a similar trend of voluntary separation requests for the 2026, right? So -- and actually taking that into account with a similar request, and this is actually what we think from EBIT guidance perspective. Yes. Does that actually answer you? Unknown Analyst: Yes, it does, yes. Yes, clarifies a lot. Delano Kadir: So up next, we have Luis. Go ahead, Luis. Luis Hilado: I initially had 3 questions as well. The first is the normalized EBIT and PATAMI in the fourth quarter was down fair bit and seems to be because of direct costs, is this primarily equipment costs or it's the mobile access cost that you spoke about during the presentation? The second question I had is regarding Unifi. The blended ARPU, is that inclusive of device sales still? Or is there an actual ARPU uplift in terms of migration to higher-end plans? And the third question is, if you could give us an update on the status of the TM Nxera DC. I saw that you mentioned that you've secured 280 megawatts of power. Does that mean the DC's long-term target is to be 280 megawatts? And any progress on the first 64? Amar Bin Md Deris: Let me -- is that the only question, Luis? Thank you. Luis Hilado: Initially, yes. I can -- I will repeat... Amar Bin Md Deris: Thank you. Let me take on the TM Nxera DC on the 280 megawatts. Of course, it is anticipated to be completed by second half of the year, at least on the first phase, yes, not on a full scale. It's on the first phase yet, which is 64 megawatts, all right? Second half of the year, quarter 3, hopefully, yes. So on the Unifi blended ARPU, yes, it's inclusive of device. Yes. However, the take-up of higher plan also increased for the second half of the year. I'll pass to Fairus on the direct cost. Thank you. Ahmad Bin Rahim: Sorry, Luis, just actually to add, what my MD said, the blended ARPU is -- actually is a combination of actually our device, but it is also -- but the factor is actually driven by 2 things. One is actually the device as well as the higher take-up as higher packages prices. Nevertheless, our total revenue -- device revenue is a low single digit to total group revenue, just to give you the context. On the direct, I just wanted to recap. I think your question is why was it my EBIT went down and you think it is because of direct costs. Am I correct, the normalized EBIT? Luis Hilado: Normalized EBIT, correct, and PATAMI. Ahmad Bin Rahim: Yes. All right. So I'll break down on the normalized EBIT. Actually, the normalized EBIT is actually -- looks lower by 2 items. We have one-off items from depreciation and amortization, as I mentioned earlier, in the quarter 4. And secondly, there's actually -- just 1 second, there's a catch-up actually cost on a one-off staff benefit that actually flow in quarter 4 when it wasn't there in quarter 3. So this should be a one-off item. Again, the 2 is one-off item, and that will still be -- that will actually be normalized back in quarter 1 this year. And consequently, and when we're looking at actually the lower EBIT, it flows down to our PATAMI similarly, yes. Luis Hilado: Sorry, Fairus, just to clarify. So the D&A and the catch-up benefit is actually one-off, but in terms of the normalization, you didn't classify it as such. And that's why normalized EBIT is lower. Ahmad Bin Rahim: Yes. And so for the -- sorry, you are asking for the depreciation, right, Luis? Luis Hilado: Yes. And the catch-up benefit on the ForEx first. Ahmad Bin Rahim: Okay. Yes. For the D&A, it's actually basically a one-off, some was due to cleanup and review of our useful life. We expedite some of the asset, right? So that's actually one part. On the catch-up, so that is actually one-off item that was actually supposed to be -- that was actually flowing in quarter 4, yes. Luis Hilado: But it was not part of the normalization of the EBIT and the PATAMI. Ahmad Bin Rahim: Yes. That's correct. That's not part of the normalized, but that's the reason why the overall EBIT went down, correct. Luis Hilado: Yes. It's more of timing. Okay. Sorry, just to clarify on Nxera. The -- is there any prospective tenancy you've already -- you can let us know about? Is it primarily you fill the rate once you get the second half construction? Amar Bin Md Deris: Yes. The demand is encouraging. So we are now considering on the next phase of the buildup, if we are able to complete the transaction by at least the second half of the year. Delano Kadir: Prem, you are up next. Go ahead and unmute yourself. Prem Jearajasingam: I have a bunch of questions. Essentially, I just want to clarify with regards to your guidance and all these one-off items. First of all, this one-off staff cost benefit that showed up in the fourth quarter, it is unusual for the -- it is significant in the fourth quarter. You have not taken it out. But is this something that we see every year anyway? So it is not really one-off. Is that a fair comment on this staff benefits? I'm going to do it one by one. Ahmad Bin Rahim: Okay. So, Prem, it is a flow through in quarter 4. It should be normalized in actually the -- in 2026. Prem Jearajasingam: So it will not show up in 2026. Is that what you mean? Ahmad Bin Rahim: It will not show up in 2026. Yes. Prem Jearajasingam: Okay. Good. Secondly, the VSS costs by the sounds of it since you adjusted RM 325 million at the EBIT level and you -- I mean, as per the announcement, RM 30 million in ForEx losses realized. Therefore, VSS is potentially about RM 295 million. Are we expecting a similar number for 2026 or a bigger number for 2026? Amar Bin Md Deris: Prem, thank you for asking on the voluntary separation. These are requests, which we received from our employees. As you know, we're moving into the digitalization and our transformation, and we are very attentive to this aspiration of the employees. And based on the trend, hence, that's what we are predicting there could be a possible similar tick up. Hence, we are prepared to ensure that we are able to at least accommodate for some of them. Prem Jearajasingam: Okay. All right. Perfect. Now, am I right in thinking that when they use VSS, there is typically a payback period for that cost, and therefore, the actual VSS impact in the -- I mean, 1 year after, if you were to get a 2-year payback, then you'd assume half that VSS cost comes back in the form of a lower staff cost? Would that be a fair assumption? Amar Bin Md Deris: Yes. Yes. It is a fair assumption. Prem Jearajasingam: Yes. So, in 2026, having spent, let's call it, RM 300 million in 2025, we potentially get back about half of that in lower staff costs in 2026. Amar Bin Md Deris: Yes. Some of the benefit will flow through in the year 2026, but we expected a full payback with the circa of maybe 2 years. Prem Jearajasingam: Yes. Okay. Perfect. Now, with regards to -- there's -- also, as part of your announcement, there is this -- the post event where you are switching 5G network to U Mobile, and as a result, you forfeit something like RM 127 million in prepaid fees for 5G access, do we need to take further provisions for this in 2026? Or has that already been captured in our accounts already? Ahmad Bin Rahim: I think, Prem -- I think as we -- as we explicitly mentioned in our announcements, this unused prepaid capacity will need to be provisions in 2026. Prem Jearajasingam: So you will -- okay, so you will need to provide. And in your guidance for 2026, is this RM 127 million part of the adjusted EBIT or the underlying EBIT? Because it's all getting very confusing what we are taking -- putting in and taking out. So if your baseline EBIT guidance for 2026 is RM 2.0 billion, is that after taking into account this RM 127 million or not? Ahmad Bin Rahim: Yes, Prem. Prem Jearajasingam: So it's already captured. That RM 2.0 billion guidance includes what is essentially RM 300 million of VSS, RM 127 million of the 5G-related forfeits. Anything else that is one-off in nature that is being guided for in that 2026 guidance? Ahmad Bin Rahim: I think we discussed a bit on the separation. What we -- it is actually based on the guess. What we only have is actually current-year trend. So that get emulates and actually incorporated part of our 2026 guidance, yes. So yes, those are the items. Prem Jearajasingam: All right. I'll leave it there for now. Delano Kadir: Isaac, you are up next. Chee Chow: I have some questions just focused on the manpower cost itself. I think if I compare today's and I look at the trend for the past 10 years, the manpower cost as a part of the revenue has always been like hovering around 20% to 22%, while the number of staff strength have shrink quite -- very significantly compared to 10 years ago. So I was just trying to understand, I mean, like what happened? I mean, we are seeing more than 10,000 declines in the staff strength and yet manpower cost as part of revenue is still quite sticky at 20% to 22%. That's question number one. Number two is also related to manpower, but why don't we just take this first? Amar Bin Md Deris: Thank you for the question, Isaac. So one of the main reason is because of the -- even though we are able to optimize the manpower, but there will always be increase in salary on per annum basis and also recurring salary adjustment as and when the interval comes. So that kind of like push it up again one way or another. Chee Chow: All right. Number two is on the VSS expectations for 2026. Is there a reason why this -- okay, so do you approve all the applications for 2025 or there was some application that was not approved, that's why you expect it to come in, in 2026? I was just trying to understand, I mean, beyond '26, about '27, '28, what should we be looking at in terms of where do you want to go in terms of your staff counts and in terms of your manpower cost for that matter? Amar Bin Md Deris: Well, of course, we can see quite a rapid trend for 2025, but we -- but most of it is attributed to early retirement, so we could foresee it would taper down over the years for the early retirements, right? And that's where we expect it. At least, the trend will taper down. But since this year -- I mean, since last year, we noted that there's quite a request -- a significant request for separation, yes, for career transition, for early retirement. And for us, we take the liberty to approve all these requirements -- requests. And as I said earlier, we can foresee the trend to at least taper down, but -- that's what we are expecting perhaps the trend could be almost similar for this year, and we are prepared for that. Chee Chow: All right. Just I think one more question before I pass it to someone. So now that you are transitioning to the U Mobile, so has the transition -- so when is the transition supposed to start? And in terms of the annual savings, is there any numbers that we can share? Is that more the cost? Is that more of the efficiency, like on this one? Any guidance on that would be very helpful. Amar Bin Md Deris: So we have initiated the process by issuing the notice of termination. So -- since it's a process, it will be a gradual phasing out of our subscribers from DNB to U Mobile. So we anticipate it will be completed by end of the year, hopefully by quarter 4 this year, where it will be fully cut over if all is being delivered according to plan, yes. And with respect to the savings, yes, there will be, as per the disclosure in Bursa as well, we anticipate that there will be a saving in this near term with respect to the commercial. Chee Chow: So in terms of the unused amount, so by the end of the year, would it be lower than what it was shared? Or that was -- I mean, so the RM 121 million, as you continue to use it throughout this year, wouldn't that be lower by the end of the year? How should we look at that? Amar Bin Md Deris: No, not necessarily, Isaac, because the capacity can be carried over throughout the contract tenure. Delano Kadir: Up next, [ Paige ], go ahead and unmute yourself. Unknown Analyst: I apologize for kind of doubling down on this, but I want to talk further about the EBIT guidance. Can you give EBIT guidance on an underlying basis? Like how do I understand from the RM 2.4 billion into next year? And then, how do I think about it building on the adjustments for which I understand is the 5G versus the VSS? But like on an underlying basis, can we just get a clear number on that, please? Amar Bin Md Deris: We expect that it should be similar to the current guidance, Paige. Yes. Unknown Analyst: So to clarify, underlying EBIT guidance for next year would be in line with the RM 2.4 billion for this year. Is that correct? Ahmad Bin Rahim: Yes, for the underlying, correct. Unknown Analyst: And then you would expect that -- I mean, obviously, we're expecting some revenue growth. So we're just expecting cost growth in line with revenue growth. Is that? Ahmad Bin Rahim: Exactly. So there will be some growth in terms of our IT applications and some of the licensing as well, which we can see that the trend is rising in the market. Delano Kadir: And you're back again, Luis, for round 2. Go ahead. Luis Hilado: Yes. Just 2 housekeeping questions, please. Are we expecting copper sales again this year and going into the long term? Any guidance? And how much inventory you still have to sell? And second is on the -- just to nail down that the fair value gains on the tech fund, those are all done already so that we won't see that 2026 onwards. Amar Bin Md Deris: I believe you will not see the tech fund for 2026. That one I can confirm. But for the copper sales, as you know, we are ramping up the recovery of this copper to mitigate the case of cable theft as well. So it is in our best interest to speed it up, and we have started off this year. So you can expect the same trend for next year. Delano Kadir: Up next, we have Mun Chan. Go ahead and unmute yourself. Mun Chan: I just have 1 question. So actually, what's the main reason for you to switch from this DNB to U Mobile? Amar Bin Md Deris: Thank you for the question. I think for Telekom Malaysia per the announcement of the government of -- for the dual 5G network. So we have run through a process of acquiring what would be the most competitive in the tender process. So the outcome is what we have announced today. I hope that will clarify. Mun Chan: Sorry, just maybe just a follow-up. So does that mean that you should be enjoying better terms, I mean, under this U Mobile as compared to DNB? Amar Bin Md Deris: Yes. I mean, for example, as I mentioned earlier, in our disclosure as well, we expected to see some benefit within the near term with respect to the rates, yes. Delano Kadir: Up next, Kelly. Thanks for joining us from your -- even though you are on maternity leave. Go ahead, [ Kylie ]. Unknown Analyst: I just want to dive in deeper on the DNB access agreement. So is -- are you subject to other penalties or termination fees from the termination? And for your U Mobile agreement, is it based on actual usage? Is there a minimum capacity offtake or just based on traffic volumes? So that's all for now. I've got another set of questions later. I'll follow up after you answered this set. Amar Bin Md Deris: We are exercising our rights as per the access agreement on the -- our termination notice. So we don't foresee any penalty, as we are merely exercising our rights under the agreement. That's one. On -- what was the question on the paper usage traffic volume? Unknown Analyst: All right. Do you -- is TM subject to a minimum capacity offtake? The reason I asked because that was one of the terms under the DNB agreement. For U Mobile agreement, is it the same terms? Amar Bin Md Deris: As per any typical MOCN agreement, there will be a minimum capacity uptick, but the level will be different. Unknown Analyst: Okay. Just 1 more -- yes, just 1 more just on your submarine cable. For Asia Link Cable, should we expect material earnings contribution? And what services will you offer that will ride on this cable? Is it mainly managed wavelength or IRUs? Yes, what should we expect? Amar Bin Md Deris: So yes, there will be some contribution as one of the cable that we have invested in will be ready this year, which is ALC. The services will be -- there are many services, not only IRU. There are bandwidth services, IPL as well that we are selling on the international market. Unknown Analyst: Right. So can I just confirm that fiber sales for these international submarine cables are something that TM would not be prioritizing? Amar Bin Md Deris: Can you repeat the question again? Unknown Analyst: All right. So the main services that you will offer for your global -- for TM Global's customers would just be leased bandwidth. Amar Bin Md Deris: Yes. Our submarine cable on bandwidth leasing. Delano Kadir: Up next, Azim Faris. Azim Faris Bin Ab Rahim: Can I just get you to recap what is the normalizing item for the third quarter of 2025? Ahmad Bin Rahim: Azim, if I can just help to recap, actually, there are 2 items. One is actually our separation cost, and the other one is actually our ForEx. Yes. Azim Faris Bin Ab Rahim: I mean for the third quarter 2025, not the first quarter. Ahmad Bin Rahim: Yes, correct. Actually, it's the same, both items, third quarter. Yes. Azim Faris Bin Ab Rahim: Can I get the number, the amount? Ahmad Bin Rahim: Yes. Majority of the normalizing item in quarter 3 is actually coming our -- from our VSS, and I think they added actually with our ForEx loss in the quarter. Azim Faris Bin Ab Rahim: Next, my question is about the gain on the fair value, right, for your investment fund. May I know where is it showing up in the balance sheet? Because I see actually there's some decline in the investment fair value through P&L. Is that the line that we should look at? Ahmad Bin Rahim: Sorry, Azim, if I can just recap, you would like to clarify where is actually the -- where we derive the fair value in the balance sheet, right? Is that correct? Azim Faris Bin Ab Rahim: Yes. Amar Bin Md Deris: Because they are recognized in other gains in our income statement. And that you can see the fair value to -- from the balance sheet category, it will be part of our noncurrent asset and the investment at fair value through P&L, FVTPL. Thank you. Azim Faris Bin Ab Rahim: Because I think if you compare to the third quarter 2025, the amount is actually larger... Delano Kadir: Sorry, Azim, you are actually breaking up. Can you just repeat that question again? Azim Faris Bin Ab Rahim: Yes. I think I'm looking at the same line, which is the noncurrent asset, the investment at fair value, right? In the third quarter, the amount is, I think, RM 250 million, and this fourth quarter is RM 107 million, is actually declining. Am I seeing the right thing? Ahmad Bin Rahim: Sorry, Azim, I'm trying to actually -- hopefully, I can provide a better clarity because it's actually -- it is done over a period, right? So during the quarter, so we have actually revised up. Then when actually the disposal was completely done, then actually -- then there's -- hence, the reason why you cannot see the differences, yes. Azim Faris Bin Ab Rahim: So meaning there is some disposal on the investment in the fourth quarter, right? Is it? Ahmad Bin Rahim: Yes, correct. Azim Faris Bin Ab Rahim: Okay. May I know what is the value of that? Ahmad Bin Rahim: Sorry, say that again. Azim Faris Bin Ab Rahim: The value for the disposal. Ahmad Bin Rahim: We have not disclosed this, but -- because it's actually one off from actually one of our long-term technology fund, yes. Delano Kadir: Up next, we have Joe. Go ahead Joe and unmute yourself. Joe Liew: Can you hear me? Delano Kadir: Yes, loud and clear. Joe Liew: Yes. All right. Great. I have 3 questions from my end. First, I just want to reconcile your adjusted PATAMI with your adjusted EBIT in the fourth quarter of '25. So adjusted PATAMI is RM 363 million according to your slides, your adjusted EBIT is RM 541 million. I just want to know in between these 2, what are the items that you actually deduct from the EBIT? Because if I just deduct your interest and your tax, I wouldn't be able to get RM 363 million. So is there an additional item that you actually deducted to get the PATAMI, adjusted PATAMI? Amar Bin Md Deris: Thank you. Actually... Ahmad Bin Rahim: Thank you, Joe. So I think we have actually been mentioning, actually, on the -- for a couple of items. One is actually our VSS costs, and the other one is actually our ForEx. So taking down to ForEx, there are also ForEx on borrowings. And these are all net tax impact, yes. And only those 2 items, ForEx at operations and borrowings as well as actually the VSS net tax. Thank you. Joe Liew: Okay. So that will get me to the RM 541 million EBIT, right, adjusted EBIT, correct? So if I knock off my tax and I knock off my interest, I will be able to get about RM 400 -- no, slightly RM 430 million, not RM 363 million. So that's why the discrepancy there as stated above. Ahmad Bin Rahim: Sorry, I probably should actually -- we also actually normalized one-off gain from our technology fund actually at the PATAMI level. Thank you. Joe Liew: All right. But that would mean you deduct the gains from the technology fund twice, isn't it? Because the RM 541 million already excluded the gains from technology fund. Ahmad Bin Rahim: Gain is not actually recognized at EBIT, actually below the EBIT line. The gain from actually our -- yes. Thank you. Joe Liew: Okay. Okay. All right. The second question is in regards to gain. So I -- if -- maybe you have shared it earlier, but what was the full year DNB excess costs you paid for FY '25? Ahmad Bin Rahim: No, we have not actually declared any DNB excess cost. And -- yes. Joe Liew: All right. Okay. But then the last question for me would be -- last 2, CapEx guidance for the year. I think CapEx has raised from 16% to 18% to 20%. I just want to know where will the increase be coming from. Ahmad Bin Rahim: So our CapEx, we will remain actually committed to actually continue to expand our network capacity and reach. But bulk of the investment also will cover our submarine cable investment, yes. Joe Liew: This CapEx, does it include the TM Nxera CapEx? Or this... Ahmad Bin Rahim: We don't consolidate actually TM Nxera, yes. Yes. Delano Kadir: Do we have time for maybe one more question from anyone else? Okay. With that, thank you very much, everyone, for joining us today. And we will see you in the next quarter. Again, if you have any other questions, please feel free to drop myself or the IR team line. Thank you very much. Amar Bin Md Deris: Thank you. Thank you very much.
Félicie Burelle: Good morning, ladies and gentlemen. Welcome to this 2025 annual results presentation, and thank you for joining either here in Levallois or remotely. I am pleased and honored to do this presentation for the first time as Chief Executive Officer. And you might have seen in our press release this morning that the Board of Directors and the Chairman here present in the room have entrusted me with a great mission to lead our company into the next phase of development. As many of you know, we have been shaping our company over generation with very strong family and engaged values, long-term commitment, financial discipline and also a deep sense of ownership towards our stakeholders. And I'm pretty proud to be continuing this legacy in the years to come. So I'm focused and determined to keep on executing our strategy. And I'm particularly pleased to present to you today a solid -- very solid set of results, which I think are demonstrating the relevance of our strategy, the way to move forward and the resilience of our company. Besides that, we are actively positioning our company on the future mobility hot topics, and there are many electrification, digital, AI, competitiveness, you name it, a lot of challenges ahead, but a strong road map to go there. And I would like to do a special thanks to the Executive Committee of OPmobility, who is here in the room today and all of the OPmobility teams that are engaged in delivering this road map. So now I will walk you through the results alongside Olivier Dabi, our CFO; and Stephanie Laval, Investor Relationship and Financial Communication and also strategy planning. So you now have the same person helping me building the strategy and explaining needs to the market. Before jumping into the results, a bit of context on the market that you know is quite complex to apprehend today. More than ever, the regionalization and the pace of what is happening in between the region is growing and is diverging. We still have Asia representing 50% of the market and the North American market still strong in terms of demand with a sizable consumer market and Europe that is having its own challenges. In that context, we are actively pursuing the diversification of our footprint and of our customers. Again, 2025 has been a year with some challenges in terms of OEMs volumes and supply chain volatility, still the semiconductor, but other topics that somehow have impacted our customers. But again, we have shown resilience and flexibility and demonstrating our capacity to adapt to that and taking the measures necessary in terms of cost reduction to sustain this pace. 2025 definitely has been intense year in terms of geopolitical impact, starting with what happened on Liberation Day back in April. So impacting the strategy of our customer and the dynamics of the footprint. But we have leveraged our sizable footprint, 150 plants everywhere. And this is providing us the balance to really be close to the customer and mitigate the impact of what can happen at each region. Besides that, the pace of technology and innovation also is a different approach by region. We can see a lot of topic on AI, autonomous driving and robotization coming out of Asia and a lot around autonomous driving in the U.S. and we are getting closer with adapting our -- again, our organization to be able to better understand the customer dynamics and their needs, which has enabled us to make some great achievement for 2025. We took the commitment to improve all of our KPIs, and we did. We will come back to that, but we have reached all of our targets, which has enabled us to put in place still a very robust financial structure. Our net debt-to-EBITDA decreased from 1.7x to 1.4x. All of that demonstrating again the solidity of our business model. Strong acceleration. 2025 was definitely an intense year in terms of movement for the North American market. We have also initiated some strong initiatives for Asia, and I'll come back to that a bit later. So we are happy that 2/3 of our order intake for 2025 is targeting regions outside Europe, which doesn't mean that we don't want to consolidate Europe, but we want to focus on the countries, we're showing significant room for growth. And finally, we took the commitment for 2025 to be carbon neutral on Scope 1 and 2, which we have obtained and that including the lighting activities that we bought in 2022, which were not considered when we set up the target back in 2019. A bit of color on the activity by region. So you can see Europe still representing half of our revenues. And in a market that's slightly decreased, we have been happy to enjoy some growth, mainly in Western -- Eastern Europe countries, led by exterior and our module activity. North America represented 28% of our revenues. So if you look at globally, you can see that OPmobility decreased by 1.5%. But if you look at the reality by country, we grew 1.2% in the U.S.A., while decreasing in Mexico, Canada by almost 5%. Obviously, the trade tariff has had an impact on the Mexican market and slower ramp-up and some delays have led us to decrease in the region. Almost 20% of our sales from Asia and again, with a bit of a different dynamics in between China and Asia. We have grown in both regions, in China, slightly less than the market, but still enjoying some growth, mainly coming from YFPO, while the C-Power activity was stable. And a very solid growth in the rest of Asia with exterior in India, C-Power in Thailand and the module activity enjoying a very strong growth in Korea with JV SHB for electrification modules. It was also a year of strong launches, flawless launches, 144 launches. You can see here the split, almost 50 launches in Europe, 23 in Americas and 73 in Asia with some of the key launches highlighted. We can talk about this U.S. EV player, which we cannot mention for whom we are supplying big modules that have launched this year and that sustained the growth in the U.S.A., but also the Jeep Grand Wagoneer to whom we are supplying our exterior parts. In Europe, quite important, we are supplying the MMA -- platform for Mercedes. And you can see here, notably for the CLA in Germany, which was awarded Car of the Year, but also some key programs in the rest of Europe. And in Asia, you can see some of the players, the BYD, Kia, Maruti Suzuki, which are all customers that are, I would say, enjoying a strong push and growth now and in the years to come. Overall, coming back to this solid performance, I think this slide pretty much illustrated, again, the solidity of how we engage and we deliver, execute our strategy road map. So looking back on the 3 years, '23, '24, '25. So strong increase in operating margin, almost EUR 100 million plus of operating margin, strong increase in net result group share from EUR 163 million to EUR 185 million, and that with our capacity to absorb all of the impact on foreign exchange and cost of borrowing and nonrecurring costs, so impressive performance. And finally, free cash flow generation, which is definitely important and key for us with almost reaching EUR 300 million for 2025. So very solid performance, and I will let now Olivier get into the details of it. Olivier Dabi: Thank you, Félicie, and good morning, everyone. In 2025, OPmobility posted very strong results, very solid results, significantly improving versus 2024. This was achieved, thanks to a very strong operational performance in our plant as well as a strong grip on our cost and a decrease on our breakeven point. On this slide, you have a snapshot of all the main KPIs of the group, starting with economic revenues, which amounted to EUR 11.5 billion. It is a 1.7% increase on a like-for-like basis versus 2024. The EBITDA amounted to EUR 1.001 billion. This is an 8% increase versus 2024. I want to highlight that this is the first time since 2019 that the group is able to exceed EUR 1 billion in EBITDA. A substantial increase in operating margin amounting to EUR 490 million, up double digit versus '24. A strong net result, EUR 185 million, increasing by 9% versus '24. And as far as cash and debt are concerned, the group posted a free cash flow of EUR 297 million, up an impressive 20% versus '24. And in line with our strategy of deleveraging, the debt was reduced in '25 by EUR 167 million and amounted to EUR 1.4 billion. So all in all, our '25 metrics was achieved -- were achieved in line with the guidance that we gave last year and that we reiterated throughout the year. As Félicie highlighted, this is a testimony to the relevance of our strategy and the quality of its execution. Let's now look at each of these KPIs, starting by revenues. Revenues of EUR 11.5 billion, increasing by 1.7% on a like-for-like basis after taking into account EUR 300 million of negative ForEx with most currencies depreciating against the euro, mainly for OPmobility, the USD and to a lesser extent, the Korean won, the Argentinian peso and the Chinese yuan. There was no scope effect in 2025. Looking at the performance of each of the business segments, starting by exterior and lighting. Exterior & Lighting posted sales of EUR 5.3 billion, fairly stable versus 2024 with 2 different trends. Exterior continued to increase its sales despite having less SOPs, less tuning and development activity than the year before, while lighting continued to suffer from the poor order book of -- prior to the acquisition. I am pleased to say that in 2025, Lighting was able to secure additional orders and should be back on a growth track in subsequent years. Modules was the fastest-growing segment of OPmobility at EUR 3.6 billion of economic sales, posting an impressive close to 6% increase with sales in South Korea, as highlighted by Félicie, but in Europe as well. Finally, the Powertrain segment increased as well by 1.4% on a like-for-like basis at EUR 2.6 billion, with all its components increasing. C-Power continued to have a very strong leadership in the fuel systems, strong market position, increased volumes in all geography and benefiting as well from the slower electrification ramp-up and back to increase of hybrid volumes. Battery pack continue to build its business model, and it will be highlighted shortly that OP won a major order very recently, while hydrogen continued to build its order book and its portfolio. Let's now have a look on the impressive increase of operating margin, EUR 490 million, increasing by EUR 50 million in 2025, up 11.4%. That's a 60 basis points increase versus '24 at 4.2%. And as Félicie highlighted, over the past 2 years, the group has been able to increase its operating margin by 1 point and by close to EUR 100 million. Looking at the key success factors of such operating margin increase, all the historical activities posted strong profitability with excellent operational execution. A word on the cost control initiatives that we accelerated and intensified in Q2 after the tariff announcement, and I will highlight 2 specific initiatives. Our SG&A decreased in '25 by EUR 10 million. This is the second year in a row that the group is able to decrease its SG&A and fully absorb inflation, while we decreased our labor cost by 3%, amounting to 17% of revenues. In the plant activity, OPmobility put in place efficient flexibility in order to adapt to volatile volumes. Looking at each of the business segments, starting by Exterior and Lighting. Exterior & Lighting posted an operating margin of 5.4%. This is an increase of 10 basis points versus last year, with a trend similar to what we have seen in revenues, i.e., exterior posting very solid results, while lighting is impacted by a decrease of sales. Moving on to Modules. Modules operating margin amounted to 2.7% in '25, an increase of 50 basis points versus '24. I want to highlight that over the past 2 years, the operating margins of module went from 1.6% in '23 to 2.7% in '25, going close to Modules run rate. So module was able to grow, but to grow profitably, thanks to the quality of its order book, operational excellence and as well a strong focus on cost. Finally, Powertrain increased its operating margin by 30% at 5.5%. Our C-Power activity operating margin continued to be benchmarked and best-in-class, while to a lesser extent, the hydrogen business was also able to improve its results, thanks to a strong focus on cost reduction in order to adapt to the market. Let's now look at the bottom of the P&L with the net result. As I have stated, EBITDA amounted to more than EUR 1 billion back to its pre-COVID level, 9.8% of sales, almost 1 point increase compared to last year. Very solid increase in operating margin of EUR 50 million that was able to more than offset the increase in other operating income and expenses. Every year, the group invests 0.8%, 0.9% of its sales in competitiveness. And looking at the other operating income and expenses for the year, it mostly includes competitiveness action, reorganization, the merger of Exterior and Lighting business group, for instance, and a plant closure in Germany. Financial cost, the cost of debt of the group was down to 4% in 2025. The group was impacted by negative ForEx while our income tax amounted to EUR 79 million, our effective tax rate amounted to 35%. That's 1 point below 2024. As a result, the group was able to generate very solid net result group share of EUR 185 million, which represents 1.8% of sales. Let's now look at the free cash flow generation. Very strong free cash flow generation. This is a trademark of the group, close to EUR 300 million, up more than 20% versus '24, 2.9% of sales. Looking at the main components, our gross cash flow, i.e., the cash flow from operations increased by 60 basis points, close to EUR 50 million, mostly coming from the EBITDA. When we launched our cost-saving program in Q2, we also launched an initiative to preserve cash and set the objective of reducing the investments, '24 investment of EUR 0.5 billion by 5% to 10%, and we were able to decrease our investments by prioritizing by 11% at EUR 448 million. Our WCR remained fairly stable. 2024 was marked by an increase in our factoring programs, while they remain stable in 2025. After distribution of EUR 54 million of dividends to our shareholders and other items, mostly the leasing, our net debt at the end of '25 stood at EUR 1.4 billion, a deleveraging of EUR 167 million. Let's now move to the financial structure and the debt maturity schedule. I'll start by commenting the leverage. 2022 was the year in which the group completed significant acquisitions in lighting, in electrification, buying out the last 1/3 of what was then HBPO, close to more than EUR 900 million of enterprise value that was put on the table by the group. And as a result, our leverage increased to 1.9. As Félicie was stating, thanks to a strong financial discipline and cash flow generation at the end of '25, the group leverage stood at a reasonable 1.4x. Looking at the debt maturity over the past 2 years, I remind you that the group has raised EUR 1.1 billion in public bond and private placement in order to restructure and reshuffle its debt maturity schedule. And as you can see on the right top side of the graph, the group does not have any major debt maturity schedule before 2029 and will be able to absorb at constant perimeter, the maturities of '27 and '28 with its existing resources. One point on the bond issuance that we did in 2025, EUR 300 million oversubscribed 11x at a very competitive coupon of 4.3%. And finally, our liquidity remained extremely strong, EUR 2.5 billion, increasing by EUR 100 million, compared to '24 with EUR 600 million of cash and EUR 1.9 billion of credit lines with an average maturity of 4 years. I remind you that neither the debt nor the credit lines do carry any financial covenants in line with the group independence and discipline. Finally, with debt down and year after year, stronger equity, EUR 2.1 billion at the end of '25, logically, the gearing of the group reduced by 10 points at 66% and by 20 points, compared to the peak of 2022 after the acquisitions. So overall, in 2026, the group can count on a very solid financial structure, reduced debt to pursue its long-term growth objectives. That concludes my 2025 financial highlights. Félicie, Back to you. Félicie Burelle: Thank you, Olivier. So as you said, very sound and strong balance sheet, which will enable us to maneuver and develop for the years to come. We'll come back to that. But before that, Stephanie will talk to us about the achievement in terms of sustainability. Stéphanie Laval: Thank you, Félicie, and good morning, everyone. If you remember well, in 2021, we set a key ambition to be carbon neutral on Scope 1 and 2. In 2025, we are carbon neutral on Scope 1 and 2 at group level, meaning including our lighting activities we just acquired 3 years ago. So it's a great achievement by the group. How do we succeed in achieving this carbon neutrality? First, by reducing our energy consumption. We have improved our energy efficiency by plus 19%, compared to 2019, which is the year of reference. Second, we have increased the share of renewable energy with close to 40 sites that are equipped with solar panels and wind turbines. And we have bought some power purchasing agreement to reach that level. So we are very proud of this achievement in 2025. We have also achieved a strong momentum on our Scope 3 upstream and downstream. Our energy consumption on Scope 3 have reduced by 37%, compared to 2019, which is also the year of reference, which is totally in line with the objective we have by 2030 of reaching minus 30%. So we will continue, of course, to maintain our action on those -- that scope in order to maintain that level while the activity will continue to progress in the year to come. And at the end, we are still committed to reach and to be net zero in 2050. Moving to the ESG ratings and the significant progress we made in safety. You know that safety is really key in the company. OPmobility stands as among the best and the leaders in its industry, as you can see on the left of the slide, with for the third consecutive year, the A rating by the CDP Climate as well as the B rating for the CDP Water, which is really a remarkable achievement. The other ESG agencies also consider OPmobility as a leader in its industry with a B- compared to a C+ before with -- sorry, ESG rating. It is a prime status, which is only given to only 10% of the total companies. And we maintain our AA rating in MSCI. Looking at the right of the slide on safety, which is very key for the company. We -- so the FR2, which is the frequency rate -- the accident frequency rate we measure every year reached a record level at 0.43, totally and better than the target we had for this year at 0.5. What does it mean? It means that more than 80% of our sites published 0 accident in 2025. We are benchmark in the automotive industry. Félicie Burelle: And not only obviously, it is important for our people, but it's definitely also a level of performance -- that's why we are really very cautious and focusing on that KPI. Now moving to some strategic highlights, which I will explain with Stephanie, back to our strategy that is based on 4 pillars. I'll come back quickly. So first one, the technical -- technological leadership and diversification, which we engaged with those acquisitions already in 2022. And also, we launched at the beginning of 2025, the One4you integrated product, and I'll come back to that with some significant milestone that we have reached again in the year. The geographical diversification. I mentioned it earlier, 2/3 of our orders last year were to capture growth outside Europe, and we'll keep on doing that. 2025 was very much North American oriented and we'll push forward with Asia. And in terms of customer portfolio, the -- I would say, the market is pretty shaky in terms of dynamics, customer dynamics. We saw newcomers taking quite a big share of the growth and some others repositioning. So we are adapting to that new reality and making sure that we adapt our own customer portfolio to this dynamic. And finally, expanding beyond automotive, yes, historically, the passenger car market has been our home market. But we want -- we are pushing to expand beyond automotive that is, for sure, smaller in terms of volume, but where we believe we can grow faster in terms of value content. You know we have 2 big segments now in terms of product portfolio. The first one, which are the exterior solution. Back to my comments on the one for you, where we believe we can provide some more disruptive products and module to our customers depending on the level of integration. And as I said earlier, we launched that back early 2025, and we got 10 significant awards, which has been quite effective first year of rolling out this product offer. And we secured those programs in the 3 regions. You have -- we have one that is pretty important that we have secured with one of our historic European customer, which SOP will be in 2028, and that will enable us to mobilize our footprint in Spain and in Morocco on all the 3 products of bumpers, lighting and the integration of that. You know it brings weight saving. It increased our content per car. It provides the OEM the flexibility to come up with some more original and innovative design. And obviously, the integration of that enables us to be more efficient in terms of developing the product. So we will keep on pushing this product line, which we believe has strong potential. On the Powertrain, which is the other segment, we are capable of supplying all products, so fuel tank, battery pack and hydrogen. Fuel system, we keep on pushing our last month standing strategy, consolidating the market. We have 23% of the market and still aiming by 2030 to have 30%. And obviously, the slowdown of electrification will impact positively the length of the development of this activity. We are also benefiting from the increasing demand on the PHEV EREV segment, where we believe we can grow from 9% to 15% on this market. And we took 10% of our order intake for those solutions. Battery pack, we announced that last week, we have won a major award for a European OEM in the U.S., and we will supply 1 million units over the time -- lifetime of the contract. And this is a key milestone that is confirming the relevance of the acquisition that we've made in 2022 of ACTIA Power, which was more on the heavy-duty market, but now shifting to the passenger car. Finally, hydrogen, we have a pretty unique portfolio in terms of certified vessel, compared to what is available on the market. We have capacities in place. We are acknowledging the delay of the market and focusing -- refocusing all of the efforts on Asia, where the market is definitely shifting and where we have secured the new orders, but also to serve the European market from there. Stéphanie Laval: So moving to the second pillar, which is a geographical pillar. As previously mentioned, so starting with Europe, which is our main market today, we would like definitely to consolidate our leading position there. We can rely on a solid industrial footprint and the leadership of our historical businesses within this region. We would like, of course, thanks to this assets to accelerate with notably the Chinese OEM that are coming into Europe, and I will come back on that later on. So we are fully in line with that strategy. We are also -- we would like to rebalance, of course, our geographical footprint. That's the reason why we had in 2025, a strong focus on North America. I remind you that the U.S. is the first market for the group. It's been now 2 years. We have inaugurated a new headquarter gathering all the business groups in Troy. It was end of 2025. So it means that we are fully committed to accelerate in this region. Our ambition in the U.S. remain the same, meaning that we want to double the sales by 2030, with, of course, leveraging on our existing footprint, but also we will gain new, of course, awards supporting the OEMs that would like to expand in the U.S. in the context of the tariffs. Moving to Asia, where we have strong, of course, ambition and 2026 will be a year with a strong focus in Asia, starting with China. So China, today, we have a strong positioning, thanks to our YFPO, our JV with Yanfeng that belongs to the SAIC Group. It's a leading position in the exterior parts with YFPO equipping 1 car out of 5 in China with exterior parts, so meaning bumpers and tailgates. We want to, of course, go a little bit further. And that's the reason why we have announced end of 2025 that we have the ambition to expand the activities of YFPO to module and decorative lighting. It will, of course, let us grow in this market and accelerate our exposure to the Chinese OEM. Today, the Chinese OEM in China represent roughly 40% of our revenue and 2/3 of our order intake. So we are very well positioned to accelerate in China. Last but not least, I will make a focus on India. India, where the group operates for many years now, we have 5 operational plants. The last one we inaugurated end of 2025, which is quite unique in the market because it gathers the exterior activity as well as the C-Power activity. We have strong ambition there also to more than double the sales in India. And to help that, we have a sixth plant that is under construction for the C-Power in Kharkhoda. So you know we are expanding in all the markets, consolidating in Europe and have strong ambition both in America and in Asia. I was mentioning the expansion of the YFPO JV we had. So we announced end of 2025 that we will expand this JV. We can -- we expect to finalize the deal before the summer this year. So you will have the first impact in 2026, in H2 2026. So it will definitely strengthen our presence in China, where the group already have 10% of its revenue today, but it should increase in the coming years. Moving to the third pillar of our strategy, which is our portfolio and expansion of our portfolio in all our mobilities. So you can see on the slide the top 10 customers we have on the left. So you already known them, but we are expanding with them as well as with the winning customers that you can see in India, but also in China. And you know that the group is, of course, focusing on accelerating beyond automotive in railway, in self-driving, in off-road mobility. Just a quick focus on our expansion and supporting the Chinese OEM in their international expansion. You know that we have signed a contract with Chery to -- of course, to support them in their expansion, both in Spain and in Brazil. So it's clearly the intention of the group to be -- to work with the Chinese OEM in China, but also outside China. And you can see on the slide that we have signed other awards with other Chinese OEMs, both in Spain and in Malaysia. So we are definitely supporting them with the Chinese OEM in China and outside China. Félicie Burelle: Thank you, Stephanie. A quick update on some of the key priorities we have engaged and we -- that we are active on. We announced early Jan, the signature of MoU to potentially acquire the lighting activity of the Hyundai Mobis company. The MoU is in place. We are hoping to have a signing by mid of the year and potential closing of the transaction by end of the year. This move -- this transaction will be significant because it fits to our strategy. It's addressing 1 of the leading OEM, which today only represents 5% of our sales. It's in Asia, and it will accelerate the development of our lighting activity, which we never hide that we were first focusing on the organic growth, but also looking at some potential addition when it would make sense. And we believe here clearly, this deal would make sense to develop and grow our lighting business to the next level. We are also focusing on innovation. I won't come back on the CES. We are having many different type of initiative. And I think what is also important is that we are -- the AI, obviously, is a hot topic, and most importantly now with -- and shaking a lot of the financial markets, but we are looking at opportunities that we can embark either on processes or on products that can help us to either propose something different to the customer, which is the case of AIRY, which is a 3D printed carbon fiber battery pack that we are proposing and developing with the startups or -- and I'll come back to that, which is 1 of the key initiatives, how to be faster in terms of simulation, which is Neural Concept projects that is ongoing. And that makes a good transition with what will be key for us this year. It's improving again our competitiveness, but engaging in medium, long-term initiative to have a sustainable competitiveness. Here, you have 3 initiatives, among others, that we have. The first one, which is how to be more efficient in terms of development and R&D costs. We want to reduce our hours by 30%. And that goes, obviously by decreasing the hourly rate and expanding our footprint in best cost countries. We are also repositioning the organization on back -- some back-office topics like HR, digital NIS and finance. And we have today 5 hubs in best cost countries again. We are -- we have materialized 500 people so far, which is 2/3 of our ambition on this specific topic. And again, on the supply chain, we have launched a new tool that should help us to decrease our transportation cost by 10%. We have launched that in Mexico, and that should be rolled out throughout the group. We also have some other automation initiatives. We would like to have more JVs and improve the level of automation of our plants. All of that our transversal approach as we want to have benchmark practices that can be deployed throughout all BGs. So strong push on that for 2026. Based on the results of 2025, we will propose to the next general assembly in April '26, a dividend per share of EUR 0.45, which is -- EUR 0.49, sorry, which is -- which represents 37.7% in terms of payout, which is again an increase versus 2023. 2024 was an exceptional year, given there was a an interim dividend that was made. In terms of outlook and perspective, I mean I won't come back on all the strategy, but it remains the same. And we believe that we have the good model to be able to project ourselves again in improving all the KPIs for 2026 on the operating margin and the net result on the free cash flow and on the net debt. So I would conclude this presentation before taking your questions by saying again that we have a very solid and robust [ 2024 ] year with very strong financial metrics, again, accelerating on all the front of our strategy, and we believe we are well positioned to really address the challenges of the market. 2026 will be a transition year in many aspects. It's not going to be -- the market is projected to be flat, to be stable. But still, in that context, we believe we can deliver a solid performance again in 2026. Thank you very much and happy to take questions. First question. Thomas Besson: It's Thomas Besson with Kepler Cheuvreux. I have a lot of questions, as usual. I'll start with the easy one, financial questions. First, can you comment on the diverging trends for Powertrain and the Exterior & Lighting margin trend in H2. So Exterior & Lighting actually was strong and improving, Powertrain was weaker. Can you explain why the seasonality is this way for these 2 businesses and whether there was anything affecting them differently in the second half? Olivier Dabi: Thank you, Thomas, for the question. There was no significant deviation in profitability between H1 and H2, both Exterior and C-Power posted very solid profitability, both in H1 and H2. And in H1, we did EUR 260 million of operating margin. In H2, we did EUR 230 million operating margin with slightly lower sales in H2. Félicie Burelle: Usual seasonality. Olivier Dabi: There's no trend of having margin reduced any of the 2 businesses. Thomas Besson: Can you give us some indications about CapEx trends in '26? I mean you've cut CapEx by 11%. So a lot less in H2 than H1. Should we assume a CapEx ratio above 4.5% -- between 4.5% and 5% or an absolute level of CapEx that goes up a bit in '26 to prepare growth ahead or... Olivier Dabi: I'll continue on the financial questions. Like you said, '25, we reduced CapEx to 4.4% of sales. We have a capital allocation framework that we discussed already in which CapEx are around 5%. And this will be the level that we will reach in 2026, but we will still improve free cash flow. Thomas Besson: I'll move to more general question. I mean, I noticed that you refrained like last year to guide for higher revenues. And I'd like you to discuss, if possible, the organic revenue dynamic for the group in 2026, what we should expect by division, by region, by clients, at least a general qualitative comment. Could you, in particular, put a focus on what we should expect in the U.S. and India as you're aiming for very substantial growth to 2030? Is it something that starts in 2026 or that we should expect more in '27 and beyond? And then one specific project I'd like you to say something about even if I think it's difficult, it's the robotaxi project. I think it just started... Félicie Burelle: In 2 months. Thomas Besson: In 2 months, it's just starting. So remind us your exposure to that. I have one more after that? Félicie Burelle: On the revenues, 2026 will be stable versus 2025 in terms of sales. The market dynamic for 2026 is what it is stable with the big difference versus 2025 being the Chinese market that will be significantly down. Obviously, there are some different plus and minuses within each BG. But all in all, you should consider that sales will be stable. In terms of -- by the rebound and all of the -- I would say, the deployment of the order intake that we have embarked should more start impacting 2027. But we, obviously, within HBGs, namely the module activity will show some significant growth with topics like the robotaxi that will kick in, in 2 months' time. On that, there are a lot of different assumptions, obviously, some are more bullish than others. Our customer is pretty positive about the development of the sales and we are too. Anyway, we are engaged in such a relationship that we'll find ways to adapt. And we are showing flexibility obviously to adapt the change in volumes. But it's an important lever for them to grow in the years to come. Thomas Besson: And you're highly exposed to that product as well in terms of revenue per cap? Félicie Burelle: In the U.S., yes. Thomas Besson: Last question on lighting. So 2 aspects about this question. Can you give us an idea of the magnitude of the revenues in 2025 and how they developed organically and the level of operating loss in '25 versus '24 and whether we should expect this business to grow organically in '26 and reach breakeven in '26. The first part of that question on lighting. And the second part is about the business you're looking at. Can you share with us some details -- financial details about the Hyundai Mobis activities? You're talking about taking a controlling stake. Would that mean you'd have a JV with Hyundai Mobis? And can you just give us an idea of the magnitude of the financial implication for OP and whether this is something you can finance organically with the existing liquidity or the share count would not be affected by this transaction? Félicie Burelle: So on the lighting -- so on this project, so in terms of sales, it's EUR 1 billion plus. It's 5 plants, 2 in Korea, 1 in China 1 in Mexico and 1 in Czech Republic, which will be a good complementarity footprint with ours. It's a profitable business, so having a positive impact on our business. The JV consideration, obviously, it's still ongoing in terms of discussion, but it's an important step for us to develop and build the relationship with this customer because more than 90% of the sales of this business is with the Korean OEM. So it's, I would say, a positive approach on both sides to make sure that it's a secured transaction, given it's a carve-out that has to be operated by the seller. So it will be a majority stake, still to be defined how much. And given the size of the business and its financial profile, which unfortunately, I cannot detail, but we have the sufficient financial means to do this acquisition without a specific deployment of -- to be done. On the -- obviously, that together with our lighting business will make it a more sizable or global business. we would more than double our market share with that move. Today, the lighting activity is still suffering. You mentioned the low order intake from the past, but it's not only that, it's the market situation itself. So we are accumulating, I would say, both burdens. The level of sales is in 2025 lower than what we thought. But we have a lot of SOPs to come this year. So we should have a quite significant improvement in terms of profitability in 2026 that will accelerate in between H1 and H2. Thomas Besson: So breakeven in '26 is something credible for these activities organically? Félicie Burelle: Sorry? Thomas Besson: Breakeven for the existing lighting business should be achieved in '26? Félicie Burelle: We are on the path to improve significantly by the end of this year. Any other questions? Operator: [Operator Instructions] The next question comes from Michael Foundoukidis from ODDO BHF. Michael Foundoukidis: Michael Foundoukidis from ODDO BHF. Also a couple of questions. I will ask them one by one. So maybe the first one, you highlight in the press release that the full year 2025 margin performance was particularly notable in Q4. So could you explain us a bit in more detail what were the key one-offs versus structural drivers? And how much of that, let's say, Q4 run rate should we consider sustainable into 2026? That's the first question. Félicie Burelle: Maybe one point and then you can add. Obviously, a lot of -- we mentioned a lot of volatility throughout the year. And obviously, a lot of the topics that we are negotiating throughout the years in terms of compensation happens by the end of the year. So that's one of the reason of this impact in Q4. Olivier Dabi: Yes. I would say in H2, we did EUR 15 million more operating margin than in H2 2024 and it was a combination of indeed discussion with customers and cost-saving initiatives that we put in place. Michael Foundoukidis: Second question, when we look at your launches in 2025, Asia represented more than 50% of the group launches, so of course, it does not tell a clear picture in terms of implied volumes and revenues. But still, what does it mean for 2026 revenues in the region? Should we expect a significant acceleration in Asia and the region growing clearly above, let's say, the 20% threshold of group revenues? Félicie Burelle: The value per car in Asia is, in general, lower than in the rest of the world. But obviously, the growth will materialize and will start to impact, again, generally speaking, 2026 will be stable, and you should expect the rebound to come afterwards. Michael Foundoukidis: And maybe on North America, do you expect trends that we've seen in 2025 to continue into this year, namely outgoing outperformance in the U.S. alongside, let's say, weaker dynamics in Mexico and Canada. And more broadly, how do you see mobility in the context of potential OEM reshoring in the U.S.? And do you believe that your strategic footprint and industrial footprint, of course, would allow you to benefit and is sufficient in this respect? Félicie Burelle: So yes, we believe that we will continue to entertain a good growth in this market, which is why we are investing in we are projecting our sales to double in the region. And indeed, all of what is happening is impacting the strategy footprint of the customer. And that's the benefit of having a sizable footprint in the region is that we are able to size some of the new opportunities coming and to rebalance in between our plans should the OEM propose us to localize and need our support. So indeed. Michael Foundoukidis: Maybe a follow-up to Thomas' question on the Lighting segment and more generally about the lighting business overall. It seems more competitive than it has been historically with Chinese players also growing in that field, so what's your take on that, both in China and outside of China? And maybe from a product standpoint, do you think that the integrated offer that you again highlighted in the presentation is sufficient to differentiate you versus those peers? Félicie Burelle: Yes. The lighting business is a much more fragmented business versus the other activities that we have. But we believe that the footprint we have and the technology we have makes us more agile versus some of the big players that have -- that are more anchored in Europe and in more mature markets. So we can be more agile by delivering from this footprint. And obviously, with this transaction of Hyundai Mobis on the lighting activities that will definitely accelerate this evolution. So, yes, the technology itself is changing a lot. So finally, being a player entering now with a footprint that we can adapt and being more agile, I think it can make the difference, a difference per se on the product itself, the lighting, but also when it comes to the one for you, where we have very few players to be able to offer the integration of lighting in bigger parts, bigger modules. Michael Foundoukidis: And maybe a last question, a couple of follow-ups, more financials. First, on the revenues following your comment that state sales would be relatively stable this year. Is this organic reported, meaning that there's probably FX headwind. So just to be sure on what you meant by that? And second question, would you say that all divisions should again improve their margin performance in 2026 versus 2025. Félicie Burelle: So on the top line, yes, it's without -- as is scope as is, whatever the -- no foreign exchange nor perimeter. And sorry, the last question was -- the second question was? Improvement of all -- the performance of all BGs, yes. Michael Foundoukidis: Okay. And congrats again for this performance. Operator: The next question comes from Ross MacDonald from Citi. Ross MacDonald: It's Ross MacDonald at Citi. I think only few remaining questions from my side. On the financials, firstly, can you maybe talk about the tax rate in 2026? Should we expect that to be stable at 35%. Olivier Dabi: Yes. Tax rate should remain stable at 35% in '26. We aim to improve it a little bit, but it should stay within this ballpark. Ross MacDonald: Understood. And then secondly, on the free cash flow. Some of your peers in '25 benefited from some working capital release. Obviously, that hasn't been the case at OPmobility. But for 2026 free cash flow generation, you've touched on the investment spend. Obviously, the operating performance should be a small tailwind to free cash flow. But how should we think about working capital in 2026, should we expect no further benefits or tailwinds from working capital release this year? Olivier Dabi: As you say, we'll increase the investments. And since we plan to increase our free cash flow, it will be financed by both an increase in operations, i.e., the gross cash flow and an improvement in WCR, notably inventory management and payment terms on which we have a dedicated initiative. Ross MacDonald: That's clear. And then 2 slightly more strategic questions. Firstly, on the fuel tank market share, good to see that moving up by 23% now. I think it was 21% at the CMD in 2022. So obviously, at the current pace of share gains slightly below the 30% target, can you maybe talk around when these market share gains in C-Power will accelerate? Is that really quite back-end loaded in this decade or -- should we see that accelerate maybe in 2026? Stéphanie Laval: Yes. So yes, you're correct, Ross. The market share in C-Power has increased from 21% to 23% in 2025. We were in 22% last year. So it's -- we are really on track with the target we have of 30% by 2030. If you look at the mix, geographical mix, we'll continue to accelerate in North America, especially, so we'll have a different mix between regions. So it will also participate to the increase in the market share we have. And we consolidate in a market, where players -- some players are decreasing, even disappearing. So we are still consolidating our position in this market, and it will continue to reach the level of 30% of market share by 2030. Ross MacDonald: And then moving to the beyond automotive comments, quite interesting, a number of suppliers talking about looking beyond light vehicle production into some commercial vehicle, et cetera, end markets. Can you maybe speak to whether that opportunity is specific to 1 division or if there's a division within the group that lends itself best to growth beyond automotive? And really interesting if you can maybe give some midterm aspirations around revenue contribution from those activities? Félicie Burelle: Yes. Today, the beyond automotive only represent of our sales, and it's pretty much focused on what is linked to the electrification, i.e., the battery packs and H2 activity, who are addressing the heavy mobility with trucks, buses and small fleets, and that we will keep on growing. But we are also -- I mean when we think about beyond automotive, coming back to the question on the robotaxi, we do see a lot of movement on this market. and that we believe will grow in the future. There is 1 player with whom we are today engaged, but we are also in discussion with others. So we believe that should be part of what we call also the beyond automotive because the business model there will be pretty different from our conventional market, I would say. Ross MacDonald: Final question. I appreciate you can't give the numbers on the balance sheet impact from the M&A you announced recently with Hyundai Mobis. Can you maybe reassure investors just given that the last acquisition in lighting, obviously, you had some execution headaches around the order bank. How should we think about the order bank in that business? And would it be fair to assume that there should be much more stable instant contribution to revenues without that sort of decline that we saw with Varroc? Félicie Burelle: I mean the situation is totally -- it's not comparable. Back in the days, I mean, the first acquisition we've made clearly the situation in which the business was very different. It was a depressed business. Now what we are considering here is a very sizable business with 1 leading OEM. More than 90% of its sales engaged with that. And back to the JV topic, it's about how to further engage and set a stable relationship with that customer and also use that as a lever to grow beyond lighting with that customer. So those are very different -- 2 very different objects. Ross MacDonald: That's very clear. Maybe if I can sneak one quick final one in. Obviously, the dividend has come down, I understand why, given the very high starting point. With this M&A objective, how do you think about the dividend going forward? Is the objective to hold it at least at the current level going forward? Félicie Burelle: Sorry, can you repeat? The sound is not very good. Ross MacDonald: Apologies. It was just on the dividend. Obviously, given the balance sheet impacts from this deal, how should we think about the dividend going forward? Would your objective or mission be to try and defend this EUR 0.49 dividend in 2026. Félicie Burelle: I mean, irrespective of our strategy, we always have a policy of serving dividend to the shareholders. So that should remain the case. Operator: The next question comes from Jose Asumendi from JPMorgan. Jose Asumendi: Just a couple of questions, please. Can you talk about the opportunities to grow with Chinese OEMs in Europe, provide more content with new contracts or LatAm or any region that you consider appropriate to comment. Second, can you provide a bit more color regards to the lighting division? And where do you see the growth coming from in 2026. If you could just provide a bit more details by region or by customer. It looks like you've done the cost cutting necessary to reposition the business model, but growth is to drive the margins going forward? And then final one, are you expecting to benefit from growth in the U.S. And I'm particularly focused on Stellantis where production is going to be up quite sharply in Q1 and first half 2026. Do you have your strong content with Stellantis and And do you see that also as a benefit in the first half of the year? Félicie Burelle: So I think your first question was on the Chinese OEM outside China. Indeed, we are really leveraging the relationship and the footprint that we have in China to accompany them whenever they want in Europe. So we have a lot of interaction and also because China now is clearly on the innovation side, investing for China but for elsewhere. So we really focus on growing the relationship beyond our YFPO JV, also in the other product lines to be able to serve them elsewhere. Today, I think part of the challenge is that Europe has not yet defined its strategy in terms of the tariffs and the local content. So there are still some OEMs that are wondering whether they will invest. But logically, we should be there where they want to invest at some point. For sure, whether it will be Western Europe or Eastern Europe, we have the footprint right there to support them. On the lighting activity, as we commented, unfortunately, 2025 was a low point in terms of sales. But we've been now for 3 years in a row and again, we will have a sizable order intake in the lighting activity. So that order intake will start to materialize and the SOPs are ramping up this year. And back to your point of your question on Stellantis, we actually have quite strong activity with them in the lighting and in North America in general. And also on the different One4you topics that we discussed earlier. Operator: There are no more questions. I will now hand the conference back to the speakers for the closing comments. Félicie Burelle: Thank you very much for your time. It was a long session, but it was our pleasure to present to you those solid results and looking forward to the next meeting. Thank you.
Operator: Good morning, and thank you for standing by. Welcome to the BIC's 2025 Full Year Results Conference Call and Webcast. [Operator Instructions] Please be advised that today's call is being recorded. I would now like to hand the conference over to our first speaker today, Brice Paris. Please go ahead, sir. Brice Paris: Good morning, and welcome to BIC's Full Year 2025 Results Call. I'm Brice Paris, Vice President, Investor Relations. We're in Clichy today with our new management team, Rob Versloot, our CEO; and Gregory Lambertie, our CFO. This call is being recorded, and the replay will be available on our website with the presentation and press release. We will start with the usual results presentation, followed by a Q&A session. First, please take the time to read the disclaimer at the beginning of the presentation. With that, I give the floor to Rob. Rob Versloot: Thank you, Brice. Hello, everyone. I am pleased to be here with you today for our first full year earnings call together. And I'm joined by Gregory Lambertie, our new Chief Financial and Digital Officer. I will start with a brief overview of the key highlights from 2025. Gregory will then walk you through the consolidated results for the year. I'll then introduce my new leadership team and share our outlook for 2026. Highlighting the opportunities ahead before closing with a few concluding remarks. 2025 was a year marked by a volatile macroeconomic environment, softer consumer markets and geopolitical uncertainty. Against this backdrop, BIC faced many challenges in 2025. When I look back at my initial assessments of BIC's strength, and what we can build on for the new strategy, they are all clearly confirmed, the power of our brand, our deep distribution network and our excellence in manufacturing. The key takeaway for 2025 is that we delivered results in line with the expectations set when I became CEO. We achieved full year net sales of EUR 2.1 billion, down 0.9% at constant currency, an adjusted EBIT margin of 13.6% and a resilient free cash flow generation at EUR 222 million. Most importantly, we stabilized the business and achieved modest growth in the second half. Let me start by commenting on our main challenges in 2025. We faced significant headwinds in the U.S. across our 3 categories impacted by tough market trends. In the lighters, shavers and ball pen segments, markets were down mid-single digits in 2025. In Latin America, we faced serious challenges in Mexico. Net sales performance was impacted by big distribution losses and intense competition. We recently made leadership changes in Mexico with a clear objective to improve performance going forward. Finally, the very disappointing performances of our Skin Creative businesses, Rocketbook and Cello, weighed significantly on our growth and profitability in 2025. As I mentioned in Q3, it is my responsibility to act swiftly and rationally. As a result, we have taken decisive steps to streamline our portfolio, including the discontinuation of these underperforming activities. However, despite the numerous challenges we faced, we saw an improved performance in the second half of the year, particularly in the Middle East and Africa and in the U.S. Now let me highlight some key achievements for 2025. First, Tangle Teezer was integrated successfully, growing double digit in 2025 and contributing 4.1 points to the group's growth with accretive margins. This very strong performance reflects disciplined execution, strong collaboration across teams and the rapid alignment of Tangle Teezer with BIC's operating model. I will come back to this in more detail later. Second, we saw strong momentum from our value-added and recently launched products, all supported by impactful advertising campaigns. Products such as the 4-Color Smooth pens, the BIC Flex 5 and Soleil Glide shavers resonated well with consumers reinforcing the strength of our brands and our ability to drive mix through meaningful innovation. We also continued to make tangible progress on our ESG actions. We launched the Twin Lady razor, featuring a handle made from 87% recycled plastic and blades incorporating 70% recycled steel, reflecting our commitment to more sustainable product design without compromising performance. In addition, we achieved key milestones across 3 core ESG KPIs. 100% of cardboard packaging now comes from a certified recycled source. We reduced our Scope 1 greenhouse gas emissions by 47% compared to 2019. And lastly, we helped improve learning conditions of 245 million children across the globe, notably through the work of the BIC Foundation. I now want to tell you a bit more about our recent innovations and partnerships launched in 2025 and some planned for 2026. At the heart of these initiatives is a renewed focus on the power of our brand, which I strongly believe and see as essential to successfully execute our new strategy. In 2025, we launched the BIC Soleil 5 Glide, a new premium women's shaver supported by an impactful marketing campaign designed to modernize the category and strengthen brand engagement. Innovations like this one or like the BIC Soleil Escape are key to sustaining our leadership and driving mix within this segment. In 2026, we will further strengthen our shaver portfolio with the launch of the new BIC 5 Trim and Shave. This innovation combines a 5-blade shaver with an integrated precision trimmer, delivering superior performance and versatility at an accessible price point. In 2025, we executed highly successful partnerships with Netflix on Squid Game and Stranger Things across Europe and Latin America, leveraging a strong cultural moment to create distinctive collectible designs that resonated particularly well with younger adult consumers. For example, in Brazil, we partnered on a limited edition of the BIC 4 Colors and Stranger Things collaboration as one of Netflix's most successful global franchises, Stranger Things powered an activation that blended local pop culture with global entertainment, turning an everyday icon into a collectible. 2025 was also a year of major ramp-up for our first reloadable utility lighter, EZ Load. The product posted encouraging results, particularly in Europe, and our teams are working on expanding distribution further. EZ Load represents an important step in our efforts to combine innovation, sustainability and category premiumization. Lastly, in stationery, our iconic 4-Color pen once again delivered strong performance in 2025 with new additions such as the 4-Color Smooth contributing to growth. In January '26, we launched new BIC Cristal Figurines now available in our main markets. This great innovation combines the quality of a BIC Cristal with playful animal figurines and pastel colors to target a younger audience and encourage a collection trend. This launch allows us to access a growing consumer segment while leveraging one of our most iconic products. Finally, we also delivered several exciting innovations and partnership within Tangle Teezer, which I will cover more in the next slide. Moving on to Slide 6. Tangle Teezer delivered a very strong performance in its first year within BIC with double-digit net sales growth and margins accretive to the group. From a product perspective, The Ultimate Detangler hairbrush family drove strong growth in 2025 with consumers picking up the new premium Chrome and Matte collections. The Mini Ultimate range also proved to be a highly successful driver of incremental sales in impulse retail locations. And at the end of 2025, a limited edition collaboration with the popular SKIMS brand of Kim Kardashian further reinforced Tangle Teezer's appeal and was a clear commercial success. More recently, Tangle Teezer also partnered with the hairstylist of Grammy Awards winning artist, Olivia Dean, using the Ultimate Detangler for her red carpet look, authentically placing the brand at the center of a high-visibility global cultural moment. All these achievements helped consolidate Tangle Teezer's market leadership, securing the #1 position in the U.K. and growing market share in the U.S. to become the #3 detangling hair care brand. Finally, I am proud to see the continued progress in seamlessly integrating Tangle Teezer. And I'm very happy to share that in December 2025, we started to produce our first Tangle Teezer brushes in a BIC factory. Now before I give the floor to Gregory on the financials, let me go over our shareholder remuneration. In line with BIC's capital allocation policy, the Board of Directors will propose an ordinary dividend of EUR 2.40, representing a 50.6% payout ratio. In addition to this dividend, we are renewing our share buyback program in 2026 with a total consideration that can reach up to EUR 40 million. Our resilient free cash flow in 2025 enables us to continue delivering these returns to shareholders while reinvesting in the business to deliver on the strategic goals and new capital allocation policy that will be communicated later this year. With that, I will now hand it over to Gregory, who will present to you our 2025 consolidated financial results. Gregory Lambertie: Thank you, Rob. Good morning, everyone. Having joined the group in early January, I'm pleased to be here with you today for my first earnings call with BIC. I'll present to you our full year '25 consolidated results and then hand it back to Rob for the conclusion. Let's start with a general overview of our key financial figures. Full year net sales stood at EUR 2.1 billion in 2025, down 0.9% at constant currency and 4.7% on an organic basis. As mentioned earlier, we saw improved momentum in the second half after significant declines in the first half. Net sales in Q4 were EUR 495 million, up 1.1% at constant currencies. Excluding perimeter impacts from the acquisition of Tangle Teezer and the sale of Cello, net sales declined 2.3% in Q4. Full year adjusted EBIT was EUR 283 million, representing a 13.6% margin compared to 15.6% last year, mainly impacted by the decline in our revenues and partly offset by cost actions. Consequently, adjusted EPS was EUR 4.74 compared to EUR 6.15 in 2024. Lastly, free cash flow totaled EUR 222 million in '25, down EUR 49 million versus last year. Turning to Slide 10. Let's review the main building blocks of Q4 net sales evolution. In Q4, net sales were down 2.3% organically, mainly driven by the 2.2% decline in Flame for Life and in Human Expression by 1.7%, while Blade Excellence was up 1.6%. For the full year, net sales were down 4.7% organically, 0.9% at constant currency. Again, Human Expression and Flame for Life were the biggest negative drivers, declining minus 2% and minus 2.5%, respectively while Blade Excellence was down 0.2%. Turning to Slide 12. Let me walk you through the 2025 performance by division, starting with Human Expression. Net sales for the full year were EUR 736 million, down 5.6% organically. Constant currency performance was lower since discontinued businesses were a drag on growth. In North America, BIC's performance was significantly impacted by Skin Creative and Rocketbook. And as Rob mentioned earlier, we took decisive actions in Q4 with the discontinuation of these activities. In addition, the U.S. ball pen segment, where BIC is most exposed, declined mid-single digits in value. However, net sales for the core stationery business improved meaningfully in H2 versus H1 as we experienced a strong back-to-school sequence in Q3 in segments like mechanical pencils and correction. In Europe, following a very good 2024 driven by growth in flagship products such as the 4-Color Olympics, net sales were slightly down in 2025. Performance was resilient despite a challenging market, and it's worth noting the sequential improvement throughout the year, thanks to steady distribution gains and the success of recently launched 4-Color pens addition like the 4-Color Smooth. In Latin America, the decline was mainly driven by Brazil and even more by Mexico. In Mexico, in particular, we implemented managerial changes and are already seeing a stabilization. Lastly, in Middle East and Africa, net sales grew mid-single digits, driven by good commercial execution and solid back-to-school season in key countries like South Africa. Human Expression adjusted EBIT margin was 7.5% in 2025, flat versus last year. The impact of unfavorable currency fluctuations and higher raw material costs was offset by lower expense as well as favorable price and mix. Moving on to the performance of the Flame For Life division. Net sales were EUR 723 million in 2025, down 6.7%, both organically and at constant currencies. In North America, net sales were down significantly in the first half of the year and were impacted by deteriorating trading environment and lower consumption. Market trends, however, showed sequential improvement throughout the year. The U.S. pocket lighter market ended at minus 3.7% in value in 2025, and BIC managed to maintain its share in the [ lighter ] market. Our net sales were more significantly impacted in the convenience channel. In Europe, net sales were slightly down, impacted by soft performance in key countries like Italy and Germany. This more than offset distribution gains in the discounters channel and solid performance in the utilities lighters segment. In Latin America, we were impacted by challenging market trend with tough competition in Brazil and Mexico. In Mexico, in particular, performance was particularly poor in the traditional channel. As mentioned, this has been addressed through managerial changes. Finally, our net sales in Middle East and Africa grew double digits with strong commercial execution in Nigeria and distribution gains in Morocco. Flame For Life adjusted EBIT margin was 29.9% in 2025 compared to 33.3% last year. This decrease was mainly due to net sales decline and the negative impact of U.S. tariffs in H2. Turning to the next slide on Blade Excellence. Net sales totaled EUR 602 million, down 0.8% organically. As mentioned, Tangle Teezer performed very well, growing double digits and fueled by new products and distribution gains. In the U.S., our core shaver business declined mid-single digits, facing deteriorating market trends and high competition, particularly in the women's segment. However, we did a solid performance in the premium range and the new products such as BIC Flex 5 and the BIC Soleil Glide. In Europe, net sales declined slightly on a like-for-like basis as a result of softer performance in key countries such as Italy and Greece, and this more than offset strong commercial performance in Eastern Europe and the success of value-added products like BIC Soleil Escape. In Latin America, our trade-up strategy towards the multiblade segment continued to deliver positive results, particularly in Brazil. Lastly, in Middle East and Africa, net sales grew slightly, mainly driven by good Q4 performance in key markets like Morocco and Nigeria. Overall, Blade Excellence '25 adjusted EBIT margin was 15.9% compared to 18.5% in 2024, mainly due to tariffs and a very high comp in '24. Moving on to Page 15. Full year '25 adjusted EBIT margin was 13.6%, down 2% versus '24. Gross profit had a negative impact of 1.6 points, driven by high raw material and the negative impact of tariffs. This was particularly offset by continued manufacturing efficiencies and the positive contribution of Tangle Teezer. Brand support was relatively flat versus last year, and we had lower operating expenses, thanks to disciplined cost control. That said, as a percentage of net sales, operating expenses increased 0.3 points due to negative operating leverage. On Slide 16, let's review the key elements of our P&L. Adjusted EBIT stood at EUR 283 million, down EUR 60 million versus last year. Nonrecurring items amounted to EUR 127 million, mostly due to the sale of Cello and the discontinuation of our Skin Creative activities and Rocketbook announced in Q4. This included mainly EUR 104 million related to the discontinuation of Skin Creative and Rocketbook announced last December, EUR 11 million related to the negative impact of Cello's disposal and EUR 10 million related to the fair value adjustment on the Power Purchase Agreement in France and the Virtual Power Purchase agreement in Greece. As a result, income before tax was significantly down to EUR 139 million compared to EUR 298 million in 2024. Lastly, net income group share was EUR 86 million compared to EUR 212 million last year, while our adjusted net income group share was EUR 195 million compared to EUR 256 million last year. Our adjusted group EPS stood at EUR 4.74 compared to EUR 6.15 last year. On the next slide, you can see the main building blocks of free cash flow in 2025. Operating cash flow amounted to EUR 400 million, down EUR 71 million year-on-year, mainly due to the decrease in operating margin. Change in working capital was a positive contribution of EUR 7 million and income tax paid was EUR 90 million. CapEx were EUR 87 million, flat versus last year. As a result, in 2025, free cash flow was solid at EUR 222 million. Before giving the floor back to Rob, let me present our net cash position on Slide 18. On top of the free cash flow elements in 2025, we spent EUR 127 million in dividends and EUR 40 million in share buyback. This concludes our review of BIC's full year 2025 consolidated results. In summary, 2025 was a difficult year for BIC in most of our key regions, marked by continued inflation, consumer anxiety and tariff uncertainty in the U.S. Against this backdrop, the group continued to focus on free cash flow resilience through disciplined cost management and working capital improvements. Looking ahead, as we develop our strategic plan, we will continue to focus on protecting our cash, simplifying our organization to ensure we are fit for growth and well positioned to drive growth and profitability. With that, I give the floor back to Rob. Rob Versloot: Thank you, Gregory. 2025 was also a year of major changes in our governance structure. I just put in place a new leadership team, tighter and leaner with a clear objective of improving the business going forward. I strongly believe that BIC now has the right structure and leaders to execute and drive our next phase of growth. In addition to this, more, than half of BIC's Board of Directors was renewed last year and it is now fully equipped to support the implementation of our new strategy. These leadership and governance changes are essential to putting the business back on track. Let's now take a closer look at our 2026 outlook. Starting this year, BIC will now guide on organic net sales performance, a key KPI and priority for us going forward. It reflects the true underlying performance of our business, excluding the impacts from perimeter and foreign exchange. In this year of transition and as BIC's leadership team prepares its strategic plan, which will be presented later in the year, we anticipate under current assumptions, improving organic net sales trends in 2026, a slight expansion in adjusted EBIT margin and a stable free cash flow generation year-on-year. To conclude, 2026 is a transitional year as we are focused on improving and transforming our business as well as implementing the right structure and operating model. With the full support of the Board of Directors and my new leadership team, I strongly believe we are well positioned to prepare a clear plan of action and write the next chapter for BIC. I'm very optimistic that the decisive action we have taken so far are laying strong foundations for BIC to return to sustainable, profitable growth. I could not conclude this call without honoring the memory of Francois Bich, son of our founder, Marcel Bich, who sadly passed away this Monday. Throughout his career, Francois played a pivotal role in developing iconic safe lighters and transforming them into a global success through his visionary leadership from the acquisition of Flaminaire in 1971 to leading our lighter category until 2016 when he retired from his executive position. When I joined as CEO, I had the immense privilege of speaking with him. And I have to say that without Francois, BIC would undeniably not be the company we all know today. His legacy will continue to inspire us for the years to come. This concludes our presentation for today. We will now take your questions. Operator: [Operator Instructions] And we take our first question. And it comes from the line of Andre [indiscernible] from UBS. Unknown Analyst: Obviously condolences to the Bich family. I have a couple of questions. Firstly, on the 2026 outlook. Could you confirm that when you talk about an organic -- an improvement in organic trends, this does not necessarily mean you're going to return to growth in full year '26. And coupled with that, your margins will only increase up to 10 basis points because you talk about a small margin improvement. Coupled with this, where do you see the sharpest improvement coming within your divisions? And how much of that will be driven by Tangle Teezer? And secondly, obviously, Rob, Gregory, you've been with BIC for a few months now. What are your first impressions? And without giving too much ahead of the strategic update, any areas that strike you as most right for improvement? Rob Versloot: Andre, for your questions. I will start with your first question, which was about our guidance for 2026. I want to make it very clear. 2026 is a transitional year in which we aim to stabilize performance and laying the foundation for our new growth cycle. That would be our key priority for this year. I think your second question was related to the margin expansion. Look, I think what helps us in 2026 is the fact that we have exited underperforming businesses in Q4, namely Rocketbook, Cello and Skin Creative. We are also focusing on disciplined cost control. But on the other hand, we're also being hit partially by tariffs in the U.S. So the combination of all this makes us believe that we will be able to slightly expand our margin in 2026. It was related to my impressions of BIC. I would like to summarize that in 3 things. First of all, we have a wonderful brand, which is known in many places across the globe. So I think it's a fantastic brand platform. The other thing that has impressed me in my first month is the amazing manufacturing capabilities we have to produce super high-quality products at very cost competitive levels. And thirdly, we have a fantastic distribution footprint in many parts of the world. So I think this company has some really -- some key strengths and -- which will help us to revive growth going forward. Last point, if I get you right, Andre, was the Tangle Teezer performance. I can honestly tell you, we're super happy with Tangle Teezer. Also in 2025, our first year of full integration, we could notice that Tangle Teezer continues to grow at a fast pace, double-digit top line. It's margin accretive for our company. It has consolidated its #1 market share position in the U.K., and it's a fast-growing brand in the U.S., now reaching #3. So yes, all lights on green for Tangle Teezer and it also has been a key contributor to our growth in '25 with 4.1 points to the group's net sales performance. Operator: [Operator Instructions] And the next question comes from the line of Geoffrey d'Halluin from BNP Paribas. Geoffrey d'Halluin: I've got 2 questions, please. First one is related to the end of 2026. If you can share with us any thoughts on the trading trends you've seen in the first weeks of 2026, especially for the Flame For Life division in the U.S. That's my first question, please. And second question is related to the exit of businesses, so like Cello, Skin Creative business and Rocketbook. Could you share with us how much is it in terms of revenues, which is exited the company? And maybe also any thoughts regarding the profitability of this business? And on top of that, do you expect any additional one-off costs related to these disposals or business exiting? Rob Versloot: Geoff, thank you very much for your question. This is Rob speaking. I will answer the first part of your question, and then I will pass on to my colleague, Greg, to answer the second part. So your question was related to our expectations for Q1 and current trending. What I can tell you is that we expect a relatively flat organic growth for Q1. And what we are doing is we are taking actions to set ourselves up for real sustainable growth, amongst others, by rightsizing level of inventories at key distributors and wholesalers globally. Maybe more in particularly because I think you were also mentioning the Flame For Life. We expect a slight recovery in the U.S. despite the fact that macroeconomic environment continues to be uncertain with especially low-income consumers continuing to feel the pinch following the implementation of U.S. tariffs. We can also notice that we see some key customers continuing to optimize their level of inventory. So that's the U.S. Then in Mexico, where we, of course, in the recent days, we had a lot of unrest, where our primary concern is the health and safety of our employees. But concerning performance, we clearly expect a stabilization in Mexico. We had a very tough year last year. We took action, put new management in place, and we believe that we will be able to improve the performance in Mexico accordingly. Other regions, our expectation for now is more or less flat versus last year. This concludes my answer to your first question. I now pass on to Greg for your other question. Gregory Lambertie: Geoffrey, on your second question regarding disposals, I will not comment on the specific in terms of numbers, but the disposal of Cello and discontinuation of Rocketbook and Skin Creative will have a positive impact on organic growth and should be pretty -- organic growth in EBIT margin and should be pretty neutral between the disposal proceeds and the wind down cost in terms of free cash flow. Operator: [Operator Instructions] And now we're going to take our next question. And it comes from the line of Marie-Line Fort from Bernstein. Marie-Line Fort: Yes. I've got -- I would like to come back on 2 topics. The first one is about tariffs, the impact of the new tariff announcement? And what do you expect at this stage, even if it's not very clear? The second question is about the start of production of Tangle Teezer brushes. Could you tell us a bit more? Where is the production located? Is it a trial? What will be the ramp-up? And when do you see new synergies in terms of production and in terms of evolution in margin? Gregory Lambertie: Regarding tariffs, it's obviously too early to tell regarding the impact of the Supreme Court decision. It should persist -- and our view is that it should persist as we enter 2026 because raw material and local inventories were built at a higher cost that included those tariffs. So we'll now need to assess how the U.S. administration will react to this decision. Just to give you a sense of the numbers, in the current environment, the overall impact of tariffs for BIC as of -- for '25, '26 on an annual basis, the overall impact is EUR 31 million, of which EUR 13 million already impacted 2025. So we have EUR 18 million ahead of us, which we obviously try to offset through a number of levers, pricing, gross profit optimization, accelerating transformation of our supply chain and adjusting our manufacturing footprint and also disciplined cost management, which has to be one of our priorities as well. So that's that regarding the impact of tariffs. And on Tangle Teezer production? Rob Versloot: Yes, let me take that one, Greg. Marie-Line, I want to come back on your question related to Tangle Teezer. So we have started to produce the first brushes in our factory in Mexico by the end of last year. And we also have plans to produce the brushes in Tunisia in the course of 2026. So that integration is going well. Marie-Line Fort: And in terms of synergies, any kind of ideas of what could represent and at which or reason? Gregory Lambertie: Sorry, Marie-Line, we couldn't hear you very well. Can you repeat, please? Marie-Line Fort: Sorry. Just wanting to know if you can precise the synergies expected, not in terms of figures precisely, but in terms of calendar, at least? Gregory Lambertie: So it's pretty much limited in '26 and should be accretive going forward. Operator: Excuse me, Marie-Line, do you have any further questions? Marie-Line Fort: No, that's fine. Operator: Thank you so much. Dear speakers, there are no further questions for today. I would now like to hand the conference over to your speaker, Rob Versloot, for any closing remarks. Rob Versloot: Thank you. I'd like to thank you all for attending today's call. And looking forward to stay connected with you throughout the year. Thank you very much. Gregory Lambertie: Indeed, thank you for your attention. Bye-bye. Operator: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.
Operator: Hello, and welcome, everyone, to the St. James's Place 2025 Full Year Results Q&A session. [Operator Instructions] I will now hand over to Mark Fitzpatrick, Chief Executive Officer, to begin. Mark FitzPatrick: Thank you, and good morning, everyone, and thank you for joining us. Unfortunately, Caroline is unable to be with us this morning due to a family bereavement. Instead, I'm joined by Charles Woodd, our Finance Director. Before we open for questions, I'd like to briefly reflect on a year of strong delivery and execution for St. James's Place. We delivered growth in new business, growth in funds under management and growth in underlying cash result, while at the same time, delivering strong returns for our clients. Drawing out some of the results, which are new today, the underlying cash result of GBP 462 million, up 3% year-on-year and 4% ahead of consensus. Underlying cash basic EPS of 87p per share, up 6% year-on-year. We're returning 50% of the underlying cash result to shareholders through ordinary dividends and buybacks and a total of GBP 313 million to be returned to shareholders for 2025. Alongside delivering a strong operational and financial performance, we made good strategic progress. Our simple comparable charging structure implementation went live smoothly in late summer. The new structure puts our investment performance on a fully comparable footing with the wider market and enabled the successful launch of Polaris Multi-Index. This has broadened client choice and grew to over GBP 1 billion of FUM at year-end, just 2 months after launch. Our review of historic ongoing service evidence continues to progress. Based on our experience in the second half of the year, we have released a further GBP 25 million from the provision today, taking total releases to GBP 109.5 million for the year. We are now deep into the operational delivery phase and are on track to complete the program in 2026. Our cost and efficiency program also made good progress. For example, we completed the transition to our new organizational design during the year, and we remain on track to remove around GBP 100 million per annum from our addressable cost base by 2027. These achievements give us the confidence in the strength of our business and our prospects, which has enabled the Board to update our shareholder returns guidance going forward a year earlier than originally anticipated. So from 2026, we intend to increase our payout ratio to 70% of the underlying cash result. We anticipate that this will comprise ordinary dividends, which will make up at least 40% of the total shareholder returns and the buybacks will make up the difference. A different way of thinking about is that dividend is expected to be at least 28% of the underlying cash result and buybacks the remaining 42%. That's how you get to 70%. Our priorities for 2026 are completing our remaining transformation programs, expanding the range of technology tools, including those which are AI-enabled and making those available to our advisers with the goal of helping them to work as efficiently as possible. This will give them more time to do what they do best, which is building trust, deepening client relationships and delivering personalized, high-quality advice. We see technology deepening the human relationships between clients and advisers, not replacing them, accelerating elements of Amplify, where we have the capacity to do so later in the year, and we will focus on refreshing our cash proposition and enhancing our high net worth proposition. We look to the future with confidence. We have already made changes to the business, and we're focused on strengthening and growing SJP over the long term. This means we are well positioned to capture the structural market opportunity ahead and deliver for all our stakeholders in 2026 and beyond. With that, I'm very happy to turn to questions. Operator: [Operator Instructions] Our first question comes from Andrew Lowe from Citi. Andrew Lowe: I wanted to ask on AI and how you see the potential threats from your business. So I'd love to hear a little bit more about what makes you comfortable about the potential threat to growth and pricing power from competitors, including D2C platforms who in time might be able to offer AI-led financial advice. As sort of corollary to that, it would be really helpful to hear a bit more color on the AI tools that are operational today, what we might expect in the next 12 months? And how much this could improve your adviser productivity going forward? And the second question was just on the adviser numbers, which fell by 0.4% in the second half of 2025. Could you please give a little bit more color on the productivity of your departing managers? And just any comments on the outlook for adviser numbers going forward would be really helpful. Mark FitzPatrick: Andy, thank you for those questions. In terms of technology and AI, I think the way that we see technology is really it's an opportunity to strengthen our face-to-face advice led model. So what we've observed over time, I think, is that while a lot has changed in and around the competitive landscape, what has been central, actually, is the [ primacy ] of the adviser client relationship and the longevity of that relationship because research tht we have done and that we talk about in the accounts and research that others have done effectively emphasize that actually people still value human engagement in making financial decisions. They seek personal advice, whether it's around retirement, tax planning and various other things, et cetera. And I think when we also think about AI, I think it's also important to bear in mind that advice in the U.K. is a highly regulated and a high trust service area. And therefore, it requires the personalization, the suitability and the accountability and human judgment is absolutely core to that where we see AI can play a very, very positive role is in enhancing adviser productivity and client experience. You'll have seen in the presentation earlier on this morning that we're really using some AI tools to give advisers back time. And I think that's where the deep vein is going to be for the next few years for our advisers, for us and for the whole profession. I think the more we can give time back to advisers to really focus with their clients is going to be absolutely key. I think by virtue of our size and scale at St. James's Place, we've got the opportunity and the connectivity, and we are talking with some of the very biggest players on their thoughts and on what we are doing and how we can simplify and how we can make what we do even better and even more efficient. And bear in mind as well that of our 5,000 advisers, the vast majority of these folks are phenomenal entrepreneurs, not just in being great advisers, but also in terms of finding solutions in their own businesses and how they make themselves more efficient. So within our 5,000 advisers, we have some of our businesses where they have actually created and built their own technology to improve some of their efficiency on how they do things. And through our oversight and through our listing of data protection and everything around that and security, we're making those and facilitating those to be available to far more partners within St. James's Place. So the great thing is the innovation isn't just happening at the corporate level. It's also happening within the adviser community, where they're eating, sleeping, drinking this 24/7. So some really, really good ideas coming from them. What we're doing is making sure we can protect the data, protect the integration and really make sure it plugs and plays properly with the rest our kit. So at the end of the day, I think AI will enable greater productivity. It will enable advisers to get back to what they really enjoy doing. And it's not the admin they enjoy doing. It's actually being in front of clients. It's finding new clients to serving clients. It's being there for clients when they truly matter. Sorry, I'm repeating on, but I'm conscious that this is a big topic. And therefore, I'm probably going a little bit fuller in the answer just to kind of give everybody a little bit of color. In terms of some of the features that we have today, et cetera, along the way, we have a number of tools that we're using, whether it's advice assistant, which kind of harnesses the data in the sales force and can produce suggestions on planned wrappers, investment amount fund selections and various other things, a rules-based engine based on our Advice framework, which has been trained on thousands of recommendations made previously by SJP clients. And we've seen a very strong take-up from advisers around that. whether it's preparing meetings or whether it's summarizing and listening into meetings with clients, summarizing, converting the meetings into notes that get sent to the client, notes that get sent to the admin actions to be done. Those are things that we have trialed extensively, and we're now in the final stages of looking to roll those out across the partnership as a whole during the course of this year. And then we have something particularly innovatively called ChatSJP, which covers a whole lot of the documents in our Advice framework and business submission guides and the like. And what that does is enables the power planners and the admin teams, et cetera, just to check in on some of the advice that might be given and some of their thinking and some of the plans just to make sure everything is aligned. And what that does is that saves huge amount of time for every query that otherwise might be done through a call center and enables the call center operators to really focus on considerably more complex matters. So we're trying to -- we're not trying. We are introducing technology throughout the organization because I do see that the technology providing us with different hands in terms of what we do, but it's not going to change the face of Advice. And then, Andy, your final question on adviser numbers, yes, adviser numbers declined modestly in the second half of this year. I said back in February last year that we'd be embarking upon an initiative. And what you saw in the second half of last year was the outworkings of some of that activity. I think it's fair to say that the advisers that have left us as a result of that, their productivity was significantly below average productivity on both gross flows and from a FUM perspective, which is why you haven't seen any real shift in productivity. If anything, productivity, and I can get to that later on, but productivity has been significantly stronger during the course of this year. But Andy, thank you for those questions. Sorry, I'll try and be brief for the next few questions. Operator: Our next question comes from Andrew Crean from Autonomous. Andrew Crean: Just a couple of 3 questions. Firstly, can you say anything about trading so far in Q1 '26? Secondly, your liquidity -- free liquidity targets. I just wanted to explore this a bit more. Do you have any targets for group liquidity? And the reason I ask is because if I looked at your doubling of profits in 2030, one is talking about somewhere retaining, if you pay out 70%, you're talking about retaining somewhere between GBP 240 million and GBP 270 million of profit, which is in line with the amount of group liquidity you currently have. I suppose that poses the question whether up the line, once the earnings really get going, whether the 70% is too low and you will just build excess liquidity over time? And then a third question is client growth. I think plant growth was about 3% this year or last year. Could you give us a sense as to what you anticipate client growth to be like over the next few years? Mark FitzPatrick: Okay. Thanks for those questions. So trading -- first off on trading, we put out our Q4 trading update less than a month ago, and I think the team provided a little bit of color about the fact that flows were normalizing. We were seeing flows normalize over that period. So I'm not minded to give necessarily a month-by-month running update. But what I would say is we've seen that continue. And the partnership is in exceptionally good health. They're all working incredibly hard at the moment. This is a very, very busy time and with tax year-end 5 weeks away. So there's a huge amount of activity on the go, which is very encouraging. From a liquidity perspective, so some new disclosure for everyone in the world of liquidity and how we think about liquidity. I think it is important for us to be able to make sure we have an appropriate degree of liquidity at the center to support the capital allocation framework. The liquidity levels that we have, we will be considering them on a regular basis, and we will be making our determinations as regards what we do with that liquidity based on facts and circumstances at the time. And if we see an inappropriate buildup, then we will -- it will get activated through the capital allocation framework along the way. The 70% payout ratio that we've effectively indicated for the time being, bring it forward a year, I think, is dripping with signaling of confidence in the business and how well the business is performing and the great progress that we have made. So we're very pleased to announce that a year really. We're very pleased to have increased the level of the payout. We think the composition, the 2 sectors of it in terms of dividend and buyback are important and are weighted appropriately. And if -- and as and when that number builds in the fullness of time, as I said, facts and circumstances will dictate. We would expect -- you should expect to see the [ GBP 271 billion ] number grow as the business grows. We are a growing business and [ GBP 271 billion ] for a business with 220 billion and 1 million clients under management feels appropriate for this size and the scale. In terms of client growth, really interesting one, Andrew, because client growth is going to become a little more complex as during the course of '27 and onwards, we have a stronger push towards high net worth because with high net worth, it's going to be less about pure client numbers, and it's going to be a real focus on getting clients with larger funds under management and our advisers doing more with them and therefore, needing to spend a bit more time with them. So that's something that we're thinking about internally. But what I can say is the vast majority of our advisers when we did a survey with them at the back end of last year indicated they are expecting client numbers to grow. And as is often the case and has been the case with us for some time, the vast majority of our new clients are word-of-mouth referrals, which I think contributes to a very, very high client retention level and very, very sticky relationships, which is a great business to be in. But thank you for those questions. Operator: Our next question comes from Nasib Ahmed from UBS. Nasib Ahmed: Three questions from me. Just firstly, following up on AI. You had the charging structure change last year. You had an opportunity to update your tech stack. I know there's different tech solutions that you're using across the piece. But I guess the question is, is your tech stack nimble enough to add on these AI LLM type models? Because, of course, you've got the scale, but with bigger companies, sometimes you've got legacy tech that can't really cope with this. So question number one, are you kind of happy with the way your tech stack can adapt to these new models? Secondly, on complaints, I saw kind of new open complaints first half '25 were still high relative to history, they're kind of stabilizing but to a high level. When do you expect them to come down? And is that putting pressure on kind of your complaints team at the moment? I know you recruited quite a lot of people recently. And then finally, on kind of regulation, D2C simplified advice. What are your thoughts around here, targeted support as well within that? And would you kind of look to acquire a business and move into D2C as a result of that? Mark FitzPatrick: Nasib, thank you for those questions. AI, the simple comparable charging out of [indiscernible] have tried to weave in all sorts of other changes to what undoubtedly was the largest tech change program that we've had in the history of St. James's Place. So on the tech stack, bear in mind that we have a tech stack that includes Salesforce, that includes Snowflake, that includes some really, really modern tech that gets updated on a regular basis. So it's through that, that we're able to kind of plug and play and interact and indeed with one of our adviser firms who's been working on some great kit and has got some great AI kit that helps facilitate and improve efficiency. We very recently plugged that in and got that working well with Salesforce. So having done that, we'll be able to roll that out to other elements. And that's given us the confidence that we can plug and play modern kit into our stack. So not particularly worried about that component. On complaints, BAU complaints, so business as usual complaint levels are down. What we're seeing is there's still some activity in terms of the historic evidence review, et cetera, from some claims management companies, but much, much lower levels, inordinately lower levels. And dare I say we are doing more checks and balances in terms of whether the complaints that come in are legitimate complaints. We have some complaints that come in when we write out to the client, they say, yes, I spoke to them, but I didn't want to complain. So it's not a legit complaint, and others kind of aren't even our clients. So we've had a -- we've got a lot of noise in the system. But on the substance, we're comfortable that BAU level complaints are coming down and are coming down to a more normalized level. On rates, the government, I think, is -- and both the government and the regulator are comfortable that there's a lot coming down the road in terms of the Mansion House reforms and really want to see how well these land. So my discussions with treasury and with the FCA is they are very focused on ensuring a successful launch of targeted support. In terms of disclosure regimes, they're trying to make things simpler, et cetera. The retail investment campaign, they're really focused on trying to get more people investing. So it seems a lot more joined up than it might have been in the past. Targeted support isn't really going to be for us by virtue of the nature of how that's going to work. I think targeted support is going to be very difficult if a human has to get involved because a human can't unhear what they've heard and a human is likely to pick up something that might throw it out of the decision tree that is effectively so key to targeted support. Simplified advice. We are expecting some consultation papers from the regulator on simplified advice later on this year. We have been in contact with them. That is likely to be a lot more relevant to us. A key component of that is ensuring that if and when simplified advice comes out, it's done in a way that is economically viable for an adviser to be able to engage with somebody without doing a full fact find. So there's still quite a lot of issues that need to be worked through. But the encouraging thing is that the regulator has demonstrated and government has demonstrated a willingness to engage with industry and listen and with trade bodies and take views on. So I'm cautiously optimistic that if this comes through, it should come through in a good guys, but there's lots to do around that particular patch. As against D2C, if you think of what our underlying purpose is, which effectively is to provide invaluable advice. Therefore, I don't think kind of a pure D2C play is something that's on the strategy. When you think that only 9% of the adults in the U.K. take advice today, the market opportunity is so big for all of us in the U.K. I truly believe it is one of the really few growth areas in financial services in the U.K., the element of wealth getting people to invest. So if government, the regulator, we, all the players in the sector, D2C or otherwise, are getting people to invest rather than save, that's going to be fantastic because there are 3 big gaps in the U.K. economy. There's an advice gap, there's effectively investing gap and there's a retirement gap. And we've got too much saved, underinvested. We have too few people taking advice. And we all know we're in a DC world rather than the DB world. And I don't think society has truly understood the risk that they are taking on themselves and their need to prepare for their retirement in a more fulsome fashion than they're doing today. So I think there's lots of opportunity for us all to actually grow very, very successful businesses. And I think we're going to stick to our knitting in terms of the advice piece. Operator: Our next question comes from Ben Bathurst from RBC Capital Markets. Benjamin Bathurst: I've got questions in 3 areas, if I may, as well. Firstly, Mark, in your prerecorded remarks, you mentioned you'll be looking to improve reporting of financial performance. I think you said before half year 2026 or half year 2026. I just wondered if you could give more details on the scope of that project and if it's going to extend to making changes to the underlying cash disclosure. Then secondly, on flows, you saw fit to comment that outflows have normalized at the end of Q4 and into Q1. Just to clarify, does that mean a return to the levels of outflows as a percentage of AUM that you saw in the first 3 quarters of FY '25? And then sort of related to that, but just on the pensions flows outlook, we're obviously edging towards the 2027 date for pensions to fall into the net for inheritance tax. I wondered if you started to see any differences in the typical advice that you're delivering to older clients around keeping funds in the pension wrapper. And we should really expect withdrawal rates from pensions to tick up over the next year or 2 in light of those changes? Mark FitzPatrick: Ben, thank you. Three really interesting questions. For the first question, I'm going to hand over to my partner in crime, Charles Woodd. Charles? Unknown Executive: Ben, very good to chat about this. Yes, this has been an exciting project that we've been doing over the course of the last year. You'll have seen some of the output emerging. So we streamlined our financial review at the half year. We've done that again at the end of the year, and we've introduced new capital and liquidity metrics, a new section on that. And hopefully, that answered a number of the questions that were rising. The implementation of the simple comparable charges, which happened in late summer, that was another important building block. And so building on that, we've been sorting out what the reporting should look like. And we are expecting to share that with you, certainly for the half year and expect to share that with you all probably later in Q2, possibly May might be the right sort of time for doing that. Mark FitzPatrick: Charles, thank you. Ben, in terms of flows, I don't think I've necessarily changed your models based on what we saw in Q3, Q4. I think I'd look at more the long-term element in terms of flows. And in terms of pensions, I think from memory, about -- historically about 4% of individuals just across the market paid inheritance tax. And I think the ONS in light of the changes the government brought about thought that, that might go up by 1.5%, maybe 2%. So call it 6%. So it's not for everyone, thankfully. But what we are seeing, I think, is that investment bonds becoming a lot more attractive now. Pensions still being an incredibly valuable vehicle for people to invest in up to a certain level and -- while they're working. And what we're seeing is people now starting to utilize their pensions rather than considering them as a pure investment vehicle that they might have had as a generational wealth transfer vehicle. So the advice is shifting. It's a very, very complex area. I know our team are deeply engaged with government and the regulators working through how those changes need to come through and making sure the changes don't cross over with one another. But we do expect actually pensions to continue to be important. But for those older clients, we expect to see them drawing down on pensions probably in a slightly stronger way than they might have originally. But then I would expect them to be leaving some of the other investments alone, and we might start to see some of those withdrawal rates start to improve along the way. So it's going to be fluid. We need to see how it pans out. My big request of government of late is when the next budget comes up, please make sure that you are proactive in saying, we're not looking to change pensions again because we cannot have a third year of further speculation. So get out of the blocks and just try and close that down early as possible, please. Operator: Our next question comes from Enrico Bolzoni from JPMorgan. Enrico Bolzoni: So sorry to go back again to the AI topic, but I have one follow-up question, if I may. So I think there is no pushback on the argument that AI can dramatically improve adviser productivity and do wonders internally in terms of reducing costs, so on and so forth. I guess my concern, which I suspect is shared by a portion of the market is more what the impact is going to be on perhaps the future cohort of clients. So maybe those that in theory would pick up advice in 10 years from now, let's make an example. In the U.K., the majority of people pick up financial advice when they are approaching their retirement age. So I suspect people that are in their 50s. So the concern I have is if these people that now are using B2C platforms, which is an area where, by the way, you don't want to go, will be gradually see the benefit of AI in their existing B2C usage. Is there not a risk that these clients when they reach the age where in theory, they should pick up and historically, they would have picked up financial adviser when they're in the late 50s, might decide not to do it because by the time that's going to happen, it's going to be in 10 years' time, they will just have like an amazing AI proposition within their B2C platform. So are you concerned by that? And would you consider be a bit more explicit in guiding your adviser to recruit or to use that additional capacity freed by AI to recruit younger clients or get them when they are very young to avoid this risk of not getting them at all? So that's my first question. And the second question is on the Polaris Index range. I was wondering if you can give us maybe an update, some color in terms of what the appetite has been if you're seeing clients perhaps switching out of their active proposition and into passive or if mainly this is appealing to clients that put fresh money into the passive range and they don't really switch from their existing investments into passive. Mark FitzPatrick: Enrico, good to chat to you again. Really interesting point in terms of your scenario in terms of AI. Just a couple of useful facts just to share with you. By -- I think by virtue of the fact that our average advisers considerably younger than the average adviser in the market. Actually, what we're finding is the average age of our new clients is actually coming down. So over 1/3 of our new clients are under 40 years old, which is fantastic. So we are effectively -- the advisers are effectively ahead of this issue and building in a fantastic pipeline of future relationships by engaging with clients at a younger age because it's not just about the -- what do I do when I retire and how do I prepare for decumulation. It's getting them to do the right things and getting the right behaviors in places my 17-year-old son said that, SJP, it sounds like you guys are financial PTs, financial physical trainers. You get people to do what they should do when left on devices, they may not do it. So I think the element of -- we're getting more and more younger clients, our advisers younger, which is helpful and also very helpful in terms of their comfort around using new tech as well. And I think we see that quite a few of our clients actually have business with D2C as well as having business with us. So share of wallet has grown a little bit over the course of the last year. On average, I think we're about 50%, 55% or thereabouts. But it's -- so it's not 100%. People have money in D2C, but they understand what they get from St. James's Place, what they get from the adviser, et cetera. And in time, what we see is actually more and more of that money coming in. The longer somebody is with St. James's Place, the more money tends to come in to St. James's Place and the share of wallet tends to grow rather than stagnate because they just see the value of what's there. And to some extent, I talked to a little bit of Polaris and Polaris Multi-index. Effectively what it is, is providing clients with a broader range of options where there is something that is a little bit different from the conventional Polaris. What we're seeing to date is we're seeing new clients, new money coming into that. We are also seeing a little bit of switching from the existing funds into Polaris Multi-index. And I think the reason a number of folks like that is they like the ongoing asset allocation, the ongoing rebalancing that happens along the way at an incredibly attractive price point for the client. So it's early days in Polaris Multi-index. It's very similar to what we saw on the main Polaris when that launched, we saw a lot of switching initially, and then we saw a lot of new money coming in as actually the investment performance kicked in and people just had more and more confidence about it. I am delighted at what the guys have done. I think it's fantastic to -- in the first 2 months, have gathered effectively GBP 1 billion worth of assets into Polaris Multi-index and really looking forward to seeing the growth of that because we can now offer clients a broader range of product across the way. But thank you for those great questions, Enrico. Operator: Our next question comes from Gregory Simpson from BNP Paribas. Gregory Simpson: Two questions on my side. Firstly, wondering if you could share any comments on how you're seeing advisers and clients behave with the new fee structure and if you're seeing any differences versus the old model in terms of inflow, gross inflows and productivity, just aware that Q4 is a bit unusual with the budget in terms of reading anything into the flows. That's the first question. Secondly, can you provide a bit more of an update on the high net worth push? What's the kind of time line? Would you have advisers that are more directly employed by SJP in this model? And what do you need to add on the product and investment proposition side? Mark FitzPatrick: Greg, thanks for those questions. In terms of the new fee structure, I think speaking to clients, they are candidly wondering what all the big fuss was about. From their side, they're seeing it very much in line with everything else that's out there in the marketplace. So they think it's -- from a client side, they think it's a lot simpler. The advisers, as I mentioned, I think, earlier on, are incredibly busy engaging with clients. So they are absolutely connecting very, very busy. Case count is very strong at the moment. So it's all looking that the fee structure is -- the old fee structure is in the history books. We're now kind of level-pegging with everyone else. In terms of the high net worth push, the high net worth push, I think, is one where I'm really, really excited and really interested for us to spend more time, more energy in. The element of the high net worth aspect is that we -- later on this year, we are looking to make even more impact on it. We've recruited some new talent. We're looking to streamline and improve the service that is available for both our advisers and clients in this area. We have, I think now as at year-end, 10% of our FUM is effectively in the high net worth segment, so a slight increase on last year. It is -- the team are working very closely with some of our advisers who specialize in the high net worth area. We've had some off-sites exploring what do we need to do about product range, what do we need to do about service, what do we need to do about our brand. So we're clear on what we need to do. We're now just getting things done. We're recruiting, as I said, additional people, and we're equipping the people in that regard. And I'm quite excited about what we might do around this space. I think there are a lot of our advisers who are very interested in being more engaged in this space. A lot of them are very engaged in the space. I think if we can provide them with greater support, they'll be able to do even more in and around this space. And they're all looking to grow their businesses. So I think that's probably the route in rather than us trying to kind of think we're going to have our own employed advisers focusing on the high net worth space. So I'm excited about it. In reality, I think it will be the second half of this year that we really start to lean into it even further. It is part of the amplify phase of the strategy, but wherever I have capacity, I'm looking to try and apply it to the high net worth opportunity because I think it is so real. So you've picked on a real topic. Operator: Our next question comes from Larissa Van Deventer from Barclays. Larissa van Deventer: Three questions from my side as well. The first one, Vanguard announced yesterday that they are launching a new model portfolio solutions product in conjunction with Wellington. How do you see St. James's Place product range as differentiated relative to the other model portfolio solutions available in the market and perhaps specifically referencing the Polaris Multi-Index that you mentioned in your presentation? Second question, on the historic ongoing service evidence review, you mentioned that you will complete that in 2026. Does that mean that we can completely put it to bed in '27? Or is there a set of limitations that needs to run before you will be able to finalize how much of the provision is needed? And then the last one, AI, a very topical sort of questions this morning. But with Polaris Multi-index being a lower cost offering and with AI potentially lowering costs, do you see future growth coming from maintaining margins? Or do you believe that margins may be compressed? And would you be looking to grow mainly from increased customer volumes? Mark FitzPatrick: Okay. All right. NPS products that are out there. There are a number of NPS products that are out there. So Polaris and Polaris Multi-Index are fund of funds, so not really the same as a model portfolio service. So rebalancing in an NPS will effectively crystallize capital gains tax, and that wouldn't happen in a fund of funds, hence, less frequent rebalancing in the NPS as against the rebalancing that we can do in the Polaris and Polaris Multi-index range. So we're more dynamic. And therefore, we believe in a world that is changing as rapidly as it is, we think that is an advantage for Polaris and PMI. It looks like the latest NPS is out there has kind of got a mixture of kind of active and passive, et cetera, along the way. And effectively, at the moment, Polaris is kind of -- we have Polaris where there is some kind of systematic activities in normal Polaris and Polaris Multi-index works through 14 index funds. So as a blend is probably at a more attractive price point. Ultimately, I think in terms of product innovation, what our team have been able to demonstrate is a great ability to innovate, come up with solutions that work well for clients. So there's a real client adviser demand and pull. It's been great to hear some advisers saying, Mark, my clients have been at me for ages to have something like Polaris Multi-index. It's great that we have it now, and it's great that I can talk to them about it. In terms of the ongoing service evidence review, you'd recall one of the reasons we put a limit on our time period of going back to 2018 was effectively linked to statute limitations. And that has stood up from challenge from all sorts. So I think at the end of 2026, we should be done now. There may be somebody who wants to take it to false and complain about XYZ, et cetera, and that might draw the process out. But for all intents and purposes, I expect us to be done. The team know my ambitions to have it done this year. And I'm certainly not on this call going to let them off the hook on that front. In terms of AI and in terms of future growth and margins and the like, candidly, when I look at margins, I think there are 3 elements to our margin. There's a margin for advice, there's a margin for the platform and there's a margin for the fund manager piece. The fund manager piece is all as you know on the phone, [indiscernible] the pressure that's under. In terms of platforms, we see the fixed -- the cost base from that tends to be a little bit more fixed. And therefore, as we grow in size and scale, and I think we've mentioned this before, we would expect to give back some of that increased profitability and share that with clients at a later stage. In terms of the advice, advice is really interesting because there are so few advisers in the U.K. The regulation is very high in the U.K. vis-a-vis advice. And therefore, we don't see there being a huge amount of downward pressure on that component. So I think our growth is going to come through growth in terms of both clients and in terms of funds under management because as I mentioned earlier, as we do more in the high net worth space, that might give rise to slightly fewer new clients but larger FUM with that more sophisticated, more challenging needs and therefore, a bigger role for the adviser to play rather than speaking to a client maybe once a year, it's speaking to the client maybe once a quarter or more regularly than that. So I think I'm looking, especially in this market where there's 9% of U.K. adults take advice. We have so few advisers in the U.K. An interesting stat I saw is that SJP contributes 52% of all new advisers in the marketplace through the academy. So it's really, really important that we have a thriving advice profession. And we need to make sure like other professionals, they are appropriately paid and rewarded for the fantastic work they do. Operator: Our next question comes from Fahad Changazi from Kepler Cheuvreux. Fahad Changazi: Only got just 2 left. Could you give an update on your target of doubling the 2023 underlying cash results by 2030? I know it's only 2 years in, but in terms of underlying assumptions on costs, AUM, et cetera, where you are standing now versus the target? And finally, just a follow-up on AI. We have controllable costs increasing by 5% in 2026. Could you remind us again what these are and if AI will help this underlying growth rate in the long term? Mark FitzPatrick: Fahad, very interesting question. So firstly, on the ambitions that we set out as part of our strategy, we remain very comfortable with the doubling of the underlying cash between 2023 and 2030. I'm not minded to rebroker that this early on because while we have had a much stronger start than I think we all thought and we all expected, I am conscious that markets are not linear, and there's quite a way to go between 2030, et cetera, along the way. From controllable costs, the controllable costs, by and large, cover people, cover property, cover tech. And in time, I would expect as we get smarter in terms of how we use some of our tech that, that may give an impact or provide an impact in terms of what happens with our controllable expenses. The key thing to remember is that our main admin provider, SS&C, that cost base is not in controllable. So a lot of the AI functionality will sit in there or sit in the advisers business. There will be some that will sit in us. But at the moment, our focus is in terms of trying to make our advisers as productive and supported them as possible, one; two, make client interactions and adviser interactions with the corporate and the admin as smooth and as simple and as standardized as possible. And then three, we'll be working out right, how do we use AI within the corporate, et cetera, along that way. But I'm being very deliberate in that sequencing because I think the biggest bang for buck is making the advisers' lives as easy as possible so they can spend more time with their clients. Second is looking after the client interaction and all the admin processing, making that standard as simple as possible. And then third will be the element of how we actually simplify what we do internally here at the corporate and the role that AI can play. I know that folks internally do use AI and AI is part and parcel of kind of what a lot of us use. But at the moment, I think we are all experimenting with it, getting more comfortable with it as against it being necessarily a major drag or reduction in our controllable costs at this stage. Thank you. Operator: Our next question comes from David McCann from Deutsche Bank. David McCann: So,,yes, 3 for me, please. So first one on the capital distributions and the new policy there. Can you just give us some color as to what the thinking was with the bias towards the buyback, the 40-60 in favor of the buyback? What was the thinking there rather than a more dividend biased amount? That's the first question. Secondly, thanks for the new disclosures on the liquidity that potentially is quite useful. Just wanted to know that where -- yes, how you're still thinking about the business in terms of the actual capital? Historically, you've sort of focused towards MSP and the surplus around that as being the preferred metric rather than Solvency II. But if we're thinking about the actual capital and the free capital in the business, how should we be thinking about that today? And kind of what is the level? Because I think that disclosure doesn't appear to be in the statement anymore. And then finally, sort of looking forward a bit more, clearly, the business is in much better shape than it was when you came into the business, Mark, and a lot steady and the ship has been done, which is great. Looking at the business going forward, do you -- your predecessors really focused entirely on organic growth in a different environment and with different levels of organic growth to what you're seeing, I guess, now. So are acquisitions still firmly sort of off the table, off the agenda? Or is it something that you might consider more now the business is in better shape again, a lot of things have been clarified and you're kind of moving forward, the cash generation that's coming through and so forth. But just curious as to how you're thinking about that. Mark FitzPatrick: David, thank you. Good to talk to you. Let's take them in order. In terms of distribution, the 40% cash, so of this kind of 28% of the return is going to be cash dividend. That's a minimum. The balance of 42% is effectively the buyback. We felt at these share prices and the value enhancement to the market to shareholders of having a stronger buyback rather than the cash dividend was important. I think if you look at consensus numbers for 2026 and you model out the new distribution, it shows a healthy uptick in both cash dividends and in the buyback. So we -- the Board was comfortable that, that would respond to people who are very interested in dividend and also people who recognize that actually a buyback has become a much more accepted tool in the U.K. market and can be very powerfully deployed, and we were keen to deploy it on an ongoing basis rather than a discrete basis. On capital, the -- there's a reference to the management capital coverage assessment, which I think is a new fancy word for what was the MSB. And I'll let Charles cover that in a moment. But I think the data is contained within the data book around the capital and where we're at. Charles? Unknown Executive: Yes, that's right, Mark. Yes. Look, David, I think you're sort of referencing the fact that we are an insurance group, and therefore, we do have reporting requirements under Solvency II and that type of thing. But I think we would suggest that the new disclosure is designed to make clear that really that's not the sort of the limiting factor in terms of how we think about capital and about shareholder distributions, but really the focus is on liquidity. That's what we focus on and what we'd like you to focus on to. As Mark noted, the management solvency buffer, the MSB, which have been replaced by the MCCA, still lives and it features in our capital and liquidity disclosures. So it is part of the bridge from our total liquidity down to the free liquidity. But capital solvency suggests that's not the key thing to focus on. We would encourage you to focus on those new liquidity disclosures. Mark FitzPatrick: And David, on your third question, you are right that I was very clear that inorganic was not something we were going to consider, especially given the share price of old. I think there is such a strong organic opportunity ahead of us. That's where all our focus and attention is. We have seen when players aggregate up other folks, it creates huge disruption and huge distraction. There's a lot of distracted and disruptive players in the market. We plan on looking at that very carefully and seeing if there's opportunities for us to lift our teams, et cetera, from some of our competition, given that they are potentially somewhat discombobulated over recent events. Operator: Our next question comes from Charles Bendit from Rothschild & Co Redburn. Charles John Bendit: One on AI and one on cash monetization, please. So I just wanted to take a different tack away from how AI might change the customer experience and focus on the adviser experience. I'm just keen to understand if you think AI might drive adviser head count to shift at an industry level between the restricted and independent channels. So my question would be, how do you assess the risk that third-party AI-driven adviser productivity tools could make it easier for independent advisers to operate outside of the SJP ecosystem? So if IFAs can now run more efficient practices and potentially capture a larger share of the value chain through higher advice fees or by offering clients lower all-in fees at the expense of platform charges, what aspects of the SJP restricted model remain most critical in retaining advisers? Is it primarily brand, the broader support and compliance infrastructure, your succession framework? Or do you just believe that AI solutions in the open market will never really be able to replicate the depth and the integration of your own tech stack? And then my second question is just wondering if there's any update on your plans to further monetize idle client cash via arrangement with Flagstone. It feels like the FCA is no longer scrutinizing retained interest. So just wondering if you see an opportunity to expand margin there. Mark FitzPatrick: Charles, thank you. Two really, really interesting questions. On the AI piece and adviser experience, et cetera, I think a few things stand out, and this is kind of what advisers who come to us and advisers have been with us a while say stands out. A is the element of the scale, capital, the resources we have to deploy. So bear in mind that we announced 18 months ago that we are deploying approximately GBP 260 million back into our business to improve our technology, use of data, broaden our client offering, focus on client segmentation, all of those kind of components. There's nobody else in the market that's putting that kind of money into the business, into any business. If anybody is putting money in it to buy businesses, it's not necessarily to improve them. And those who are buying are talking about synergies and taking costs out, not putting investment in on that side. Brand and reputation is very, very important. The technical support, just given the complexities of pensions and other things, the technical support that we have. And then also, we provide an advice guarantee for clients and for the advisers effectively saying that we guarantee the advice that they give as a part of St. James's Place. That's before you get to the element of actually the frequency with which rates change and everything else like that for IFAs is becoming incredibly difficult, which is why I think you're seeing more and more getting consolidated up and aggregated up, et cetera, and why you're seeing kind of small boutiques really struggling to kind of grow and cope with the weight. And if you're going to do technology properly, you need a checkbook. And we have a checkbook. And because of our size and scale, the big players come and talk to us. They want to know what we're doing, what we're thinking, how they can help. They're generally not coming around to the local shop. So effectively, our big offering for clients and advisers is that we give them the best of both worlds. We give a client the local long-term relationship from somebody who lives around the corner, who kids might go to the same school as your kids, but that person is backed by the power and strength and the brand and reputation of St. James's Place. And an IFA just can't do that. As for the cash piece, the -- to use your phraseology, the idle cash. The Flagstone level has continued to increase. So we have seen an uptick in terms of the number of Flagstone is GBP 5.7 billion in Flagstone. Just to remind everybody that is not included in our FUM number. We are working with Flagstone, we are pursuing other opportunities as well in terms of what we might do in terms of cash to try and get that money to be more broadly invested. We know from speaking to our advisers that while clients have money at Flagstone, there are a whole bunch of clients who have money elsewhere. So step one for us is to get some of the money elsewhere into something like a Flagstone or a company like Flagstone. And then secondly is to actually get it more easily transferred across into St. James's Place. At the moment, it's a very clunky going from a deposit account to a holding account to your own personal account to an SJP account and then to get invested. Most people give up the world to live during that journey. What we're looking to do is to streamline that so that can be a single click across from savings to investment because there I say, as we all know, I think people are over saved in the U.K. as in the U.S., and we need people to invest more and be less worried about timing the market and more focused about getting the money in the market so we can benefit from the compound effect. So there's quite a lot of time and attention focused on how do we work that better and how do we help our clients be more effective. They've worked hard to make those savings, how do we convert them into sensible investments. Thank you for those questions, Charles. Operator: We currently have no further questions. So I'll hand back over to Mark for closing remarks. Mark FitzPatrick: Thank you very much, everyone, for your questions and for your engagement. Really, really good questions today. Three key takeaways, if I could leave you from our results today. Firstly, was that 2025 was a year of strong delivery and execution for St. James's Place. We delivered strong operational and financial results while making significant strategic progress. We're delighted to have updated our shareholder returns guidance going forward a year earlier than originally anticipated, and we move forward with an increased payout ratio of 70% of the underlying cash. And thirdly, we look to the future with confidence. We've already made changes to the business. We're focused on strengthening and growing SJP and the partnership over the long term. This means that we are well positioned to capture the structural market opportunity ahead and deliver for all our stakeholders in '26 and beyond. Thank you very much, everyone, and have a great day. Thank you. Operator: This concludes today's call. Thank you all for joining. You may now disconnect your lines.
Anette Olsen: Good morning, everybody, and a heartly welcome to the fourth quarter presentation for Bonheur 2025. My name is Anette Olsen. I'm the CEO of Bonheur. Today, we will do the presentation as usual, where Richard Olav Aa, our CFO, will present to you the overall figures. And we will then move to presentations by each individual CEO for the underlying companies. We have today a new CEO that we will present to you. She has been with us for a bit of time now, but first time presenting, and that is Maren Sleire Lundby. She is the CEO of Fred. Olsen Seawind. So a heartly welcome to you, Maren, and for everybody else. We will move to the figures. Richard? Richard Olav Aa: Yes. Thank you, Anette, and also a warm welcome from me to this fourth quarter presentation. Before moving into the numbers, I think in my view, there are a lot of events this quarter, but maybe 3 things that I would like to point out that we -- one is that we continue to grow our earnings despite that significant assets like the Mid Hill windfarm and the installation vessel, Brave Tern, both have been idled the full quarter. And despite of that, the earnings continue to grow. Secondly, we have a major transaction this quarter with our long-term partner, MEAG, which we have been partnered in the renewables side for many years now, but also now are partnering with Fred. Olsen Windcarrier, which both Haakon Magne Ore and I will come back to. And thirdly, is a stellar booking performance in Cruise Lines. I think it's the best fourth quarter booking we ever had, and Samantha will come back to that in her presentation. A lot of other events as well, but I would like to highlight those 3 before we move into the numbers. So here, we have the highlights for the quarter per segment. I will be quite brief on this because this will be well covered by the CEOs. But starting from left, Renewable Energy and EBITDA fourth quarter last year of NOK 444 million, down from NOK 587 million. The main explanation for the reduction is that in fourth quarter '24, we booked NOK 160 million in insurance claim on the Mid Hill windfarm, that we don't have in the fourth quarter of '25. There are, of course, other pluses and minuses. Generation is somewhat down. We still have outages on several windfarms this quarter, but that was also the same in the fourth quarter in '24. So the main explanation on the result is the insurance. Sofie will cover the grid situation more in detail, but there are pluses and minuses there. It's very positive what we see in the U.K., that the U.K. government really takes renewable energy seriously and not at least with the new AR7 auction and also they're reinforcing the grid. Unfortunately, this comes with some negative impact on us and especially on the Mid Hill windfarm that Sofie will come back to. On the construction side, she will also cover that in much more detail. But Crystal Rig IV is soon to be finished actually this quarter. And then we have Windy Standard III, where we now have some issues related to turbine transportation, which could potentially delay the project. Wind Service, a good improvement from NOK 180 million to NOK 359 million year-over-year and despite Brave Tern being idled in the full quarter. Good operational quarter for Blue Tern and Bold Turn and also GWS had a strong finish to the year. Maybe most significantly in the quarter is the transaction with MEAG MUNICH ERGO, which is a long-term renewable investor, one of the leading in the world, which we have been partnering with on windfarm side. We also made a partnership agreement with them where they come in to FOWIC, invest EUR 150 million or approximately 24% in FOWIC. And this cooperation is intended to strengthen FOWIC's long-term strategic opportunities. For those who have followed us a while, you maybe remember 4 years back, we tried to IPO FOWIC that we had to pull away from due to the full-scale invasion of Ukraine, which is actually 4 years ago as we speak. Looking in retrospect now, I think we believe this is actually a better strategic transaction for the company. But financially, it's a total different valuation than we saw and a much better valuation than we saw in the IPO. So we're quite happy with this solution for FOWIC and also Haakon Magne Ore will come back to seeing it from more the company perspective. Cruise Lines, a quarter of continuous improvement, both on occupancy and yield. Still, the occupancy is below where it should be. But again, like I started with, and Samantha will cover more into detail, the booking numbers, which have grown 17% and really a massive change in this quarter -- in the fourth quarter, sorry, is really pointing to an improved occupancy for the future if Cruise Lines can keep up that kind of booking performance. Other investments, also an improvement. That's really related to the turnaround in NHST, which are now producing healthy margin for the media business. Per Arvid will cover more the progress on floating solar in particular, but we continue to invest both in floating solar and floating wind in 1848. Another news this quarter is that the Board proposed a dividend of NOK 7.30 per share, approximately NOK 310 million in payout. That is a healthy growth from last year dividend of NOK 6.75. The equity in the parent company after also allocating to the dividend of NOK 300 million, continues to grow and goes up year-over-year from approximately NOK 1.8 billion to approximately NOK 8.7 billion, and the equity in the parent stands with this dividend allocation at 68%. Summing up a little bit more long-term and maybe in particular, how the year ended, and this is the rolling 12 months revenues and EBITDA for the group. So the last data point is obviously the full year since it's rolling 12 months. We see on the revenue side, we end the year on a lower level than we had in '24. That is basically related to, see the bump on the Wind Service. That is due to the big contract we had with Shimizu for the Blue Wind vessel where we took in the full revenue, but also the full cost of that vessel. In addition, we sold off UWL and also the termination fee related to the big terminated contract in FOWIC also is a year-over-year event on the revenue side. Maybe more importantly is the earnings. That continued to grow year-over-year. You see the end position there with the black line. It's an improvement from '24 despite, as I started with, significant assets being out during the year and good improvements in many of the business units. We've been through this on a high level, but so just briefly going through the a little bit more detail on the revenue and EBITDA per segment in the fourth quarter. Revenue is down NOK 194 million. We see the main explanation is in renewable, and that is, again, the insurance claim on Mid Hill that was a part of the fourth quarter '24 revenues and not fourth quarter '25 revenues. Wind Service, a slight reduction in revenue. That is, again, related to termination fees, Blue Wind and UWL. So the 2 remaining vessels, we have 2 vessels that have been in operation and also GWS had a very strong finish to the year on the revenue. So good underlying revenue growth in Wind Service. Cruise Lines, flat on revenue measured in Norwegian kroner, but here we have to remember that the krona has strengthened quite a bit to the pound year-over-year. So there is a good underlying growth in pounds in Cruise Lines. And then some growth in NHST. On the EBITDA, the reduction in revenues due to the insurance claim plays also then directly into the reduction in EBITDA in renewables. While we see on Wind Service, the performance of Bold Tern, Blue Tern, and also GWS in a strong finish to the year, makes the EBITDA grow quite considerably year-over-year. Also Cruise Lines improved yield and occupancy, improved EBITDA, and also then the turnaround on NHST improved EBITDA there. So in total, EBITDA improves by NOK 73 million year-over-year. And like I started, a continuous improvement in EBITDA despite significant assets being out of operations. Then the consolidated figures, we have already explained the revenues and EBITDA. Depreciation is higher than normal this quarter. That is related to FOWIC that we have scrapped some of the equipment on the tern vessels coming out of the upgrades that we don't see a need for anymore after upgrades. Net finance is higher than normal this quarter. It was lower than normal the fourth quarter in '24. This is mainly related to unrealized gains and losses on the interest rate swaps in Fred. Olsen Renewables on the 2 joint ventures, which are project financed in the U.K. So in a way, fourth quarter '24 was abnormally low and fourth quarter this year is normally high. On taxes, we have the opposite, a normal low tax quarter that is related to Blue Tern entering the tonnage tax system, where we can reverse some of the earlier accrued taxes. So taxes year-over-year improved NOK 73 million. So all in all, also the EBITDA improved NOK 73 million, but we also see this also flowing down to an improvement in the bottom line on the net result. That takes me to my last slide, that is the group capitalization per fourth quarter '25. There are no big changes to this since the third quarter. So I will be quite brief. It's well in line with our policy, which you see on the left-hand side. Cash sitting in 100% controlled entities, close to NOK 5 billion. And the external debt we have in 100% controlled entities are mainly related to the bonds issued by Bonheur, close to NOK 3.1 billion. So where we control things 100%, we are net cash positive by close to NOK 1.7 billion. Where we have significant debt is, again, on the 2 joint ventures in the U.K. with [ TRL ] and Hvitsten, where the external debt is close to NOK 4 billion. Wind Service, which is GWS and where we don't control 100% GWS and Blue Tern, cash and debt net each other out and the same with NHST, which has a cash position slightly above the debt. So I think I will end there, just saying that the balance sheet is strong and hand it back to you, Anette. Anette Olsen: Thank you, Richard. First out is Sofie Olsen Jebsen, CEO of Fred. Olsen Renewables. Sofie Olsen Jebsen: Thank you. Hello, everyone. So summing up this quarter for Fred. Olsen Renewables, our production was 8% lower than the same quarter last year. I'll come back to the reasons for that. One point to highlight is that Mid Hill had an outage both in this quarter and in same quarter last year. But last year, that was compensated by insurance. For our construction projects, Crystal Rig I has estimated full production in March. And on Windy Standard III, the second construction project, the turbine component transportation is potentially delayed. You know this overview of our business model, and we are working to mature our projects towards the operation phase. So no big changes here from previous quarters. Moving on then to give a bit of a backdrop of the market. We have seen this quarter that the European power prices have risen due to an increasing demand. And that, combined with a weakened renewable output and then an increased need for fossil-fired generation has led to the higher prices that we see. There has been winter, so the demand has increased as normal. Additionally, we see that the Nordic power prices are the lowest in Europe, even though they increased significantly towards year-end. And then we see that continental market prices are indeed supported by fossil-fired generation that has increased. It also remains to comment that the prices are sensitive to hydrology, temperature, and changing gas prices. Moving on to production. That was 8% lower, as mentioned. We have this quarter seen external grid outages and constraints that I will come more on to. But in short, there is an ongoing grid upgrade program in the U.K. That is a good thing for the industry as a whole. Unfortunately, that is affecting our windfarm Mid Hill negatively, which has an outage this quarter, unfortunately. It also had an outage the same quarter last year, but that was due to a transformer failure at the substation and hence compensated by insurance. We're also seeing grid export constraints at Rothes and Rothes II. In addition to these external grid events, we have had lower production in Sweden at Hogaliden and Faboliden due to grid export limits, which are also then slightly external, but also icing and blade issues where we estimate that the blade repairs will be completed by Q3. In Norway, at Lista, we have partially curtailed turbines because we see there has been some fatigue-related broken bolts in the foundations, which we are -- have been investigating and are scheduling out a repair program for, which will be completed by Q4. I think it's worth mentioning that these foundations at Lista are quite solid. They are anchored down in the bare rocks. And when the bolts have been broken there, it has -- it is due to some fatigue-related reasons. On a more positive note, our windfarm, Crystal Rig I in Scotland has seen an increased availability on the recovery program we have there, which is the windfarm we have with very early generation design turbines. So moving on then to go a bit more into the grid outages and constraints, which we thought it was interesting to give you some more flavor of this quarter. Because the Mid Hill grid outage, which is current, is scheduled by SSE, so not controlled by us, to last until April '26. Now it's -- that was the original schedule. We now see an expected reenergization in July '26, which reflects weather impacts, supplier delays, and also supplier quality-related issues that SSE have experienced. There is also a second outage planned by SSE from November to April, so November 26 to April 27. There are mitigating actions underway, which we are working very hard on at the moment, and we expect a more firmer schedule to be updated by this mid-year. On Rothes I and Rothes II, we have seen grid constraints. They have been constrained since December '25 with then export limited at 50%, i.e., 25 megawatts per site because there has been a current transformer failure at the substation. In order to complete the repair there, there will be a 0 outage period from February to March so that SSE can perform all the job they need to do. After this, we expect all of the 3 sites above actually to return to full capacity once the outages are finished. Moving on then to our construction projects. Crystal Rig IV near Edinburgh in Scotland is estimating full production in Q1. I would also like to update on Windy Standard III, which is more in the southwest of Scotland, where we have seen new regulations since the beginning of this year that has significantly reduced the capacity for the Scottish police escort for abnormal load transport, which is required to transport blades, et cetera. We have now updated information on the availability of police resources, which result in a potential 4 to 6 months delay of these turbine component transportation. We are investigating mitigating actions and the impact that this may have on cost and schedule is still to be assessed. So this is the latest information I can give you as of now, and it also marks the end of my presentation. Thank you. Anette Olsen: Thank you, Sofie. And then next is Haakon Magne Ore, Fred. Olsen Windcarrier. Haakon Magne Ore: Good morning, everyone. If you turn over to the highlights for the quarter, I'm pleased to also say this quarter that fourth quarter was yet another quarter with solid operations. I think we have said that for the year, but I think it's good illustrated by that we achieved more than 99% uptime on our vessels throughout the full year. Further, as Richard mentioned, MEAG -- late December, MEAG announced an investment in FOWIC of EUR 150 million. I'm very pleased to also say that that formally closed in February. On the market side, I think we see -- continue to see the same trend as we have spoken about for the last 1 to 2 years, where we see that the underlying turmoil in the value chain and the industry is impacting the volatility of demand, especially towards the end of this decade. If we then turn over to the quarter itself, what the vessel has done. Bold Tern continued with good performance on the monopile drilling campaign of France. Brave Tern, there we used the period coming out of yard to prepare and mobilize for the Thor project. This is the first project for us with the new 14, 15-megawatt generation turbine. The vessel went on hire on Tuesday evening, and I think we are close to being fully loaded already for the first round. Blue Tern, it was on a major O&M campaign with Vestas for the quarter. This was the third consecutive major O&M campaign for the vessel this year. So I think it's very good that it proves its value in the higher-end O&M market. And also to illustrate the performance for the 109 days contract we had with Vestas, we actually had 0 downtime. I think that is one of the first time in the company history that we are able to deliver such a long contract without having any -- an hour of downtime. If we go more into the quarter, as I said, solid performance for the quarter. We were very close to 100% uptime, as Richard mentioned, both Brave Tern did not work. It was mobilizing and preparing for the Thor project. And I think I just added a picture in the slide to illustrate what we have done. You see now the new blade rack, which is out of the vessel. I think a little bit also illustrating the size of the turbines we are now starting to handle in addition to it being a nice picture. For the year, we, as I said, reported around above 99% uptime when we are on contract. And we had a quite significant amount of yard time. So more or less on average one vessel out every quarter due to yard, which hopefully now comes to an end in this year. I think we have touched upon it a couple of times, MEAG investing EUR 150 million in FOWIC. They will get around 24% ownership. It builds on an established relationship. But I think as we see it, I think it's a very good transaction, both for Bonheur and also for FOWIC. FOWIC was debt-free before this transaction. With the transaction, we further strengthened our position to deliver on our target to remain a leading payer long-term. So we are in a position to develop the company when we find the opportunity in the market. On the accounting side and the financials, we ended the quarter with an EBITDA of EUR 28 million, which led to an annual EBITDA of EUR 137 million. That was actually the fifth year with increasing EBITDA and a new record for the company. If you go to my last slide on the backlog. At the end of the year, the backlog was at EUR 391 million. I think that the trend we have seen for the last year with major new contract activity being slightly on the lower side than what we normally have seen in general for the industry continued also this quarter. On the positive side, the early announced reservation for the Gennaker project in 2028 turned into a firm charter party and is now part of the backlog. On the market side, I think 2026 will be the most busiest year on record for the industry. The number of turbines, which is scheduled to be installed, is significantly above what we have seen in the last 3 years. So activity-wise, the medium-term is high. But as we have mentioned, we see that the turmoil in the value chain that started back in '22, '23, it impacts the timing of demand. This is not new. This trend has been there for some time, but we see that it impacts the timing of demand, especially when we look into the end of this decade due to the long lead time in the industry. So I think that concludes my remarks. Anette Olsen: Thank you, Haakon Magne. Samantha Stimpson, Fred. Olsen Cruise Lines. Welcome. Samantha Stimpson: Good morning. So if I go through the highlights first. So overall, a good performance in Cruise Lines for quarter 4 with increases being seen in utilization, yield, as well as continuing our focus on cost controls. We also continue to see improvement in customer satisfaction, and I'm pleased to say forward bookings are looking strong. So if I take you through that in a little bit more detail. So we've been able to increase yield per passenger per day by 3%. Our utilization also increased by 3%, which gave us an overall, with the cost control measures, EBITDA impact of a positive NOK 14 million year-over-year. When we look at customer satisfaction, our customer Net Promoter Score continued to increase in the quarter with a positive 10-point improvement, demonstrating that we continue to listen to the guests and improve our customer proposition, supporting our retention going forward. And again, pleased to say as per Richard's update this morning, that forward bookings are looking strong. In addition to that, quarter 4 bookings actually performed very well for late departures in the Q4 2025 period. And sales for '26 and '27 are looking very promising. And if we look at our final slide, it just gives you a bit of an overview of the sailings that we had as we went through Q4. So Borealis, you can see here, 7 sailings in that period. She had fewer sailings than Bolette and Balmoral, predominantly due to her dry dock that happened during the Q4 period. And then what you can see is Balmoral had more sailings in that period, demonstrating, as I mentioned in the previous update, that we are continuing to focus on increasing the number of sailings, therefore, having shorter sailings in each of the quarters, enabling us to carry more passengers in each of the quarters. And that's the end of my update. Thank you. Anette Olsen: Thank you, Samantha. And Maren will now cover the Fred. Olsen Seawind. Maren Lundby: Thank you. So good morning, everyone. My name is Maren. I stepped into the role as CEO of Fred. Olsen Seawind in December last year. So a few highlights from last quarter from our side. We have 2 strong projects in attractive markets. We have diligent and flexible development strategies in our projects. And the strong results from AR7 announced earlier this year confirms the policy supports in the U.K. as well as our strategic direction set out for our U.K. projects. For an overview of our portfolio, we'll -- we can see Codling Wind Park, a bottom fixed project in Ireland together with EdF. We have secured site exclusivity, grid access, and a CfD contract for 1,300 megawatts for 20 years. In late '24, we submitted the consent application, and we are actively engaging with authorities and stakeholders to progress the consent determination. The project's focus is on maturing supply chain and business case towards FID following the consent award. In Scotland, we have a 1,000-megawatt floating project together with Vattenfall, Muir Mhor. There, we have secured site exclusivity, onshore consent, land areas, and grid access. So the remaining milestone is the offshore consent, which we expect to come in later this year. So the project is focused on securing the final consent, obviously, as well as progressing towards a CfD auction. So if we zoom in a bit to the project in Ireland, where the consent application process is ongoing and followed very closely by the team. We are also in the process of submitting data under the further information request that we received from the Irish government last year. As you may recall, this has postponed the expected consent determination somewhat. The Irish government, however, remains fully committed to its offshore wind ambitions as was illustrated by the successful Tonn Nua auction in late '25. Codling is still a key project to reach the government's offshore wind ambitions. Within the project, we are preparing for procurement processes on all the major scopes on the back of the expected consent determination. Moving to Scotland and my final slide. We have signed land option agreements last year for both the landfall and onshore substation area. As I mentioned, the onshore consent was awarded and so was grid was secured last year and also advanced with the radial connection. We have potential to improve the connection dates further. And with all this, together with the expected offshore consent to come this year, we will be in position to bid into a CfD auction when we receive the final consent. We remain focused on being the first mover or one of the first movers in Scotland for floating offshore wind. And as I mentioned, the strong results from AR7 confirms the U.K. government support towards the industry, its ambitions towards clean energy 2030 targets as well as confirming that strategic direction that we have set out for the project. Thank you. Anette Olsen: Good. Per Arvid Holth, Fred. Olsen 1848. Per Arvid Holth: Thank you, Anette. So in my previous presentation in the last quarter, I presented the numbers from the International Energy Agency, showing that solar PV is the fastest-growing source of renewable energy and will be the largest source of renewable energy by 2028. And in Fred. Olsen 1848, we strongly believe that floating solar will be part of supporting that growth. So in this presentation, I thought I'd go one step deeper and focusing on shore lines. It's basically inland and nearshore FPV that is we look at and speak about why we in 1848 are targeting the shore lines and distributed PV applications. As you can see, it is expected to have a solid contribution to the growth for island communities and ports. So nearshore FPV is something that we have been convinced about in 1848, and it's also a very strong driver behind the design of our floating solar PV technology, BRIZO. Nevertheless, we see that nearshore solar is lagging a bit behind inland, which has already reached utility scale developments. But we do see movements now in the markets across Southeast Asia, in the Pacific, in the Indian Ocean, and in the Korean. So our focus has really been on where do we enter nearshore solar with our technology. And here, island communities and ports powered by fuel oil stand out as a clear case. So if we move to the next slide, that is because there are some clear pain points for these applications that a nearshore FPV plant can solve. One is a high power price, several times higher usually on islands than on -- than the global average, being dependent on importing fuel oil brings volatility to your electricity prices. Energy security is important in most regions these days and relying on imported energy is reducing energy security. Of course, it's not sustainable. And if you want to grow renewables along the shore, then scarcity of land can be an issue. So for these pain points, a technology like BRIZO brings relief and solving these pain points. And that is through cost savings, floating solar is cost competitive to fuel oil. It solves land and carbon footprint challenges. That is every kilowatt hour produced by floating solar displaces a kilowatt hour produced by fuel. And it also resolves the footprint challenges, which can be onshore. Every kilowatt hour produced by a local source is more secure than one that depends on imports. So it strengthens energy security. And another benefit for nearshore PV is it's scalable at speed. So a technology like BRIZO comes in modular -- 3-megawatt modular parts. So you can start with 3 megawatt, increase with 12, and so on and so on as the demand increases. So as a summary, entering the nearshore market, we see that the displacement of electricity generated by fuel oil is a natural starting point. And beyond that, we also see clear scaling applications for floating PV, supporting industrial scale developments or even utility. So a bit of a sneak pick on how we look at nearshore to finalize the CEO presentation at this time. Thank you. Anette Olsen: Very good. We will now open up for questions. Operator: [Operator Instructions] We are now going to proceed with our first question. And the questions come from the line of Daniel Haugland from ABG Sundal Collier. Daniel Vårdal Haugland: I have 3 questions. I'll start on FOWIC and the MEAG deal. It's a very interesting transaction, obviously. So I was wondering, can you give any more commentary on what is kind of the strategic rationale or maybe your plans here? You kind of commented a little bit about it, but I see that the deal includes some primary components. So do you have any kind of plans to do with the proceeds, et cetera? So I'll just start there. Richard Olav Aa: No. In general, I think the financial details is disclosed in details in the presentation on what is secondary and what is primary share issues. So I think you have that details in the press release itself. When it comes to the strategic, what -- how we are going to develop the company, then I have to refer to the Bonheur guiding policy where we do not disclose any thoughts on major investments or future before it potentially is done. Anette Olsen: It's nice, though, to see that MEAG believes in us and wants to invest in the company. Richard Olav Aa: Absolutely. And as I said, it puts the company in a very good position. It was in a very good position being debt-free. But now with this added flexibility, we are in a position to rapidly take advantage of opportunities should they arise. Daniel Vårdal Haugland: Okay. Then I have a question on Cruise. I think you -- it maybe a few quarters ago, but I think you indicated that Bolette was also going to dry dock in Q4. So that doesn't seem like it happened. So any commentary on whether there's kind of a planned dry dock for Bolette now, let's say, in the next couple of quarters or? Samantha Stimpson: So I think I heard all of your question. So in quarter 4, Borealis had her dry dock and quarter 1, Bolette had her. So quarter 1 of this year, Bolette had her dry dock, so it was complete. You're right, the original plans 2 years ago were to do both vessels in Q4, but I made that change the year before last to separate the dry docks one in each quarter. Daniel Vårdal Haugland: Yes. That make sense. And for the -- but kind of the duration is kind of approximately the same, I guess? Samantha Stimpson: What, sorry? Richard Olav Aa: Duration. Anette Olsen: Duration. Daniel Vårdal Haugland: So a couple weeks, I guess? Samantha Stimpson: Yes. So the duration of the dry docks for both vessels, so for Borealis and Bolette was around sort of 2.5 weeks for each of the dry docks. Daniel Vårdal Haugland: Okay. Super. And then just last question. So my question is basically on renewable energy. So are you seeing any kind of external interest in your onshore portfolio? And the reason I'm asking is obviously that Orsted sold its European onshore portfolio to CIP this quarter and it seems like they are getting a good price. So are you guys kind of also open to do anything structurally in onshore? Not obviously selling the entire business, but let's say, divesting parts of the portfolio to further develop new projects or something like that if an opportunity arise? Sofie Olsen Jebsen: Thank you for your question. I think what I can comment on there is that we are very much focusing on progressing a solid and healthy portfolio of projects in the markets that we are in. So that is our main focus at the moment. And we will let you know about any other developments if and when they occur. Operator: We are now going to proceed with our next question. And the questions come from the line of Lars Christensen from Fearnley. Lars Christensen: I have a question in relation to the Fred. Olsen Cruise. Is there any planning of future fleet here in relation to that? You're starting to have a pretty old fleet in the Cruise segment. Is it possible to get any color on that, please? Anette Olsen: Future possibilities. Samantha Stimpson: So under Bonheur guidance, I can't sort of speculate on anything. What I can say is, in '22, we welcomed 2 vessels into the fleet, larger vessels, which we were very excited to receive. And we continue to monitor activity in the market. And yes, I think we're in a good position. We've still got opportunity to continue to focus on utilization and occupancy improvements with the current fleet, but we'll continue to monitor the market and our performance. Lars Christensen: Okay. And then I also have one question in relation to Codling. Is it possible to get any color on how much you have invested so far into the project? Sofie Olsen Jebsen: Thank you. The question was how much we have invested so far into Codling project? Yes. I believe the number is NOK 800 million. Richard Olav Aa: Yes, it's disclosed on Page 18 in the report, both for Codling and Muir Mhor. Yes. Sofie Olsen Jebsen: Yes. Operator: [Operator Instructions] We have no further questions at this time. So I'll hand back to you for closing remarks. Anette Olsen: Well, thank you very much, everybody. It seems that the presentations this time are fairly clear and understood. So thank you for joining us.
Ignacio Cuenca Arambarri: Good morning, ladies and gentlemen. First, we would like to extend a warm welcome to all of you who have joined us today for our 2025 fiscal year results presentation. As is customary, we will follow the traditional structure of our events. We are going to begin with an overview of the results and the key developments during the period. The presentation and the Q&A part will be delivered by the top executive team joining us today: Mr. Ignacio Galan, Executive Chairman; Mr. Pedro Azagra, CEO; and finally, Mr. Pepe Sainz, CFO. After the presentation, we'll move on to the Q&A session. I would like to remind you that we will only be taking questions submitted through our website. Please send your questions exclusively via www.iberdrola.com. Finally, we expect today's event to last no more than 60 minutes. Should any questions remain unanswered, the IR team will, as always, remain fully at your disposal. We hope that this presentation will be useful and informative for all of you. And now without further ado, I would like to hand the floor over to Mr. Ignacio Galan. Thank you once again. Please, Mr. Galan. Jose Sanchez Galán: Thank you, Ignacio. Good morning, everyone, and thank you very much for joining this conference call. In 2025, reported net profit reached EUR 6,285 million, up by 12%, even excluding EUR 464 million noncash charges to adjust the value of our renewable pipeline in different countries. Excluding those charges, net profit will reach EUR 6,749 million. Adjusted net profit, which, as you know, exclude the impact of capital gains increased by 10.3% to EUR 6,231 million above our guidance. Adjusted EBITDA rose EUR 15,684 million, up 3%, with 21% increase in networks, reflecting our high regulated asset base in improving framework in our core geographies, partially offset by nonrecurring impact of ancillary service costs in our power business due to the reinforced system operation in Iberia as well as lower prices. Total investment reached EUR 14.460 billion with 2/3 allocated to transmission and distribution networks, driving 12% growth in our regulated asset base in just 1 year to almost EUR 51 billion. In Power & Customers, we added 2.7 new gigawatts in operation, and we have 4.7 gigawatts more under construction that will start producing next quarters. This strong expansion was combined with a further improvement in efficiency, thanks to an increase of only 1% in our current recurring net operating expenses, well below gross margin. And financial strength with net debt down EUR 1.5 billion, driven by an 8.2% increase in our operating cash flow, up to EUR 12.811 billion. This positive impacts of our asset rotation and partnerships plan and the capital increase last year, improving our FFO and adjusted net debt ratio to 25.5%, comfortably in the range of BBB+ rating. Finally, yesterday, the Board decided to propose to the General Meeting a total dividend of EUR 0.68 per share. As you can see, 2025 has been a transformational year for Iberdrola, thanks to the implementation of our strategy. In the last 12 months, we have a remarkable progress in all the pillars of the plan we presented a year ago. Reinforcing our focus in networks infrastructure with transmission as new growth vector in the U.K., where we have secured EUR 14 billion of TOTEX for the next 5 years under RIIO-T3, including [ submarine ] interconnection like Eastern Green Link 1. In the U.S., after the commissioning the NECEC interconnection between Massachusetts and Canada and now also in Australia, where we were recently awarded EUR 1.2 billion line in the state of Victoria as we expect it to complete by 2030. On top of that, we have also continued increasing our distribution investment and progressing in the definition of new frameworks for the coming years in all our countries, mainly in Brazil, where the regulator has already approved the renewal of our distribution concession for 30 years, more providing us visibility up to 2060. In addition to organic investment in the asset rotation transaction completed in 2025, have also confirmed our strategic focus on networks, mainly due to the acquisition of Electricity North West now fully integrated and the purchase of Avangrid and Neoenergia minorities. This record activity is also expanding our contribution to social development and job creation across our geographies, with 4,500 new hires in 2025 and a total workforce of 45,400. EUR 13.2 billion of purchase to thousands of companies that support 0.5 million jobs across our supply chains, and tax contribution of EUR 10.4 billion, and EUR 425 million allocated to research and development, reaffirming our position as leading private utility worldwide in innovation. Thanks to our performance in 2025, we are facing 2026 at the beginning of new growth phase. But before that, and given that we are from Bilbao, let me share with you the few figures that show our transformation over the last 25 years. Since 2001, we have multiplied our total asset base by 8x to EUR 161 billion, driven by the expansion of regulated networks asset base to EUR 51 billion, 10x more than 2001. Our generation capacity from 16 to almost 60 gigawatts today. And our storage capacity was multiplied over 3x, thanks to the investment made in existing hydro turbines to make them reversible, new pump storage facility, like Tamega, and battery project across the world. On top of that, our international expansion has fully transformed Iberdrola from utility based in Spain with just 1% of our activity in other markets in 2000 to a global utility with 65% of our business in the U.K., U.S., Germany, France, Brazil and Australia. As a result, we are reaching our 125th anniversary, consolidated as the largest utility in Europe and 1 of the 2 largest worldwide with a market cap above EUR 135 billion, 12x more than 2001, even after paying EUR 47 billion in dividends across the last 25 years. And you can be sure that the key pillars of this growth story were our vision, our strategic [ coherence ], our ability to anticipate the structural shift in the sector across our access to financial resources and supply chains and our track record of execution. Are also all of them, the best guarantee to sustain growth in the coming years. We are demonstrating we are a company that always we fulfill our promises, even we overfulfill our promises. We overdeliver what we promised. It's a bit different with others, with they are promising, they are not delivering as much as they are promising traditionally. Moving to 2025 result, adjusted EBITDA reached EUR 15 million -- EUR 15.684 billion with 2/3 coming from international business. The United Kingdom contributed with EUR 3,306 million and U.S. EUR 2,662 million; Brazil, close to EUR 3 billion; and the EBITDA from other European countries and Australia reached EUR 791 million; with Iberia contributing the remaining EUR 6 billion. As a result, 81% of our group EBITDA is already coming from A-rate countries. By businesses, Networks adjusted EBITDA grew by 21%, thanks to higher regulated asset base in all countries, new tariffs in the U.S. and Brazil and the consolidation of Electricity North West, while renewable power and customer EBITDA fell by 10% as a result of lower market prices and the impact of the so-called reinforced operation implemented by Red Electrica in Spain, partially offset by the addition of 2.7 gigawatts of new installed capacity worldwide. Total investment reached EUR 14,460 million due to the acceleration of organic growth and the acquisition of Neoenergia minorities in Brazil. By countries, investment increased by 34% in the U.K., driven by 47% rise in networks due to the new transmission project and the ongoing investment of Scottish distribution Manweb and Electricity North West. U.K. investment in power also increased by 21%, mainly in East Anglia THREE offshore wind farm. In the U.S., investment increased by 2% as the growth in transmission and distribution more than offset the slightly lower investment in power after the completion of projects under construction. Combined, U.S. and U.K. contributed 60% of total investment, with 70% allocated to Iberia, 14% up to Brazil and 9% to other countries, mainly Australia, where investment more than doubled year-on-year, offsetting the decrease in Germany and France as offshore projects are put in service. By businesses, Networks reached EUR 9 billion, almost 2/3 of the total, with 13% growth in organic investment, mainly in U.K. and Spain. And the U.S. and Brazil, where the increase in distribution has more than offset the completion of transmission project. Our regulated asset base increased by 3% to EUR 51 billion with transmission already represented today 25% of our total network assets. And this pattern will continue in the next years, reflecting the progress made in our regulatory frameworks and the construction of new projects. In the United Kingdom, Ofgem published its Final Determination for RIIO-T3 with almost EUR 14 billion of TOTEX for Scottish Power Transmission up to 2031. This will imply multiplying by 4 the investment made in the previous 5 years, securing long-term growth and fully transforming the profile of Scottish Power. In the United States, Avangrid benefiting from higher rates and the rising contribution to result of new transmission project that will accelerate 2026, thanks to the commissioning of our interconnection line between Canada and Massachusetts, adding EUR 125 million per annum to group EBITDA. In Spain, the new remuneration methodology for the period '26 to '31 has already been published. While in Brazil, the regulator has approved the renewal of our distribution concession for 30 years up to 2060, and Neoenergia has completed this transmission project with a total contribution of EUR 250 million to EBITDA per year. Finally, Iberdrola Australia was awarded as a transmission line in the state of Victoria with an investment of EUR 1.2 billion up to 2030. They will increase significantly our footprint and result in the country, and we continue developing a pipeline of additional transmission projects in another different states. In Power & Customer, we invested EUR 5,260 million, well spread across the U.K. and the U.S., Iberia and other countries. By technologies, we invested EUR 1.7 billion in onshore wind, EUR 1.4 billion in offshore wind, EUR 1 billion in solar and EUR 1 billion in storage and retail. We have already put in service 2,710 megawatts of onshore and offshore wind, solar PV and storage. And we have 4,679 megawatts under construction as well a pipeline of more than 9,000 megawatts ready for 2028, more than enough, of course, to secure all the new capacity expected in our plan. Regarding routes to the market, we have also sold all our production for 2026 with an attractive mix of regulated contracts with an average duration of 14 years. Retail customers and long-term PPAs, which already represent 2/3 of our total energy sales and will continue increasing, thanks to the ongoing signature of new contracts. As a result, we have been recently recognized as the leading seller of PPAs in Europe and 1 of the 3 largest worldwide. Operating cash flow was up by 8.2% to EUR 12,811 million, reflecting the strong performance of Networks and the stable contribution from Power. This rise in cash generation up to EUR 1 billion in just 1 year, together with asset rotation and partnership and the capital increase of last summer has allowed us to reduce our adjusted net debt by EUR 1.5 billion to EUR 50.2 billion even after the consolidation of Electricity North West and the acquisition of minorities in the U.S. and Brazil, improving even more our ratios with FFO to adjusted net debt reaching 25.5% and adjusted net debt to EBITDA down to 3x. Following the strong operational and financial performance, yesterday, the Board decided to propose to the General Shareholders Meeting a total dividend of EUR 0.68 per share, adding EUR 0.427 to EUR 0.253 already paid 3 weeks ago as interim dividend. These figures represent a year-on-year growth of 6.3% in dividend per share and 12% in total dividend payments, up to EUR 4.5 billion, taking into account the impact of a capital increase. I will now hand it over to our CFO, who will present the group financial results in further detail. Thank you. Jose Armada: Thank you, Chairman, and good morning to everybody. '25 adjusted net profit reached EUR 6,231 million, representing a 10.3% increase compared to the EUR 5,651 million in '24 adjusted net profit. Reported net profit was 12% up to EUR 6,285 million. 2025 net profit would have reached EUR 6.7 billion if capital gains had not been more than applied to adjustments in our Power division and as the Chairman has said, mainly in renewables. As the main perimeter change, I have to say, ENW has been fully consolidated since March. Another thing to note for you is that the Mexico P&L and debt is included here for illustrative purposes because in our reported accounts, it is classified as an asset held for sale due to the expected closing of the transaction very soon. FX evolution has had a minor effect on results, thanks to our FX hedging policy, with the dollar 4%, the pound 1.1% and the real 7.6%, all of them depreciated against the euro. Our EUR 6,231 million adjusted net profit is beating our adjusted -- our guidance and is close to the EUR 6,285 million reported net profit. In this slide, you can see the details of the adjustments from '25 reported net profit to adjusted net profit. The EUR 379 million exclusion of U.K. Smart Meters capital gain in Q3 is more than compensated with the EUR 464 million in adjustments in our Power division, which are write-offs in our renewable pipeline. And the network cost recognition one-off in the U.S., a noncash item, which is taken out from our adjusted net profit, is also partially compensated with the inclusion of the cap allowance in the U.K. as it is a cash income. Adjusted revenues rose 0.6%, driven by the Network business, while procurements fell 0.7%, driving up adjusted gross margin by 1.8% to EUR 24.3 billion. And here, we are excluding the cost recognition in the U.S. Networks. Excluding capital gains from asset rotation accounted at the operating income and one-off efficiencies, '25 net operating expenses improved 4.1%, affected by lower storm costs that also diminished gross margin. Adjusted net personnel expenses rose 1.9% due to a higher number of employees, as the Chairman has commented. Adjusted external services declined by 5.2%, mainly due to the EUR 350 million lower storm cost and adjusted other operating income increased by 10% compared to '24 due to the indemnities of past year costs, partially offset by the EUR 121 million negative impact of the East Anglia sale that -- it is compensated at the financial results. Excluding mentioned storm-related impacts and other adjustments, net operating expenses on a recurring terms grew 1%. Analyzing the results of the different businesses and starting by Networks, its adjusted EBITDA grew 21% to EUR 7,794 million, mainly driven by the strong performance of the U.K. and the U.S. and a significant last quarter improvement in Spain. Transmission EBITDA is up 28% to EUR 1.1 billion and distribution EBITDA 19% to EUR 6.7 billion. In the U.S., the EBITDA reached $2,491 million, 73% more with higher rates in distribution and better contribution from transmission and positively impact since Q1 by the decision from the New York regulator that allows to register a regulatory asset under IFRS regarding past costs of $551 million. Taking out this effect, EBITDA is still up a remarkable 35% on an adjusted basis to $1,940 million. In the U.K., EBITDA increased 28.7% to GBP 1,595 million, including 10 months positive ENW contribution and the growing contribution from transmission. In Brazil, EBITDA was up 13.8% to BRL 13,837 million, thanks to higher revenues in distribution due to demand inflation and increase in rate reviews over a higher asset base. Transmission contributed positively with BRL 1.6 billion EBITDA, 56% up or BRL 583 million more than in '24 as all the lines have been completed. In Spain, EBITDA grew by 31% to BRL 2,015 million. The result was positively impacted by the recognition in Q4 of incentives related to '24 and '25. The remuneration increase for the '24, '25 period, 6.58% and from the positive effects in Q4 '24 of a negative one-off in efficiency costs. '25 Power EBITDA reached EUR 7.9 billion versus EUR 8.8 billion in '24, both excluding capital gains from asset rotation, which are EUR 1.3 billion lower in '25 as higher production due to 270 million -- 2,700 megawatts additional installed capacity did not compensate lower volumes and prices. Emission-free generation reached 85%. In Iberia, EBITDA was EUR 3,921 million, 16.8% down with higher production more than offset by lower margin and sales, explaining part of the year-on-year variation and higher ancillary services costs, lower court rulings and higher levies despite the termination of the 1.2% revenue tax explaining the remaining decrease. Hydro reserves have reached an all-time record of more than 9 terawatt hours as of today. In the U.S., EBITDA grew 0.9%, reaching $1,069 million, supported by higher prices and new solar capacity. This growth came despite the fact that '24 was positively impacted by the Arctic Blast storm one-off and by the sale of Kitty Hawkin the fourth quarter of last year. In the U.K., EBITDA grew 0.4% to GBP 1,536 million, considering the GBP 324 million capital gain from the U.S. -- from the U.K. Smart Meters divestments in Q3. But adjusted EBITDA, taking out this capital gain, was down 20.8% to GBP 1,212 million, with lower prices and lower volumes in renewables and lower EBITDA from the supply business, driven by lower volumes. Net operating expenses included GBP 108 million negative one-off impact linked to the East Anglia THREE sale, which is more than compensated at the net financial results. In the rest of the world, EBITDA grew 10.4% to EUR 796 million due to the higher contribution from offshore wind farms, St. Brieuc in France and Baltic Eagle in Germany, but with lower contribution from supply business in Portugal, due to a EUR 30 million negative impact of the ancillary services costs as a consequence of the blackout. In Brazil, EBITDA fell 2.7% to BRL 1,283 million as a consequence of lower production and lower margins, but with a positive impact of BRL 297 million linked to the negative adjustment recorded in Q4 '24 following the classification of Baixo Iguaçu as held for sale. Finally, in Mexico, EBITDA reached USD 632 million, decreasing 71%, with lower reported contribution due to the assets sold on February 26 last year and the higher contribution from the retained business, tanks -- sorry, the sold in February 25 last year and with higher contribution from the retained business, thanks to higher availability and demand. As mentioned at the beginning, the performance of the EBITDA from Mexico is for illustrative purposes, as on the official account is classified as held for sale, so the results are on the discontinued operation paragraphs before the net profit line. Adjusted depreciation and amortization and provisions with EUR 524 million of adjustments in '25 and EUR 1,500 million in '24, mainly in the Power business, increased by 3% to EUR 5,793 million, driven by a higher asset base despite lower bad debt provisions. Adjusted EBIT reached EUR 9.9 billion and grew 3.1% in line with adjusted EBITDA. Net financial costs increased by EUR 288 million due to minus EUR 1,863 million, mainly driven by EUR 263 million higher debt-related costs, due to EUR 6.2 billion higher average net debt, with an impact of EUR 357 million, while interest-related costs and FX improved by EUR 94 million due to FX depreciation, especially of the real and the dollar. Derivatives had a positive contribution of EUR 164 million, mainly due to the East Anglia THREE derivative contribution, while the rest had a negative impact, mainly due to the Mexico hedges compensated at the net profit level in the tax line, lower capitalized interest and other items. Cost of debt improved 6 basis points to 4.75%, mainly thanks to lower short-term interest rates, especially in the euro, despite higher interest rates in Brazil. Excluding the real, cost of debt improved 15 basis points to 3.55%. '25 net debt, as the Chairman has said, is EUR 1.5 billion lower than the EUR 51.7 billion reported in the '24 year-end, reaching EUR 50.2 billion. This positive evolution was driven by the EUR 12.8 billion FFO generation, plus the EUR 4.6 billion as a result of asset rotation and East Anglia THREE debt deconsolidation and the EUR 5 billion capital increase, more than covering the EUR 12.6 billion CapEx plus the EUR 1.9 billion of Neoenergia PREVI acquisition and the EUR 4.6 billion dividend as well as a EUR 2.2 billion ENW net debt consolidation. As a consequence, our credit ratios are strong for our BBB/Baa1 rating. Our adjusted net debt-to-EBITDA was 3.02x. The FFO adjusted net debt reached 25.5%, and our adjusted leverage ratio was 43.8%, 1.6 percentage points lower than at the end of '24. Regarding our financing strategy, we delivered a year of unprecedented execution awarded by the IFR magazine as the best issuer in the world in '25. In addition to the capital increase, Iberdrola signed EUR 16.7 billion of new financing under highly competitive conditions in different markets. We placed EUR 4.9 billion in bonds, achieving several milestones. Our first green senior under the EU Green Bond standards and ICMA standards, a nondilutive green convertible with the high savings versus a senior structure ever in Iberdrola. Our lowest coupon among all hybrids issued in the euro market in '25 and the tightest spreads and Neoenergia and NYSEG. In structured finance, we secured EUR 4.5 billion, driven by the East Anglia THREE project financed by 23 banks and the Danish Export Credit Agency. We also reinforced our liquidity position with EUR 3.8 billion in credit lines, including EUR 2.5 billion sustainable syndicated facility for the holding and Avangrid, which has now become a benchmark in terms of pricing. In multilateral and development financing, we added EUR 2.5 billion, including green funding from the EIB, supporting next-generation investment and the first green loan granted by the National Wealth Fund to a European company to finance projects in the U.K. '25 adjusted net profit grew 10% to EUR 6,231 million, while reported net profit rose 12% to EUR 6,285 million. Let me stress again that the net profit would have had exceeded EUR 6.7 billion if '25 capital gains had not been more than applied to adjustments in our Power division. Now the Chairman will conclude the presentation. Thank you very much. Jose Sanchez Galán: Thank you, Pepe. To conclude, 2025 was again a year with a strong operational and financial performance. But above all, last year confirmed the transformational impact of our strategic plan based in network infrastructure as a key driver. In 2025, our RAB increased by 12% with attractive returns and visibility, thanks to our presence in countries like United States and U.K. And we expect to continue growing in the coming years, both in distribution due to integration of Electricity North West in the U.K. and increasing investment needs in all geographies and in transmission, mainly in U.K. and U.S. and Australia. In Power & Customers, our selective approach focusing our core markets and our balanced mix of technologies allow us to install 2.7 new gigawatts in 2025 with 4.7 gigawatt more under construction and 9 gigawatts of projects ready for 2028. In addition, 100% of our energy is already sold for 2026, mainly through long-term PPAs and regulated contracts. And we have continued expanding our unique portfolio of storage, which include hydro pumped facilities in operation capable of delivering up to 10,200 gigawatts per annum and a pipeline of battery and hydro pumped storage projects up to 7,500 gigawatts hour per annum. In 2025, we have also confirmed our commitment to financial strength with a reduction of EUR 1.5 billion in net debt to EUR 50.2 billion, following an 8% increase in cash flow generation up to EUR 12.8 billion, the execution of our asset rotation and partnership plan and the capital increase of last year. Driven by the expected continuation of these positive trends in 2026 and the impact of new investment today, we are setting an adjusted profit guidance of more than EUR 6.6 billion in 2026. We will mean adding EUR 1 billion to our net profit in just 2 years, and we will put Iberdrola in the best position to exceed our guidance of EUR 7.6 billion for 2028. But the growth potential of our business model goes far beyond 2028, given the unprecedented investment opportunities created by electrification. In the last years, electricity consumption has been growing faster than infrastructure, accumulating a huge latent demand that today is waiting to be connected. Most countries are responding to this situation by increasing network investment and accelerating planning processes. But consumption is expected to continue increasing strongly in the coming years in heating and cooling, as more heat pumps are installed, transport, as the penetration of electric vehicles continues to accelerate in industry, especially in low temperature processes, creating the need for more installed power and storage facilities. Generation technologies will be chosen by each country according to 3 main criteria: self-sufficiency, competitiveness and sustainability. Of course, this new production will also require a substantial upgrade in transmission and distribution networks. On top of this, data and artificial intelligence have emerged as the last year as a new demand vector with a very large potential, mainly from technology companies, which are already Iberdrola's largest customers in our key markets, the U.S., U.K. and Continental Europe. This already requires significant upgrades of generation and very especially transmission and distribution assets. And this virtuous circle of additional power demand and infrastructure is just starting. Today, electricity is only 20% of the global energy demand, and this percentage is expected to grow strongly, boosted by new technological solution and the need for strategic autonomy and competitiveness. In Europe, for example, the commission expect that the share of electricity in total energy consumption will double in the next 10 years and triple by 2050, reaching 60%. And we are in the best position to reaffirm our current global leadership in electricity infrastructure, which has become a new high-growth sector, thanks to the electrification, as we anticipated 25 years ago. Since then, we have been implementing a consistent strategy based in expansion of networks, selective investment in Power and access to customers through all route to market, including the most sophisticated instrument like multi-country PPAs. The EUR 170 billion invested in the last 25 years have allowed us to multiply our asset base by 8x and expand our geographical footprint to several countries, mainly in the U.S. and the U.K. to become the largest integrated utility in Europe and 1 or 2 largest worldwide by market capitalization, always preserving our commitment to BBB+ rating, thanks to our financial discipline and our ongoing access to market and liquidity. Our size, diversification and solidity are the best guarantees to secure access to supply chains, technology and the best talent and skills and to maintain our track record of shareholder return more than 1,800% over the last 25 years and sustained growth in results. Thank you very much for your attention. We can now begin the Q&A session. Thank you. Ignacio Cuenca Arambarri: Thank you, Mr. Galan. The following financial professionals have raised the following questions. First, Rob Pulleyn, Morgan Stanley; Gonzalo Sánchez-Bordona, UBS; Ahmed Farman, Jefferies; Arturo Murua, Jefferies; Pedro Alves, CaixaBank; Pablo Cuadrado, JB Capital Markets; Fernando Garcia, RBC; James Brand, Deutsche Bank; Jorge Alonso, Bernstein Societe Generale; Philippe Ourpatian, ODDO BHF; Dominic Nash, Barclays, Meike Becker, HSBC; Peter Bisztyga, Bank of America; Pierre Ramondenc, AlphaValue; and finally, Skye Landon, Rothschild. The first question is, can you expand on the main elements driving the increase in net profit? Jose Sanchez Galán: Net profit, '26 will be another year of growth. I think there are several reasons -- sorry. Sorry, it was off. I said '26 will be another year of clearly growth. The first one is due to the consolidation of Electricity North West and Neoenergia. As you know, we are already in Neoenergia, we expect in the next few weeks, we will have the control, the 100% of the company. The positive acquisition, the minorities is what I mentioned. New distribution frameworks, what we are now -- like the case of U.K., which is the T3 -- RIIO-T3 from April. New interconnections between Canada and Massachusetts, which I mentioned it was EUR 125 million EBITDA contribution per annum. The Brazil, the finalization of transmission project, which can add, as I mentioned before, EUR 250 million additional EBITDA as well the contribution of the 2.7 megawatts -- 2,700 megawatts installed power in 2025. And the partial contribution of this 4.7 gigawatts, which is now under construction and will be completed during the year. The other one important point, I think we are beating this year the record of hydro reserve in the history of the group. So I can say in this moment, all our dams are 100% almost full. So I think we are on the 95%, which is the reserve margin we have to keep already just for security reason. So that is already provided, more than 9,000 gigawatts of store energy, which will be used in due time. And that can be completed with our capacity of pumping storage, which I mentioned, is another potential, almost 10,000 gigawatt hours per annum, then we can as well potentially produce with it. Financial expenses, as I mentioned -- it was mentioned by Pepe Sainz, is fully under control. It's a lower debt and our interest rates are mainly fixed or hedged. So that's why I think we are confident that to reach more than EUR 6.6 billion net profit this year. That represent practically, I think when we present last year, our plan, it was a plan to increase by EUR 2 billion in 3 years. So I think between '24 and '28. So I think with that one, we can already secure then half of the time, this EUR 1 billion has already been already increased already. And that's why I think we are comfortable that another EUR 1 billion from '27, '28 as well can be easily be achieved. Traditionally, always, as I mentioned before, we are over delivering our promises, which I think you see that when we made that one is we are normally comfortable then we can already achieve these numbers. And related to net debt, I don't know, Pepe, you would like to say something. We are very, very happy with our cash flow generation, which continue increasing. And -- but I think you mention, Pepe, with more detail. Jose Armada: Well, in the net debt, we are expecting to end '26 somewhere between EUR 54 billion and EUR 55 billion, which is below what we had in our plan. And this is basically because we have, as you know, finished this year with lower debt than what we had expected. So lower EUR 1.5 billion at EUR 50.2 billion, this means that we are going to increase a little bit the debt amount as we continue to invest, but below what we had in our plan and that we had in our Capital Markets Day. So as the Chairman has said, the debt under control and the financial expenses also. Ignacio Cuenca Arambarri: Next question is related to the nonrecurring impacts that are affecting the 2025 EBITDA and net profit. Jose Sanchez Galán: So Pepe, [Foreign Language]. Jose Armada: Yes. Well, as you know, well, this year, we had a capital gain mainly by the -- due to the sale of the Smart Meters in the U.K. This is something that we have adjusted. We have taken away another EUR 460 million to more than compensate this EUR 379 million. This EUR 464 million is in the below the EBITDA. But -- so we are stripping EUR 379 million of the EBITDA this year versus EUR 1,700 million last year, mainly due to the Mexican capital gain. This is what makes the fact that in reported terms, the EBITDA is below last year, but not in recurring terms. So these are the 2 main impacts at the EBITDA level. And at the net profit, so below the EBITDA level, mainly in the EBIT, in the depreciation and amortization in the provision side. This year, we have provisioned EUR 460 million, mainly to some adjustments in the value of our pipeline, mainly in renewables across different geographies, okay, compared to last year, which the adjustment was basically in the onshore, in the U.S., as you recall. This year, it's been in -- basically in -- across different geographies. And last year also in the provision line, we adjusted around EUR 1,500 million in the provision line in '24 to compensate this capital gains that we had in the EBITDA level. So we stripped this provision from the EBIT side. So to conclude, last year, we stripped EUR 379 million at the EBITDA -- this year, EUR 379 million at the EBITDA level. '24, EUR 1,700 million at the EBITDA level. And this year, we have taken away around EUR 460 million at the EBIT level. And we have also taken away last year also through efficiencies and adjustments, another EUR 1,500 million. And in addition to that, we have 2 other elements, which is basically the fact that this year, we have included the a cap allowance, which compensates what we are taking away, which is the New York recognition of the past costs, okay? So that is basically the main adjustments in our numbers. Ignacio Cuenca Arambarri: Next question is related to the recent regulatory development in both in Spain and the U.K. and how this compared with the assumption included in our strategic plan. Jose Sanchez Galán: So I think, as I have mentioned, in the case of Spain, we have to manage our business according with the signal that has been given. So signals is that they are already just reducing the money in operation and maintenance. So we have to adapt our operation and maintenance to the new circumstances. They are already just limited the CapEx that they are giving some guidelines where to invest and how much to invest. So we have to adapt to the circumstances. But I think I would like to say that in the case of Spain, it's less than 20% of our RAB. So I think we will adapt to the circumstances in such a way that we will not be affecting our P&L, adapting our expenses, adapting our CapEx to the framework has been defined. But I think our Networks business is depending much more of other countries. I think in the case of U.K., as I mentioned, only the growth that we are expecting in transmission is absolutely huge. Only in transmission, the regulator has already recognized the need of accelerating our transmission lines, multiplying by 4x the CapEx towards the previous 5 years with a clear, stable, predictable and attractive framework. So I think RIIO-T3 is clearly a transformational things for Scottish Power. So the RAB of transmission in 2030 will be equal, even highly higher than the RAB of distribution. So together, we are going to reach more than EUR 30 billion RAB compared with EUR 9 billion we have in Spain. So I think just to give you the image what that represents. And as well, the return on equity. If return on equity including incentive, higher than 9%. Similar situation we are facing in other countries like United States, which as well there are pressure for increasing the investment and the situation in Brazil with ANEEL also is already just renewing the license for the next 30 years with a commitment of investing a huge amount of money in the country for electrifying the sectors, which are still in the country, are not electrified. So I think those are the main things. So I think our business, transmission and distribution business, is a growth vector, which is transmission, either in U.K. in United States, which I think in the case of Britain is going to transform completely, the size of the company, from a company EUR 15 billion RAB to EUR 30 billion RAB. And in the case of United States, a similar thing as well as Brazil. In Spain, so the situation, we have to follow the signals of regulator. But in any case, our -- the size of our business in Spain is less than 20% of our total, so which I think is not important, what -- it represented for that one. But we will adapt completely -- our deliveries, what has been already been given. The signals given is clear, less investment in operation and maintenance, CapEx already addressed to certain areas and not to another areas. I think we have to follow this instruction. That's it. Ignacio Cuenca Arambarri: Next question is regarding the regulatory framework and negotiation in New York, both -- Maine and how this aligned with the assumption included in our strategic plan. Jose Sanchez Galán: Pedro, would you reply? Pedro Blazquez: Okay. I think we are always suggesting Chairman on these rate cases to the circumstances. Last year, we focused on recovering storm costs in New York, EUR 800 million and more than EUR 300 million of storm costs as well in Maine. That was the focus. I think this year, because of circumstances, we believe it's the right thing to do, interim rates and 1-year rate case in Maine. The interim rates will be applied in July, and then we will request for a 1-year rate case. After that, we'll go into a multiyear rate case. And in the case of New York, we still have the current rate plan, which will be in the mid of the year, and we're already working in a 1-year rate case. And after that, we will file also a multiyear rate case. Ignacio Cuenca Arambarri: Next is, could you provide an update on the status of Vineyard Wind 1 project and its recent progress? Jose Sanchez Galán: So I think it's -- I would summarize in 2 words. For me, as engineer, the farm is already completed. In this moment, we have more than 60 turbines of the 62, which are fully installed. I think there are more than 55, I think, in operation exporting electricity. So I think these numbers means the level of availability is similar for other offshore wind farm we have in operation. So for me, that is completed. Nevertheless, Pedro, you would like to add any detail. But for me, the sentence, that is fully completed. That's it. Pedro Blazquez: Yes. I think you're totally right, Chairman. I think we have 60 of 62 rotors installed. That's 97%. Probably in the next days, we will install the 2 remaining ones. And I think from an operation point of view, 52 of the 62, that's almost 85% of them, are right now allowed for operation. Ignacio Cuenca Arambarri: Next is, how is your customer base evolving in Spain, particularly in terms of channel level, customer retention and portfolio quality? Jose Sanchez Galán: Pedro? Pedro Blazquez: Okay. I think it's important to know that we are the market leader. We are the leader in energy supply. We are the leader in number of customers and also the leader in churn rate. So it's normal that we have some rotation in those customers. I think we continue to be successfully measuring -- taking actions to retain our best customers. And right now, we feel that even that margin per customer is right now growing from an energy point of view. Jose Sanchez Galán: So I would like to insist in one more word. I think we are lead in number of customers and -- but the level of loyalty of our customer is huge. We have the record. We are the best in churn rates in the country as well. So I think it's normal, when you are already the largest number of customers, then you lose someone else. But important is the level of loyalty of the existing one. So the percentage of rotation, customer rotation in our case is much lower than the rest, especially those newcomers. The newcomers is the rate case -- the churn rates are absolutely huge, so -- which I think as well is normal in other countries. When you go as a country initially, I think the number of -- you win customer, but you lose customers. The important thing is the loyalty of our customer is huge. I think that I would like to mention this message. Ignacio Cuenca Arambarri: Next, could you provide an update on your view regarding the role of nuclear generation in Spain and the status of the Almaraz extension process? Jose Sanchez Galán: So I don't know how many times I repeat it as engineer, what is my vision. So our -- the nuclear power plant are necessary, are safe, are efficient and contributed to lower prices in all countries. So I think that is a reality. In the case of Spain, we have -- we suffer a huge taxation, which I think has reached almost EUR 30 or EUR 35 per megawatt hour, which is 3x, 4x more than other neighbor countries. But the power plant itself, I insist, are necessary, safe and efficient, and they are already generating lower prices. I think that is like that today, some of the nuclear power plant are being called to operate under restriction because they are cheaper than gas plant. So I think that is the reality we are facing today. In fact, today, European countries with no nuclear have structurally higher prices, Italy and Germany around EUR 20 more than France or Spain. So I think that is the big debate in Europe. So those countries what we have already keeping our nuclear power plant, and we have already invested in another renewable technologies, we have lower prices than those who have not already, either not built or either has already closed, the nuclear power plant, and they are fully dependent on the import of fossil fuels, which I think that makes that the cost is automatically higher. So that's why, for this reason, we have already asked the extension of Almaraz, and we will as the extension of others in the future, I imagine. And I think this process is ongoing. So I think it's Nuclear Security Council is analyzing. So -- but I think I'm not seeing that -- we have already delivered all the paper requested. And I think the fact is this power plant, most power plants, similar to that one, are already extension life up to 60, even 80 years, which I think will have not much sense. And here, we will not already use this asset, which, I insist, are necessary, safe, efficient and contribute to lower prices. Ignacio Cuenca Arambarri: Next is related to the status of the Neoenergia minorities acquisition deal. Jose Sanchez Galán: Sorry? Ignacio Cuenca Arambarri: Sovereign Energy, the process of deal. Jose Sanchez Galán: Well, I think that the process is going on. I think it's a question of weeks. So I think we have not any -- all they are progressing well, by step by step. And I think I feel Pepe in April will be closed later. So I think it's going according to schedule. Ignacio Cuenca Arambarri: Next is, how will recur U.S. network investment affect customer affordability? And are European regulators becoming more focused on this issue as well, especially Italy with the new measure adopted? Jose Sanchez Galán: So as I mentioned in my presentation, today, we have a significant latent demand unattended due to lack of infrastructure. So I think that is a fact in all countries. The fact European Commission has already made directive recommending higher investment in networks, in infrastructures. So -- and I think this lack of infrastructure of transmission and distribution is causing losses in curtailments, and that is generating extra cost to many countries. So that's why higher investment in network will allow to solve those curtailments. I think in the case of U.K., if I don't remember that the curtailments amount something like GBP 5 billion per annum just because there are certain electricity, in some part of the country, cannot be exported, in another part of the country and this part of the country have to use more expensive sources of energy toward another one, are already not being able to be exported. So this more investment solve this problem of curtailments. That can incorporate an additional demand. We now is latent, we cannot be supplied. And they will dilute it. This extra demand will dilute the cost and the impact of this infrastructure cost, resulting, again, the lower cost per kilowatt hour. So that is better surplus. If we are not making the infrastructure, we have to pay higher cost of electricity that -- if we have this infrastructure, we can benefit, we can enjoy a lower cost of electricity, and we will consume more electricity, we will dilute the cost of this extra infrastructure. So the British regulator has understood very well, and that's why they are already introducing incentives for accelerating the construction of new infrastructures precisely for diminishing the curtailments that the British are paying at present. And in generation, I think my position in your chart also clearly, each country have to look for how to use their own indigenous energy to become more autonomous, to have -- to become -- to use more autonomy in their energy, to avoid problems that we've been experiencing in the past, to the import of certain energies from other countries. I think we've been suffering the problems of shortage of gas 2 years ago because the lack of supply from Russia. So now -- but in any case, this cost of gas imported with liquefied always will be more -- will be less competitive than those who have the gas door-to-door to the power plant. So that's why each country have to look what is the alternative. In the case of Europe, the European Commission is clearly defining what they would like. They would like more autonomous energy base in renewables, onshore, offshore, solar, more nuclear, extension of the existing one or potentially new one, which is the case of France. France just published their policy. They are relying in more nuclear and more offshore. And I think Britain is already same thing as well. And that is the point, is the point is networks for supplying the demand which today cannot be supplied. These networks can really diminish the cost per kilowatt hour because they will dilute it, with more demand diluted, the cost of the new infrastructure. And the power will be depending on the countries and depending on the source in each country. If the country has one type of sources of energy that the energy will have to be used with the basis of competitiveness, sustainability and self-sufficiency in the country. Ignacio Cuenca Arambarri: Next is, could you update on your U.S. renewable pipeline? Is repowering still an opportunity in the U.S.? Jose Sanchez Galán: It is. But, Pedro, you can already explain in more detail. Pedro Blazquez: I think in the U.S., we have 11,000 megawatts in operation. And we are right now building around in construction 600 megawatts, out of which 445 are repowering. I think because of the customer demand to continue to increase, we are also looking into extension of life between 15 and 20 years with very moderate investments and attractive business cases. I think on top of this, we have more than 4,000 megawatts of pipeline. We don't have any new projects in the projections we gave in the Capital Markets Day because we prefer to actually do things and there will be an upside every time we decide to do new projects. Ignacio Cuenca Arambarri: Next is something related to the previous question, but could you provide your view on the recent regulatory intervention in Italy power market? And do you foresee similar measures in Spain? Jose Sanchez Galán: So Italy, as I mentioned before, I was explaining clearly, they have higher prices than other European countries due to their past energy policy decisions that they already make -- they increase their dependence of gas imports. I think that is clear. Same then Germany, is facing higher prices in Europe, there, due of decision -- political decision taken in the past of that one. I think this case is very different for other countries that we have renewable and nuclear driving structural lower cost. That is the case of France, that is the case of Spain. I think in line with the conclusion reached in the European Commission 3 years ago and related to the market design, we continue thinking the long-term contracting, mainly in PPAs, are the solution to avoid volatile and high power prices for European consumers. So I think the fact those countries who have already more long-term contract are those countries are part of the mix of power generation. Other countries, we have already more stable and predictable prices. So I think Europe needs to become more and more energy independent. So we cannot rely in sources which are not already in our hands. So that's why any market intervention will not help to attract the necessary investment to attend this growing electricity demand. So we have to be very careful with all these measures. We have to be very careful with the taxation. We have to be very careful in the fact that taxation, European Commission is recommending as well reduction, a substantial reduction in taxes to electricity for increasing competitiveness because that is the best way to increase the competitiveness of European. If we compare the taxes of Europe with the Americans with the Chinese -- or the Chinese, in some cases, it's 5x more, the European toward the Americans or the Chinese. So I think it's not a question of looking for more reforms. It's a question of looking what is the problem. The problem in Europe is taxation, and energy policies has not been in some countries making the right direction. If we are keeping already the nuclear power plant, if we increase our investment already in autonomous energies, which in the case of Europe, certain is renewable onshore, offshore solar, hydro, we make more storage. So certain, we can be already as competitive as others. And that is what they are making in countries like China, which are investing heavily already in autonomous energies, mainly renewable hydroelectric and nuclear as well for keeping already a much competitive mix of power generation. Ignacio Cuenca Arambarri: Next is, could you update on your activity with data center clients, particularly regarding PPAs and expected demand growth? Jose Sanchez Galán: So I think PPAs with technology company is not new for us. I think we have PPAs with the largest users of data centers. We have already in this moment, more than 150 gigawatt hour of new PPAs signed. And only last year, we signed 1 terawatt hour more, and we have already 12 terawatt hours per annum, already the energy supply to these companies. I think I insist on that one many times. I think there are people who have been dreaming to become data centers builders. We are already data center facilitators. So we try to facilitate the installation of data centers because data center is a large consumer of electricity and our business is to sell electricity. That's why we are doing our best for helping those who would like to install new data centers through providing land or providing connection or providing these PPAs, whatever. So I think it's -- data centers is not only a question of power, it's a question as well of connection. It's a question of networks. More networks are needed as much power is needed. But I think if I have to, say, prioritize, networks is the first bottleneck in this moment more than power itself in some of the countries where we are present actually. Ignacio Cuenca Arambarri: Last question is related to the guidance given to the 2028 and is, please, can you elaborate why 2028 guidance has moved from around EUR 7.6 billion to higher than EUR 7.6 billion? Jose Sanchez Galán: So I think we have increased our net profit EUR 1 billion in the last 2 years. And we expect to at least to increase another EUR 1 billion more in the next 2 years. Investment and asset rotation is ahead of schedule. So I think the RAB is up by 12%. We have more than 7,000 megawatts, new megawatts in construction -- in operation in this moment. We have 9,000 megawatts in pipeline ready for 2028. We are seeing the acceleration of electrification. I was insisting and insist again and again, we need investment opportunities in transmission and distribution. Clearly, that is a clear example in T3 in U.K. We have for the incentive for acceleration. We have increased our return on equity by 100 basis points if we go ahead of schedule. So I think it's incentive for being faster. On top of this, we have already better expectation for 2030 and beyond with new opportunities in transmission in countries like Australia. So I think all in all, we are keeping our plan and delivering focus in networks, being selective in renewables and in Power, as Pedro mentioned, in the United States, there are opportunities that we are making, but we can make more, the demand. There are other countries, but we are possibilities in making more things. But we don't like to make dreams. As you remember, we put name by name, power plant by power plant how -- which one we are going to build per annum. So it's not saying, "We are going to make 9,000." No. "We are going to make this 9,000 in this country, in this period, in this thing." So we have already -- in the case of United States that Pedro mentioned, we have -- for repowering, we are 11,000 megawatts already in operation, with more than half can be repowered. But we will -- but in the moment we have one by one, which one we are going to be repower, we will let you know. But I think we are working with that one case by case because the time is -- it moves faster. Nevertheless, I think we have already our financial strength. We are committed with it. We took all the necessary steps for keeping already our financial solidity. And I think it's -- and that's why we feel we have a unique value proposition in the sector. So I mentioned in my speech something that we are from Bilbao. So I think it's -- although the people from Bilbao, we have the reputation of being a little exaggerated sometimes, in our case, after 125 history and 25 years of myself leading the group, we have already taken, I feel, the best of the country of us. The ambition to achieve better and higher results and the pride of, also typical from Bilbao, of overdelivering. And that is our track record. Our track record is an ambitious plan and overdelivering result. This is a result of the plan '22 to '25, what we just finished with our plan, and that is going to be, again, our plan for 2028. Compared with others, who has not proven this ambition and has not proven this delivery. Ignacio Cuenca Arambarri: Well, after this Bilbao answer, I will now hand the floor over to Mr. Galan again to close this event. Jose Sanchez Galán: So thank you very much to all of you for participating in this conference call. And I think if there are any questions, our Investor Relations will be available for any additional information you may require. Thank you, and thank you very much. See you soon. Thank you.
Stanislas De Gramont: Good morning, everyone. Welcome to this Groupe SEB 2025 Full Year Results Presentation. I am Stanislas de Gramont, Chief Executive Officer of the group, and I will be doing this presentation together with Olivier Casanova, our Chief Financial Officer. Right. We will cover the following points in this presentation. And of course, after these presentations, there will be a question-and-answer session. The points of the agenda will be the key elements of 2025 regarding sales, our results, our financial structures, what have been our ESG achievements. We will talk about the growth relaunch Rebound plan initiative that we've announced today to our employees and shareholders, and we will conclude. Then we'll take, of course, your questions together with Olivier. As a way of introduction, I think it's fair to say that 2025 performance is closing on a better note. We are in line with the targets that we revised in October. We've confirmed and launched the Rebound plan that we again announced in October. And if I step back and look at the overall year, we have a very slight organic sales growth, 0.3%. We are in a complex environment, yet our small domestic equipment markets remain resilient. Our results are down in 2025. Yes, we have good sales growth in floor care, in linen care, in cookware, and this is supported by good product innovation. We have a very dynamic growth in e-commerce, especially via our direct-to-consumer sales. We've seen, as you know, and we've amply talked about it through the second and third quarter of the year, significant cyclical headwinds on currencies, on Americas, on Professional, and that impacts around about EUR 120 million in profit, operating profit through 2025. And we also have an acceleration in the transformation of the environment in terms of go-to-market, in terms of digital activation, and this is what triggers our launch of the Rebound plan that is designed to bring the group back to a profitable growth trajectory. Now if we move into numbers, 2025 December, we have sales of EUR 8.169 billion, up 0.3% like-for-like. Our ORfA is at EUR 601 million, down EUR 201 million versus last year. That translates into an operating margin of 7.4%. As a result of that, the net profit group share is EUR 245 million. That compares to EUR 232 million, but you will remember that last year's net profit was impacted by the Competition Authority fine of EUR 190 million. We end the year with a net financial debt at EUR 2.34 billion. That is EUR 2.152 billion, excluding this Competition Authority fine, and that's EUR 226 million versus the end of 2024. And the Board is proposing to the general assembly a dividend of EUR 2.8 per share, stable versus 2024. This will be approved and voted in the AGM of May 12, 2026. Now if we go into the analysis of the year, starting with the sales. As I said, we have a slight organic sales growth in 2025, 0.3%. To note that we still have a pretty substantial currency effect on our sales, 2.5% of net sales. It's not extraordinary, but it's pretty steady, and we expect to have a comparable one in 2026. The scope was up -- was contributing to 1 percentage points with the acquisition of La Brigade de Buyer and some phasing into the integration of Sofilac, leading to net sales of EUR 8.169 billion. If we break it down by activities, we see that the Professional business reports EUR 995 million on sales, up 2.1% in reported, minus 6%, minus 5.9% like-for-like, with a fourth quarter better, fourth quarter at 6.7% growth, flat like-for-like. Whilst on the Consumer division, we have an overall sales growth of minus 1.6% reported, but plus 1.1% like-for-like with a fourth quarter essentially similar at 1% like-for-like growth. Now if we look at the Consumer business and if we look at the overall business, we have, in fact, 2 blocks. We have on the left side, EMEA and Asia, which are around about 60%, 65% of the group sales, which have grown, respectively, 2% and 2.7%. In fact, EMEA without the loyalty programs grew 2.8%. So 2/3 of the business has grown by 2.8%, 2.7%. On the other side, we had the Americas that have declined by 4.9% with U.S. at minus 4.5% and the Professional business that has declined 5.9%. And these 2 represents around about 30% of the overall group business, 25% less. And that, I think, explains the -- that explains why we say that this year is a contrasted year in terms of sales performance. Now if we look a bit more detail into the quarters, let's start with North America. We started the year great. We started the year with Q1 at 4.9% growth was great. Then we had 2 dips in Q2 and Q3 at, respectively, minus 11% and minus 14%, and the reassuring fact that Q4 ends at 4.7%. And if you remember, we said in Q2 and Q3 that we had -- we were suffering a clients' wait-and-see attitude and that we would see a normalization of the activity in Q4 that we have observed. Equally, on the Professional, we started the year with a very negative first quarter that was expected, minus 21%. That has recovered through Q2 and Q3 and leading to a flat Q4. We'll come back to that, in fact, right away. We've seen a stabilization of the business in the second half. And if you look at the details of that business in the second half of the year -- next slide, we have a contrasted situation. We have good momentum for machine deliveries in Germany and China, which are roughly 40% of the business and strong growth in services, which is great. We have double-digit growth in new regions like Eastern Europe and the Middle East. And that has been tempered by a wait-and-see attitude of customers in the United States in part due to, I would say, that tariff hike on Switzerland of 39% that stayed around between mid-July up until mid-October to end of October and in part to a caution in implementing CapEx in machines from large U.S. customers. On the other side, on the positive side on the Professional business, we've integrated La Brigade de Buyer in our culinary activity that is showing very, very strong growth driven by high-end stainless steel cookware and online sales. Beyond numbers, in the Professional business, we have started production in our Professional Coffee hub in China. I remind you, this is an R&D center. It's a processing, it's a production facility. We constructed it in 2025 through 2025, started serial production early in 2026. That's an investment of approximately EUR 40 million. And I'm very happy to share with you the first 2 machines that are coming out of this hub, beautiful machines. And you see that the number of cups per day, which is a way to qualify the type of customers the machine is aiming for is contained 50 cups per day, 80 cups per day. And that reflects our priority to focus these machines on the small businesses and the offices segment, which is a great new business opportunity for Professional Coffee machines that we want to exploit. And those machines are -- will be the spearhead for our development in that new segment of Professional Coffee. When we move to Consumer sales, we have through 2025, mixed performances and overall moderate sales growth. By geography, we are moderate growth in EMEA. I talked about it, 2.8% ex loyalty, excluding loyalty programs with maybe 2 -- again, here a contrasted situation. We have 11 markets with growth at or above 5%. We have an underperformance in Germany that we need to deal with. We've returned to annual growth in Asia and particularly in China. And in America, we have seen sales decline with a gradual normalization in North America through the end of the year. When we look at our product lines, we have great momentum in cookware, in kitchen utensils, in floor care and linen care. Those are all supported by strong product innovation. We see a slight decline in kitchen electrics. And last, on Consumer sales, we see our online sales up by around 10% organically, supported in particular by direct-to-consumer sales. Let's do our round-the-world exploration, starting with Western Europe. Western Europe posts 1.1% growth in 2025, 2% like-for-like, 2.8% if we exclude loyalty programs. Again, our sales are up in most -- in almost all Western European countries bar Germany. France is positive, excluding LPs. And the momentum, again, is still very positive in cookware. We see very successful innovations. I'll talk about that in a second. We have less buoyant categories, and I think that explains in part our difficulties in Germany, grills, multi-cookers. And overall, our market shares on the segments we operate on are stable. In the other EMEA countries, we have good organic sales growth, consistent organic sales growth around 10% in Eastern Europe. Turkey keeps growing, driven by our key categories and a very strong development of online sales. We've seen disturbances in Africa and the Middle East and very much related to the geopolitical environment. Now let's look back at 2025 and look at what happened on the product front. The first thing and the most important thing that happened in 2025 for us on the product side is the very, very strong and powerful expansion of washer vacuum cleaners. We've reached almost EUR 100 million of sales in year 1. We have #2 position just behind a Chinese competitor, way ahead of all our traditional British or American competitors. We've also expanded fast in the spot cleaners segment, great products, EUR 25 million sales in year 1 only, #2 in a market that we were not present in a year ago, a remarkable achievement. And back to our core categories, we've launched this year garment steamer with vacuum function, which is called Aerosteam that has delivered -- that has contributed to delivering EUR 90 million in sales in garment steamers in Europe only, double-digit growth, strengthening our #1 competition. So we see that our development in Western Europe and in Europe has been driven by strong innovation. Beyond that, we mentioned a couple of times through the year that we had some challenges on our historical core pillars, and Cookeo is one of them. Cookeo is a remarkable long-standing success story of the group, launched in 2012, sold over 5 million products. We relaunched it in Q4 with Cookeo Infinity. And what is tracking is that against a 20% decline first 9 months 2025, our sales in Q4 on the strength of this relaunch reached 10% growth, showing that -- and what is this product? It's an air fryer and pressure cooker combined equipment. Very, very strong popular success, very strong success with influencers, very strong talks on social networks. I think that also says -- shows us a way to evolve our marketing. We'll come back to that later on. I mentioned a couple of times that cookware is a very strong pillar of the group. We have a multi-material, multi-coating strategy. We are leaders in all those coatings and materials. And we've posted, again, I would say, in 2025 in EMEA, a growth of 10% in that category, a very strong pillar for the group. Going west to the Americas, we commented it amply vastly in the course of the year. So North America finishes the year at minus 4.5% like-for-like. You see the effect of currencies. I think it's around minus 9%, minus 10% in reported. I will not expand again on something that we've very, very often discussed. We have the direct and indirect effects of changes on U.S. tariffs that created a wait-and-see attitude with U.S. customers. We see through fourth quarter a better alignment between sell-in and sell-out, and that is the explanation of sell-out/sell-in recovery. We have consolidated our market shares in our core categories of cookware and linen care. And we see Mexico that still is a strong country but has a volatile year, yet to be noted, a very good acceleration of online sales in a country that was a bit backwards. Coming to South America. South America is skewed towards the fans business, which is very climate or weather dependent. La Nina is a cold weather phenomenon, and that has impacted our fan sales through Latin America, particularly in Brazil. Yet we see very strong performance in Colombia across all categories, including our fans business. And when I step back and look at our North American business, maybe something we don't often enough talk about, which is All-Clad. All-Clad is an American brand of premium cookware. And we celebrate again year after year very strong successes. It's local, it's premium, it's in the U.S. Sales have been growing around 10% per year over the past 5 years. We're leaders in the premium cookware in the business. We increased our U.S. local production, and we've increased it by more than 50% over the past 3 years, and we're now implementing complementary capacity investments in Canonsburg, Pennsylvania to expand again the capacity. So that shows that we have not only a mainstream business with Tefal market leader in the U.S., we also have the leading premium U.S. brand in cookware. Going south, again, Colombia is a good example of how we are expanding our business. We have double-digit organic growth in Colombia and have had so for the last couple of years based on very strong historical positions in fans and cookware to which we've added #1 position in food preparation and more recently, #1 position in the full automatic cool coffee machines. We are creating the market in Colombia and I would say, also in Mexico, and that is for us a good relay of growth in this part of the world. Going east now with an Asian business that has recovered growth, both in China and in the rest of Asia. Starting with that rest of Asia. The good news of the year is the return to growth in Japan and a good momentum in Southeast Asia. We have a slightly weaker performance in Korea. I think the environment in Korea is a very challenging one. Overall, we have success in cookware and the growth in SDA is more mixed between categories and markets. China has returned to organic growth in a broadly stable market in 2025. We are confirming month after month, quarter after quarter, year after year, our online and offline leadership in our 2 core categories of cookware and kitchen electrics. We've seen successful launches, rice cookers with stainless steel bows, titanium works, garment steamers with vacuum function. I think there's still a strong dynamic on innovation in our Chinese business. And we see some very strong dynamics of the online segment with an ever-moving online landscape. And if we go to the next slide, we see that something that we've talked about in the last 3 to 5 years, which is the expansion of social commerce with a very rapid growth in China. 25% of Supor's online sales are now in social commerce, and that's tripled since 2021. We're leaders in China in that segment, including on Douyin, Douyin, which is TikTok in China, both in kitchen electrics and in cookware. And we see developing instant retail, which is through platforms with very, very short direct delivery. Instant retail is a channel that grows very strongly in 2025, and we are already #1 in this new channel of sales -- new channel in this alternative way of doing online sales in China. As far as social commerce is concerned, we see a strong development outside China. We've opened in 2025 alone 13 TikTok shops in various countries in the world following or anticipating the development of this platform. I now hand it over to Olivier to share with us the financial results of the year. Olivier Casanova: Thank you, Stanislas. So let's move to the main numbers. So as you can see, we achieved an ORfA of EUR 601 million for the full year, which is 25% below last year, but at the high end of the revised range, which we had indicated back in October of EUR 550 million to EUR 600 million. This translates into operational margin of 7.4%, which is, of course, disappointing 230 basis points below last year. If we look at Q4 now, as you can see, we delivered EUR 334 million of ORfA, which was, I would say, only 6.7% down versus 2024. You have to remember that 2024 was the highest ever. And so with this performance in '25, in fact, we are delivering the third highest ORfA for Q4, very close, in fact, to the performance of 2023. And this was in terms of operational margin, 13.3%, only 80 basis points below last year. Let's look at the bridge now. As you know, and we talked about this in earlier, let's say, presentations, we have a very complex year. So you will find the traditional ORfA bridge back in appendix, but we thought it would be more telling to identify and isolate the 3 cyclical headwinds that Stanislas talked about. So as you can see on the full year, we confirm what we have said before. We've had 3 distinct conjunctural impacts. The first one, of course, is North America, which has impacted us by EUR 40 million compared to the prior year. This is a combination of 2 effects. On the one hand, it's the fact that we increased prices to compensate the negative impact of tariff, but there was, of course, a time lag. The tariffs were implemented on beginning of April and the price increases happened at the end of the second quarter. And the second element, again, which Stanislas highlighted, we've had in Q2 and Q3, minus 12%, minus 14% in sales as customers adopted a wait-and-see attitude given the significant volatility and uncertainty regarding tariffs and in particular, changed also the way they imported the product from direct import to local sales. Secondly, on currencies, we had a negative impact of EUR 40 million, which is, again, 2 things. It's the delayed positive impact from U.S. dollar and CNY as we, let's say, went through our inventory. And we had only, in fact, a positive -- a small positive impact for the full year, and we'll talk about this in a second. The second element, of course, which is by far the biggest is the negative impact from emerging market -- you know that traditionally, we are compensating the depreciation by implementing price increases. We operate, of course, in a high inflation environment in many of these countries. And this year, because of the depreciation, in particular, of the U.S. dollar versus the euro, we were not able to compensate as much as we traditionally do, and this impacted us by EUR 40 million. And then the third element we already talked about is the fact that we had a very high basis of comparison in '24 with, in particular, very significant order in China. The last element is the -- what we call other effects, which is the growth volume -- price volume mix effect and the COGS effect on the rest of the business. We had positive volume effect, not as much as we would have liked and insufficient price/mix effect. And this is in large part why we are, of course, launching the Rebound plan. We'll talk about this in the rest of the presentation. Now what is interesting is to look at the Q4 performance on the same parameters because you can see that the 3 cyclical headwinds, in fact, turned around in Q4 as we had expected. So first, on North America, you can see that we were flat in terms of profit versus last year. Of course, we regained growth with 4.7% organic growth. The markets have been progressively normalizing. Again, we are not going back to the situation we had in the U.S. market at the beginning of '25. But nevertheless, we are seeing a progressive normalization. And secondly, of course, we have the full benefit now of the price increases, which are compensating the negative impact on tariff. The second element on currencies, we had finally the strong positive impact from the depreciation of the U.S. dollar and the CNY, as you know, which are 2 currencies where we are deeply short. And therefore, we have benefited from this positive impact in Q4. And then finally, on Professional, as we've explained, we returned to growth in the second half, and we are flat versus the prior in Q4. And so this translates into a stable performance versus last year. And we still had a slight negative impact on the rest of the business versus last year. Again, remember that Q4 2024 was the highest ever achieved by the group. But it's true that it's lower than our expectation in terms of volume effect and in terms of price mix. And this is why, again, we've launched the Rebound plan. Now how does this translate over, let's say, the fourth quarter? You can see that in H1, we were around 50% below the prior year. We have closed partly this gap in Q3 at minus 25%, and then we are very close to the prior year in Q4. If we now move to the rest of the P&L, you can see that this translates into -- the EUR 601 million translates into an operating profit of EUR 502 million. The main element, of course, is the line other operating income and expenses. Last year, of course, we had the significant impact from the fine from the Competition Authority, which cost us -- which was provisioned at the time for EUR 190 million. This year, we have a total charge of EUR 81 million, which includes EUR 24 million of provision and expenses related to the Rebound plan. We have, in particular, taken some impairment related to the decision on certain industrial sites. This translates into a net profit group share of EUR 245 million for the full year, which is, of course, slightly up on EUR 232 million last year. But as you know, the EUR 232 million included the fine from the Competition Authorities. If we move to the working capital requirement, as we had warned, we are on the high side compared to our traditional target of 15% to 17%. The -- let's say, relatively good news is that we are back to the same level as last year in terms of inventory. You remember that at the end of H1, we had an inventory, which was significantly higher than the prior year. So we have managed to bring this down to the same level as last year. It is still higher than where we would like to be, where it should be, in part because we are continuing to suffer from increased amount of stock on water because of the closure of the Red Sea of the Suez Canal. This is costing us around 0.6 percentage points of working capital. And we have also a slightly lower amount of payables, as you can see, at 13.2% versus 13.8% last year. Again, this reflects the slowdown of production in the second half to adjust the inventory level. So we are determined to bring our working capital requirements back to the range of 15% to 17% in 2026. And this will be done in part by optimizing our inventory level. We think that we have some way to go and therefore, are confident to go back to our range. If we move to the free cash flow statement, you can see that I've mentioned the working capital variation, of course. On CapEx, as expected, we are slightly on the high side also because we had, of course, the -- to finish the significant investment in our new Professional Coffee hub in China, in Shaoxing. We have also the completion of the Til-Chatel logistics platform in Europe for cookware. And so this explains that CapEx was slightly on the high side. And I don't comment on the other elements. This brings us to a free cash flow for the full year of EUR 124 million. And interestingly, we had a strong free cash flow generation in H2 at EUR 337 million this year. So let's now bridge to the net debt level. So in terms of dividend, as you know, we had EUR 150 million of dividend payment for the mother company, SEB SA. And in addition, we continue to repatriate a significant dividend from Supor. And this means that we had also EUR 50 million paid out to the minorities. In acquisitions, with, let's say, a relatively modest year in terms of acquisition spend, mostly attributable to the acquisition of La Brigade de Buyer and to a smaller extent to some investment in SEB Alliance. This brings us to a net debt level of EUR 2.152 billion, excluding the fine and EUR 2.342 billion, including the fine of EUR 190 million. In terms of financial structure, we have still a very strong financial structure. Of course, our financial leverage ratio has increased to 2.7x, 2.5x excluding the FCA fine. This is in large part due to also the decrease in the EBITDA. But we are determined to bring this level back to the comfort zone, which, as you know, is around 2 between, let's say, 1.8 and 2.2. And we are determined to do this starting quickly in 2026. We retain, of course, a very strong financial flexibility. We have continued to optimize our financing structure in 2025, including by refinancing with a new bond issue successfully placed in June, a bond issue, which was vastly oversubscribed. We, of course, continue to have no covenant in our financial debt and financial security, which is very high at EUR 2.5 billion and including EUR 1.5 billion of committed but undrawn backup facilities. That concludes the section on financials. Let's maybe move to the -- our ESG progress. Now as you can see on the next slide, we have made progress on our objective to reduce GHG greenhouse gas emissions. So we are down 23% versus the reference year of 2021. This compares to, let's say, minus 18% in 2024. So I think we are making good progress towards our target. This is due to various initiatives. Of course, the deployment of solar panels in China in 2025 and will continue in '26. The deployment also of an energy management tool, which has continued in '25 and various energy-efficient equipment, for example, on injection molding machines. We are making progress also on the health and safety front with lost time injury rate, which is down to 0.76 versus 0.81 in 2024. This is due in large part to the deployment of a training program across the group. Finally, on, let's say, our objective to reduce indirect greenhouse gas. As you can see, we are down minus 9% versus 2021. We have made several significant progress in 2025. On the recycled material, in particular, as you can see, we are now at a level of 52% of recycled materials in our product. This compares to 34% in -- only in 2021. And we've made particular progress on recycled aluminum, which is now at 51% versus 9% in 2021. We are also making progress on energy efficiency, in particular, both from, let's say, product design to usage by encouraging, of course, the deployment of eco mode in our products. And we are confident, of course, to reach our target of minus 25% by 2030. Finally, the progress were recognized by various rating agencies. We've seen notable improvement in our ratings in 2025 and early '26. I will just point 2 of them. On SUSTAINALYTICS, we have moved from medium risk to low risk. And on MSCI, we have moved from BBB to single A. So again, very good progress recognized by agencies. That concludes my presentation. Stan, I hand over to you for the Rebound plan. Stanislas De Gramont: Thank you very much, Olivier. So the last section of this presentation, I would say, before the question-and-answer, of course, session is around the Rebound plan. And I would start with the start. The start is our mission, our mission and our ambition. Our midterm ambition is to grow our Consumer business, strengthening our global leadership and to become a reference player in the Professional business. This to serve a mission to make consumers' everyday lives easier and more enjoyable and contribute to better living all around the world. And that is what drives us in this plan. Now when we look at what makes us believe that and what makes the group very strong, the first one is we have very strong world-leading positions. We are -- we have 75% of our sales in markets where we have a leader positions, #1 or #2. Of course, we are #1 in Professional full automatic coffee machines. We're #1 in cookware. We're #1 in linen care. We're #1 in electrical cooking. We're #2 in blenders, and that is a very strong base to start from. We make over 80% of our sales on our top 5 brands, Tefal, Supor, Moulinex, Rowenta and WMF. When we go a bit further in details, we have a strong global presence. We are the most international brand or company in our industry. We serve every distribution channels. And of course, yes, we are overrepresented still in the offline business, but that's because we started very strong in the offline business. We have an extensive product offering covering several products -- many product families, which allows us to create and to have balance between those families that become very popular and those families that are more stable in some instances. And last but not least, we have a diversified industrial footprint, having factory -- having over 47 factories worldwide in Americas, in Europe and in Asia and a good balance between what we make, 61% of what we sell and what we source, 39% of what we sell. So we see the group as a very solid position, very balanced position. And that explains, I think, the successes of the last decades. At the same time, we see an acceleration in the transformation of our environment. We see acceleration of innovation, the launch cadence, the variety of product that becomes a key element of marketing. We've moved from product-centric to consumer experience-driven innovation. Communication has become social first. And that's a good transition to the second point. We see a fast transformation of the brand consumers relationship driven by social media, driven by influencers, user-generated content, influencers today are the #1 source of information for new products. Ratings and reviews have become paramount and real-time data management in the way we activate and we market our products becomes a must and a given. We see an acceleration of the shift in the go-to-market strategies and in the way and the places consumers buy products from. The speech of the last 5, 7 years was the development of e-commerce. Now the talk is the development of direct-to-consumers, brands selling directly to consumers, social commerce that is expanding very fast as we've seen. Omnichannel is now reaching a new maturity. And last, we see the rising importance of sustainability around repairability, around product lifespan and managing that lifespan, energy efficiency, refurbishment, second life. All these elements create an imperative of speed, and evolution of our marketing practices and the evolution of the resources we invest into marketing. And this Rebound plan, in fact, is designed to return to a profitable growth trajectory. And everyone is important. Reinventing our growth model first, we want to act as a leader in innovation. We want to systematize a new marketing and e-commerce practice around the globe, and we want to accelerate the development of our sales in the most promising segment, sorry. We will restore our profitability through this plan by simplifying our organizations and operating methods. We want to increase our purchasing and industrial efficiency in all fronts, and we want to reduce our overheads. And last, we will strengthen our stakeholders' engagement. We want to nourish and evolve the connection and the involvement of our consumers. We want to create more desirability. We want to develop meaningful innovations carried by inspiring brands. We do a lot of that already. I mean every day, 400 million consumers use our products. We've sold over 2 billion products in the last decades. But we think that we can update that element of our interaction and connection with consumers. And of course, we will only do that, thanks to the engagement and energy that our employees put in the transformation -- in this transformation day in, day out. Now concretely, what will that mean? That means faster launches and more impactful innovations. We use some KPIs just to illustrate that. We want to accelerate our time to market for innovations by 1/3, gain 30%. We want to have over 80% of our key innovations reaching 4.5 and above ratings. And that will be developing new categories, new usages that will be co-developing products with consumers and with influencers. And of course, that will be on the Consumer front, but also on the Professional front and hub in Shaoxing will be a centerpiece of that, too. I mentioned we need to evolve our digital marketing and e-commerce practice. There are -- there's a strong evolution of marketing and the way we interact with consumers with a strong skew towards social media and influencers. And we will indeed focus our efforts on social media, on influencers. We will accelerate the production of targeted contents through the use of artificial intelligence. We will guide our marketing investments much more through systematically using data, and we will increase the allocation of resources on the online sales, including direct to consumers. Now to give you some color, as we say, on those matters, that is material. We will triple our social media investments in the course of the next 2 or 3 years. We'll multiply by 3 or add 1 billion views of our influencer videos in the next 2 or 3 years, and we will increase our active consumer base in our CRM platform -- CRM platform, sorry, by -- we'll double it basically. There will be an efficiency dimension in this plan. We want to reduce complexity. We want to regain operational agility. There will be a strong focus on data, and we will generalize the use of artificial intelligence as and where, as an enabler, it can help the business run more automatically run faster. We will simplify our product ranges. We have some complexity in our product ranges. We will simplify our organizations and processes, and we will reduce materially our indirect purchases amount, massifying and harmonizing our needs between all parts of the business. And again, here are some KPIs to illustrate that. Our SKU ranges will decline by 25% to 30%, depending on the category. We'll have a 5% to 6% reduction in the addressed indirect purchasing envelope, making it a material area for savings. Now if we wrap up the financial part of this Rebound plan beyond the recover growth part, we expect EUR 200 million recurring savings by 2027 on this plan with 3 areas of cost savings, indirect purchases, industrial efficiency and overheads that will have a potential impact of up to 2,100 positions worldwide, of which 1,400 in Europe. And this will include potentially 500 positions in France that will all be made on a voluntary basis. We will accrue mainly in 2026, the cost of this plan and we will disburse mostly in 2027. As far as the one-time plan cost is concerned, we see it between 1 to 1.25x the recurring annual savings. Well, as a conclusion, I will start by a statement that is very, very traditional in the group. We know that the group's business is very much skewed towards the fourth quarter. In fact, last year's fourth quarter is over 50% of the profit -- of the annual profit. So usually, we don't give financial or quantitative guidance at the start of the year. We wait until July usually to do that. Now what we see and what we can say in 2026 as a guidance is that we want to return to growth in ORfA in 2026. This is clearly a clear priority. We want to go back to a more normative free cash flow generation. That's also something that is -- that we need to bring back into our usual trajectory. We will lower in 2026 our financial leverage with the objective, as Olivier said, of returning to the group standards of around 2 by 2027. That, of course, excludes acquisitions. But more importantly, and I think the analysis of 2026, the results of the fourth quarter and the deployment -- the fast deployment of the Rebound plan that we want to execute in under 2 years, confirm our ambition to go back to our midterm ambition. That is, to remind you, a target of 5% annual organic sales growth and operating margins of 10%, then progressing towards 11%. And I think that is what guides us. This is our beacon. And I think we are putting together the right actions and the right mobilization of our teams to deliver that. Thank you very much. We'll now hand over to you for your questions. Operator: [Operator Instructions] Our first question is from Geoffrey d'Halluin from BNP Paribas. Geoffrey d'Halluin: I will have 3 questions, please. First of all, happy to get your thoughts on what you've seen in the start to the year 2026, especially for the month of January and Feb, I'm aware it's a small quarter for you, but happy to get any thoughts on the current trading, please? Secondly, I guess you said the one-off cost linked to the Rebound plan is going to be about 1 to 1.25x. So that means about EUR 300 million to EUR 350 million. Could you spread this cost between the next coming years? Should we expect all of these costs to be booked in 2026? And actually, is it cash cost? And the third question is related to the Professional business. So we've seen an improvement in Q4, flattish growth. What are you seeing for 2026? Do you expect the unit to go back to the, I would say, medium-term algorithm -- growth algorithm you provided to the market before? Stanislas De Gramont: I will take 1 and 3. Olivier, maybe you want to evacuate the second question. Olivier Casanova: Okay. So let's deal with the second question. So as indicated, we will take, I think, most of the provision in 2026, probably, in fact, in the first half because by that time, we will have, I think, enough, let's say, parameters to evaluate and be able to take a provision. We have, as I mentioned, taken EUR 24 million in '25 already, and part of that was noncash. I would say 90% of the charge will be a cash charge and only around 10% will be noncash. Stanislas De Gramont: Olivier, I'll take the next 2 questions. Starting with maybe the Q1 current trading. It's very early to say. I mean, we have a Chinese New Year that is moving 2 weeks backwards forward 1 year to the other. So January, February are very unstable. We don't see an extraordinary Q1. We don't see a bad Q1. I think we are in a trajectory where we are building a business with a clear discipline and focus on recovering profitability and Q1, hopefully, will reflect that. The Professional question is a fair question. I think Professional is a very healthy business potentially. We have some areas of great stability and sustained growth. I mean, Germany, Eastern Europe, Middle East, Asia. We have more instability in China, as you know, linked to the fluctuations of the large contracts. And we have this U.S. situation, which in a way delays or hampers the conversion of great projects into contracts. So we don't give guidance at this stage to Professional through 2026. Now if you step back, I think the drivers of our Professional business are 2 or 3 large contracts. And today, we have no signs of up or down versus historical. So it's pretty constant. We have geographical expansion, which is year after year confirming as a good growth driver. And we have something new this year, which is the development of these new machines into new market segments, small businesses, offices. I think we're coming in the market. We are the first European company to come on the market with such a range of competitive machines, cost competitive, very profitable machines in that area. And I think that will weigh materially on the development of the Professional Coffee business this year. I hope that answers your questions, Geoffrey. Operator: We now move to our next question from Christophe Chaput from ODDO BHF. Stanislas De Gramont: [Foreign Language] Christophe Chaput: Just one question remaining for me. I just would like to come back on currency impact. So as you say, you started to benefit in Q4 from the positive impact on U.S. dollar and Chinese yuan depreciation on your ORfA, I mean. Could you remind me how much it impacted the Q4? I'm not sure you give the figure. And assuming those currencies stay at the same level than the actual one, what could be the positive impact for the full year 2026 because it's quite meaningful, if I may? Olivier Casanova: Okay. I'm afraid I'm going to disappoint you, and I won't give you very precise numbers. But I think what we can say is that we had a net positive impact, which is a mix of positive impact from CNY and U.S. dollar, but still negative impact on other currencies. I think it's quite, let's say, normal. And in 2026, we expect, again, overall for the full year, a positive impact again from U.S. dollar and CNY, but still negative impact on other emerging market currencies. We expect further depreciation in the Turkish lira, Egyptian pound, Mexican peso, et cetera. So there will be some negative impact from currencies. But overall, I think what we can say is that we are expecting a total, let's say, impact of currencies on ORfA, which would be still negative, but much less than in prior year because of the positive impact, net positive impact from U.S. dollar and CNY. I hope that answers your question. Christophe Chaput: Just to be sure, ORfA 2026 negative related to currency? Olivier Casanova: Well, just to be sure, in 2025, the negative impact was EUR 80 million in '25. What we're saying is that the negative impact will be much smaller in '26, much smaller than minus EUR 80 million. Christophe Chaput: Okay. Understood. And on the top line, you say more or less the same level than in '25, which means minus EUR 200 million. Olivier Casanova: Yes. Operator: Our next question is from Alessandro Cecchini from Equita. Alessandro Cecchini: Can you hear me? Stanislas De Gramont: Yes. Alessandro Cecchini: The first one, actually, it's on your cost base, I would say, excluding, of course, the Rebound plan. So just to have a sense on 2026 about the various moving parts on input costs, on raw material transportation. So just to have your idea which kind of year you see in 2026 in terms of input costs, of course, excluding the -- I mean, the Rebound plan. My second question is instead about the U.S. market. You explained very well that -- I mean, we had minus EUR 40 million of negative impact in 2025 in terms of bridge. So just to have a sense, do you expect to have a positive now in 2026? And I mean, what kind of share you expect to recover in the U.S. given the several statements that you said before? Stanislas De Gramont: Okay. I will start with the second one, Olivier will take the first one. On the U.S. market, we have -- as we were disappointed by Q2 and Q3. You remember, we have a much better than -- a big improvement in Q4 versus Q2 and Q3. And I think that reflects the strength of our brands in the U.S. that reflects the strength of our market positions. Remember, the U.S. market is 3 pillars for us in the Consumer business. I'm not talking Professional, I'm talking Consumers. And I guess your question refers to Consumers. It's based on Tefal cookware. It's based on All-Clad cookware and kitchenware, and it's based on Rowenta linen care. And those 3 have leadership positions. And what Q4 shows in a market -- in a consumption market that is not very dynamic in the United States, the strength of our brands and of our positions. And in fact, when we look at the current trading in the U.S., it is positive in dollars despite price increases, despite all the uncertainties on consumption. And I think that reflects the strength of our Consumer brands and of our Consumer business in the U.S. So in a way, we do expect to recover a material part of what we lost last year in sales and profit in the United States. That said, the current level of uncertainties on demand, and I'm sure you read the same papers and documents as we read on U.S. consumer sentiment without even mentioning the announcements of U.S. President last weekend on tariffs. I think there's an area of uncertainty around the U.S. business that may alter that expectation to recover a material part of what we lost last year through 2027. But I think the key point for us in the U.S. is the strength of our brands -- is the strength of our brand positions because where we -- we are not everywhere, of course, we know that. But where we are, we are very strong and we have very strong positions. Olivier? Olivier Casanova: Okay. On input cost, I think we don't expect a very significant impact either way. There are some pluses and minuses, but it shouldn't be a major driver of profitability in 2026. We can expect maybe some slightly higher cost on some metals. For example, you've seen the strong price increase at the beginning of the year. Of course, it is -- the impact is very significantly moderated because of our hedging policy, which is, as you know, hedging over a long period. But still, there could be some slight increase. On the other side, we have maybe some positives on the shipping cost. So overall, it should not be a major driver. What is going to drive our profitability this year is much more the initiatives that we're taking on the industrial side to improve our efficiency and our productivity and also all the initiatives around redesign to cost, where we are looking to improve, let's say, the bill of material and the cost of some of our major products. Alessandro Cecchini: Okay. So very clear. My last point was instead on the Professional business. So it's a business with opportunities you have already highlighted correctly, my view. So just to have in mind, so if we expect, I mean, a trend more or less flattish or slightly up in 2026. So if we take the fourth quarter as a reference, you think that to recover the ORfA lost maybe could be more in the 2027. So just to have an idea which is your perception on the profitability and business dynamics for the Professional business. Stanislas De Gramont: I understand where you want to get to, Alessandro. It's early to say. We've seen a stabilization of the business. We have some good plans. We need to see how those plans materialize. We need to see how the U.S. business is evolving because it's a key element of -- it's a key part of our Professional business. So allow me to take a few weeks before we can give you a flavor and the direction for this Professional business. It's not that I don't want to. But today, we don't have qualified-enough elements to give you that flavor you're looking for. I'm sorry. Operator: We will now move to our next question from Natasha Brilliant from UBS. Natasha Brilliant: I've got a few or 3 questions. First one is just on the Professional Coffee hub in China. How does the pricing and the profitability of these machines compared to the existing Professional business? My second question is on the Rebound plan. So if growth trends change materially, either better or worse, could you increase the cost savings above EUR 200 million or even reduce them if you don't feel that you need it? Or is that EUR 200 million pretty much the level that's set now through to 2027? And then my last question is just on the midterm targets. So if I look at consensus out to even 2030, I think margins are below 10%, closer to 9%, organic growth also just below 5%. So my question is really when do you think the midterm targets might be achievable? Stanislas De Gramont: I'll let the first one to Olivier. On the flexibility of the Rebound plan, I think the Rebound plan is characterized by a large spread of projects. So we are not depending on 1 initiative or 2 initiatives. We have several initiatives in the support functions, in marketing functions, in development. And I think that gives us -- that lowers the risk of execution of one single part of the plan that could not materialize. I think that's some reassurance. I don't see very much upwards or downwards risks in terms of the execution. You may have some slippage of 3 months, 6 months just because of the voluntary dimension on most of the social measures. But it's pretty much where I think where we see it. Our midterm targets, I think the -- we are focused on recovering our level of profitability. That will be our priority in the next couple of years. I think growth will come back with -- it's on base. We have, as I said, a good base. I mean, we say no growth in 2025, yet China or Asia and Europe, EMEA grew by 2.7%. It's not 5%, it's not 0. So I think we -- this will be, I think, what fluctuates the achievement of the midterm target. But certainly, it is before 2028 that we want to reach that 10% at or before 2028. Why do I say that? Because midterm today is 2 to 3 years, it's not 10 years. So read our midterm guidance as 2 to 3 years, not 5. Olivier Casanova: Okay. On the first question, so as we mentioned, the machines that we've presented the elevation and peak, in fact, are addressing a customer base where we are not so present today, which is small offices, medium-sized businesses. And those are naturally positioned in terms of price points much lower than, let's say, the high-end machines, which are designed for customers that need, let's say, 350 cups per day. So here, we are looking at machines which are positioned below EUR 2,000, below EUR 1,000. But we are, of course, designing those machines, and this is also why they are let's say, produced and assembled in China. We are designing them and we are producing them in the most competitive way in order to achieve a similar, let's say, target gross margin as we do on the high-end machines. So that's our objective. It's the same strategy, by the way, that we have on the Consumer side. We have to design those machines in a way to deliver the target constant gross margin. Operator: [Operator Instructions] Our next question is from Alessandro Cuglietta from Kepler Cheuvreux. Alessandro Cuglietta: I hope you can hear me well. Just a quick one on the Rebound plan. How much of the benefit from the EUR 200 million savings do you expect to have in 2026? Is it like maybe 25% of the total? And how much of the total savings do you expect to reinvest because you mentioned more investments in marketing, innovation? So wondering if there's reinvestments out of those EUR 200 million. Stanislas De Gramont: Olivier? Olivier Casanova: Okay. So we don't -- I mean, we're just launching the plan and -- we have to go, of course, through discussions with the unions and the employee representative, et cetera. So I think it's too early to be very precise on the timing of the execution, and this will impact, of course, the amount of benefit that we have in 2026. Overall, it's going to be, I'd say, a small portion compared to the total. Most of the benefits, of course, will come in 2027 and probably a small carryover in 2028. We -- your second question on the reinvestment. In fact, we don't really look at it this way. Of course, we're looking to invest more. We said that it's an important element. It's redirecting our investment and also investing overall more to support our innovation and amplify, let's say, the impact of our innovation. But of course, those investments, they have to have a return above 1. So we are not looking to precisely reinvest the savings that we want to generate. Those are, let's say, 2 separate things. Stanislas De Gramont: And I would say, I mean, let's also speak clearly, we also want to improve our profitability. So I think there's a clear focus of the management of the leadership teams to improve profitability. And we are creating a plan that will structurally improve our ability to deliver growth. That will imply some investments, some increased investments in marketing, but we want to improve substantially the profitability of the company. Operator: So there are currently no further questions over the phone. With this, I hand over for any webcast questions. Stanislas De Gramont: Should I read them? How do we do it? Let me read the first one. Given global market shifts, what our group sales top strategic priorities for 2026, 2030 in both consumer and institutional channels, especially in high-growth markets such as China? Olivier Casanova: But I think it should be China rather than India. Stanislas De Gramont: I think the group has a widespread coverage of product families, product categories and geographies. Today, our Indian business is very small. I mean, we are almost inexistent in India. The way we look at it today is we see that our existing markets have a very strong and important potential for development. We see that innovation day in, day out drives extra consumption and extra value in every market, including India. We see India as a further opportunity down the road. It's not in the next 3 to 5 years road map of the group to develop in India. We see the development in the next 2 to 3 years, very much focused on the geographies we are in, developing, reinventing or evolving our relationship with consumers through the evolution of our marketing practices, accelerating our pace of innovation on existing or adjacent categories where we are in. We will have some geographical development in countries where we have some understanding of how we perform in neighboring countries. We think India is another dimension, and we don't have any plans to develop our business in India in the next 3 to 5 years. That is in the current setup of organic developments. Now the acquisitions will, of course, study them. Olivier Casanova: So the next question, maybe I can ask you, Stan. From your perspective, how important will e-commerce become for our Professional segment in the coming years, both in terms of direct digital sales and supporting customers with digital self-service? Stanislas De Gramont: It's a great question. Thank you very much. The first thing is there is a very strong connection already between our Professional customers and our Professional business on telemetry for machines management. We have our own programs. We have distance service programs. I think 1/5 or 1/4 of our servicing of machines in Germany is done online. So there is a very strong online connection already between our customers and our Professional Coffee business. That said, we see that the Professional distribution business in the U.S. is expanding rapidly D2C. The direct-to-consumer distribution is expanding rapidly in all Professional segments. We also see that the more we will move towards smaller customers, customers for 1, 2, 5, 10 machines, the more D2C service or serving of these customers will be relevant for buying, for servicing, for spare parts for all these dimensions of the activity. The good news is that we have a very substantial chunk of our machines, which are connected or connectable to our own platforms or to customers' platforms. We are very advanced in this industry in our ability to connect machines to customer systems or to our own systems. So we have the infrastructure by design that allows us to be digital or D2C ready in those dimensions. I'm reading the screen. I see that we have another question on the phone, please. Operator: Yes. So we have a follow-up question from Alessandro Cuglietta from Kepler Cheuvreux. Alessandro Cuglietta: It's me again. A quick question because if you look at the plan and the margin targets, I mean, we assume that to get back to your 10% EBIT margin, we need sales growth. And so I'm wondering how do you look at sales growth, I mean, at the market level in your Consumer business? Do you expect low single-digit growth over the next 2 to 3 years? And a follow-up to that, do you expect to gain market share? Is that part of the strategy as well? Stanislas De Gramont: Of course, I understand the question where it's coming from. I think -- I mean, when you look at the equation, 2028, below 10% profit will be disappointing for all of us. I think that starts from there. We are in an unstable environment. We have an unstable 2026. So it's early to give a guidance for 2026 sales growth. I think what you can think -- you can think of our business as our priority will be to restore the conditions for having sustained and sustainable sales growth. Our financial priority is to go back to our financial trajectory -- traditional financial trajectory, which I remind you is towards 10% operating profit growth is towards normative free cash flow generation, is reaching a leverage around 2. So I think that gives you enough indications. And what we try to do is to [ desensibilize ], if you want, the achievement of those financial targets from the organic sales growth ambition. That said, we remain convinced that the model of value creation of the group is based on profitable sales growth. That is the surest and more consistent way to deliver cash flows and to deliver return to shareholders. Operator: There are currently no further questions. Stanislas De Gramont: All right. I see no more questions. I would like to make a couple of closing words. 2025 has been a rather difficult year. We are creating the conditions to see 2025 as an inflection point for the group. We've heard and we are determined to restore the trajectory of the group, which is a profitable growth trajectory with a strong financial discipline with recovery of profitability, but at the same time, with creating the conditions for a Rebound plan to create a group that will again be able to deliver this 5% organic sales growth consistently and profitably. I would like to have the final, final word as a thank you for the analysts and the investors that follow us. And we will speak again in the publication of the first quarter results. Thank you very much.
Qazi Qadeer: Good morning, everyone. This is Qazi Qadeer from Panoro Energy. I'm the CFO. With me joining today is Eric d'Argentre, our Chief Operating Officer; and Julien Balkany, our Chairman. We are also supported by Andy Dymond, who is our Head of IR and Corporate Finance. I'll read out the disclaimer to you before we begin. This presentation does not constitute an offer to buy or sell share. So there are risks and uncertainties, including, among others, uncertainties in the exploration and for the development and production of the gas and oil interest in estimating those as well. And we basically -- we are going to discuss some forward-looking statements that are often identified here in these presentations. I think the disclaimer is understood to be read, so we can begin. For the housekeeping, we have a feature to do question and answers. [Operator Instructions] We are going to keep a disciplined, focused time on this call to take questions because we have a very, very packed agenda today, so we appreciate if the questions keep coming, and we'll try to answer those after the call on an offline basis. Next slide, please [ Sarah ]. I'll hand over now to our Chairman, Julien Balkany, who will take us through the materials. Julien Olivier Balkany: Thank you, Qazi. Good morning, everyone. Before we move to our Q4 results, trading, financial and operational update, I would like to say a few key words on the transformational and accretive acquisition that we have announced last night. I'm very delighted to announce that we have agreed to purchase an additional 40.375% in Block G offshore Equatorial Guinea from Kosmos Energy. The upfront headline consideration is $180 million with interim adjustments in Panoro's favor from the effective date of the transaction that is January 1, 2025, which expect to reduce the cash payment on completion between $140 million to $150 million. Closing is anticipated sometime during summer 2026. There is a further deferred contingent consideration of $29.5 million (sic) [ $39.5 million ] in aggregate link to certain production and oil price thresholds over 2026 to 2028. I would like to highlight that ourselves and our partner, Kosmos have been able to fully derisk the transaction, mitigating the execution risk, clearing all governmental approval and preemptive rights in advance. The only outstanding approval is CEMAC, which is an anti-competition assessment from Central Africa regulator, which we expect to be concluded within a set 6-month timeframe from submission to facilitate completion in summer 2026. As of the effective date and initial consideration, we are acquiring 46 million barrels at an enterprise value of about $3.91 per barrel, which is over 50% discount to Panoro last traded multiple market benchmark, including broker valuation and regional transaction comparables in West and Central Africa. Production net to the interest being acquired in 2025 was around 8,200 barrels of oil per day. In terms of funding to finance this acquisition, we launched yesterday an equity private placement at yesterday closing price, at no discount, for just below $50 million, which we have successfully closed and was multiple times oversubscribed last night. The demand for the placement and fact we completed it at no discount is a clear testament to the quality of Panoro asset base, including Block G and the compelling terms of the acquisition. We are also seeking to utilize the $150 million tap headroom in our existing bond framework. And today, we are commencing fixed income meetings with prospective bondholders. Next slide, please. Transformative impact, materiality and longevity. I would say this slide speaks for itself and show the transformational impact on Panoro's operating profile. Based on 2025 full year, the acquisition increased Panoro pro forma production by approximately 80%. And on a 2P reserve basis, it increased Panoro size by over 100%. This acquisition basically doubled the size of Panoro overnight. Other of the many benefits of the acquisition will be the increase and more frequent crude oil lifting, giving us better and greater regularity with the oil price through the years, which we fully expect to drive material cash flow expansion with the objective to enhance shareholder return for the next years to come. Next slide, please. Block G overview. Before I hand over to Eric d'Argentre, our COO and President, I want to remind people that it is almost 5 years ago today since we announced our entry in Equatorial Guinea and the acquisition of our current 14.25% interest in Block G from Tullow Oil. That acquisition paid back in less than 18 months. And as you can see in the graph on the slide in front of you, our 2P reserve at our last annual report are greater than the 2P reserve at acquisition, showing that we have replaced more reserves than we have produced. There are clearly some parallels with the acquisition we have announced last night, hopefully, at the right time in the current oil prices cycle and Panoro's ability to transact swiftly and with certainty and also the strong support of the capital market and our shareholders. I will now hand over to Eric, who will take you through the operation of not only Block G, but also the exciting and high-impact work program across our wider E&P portfolio. Eric d'Argentré: Thank you very much, Julien. Good morning, everybody. On this slide, on the Block G, you can see on the left-hand side our Ceiba and Okume Complex. So Block G is composed of 2 different oil accumulation, 6 fields on conventional more shallow water and the Ceiba field, which is a subsea development. The key figures on a pro forma basis are very strong. We have 115 million barrels of 2P. Our production for '25 on a pro forma basis is 11,000 barrel of oil per day. As you can see on the left-hand side, the production curve, delivery was strong through the years. 2025 saw a little low on production delivery mainly on the Ceiba field. We have discussed that in the previous reports, quarterly reports on the Ceiba multiphase pump failures or problems. I'm pleased to say that, back in October, one pump was back in service. Another one is being finalized now as we speak this coming weeks. And we expect the Ceiba field to gradually recover production and get back to its full potential in the course of the year 2026. Next, please. So Block G, Okume and Ceiba, it's important to note that it's very large oil accumulation, multibillion barrels of oil in place originally, 1.3 billion on Okume and 1.1 billion on Ceiba field, with the current recovery factor that is rather low at around 20%, 21%. And with our long-term view and extension granted in 2022 until 2040, we expect, with the work program, to recover around 30%. That is the target. And you can see from 2025 going forward on the next 5 years, we have in the first few years, focusing on the recovery of our cluster in Ceiba field, additional well workover and intervention, stimulation, pump optimization on the Okume Complex and then moved to -- in 2 to 3 years in 2028 and forward, on the drilling campaign to add additional drainage point on the Okume field and the Ceiba accumulation over the years that we expect in our 5 years plan to reach -- to get back above 30,000 barrels of oil per day and produce around 55 million, 54 million gross production at moderate development cost, around averaging $10 per barrel. Next, please. So on the large group production, Panoro has delivered a consistently increase of production with a historical level in 2025 at 2,300 barrel of oil per day pre-acquisition. And you can see here, the impact of the 40.3% acquisition of Kosmos interest on '25 pro forma basis. Our production guidance for 2026 on a pro forma basis are around -- between 15,000 and 17,000 barrel of oil per day with the current program. And as I mentioned in the previous slide on Block G, we have as well strong program -- investment program, specifically on Dussafu block in Gabon with MaBoMo Phase 2 drilling starting this summer. And we are on the road to the 20,000 barrel of oil per day net to Panoro Group. That is very strong asset base is as well in terms of cash generation, very healthy and strong. You can see on the right-hand side, we are very resilient at oil price. Even at $60 a barrel, we have a healthy cash flow generative way above our pro forma bond feature and going up to the $800 million and $900 million mark once the barrel price goes to $75, $80. Next, please. So we have discussed this morning the transaction on Block G, but let's not forget the rest of our asset base and especially the Dussafu asset, which is a cornerstone asset for Panoro, has strongly delivered production with a very good upside for the years. And here again, with historical peak production in 2025, about 33,000 barrels. We have a strong 2P base. As I mentioned, the MaBoMo Phase 2 was FID-ed and drilling will start very soon. And we have -- in parallel, we are maturing with the operator Bourdon FID. Bourdon was discovered late '24, '25. It's a 25 million barrel recoverable reserves and we expect FID to be sanctioned in the coming months. Next, please. On Tunisia, it's a more modest asset base, but very steady, very important in the portfolio as well. We have delivered good production last year, above 3,000 bopd fighting decline, maintaining our baseline. And we have a list of productive project and well intervention in 2026. And we are maturing some drilling project for later '27, '28, that will not just maintain the plateau or extend the plateau above 3,000, but increase production on the Tunisian asset. Thank you. Next slide, please. Another exciting project we have, on exploration. We have the Niosi and Guduma blocks, which are, as you can see right in the middle of a very prolific basin with the Dussafu production and the Etame field of VAALCO very close to it. And we have finalized the seismic survey back in December and January. It's now being processed and interpretation this year and part of 2027 to mature the already identified prospect, whether on the top corner of the Dussafu block or on the Niosi trend as well. That's a very, very exciting project, and we aim to well being sanctioned sometime in 2028. Next slide. Another very exciting project in block, Block EG-23 in Equatorial Guinea. We have high-graded Estrella discovery, very exciting discovery with well tested above 6,700 barrel of oil per day and almost 50 million standard cubic feet of gas. It's about 10s kilometers from existing producing facilities of the Alba field, making it a very fast track and easy tieback. And you can see next to Estrella, the green Rodo discovery that would conceptually could be a commingled development of Estrella and Rodo with one platform and drilling center. So another exciting project to follow. Next slide, please. Thank you. I will hand over to Qazi Qadeer to take you through the full year results. Qazi Qadeer: Thank you so much, Eric, and good morning, everyone. I'm going to discuss very briefly the 4Q and full year highlights for 2025. We are looking at revenue of $216 million, a little bit less compared to 2024, but it is a function of 2 items, which is oil price and the composition of liftings, which then basically affect the cutoff of the sales if they are very, very close to the period end. EBITDA was $98 million approximately. Again, this was driven by the volumes lifted during the year versus the realization for the year compared to 2024. We came exactly on our guidance on the capital expenditure of USD 40 million, which we believe is a good result for the discipline of capital we maintain at the company. Strong cash position, $77 million, and we are basically fully drawn on our bond, which we raised last year and very, very healthy and strong cash flow generation from operations at USD 73 million. We are looking at cash distribution of NOK 50 million, which we have announced this morning to be paid on or about 10th of March. And just looking at the few years, we have started to declare our distributions, accumulated basis is about NOK 710 million, with a very healthy set of buybacks as well at NOK 135 million. Next slide, please. Just to talk a little bit about the shareholder returns. So effectively, we have returned 30% of our current market cap. Obviously, this will be a little bit different if we consider the market cap of this morning, but certainly when we wrote this presentation, 30% of market cap since we started consistent distribution since March 2023. A very healthy yield so far we have maintained, but obviously, we are constrained by the framework that we have under our bond terms, which basically give us a finite capacity for distributions in 2026, which is about, in equivalent terms, USD 21 million. And off this, we have distributed for this quarter about NOK 50 million equivalent. Next slide, please. We are going to talk a little bit about guidance on liftings and also discuss how the announced acquisition affects our business. Very, very positive change from the acquisition of Kosmos' interest, which is expected to be fully available to us in 2027, but certainly from the later part of the year when we complete the transaction in the third quarter 2026. On an existing basis -- business basis, we are talking about accumulation of inventories until the first half of the year, which is about close to 600,000 barrels, but very, very active sale campaign in later part of the year. So for guidance purposes on existing asset base, 3 million to 3.5 million barrels of sales versus assuming on a pro forma basis, we get about 5.1 million to 5.5 million barrels of sales for this year. Now what it also does is that it increases our frequency of the lifting and during the completion period with Kosmos transaction, we are still taking the benefit of a more spread out profile of our crude liftings, which also exposes us to more data points on the pricing for our crude. Next slide, please. So again, just talking about how the buildup for cash has been for this last -- past year. As I mentioned very healthy cash flow generation from operations. We have also between the recycling of inventories through the advances. We are close to about $100 million of cash flow including operations. With our discipline delivery on the capital expenditure of our $40 million and after paying off all our obligations, we are returning about close to $40 million in share buybacks and cash distributions for this year, ending with about $77 million of cash at the balance sheet as of 31st of December 2025. We are also, as you have seen, announcing a tap issue for a $150 million bond to fund the acquisition of our announcement this morning to take the working interest of Kosmos Energy's Block G 40.375%. This will basically be the source which will basically fund this acquisition later in the year. For guidance purposes, we have some capital expenditure, which is about USD 50 million to USD 55 million on an existing basis of the assets. And with -- on a pro forma basis, assuming we complete the transaction with Kosmos, it is going to be another $15 million to $17 million higher. Next slide, please. So just in summary, I will let Eric summarize the messaging and then we'll go straight into Q&A. Eric d'Argentré: Thank you, Qazi. As a summary and the main message for you today is that we are delivering on our strategy -- on our growth strategy. The first pillar being the production baseline and the reserves, we have produced highest production this year -- in 2025 last year, at record level. We have FID'd the MaBoMo Phase 2 as we discussed. That will take us back to 40,000 on the Dussafu block. That's a very exciting Phase 2 drilling. So we have a consistent organic reserve replacement, whether it is in Gabon or in Equatorial Guinea as well as in Tunisia. In parallel to this strong production and reserve base, we are maturing growth project in our asset portfolio with the Bourdon discovery in Gabon. We mentioned -- and I mentioned the Estrella project in Block EG-23, for which we expect resource recognition very soon. And the new 3D seismic we just acquired with our partners, BW Energy and VAALCO, Niosi, Guduma and Dussafu block will allow us to mature and firm up extra additional growth within the south of Gabon area where we are already. And in terms of corporate, in our growth strategy, Panoro has a strong track record of accretive M&A. That's part of the company DNA, and we have delivered on that strategy with the announcement yesterday of the acquisition of the 40.375% interest of Kosmos in Block G offshore Equatorial Guinea. Thank you. That's the last slide. We'll now go on the Q&A for some time, and I would remind you to try and focus on the big news of last night and this morning on Block G, so that we stay focused. Thank you. Andrew Dymond: We will now open up to Q&A. As has previously been mentioned, for obvious reasons, we are on a tight timetable today. If we don't manage to answer your question or get to you, please do contact us on info@panoroenergy.com or ir@panoroenergy.com, and we will get back to you. First question is from Stephane Foucaud. Stephane Guy Foucaud: It's really around EG and around the production profile over the coming years. So two on that. The first one, could you confirm if this production profile is indeed just on the 2P case or whether it includes some 2Cs to achieve that target? And then I think you talk about a $540 million of CapEx from '26 to 2031, I think it is. Could you give a sense of the timing of that CapEx? How it is spread over the years? Eric d'Argentré: All right. Thanks, Stephane. So to answer your question, we have, in terms of production and the 5 years plan about your 2P, 2Cs, it's -- we are talking here about the 2P, not the 2C in this 5 years plan. The 2C would come as an addition to this 5 years plan. So the drilling we mention is on current recognized reserves, but not all developed, so underdeveloped reserves. And the other part of your question on the CapEx. So the next 5 years plan a net rev means producing around 55 million barrel of oil at an average cost of $10 per barrel. You can well imagine that some of the work like stimulation of light workover on the Okume Complex may come at $5, $4 to $5 a barrel development. Drilling in Okume Complex is more within the $10 to $12 or $13 range, and the Ceiba drilling will be around $15 to $17 per barrel development cost. So the average of this large portfolio is around $10 per barrel development cost. Stephane Guy Foucaud: Okay. So if I understand therefore, looking at the slide, that means that probably the higher cost, in overall, probably come in the later years rather than the earlier years of the program? Eric d'Argentré: Yes, exactly. The -- yes. The Ceiba drilling needs more work, more engineering. It's higher investment. So we are going for the conventional shallow water first, easy barrels on Okume wells -- well stock, maximizing the existing well stock, and then we will go on drilling. And the Ceiba drilling will come after the Okume drilling campaign. That's where we are very much aligned with the operator. Andrew Dymond: [Operator Instructions] Okay. On the basis that there are no further questions pending, I'd just like to remind you if you do have a question after this call, please feel free to contact us online and we will get back to you. Otherwise, that will conclude today's webinar. Thank you very much. Qazi Qadeer: Thank you. Eric d'Argentré: Thank you very much. Julien Olivier Balkany: Thank you all.
Robert William Wilkinson: Good morning, everyone. I think we'll start. Welcome, everyone, to Hammerson's 2025 Full Year Results Presentation. I've met a number of you already over the last few weeks, but for those I haven't met, I'm Rob Wilkinson. I joined Hammerson as CEO in January of this year. I'm with Himanshu Raja, our CFO, of course, who's joining me for the presentation this morning. In terms of the actual presentation itself, I'd like to start with sharing with you a couple of my first impressions of the company since I joined, obviously, looking back at the achievements and results of 2025, our outlook for '26 and beyond, I'll pass then to Himanshu to comment on the financials in a bit more detail, before some closing remarks, and then obviously be delighted to take any questions at the end of the session. So if I start, since October of last year, I made it my priority to visit all 10 of our flagship destination assets to meet with the teams. And one thing that's very clear is that the extent of turnaround that's been achieved over the last 5 years is nothing short of remarkable. And credit should go to Rita-Rose and the team for what they've done over that period. It also clearly positions Hammerson now at a situation where we can now leverage our platform and assets as we go forward. But 3 things have really stood out for me about the company since I joined. The first is the quality of our unique portfolio of retail-led destinations across the U.K., France and Ireland. We are the leading pure-play company in those markets. And today, 98% of our destinations are rated A or better by Green Street. So a fantastic portfolio. We've also got a fantastic team. We have a first-class integrated platform, which is built on a management team that is best-in-class and passionate about driving the destinations that we manage across our portfolio. This sits alongside our data-led technology platform, which provides us with customer analytics, allowing us to drive excellence and continue to outperform the market, as you'll see later. And finally, the strength of the company financially and our access to equity and debt capital markets as obviously demonstrated last year with our equity and bond issues, which were very successful and were both heavily oversubscribed. So a lot has been done, but I can assure you there's plenty more to do, plenty more to come. But I do believe that Hammerson is extremely well placed now to embark on our next phase of growth. If I turn to the results themselves for a minute, they are undoubtedly a strong set of results and ahead of consensus. Our net rental income increased by 23% year-on-year to GBP 180 million, driven by in part the JV acquisitions we undertook last year alongside like-for-like rental growth of 3%. Our earnings have increased by 5% as we've gradually reinvested the proceeds of the sale of the interest in Value Retail. Those increased earnings have generated increased dividends, up 6% year-on-year, which is reflective of that growth, but also a sign of our confidence in the future. Our portfolio is up 33%, a little above GBP 3.5 billion, and that's been driven again by those JV acquisitions alongside capital growth of 4% in the year, which itself was driven by ERV growth and yield compression in the U.K. and Ireland. That's translated into a 6% growth in NTA to GBP 3.94 at the end of the year and a total accounting return of 11%, marking a return to positive territory for the company. So very strong results overall. As I look at our key priorities as I see them, well, put simply, is to continue doing what Hammerson has done very well for several years. We will continue to drive the returns of our existing assets and portfolio. We have a strong track record of repositioning our assets and creating significant value from that, alongside leveraging, as I mentioned, our technology platform to optimize our brand mix and also enhance the customer experience at our centers. All of that will help us to continue to increase rental tension across the portfolio. Second, we will continue to maximize both the value, but also the optionality of our strategic land, either developing it ourselves, in partnership or, in certain cases, recycling capital from assets in due course. Finally, we need to scale up, and it's not about growth for growth's sake. This is about focusing on accretive, disciplined acquisitions that are consistent with our strategy, but will allow us to enhance our operational efficiencies, therefore, driving earnings growth into the future. If I look a little bit at those priorities in more detail and what we've achieved, at an operational level, it's been a very strong year as well. Our occupancy has increased to 96%. In fact, 6 out of 10 of our destinations are now above 98% occupancy, and that's led us to a shift in mindset and strategy from leasing up the assets to rent up as we look to increase the rents across our centers. We've seen an increase in footfall. So we've added 3 million visitors during the year, up to 170 million visitors across 2025. This is in stark contrast to our national benchmarks. As you can see from the chart in the middle there, the yellow are our benchmarks. They're either flat or negative compared to the growth that we've achieved. All that translates into the important things for our retailers with sales of more than GBP 3 billion in 2025. And the statistic that I particularly like is what we call the new for old. So this is taking the former underutilized or vacant anchor space within our schemes, repositioning them into new concept. And across those, we've seen an increase in sales densities for our retailers of 40% compared to pre-COVID levels. If I shift to leasing, another year of very strong performance across the leasing front, a record level of new deals at over GBP 50 million signed during the year. As you can see, at substantially above, in fact, double digits above passing rent or ERV, leading to additional rent of around GBP 260 million to first break. We've had a number of firsts across our portfolio, either regionally or first within the portfolio for the likes of Sephora, Uniqlo, M&S and Lululemon. And pleasingly, we have more of those happening during 2026 as well. 2026 has started strongly on the leasing front as well. As you can see, our pipeline of around GBP 20 million is a very positive start for the year on the leasing front as well. Our final part of driving the performance of our destinations is repositioning. And clearly, 2025 was a very active year on that front as well. If I start with Cabot Circus on the left, the opening of the M&S store in November was incredibly strong. It increased footfall in the center on the day by 50%, 5-0 percent, and M&S themselves had record sales as well. We've invested in an overhaul of the car park, installing frictionless technology, which has driven, apologies for the pun, an increase in usage of just under a quarter, so up 25% on the year in the car park. And recently, a couple of weeks ago, we opened, in a grand ceremony, the Odeon Luxe at Cabot Circus, which is the only cinema in Bristol City Center, which will help obviously drive activity further and into the evening, which then obviously has a benefit for the F&B provision within the center. We've got further openings in the center this year with Uniqlo and Sephora to come. And we've just started the regeneration of Quakers Exchange and beginning the public realm works there as we speak. So a lot has been done, but still a lot going on and a lot to come within Cabot Circus itself. If I turn to the Oracle, we obviously introduced Hollywood Bowl and TK Maxx there last year. Hollywood Bowl had their best ever opening at the Oracle. And that obviously helped footfall up 9% in the second half of 2025. Our net rental income is up 10% on the scheme and more to flow through from the upsizing of Zara and Apple within the Oracle during this year. And as many of you know, we still have the Debenhams, the former Debenhams unit within the center, on which we have multiple options, both retail, but some of you may have seen that we also got outlined planning for the residential scheme at Reading Riverside earlier this month. So again, lots to do still at the Oracle. Finally, Les 3 Fontaines in France, the extension phase there, as you will recall, is fully pre-leased to Primark and Nike. And what's really pleasing is to see the kind of halo effect of that already as we've made further lettings to an Apple reseller and to Aroma-Zone adjacent to that scheme. So Cergy is now 90% occupied, which it never has been before. But we also expect that to increase. As that scheme opens and starts to trade from Q1 next year, we expect further leasing activity from that as those retailers have opened. If I move on to the pipeline and how we look to maximize the value and optionality, as I mentioned, you've seen this chart before. We've updated it since you last saw it. So on the left-hand side, you've obviously already heard about the Bullring and Dundrum repositionings. Worth noting that we continue to benefit from those repositionings even today. In pink, obviously, already mentioned the Oracle, Cabot, and Cergy a little bit further to the right. But also to mention the completion of The Ironworks at Dundrum, which completed in October, and we are obviously in the middle of leasing that up. We've got about 1/3 leased and very strong demand for what is very good product in a tight market. Looking at the recycling side of the equation, the box in blue in the middle, we completed the sale of our last interest in Leeds a couple of weeks ago, and that completes our exit from the Leeds market entirely. So we sold the last site for GBP 6 million, slightly above book. So we've realized a total of GBP 32 million in the last sort of 18 months or so from the complete exit of our interests in Leeds. And on the right-hand side, you have our longer-term development program. So where we're looking at master planning options, obviously, and that includes Birmingham with the Martineau Galleries that I mentioned already. And actually, the Birmingham estate is almost a perfect example of a way of describing how we look at our strategic land holdings. We are clearly right in the center of Birmingham and the iconic Bullring sits at its heart. That itself is now 98% occupied. And so we've got significant spillover into Grand Central. You can just see to the right, where we've got retailers taking space within that as demand spills over from the main center itself. At Grand Central, moving on to additional opportunities, we have our Drum project, which is a great example of projects within our schemes that are integral to them. We are currently working up a mixed-use office, retail, F&B and leisure scheme at the Drum, which we'll look to take forward in the months ahead. Another part, which is integral, is at the top of this image, Edgbaston Gardens, the car park, on which we have outlined planning for 700 residential units or 1,500 student or a combination of the above. And again, these 2, as I say, are integral to the scheme and provide synergies in terms of footfall. On the bottom left, a little further afield, you have Martineau Galleries, which is a very large office and residential dominated scheme. This is a much longer-term project on which we will look to maintain control of the master planning, to maintain control of the overall environment. But ultimately, we will look to maximize value and recycle capital in due course for that project. And coming back to increasing our scale, which obviously allows us to leverage our operational efficiencies and the platform that I've referred to already. It also helps us to increase diversification and liquidity and obviously deepen the relationships that we have with our retailers. In the last 15 months, we invested just under GBP 760 million in buying out 4 of our joint venture partners at a yield in excess of 7.5%. Those deals have been significantly accretive to earnings. And as I've mentioned, we've been able to execute them without adding any management resource, so very accretive from that standpoint as well. We will continue to target further accretive acquisitions, both internal and external, so long as they are accretive to earnings and they are consistent with our strategy of investing in retail-led destinations. And finally, if I turn to the outlook for '26 and beyond, we're expecting net rental income growth of 20% next year, driven by a full year effect of the JV acquisitions, of course, but also like-for-like rental growth of between 4% and 5%, earnings growth for the year of around 15%. It will be a touch less on the EPS because of the share issue last year, and Himanshu will comment on that. We have a clear line of sight as well to our earnings into 2027 as we benefit from the leasing activity that we've had in '24, '25 and beginning of '26, and also the Cergy 3 scheme coming on board. So again, a very positive outlook as we go forward for earnings into 2027. On that note, I'll hand over to Himanshu to comment on the financials. Himanshu Raja: Thanks, Rob. And good morning, and welcome to everyone this morning. As usual, let's just jump straight into the financials. As Rob said, another strong year of financial performance for us. Starting with the top line. Net rental income up 23% year-on-year and like-for-like growth of 3%, exactly in line with our guidance. And just unpeeling that a little bit, it was really pleasing to see the U.K. up 4%, and we had particularly strong performances both at Westquay and at the Oracle. The like-for-like in both France and in Ireland was around 2%, solid performances in our French operations and really strong performance in Dundrum, benefiting from the repositioning of 2 or 3 years ago, and also strong performance in Pavilions. Turning to the earnings line. EPRA earnings slightly above consensus at GBP 104 million, up 5%. And the key is that we saw really strong operational gearing come through with the EPRA cost ratio down nearly 4 percentage points to 35.9%. And finally, on the P&L, the IFRS profit of GBP 232 million is our first full year positive IFRS result since 2017. On the balance sheet, an increase of 33% in valuations driven by the acquisitions, yield compression as well as ERV growth, and then the beat on NTA up 6% to GBP 3.94, so I'm going to unpeel those in more detail. Credit metrics are robust. LTV of 39%. And remember, on net debt-to-EBITDA to annualize the effect of the acquisitions, which we've shown in today's release at 8.1x. So let's now turn to the earnings walk. Starting with the reported number of GBP 99 million last year. You remember, last year naturally included the contribution from Value Retail. It included the contribution from Union Square and also 2 months benefit from the acquisition of Westquay. Adjusting for those, for the like-for-like portfolio, the rebased earnings would be at GBP 76 million. And then starting from that, we saw GBP 1.4 million from the disposal of the noncore land in Leeds, like-for-like growth, the GBP 3.6 million uplift, and a GBP 35 million contribution from the acquisitions. The increase in net administration costs principally reflects inflation, but also the loss of management fees now that we own 4 of our U.K. assets, 4 of 5 U.K. assets at 100%. Net finance costs were up GBP 7 million. Really 2 moving parts there called out on the slide. The largest being the lower interest receivable of GBP 10 million as we redeployed cash into yielding acquisitions. And then the interest payable improved by GBP 3 million from the successful refinancings that we did in 2024. Turning then to the NTA. And remember, when you're looking at the NTA, the cancellation of 9 million shares from the share buyback, which we suspended at the half year as we deployed funds into the acquisition of Bullring and Grand Central, and the equity issuance, which is 48 million new shares from the equity raise. So the walk starts at GBP 3.70, earnings added GBP 0.20, as you can see on the slide. The GBP 120 million property revaluation adds a further GBP 0.23. Dividends, naturally an outflow of GBP 0.16, the GBP 82 million of dividends. And then you see the effects of both the share buyback and the equity issuance flowing through to deliver that GBP 3.94. And to valuations. As Rob said, just over GBP 3.5 billion of value today and a capital return -- and a total property return of 10%, capital return of 4%, and an income of 6%. And just going left to right, starting with the U.K., the U.K. was up 13%, benefiting from an average 21 bps yield compression. And we saw that coming through at Bullring, we saw that come through at the Oracle and at Cabot Circus, really underscoring the benefits of the repositioning. And it was pleasing to see ERVs up also 3% in the U.K. France total returns were 5%, really driven by income growth, while yields were stable. And Ireland posted a 12% total return with 20 bps inward yield compression and a 4.5% growth in ERV, really reflective of the fact that our Irish assets are 99% occupied. And finally, on developments, a 14% return, which includes the uplift from the discounts that we achieved on the land elements of our joint venture acquisitions. So just to close on this slide and to share with you our reflections on ERVs and yields. Whilst we saw ERVs up 3% in 2025, there is more to come as there's a lag here in values fully reflecting the leasing spreads coming through on ERVs. And to yield compression, you can see on the right-hand side of this chart, the range of yields today compared with where the peak yields were in 2016, 2017. And on the far right, you can see the 5-year swap rates. And whether you compare the yields today to those at peak, or to the spread to current swap rates, they continue to look elevated. And therefore, it was really pleasing to see the tightening of yields coming through in the U.K. and Ireland as the sector became much more attractive to that wider pool of investors. The balance sheet. We've been very disciplined in our capital allocation in 2025. We've seen strong support from both equity and debt markets. And during the year, we saw our credit ratings strengthened from both credit agencies. Our credit metrics remain robust and are fully aligned to maintaining a strong investment-grade credit rating. We are in a good place at this point in the cycle. Liquidity remained high at GBP 1 billion, and our refinancings in 2024 and in 2025 have largely addressed the upcoming maturities. And since the year-end, we've repaid a further GBP 104 million of debt from cash on balance sheet, and you'll see in the additional disclosure at the back, the resulting maturity chart. So moving to my last slide and more detailed guidance. We expect EPRA earnings growth of 15% to around GBP 120 million with EPS growth of around 10%, taking account of the equity issuance. In terms of the key line items, we are forecasting an acceleration in our like-for-like growth to 4% to 5% and total NRI growth of around 20%. Our flagships gross to net will be at around 80%, and we will maintain administration costs broadly flat through continued strong cost control, notwithstanding the loss of around GBP 1 million of annualized management fees following the JV acquisitions. It was pleasing to see our EPRA cost ratio come in around 4 percentage points. And as you look forward with the growth included for both '26 and 2027, we expect to see the EPRA cost ratio come down by 3 to 4 percentage points in each of 2026 and in 2027, such that in 2027, our EPRA cost ratio will be below 30%. Net finance costs will be about GBP 60 million from the lower cash balances after the acquisitions and falling rates, partly offset by the higher interest from the October 2025 bond issue. And then finally, to CapEx. We expect to spend around GBP 30 million to complete the repositioning at Cabot Circus, the Oracle and Cergy 3. And our ongoing asset management leasing CapEx, we guide to about GBP 34 million. Philosophically, we always seek to fund that from FFO after dividends, and we'll be in that position starting in 2027. And then finally, to the dividend. The dividend has increased this year with earnings. Our payout ratio remains 80% to 85%. And of course, with growing earnings, we grow dividends. With that, back to Rob. Robert William Wilkinson: Thanks, Himanshu. Just to conclude then, we will clearly remain focused on capitalizing on Hammerson's strengths. We will look to continue driving returns from the existing assets and portfolio. We'll look to scale up in order to really use the operational leverage that is inherent within our platform. All of that, alongside what you've heard from Himanshu, gives us great confidence in the future. And we've got, as I said, a very clear line of sight to our earnings growth in 2026, which is strong, but also into 2027. So I'm very excited about where we are in Hammerson's journey and as we embark on our next phase of growth. Thank you for listening, and I'm very happy to take any questions. Thank you. There's one here in the middle. Bjorn Zietsman: Bjorn Zietsman from Panmure Liberum. Himanshu, just a question on the earnings walk. So if we sort of strip out the VR disposal benefit and the NRI acquisitions, the adjusted EPS -- adjusted earnings number would have actually gone backwards. So I guess my question is, over the past 2 years, how much benefit has come from project repositioning or asset repositioning like the Bullring? And do you have to do more deals in the future to continue to drive earnings beyond FY '26? Himanshu Raja: What you've seen, Bjorn, is, if you reflect back on the repositionings being with Bullring and Dundrum, there's always a lag before that comes through. With the completion you now see at both Cabot and Oracle, which will complete and is fully funded in our guidance in 2026, that's where you now begin to see that acceleration coming through in the NRI. And that's across the board, not just in the U.K. We see it coming through from the lease-up at TDP, where it went through a 10-year anniversary cycle last year. You'll see it coming through on Cergy, and we continue to see that coming through. So largely, the repositioning have been complete, and we're now reaping the benefits of the investments we made, both in lease incentives and in CapEx now coming through. Thomas Musson: It's Tom Musson at Berenberg. Clearly, good results today. Can I just ask, in your November trading update, you talked about medium-term guidance of an 8% to 10% EPS growth CAGR. Today, you sort of mentioned to expect further growth in EPRA earnings in FY '27 and beyond. Just wondering if that 8% to 10% outlook in the medium term on earnings still holds? Himanshu Raja: Tom, that was based, if you recall, at the time following the disposal of Value Retail, so it was based off the 2024 rebased earnings, which was GBP 76 million shown on my slide on the like-for-like portfolio. So projected forward on a 5-year CAGR, that still holds. It was off that '24 base. Maxwell Nimmo: It's Max Nimmo here at Deutsche Numis. Just you're talking about scaling up, but it needs to be accretive. Just as you kind of look around the sort of your universe as it were, where do you see the kind of most accretion that you can find? Is it within the U.K. and extracting value from that strategic land? Or do you think actually maybe we go to further into Europe here where we can find higher yields and tighter financing? Just any views you have from that perspective. Robert William Wilkinson: Sure. I'll answer that to a degree, Max, and certainly come back later in the year with perhaps a little bit more precision. In short, today, across pretty much all the European markets, there is a spread between the yields at which you can acquire and the cost of debt. And of course, there's differential, as you mentioned, between U.K. and Europe. I see both of those as being attractive. But I think what will drive our acquisition strategy going forward is really about specific situations of assets that we like and where we can actually create further value through repositioning as we've demonstrated so far. So just the spread of markets themselves doesn't provide the answer to the question, you've got to look at the specifics of each opportunity. What I've said to the team so far is that having been through a period over the last 5 years where the company has had to do certain things to ensure that it continues, our focus now is we should be choosing what we do and where we do. And so we're spending some time looking at that, looking at the opportunity set across the markets in Europe. And as I said, we'll come back later in the year to give more commentary on that. Oliver Woodall: Oli Woodall from Kolytics. Just kind of following on from that, if an acquisition opportunity does present itself, what is your appetite given LTV has come up? And is that -- you're going to provide color later on the same? Robert William Wilkinson: No. I think, look, we'll be open to acquisition opportunities if and when they present themselves. We will not sort of necessarily wait. If the right opportunity presents itself, we will act. In terms of the second part of your question, which Himanshu may comment on as well, we're comfortable with where we are in terms of our balance sheet metrics. We've got our guardrails that we want to stick within. I think it's important to note, last year, obviously, we were able to demonstrate the ability to combine both equity and debt to fund acquisitions, and that's certainly we would look to do going forward. But there are other avenues as well of funding acquisitions that could be in partnership again, could be through recycling capital from some of the disposals. So I think we certainly will be open to acquisition from now, and we'll be looking to stay within the kind of metrics that we have today from a balance sheet standpoint. Himanshu Raja: I would add that the acquisitions that we've done in 2025 have been a net credit positive. From a credit agency perspective, you saw both credit ratings strengthen. And that was just a reflection that we now have rental-driven EBITDA streams, not joint venture distributions under our control. So you'll continue to see, as you run the numbers, that net debt-to-EBITDA strengthening as you go into 2026 and 2027. Oliver Woodall: Okay. That's clear. And then one more on the tenant health of -- well, across your portfolio. I don't know if you give an occupancy cost ratio number anymore, or if there's any color you can give how that's looking across the different geographies? Robert William Wilkinson: Sure. Do you want to comment on the OCR side? Himanshu Raja: Yes. Tenant health overall remains robust. The OCRs now across U.K., France and Ireland are in their mid-teens. And actually, rent to sales only now makes up about 10% of the OCR. Rates, where there's a lot of talk about rates, represent about 2% to 3%. And across our portfolio, with the 2026 revaluation, we'll actually see the multipliers come down. So on average, across the portfolio, we'll see an 8% to 10% benefit on rates coming through for occupiers. So it's more national insurance and other costs that the occupiers worry about rather than rent to sales or rates. Tom Berry: Tom Berry from Green Street. Just the French macro picture looks a little bit weaker at the moment and indexation expected to be on the lower side next year. How does that kind of play into your guidance for 2026? Robert William Wilkinson: Well, it's fully factored in, obviously, in terms of the outlook guidance that we provided. It's a market that has much lower volatility and has much lower cost of finance. And therefore, it's still a major contributor to our earnings today and going forward. But obviously, we'll keep a watching eye on what happens in France. Himanshu, anything else you want to add? Himanshu Raja: Yes. And I would just add that, that acceleration of the NRI growth of 4% to 5% equally applies to France. So indexation, as you say, really is pretty much 0 for 2026, but it's the benefit of the lease-up at TDP and the opportunities that Rob has already talked about at Cergy that really begin to come through on the '26 numbers. Robert William Wilkinson: Anyone else in the room? Okay. I don't know if there are any questions that have come through? Yes, I think so. Josh? Josh Warren: Nothing that we haven't already covered. So in the interest of time, Rob, if you'd like to draw a conclusion, I'll just remind everyone, we've obviously got a short turnaround, so please do move back to the drinks area. Robert William Wilkinson: Thank you, Josh. Look, again, just thank you for being here and for listening. Sorry. Josh Warren: Apologies. Apparently, we have some questions on the phone line. Operator: [Operator Instructions] We will take our first question from Veronique Meertens from Kempen. Veronique Meertens: Just 1 -- 2 questions. One, again, about those investment markets. I appreciate that you can't go into full detail, but just maybe from an overview perspective, do you see more opportunities arising or more discussions over the last few months? Or do you feel that investment markets are still a bit in a lockdown across your 3 different geographies? Robert William Wilkinson: Thanks, Veronique. The short answer is that we do anticipate further investment activity and growth during 2026. I think a number of potential sales have been headlined already, and we do expect those to come through during the course of 2026 in the U.K. I think in general as well, the environment for investment is likely to improve slightly in 2026 as interest rates potentially continue to come down gradually and investor sentiment across Europe has started to improve. So I think we'll see what's happened already a little bit in the U.K. start to spread into Europe as well. So in short, we expect there to be further investment activity, and we will certainly be looking at that. Veronique Meertens: Okay. Perfect. And then one other question. So you obviously have quite a positive outlook, both from improved top line and bottom line. So I'm just curious what would you say is the biggest challenge for Hammerson in 2026? Robert William Wilkinson: I think the biggest challenge actually are sort of factors that are somewhat outside of our control. So it's really coming back to particularly the U.K. macro picture, perhaps France as well and the impact that has on consumer. I think those are probably the potential headwind risks that we face more than anything that's sort of specific to our portfolio. So yes, overall consumer. Operator: Thank you. It appears there are no further questions. I'd now like to turn the conference back to Rob for any additional or closing remarks. Please go ahead, sir. Robert William Wilkinson: Okay. Well, no, just once again, thank you all for listening. As I said in summary, a very exciting time for Hammerson. So again, thank you for coming here for your questions and look forward to seeing you further. Thank you. Thanks all.
Operator: Ladies and gentlemen, welcome to the Marqeta Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Maria Greiser, Director of Investor Relations. Please go ahead. Maria Greiser: Thanks, operator. Good afternoon, everyone, and welcome to Marqeta's Fourth Quarter 2025 Earnings Call. Hosting today's call are Mike Milotich, Marqeta's CEO; and Patti Kangwankij, Marqeta's CFO. Before we begin, I would like to remind everyone that today's call may contain forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including those set forth in our filings with the SEC, which are available on our Investor Relations website, including our annual report on Form 10-K and our subsequent periodic filings with the SEC. Actual results may differ materially from any forward-looking statements we make today. These forward-looking statements speak only as of the time of this call, and the company does not assume any obligation or intent to update them, except as required by law. In addition, today's call includes non-GAAP financial measures. These measures should be considered as a supplement to and not a substitute for GAAP financial measures. Reconciliations to the most directly comparable GAAP measures can be found in today's earnings press release or earnings release supplemental materials, which are available on our Investor Relations website. With that, I'd like to turn the call over for Mike to begin. Mike Milotich: Thank you, Maria, and thank you for joining us for Marqeta's Fourth Quarter 2025 Earnings Call. I'm excited to be joined on this call by Patti, our new CFO, who started on February 9. Patti is a proven finance executive with extensive experience across technology, financial services and payments, and we're excited about the value she will have at Marqeta. To start our call, I will briefly touch on our Q4 results, followed by a few Q4 highlights of the growth in our business across use cases, geographies and value-added services. I will then turn it over to Patti, who will cover the details of our Q4 financial results and our expectations for 2026. Our fourth quarter results were once again demonstrating our outstanding growth as we reached new levels of scale while continuing to increase our adjusted EBITDA as we trend towards GAAP profitability. Total processing volume, or TPV, was $109 billion in the fourth quarter, crossing the $100 billion threshold in a quarter for the first time in Marqeta's history. With a year-over-year increase of 36%, this was the third straight quarter in which our TPV growth has accelerated by 3 points from the previous quarter, demonstrating our strong business momentum as we exit 2025. Q4 net revenue of $172 million grew 27% year-over-year, driven by strong TPV growth across the use cases we enable. Q4 gross profit growth was $120 million, a 22% year-over-year increase, exceeding our expectations by several points. Our adjusted EBITDA was $31 million in the quarter, which was another all-time high, translating into an 18% margin and more than doubling the dollars on a year-over-year basis. This was fueled by strong gross profit growth and the benefit of our scale platform and efficiency initiatives. This quarter and throughout 2025, we drove significant growth by deepening our existing customer relationships through seamless geographic, use case and value-added service expansion while also successfully onboarding and ramping new customers. Our leadership and expertise powering innovative offerings continues to attract established brands seeking a proven partner to drive growth and user engagement by leveraging card programs. One area we highlighted throughout 2025 is the growth and traction we are seeing in Europe. TPV in Europe grew more than twice as fast as the overall company in the fourth quarter, which is the first quarter in nearly 2 years that the growth has been below 100% on a year-over-year basis due to the rapidly expanding base. As a testament to the scale we have achieved in Europe in a relatively short period of time, the TPV in Q4 2025 was nearly 40% higher than our annual TPV in 2023 and spans the breadth of the use cases we serve. In Q3 2025, we completed the acquisition of TransactPay, which enables us to deliver a complete offering in the U.K. and the EU across processing, program management and the EMI license comparable to what we offer in the U.S., Canada and Australia. The ability to offer an end-to-end solution across geographies is becoming increasingly important in serving enterprise customers, whether they are large fintechs or embedded finance multinationals. One such customer is Uber, a long-standing Marqeta customer. Our relationship started with enabling couriers for delivery in the U.S., which has since grown across many geographies. We then expanded into new use cases such as the Uber Pro card to support the financial needs of Uber drivers, which we are now helping to expand geographically to the U.K. Marqeta solution now live allows Uber drivers in the U.K. to access their funds immediately, get rewards and keep their money in a high-yield savings account with a partner bank, all within an Uber-branded app developed by Marqeta. Last year, we highlighted our work on a white label app designed to give customers a fully branded out-of-the-box solution managed by Marqeta that accelerates customer time to market. This program is the first to deploy the white label app, utilizing the preconfigured flows for onboarding, account setup, transaction monitoring and support, all of which reflect Uber's brand. This exemplifies the breadth and depth of the Marqeta offering by delivering the full spectrum of processing, program management and value-added services. This includes banking and money movement with seamless integration with our banking partner in the U.K., processing, fraud monitoring, real-time decisioning, risk management and our white label app. The holistic approach enables Uber to work with one partner to deliver a robust solution with full banking functionality. This expansion also highlights the confidence and trust that a discerning customer like Uber has in Marqeta to deliver a scalable and comprehensive product to their target market. This solution showcases our ability to offer a complete end-to-end solution, which is important for enterprise and embedded finance customers who are looking for a single best-in-class provider operating at scale with a full offering across geographies. Lending, including Buy Now, Pay Later, continues to be one of the most compelling and fastest-growing use cases. We continue to see strong growth in demand in Q4, which is driven by our ability to support customers with innovation at scale across many geographies. BNPL started with Marqeta enabling virtual cards for seamless payment experiences without costly and time-consuming back-end integrations. The category has continued to evolve, and we have been at the forefront of enabling seamless geographic expansion and newer innovative solutions such as the Visa Flexible Credential and Payanywhere cards, which allow our customers to deliver a better value proposition that is clearly resonating with their users. In a testament to our leadership in BNPL and the unique combination of capabilities we enable globally, in Q4, we added yet another BNPL customer who will be flipping an established program to our platform. For Technologies, a BNPL provider that allows shoppers to split online purchases into 4 payments, was looking for a tech-forward partner with a proven track record and the expertise to support their ambitious growth goals. As a result, they are moving their business to Marqeta. In addition to helping existing customers expand into geographies and use cases with new programs, we continue to strengthen our offering by delivering additional value-added services, which helps create more durable relationships and bolster the economics of our business. In Q4 2025, value-added services contributed over 7% of our gross profit with 18 of our top 20 customers utilizing at least one of our value-added services. As we have highlighted in the past, our real-time decisioning product within our suite of risk services was built to be issuer-centric and allow customers to create rules and controls to manage transaction fraud by leveraging actual transaction data. In Q4, we launched an enhanced version of this product with a long-standing customer using artificial intelligence and machine learning capabilities for real-time risk evaluation during the authorization process. Our enhanced model uses many transaction level attributes and historical behavior patterns to predict risk at the time of the transaction, all with millisecond level response times. We sought the input of several of our existing customers to create these models, which are self-learning and will work to continuously improve fraud detection and adapt to emerging threats. In Q4, we also signed 2 additional customers for this enhanced real-time decisioning capability. Both customers were looking for a flexible solution to help meet the different needs for neobanking and lending use cases across multiple geographies as they scale, appropriately balancing the expansion of their target audience and credit lines with fraud mitigation. By embedding AI-powered controls and advanced machine learning into the authorization process, we enable customers to expand confidently while also strengthening their fraud defense as they scale. To wrap up, as I reflect on our many accomplishments in 2025 and the efforts that are currently underway, I'm excited about our business momentum as we look forward into 2026 and beyond. First, given the long lead times in onboarding new business and the time it takes for new programs to ramp up, deal activity provides good insight into business momentum that takes time to impact the P&L. We are successfully shifting to targeting enterprise customers with embedded finance use cases, signing 3 Fortune 500 customers in 2025, and the average deal size increased over 20% year-over-year. We also executed a flip in each quarter, both credit and debit products, demonstrating our competitive differentiation. And over the past 2 years, we have signed approximately 40 new logos, while our top 15 customers are adding over 3 programs to our platform, with 14 of our top 15 customers adding at least 1. Second, our leadership in lending and Buy Now, Pay Later use cases continues to be a source of strength as commerce continues to shift toward these payment methods. Our success in lending and BNPL clearly illustrates what makes the Marqeta platform unique, modern, flexible processing that can support a wide range of value proposition from anywhere cards, distribution through wallets and virtual card solutions. We enable innovation for our customers, such as being the first to support flexible credentials in the U.S. and Europe, multinational reach that enables geographic expansion and reliability at scale to handle rapid growth even among very large programs. Third, our traction in Europe, where 2025 TPV was 8x the size of 2022 and should continue to be a source of strong growth. The addition of TransactPay significantly enhances our offering, enable us to deliver a full solution set in Europe aligned with U.S., Canada and Australia. The launch of the Uber U.K. program this past quarter is just the beginning. Lastly, we continue to expand and enhance the solutions we offer, both within program management and value-added services, increasing the value we deliver for customers and strengthening our customer relationships. This should continue to be a growth vector for us going forward, particularly value-added services, which are still only 7% of gross profit exiting 2025, but more than doubled year-over-year. Our financial performance in 2025 demonstrates what can be delivered when the business is firing on all cylinders. Our 24% gross profit growth and 26% adjusted EBITDA margin on gross profit has us on the cusp of GAAP profitability. We believe the market is evolving in favor of modern multinational processors operating at scale, which is reflected in our recent deals and our sales pipeline. Although we expected -- although we expect 2026 gross profit growth to be impacted by 2 specific factors whose timing really weighs on 2026, make no mistake that the structural components of our business remains strong as we look to reach larger milestones in the years to come. With that, I will turn the call over to Patti to discuss our Q4 financial results and 2026 guidance in more detail. Patti Kangwankij: Thank you, Mike, and good afternoon, everyone. I look forward to getting to know all of you moving forward. I'm excited to be stepping into this role at a time when Marqeta is building the business for scale and on the cusp of GAAP profitability. Our financial results for Q4 reflect another great quarter and an even stronger-than-expected finish to the year. Both net revenue and gross profit growth were approximately 4 percentage points higher than expected due to the business momentum reflected in our TPV growth. For the third straight quarter, TPV growth accelerated by 3 percentage points on a sequential basis, reaching 36% in Q4. With adjusted operating expenses roughly in line with our expectations, the higher gross profit led to another record quarter for adjusted EBITDA, and we approached GAAP net income breakeven for the third quarter in a row. Let me start by providing some color on our incredibly strong TPV, which was $109 billion in Q4, growing 36% year-over-year, with 3 of our 4 major use cases delivering accelerated growth. Non-Block TPV continues to grow over 2x faster than Block TPV. Growth within our financial services use case accelerated from last quarter, and the growth rate continued to be a little slower than the overall company. Lending, including Buy Now, Pay Later growth slowed from Q3, but remained very robust, growing just shy of 60% on a year-over-year basis, mostly due to the growth in flexible network credential usage and our customers' continued geographic expansion on our platform. The growth slowed versus Q3 because we lapped the Klarna migration in Europe, which was executed in October of 2024. Expense management growth accelerated several points from last quarter, with growth exceeding 40%. This performance is driven by customers continuing to acquire new end users as their platforms gain share while utilizing our uniquely configurable capabilities. On-demand delivery growth also accelerated and continues to be in the double digits, but below the company's overall growth rate. Q4 net revenue was $172 million, growing 27% year-over-year. Block net revenue concentration was 44% in Q4, in line with last quarter. Q4 gross profit was about $120 million. The 22% year-over-year growth was approximately 4 points higher than we expected, primarily driven by 2 factors. First, TPV growth outpaced expectations across all use cases. Second, the addition of TransactPay added 4 percentage points to gross profit growth, which was 1 percentage point higher than expected. TransactPay contribution can fluctuate from quarter-to-quarter based on implementation fees and several projects were delivered in Q4 ahead of expectations. As a reminder, we revised our accounting policy for estimating and recognizing card network incentives starting in Q2 of 2025. As a result, Q4 gross profit growth had a headwind of 5 percentage points due to the difference in methodologies for the year-over-year comparison. Our gross profit take rate was 11 basis points, a little bit more than 0.5 basis point lower than last quarter, largely due to the impact of the major renewal completed in the quarter. Q4 adjusted operating expenses was $89 million, growing 4% year-over-year, in line with our expectations. We continue to remain focused on operating efficiency and are realizing the benefit from the increased scale of our platform. Q4 adjusted EBITDA was $31 million, a margin of 18% based on net revenue. Adjusted EBITDA margin based on gross profit was 26% and illustrates the profitability potential of our business. Our Q4 GAAP net loss was just over $1 million, which included $7 million of interest income. We ended the quarter with approximately $770 million in cash and short-term investments. Our share repurchase activity remains ongoing as we continue to believe the current valuation does not fairly represent the company's value or the market opportunity ahead of us. In Q4, we repurchased 20.2 million shares at an average price of $4.76. For the full year 2025, we repurchased 84.8 million shares at an average price of $4.59, which is a reduction of nearly 17% of the outstanding shares as of 2024 year-end. As of December 31, we had over $91 million remaining on our latest buyback authorization. Let me briefly summarize our full year 2025 performance, which was a fantastic year. TPV growth was 31%, adding over $90 billion of volume versus 2024. Net revenue grew 23% and gross profit grew 24% on a year-over-year basis, fueled by strong TPV growth, the delay of 2 major contract renewals and a significant increase in adoption of our value-added services starting in Q1. Gross profit growth was 8 percentage points higher than the high end of our expectations at the start of the year, primarily for 3 reasons. First, we had spoken all year about 2 major renewals that we expected to be completed mid-2025. Both renewals were delayed as we engaged in discussions around additional opportunities as part of the contracts, which added 2 percentage points to gross profit growth. Ultimately, one was completed in Q4, while the other is shifting to 2026. Second, we had nonrecurring benefits in each quarter, except for Q4, which added approximately 1.5 percentage points of growth. The remaining upside was driven by stronger TPV growth across multiple use cases, particularly lending, including BNPL. Adjusted EBITDA was $110 million for the year, which is more than 3.5x what we delivered in 2024. Our strong gross profit growth was paired with adjusted operating expense growth of only 1.5% due to success in our efficiency initiatives, increased platform economies of scale and investment delays in the first half of the year following the CEO transition in Q1. Now let's transition to our expectations for 2026. I will start with our full year 2026 expectations before sharing more details on the quarterly cadence. Let's start with TPV. In 2026, we expect the growth to moderate into the high 20s due to increasingly tough comps, particularly in the second half. This growth is expected to add $100 billion in TPV. We expect 2026 gross profit growth between 10% to 12% with an implied gross profit dollar range of $481 million to $490 million. There are 2 specific factors that uniquely pressure gross profit growth by 7 percentage points combined with their impact amplified by their timing. First, the 2 large renewals we have been discussing for the last year are expected to reduce our growth by 4 percentage points in 2026. The delay in these renewals benefited 2025, but increases the grow-over impact in 2026. As a reminder, these are the last 2 renewals where we expect to meaningfully adjust our pricing coming out of the fintech boom a few years ago. Second, based on the level of Block TPV exiting 2025, we expect them to shift to the next pricing tier in their contract, reducing growth by 3 percentage points. At the time of the block contract renewal in the second half of 2023, we agreed on the next level of scale for their business on our platform. To incentivize their growth, we included a price tier that steps down 2x the size of other pricing tiers in the contract. Block just reached that tier in December 2025, and we expect them to remain there for all of 2026, creating an unfavorable year-over-year comparison. Those 2 factors weigh on 2026 growth because of their timing, but we don't expect them to be impactful to our growth trajectory in 2027 and beyond. In addition, Cash App's diversification of new issuance is expected to lower our 2026 gross profit growth by approximately 1.5 to 2 percentage points. This assumes we gradually lose new issuance in the first half of the year and receive no new issuance in the second half. Before moving on, let's take a step back. At the start of 2025, we expected gross profit growth to be 14% to 16% in 2025 and in the low 20s for 2026. We outperformed in 2025 with 24% gross profit growth. The key factors driving the outperformance in 2025, such as the TPV growth momentum and the timing of the renewals, onetime items and the jump in adoption of our value-based -- value-added services in Q1 2025 are some of the same reasons that gross profit growth in 2026 is lower. However, the 2-year expected CAGR from 2024 to 2026 of 17% to 18% and the absolute dollar amount of 2026 gross profit have not changed. Coupled with the strong execution of our efficiency efforts and platform scale, we now expect both adjusted EBITDA and GAAP net income to be ahead of our projections for the start of last year -- from the start of last year. Full year 2026 net revenue growth is expected to be 12% to 14%. 2026 adjusted operating expenses are expected to grow in the mid- to high-single digits. We remain disciplined with our investments in growth initiatives and continue to benefit from efficiency and platform scale. Investment delays that materially lowered our first half of 2025 expenses are lifting our growth rate in 2026. Therefore, we expect full year 2026 adjusted EBITDA to grow in the mid-20s, more than twice our gross profit growth rate. As a result, we now expect to generate a modest amount of GAAP net income in 2026, likely around $10 million. Let's now turn to the quarterly cadence. TPV growth is expected to be in the low 30s in the first half of 2026, then moderating and exiting Q4 2026 in the healthy mid-20s as we grow over strong year-over-year comps. For Q1, we expect gross profit to grow between 17% to 19%, representing approximately a 4 percentage point step down from Q4 2025. This is primarily driven by a 3 percentage point headwind from Block price tiering and a 1 percentage point lower contribution to growth from TransactPay. Q2 gross profit growth is expected to be approximately 3 percentage points lower than Q1, mostly due to the second major renewal going into effect. We expect gross profit growth in the second half of the year to moderate to the high single digits, slowing from Q2, primarily driven by 4 factors: Lapping the inclusion of TransactPay will lower growth by 3 points. Lapping the strong growth in our lending, including BNPL use cases in the second half of 2025 will lower growth by approximately 1 point. Incentive timing is benefiting the first half and decreasing second half growth by approximately 1 point. The assumed loss of Cash App new issuance will reduce growth by 2 to 3 points. Q1 net revenue growth is expected to be 17% to 19%. Q2 net revenue is expected to be approximately 3 percentage points lower than Q1, in line with gross profit and in the low double digits for the second half of the year. Our 2026 investments are primarily focused on technology and product innovation as well as increasing our go-to-market and compliance resources to meet growing demand. Q1 adjusted operating expenses are expected to grow in the low double digits before jumping into the high teens in Q2 due to a tough comparison from investment delayed in 2025. As you may recall, the Q2 2025 expenses were uncharacteristically low. Growth in the second half is expected to be in the low to mid-single digits as we grow over the inclusion of TransactPay and more typical investment levels. Q1 adjusted EBITDA growth is expected to be 45% to 50%. We expect Q2 growth to be approximately 10% to 15% due to the tough expense comparison, while the second half should grow 20% to 25%. Lastly, we expect to be approximately GAAP breakeven in the first 2 quarters of the year and then start generating net income in the second half. In conclusion, our achievements in 2025 have built a strong foundation for continued success in 2026 and beyond. Our ability to migrate customers in both credit and debit and flip several portfolios helps accelerate time to value and translates to gross profit and bottom line growth. We have great traction in Europe, and we are already seeing increased demand and bookings with the acquisition of TransactPay and our ability to now offer a full end-to-end solution in Europe. Not only does this increase our pipeline and opportunities for growth, but we expect this to help bolster our gross profit take rate. Lastly, the traction we are seeing with value-added services not only helps create stickier customer relationships, but also helps gross profit. As we head into 2026, we are excited about the momentum of our business. Our deep expertise and ability to enable innovation at scale are paying off and these growth areas, coupled with our scale, position us to achieve GAAP net income profitability in 2026, a pivotal milestone that launches our next phase of value creation. I will now turn it back over to the operator for questions. Operator: [Operator Instructions] our first question is from Timothy Chiodo with UBS. Timothy Chiodo: Patti, great to be on the call with you. The Cash App topic, so I apologize for just getting right at this, but I did notice a little bit of a change there. So gradual on the new issuance in first half and then turning off the new issuance in the second half. I was wondering if there was any update you could provide investors around maybe the longer-term messaging around to what extent this diversification might persist? Would it persist into 2027, '28, '29? Will there be some kind of a limit to it where we hit a happy medium across the various providers that Cash App is using? And then related to that, I also noticed that you mentioned the tiering that Block is hitting this year, and you expect them to be at that tier for the entirety of the year, which somewhat implies that the second half lack of new issuance isn't overly material to 2026 numbers as you've previously guided. But the follow-up question that if that lack of new issuance starts to catch up to the Block volumes next year, does Block potentially slip back into a lower tier and therefore, your take rate with Block returns to norms rather than the headwind that it sees this year? Mike Milotich: Thanks, Tim. I'll try to cover -- you covered a lot of ground there. So let me kind of dive in. So yes, we have changed our assumptions a little bit on the impact of them diversifying their new issuance. Up until this point, and we're almost at the end of February, we see no discernible impact on the new issuance we're receiving. So at this point, it's minimal to really not being able to see anything. And so -- but we do expect them to be getting started. So what we've assumed now is that through the first half, it will sort of gradually -- we'll be receiving less new issuance. But then by the second half, we will no longer see any new issuance. In terms of the second part of your question in terms of the longer-term impact of diversification. As you know, Tim, in payments, a lot of people have -- well, they see multiple providers, but they tend to have a primary provider, right, where you have 80% to 90% of your volume and then you have a second provider who you really use for diversification purposes. And how that plays out for us with Cash App remains to be seen, but we feel really good about our ability to remain their primary partner. One, we feel that our platform capabilities are quite differentiated in terms of what we can do and what we can provide them. The second thing is that our relationship goes very deep and goes back very many years. And so we have -- we're accustomed to working together and have just a very deep relationship and are quite responsive in terms of how we work with them. And then finally, and maybe most importantly, the -- there's a lot of very engaged users that remain on our platform and would be quite disruptive for them to look to maybe move those off of our platform. And when you look at the contribution to the spend from those users, we feel that's really going to benefit us to remain the primary partner. And we continue to also provide option value. So it'd be very easy for them to consider international expansion, for example, or move into more of a traditional credit card product on our platform that may be more difficult to do with the partners they're using for diversification purposes. So we -- it remains to be seen, Tim, but we feel good that we have a very strong relationship, and we continue to add value, and we'll just have to continue to assess it as we get through this year. In terms of your second question on the tiering, so yes, you're correct. I mean if you go back to the renewal 3 years ago, what really we set out to do at that time was with -- together with Cash App and the negotiation, we said, okay, when does the business hit sort of like the next level of scale, like truly get to even a completely different level of operating. And at that point, we should maybe have a little bit of a price adjustment to reflect that new kind of level of scale they've achieved. And they just moved into that in December. And so -- but the tiers are relatively big. So just given the size of the business, and there are more than 10 tiers in the contract, but the blocks of volume are relatively good size. So there's a lot of room in there for them to remain in that tier. But you're right that even with losing some new issuance, we still expect some growth and they would remain in that tier for the year. And if they were really to start diversifying away more significantly, then that's the benefit of price tiering. It would start to get more expensive, and that would be the cost of diversification on their side. So we'll see how it plays out, but we feel good about our relationship and our ability to continue to add value there. Operator: Our next question is from Connor Allen with JPMorgan. Connor Allen: Patti, congrats on your role. Maybe a question for you, if you don't mind. Can you talk a little bit more about your choice to join Marqeta? I'm curious, considering your background across cards and payments, just what stood out for you in your diligence? What makes you the most excited here? Patti Kangwankij: Yes. No. Well, thanks, Connor, and it's nice to meet you. So I've been in and around payments for over a decade now across -- as you mentioned, across acquiring, issuing and banking and across a bigger kind of like within a bank as well as kind of Stripe and then subsequently at Roofstock, which I was trying to implement embedded finance within that. So I've known about Marqeta for years, and I was at Stripe when they launched issuing and really recognized Marqeta as a category creator at that time. So when the call came in, I spent some time with Mike and the Board and the leadership team, and I got very excited about the combination of kind of the team I'd be working with, but also kind of listened to a lot of their track record in 2025 and kind of the growth they've been seeing and kind of all the opportunities ahead. And then also the customers that they worked with DoorDash, Klarna, Uber, Block, having worked with these customers across different organizations, they don't take these decisions lightly and really, it kind of validated what's been built here. And so -- and as you know, payment platforms are kind of complex and hard to build. So -- and they require deep relationships. And so I just felt like my experience was especially relevant at a time and place where there was just a lot of growth and investment ahead. And so I'm excited to be here today to join the team. Connor Allen: Great. Appreciate that and share the same view on our side. Maybe one for you, Mike, if you don't mind. I wanted to ask a little bit about competition. There's been some discussion in the market about newer entrants competing for larger deals. I mean we gather that it's not necessarily happening where Marqeta typically participates. But I'm just curious at a high level, if you've seen any shift in the competitive environment, new faces and RFPs, et cetera? Mike Milotich: We are not seeing any significant change in the competitive environment. I would say it's relatively stable. I think what is more changing from our perspective is a few years ago, in the fintech boom times, right, there were a lot more deals, a lot more uncertainty where you were making bets on customers and whether they would succeed. That was a big part of the sort of process. Not only are you bidding for the business, but you're also trying to assess the chances of success. What's now happening is there are fewer deals, but they're much more substantial in size. And there are customers who already have a user base and a brand. And so from our perspective, have a much higher likelihood of success because they're really just looking to insert a card value proposition into an existing user base. And so the fact that then there are more established companies has changed a little bit the dynamics of who we see because usually, they're only going to include players who have more substantial scale, and that's a much bigger part of the decision-making process because they're confident they're going to reach several billions of volume or maybe even to double-digit billions of volume annually and who has the platforms and the experience and track record of delivering on that kind of scale. And so it's mostly stable, but there is a slight change as we move upmarket, so to speak. Operator: Our next question is from Darrin Peller with Wolfe Research. Darrin Peller: Patti, nice to connect and congrats also, to connect again. I guess when I just think about the underlying trajectory of the business, Mike, I know we talked about 7 points of impact to your gross profit outlook really associated with the items that you discussed on Block as well as the renewals. And I guess there's another few points on pricing, which I think is a little bit more newer to us just given the scale of Cash App. And so the combination, you're really still growing your Cash App by somewhere over 20% when you look at your guide and those variables. A, is that how you want us to think about the trajectory? And, b, if that's true, maybe remind us of what you're seeing as the top drivers. I mean you're talking about flips in the business, where are you seeing the most strength? Just rank the top few strengths you're seeing driving that 20% plus algorithm. Mike Milotich: Sure. Yes. Thanks, Darrin. And you're exactly right. There is the 2 impacts we called out that are 7 points, the renewals and the Cash App tiering, those to us are very timing specific. It's almost like they're almost perfectly lining up to hit our 2026 growth in a way if they were -- the timing was a little different, these impacts would be spread it out and our growth wouldn't be kind of where it is in the lower double digits. So those 2 things, we really think are very specific to timing and therefore, go away. And then we have a little bit of 1.5 to 2 points of the Cash App diversification. And then just in general, the TPV growth is just moderating, right? The second half, our growth has really been particularly impressive given our scale, and we don't -- we still expect it to be strong, but not growing over 30%. And so you put all those things together, and there's sort of 7 points of timing and call it, 4 to 5 points of other factors. I think when we look at what is -- what's exciting to us, I would put it in a few different areas. Like there's 4 things where we really have strong momentum. Like the TPV growth, again, is very impressive, particularly Buy Now, Pay Later, and we just think that's going to be a growing use case that's just going to continue to get wider adoption. Europe is not only fast growing, but we've added capabilities there with TPL just in the last 6 months. Our value-added services, the size of that business doubled in 2025, and that tends to be a stickier, higher-margin business. And then the new cohorts, the new customers we're bringing on, as I mentioned, 40 new logos, 14 of our 15 top customers have done a new program with us in the last 2 years. So our existing customers are expanding with us. And so those are all the things that make us feel confident of just the underlying momentum in the business. And then when you combine that with some things that are more on the come, a pipeline that's full of enterprise customers who are looking to move into card payments and looking for established scale players. We have innovative new products that we're experimenting with and we're hoping we'll get some traction in 2026. And then, of course, credit is something that we've been taking our time with making sure we do it the right way, but we're going to start leaning in more and more in kind of the next year or 2. So those are all things that I consider to be on the come. And then the last piece I would just highlight is the beneficial mix as Europe and value-added services, which are growing much faster than the company, and we think will continue to do so, as they gain share of gross profit, it will lift the overall gross profit growth rate. So that's why I mentioned in my comments, I think the growth we're seeing in 2026 is very specific. We think that actually the underlying components and structural elements of the business are actually quite strong and on a good trajectory, and we feel good about the path that the business is on. Darrin Peller: Yes. Okay. Guys, just one quick follow-up would be to double check that you reviewed the portfolio and don't feel any risk of incremental renewals, large renewals. I just want to see if there's anything else we should just keep an eye out for, for the year that would impact maybe guidance even into the next year. It may be too early to know the end of the year, but anything you see where your transparency is? Patti Kangwankij: Yes. I think it's probably a little too early to be talking about 2027. But I think, yes, we do, on a normal way basis, have renewals all the time. But really, these 2 that we're highlighting here are the 2 remaining from coming out of the fintech boom. But I think you'll always see as we're kind of growing with these users and you would see -- you would naturally see some pricing step down as they grow with us, but that's, again, to incentivize them to grow with us. Mike Milotich: Yes, I would say, we have pretty good visibility. And I think we -- as Patti just said, I mean, we've included sort of the BAU things that we would expect to see. So we feel pretty good that we've incorporated everything. Patti Kangwankij: Yes. Operator: Our next question is from Sanjay Sakhrani with KBW. Sanjay Sakhrani: Welcome, Patti. I'm just curious, I know, Mike, you talked a little bit about the expectations for moderating TPV growth in the second half. Obviously, you're growing over some difficult comparisons. But curious, is that sort of conservative given you have the pipeline and then obviously, BNPL is doing well? Or do you feel like there will be a little bit of a scale back in terms of issuance there? Mike Milotich: Yes. It's a great question, Sanjay. I think the performance we're seeing in this past quarter, I would say, is just -- is pretty remarkable. Like when you -- just to step back a minute, our lending and Buy Now, Pay Later use case is growing almost 60%, and that's despite us lapping the conversion with Klarna that started -- that we executed in October of '24. So we're growing almost 60% with like a tougher comp. Expense management is growing over 40%. That's a pretty big use case for us. So that's the first time it's grown over 40% in 3 years. Financial services, which is by far our largest use case, is growing over 30% in Q4, and it hasn't -- that's the first time that's happened in 2025 on, again, a very large base. And even on-demand delivery, which for the last couple of years has been more of a single-digit grower, is now double digits the last couple of quarters and accelerated. So we really are seeing incredible performance. We've tried to be reasonable. As we said, we think in the first half, our growth will remain over 30% as there's just so much momentum. But as we get to the second half, it's just we have really tough comps. And if some of these things can keep rolling at that level, obviously, that would be great for the business, but that's not what we've assumed for now. We think those tougher comps will slow the growth a little bit, but growing in kind of the mid- to high 20s on a base of almost $400 billion of volume, we feel pretty good about the growth of the business. Sanjay Sakhrani: And then just a follow-up on value-added services and Europe. I guess when we think about the growth there, can you just maybe help us dimensionalize sort of what you're expecting this year versus last year? And what maybe the broader product rollouts are that could actually maybe accelerate the growth there as well? Mike Milotich: Sure. So let me start in Europe. Europe is now I don't know, about a little bit -- maybe a little bit more than mid-teens of our TPV. And this is the first quarter in a couple of years that it hasn't grown over 100% just as that base is growing. As I mentioned in my comments, 2025 is 8x the size of 2022 in terms of our business in Europe. So we have a lot of momentum there, and that was all done with a relatively limited value proposition of just our -- we have great processing. And of course, we're quite proud of our processing capabilities, but we didn't really have many other services around that capability. And with the TransactPay acquisition, we now have a much more robust value proposition to sell and market. And so we are expecting Europe to still meaningfully outpace the overall company, both in terms of TPV growth as well as gross profit growth. So we expect that to be a pretty major contributor. In terms of value-added services, we continue to add new capabilities and more and more customers are looking for scaled solutions. I would say the growth, we think, will moderate a little bit in 2026 only because we really had a pretty significant step-up in 2025. We had a few of our largest customers adopt offerings from us, which then meant that the gross profit doubled in 2025 versus 2024. And although we think it will keep growing at a nice clip faster than the company, it's not going to keep up that pace. But we do think it will be a meaningful contributor. And typically, those are higher-margin products and they increase the stickiness with the customer as well. So we're quite excited about kind of our expanding portfolio and the increased penetration that we have with those products into our customer base. Operator: Our next question is from Craig Maurer with FT Partners. Craig Maurer: Welcome, Patti. I wanted to put a finer point on Tim's question earlier considering a lot of what I had has already been asked and answered. Visa was pointed on their call to call out the win in cash for Cash App. They've been putting a lot of emphasis on their Issuer Services business. So I was wondering what you're seeing differently from them? Are they increasing their presence in the market in terms of what they're doing for fintechs? How is this changing how you're looking at the market, if at all? Mike Milotich: Sure. Obviously, I don't know exactly. I can only see what Visa says publicly. But in my view, what Visa DPS particularly offers is, obviously, they have a lot of credibility to say they can handle your business at scale with great reliability, right? So when you've gotten to that size, then they become an option, and they're used to managing customers of that size. And just because of the size of their platform and how long it's been around, my perception would be they're probably just not quite as flexible. So catching customers earlier in their life cycle is probably not kind of prime hunting ground for them. But talking to or talking to prospects who have already achieved a lot of scale and have a lot of maturity, that's a good match for them and where their strengths, it sort of plays into their strength, so to speak. So I would say I think they have made platform improvements. I have no doubt they have more capabilities than they did a few years ago. But I think there's still a relatively small group of people that kind of have that kind of scale that they would target. I think we would still have big advantages, I think, in terms of nimbleness and thinking of more creative solutions to solve very specific problems for customers as opposed to something that's pretty stable processing and they know what they want. And so we may see them a little bit more a couple of years ago, we didn't really see them much. And I think as we go after bigger and bigger business, then that would be maybe a competitor we'll see a little more frequently. But we still feel very good that our value proposition is that we also can support a lot of scale and have programs that are quite big, but we still have a lot of agility and a lot of unique capability and configurability that allows people to do things that are a little bit different and differentiate themselves in the market, and that's really what sets Marqeta apart. Operator: Our next question is from James Faucette with Morgan Stanley. Michael Infante: This is Michael Infante on for James. Mike, I'd be curious to hear how you're thinking about the mix shift we're seeing in BNPL broadly with respect to a larger percentage of volume originating on Flex Credential cards as well as within digital wallet. So as that mix shift continues, what's the impact on your unit economics, if at all? Mike Milotich: Yes. I would say not a big impact on our unit economics. I would say they're relatively similar. I would say, typically, more of a consumer value proposition is going to have a little bit of a premium versus a single-use virtual card. But at least at this point, the people -- the first movers with the flexible credentials are quite large players who have a lot of volume. So I would say the economics are relatively similar. But the big difference is the lack of -- I don't know, maybe I'll just say stickiness that comes when you shift from a virtual credential to a consumer credential. That's going to be a much more sticky relationship, harder to diversify because there isn't a lot of precedent for people trying to run a single program on multiple stacks. And versus in virtual card, every transaction that occurs, you could send it to a different platform if you wanted. And so I think the real benefit to us in addition to just having leadership in this space and being able to handle consumer value propositions, which some of our competitors don't have a lot of experience with. But in that shift to something that's more consumer-oriented, it also becomes a little bit of a stickier business for us and a little bit more challenging for customers to diversify, which should be good for us given our early leadership here. Michael Infante: That's helpful, Mike. And then maybe just secondly, any quick update you can share just on the nature of your conversations with some of the larger financial institutions and in the areas that they're diligent in? Mike Milotich: Sure. I would say we -- our conversations with financial institutions, I would say, are more frequent and substantive now than they were a couple of years ago. I think there's a real shift in the market towards people really looking at modernization. I think the -- as we've said before, the fintech winners have been crowned and they're becoming big businesses. And so what I think maybe a few years ago, maybe people saw as growing the pie are now starting to become real competitive threats and real competition for the banks for not only deposits, but also spending, both consumer and commercial. And so I think there's a broader recognition that to successfully compete with some of those value propositions, you're probably going to need a little bit more sophisticated technology and more ability to be flexible and configurable. And so we are having more and more conversations. We still believe, though, that these are inherently cautious organizations, and we're likely to break in still with a specific use case. And I would say the 2 probably at the top of the list from our standpoint would be something in commercial, just given our success and proven track record at supporting many of the disruptors and then also in some sort of lending Buy Now, Pay Later use case where a lot of banks also are interested in providing that kind of capability on their cards. And we clearly, again, have established leadership and track record and ability again to support big scale. So we're working to get our foot in the door. And I would say the conversations, there's a lot more promising than maybe a couple of years ago where it felt like it was still pretty far off. Operator: Our next question is from [ Andrew Schmidt ] with Citi. Unknown Analyst: Welcome, Patti. So I just wanted to dig in on the implementation time frames and partner bank diversification. Maybe you could just give us an update there. And then for the enterprise customers for embedded use cases, if you could just elaborate on what implementation time frame looks like for that type of customer, that would be helpful. Mike Milotich: Sure. So in terms of new bank partnerships, we added a new -- well, a new U.S. bank and then a U.K. bank last year. We're in the process of implementing another U.S. bank and a European bank in the first half of this year. So we are diversifying our bank offering. In Europe, it's purely because now we have the capability to sort of offer a combined value proposition. So those are new. And in the U.S., the diversification more is targeting 2 things. Either it's a use case, not all of the banks are comfortable with all the types of use cases that we can serve. So some of it is about -- as our business diversifies, we might need different partners. And then some of it is also capability, right? Some of these banks have been investing and have some unique capabilities that we think pairs well with ours to meet a customer need. So that's why we're expanding our bank kind of portfolio. In terms of the implementation time, I think we've gotten to a good place there, where we have solidified the processes. We've taken out a lot of the challenges we had with things moving slower. And I think also we've done a good job educating customers about the impact of changes that they make along the way and what that can do to time line. So I think we've stabilized that pretty well. But maybe what you're signaling in the second part of your question is true. As we're moving into more enterprise deals, they do move a little slower, right, than our previous customer base who -- a lot of times, our value proposition or the card they were doing with us was critical to their business and what they're trying to achieve. So they're ready and willing to move very fast, and it's one of the top priorities going on at the entire company. When you're dealing with a much larger organization, there's just more complex decision hierarchy, there -- even just the kind of scrutiny that we get in terms of tech and security and all these things, it just takes a little more time. So I would say, in general, they're moving a little slower. But as I mentioned earlier, we're okay with that trade-off because we feel the probability of success is much higher and their ability to hit the ground running is also much higher given they're going to be bringing this value proposition into an already established very large user base as opposed to a few years ago when it was a new fintech, they were going to be building it mostly from scratch. Unknown Analyst: Got it. I appreciate those comments. And then maybe we could just chat on value-add services for a moment. It's good to see the uptake on the enhanced risk product. Can you just talk about just expectations for attach there, monetization, that would be helpful. And then obviously, a more important point of all this is just the pipeline for other value-add services. It's important to keep iterating these. Maybe you can talk about kind of what you're sort of targeting, what types of areas in the future. Mike Milotich: Sure. I think the biggest change that we're seeing is that, again, with the fintech customer base, they almost prided themselves in piecing together kind of best-in-class solutions, right? They viewed it as their modern tech stack, they're going to take best-in-breed and pull it together to something that's quite unique in the market and best-in-class. And so they were a little bit willing to choose a la carte. I think as we're talking to more and more enterprise customers, if you've got a good solution, they're happy to take it from you. They don't want to connect to 5 different people to push -- pull together their value proposition. So if you have a good offering to make and you're going to be the process and program manager, they are -- I see what we see are more inclined to take that solution from you just to make their life a little bit easier and to be able to move faster. And so that's really the difference that we're seeing in the uptake. And in terms of the areas, I think our strength is clearly in tokenization. We have capabilities there that we think are very differentiated. And then in our risk services. Those are the 2 areas. Everyone in issuing is going to want -- is going to have to do some level of fraud management and fraud monitoring, right? And so those are the 2 areas that I think we're going to continue to invest and make sure we remain strong. But we are moving into new areas related to rewards, our white label app, more kind of data and analytics services as we continue to get bigger and have more scale. And so those are some of the things that are relatively small now, but we think have a lot of potential to be larger in the future. Operator: Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you again for your participation.
My Vu: [Presentation] Good morning, and a warm welcome to Hoegh Autoliners Fourth Quarter presentation. My name is My Linh Vu, Head of Investor Relations. And with me today, we have our CEO, Andreas Enger; and our CFO, Espen Stubberud, who will walk you through the last quarter business and financial performance. As usual, we will conclude the webcast with a Q&A session at the end of the presentation. So if you have any questions, please send an e-mail to our Investor Relations mailbox at ir@hoegh.com. So with that, I will leave it to you, Andreas. Andreas Enger: Thank you, My Linh. And once again, welcome to our quarterly presentation, starting today with a picture of Hoegh Sunrise, one of our newbuild vessels that was named -- had celebrated its naming ceremony last summer with valued customers in the land of the Rising Sun. We are pleased to report another quarter, and this is also an end of the year with solid performance in -- I think in somewhat we could justifiably call a somewhat turbulent year on the macro side, but has still translated into very solid performance from our part. EBITDA for the quarter, $145 million, translating into net profit $105 million, gross rate of $91.4 million. And we are now back on our regular full payout dividend policy of which this quarter translates into $99 million. One more new build delivered in the quarter, a solid equity ratio of 55%. If you look at the year, $621 million of EBITDA and $513 million net profits delivered, gross rate of $93.4 million. We have declared for the year dividends of $424 million, maintaining our very solid dividend yield, taking delivery of 3 vessels, and we have a return on invested capital of 26%, all adding up, as I said, to very robust performance. I'm just going to go through some pieces on the market and sustainability and then hand over to Espen for capacity financial before we end up with an outlook for -- in the current quarter. On the market side, I think it's relevant to emphasize the importance of China and Chinese car exports for our industry and for the capacity balance and clearly being the driver for vessels running full and delivering the performance. Europe remains China's clearly largest export market, but we also see strong growth in other markets such as the Middle East and South America. So the export boom is broadening. The Chinese OEMs are almost doubling their market share in Europe in 2025, now surpassing American and Korean OEMs. So it's a very, very strong continued growth from China that is the main driver in development of our industry. And that goes across also the cargo segments. Clearly, the main driver from China is new vehicles, where China has established a clear position over the last few years as the dominant car exporter to the world, and that development is continuing at full force. Also importantly, we'll had some fairly soft development in the High & Heavy market over the last several years, but we are now seeing a change in that. But also that part is driven by a strong growth in the exports of construction equipment from China with other exporters being largely flat. Then let's turn to our contract backlog. In the quarter, we have increased the contract share of volumes transported up to 84%. That is a result of our strategy over the last years to prioritize duration and robustness of contracts over short-term profit rate optimization and clearly increasing the contract rate from 80% to 84% in the quarter is diluting to profit because we are actually leaving behind potential higher paid cargo to serve our customers as a part of our strategy. We believe that is a, what should I say, resilient, robust strategy in the current market, and we are pleased to continue to exercise that even if it then leaves out some opportunities to take higher paid cargo. The average duration of the contract backlog is 2.9 years, almost 3 years. We are basically sold out for 2026, also have a very strong contract backlog into 2027. We have added $250 million of contracts during Q4, though being contracts below the $100 million threshold individually for separate reporting, but there's still been a solid contract inflow during the quarter. And when it comes to the 29% of contracts that are up for renewal during 2026, those are -- 80% of those are with customers that has been with us for 10 years. So it's with very solid customer relationships where we basically expect good opportunities to renew most of or all of those. And then obviously, we have the other ones which we talked about, the rate agreements, which are noncommitting agreements where we have clients in a structure where we unfortunately have had to do a little less of taking low paid cargo. And just on the spot volumes, which is a small share of it, but I just also want to emphasize that our spot business is primarily High & Heavy or break bulk business where the volume of sort of individual lots and spot cargo is larger. So 70% of the spot volume is in the High & Heavy segment. On the sustainability side, we are with the introduction of our new builds, delivering strong improvements on our carbon intensity. And this is to the story we have around our Aurora-class vessels that are delivering substantially better carbon performance also on fossil fuel and so on that side, it is the Aurora class primarily that is driving our improvements. But we also had a fairly intensive docking cycle during the last year, and we do have extensive energy efficiency improvements scheduled for all our dry dockings of legacy vessels. So it's a combination of continuous improvement of energy efficiency on our legacy fleet and introduction of very carbon-efficient newbuilds. We also have certified 4 of the Aurora class vessels during the quarter for shore connection. So we are stepping up shore power as a source of reducing auxiliary engine use and carbon emissions in port. Then I'll leave it to Espen for capacity and financials. Espen Stubberud: Yes. Turning to the capacity market. We've had a couple of years now with a relatively strong fleet growth. We had 75 vessels delivered during 2025 and 13% fleet growth. So despite quite a large number of ships being delivered, the charter market remains strong, although the pricing is down from the elevated levels seen in '23 and '24, the pricing is still relatively expensive and has been stabilizing and moving flat over the last few months. And in fact, into January this year, pricing is up. So there are no idling ships. The capacity market is firm. And if you want to add a few ships over the next few months, there are very, very few candidates. Turning to the financial update. As Andreas already said, 2025 was another strong year for Hoegh Autoliners. Despite U.S. tariffs, despite U.S. port fees, despite increasing imbalance in our system and not the least the growth in the net fleet. EBITDA came in at $621 million, that's down from 2024. Two main drivers. One is reduced rate and one is -- the other one is increased charter costs. The rate is down about $5, as we can see here, from $85 net to about $80 year-over-year. That's following our strategy of adding to our contract backlog, taking on more contract business, long-term agreements, which has increased the share of contract business from 73% in '24 to 82% in 2025. The increased charter cost comes from overall growth in volume. We increased total volume by 10%, but increased volume out of Asia by 40% year-over-year, and that comes with added charter costs. Turning to the quarter. The Q4 volume came in at 3.9 million cubic meter. That's down 2% on quarter-on-quarter. That's following us having 2 vessels fewer in operation. We redelivered 2 ships in the third quarter to long-term charters, and we also sold 1 vessel. So this -- we had 2 ships fewer in operation. That's just a quarterly impact as we had, as Andreas said, another newbuild delivered in December and also one very early in January. We've seen very strong demand from contract clients, as Andreas alluded to, also towards the year-end, which has increased the share of contract cargo in the fourth quarter and is reducing the rate by close to 2%. EBITDA came in at $145 million. That's down $10 quarter-on-quarter, $5 million is related to USTR cost, while the remaining $5 million is sort of a net impact of lower activity and somewhat lower rates. It looks like net profit is down 21% quarter-on-quarter. Just as a reminder, we sold 1 vessel then in the third quarter. So the third quarter net profit before tax includes $20 million from selling that ship. Adjusting for that, the net profit before tax is down 7%. Looking at the EBITDA bridge quarter-on-quarter, you can see the drop in volume following fewer operating days and marginally lower rates. Lower activity comes with lower fuel costs and also lower voyage costs. However, in this quarter, the lower voyage cost was fully offset by the USTR cost, which is booked under voyage expenses, leaving us with $145 million in the fourth quarter. We have a strong balance sheet with healthy ratios and stable ratios. Net debt-to-EBITDA still at 1x, equity ratio of 55%, moving flat, and we ended the year with $299 million in cash, somewhat up from previous quarters following the change in dividend calculation that we announced in the last quarter. We also had close to $200 million in liquidity reserves at the end of the year from a revolver. That revolver was originally maturing in the first quarter of '28 and have been extended by 2 years. So we end the year with $299 million, and we have decided to pay out cash in excess of $200 million, meaning we'll pay out $99 million in dividends in March, and we now paid out $90 per share. Then I think we're at the outlook, Andreas? Andreas Enger: We're coming to the outlook section. And very briefly, what we have seen last year and what we still see is that demand for ocean transportation and car carriers remain strong, supported primarily by increasing demands from Asia. When it comes to the discussions going on around the Red Sea and the Middle East, there is no return to the Red Sea transit planned for the near future. The risk level is still considered high, and we are observing, but not planning to act on that in the near term. And for the first quarter 2026, somewhat also driven by, as I said, two newbuild deliveries right in December and early January of this year, getting into operation, meaning that we now have the first 8 of our Aurora-class newbuilds in operation and performing very well, helping us to a slightly increased -- expectation of a slightly increased EBITDA in first quarter of 2026 over the fourth quarter of '25. That ends our presentation. And then I think we'll leave it to My Linh to manage questions from the audience. Thank you. My Vu: Thank you, Andreas. And we have received a few questions from our online audience during the webcast. And the first question is relating to our capacity planning. So that the company has planned to sell further older ships during 2026. Do the companies have the plan to sell further older ships during 2026? Andreas Enger: I don't think we -- I mean, I think we are continuously looking at what to do with our fleet composition, but we don't have any immediate plans for selling vessels. And I'm not -- I wouldn't -- I don't think we would guide anything on that because vessel sales are also, I think, in this market triggered by opportunistic situations. But we are clearly committed to fleet renewal and energy efficiency. So we -- I think it's fair to say that with our newbuild program, we have a strong preference from larger, modern, more efficient and more carbon-efficient vessels over what is the dominant sort of legacy fleet in our market. My Vu: Thank you, Andreas. And the next question. We have talked a lot in 2025 about the structural trade imbalance that has negatively affecting our operating costs. Can we comment a little bit, do you see any improvement in this point for 2026? Espen Stubberud: Yes. I think we've had a history in our company to try to fill ships in both directions, and we've been doing that successfully for a number of years. We saw -- starting 2024, we saw that we had a slight imbalance, meaning we ballasted about 1 ship per month from the Atlantic and back to Asia. And as we've talked many times, we've seen very, very strong growth in Asia over time with obviously China as the main driver. And the growth we've taken and seen over the last year of 40% means that all the growth is coming in Asia and the volumes coming back is somewhat in decline, meaning that the imbalance has increased quite a bit. So the balancing activity is up 2.5x year-over-year. So -- and I think that's a theme for all operators. I don't think we see any change to that into '26. So we expect that imbalance that we've seen in '25 to be about the same in '26. My Vu: Thank you, Espen. Yes. And the next set of questions coming from analyst Petter Haugen, ABG. First, about our outlook. Can you say more about slightly above in the guidance for Q1? Andreas Enger: No, I think we mean slightly above. My Vu: Yes. And the next question is about the full year guiding. So one about, the company and our segment guides for full year EBITDA. Why we do -- we choose not to guide for the full year? Andreas Enger: We basically -- if you look at the world around us, we believe that guiding for a full year is mostly speculative, and we don't engage in speculation. My Vu: Yes. And for our new building plan, we have put today about 12 vessels on order. Are we contemplating further new builds? Andreas Enger: We have -- I think I said repeatedly that we consider these 12 vessels to be the current program. Clearly, if you look into our 2040 and 2050 objectives, I'm sure there will be further newbuilds in there. But currently, there are none in our plans. My Vu: Thank you, Andreas. Yes. And also from this -- in this quarterly presentation, we also updated our contract backlog, including renewals for 2027. Can we comment anything about the expected duration or rates for the 29% contract renewal in 2027? Andreas Enger: No, I don't think so. But I think we are experiencing strong demand for contracts, the typical sort of duration of contracts, I guess, in our industry has been sort of 3 to 5 years for the longer contracts. And I think we are likely to be in that territory. But that is -- it's a bit individual contract by contract, and it's something that we -- and these are things that we haven't even started negotiations. But I think we said in our presentation that the -- most of the contracts that we are going to have renewal negotiations in 2026 are long-term customers. They stayed with us for a long time. So it is -- we are negotiating with companies where we have a long-term relationship. My Vu: Thank you, Andreas. And one of the topic that we talk a lot about in the last quarterly presentation in the next question from our investor online. So with the current -- for now, the USTR port fees on pause until November 2026. What are our view about how much EBIT coming back in November? How much do you think we can pass this on to our customers? Andreas Enger: I think I said a few minutes ago that we're not engaging in speculation. And I think that having any view on that now is highly speculative. What I would say is that closely following, working through relevant challenge to understand, respond to -- and if there is any possibility, particularly together with our customers, including U.S. customers that will be hurt by some of those fees. We are working actively with the matter, but I think we're pretty far from one thing to speculate on the outcome. My Vu: Thank you, Andreas. And we mentioned in light of the strong China export demand ongoing, we also have that comment in our outlook. What is the management latest view whether the car carrier order book is still too big? Andreas Enger: I think -- I mean, I think what we observe is that the current -- I mean, the order book so far, counter to most expectations have been absorbed very well, and we see it continue to be absorbed well. And so in that sense, I think the view that the order book was far too big is becoming maybe challenged by realities. But -- and I think the answer to that question will -- is basically based on a forward view on Chinese exports. And what we see from our customers is that they have the capacity, they have quality products and they have attractive price points. If the Chinese are allowed to continue their export growth, you will continue to get good absorption of capacity. My Vu: Thank you, Andreas. Yes. And we also received a lot of questions. I think some of the questions already covered previously by other audience. So I will just read the question that is new on the topic that we haven't seen. So in 2025, Hoegh Auto actually charter-in a few vessels. How do we see that in 2026? Do we see more TCE opportunities to enter the fleet? Or are we comfortable with the current fleet? I think for you, Espen. Espen Stubberud: Yes. No, as we talked to, we took on some new business out of Asia at the end of 2024, and we've been supporting that new business volume with some charter-in activity. particularly after deliveries of the newbuilds, and we had 2 newbuilds delivered just before the summer, and we have very recently just had 2 more delivered. So we've been planning for that capacity to come in, and we've been supporting that volume growth this year with extra capacity. And I think as we talked to the imbalance, I think that will be stable from '25 to '26. We have now 2 more newbuilds coming in fully in operation in the first quarter. So that should reduce the charter-in activity. Having said that, we think we'll also use the capacity market opportunistically with short-term charters, typically between 3 months and 12 months to some level also in 2026. My Vu: Thank you, Espen. And I guess that bring us to the end of the Q&A session today. Thank you very much for tuning in, and we look forward to see you next time. Thank you.
Gerard Ryan: Good morning, everybody, and welcome to our results presentation for 2025. Now this morning, Gary Thompson, our CFO, and I will be very happy to talk you through what has been another successful year for our business. I do want to acknowledge, however, that this is an unusual set of results in that we have in the background, the BasePoint bid for IPF. However, today's presentation is all about those results, not about the bid. So what we're going to do is we're going to go through the results as normal, and then we're going to follow on from there. And if we're allowed to answer questions at the end, we will, but we'll have to take advice on that. So with that, let's get started. Now as usual, I'm going to deal with the results at a very high level, and then I'm going to talk about our strategy and how that is delivering for us really, really well and consistently. I'm then going to talk a little bit about regulation, something we haven't done for a while. And I'll also touch on the security situation in Mexico. After that, I'm going to hand off to Gary, and Gary is going to take us through the divisional results in a detailed way and talk about how each of our divisions has performed over the past 12 months. He'll also deal with the balance sheet, look at how the portfolio is performing and how we finance the balance sheet and also dealing with the capital side of things. I'll then pick up at the end, and I'm going to do some closing remarks. Now as always, we have plenty of time at the end for Q&A. And just on Q&A, somewhere on your screen, there should be a dialogue box that at any stage during this discussion, you can type in your questions, and at the end, Rachel is going to pick all of those up and put those to Gary and myself to answer for you. Overall, I think this should take probably around 40 to 45 minutes. So with that, let's get started. Now hopefully, you had a chance to look at the RNS that we released this morning. And if you did, you'll see those we delivered a profit of GBP 88.6 million pretax and pre-exceptional items. And Gary is going to talk about the exceptional items later on. Now that's up 4% year-on-year. And it's delivered on the back of constant demand from our customer segment with excellent execution by our colleagues throughout the organization. In terms of top line, we improved our lending by just under 12% year-on-year, and our net receivables are up by just under 14%. So you can see it's fast approaching GBP 1.1 billion. Credit quality continues to be very good as our collections, and our Next Gen strategy really is delivering for us. So with all of those things taken together and with a really good strong balance sheet, the Board are pleased to propose a final dividend of 9p per share, and that's up 12.5% year-on-year. Now those are the very summary highlights. As I said, Gary is going to take us into a lot more detail on that. So what I'd like to do now is touch on our strategy. And I know for many people watching today, you've seen this quite a few times, but given the circumstances, I'm expecting that there are a lot of viewers out there who don't know us that well. So please bear with me as I take those people through what our strategy is and how we're executing against it. So it will seem familiar to a lot of you. This is our 3-pillar strategy. First of all, it's important to understand that we have a purpose in this business, and that is to build financial inclusion. So for people who are less fortunate than most of us and have less access to financial services products, we are there to help them. And we do that through this 3-pillar strategy that you see on the screen now. And what I'm going to do is walk through each of those pillars and tell you some highlights about what's happening under each of those. So the first pillar is Next Gen financial inclusion. And this is all about where we're trying to build the products and services that are appropriate for our customers today, but will also be attractive to them down the line. Then we have Next Gen org, which is all about trying to become a smarter and more efficient organization and deliver better services for our customers. And then finally, we have Next Gen tech and data. And this is just about becoming a technology-enabled business and using data in the right way to deliver services efficiently. Now all of this is done within our guiding financial model, and Gary is going to touch on that. But underpinning everything here are our values, which are responsible, respectful and straightforward. And in the 14 years that I've been in the business, those have never changed and they shouldn't either. So let's go and have a look at how we're doing under each of these pillars in turn, starting with Next Gen financial inclusion. Now I'm sure many of you will know that we launched our first-ever credit card in Poland some 2 years ago. So in effect, we created a new market segment where one didn't they exist. And I'm delighted to say that credit card is proving to be a big hit, and we currently have over 200,000 users of the card in Poland. In addition, it's now not just being delivered by our customer representatives or agents, but it's also being delivered fully digitally depending on customer preference and credit standing. As well as being in Poland now, we are currently testing the card in Romania. This is something we talked about at the interim results. It is very much a test phase, but I'm quite hopeful that it's going to prove to be a success there as well. And how else then do we interact with customers? Well, we have what we call our partnership model, and you might know it as point-of-sale finance. So we want to be where our customers need finance, so when they're out there shopping. And we're now interacting or have our services offered through 2,700 retailers. What I can confirm is that there is no shortage of demand, and this is now in Romania and in Mexico. There are lots of customers in our segment who want this type of credit. What we are having to do is figure out how to calibrate the credit quality, because ordinarily, when you do your marketing and it's broad-based marketing, you get a good picture of the whole segment. When you then change your channel and you bring it down to an individual retailer, you automatically skew the nature of the customer that's coming to you, and so you have to change your score card. And so we're currently in that evolution phase where we're getting plenty of demand, but we need to get the credit quality right. So that's going to take us a bit of time. In Mexico, we continue to extend our reach. We've opened a further 2 branches, one in Monterrey and one in Ensenada. And I can confirm that in 2026, we'll open a further one in Monterrey, and a new one in Chihuahua as well. So essentially, it's just that the geography is so big, we need to continue extending our reach through the physical infrastructure. Short-term products. Now short-term loans are something that we steered away for quite some time because of the negative association with payday lending, but we came up with a construct of a short-term loan that met the customers' needs, but at the same time, tried not to penalize them if they got into difficulty. And by that, I mean if they got into difficulty on the short-term lending repayments, we would offer them the opportunity to switch over to a slightly longer loan with a lower repayment and a lower interest rate. And I have to say that, again, is proving very popular. But once again, it's a completely new product for us, and it's all about the credit quality, and we're working our way through that at the moment. Brand in Australia. Now when we spoke about the interim results back in July, August time, we talked about the fact that we've taken a decision to invest more money in the brand in Australia, up to GBP 3 million per annum. We're currently executing on that plan. Brands haven't built overnight. So I would say this is somewhere -- one where we need to have a 3- to 5-year view. We're pleased with what's happening so far, but in terms of the payback, that's going to come a little further down the line. And then finally, at the bottom of the page here, you see a reference to a further GBP 5 million investment on our new growth initiatives. Essentially, what we're saying here is that we feel very positively about the growth that we're generating. And then to concrete that into the business, we believe we should spend a further GBP 5 million per annum for the next 2 to 3 years. So it will be a bit of a drag, but we believe it's really worth it in terms of expanding the business over that period of time. And I think Gary is going to refer to this when he gets up shortly. So those are all the things that we're doing to generate financial inclusion and bring current customers in but also ensure that we're attractive to future customers. So let's look now to our second pillar, and that is Next Gen organization. So trying to be a smarter and more efficient organization in order to deliver more effectively for our customers. And here, a lot of what we're doing is using technology to be better at what we do. So a few examples for you here. In terms of delivering change in the organization, we have a huge amount of change going on, whether it's new products, new channels or changing regulation that we need to adapt to. But even though we are one group, we have 2 very distinct ways of delivering strategic change. In our digital business, it's done under the product operating model, which I'm sure will be familiar to a lot of people. Essentially, there, product teams are formed and they own a product from birth through to maturity. They design it, they get the technology set up, they tweak it, they implement it and then they monitor it. Whereas in our home credit business, it's done the more legacy way, which is to say that for each product, when we want to do something, we start to pull people out of individual functions and we get them to work on it for a short period of time, and then they go back to doing something else. The second way is far less efficient and far less, I suppose, speedy in terms of getting impact in the organization. So what we've decided to do is to switch to product operating model across the whole organization. It is a really large undertaking. It will take us probably 18 months, 2 years, but we've started and we're really pleased with what we see so far, much better engagement internally in delivering new products and delivering strategic change, but also much faster impact across the business. Multiyear project delivery. What I'm referring to here is the fact that we've embarked on delivering a new finance and HR platform, a global platform. It's going to be SAP. It's going to cost us approximately GBP 12 million, and I think it's going to take us about 2 years. So it will give us a new platform for all of our finance and HR communities across our 10 countries. That will allow us then to standardize processes around that, and out of that, we will drive significant efficiencies. So it's a big undertaking, but we've contracted with a lot of professionals internally. We have over 250 people working on this at the moment. So it's something that we really need to nail, but I feel good about where we're at on that just now. ISO 45003. Now this might be new for some people, but it's all about psychological well-being at work. We want to be a great place to work. We employ about 5,500 colleagues, and we have about 16,000 customer representatives around the globe. We want them to feel valued and to feel safe working here. We want them to believe that they have opportunities and that their careers can develop. And so our team worked incredibly hard to achieve ISO 45003 for all of our home credit businesses and our digital business in Poland. It's a huge achievement and my thanks to them for that. And then finally, our reputation. We deal in a very specialist area of the consumer finance market, one where we have to be incredibly careful making sure that our customers can afford the money that they borrow from us that we treat them well all the time, but particularly when they get into difficulty. In order to make sure that, that works for our business and for our customers, we need good regulation, but to influence good regulation, you need to have a good reputation so that you get a seat at the table. And so we spend a huge amount of time working with external stakeholders to get them to understand what we do and why we feel we do it so responsibly. And so reputation for us is a key driver of our success and something that we'll continue to invest on in the years ahead. That's what we're doing on Next Gen org and turning then to the third pillar, Next Gen tech and data. The very first line you see here is what we spent in 2025. So GBP 35 million. And for an organization our size, GBP 35 million on CapEx is a big number. I can tell you, in 2024, we spent GBP 24 million. And if you look at the bottom of the page, you can see that we estimate that this year, it's going to go to GBP 45 million and possibly GBP 50 million thereafter for a year or so before it drops back down. Why? Well, there are a number of reasons. One is we have over -- I think the number is 450 or 460 individual systems or platforms across this organization. We need to simplify, standardize and secure our systems. But to do that, we need new technology and new technology cost money. So that's one thing that we're doing. And the SAP thing, the finance and HR platform is just one example of that. But let me give you some other examples of what we're doing here. So omnichannel platforms. In many other businesses, particularly banks, you would probably take this for granted, but for us, it's been quite a challenge to ensure that when our customers, this is particularly home credit, talk to their agents and then subsequently ring a call center or try to contact us by e-mail. In the past, they've had 3 different routes to get to us, but none of those conversations really joined up in our back office. This omnichannel experience through our Xenia project is to ensure that all of the conversations with the customers join up. So whether they call an agent in a call center, whether they contact us through webchat or WhatsApp, which is now integrated, all of those conversations form part of a whole and the customer gets a much better service, a seamless service, I would almost say. But it's a big investment, and I think we're closer to the end of that journey than the beginning, and it feels really good. Another example would be digital self-service through a customer app. Now we talked about this before. We have a very good one in Mexico that our Mexican team designed. We have a good one in Poland designed by our team there, and we're rolling it out now in Hungary, Czech and Romania. So within 6 to 8 months, it should be across all of our Provident businesses. The great thing about that app is that customers will self-serve because we see it in Mexico, and we see it in Poland. It dramatically reduces the call volume, the inbound call volume with simple queries because the customer gets on the app and they do it for themselves. But not alone that, actual problem resolution back through the app educates the customer further on how to get the best out of it, and then that has a positive impact on their relationship with us. So it's taking a bit of time and a bit of money, but the customer experience is vastly improved as a result. Digital payment flexibility. Here, I just want to mention Mexico. So Mexico is a huge geographic area to cover. And we do it in home credit through our agent network. But clearly, they can't cover everywhere. And what we've been finding over a number of years is that customers complained quite a bit that they weren't getting a consistent enough service when it came to collections. And so what we did over the past 3 years -- well, actually, it's probably more than 4 years now since the pandemic is we've tried to give customers in Mexico home credit, more and more options through which they could pay their loan back to us. And so we just signed up to a new platform now, and I think that was just in the last couple of months, it's added 30,000 payment points. So through retailers, 30,000 additional payment points in addition to the 12,000 bank branches that we deal with and in addition to the 23,000 OXXO stores that we deal with. So what we're really trying to do is to say to a customer, if you can't see the agent or they can't see you, you have -- you literally have tens of thousands of other areas that you could pay your loan back for or back through. Digital capabilities with AI, I wanted to mention AI specifically because in our previous discussions on AI, I said that people shouldn't expect a silver bullet solution for AI in our organization. It would most likely be incremental benefits accumulating from lots of different projects. That is proving to be the case. But actually, it's proving to be more beneficial than I had expected. And so, one example is here in terms of our own technology team, where they are developers. And they're using -- I think it's called Amazon Q developer or something like that. I think that's the name of it. What they found by using this AI assisted development is that the productivity gains are enormous. So actual development time is reduced by 20%, testing time is reduced by 25% and error detection in code is improved by 33%. And those are quite dramatic numbers. And those are just in our own developer colleagues internally. And so now what we're doing, we're going to our external contracts, people who develop for us. And we're saying, if we can do this, and we're not a technology house, you must be able to do even better, and we'd like to see some of that benefit coming back to us in reduced prices. Then another example in Mexico on AI, completely different. Our HR team in Mexico have started using an AI assistant to interview people who are coming for jobs. And I know this now has a very bad rep in the U.K. because it's been all over the media, the prospective job hunters can't get to see a real person, they see an avatar or something like that. And I do worry about that. But the experience in Mexico has been amazing. So using this AI-assisted, let's call it, an avatar in Mexico, what they found is that the quality of the candidates who eventually get through to the final application is increased. And of those candidates who actually get the job, they stay for longer. And so I went back with David and his team as to why that was the case because I wanted to understand it. And what it would seem is this that human behavior is, if I'm pitching to you for a job, I'm going to sell the job to you. And then when you arrive, the job might not be quite as spectacular as you thought it was when I described it. And so you're initially disappointed and you may stay for less time. But the avatar or the AI assistant, tells you exactly as it is. And so when you arrive and you get through all of that process, the job you get is exactly the job that we have. And therefore, your satisfaction levels are higher, and you're more committed to staying. It was a complete revelation to me, but it's one of the multiple, I think, benefits we're going to get out of AI going forward. I think that's all I want to say on tech for now. So those are our 3 pillars in terms of our strategy. And now I'm going to move on to regulation. And before I do, I just want to say that probably for the past 18 months or 2 years, Gary and I haven't talked about regulation that much. We've referred to the fact that CCD II is coming up, and there's probably going to be a rate cap in the Czech Republic, things like that. But today, I'm going to give you a more detailed update, and I'll explain why. And it's all about CCD II. Now CCD II was required because the way financial services are provided to consumers in the EU has changed dramatically over the last dozen or so years. So CCD I needed to be updated, and that is what this is all about. Now the way it was structured was that CCD II transposition into local regulation was meant to be achieved by November '25 and be effective from November '26. In fact, only one country in the EU as far as I'm aware, achieved that, and that was Hungary. All of the other countries have missed the deadline. And so the commission came out and said, unless you get on with it and get this thing done, we will be looking at finding people. And so what we have seen over the last 2.5 or 3 months is a huge uptick in activity around the transposition of the EU regulation into local regulation or law. Now what needs to be said is that the EU directive needs to be transposed into local regulation, but it doesn't prevent. In fact, in some cases, it seems to encourage local regulators to look at the whole of their regulation in this space and rethink a lot of it. And as a result, we're getting what you see on the page today, a whole menu of items that are currently in discussion across either one or multiple countries. And they're not even necessarily connected to CCD II, they're connected to the idea that the regulation in this space is being reviewed. And I want to talk about a number of them because they're potentially quite big. So the first one is introduction on caps on lending-related fees. Now as you know, we already have caps but they're mostly interest rate caps or total cost of credit cap. So we have them essentially in most countries with the exception of Czech and Australia, I think there is a cap there, but Czech in the European Union. What this talks about is that as well as that, there would then be individual caps on individual fee items for things related to a loan. So that could get quite complex and difficult to manage. And so we're looking at that very closely. The rate cap in Czech we've talked about, and we think that's absolutely coming, affordability assessments. Now at the heart of every loan that we provide, our ultimate aim is to make sure that the loan is appropriate for our customer. And in particular, that it is affordable. And affordability regulations are there in practically all countries. But the discussions that are going on at the moment in some countries talk about enhancing those regulations significantly. And you could get to a point where, in effect, the regulations would stop you lending to some of these customers. We hope that's not the case. We're looking at it. Changes to rebates is straightforward, increasing restrictions on advertising. There have even been discussions about a complete ban on television of any consumer financial products in some places, value-added services, more restrictions, I think, to come in terms of how value-added services can or cannot be tied to a financial services agreement. And then finally, introduction of free credit sanctions. Now this one is particularly significant. The concept here is if you as a consumer have a consumer finance agreement alone and you're either happily repaying it or you're having difficulty. It actually doesn't matter. If you go through your agreement and you find an error in the agreement, and it could be a tiny error, so not a critical error. It could be any error. But if you find an error, you can go back to the finance company and effectively repudiate the contract and get free credit. And my understanding is it would involve having to repay all of the interest already paid to the customer or by the customer. So you can see that one could be particularly difficult. Now what I would say is we have a great track record in terms of dealing with regulatory change. We really have a very good track record. In some instances, we had to make really difficult decisions about coming out of countries like Finland or Slovakia because we do manage our capital very effectively. But our track record in adapting to reasonable regulation is very good. My concern here is there are so many items on the agenda being discussed across multiple countries at the same time and under a stopwatch scenario, I can't commit to you that we will convince everybody of what reasonable looks like across all of these. I'm hopeful we will get there on most of them. And we will keep updated. But it's just to say that because the countries are behind in terms of the time line, there's now a big rush on to get this done very, very quickly. So we'll come back to you on this. And then the final thing I wanted to talk about is the evolving security landscape in Mexico. This is a very late entry slide in our deck today, and it's obviously because of the death of the head of the Jalisco, Cartel that I'm sure all of you have either read about or seen videos of on the news. What's fair to say is that Mexico, at the moment, as a result, is reasonably unstable from a security point of view. It's not the whole of Mexico, but there are particular states that are being badly impacted. Our #1 concern is always for the safety and security of our colleague and our customer representatives. So [ Australiers ], as we call them in Mexico. And so we've taken the decision in 3 particular states to close our branch network, tell our colleagues not to come to work and to also advise our colleagues and our Australiers not to use the highways because the highways are particularly vulnerable. Now it's very hard to say how this pans out from here. It could all die down or quite in the next day or 2. It could escalate. We can't say. But I want to repeat our primary concern is for the health and safety of our team, and so we've taken that decision. It impacts about 10% of our customer base in Mexico. I am very hopeful that the situation calms down very quickly and that the impact in our January -- or sorry, February results will be de minimis. But I'm not in a position to say that just yet. We need to see how this plays out. So a difficult situation for our colleagues there, and we empathize with them and everything that they're going through. So with that now, I'm going to hand you over to Gary and Gary is going to take us through the trading results in a lot more detail. So Gary, over to you. Gary Thompson: Thank you, Gerard, and hello, everybody. As you heard in our introduction today, we have delivered another good set of results in 2025 with profit before tax increasing by 4% to GBP 88.6 million. This result was delivered through disciplined execution of our Next Gen strategy and continuing robust credit quality across the group, which actually offset the short-term impact of increased growth. Now you can see on this slide here that second half profits were GBP 38.7 million in 2025, broadly in line with the GBP 37.9 million in the second half of last year despite a much larger receivables book. Now this is entirely consistent with the guidance we provided at the interim results in July and reflects the impact from the IFRS 9 impairment drag on increased receivables growth as well as additional sales focused costs relating to our new growth initiatives such as credit cards, short-term loans and partnerships. As Gerard mentioned earlier, we are stepping up our expenditure as we support the additional growth initiatives, enhance the foundations of the business and drive improved efficiency. Firstly, given the success and momentum we are seeing from our new products and distribution channels, we now plan to invest a further GBP 5 million per annum through the P&L account over the next 2 to 3 years. This additional expenditure will be through additional marketing and brand building costs, enhancing our colleague capability and also the upfront IFRS 9 impairment charges we will incur as we refine our credit scorecards. We expect market expectations to adjust for this additional investment. And secondly, having stepped up our investment in capital expenditure by GBP 10 million to GBP 35 million in 2025, we are increasing it by a further GBP 15 million in both '26 and '27 as we look to accelerate the transformation of the business. We then expect capital expenditure to reduce to a more normalized annual run rate of between GBP 25 million and GBP 30 million from 2028 onwards. And then finally, on this slide, we incurred exceptional one-off costs of GBP 3.3 million in 2025 relating to the potential acquisition by BasePoint. Now on to customer growth. It was very pleasing to see that 2025 saw the group return to meaningful customer number growth for the first time in over 10 years. And there is really good demand for both our core product set as well as our new products and distribution channels. Overall, we delivered a 4.7% increase in customer numbers to 1.729 million with all 3 divisions delivering growth. Now particular highlights in the year include Poland returning to growth with 10,000 new customers added in the second half of the year. And Romania, with an expanded product set also adding 10,000 customers over the same period. And then in Mexico, we added 46,000 customers in the second half, 24,000 of which came from our digital businesses, which continues to grow strongly and 22,000 coming from Provident Mexico, which is now firmly back in growth mode following the disruption from the IT upgrade in the latter part of 2024 and early part of 2025. So now let's look at lending growth. We delivered really good group lending growth of 12% at constant exchange rates in 2025. Provident Europe delivered 13% overall lending growth. In Poland, whilst we had a slower start to the year than we expected, lending grew by 20%, with the credit card offering continued to gain really good momentum as the year progressed. And Romania, delivered equally strong growth of 18%, supported by the continued expansion of partnership and hybrid digital channels, both of which are delivering encouraging results. And then Hungary and Czech delivered solid growth of just over 4% combined backing up the strong lending performances they achieved last year. Provident Mexico delivered 7% lending growth in the year. Now as expected, the growth rate accelerated in the second half of the year to 13% of the business recovered from the IT upgrade I just mentioned, as well as continuing with the geographic expansion with the opening of 2 new branches. IPF Digital continues to deliver very good growth in both customer numbers and lending as demand for our fully remote credit solutions continues to rise. Year-on-year customer and lending growth were 16% and 13%, respectively. Now Mexico and Australia were again the best performers, delivering lending growth of 32% and 19%, respectively. And Mexico is now actually serving 130,000 customers, and that's up 40% from last year. We remain very excited about the growth prospects, both in Mexico and Australia, and we're continuing to invest in both the brand and product proposition to maintain the growth momentum and capture the strong growth opportunities that we have in both of these markets. Now on to receivables. Our receivables have now surpassed GBP 1 billion and are at a level actually last seen in 2017. The improving momentum in lending growth is flowing nicely through to receivables growth, and we delivered 14% or GBP 130 million year-on-year growth on a constant currency basis. Now actually, the growth rate is a little lower than the ambitious target of GBP 150 million of receivables growth we set ourselves right at the start of the year, with the shortfall being shared between Provident Poland, Provident Mexico and Mexico Digital. However, whilst we didn't achieve our target, it's really important to note that all 3 businesses have very good momentum and have still delivered good year-on-year growth. In Provident Europe, we delivered receivables growth of 16% to GBP 575 million. All 4 countries delivered good growth, with Romania being a standout performer with 22% growth. Poland's receivable book now stands at GBP 195 million, with growth of GBP 25 million in the second half and higher-yielding credit card now represents approximately 50% of the overall receivables book. Czech Re also delivered good receivables growth of 16%, and Hungary, which, as I'm sure you're aware, is our most highly penetrated market also delivered really solid growth of 9%. In Provident Mexico, receivables showed good growth of 11% to GBP 191 million, with nearly GBP 25 million of that receivables growth added in the second half of the year. In IPF Digital, we delivered receivables growth of 12%, which reflects that consistent delivery of our digital strategy across all our markets. Now it won't surprise you that Mexico and Australia led the way with strong receivable growth of 16% and 23%, respectively. Whilst our other markets in the Baltics, Poland and the Czech Republic delivered combined growth of 7%. Turning now to the progress we're making against the core KPIs of revenue yield, impairment rate and cost-income ratio. Now before I go into the individual metrics, consistent with the approach at the interims, we have set out our KPIs, both on a fully consolidated group basis as well as on a group basis, excluding Poland. Now this is due to the major impact, which the ongoing transition in Poland has had on our KPIs and their comparison to our medium-term targets. Now the trend I'm going to talk you through are in line with our guidance and expectations. And therefore, from our perspective, the key to achieving our medium-term targets is to continue to rescale our Polish business through an increase in the distribution of the higher-yielding credit card proposition. So starting with revenue yield. In Provident Europe, the yield reduced by 1.7 percentage points to 44.8%. This was due to 3 factors. Firstly, the flow-through of lower rate caps in Poland, albeit we expect the Polish yield to begin to recover as we continue to expand the credit card offering that I just mentioned. Secondly, we saw a slight moderation in yield in Hungary due to the reduction in the base rate linked interest cap. Then thirdly, we also saw a reduction in the yield in Romania due to the introduction of the new total cost of credit cap in the fourth quarter of last year, which is now fully embedded into the receivables book. In Provident Mexico, we saw a reduction in the yield from 85.9% to 83.5%. Now this is wholly due to the flow-through of the reduction in new customers we saw through September last year to March this year as we focused on serving good quality existing customers rather than new customers during the IT upgrade. And as I'm sure you're aware, new customers tend to be served with shorter duration, higher-yielding products compared with our existing customers. In IPF Digital, the revenue yield was broadly stable at 42.8%, with the impact of reductions in base rate linked interest rate caps in the Baltics and Australia, being offset by the growth in the receivables book in Mexico, which carries a higher yield. Now overall, the group's revenue yield has reduced from 54.7% to 52.5% over the last 12 months. However, if we exclude Poland, the revenue yield was 56%, which is at the bottom end of the group's target range of 56% to 58%. And improving the revenue yield remains a key focus for the whole business. We expect the ongoing shift to high-yielding products through our credit cards in Poland and the growth in our Mexican businesses to help improve the revenue yield over the coming years. Despite some volatility in macroeconomic conditions in all of our markets, customer repayment behavior has remained really good, and the quality of our loan portfolio continues to be robust. Together with a strong debt sale market and a further GBP 8 million reduction in the group's cost of living provision, this has resulted a 0.6 percentage points improvement in the impairment rate to 9%. This result was achieved despite the impact of increased growth and the associated higher upfront IFRS 9 impairment charges. Now excluding Poland, again, which until the second half of this year, have seen a significant contraction in receivables and therefore, a very favorable impairment position, the group's impairment rate was 13.3% in 2025, and that's just below the group's target range of 14% to 16%. We expect the overall group impairment rate to trend back up toward the target level over the next 2 years as we regrow Poland and continue to grow our receivables in Mexico, which carry a higher impairment rate, but also carry a higher revenue yield. The strong repayment performance and further reduction in the cost of living provision has resulted in the impairment coverage provision reducing from 32.9% last year to 31.1% at the end of December. Now the cost of living provision stands at just GBP 1 million and is not expected to be a feature of the group's results going forward. We continue to maintain a focus on efficiency and cost control, which resulted in cost growth of only 3.3% in the year compared with receivables growth of nearly 14%. The group's cost-income ratio of 61.1% is actually a little changed from last year, mainly due to the reduction in revenue in Poland. If we exclude the Polish businesses, the group's cost-income ratio was 56.2% and that's modestly up from 55.7% last year with the increase due to the reduction in revenue yield as well as the investment we've made in our growth initiatives. We remain heavily focused on growing the lending portfolio whilst maintaining tight discipline over the investments made in building scale and expanding our capabilities in order to improve the group's cost-income ratio to our target range, 49% to 51% in the medium term. Now moving on to the shareholder returns that we are delivering. Our pre-exceptional return on required equity was 14.9% in 2025 just below our target level of between 15% and 20%. The reduction from 15.7% in 2024 is due to the investment in growth, both in respect of receivables, and new growth initiatives and is consistent with our guidance at last year-end and the interim results. We expect our returns to moderate further in 2026 as we continue to invest more heavily in growth before seeing returns begin to improve in 2027. The group's return on equity based on statutory earnings and actual equity was 10.7% in 2025, down from 12.6% last year. This is mainly due to the exceptional tax credit of GBP 17.4 million, which we took in 2024. Our pre-exceptional EPS increased by 5.6% to 26.3p which is slightly higher rate of growth than the 4% growth in PBT, and that's due to fewer shares in issue following the completion of the share buyback in the second half of last year. The effective tax rate in 2025 is 35%, which is consistent with the rate achieved in 2024. It's actually lower than the 38% we used in the first half of the year due to a reduction in U.K. losses. And then finally, on EPS, our reported EPS reduced by 9.2% to 24.8p in the year, and this is again mainly due to the exceptional tax credit in 2024 that I just mentioned. The Board has proposed a final dividend of 9p per share, which represents 12.5% growth on last year. Together with the interim dividend of 3.8p per share, this brings the full year dividend to 12.8p per share, an increase of 12.3% compared with 2024. The dividend payout ratio of 49% is above our target of 40%, but it is consistent with our stated desire to maintain a progressive dividend policy as we rescale the business and deliver consistent returns in our target range of between 15% and 20%. Before I hand you back to Gerard, I'd like you to talk through our strong funding and capital position, which underpins our growth ambitions. At the end of December, we had total debt facilities of GBP 750 million, comprising GBP 483 million in bonds and GBP 267 million in bank funding included GBP 55 million of new bank facilities raised in the year. Net borrowings at the end of the year totaled GBP 621 million, resulted in the group having funding headroom of GBP 129 million. Now in respect to debt capital markets, our credit ratings remain unchanged with both Fitch and Moody's, and they both continue to maintain a stable outlook for the group. Our strong funding position enabled us to repay the residual 2020 Eurobonds early in first half of the year, and in the second half of the year, we took the opportunity to successfully secure SEK 1 billion of unsecured senior floating rate notes due in 2028. Now that's the equivalent of around GBP 80 million. These notes carry a floating interest rate of 3 months STIBOR plus a margin of 5.75%. And really encouragingly, our blending cost of funding has reduced from 13.3% to 12.2% in the year, benefiting from both lower interest rates but also reduced hedging costs. On to capital and our equity to receivables ratio stands at 51% at the end of the year. That's down from 54% last year. The reduction in the ratio reflects the acceleration in receivables growth during 2025, partly offset by a foreign exchange gain of GBP 47 million taken to reserves as the majority of our currencies have strengthened against sterling. Our year-end capital position supports the group's growth plans and our progressive dividend policy through to the point at which we are delivering our target returns and operating closer to our 40% equity to receivables target. We now expect this to be in 2028 following the additional GBP 5 million of investment we're making in the P&L each year. So to sum up, we have delivered another great set of results in 2025. Credit quality remains robust. There's good growth momentum through the group, and we have a strong funding and capital position to support our plans. And on that note, I'll hand you back to Gerard to take you through the outlook. Thanks, Gerard. Gerard Ryan: Thank you, Gary. Okay. So Gary has just given us a really detailed run through the performance of the business over the past year. And as you heard, things are good, very, very solid. So in terms of a wrap-up and outlook, so what are we pleased with? Well, first of all, we see consistent demand across our markets from our customer segment. And we believe that we're gearing ourselves up in terms of products, distribution channels, price points to serve those customers effectively as we go forward. We've got good momentum as we come to 2026. The balance sheet, as you've just heard, is in a strong position and credit quality is very good. And we continue to see that as we put more money into Mexico and Australia, in particular, we're looking to grow those businesses over the next few years. So that all feels very good. One of the things that maybe we're not concerned, but yes, thinking about. Well, first of all, it has to be CCD II for all the reasons I outlined earlier. There's simply just a lot going on, and it's all going on at the same time. And we're not going to know for a number of weeks or possibly months, exactly how this plays out. But we've got a good track record. We just have to figure out how many conversations we can be engaged in at one time. And the second thing is simply the cost of running the business. I think we've done a fantastic job of managing inflation in our costs. But it's clear from the numbers that we talked about earlier that the cost of technology for us has increased quite significantly. So give or take, GBP 25 million in '24, GBP 35 million in '25, moving up to GBP 45 million and then possibly GBP 50 million, all of that with very good reason. It just means that whilst the balance sheet can cope with it, we have the funding, we have the strength in the balance sheet, there is a drag on earnings as all of that gets amortized over time. But what we need to do then is make sure that we bring that cost back down and that the investment we've made delivers in terms of better service for customers and a bigger business. So in total, we're in a good position. We have a solid business, but most important of all, we are fulfilling our purpose, and that is to build financial inclusion for those who are less well off than we are. So that's it for now. I think we've gone further than the 40, 45 minutes I promised you at the start, but hopefully, it was worthwhile for those of you who are new to the business. And with that now, we'll go to Rachel, who is going to, I think, hit Gary and myself, hopefully, with quite a lot of questions. So guys. Welcome, guys. Have we got some questions? Rachel Moran: We do. Yes, I'll start with the first one. We've got a question from one of our investors, [ Freddie ], highlighting the strong receivables performance. He wants to know, will this turn into a higher PBT in 2026? And can you give some guidance on this, please? Gary Thompson: Obviously, I can't give specific guidance. I guess there's probably 3 things to note there. In terms of receivables growth, yes, it was really good. Actually, as you probably just heard, we were a little bit below 1 actually. We set out to deliver GBP 150 million receivables growth in the year. We delivered about GBP 130 million. Now -- so that was a little bit down. I guess in the year, the offset to that was better impairment performance that probably mitigated the fact that we had a little bit less receivables, so that's just on receivables specifically. I guess in terms of what is consensus at the moment. If you looked into 2026 consensus before today, and that's before today, with GBP 97 million PBT. And then I think it was about GBP 115 million PBT for 2027. Now how that will change? I can't say. But clearly, what we've guided to today, is extra investment in GBP 50 million -- sorry, not GBP 50 million, GBP 5 million per year in each of those years. So that's probably as far as I can go in terms of guidance or expectations. Rachel Moran: Now we've got another investor, Doug. Given how much of your share register is now held by the [ ARB ] community? Are you worried about what might happen if they dump the shares in the event that the vote fails on the potential offer? Gerard Ryan: Okay. Well, the first thing to say is that we, as a Board, are strongly supporting the offer. So that's out there in the public domain. We are cognizant of the change in the makeup of the share register. We do recognize that, I think, over 30% are now with ARBs. But I don't think it's for us to speculate as to what they would do. Our view is, shareholders should probably support this offer at the new level. We think it's a really good offer and good value. Rachel Moran: Moving on to a question here on regulation. Is the financial effects of CCD II already reflected in your outlook? Gerard Ryan: No, because, I guess, as you saw just a few minutes ago, what I put up was a whole menu of items, none of which are fixed. And as I said, I'm hopeful that we will get sensible answers or regulation on all of those points, but we can't determine what the outcome is. So we can't put anything in there is the short answer. Rachel Moran: This one moves on to the fact that we mentioned the GBP 5 million of additional investments in growth impacting market expectations. However, given that you won't see the benefit of the cost of living provision release going forward, are you significantly increasing CapEx which you say will come through as much higher depreciation -- sorry, I got that quite a little bit wrong. Are you expecting consensus to revise down for these... Gary Thompson: Okay. Okay. Yes. Again, as I mentioned just shortly ago, clearly, a feature of '24 and '25, the profit before tax was the cost of living provision, which in 2024, we reduced it by GBP 7 million. And in 2025, it was GBP 8 million. So look, if you want to strip those out, PBT was around GBP 78 million in '24, and it was around GBP 80 million, excluding that in 2025. I guess those movements have always been built into what the market expects. In terms of the extra investment in CapEx, and it's right, I mean, we're putting through GBP 60 million more CapEx over '24 to -- sorry, '25, '26 and '27, GBP 60 million that will lead to 10-plus more amortization per annum going forward. Now clearly, what we are looking at doing is scaling up the business. That's the GBP 5 million P&L impact that we've talked about for the next 2 to 3 years, increasing receivables growth so we can absorb obviously, the extra amortization that will come through. Now clearly as well as that, the CapEx investment isn't just about growth. It's about a lot of foundational change, efficiency, et cetera, that we are looking to deliver over the next few years. So there's lots of hard work to do, a lot of hard work, and there's a lot of change going on in the business, but we wouldn't expect or we'd look to be mitigating or getting benefit from those -- that capital expenditure when you look out in the longer term. Gerard Ryan: So certainly a drag on the P&L. And our job is to offset as much of that as we possibly can. I mean the investments are very sensible for all the reasons we've talked about over the past hour. And our role now is to make sure that those investments pay us back. Rachel Moran: Okay. We've got a question here from one investor [ Lucy ]. The number of customers has been stable in the last 3 changes, small ups and downs. What is a number of customers you'd like to see and consider as achievable in the next 3 years or so? Gerard Ryan: Well, we have a more medium- to long-term target of 2.5 million customers out there. And if you think about it, we're currently at 1.7 million, which is a good customer base for our infrastructure. So 2.5 million is quite a sizable increase. But the investments we're making are designed to deliver that, but it's over quite a long period of time. But the short answer 2.5 million would be our long-term target. Rachel Moran: Great. That's all the questions that we've had so far this morning. Gerard Ryan: Okay. Thank you, Rachel. Thank you, Gary. Well, just to wrap up then, you've heard us over the last hour, I talk about the business. We performed well in 2025. We have a very strong balance sheet. We have good prospects in '26. We do have some headwinds. I think the regulatory one is a particular concern, but we're just going to have to deal with that. I am concerned about Mexico. We just have to see how that plays out. But the portfolio quality is good. The drag from the investments is quite serious. But as I said, it's for Gary and me and the team to figure out how we effectively pay for all those things that doesn't drain the P&L. But all in all, I think a good set of results. I'd like to finish just by saying a huge thank you to all of my colleagues because this is a big business. It can get reasonably complex, and we are making it more complicated by adding new channels and new products and new services because we think that's what our customers want and need, but that takes a fantastic amount of effort on the part of 5,500 colleagues and 16,000 customer representatives who work for us every day of the year, trying to deliver good results for our customers. So a huge thank you to every one of you right there. Thank you, guys. Gary Thompson: Thank you. Gerard Ryan: So with that, I'll close the webcast for now. Thank you very much. Rachel Moran: Thank you.
Katariina Hietaranta: Good morning, and welcome to Kamux's Q4 '25 Results Information Session. My name is Katariina Hietaranta. I'm Kamux's Head of Investor Relations. And I'm here with our CEO, Juha Kalliokoski; and CFO, Enel Sintonen, who will present to you the results. Please go ahead, Juha. Juha Kalliokoski: Good morning. Thank you, Katariina. Let's get started. Here is our agenda for presentation. As usual, we shall first take a brief look at the market, followed by a review by country. Enel will then dive deeper into the financial development, including our outlook for 2026. She will also present the dividend proposal and the extension in our share buyback program that was announced this morning. As usual, we will take the questions at the end. 2025 was a tough year for Kamux, and obviously, we are not satisfied with the results. Last year was the first year in Kamux's 22 years of history that the volumes and revenue decreased. The reason behind the 13% revenue decrease is a combination of volumes and average price. While volumes were stable in Sweden and Germany, they declined by 10% in Finland. The rest of the revenue decrease came from the lower average price. Despite the decrease in gross profit, gross margin improved to 8.7%. Margins were better in Finland and Sweden. During this market, we have wanted to ensure that the keys are in our own hands, therefore, focusing on strong cash flow. We have seen that many in the industry have had issues with their cash positions. We focused heavily on inventory turnover and our inventories decreased by 23%, which is 10% more than the revenue decrease. At the moment, we are in a position to start increasing our inventory again towards the spring and summer season. Revenue from the integrated services was EUR 13.3 million with Kamux Plus at the previous year level. I'm very happy about the customer satisfaction improved throughout the year. Our long-term target is 60 and we beat that in the fourth quarter with NPS at 65. At the year end, NPS was as high as 66. Despite the disappointing volume development, we maintained our position as the market leader in Finland, selling the most used cars, both in the fourth quarter and over the whole year. New car markets were subdued in Kamux's operating countries last year, affecting the inflow of trading cars. We can already see that the car park of 1 to 5 years old cars is decreasing in all our operating countries, which means even tougher purchasing market. This may lead to higher prices of used cars also. There were no major changes to our showroom network during 2025. In Finland, our showrooms in Jyvaskyla moved to new purpose-built premises during the last quarter. Earlier in the year, we closed the showrooms in Mantsala and Savonlinna. There were no changes in network in Sweden. We have -- where we had closed altogether 6 showrooms in 2024. In Germany, we opened a new showroom in Schwerin, near Lubeck and Rostock in the Northeastern part of Germany. To improve our efficiency in the capital region in Finland, we have decided to close 2 showrooms. The Malmi showroom closes by end of February and Herttoniemi by end of March. The cars and most of the sellers will move to other showrooms in the capital area. The Seinajoki showroom will relocate by end of March to better premises. Moving to comments per country. In Finland, the competition continued tight. Consumer continued to prefer affordable cars, which were not so easy to source, as many dealers were after them. The volume development was disappointing, but the good news is that despite the decline, we maintained our position as the market leader in terms of number of cars sold. Revenue was impacted by volumes and lower average prices. Volumes were down by 10%, and the rest was due to lower average price. Gross margin developed positively for the third quarter in a row, although margin per car was slightly down. Adjusted operating profit decreased mainly due to volumes. Insurance penetration increased to 66%. The decrease in Kamux Plus penetration rate is largely explained by the lower average prices of cars sold. Our showroom in Jyvaskyla moved to new premises during the quarter. This is one of the few premises that we own ourselves. Customer satisfaction improved further and was 65 for Q4. On a full year basis, NPS was 62. And then we will move to Sweden. In Sweden, we have made good progress into the right direction during '25, but obviously, there is still a lot of work to do. The market did not help us in Q4, and our volumes stayed at the previous year level. Revenue decreased as the average price of cars was lower than in the previous year, and fewer cars were exported to Finland. It's also good to keep in mind when thinking about the full year volumes, that in the first half of '24, we had 6 showrooms more than in 2025. 3 showrooms were closed at the end of July '24 and another 3 by end of December '24. We took active inventory management measures during the quarter, which impacted the margin per car. Despite this, gross margin continued to improve, but gross profit decreased due to lower average price. Kamux Plus penetration rates have increased quite nicely and the finance and insurance penetrations rates have remained on a good level. Customer satisfaction has developed well also in Sweden, and there is a significant improvement in NPS. It was 56 in Q4 '24. And now in Q4 '25, it was already 64. I'm also happy to say we announced the appointment of Niklas Eriksson as the new MD of Kamux Sweden yesterday evening. He will begin in the MD role in mid-April, but joins the company a little bit earlier. In Germany, our challenges continued. In Q4, did a lot of inventory cleaning by lowering prices and selling cars also to the other dealers. As a result, the number of sold cars grew compared to Q4 '24. This was at the cost of the margin, leading to a weaker gross profit and gross margin and also with an impact on financing services. Adjusted EBIT was also affected. The good news regarding Germany is that also in there, our customer satisfaction has improved. NPS for the quarter was as high as 70, and even the full year 62. And now I hand over to Enel for more details on the figures. Enel Sintonen: Thank you, Juha. Summarizing our financial performance in the quarter. Sold volumes and revenue declined. And despite slowing decline in Q4, current volumes do not meet our ambition and we continue to work to turn it. Gross margin improved for the third consecutive quarter. Looking at financial performance per country. Finland and Sweden are moving step by step to the right direction. In Germany, we continue to face challenges, noted also by Juha earlier. And we work intensively and with discipline to turn it to the right direction. In response to headwinds in sold volumes, we have prioritized the right size and health of inventory. Inventory is adjusted to EUR 100 million level, unlocking a significant amount of cash. Inventory turnover has improved. Right steps towards capital efficiency have been done and will continue. Balance sheet ratios are at healthy level, net debt is at historically low level and equity ratio is 53.5%. And as a summary, at the time, we continue to have headwinds in volumes, we ensured right size and health of inventory, healthy financial and liquidity position. Here are our financial ratios. Revenue declined by 13 percentage points and key drivers were underlined earlier. Gross margin was 8.7% and improved slightly. Driven by lower volumes, operating result was negative. Items affecting comparability included termination of CEO contract costs. Adjusting operating result was negative. Inventory turnover, that we talk a lot in our business, has improved and we continued activities to gain further improvements in this area. Equity ratio has improved and is at over 50% level, as said earlier as well. After this year, volume is our key area to improve. We are looking our financial position. We are better equipped to go for volumes. Our inventory is at the right size and fit. Here we can see trend in volumes. Volumes declined in the quarter, but less than in recent quarters, mostly due to profitability focus and with impact from lower showroom network. In Q2, we sold about 3,800 cars less compared to the previous year same time. In Q3, about 2,800 cars less. And in Q4, we sold about 1,000 cars less than in previous year same quarter. So the decline has somewhat slowed down. We can see revenue and adjusted operating results trend here. Looking recent 4 quarters, adjusted operating profit trend was to the right direction in Q2 and Q3. However, low volumes impacted heavily to Q4 results. At the end of the fourth quarter, our cash position was EUR 18.5 million. In Q4, we paid back EUR 12 million of revolving credit facilities that can be withdrawn later when needed. Cash position and unused credit facilities gives us a good position to build up inventory and volumes. Our integrated services revenue development was hit by lower volumes. We are not satisfied with this trend, even though the share of integrated services has slightly increased to total revenue. And here is a visual representation on how our net working capital developed. We can see EUR 30.8 million reduction in net working capital, driven by decline in inventory. Our inventory is in a better fit from both structural and price points perspective. Outlook for 2026. Kamux expects its adjusted operating profit for 2026 to increase from the previous year. And dividend distribution. Based on the dividend policy, Kamux aims for a dividend payout of at least 25% of the profit for the financial year. This year, the result has been negative. However, the Board of Directors proposes dividend of EUR 0.05 per share to be distributed for the year 2025. In this morning, we have announced also an extension to our share buyback program. The program that was initially launched in November, has progressed well and Board of Directors decided to increase the number of shares to be bought. The new totals are: acquire at maximum 2 million shares, and this means extension of 1 million shares compared to initial launch. The maximum amount to be used for the repurchase of shares is EUR 4.5 million. The program will end April 16 at the latest. And back to you, Juha. Juha Kalliokoski: Thank you, Enel. So a few words about long-term targets and strategy. In terms of our long-term targets, we have progressed well in customer satisfaction, where we have already achieved our long-term target of 60. The group level NPS for Q4 was 65. Our task is to keep it there. We have also progressed well in terms of employee satisfaction in the last 6 months, and the eNPS has risen to 15. This is obviously still below our target, but an important improvement nevertheless. On the financial side, as we have shown earlier today, we are not where we want to be. However, we are still standing by our long-term targets. Here is our current management team, to which there will unfortunately be some changes this spring, as Johan and Joanna will be leaving us. We are progressing well with their replacements, however, and we have just announced that Niklas Eriksson will join us in April as Kamux Sweden's new Managing Director. This is a reminder of our focus areas in improving productivity. During Q4, we worked especially hard on managing our inventory in preparation for 2026 and ensuring that we have a solid cash position. There is still a lot to do and we continue to work on these on daily basis. Our strategy remains unchanged. In 2025, we made good progress in advancing customer satisfaction in all our operating countries, as seen in our NPS results. The group's NPS improved from 55 to 65. We have also progressed in improving our operational efficiency, but there is still a lot to do. 2026 is the last year of this current strategy period and we will review our strategy during the year. Our vision also remains unchanged, to become the number one used car retailer in Europe. Katariina Hietaranta: Thank you, Juha. Thank you, Enel. It is now time for questions. And we will begin by questions from the teleconference, if there are any. Operator: [Operator Instructions] The next question comes from Joonas Hayha from OP. Joonas Häyhä: It's Joonas Hayha from OP. So a couple of questions, starting from the inventory actions in Q4 that you did. Could you provide some additional color on what was the reason? Why did you need to clear inventory? Was it too low turnover or perhaps unsuccessful purchases or what? And how are you expecting metal margins to behave going forward? Juha Kalliokoski: When you speak of inventories, it's always so important to remember about the inventory turnover. If the inventory turnover is too low, it means that you are getting all the time old stock, which means losses. And that's why we focused last year to turning the inventory in just the right level, but also that we can achieve our target, the inventory turnover. And as I mentioned that now we are in a situation that we are possible to increase our inventories towards the summer and spring season. And it's easier to manage lower inventory compared to EUR 30 million higher inventory. And as we saw Q1 '25, what was the impact over there. Joonas Häyhä: Okay. And then regarding operating expenses, those seem to have increased somewhat in Sweden and Germany in Q4. Was there anything specific behind those developments? And can you elaborate the drivers a little bit? Enel Sintonen: Yes. So I would say that we had very operational Q4 in that sense. So operating costs were slightly bigger in Sweden and Germany. I would say that nothing special in there. Joonas Häyhä: Okay. And then can you update us on your store network plans for each of the countries? You talked a little bit about the plans in Finland, but what about Sweden and Germany? Juha Kalliokoski: If you start from Sweden, as we said after Q3 or Q3 presentation that we are -- we have 17 stores in Sweden and we are happy about that. But of course, it can't -- it doesn't mean that we don't change the places where we are or the buildings where we are. And there is possible to use 2,000 cars in our places what we have. It means that we pay rents 100%, but we use capacity only 60%. And we are in the same situation in Germany that we have stores there, and we are not opening the new stores for both of those countries before we are making a profit in both countries. And as I mentioned earlier, it means that we must turn the inventory in the right level and then we can expand our inventories higher. Katariina Hietaranta: Thank you, Joonas. There seems to be other questions on teleconference as well. Operator: The next question comes from Rauli Juva from Inderes. Rauli Juva: Yes, Rauli from Inderes here. Just a question on your outlook, if you can a bit elaborate more kind of the drivers behind the earnings growth expectation and the volume development and the margin development and what are the measures that will enable those? Enel Sintonen: What a difficult question, difficult to answer. So as said by Juha, our long-term target remains the same, 100,000 cars. What we have seen in 2025, both operating environment, but also our own operations have seen some challenges. So when looking ahead, we have made a number of steps to improve our own operational daily routines, also putting in place better inventory, inventory in better fit in better structure. So this is why we see that we improve in profitability. However, as seen, it has been tough. And we are -- it also sees in our outlook that we have given. Juha Kalliokoski: And maybe if I continue shortly. If you think about the building, you must first -- if there is something broken, you must first building the ground of the house. And we did that in last year in many ways. And now we think that we are better positioned to start to also grow. Rauli Juva: All right. All right. Yes, so it's mainly kind of based in your own, let's say, processes or so, so no big changes expected in the markets or perhaps in your market share on the cost side as such? Juha Kalliokoski: Of course, we are taking -- as we mentioned about the showroom network in Finland, we are taking off about the property costs a little bit and share the costs and people to the newer stores. And also, we don't believe a big change in the consumer confidence in this year. Of course, we heard something about the positive feedback from the market, but we don't calculate about the big number of that. Katariina Hietaranta: That was all questions from the teleconference, if I'm correct. Very good. Before we take questions here from the audience, there's a couple sort of related but perhaps expanding a little bit, particularly on the outlook via the chat. So questioning, again, the volume assumptions within the outlook. If there's any sort of ideas behind that in terms of unit number or year-on-year growth range? And whether the profit improvement is thought to be more volume-driven or gross margin expansion? And maybe also related to that, to the guidance is that are there some uncertainties that could prevent us from achieving it? And how should that be interpreted? Enel Sintonen: So when looking at the -- I will start with the inventory level we entered the year. So we have a much lower inventory level compared to last year when starting there. And this was also our target to enter the market with this level when we -- and this is the base where we start. Our thinking is that we build up volumes and inventory accordingly, but we do it very -- in a conscious way. So no quick fix in volumes in that sense. So we have been quite, how to say, conscious and cautious with volumes in our thinking behind the outlook. What we still think is what is the right balance between profitability and volumes. We still aim on -- continue to aim on profitable deals, healthy business. So we expect margins to remain or improve in that sense. Anything to add, Juha? Juha Kalliokoski: That was a good answer. Katariina Hietaranta: Okay. Thank you. I'll take a couple of more questions here from the chat. And there's 2 that I'll try to combine. They are related to the purchasing organization. There's a question that the purchasing organization, is it partly outsourced or 100% in your own hands and with reference to the purchase of webcasts. And then also asking how are the sourcing channels evolving today and whether we expect to have an impact of the sourcing channels in '26? Juha Kalliokoski: The purchase side and sourcing side, it's all inside the company, our own employees. You can't outsource that. We have the purchase organizations in all countries with purchase just the cars what needed in the Finnish market, in the Swedish market, in the German market. And then we have the cooperate between the countries and they have the meetings and try to share about the packages, what are the market can we share those or are we interested in Sweden, cars which are in Germany and so on. And when we speak about the channels, it depends a lot of the market. If we start about Germany, it's very much business-to-business how we purchase the cars. And in Sweden, it's totally different way. Most of the cars, what we purchased, we purchased from the private customers or business-to-consumer business and try to increase about trading cars, and we are improving over there, and it's important. And Finland, it's the highest rates about the trading cars, over 50%. And we buy locally from the private customers, but also from business-to-business inside the country, but all over the Europe also. Katariina Hietaranta: We've been speaking quite a bit about the car park development in countries and particularly in Finland and I believe also in Sweden, suggesting that due to the new car market being so slow, so the number of available used cars is getting lower, which means that particularly to Sweden and Finland, there needs to be more imports. Anything you'd like to comment on that? Juha Kalliokoski: Yes. In Finland, it means more imported cars. In Sweden, it means that, of course, the crown is now stronger compared to a year back or 2 years back. It means that it's not so easy to export cars from Sweden or import from Sweden to Finland. And that's why in the Swedish car park, it's not so much out of Sweden. But many, many, many years back, there is 100,000 cars per year what moved from Sweden to other European countries. Katariina Hietaranta: Okay. One more question from the chat and then we'll move to questions from the audience. How far are you from your normal sales levels -- normal sales level? And how much of the gap is due to the weak economy versus increased competition? Juha Kalliokoski: How far away we are, of course, we cannot set our budgets, but as we said earlier, it's very important to increase hand by hand the inventory turnover, what means to sales and the inventory levels. If you do so that you increase the inventory, of course, it's very short-term good impact. But after the 3 months, there is coming a lot of bad things on the table. And that's why we are very carefully about increasing the inventories and the sales speed coming with the inventory increases. Katariina Hietaranta: Very good. Thank you. Any questions from the audience here? Maria, please, you get the mic, just a second. Maria Wikstrom: Yes. Maria Wikstrom from SEB. I had 3 questions. I'll take them one by one. I'd like to start asking like who is winning share given that, I mean, your number of cars in Finland you sold was down 10%. The official statistics show about a percentage drop in the Finnish used car volumes. So who is currently gaining share? Juha Kalliokoski: If you look about the last year numbers, there is both Rinta-Jouppi, K-Auto and Bilar99. Those are the strongest companies which grew last year. Maria Wikstrom: And if I may expand a little bit here that, I mean, you probably have analyzed the situation, I mean, with the Board. What do you think has been like the winning recipe then in 2025? Juha Kalliokoski: Of course, if you open -- if you start somewhere and you open new stores and new locations, hire more people and increase the inventory, it means automatically -- not automatically, but it's easy to grow. But if you are the market leader and you have tough situations as we had Q4 '24, Q1 '25, then you must take -- make a choose where you want to win. And we -- as Enel mentioned, that we made decisions that we are taking a margin, healthy inventory, good cash positions. Maria Wikstrom: There have also been some, I mean, news articles about like Finnish customs having an investigation on certain car dealers for their practices of importing cars and I guess, I mean, paying for the VAT. Are you part of these investigations? Katariina Hietaranta: Maybe I'll take this one. So we haven't been contacted by authorities. Of course, we look at the news and follow the situation, but no contact -- they have not contacted us on that. Maria Wikstrom: And then finally, on Sweden. So what kind of mandate you have given -- I think his name was Niklas, the new country Head of Sweden. So is that more like a growth or profitability mandate that you gave him when he's taking the helm in Sweden? Juha Kalliokoski: I would say that in Sweden we need the growth that you can achieve the profit also. It's not so -- now in Sweden that we only need the margin. We need both of the margin, but we need also the growth. It's hand by hand. Maria Wikstrom: And if -- one follow-up there. So would that be more, I mean, growing the number of cars in the inventory? Or have you given him a possibility to start increasing the number of locations as well? Juha Kalliokoski: As I said earlier, we don't open -- and we were very clear about Niklas that we said we don't open any store before we are taking place -- use all the places what we have in our Swedish stores and store networks. And it means that we can grow our inventory, but not open any stores before we are profitable there. Katariina Hietaranta: Any further questions? Unknown Analyst: [ Jussi Koskinen ] Kamux's story was competitive advantages through or based on scale, financial services, database management and so on. So what has happened to those competitive advantages you told me to us a couple of years back? Have they disappeared? And can we somehow enhance those or get some new competitive advantages? Enel Sintonen: The areas that you mentioned are still there. The competition is more tough on those because when you go first with the competitive advantages, your competitors are very eager to copy those. So what we are -- have started already is our strategy update process. We look into those areas very carefully and our strategy overall and also competitive advantages as part of it. Juha Kalliokoski: If I continue shortly, maybe also the size of the store network, especially in Finland and Sweden, those are still in our own hands. We have our own tailor-made ERP CRM system, Kamux management system. And we know many competitors which works in many countries, and they have several different systems what they use, and it's quite tough. And of course, the brand. We are still 22 years old company and the best known in -- especially in Finland. Unknown Analyst: Is it possible to execute those old advantages more efficiently or find some new advantages? Juha Kalliokoski: We believe that we can find also some new when we are updating our strategy in this year. And also, we need strength about those advantages what we have. Unknown Analyst: I'm not sure if I remember right, but at some point of time, there was discussion that you would like to have more stores in capital area, and now you are closing 2 of those. So has the situation somehow changed or? Juha Kalliokoski: Yes. We look about how many cars we can set or put in our stores in the capital region. And now we had so many places and the sales were not as good as needed and we didn't have so many cars what are possible. And it's not okay in a financial perspective to use the place where we can -- where we couldn't make a good business. Katariina Hietaranta: Then we have questions from Davit, please. Davit Kantola: It's Davit Kantola from eQ. I have a question on the inventory cleaning or decrease you did in Q4. Could you elaborate, was it done during the quarter evenly or was it at the beginning or at the end of that? Juha Kalliokoski: I would say that we made systematic work the whole quarter. And the level where we are at the end of the year was very near about the target what we set when the quarter started. Katariina Hietaranta: Any further questions? Sorry, Maria, I was typing, replying. Maria Wikstrom: No worries. Yes, I have a few more follow-up questions, which I mean, today, when I walked here, the sun is shining and that typically means that the high season is ahead of us. And given your inventories were quite low at the end of Q4, so have you been able to source attractive used cars, I mean, ahead of the high season or are the next explanation for lower volumes being that, I mean, there were everybody in the market sourcing for attractive used cars? Juha Kalliokoski: As I mentioned, we are in a situation that we can start to grow our inventory and we started it. Maria Wikstrom: And then I think you mentioned in your CEO notes that one of the like weak points in '25 was high employee turnover. And I guess, I mean, that's probably following the lower used cars -- number of used cars sold, which then I mean reduced the compensation for the sales employees. So how you are going to tackle this in 2026? And is it possible to tackle it with the current model? Juha Kalliokoski: Yes. We started -- you can continue after me. We started the program for the leaders, I mean, store managers and the area managers start of this year to give more tools for them to handle the purchasers and the sellers and take better care of the employees. And as we see that we are on the right track when we think about the eNPS, what happened last year, the second half of the year, but we have still a lot to do. And of course, it's also how much the sellers can earn, how much they can sell, what is the margin of the cars. And it's one reason, of course. Maria Wikstrom: And I think, I mean, given that I followed you guys, I mean, quite a long time, and I think we talked about the quality of data that you have in your database. And I mean, now the AI is a big theme everywhere and I would assume that, I mean, with the AI tools, I mean, the kind of information that you previously perhaps have held by yourself is easier to accessible to other players as well. So how would you see the impact of an AI to your business? Enel Sintonen: This is something we discussed about in our strategy work as well. But of course, we have discussed many months, at least since I have been here. We see in many areas, of course, first, you mentioned that maybe competitors who doesn't have their own database have an advantage. But at the same time, we see it as an advantage as well because we own the data that we have and we can do a lot with that with IA. Also, of course, we see customer journey -- very, very traditional areas, customer journey, inventory management. It's -- the development is so fast in IA, and we also are in the journey with the development. So this is something we really work on and continue in 2026 and particularly within our strategy work. Katariina Hietaranta: Any further questions from the audience? There's at least one more via the chat. So we'll take that. How many cars do you have to return for repairs after you sell them? And how does that affect your bottom line? So after costs. Juha Kalliokoski: I would say that 70% of the costs coming when we speak about the repair cost or maintenance costs coming before the sales. It means that 25% to 30% coming after the sales. And of course, we have the ticket system. We see all the tickets. How many claims we have, how fast we handle those and what are the cost of those. Maybe that's the answer. Katariina Hietaranta: Any further questions? If not, then we thank the audience online and the audience here at Flik Studio and wish everyone a good day. Thank you. Juha Kalliokoski: Thank you very much. Have a nice day.
Operator: Ladies and gentlemen, welcome to the Novonesis Full Year Financial Statement for 2025 and Annual Report for 2025. I'm Moritz, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Tobias Cornelius Bjorklund, Head of Investor Relations. Please go ahead, sir. Tobias Björklund: So thank you, operator, and good morning, everyone, and welcome to the Novonesis conference call for 2025. As mentioned, my name is Tobias Bjorklund, I'm heading up Investor Relations here at Novonesis. In this call, our CEO, Ester Baiget; and our CFO, Rainer Lehmann, will review our performance for the year as well as the outlook for 2026. Attending today's call, we also have Tina Fano, EVP of Planetary Health Biosolutions; Henrik Joerck Nielsen, EVP of Human Health Biosolutions; Andrew Taylor, EVP of Food & Beverages Biosolutions; and Claus Crone Fuglsang, Chief Scientific Officer. The conference call will take about 1 hour, including Q&A. Please change to the next slide. As usual, I would like to remind you that the information presented during the call is unaudited and that management may make forward-looking statements. These statements are based on current expectations and beliefs, and they involve risks and uncertainties that could cause actual results to differ materially from those described in any forward-looking statement. With that, I am now pleased to hand you over to our CEO, Ester Baiget. Ester, please. Ester Baiget: Thank you. Thank you, Tobias, and welcome, everyone. Thank you for joining us this morning. Could you please turn to Slide #3? Thank you. 2025 was another strong year, a year where we capitalize once more on the momentum from the increased relevance that our biosolutions bring to customers and consumers around the world. From an original guidance of 5% to 8%, we ended the year delivering a strong 7%, including the negative impact from exiting certain countries of around 1 percentage point. Sales growth was broad-based and mainly volume-driven with prices and sales synergies each contributing around 1 percentage point. We delivered an adjusted EBITDA margin of 37.1%, in line with our initial outlook of 37% to 38% and despite significant negative currency development during the year. Growth in developed markets reached 6% with solid performance in both Europe and North America. Emerging markets were particularly strong with 9% growth, driven by the increased local presence and tailored solutions. In 2025, we added around 400 people in commercial roles and customer-facing activities with 2/3 of them in emerging markets. The integration of the Feed Enzyme Alliance acquisition, which we closed in June last year, is progressing well, and we are starting to see the benefits for being closer to the customer and from the strength of the combined biosolutions portfolio. We launched 14 new biosolutions in the quarter, bringing the year to 33 in total. In Food & Beverages, we launched innovation that tap into higher consumer demand for healthier and high-protein solutions driven by GLP-1 users, among others. Another example of innovation tapping into growing consumer demands was the new enzyme solutions for quick and cold wash cycles in Household Care, saving both time and money for consumers while enabling superior wash performance. We continue to focus on driving our people, planet positive ambition. 80% of our sales are aligned with at least one Sustainable Development Goal. I am very pleased that we have delivered on all of the 6 2025 sustainability targets, including reaching 100% of electricity from renewable sources. Turning to 2026. With already good start to the year, we expect organic sales growth of 5% to 7%, mainly driven by volumes, with pricing and sales synergies each contributing around 1 percentage point. The outlook also includes close to a percentage point negative effect of exiting certain countries. For the adjusted EBITDA margin, we guide for 37% to 38% with an expected margin expansion, including currency headwinds. And with this, let us look at the divisional performance in more detail, starting with Food & Health Biosolutions. Could you please turn to Slide #4? Thank you. The Food & Health Biosolutions division delivered a strong 8% organic sales growth in the full year, including a negative impact from exiting certain countries of around 3 percentage points. The adjusted EBITDA margin was 35.8%, an increase of 60 basis points, including the impact of currency headwinds. In the fourth quarter, organic sales growth was strong at 7%, including the negative impact of around 5 percentage points from exiting certain countries and the margin improved as well. For 2026, we expect this division to deliver organic sales growth within the same range as for the group, driven by both Food & Beverages and Human Health. The exit of certain countries will impact in the first half of the year. Please turn to Slide #5. Thank you. Food & Beverages delivered a strong 8% organic sales growth for the full year and 7% in the quarter, including the impact of exiting certain countries of 3 percentage points for the year and 6% in the quarter. Growth was mainly driven by volume and pricing contributed positively in line with the group level. Growth for the full year as well as in the quarter was anchored across geographies and most industries with continued strong momentum in Dairy. Performance was mainly driven by market penetration, strong adoption of innovation and positive market development, driven by the increasing demand of cleaner label, high protein and healthier solutions. In fresh dairy, beyond the increase in demand for efficiency, yield and high protein, we continue to see a strong pull for our bioprotection solutions. In cheese, customer conversion to higher-yield solutions continued to be a strong driver of growth. Baking, Meat and Plant-based solutions also saw strong growth, mainly driven by innovation and increased penetration. The Beverage segment grew in the fourth quarter, showing the momentum of innovation still with decline for the full year, mainly impacted by lower end market beer volumes. Synergies contributed to growth in line with expectations, supported by cross-selling and increased commercial scale across both Food & Beverages. In the fourth quarter, we launched 9 new products in Food & Beverages across Dairy, Beverages and Plant-based, making it 19 for the year. One exciting example of our growth synergies is our launch of Galaya Smooth, a solution that combines a texture-enhancing enzyme with cultures, driving smoother, higher protein and cleaner label dairy products. Another exciting launch is the Javora Enhance for instant coffee. This drop-in solution helps coffee processors unlock up to 10% higher yield with improved quality, cost and sustainability benefits. For 2026, growth in Food & Beverages is expected to be broad based, including a positive impact from synergies and pricing. The exit from certain countries will impact in the first half of the year. Please turn to Slide #6. Thank you. Human Health delivered 10% organic sales growth both for the full year and in the fourth quarter. Growth was mainly volume driven and negatively impacted by the exit of certain countries by around 1 percentage point. The release of the full revenue contributed around 1 percentage point to growth both for the full year and for the quarter. The full year development was driven by strong performance in both Dietary Supplements and Advanced Health & Nutrition. Synergies contributed positively and in line with expectations. Dietary Supplements grew across regions and subcategories, led by solid momentum in North America. Performance in Advanced Health & Nutrition was driven by Advanced Protein Solutions as we continue to scale up supply with our anchor customer and HMO. In the fourth quarter, growth was led by strong performance in Dietary Supplements across all regions and subcategories. And in Advanced Health & Nutrition, growth was driven by Advanced Protein Solutions. In the fourth quarter, we launched one new product in Human Health, BioFresh Clean. It's a clinically proven liquid enzymatic formula that supports better oral hygiene. It can be applied in toothpaste and mouthwash applications as a natural and effective solution. This is yet another example of a solution where we leverage the impact of our innovation across -- through cross-selling. For 2026, growth in Human Health will be driven by a continued positive momentum in Dietary Supplements, supported by a positive impact from synergies as well as by Advanced Health & Nutrition led by HMO. Pricing is expected to impact positively and deferred revenue is expected to contribute around 1 percentage point to the growth for the sales area. The exit from certain countries will impact the first half of the year. And please turn to Slide #7 for a look at Planetary Health. Thank you. Planetary Health Biosolutions delivered a solid 6% organic sales growth for the full year. The adjusted EBITDA margin was 38.2%, an increase of 140 basis points including currency headwinds. In the fourth quarter, organic sales growth was 2%, driven by Household Care. Agricultural, Energy & Tech was flat in the quarter, with double-digit growth in Energy, offset by timing in Agricultural and a tough comparator in Tech. The EBITDA margin was 36.4% in the quarter and down 90 basis points compared to Q4 last year. This decline is primarily due to a one-off expense relating to the realignment of activities in plant, while currencies had a negative impact as well. The acquisition of the Feed Enzyme Alliance contributed positively and in line with expectations. For 2026, and with a good start of the year, we expect this division to deliver organic sales growth within the same range as for the group with relatively stronger growth in Agricultural, Energy & Tech and supported by pricing. Please turn to Slide #8. Thank you. Household Care delivered 7% organic sales growth for the full year and 5% in the quarter. Growth was mainly volume driven and with a positive contribution from price and in line with group level. The strong performance was led by increased market penetration and adaptation of new innovation. Increased enzyme penetration in Emerging Markets contributed to growth in both laundry and dish wash, and growth in Developed Markets was mainly from innovation and supported by increased penetration of local and regional customers. Growth in the fourth quarter benefited mainly from similar factors as the one of the full year as well as strong growth in professional and medical cleaning, easing the impact of end market normalization in developed markets. For 2026, we indicate solid performance in Household Care with key growth drivers continuing to be innovation, increased penetration in both Developed and Emerging Markets as well as continued support from pricing. Please turn to Slide #9. Thank you. Agricultural, Energy & Tech delivered organic sales growth of 6% for the year while the development in the fourth quarter was flat. The full year growth was driven by a strong performance in Energy, supported by Tech and Agricultural. Group was driven mainly by volume and pricing contributed positively, in line with the group. Energy was driven by Latin America and Asia Pacific, particularly India, reflecting increased corn ethanol production. Growth in North America was also supportive, driven by greater adoption of innovation and growing ethanol production volumes, supported by increasing exports. Further, a ramp-up in second-generation ethanol and penetration of biodiesel solutions also contributed positively. Performance in Agricultural was driven mainly by plant while the performance in animal was impacted by timing. Tech was driven by increased penetration of our solutions for biopharma processing aids. For the development of the fourth quarter was driven by double-digit growth in Energy, explained by similar factors as the one as the full year, while Agricultural and Tech declined due to high comparables and timing, especially in Agricultural. In the fourth quarter, we launched 4 new products. In Energy, we introduced a new yeast, increasing ethanol yield under tough fermentation conditions, driving further value creation for our customers. And in Tech, we launched an enzymatic solution that helps increase yields in vegetable oil production and reduce costs. For 2026, growth in Agricultural, Energy & Tech is expected across all industries led by Energy and supported by synergies and pricing. Now let me hand over to Rainer for a review on the financials and the outlook. Rainer, please? Rainer Lehmann: Thank you, Ester, and good morning, everyone, and welcome to today's call also from my side. Let's turn to Slide #10. Please note that for the year-on-year comparison figures presented today, we have used pro forma figures as our baseline comparison for full year numbers. The corresponding IFRS-based figures are available in the statement released this morning. Q4 year-on-year figures are IFRS based and fully comparable. In 2025, sales grew a strong [ 7% ] organically and 5% in reported euro. The exit from certain countries impacted organic sales growth negatively by around 1 percentage point. Currencies provided a 3% headwind while M&A impacted development positively was a good 1% as expected, following the Feed Enzyme Alliance acquisition that we finalized in June. In the fourth quarter, sales grew 4% organically and 2% in euro. The exit from certain countries impacted organic sales growth negatively by around 2 percentage points in the quarter. Currency headwinds continued to be significant and amounted to 4%, partly offset by a good 2% positive contribution from the Feed Enzyme Alliance acquisition in line with expectations. Turning to our profitability. The adjusted gross margin was strong at 59.1%, which is an improvement of 240 basis points year-on-year. Lower input costs, including cost of energy as well as economies of scale and productivity improvements, led to the strong development. Pricing and synergies also had a positive impact while currencies impacted negatively. Total operating expenses adjusted for PPA-related depreciation and amortization were 29.5% of sales. This is 1 percentage point higher than the 2024 level as we are reinvesting and strengthening our commercial presence across geographies, in line with our strategic direction. In addition, Q4 was impacted by one-off expenses related to the realignment of activities in plant as well as a write-down of assets as a result of the closure of one of our smaller sites. The adjusted EBITDA margin was 37.1%. This was 100 basis points higher than 2024 and driven by the improvement in gross margin and realizing 100% run rate of cost synergies 1 year ahead of time. The Feed Enzyme Alliance acquisition contributed 0.25 percentage point in line with our expectations. Currency headwinds impacted the margin negatively by around 0.5 percentage point year-on-year. Relative to the initial outlook we gave at the beginning of the year, currency headwinds amounted closer to 1 percentage point. Taking this into account, a currency-neutral margin would rather have been at the top of the initial outlook range of 37% to 38%. The adjusted EBITDA margin for the fourth quarter increased 40 basis points to 36.6%, driven by the same factors as for the full year. As I mentioned before, Q4 was impacted by one-offs, adding up to roughly 0.5 percentage point, mainly related to the realignment of activities in the plant business. Here, we are rightsizing the organization and activities as we continue to prioritize and ensure that there's an appropriate allocation of resources across geographies to support this growing business. The Feed Enzyme Alliance acquisition supported the margin by around 0.5 percentage point. Special items were EUR 66 million and primarily consisted of transaction costs related to the Feed Enzyme Alliance acquisition. It also included integration expenses related to the combination with Chr. Hansen as well as some initial expenses for the new global ERP system. The diluted adjusted earnings per share was EUR 1.49, an increase of 16% compared to last year. If we adjust for PPA amortization, the earnings per share was EUR 1.99, representing a 15% increase compared to 2024. Operating cash flow amounted to a strong EUR 1.22 billion in 2025, which is an increase of EUR 189 million compared to last year. This was mainly driven by the strong improvement in net profit, supported by a positive development of the net working capital. CapEx amounted to EUR 471 million, equal to 11.3% of sales, which is 2 percentage points up from last year as we increased investments into our production footprint to support our growth journey. Despite this increase, free cash flow before acquisitions increased by 15% to EUR 770 million, equaling 19% of sales. Adjusted return on invested capital, excluding goodwill, was 10.1%, an improvement of more than 20% versus previous year's pro forma return. The improvement was driven by higher profitability and PPA amortization. With this, let us now turn to Slide #11 to talk about the 2026 outlook. Please note that the outlook presented today is based on last year's levels of global trade tariffs and the current foreign exchange environment. Back in December 2022, we announced the combination and presented targets for the period towards 2025. We set out to deliver a CAGR of 6% to 8% and an EBIT margin before special items and PPA amortization of 29%, which we translated to an adjusted EBITDA margin of 37%. With an organic sales CAGR at the top end of the range and an adjusted EBITDA margin of 37.1%, including the absorption of currency headwinds, we have clearly delivered on our promises. We expect 2026 to be another solid year for Novonesis as demand for our biosolutions continues to increase. The outlook for organic sales growth is between 5% to 7%, which includes a negative impact of close to 1% from exiting certain countries. Organic sales growth will be mainly volume driven and include around 1 percentage point from sales synergies. Pricing is expected to contribute a good percentage point across both divisions. The outlook also includes some uncertainty of potential lower consumer sentiment for the year. We expect a good start to the year. This is mainly attributable to the sales momentum we are experiencing so far. Additionally, we expect a positive timing impact from the animal business in the first half of the year related to an inventory buildup of a key customer. For the year, this effect will be neutral. We expect the adjusted EBITDA margin to be between 37% to 38%, showing continued margin expansion. The increase is expected to be driven by a stronger gross margin, the full year effect of the Feed Enzyme Alliance acquisition as well as the benefit from synergies. We have also included currency headwinds of around 0.5 percentage point based on current spot rates compared to 2025. Novonesis' Board of Directors proposed a dividend of DKK 4.25 per share or EUR 0.57 to be approved at the Annual General Meeting. This will be equal to a total dividend payout for the year of DKK 6.5 or EUR 0.87 per share as we already paid an interim dividend of DKK 2.25 or EUR 0.30 on August 27 last year. This corresponds to a payout ratio of 58.4%, which is in line with our dividend payout policy, which suggests a ratio between 40% to 60% of adjusted net profit. For modeling purposes for 2026, current FX spot rates suggest euro sales to be negatively impacted by around 2 percentage points. In addition, the inorganic growth contribution from the Feed Enzyme Alliance acquisition is expected to add a good percentage point. We expect around EUR 40 million in special items in 2026 related to integration activities from the combination in line with expectations, integration activities from the Feed Enzyme Acquisition and continued expenses related to the implementation of the new ERP system. Net financials are expected between EUR 80 million to EUR 90 million, and an effective tax rate between 22% to 23% is a good assumption for 2026. As already highlighted at last year's strategy announcement, we will see a temporary step-up in CapEx in order to support our growth for the strategy period and beyond. The increase of the investments are to expand our production capacity, particularly for enzymes and, the finalization of the dairy culture expansion in the U.S. In addition, we'll invest in a setup of a new ERP system over the next years. For 2026, we expect, therefore, CapEx to be in the range of 12% to 14% of sales. Net debt to EBITDA is expected to be around 1.7 at year-end as our solid cash generation will allow for continued deleveraging despite the step-up in CapEx. We are in a good place and confident in the 2026 outlook. We make dedicated investments to support the short- and long-term growth, building an even stronger and more resilient Novonesis. With this, I'll hand back to you, Ester. Ester Baiget: Thank you, Rainer. Could you please turn to Slide #12? Thank you. Our investments in innovation are driving both near and long-term growth, and we see AI as a powerful tool that further strengthens our leadership in biosolutions. We invest more than EUR 400 million in R&D and they're focused purely on biology. This gives scale and sets our innovation pipeline as a differentiated engine, fueling our ability to outgrow the end markets we present. With around 10,000 patents, our portfolio is very well protected. 85% of our 2025 product launches are IP protected. This is significant. In 2025, around 25% of our sales came from products launched in the last 5 years, in line with our ambition of 20% or more. We consistently have around 200 innovation projects in the late-stage pipeline status. In 2025, we launched 33 new solutions, and we feel confident in our ambition of launching at least 30 per year going forward, continuing to provide new answer to consumer ask from cleaner label and high-protein foods to lower water and energy bills. Over the last years, we have increasingly integrated AI in our innovation processes. We have unmatched proprietary libraries of more than 100,000 strains, more than 15 million enzyme structures and extensive data collected over decades from biosolutions across applications, scaling productions and core R&D work. This property data that only we can access is the key reason why AI provides Novonesis a disproportional advantage compared to others, who are mainly able to access publicly available data. And this data is the one, our data, that puts us in a strong position to capitalize on the opportunities that AI offers. The most material impact so far from using AI has been moving from idea to lead candidates faster with much less experimental activity, shortening this part of the innovation cycle from years to months. The next areas where we're seeing real breakthroughs are on strain design, productivity and production of outcomes in real-world applications. To summarize, AI is a real differentiator for us as it amplifies the impact of our moat. AI enables us to develop new technologies and solutions faster and with high accuracy, bringing efficiencies that so far were impossible to achieve. The more data we generate, the more we increase the impact from AI, speeding up innovation and solving for increasing higher value generation. Novonesis is a pure biologics play with unique portfolio of biosolutions, broad market reach and scalable precision fermentation setup. With strong execution and focus on prioritization, we continue to deliver on our commitments. 2026 will further demonstrate our progress to our 2030 targets and beyond. And with that, we're now ready to open the Q&A. Operator, please. Operator: [Operator Instructions] And the first question comes from Matthew Yates from Bank of America. Matthew Yates: It relates to your outlook and this sort of concept of the uncertain lower consumer sentiment environment. And I guess if I look at your really amazing Q4 growth rates, it doesn't look like you are overly impacted there. You're talking about a strong start to the year. So when you referenced this consumer sentiment point, is that something you are already seeing in your results? And if so, in what part of the business? Or is that more of a forward-looking statement that it's something that could transpire and manifest itself in due course? And if I can squeeze in a second question, specifically about your sort of Human Health business. I think it grew 12% ex the currency exits, which again, very, very impressive. Can you just talk a little bit how you are managing to decouple from arguably an end market or an end category that looks a bit more lackluster based on what we've seen some of your sort of peers or customers report. Is this innovation? Is this the merger synergies coming through? Just interested how you're driving such strong growth on the human side. Ester Baiget: Thank you, Matthew, for these beautiful questions. Yes, we feel very pleased about how we finished the year, but especially about the momentum and how we're setting us for another good 2026. Let me answer your first question and then pass it to Henrik, who will enlight us on how we are decoupling through our innovation muscle and the places we play in the market from the dynamics that we see and how we continue to outgrow the market here in Human Health. Building on your question on our outlook, 5% to 7%, that's what we are aiming for the year within the range, including 1% of exiting certain countries. And as you indicated, Matthew, this is including a potential softness for consumer behavior, mainly in U.S. that we don't see yet. We're starting the year in a strong momentum across all areas. There's a little bit of effect of timing from Q1 -- from Q4 to Q1 on Ag and Tech, as we mentioned. But beyond that, the good start of the year that puts in a very good place of comfort. Then we live in the same world that you do, and we bring that potential scenario in place on quite some softness -- potential softness in the consumer behavior within the outlook of 5% to 7%. Henrik, please? Henrik Nielsen: Thanks, Matthew, for that question. One of the nice questions to get to answer. Indeed, we are growing very well, and we're doing very well in Human Health. 2025 was also a very strong year for Human Health, where both our dietary supplements business and the Advanced Health & Nutrition business really contributed nicely. It is true that there's a lot of talk about lowering consumer sentiment. In the Human Health business and especially in the supplements business, you do see consumers also switching around and shopping around a lot. So there is growth to capture if you're out there with the right customers. And we are locked in with some very, very successful customers, especially in the U.S., where we are growing very nicely despite others struggling a bit more. It's also -- it's much more dynamic. And it's also a more fragmented market. It's not unlike many other parts of Novonesis, where position may be more broad. There's much more room for us to grow not only with the market, but also growing with share and growing with our key customer. And that is the secret of the recipe. We actually see that also in the rest of the world, but particularly in the U.S. And then also, as I mentioned, we are just growing nicely across all geographies and across both supplements, B2B and Consumer Health and Advanced Health & Nutrition. Operator: And the next question comes from Thomas Lind from Nordea. Thomas Lind Petersen: Also 2 questions from my side here. The first one relates to Ester, what you said about the, I think, greater innovation adoption within energy that you see in North America. If you could perhaps elaborate a little bit on that. We've seen the average U.S. ethanol yield get very close to 3 gallons per bushel. So just maybe if you could elaborate a bit on what is required to go above the 3 gallons per bushel, so breaking down the fiber and how you sort of see that breakdown going on over the coming years and then what that means to growth in energy. And then the second question is on the very, very strong growth that you delivered in food and bev, 7% despite the strong headwind from the exit of Russia. So perhaps if you could just elaborate a little bit on this. I'm assuming that it's dairy, but is it high protein? Is it yogurts? And is it this new Galaya Smooth innovation that you launched last year? So that would be my questions. Ester Baiget: Excellent. Thank you. Very good questions also, Alex (sic) [ Thomas ]. I'll pass it to Andrew to share the details of the broad-based growth on Food & Beverages. It is across all areas where we see it and also very diversified from a geography's point of view and continue to outgrow the market that we present. And then Claus will further elaborate on the question of innovation. But let me bring a little bit of color here that it's a beautiful question, the one that you're making, and it shows about the untapped potential of biosolutions. And this is the key formula of success of who we are, being a pure biologic play and continue to bring nuances that show what it was not possible, it is possible. We've done it in bioenergy by being in the power of combining yeast and enzymes, and we continue to drive and enable a new value generation for our customers. And it is on higher yields, higher productivity, corn oil, value-added side streams that they make our solutions extremely strong. And coupled with a very strong presence in North America, we continue to outgrow the market. But Claus, what is the roof there? How we can continue to untap that? Claus Fuglsang: Yes, Thomas, a very good question. I mean, I guess you're alluding to there must be a mass balance gap or cap somewhere, but that's still not there. There's still potential to convert more fiber. There's still potential to decrease the waste in, let's say, the yeast fermentation of glucose to ethanol. There's still a potential to increase the protein fraction, if you will, of the DDG. So there's still innovation potential in the bioenergy business. Ester Baiget: And maybe, Claus, if you speak about not only corn, but also what we're seeing in other areas in bioenergy. Claus Fuglsang: Sure. It was already mentioned in growth due to biodiesel, where continue to innovate for higher yields. And then also on the biomass side, where [ Horizon ] in Brazil continues to build out the capacity or coming online with the plant, and then in India as well. Ester Baiget: Thank you, Claus. Andrew? Andrew Taylor: Thanks, Ester. Yes, we're very pleased with the growth momentum we have in Food & Beverage, both in Q4 and coming into this year. It is truly broad-based. So we are growing in both Dairy as well as Food & Beverage. The Dairy is similar to what we talked about in prior conversations around both the new innovations we're launching in this space, but then also productivity through things like DVS conversions, and we see that continuing to be a growth driver for us coming into this next year. On Food & Beverage, it is also we're seeing growth, and that is in -- mainly driven by innovation. And we've talked in prior calls about baking and food. So we are really excited about the progress that we're making. The growth is really driven by the expansion of the usage of biosolutions in those industries. And so that's what we're spending a lot of time doing. When you think about it from a regional perspective, we are seeing growth actually in all of our regions. And clearly, there are some pockets that are higher than lower, and a lot of what we're spending our time trying to do is making sure we have our sales resources deployed at the most attractive pockets for the next 3, 4, 5 years. So a lot of it comes down to making sure we have our people in the right spots. Operator: And the next question comes from Alex Sloane from Barclays. Alexander Sloane: Two questions from my side, if that's okay. The first one, could I just ask a little bit more around the Agricultural timing impact? If you can maybe quantify how big an impact that had in Q4 on the timing side, what growth maybe in Ag, Energy and Tech would have been without that? And how confident are you that, that fully reverses in Q1 or H1 of this year? And the second one was actually on innovation again. I mean, thank you, Ester, for the detail on AI, which sounds very exciting, obviously, shortening innovation cycles. You're talking about kind of months from years. How should we expect that to translate in terms of the innovation KPIs that you report over the next 5 years? Will we see more new product launches versus the 33 that you announced in '25? Or is there about launches that are just maybe more powerful, more useful for customers where you can derive more value? Ester Baiget: Thank you, Alex, for both of your questions. Regarding the timing, it was meaningful enough to make a change or the imprint that you see in Q4. And what we feel very confident is that we see already a strong momentum in Q1. So it is purely timing, and we see that reflected in as we're starting the year. Then on innovation, yes, we are bringing AI as a powerful tool. We've been using AI. We used to call it machine learning. Now it's embedded on the 100% on the way that we operate. And mainly it brings higher home runs per shot. It is leading to high efficiencies, but also untapping opportunities that we have not even seen yet the roof. It allows us to reach spaces that we could not dream. Yes, it brings efficiencies and speed. It took before 1 year of lab data to predict the surface of a protein, and now we can do that in 30 seconds or less than a minute. But it is because we have the right data, the relevant data on how we fit those models, on how we can capitalize on the momentum on R&D. So too early to talk about the new metrics, but for sure, comfort on the quality of the muscle that we have behind and then the capability to continue to be a partner of growth, a value-added enabler for our customers on bringing new solutions in. Operator: Then the next question comes from Lars Topholm from DNB Carnegie. Lars Topholm: I have 2. Continuing on Alex's questions to Agriculture. Can you give maybe a little bit of detail on the areas where you saw the timing and the tough comps? Are we talking in animal health? Are we talking plant health? And if it's plant health, are we talking bioyield or biocontrol? If it's animal, can you comment on what species? And then a second question, Rainer, when you went through the numbers, you mentioned a one-off effect in Q4 from a realignment of activities in plant. I think those were your words. I just wonder if you can put some comments on what that actually means. Ester Baiget: Very good. Thank you, Lars. I will pass the word to Rainer and Tina on the drivers of the -- not only timing, but also strong competitor on tech for Q4 and also the drivers of the reorganization behind that we always do. We hired 400 people in commercial roles and customer-facing activities this year. And at the same time, we always streamline on the way that we operate. That's a continuous momentum, and we saw the impact of this in the one-off on Ag to continue to set us more equipped for capitalizing on the growth momentum and the opportunities we see in the market. But Tina, first to you. Tina Fanø: Yes. So first of all, when we look at Ag, all 3 sub-elements, so Agriculture, Energy and Tech all grew in 2025 and delivered the 6% for the full year. And we are seeing good momentum here in 2026. We talked to strong growth, double digit in bioenergy also in Q4. And then we talk to some timing in Ag and Tech. I mean, Tech, we have talked about a couple of times, the biopharma processing aids that, that is more lumpy and bumpy starting out from the COVID-19 test kits. And that's also what we are seeing here in Q4. And we see a good start to -- here in '25, and we see a good start to 2026. If we then go specifically into Agriculture, we see -- if you look back at our 2024 numbers, we had a very strong Q4 in Agriculture, and we do expect a very strong also in Agriculture here in 2026. If you look at it -- if you look even more detailed at it, we had good performance on plant, while animal was a bit more subdued and a lot of it comes from emerging markets. But we do see, as we also call out, a strong also animal performance here in 2026. Then over to the restructure. Over the years, we have developed many strong solutions in the plant biosolutions space. And as you know, Lars, we have also talked about the need for prioritization and our focus on securing that we prioritize our cash in the best possible way. And now we want to focus on getting full benefit from what it is that we have. We have developed so many solutions, and we want to get them out and secure that we have the right footprint in the right places in order to deliver to that. So that's what it's about. It is about capitalizing on what we already have. Rainer Lehmann: Really nothing to add. I think Tina explained it wonderfully. It's making sure the business has the appropriate resources to grow. Operator: And the next question comes from Soren Samsoe from SEB. Soren Samsoe: Soren here. So first question is, you talk about a good start to the year. Just what areas are you more specifically referring to? And also, does this mean that we should see the year of '26 to be front-end loaded when it comes to organic growth and margins? And the second question is on CapEx to sales, which you guide for 12% to 14%, and similar level, I guess, in '27. Maybe you can elaborate a little bit on what this relates to? Are you going to build more capacity in other markets besides the expansion you're doing in the U.S.? Ester Baiget: Thank you, Soren, for the very good question. The good start of the year is broad-based. It's across all areas. Then there is the onetime effect of inventory that Rainer mentioned in his comments that, that we're pleased. I mean the earlier we have that in place, the better for us. And that's only -- but it's irrelevant for the -- or not impactful the overall year, it's simply a timing effect that we're going to see particularly in Ag for the beginning of the year in Q1. But then the growth that we see, it's across all segments. And then reading to CapEx, yes, it is built and made for support growth for the broad range of our guidance, including the high end. And I'm here, I'm passing the word to Rainer that can put a little bit more color. Rainer Lehmann: Yes. So of course, it's the continuation of the expansion in the U.S. basically for the food culture business, right? It's going to go online in beginning of Q4 of this year. But then it's also ensuring that for the enzyme business, we have enough capacity to really accompany our growth journey, and that will be outside of the U.S. It will be more in the emerging markets and in India in this regard. So that is, of course, also going to be a multi-journey. Important here is this is really a temporary elevation, this 12% to 14%. And it also includes the roughly basically percentage points of the capitalization of expenses related to the ERP. Soren Samsoe: Will it be dedicated to any specific segment like Energy or Dairy or whatever? Rainer Lehmann: Facilities, we're building multipurpose facilities. And these are investments not only in capacity but also in resilience overall so that we're able to really use these assets in a broad portfolio, of course, then across the enzyme portfolio. Operator: And the next question comes from Tom Wrigglesworth from Morgan Stanley. Thomas Wrigglesworth: A couple of questions. I wanted to talk a little bit around the margin, both environment and the outlook. So with regards to the environment, where are we on the kind of the cost dynamics in terms of inputs and raw materials? I think sugar prices have been coming down. I wondered if that was supportive. And secondly, in terms of the bridging elements for that margin midpoint, 37.5. Should we think about that as linear progression through the year? And what are you assuming around the SG&A investments that you're making and how that will trickle through into 2026, noting that, obviously, your ambition was to expand your sales force in emerging markets. So color around the margin would be very helpful. Ester Baiget: Thank you, Tom. Rainer, if you please could take this one. Rainer Lehmann: So regarding the timing of the margin, it's pretty much, I would say, fairly stable. It will be over the year. I would assume, as we said, like in 2025, we increased, for example, on the S&D side, 400 new colleagues that will, of course, be there from the beginning in this regard. We also do not expect actually any major growth rates from H1 to H2, right? We highlighted that the animal or in the agriculture space on the animal side, we see this onetime purchase, which for the year is neutral but will affect H1, right? We do not know if it's Q1 or Q2. That's what I'm saying here H1 in this regard. And so therefore, we do not -- therefore, the ratio should be fairly consistent, right? And for the mid guidance, we also said, keep in mind that while there are clearly positive impacts, as you know, and further increase on the Feed Enzyme Alliance that we're, of course, going to harvest more synergies that add another 20 basis points. But also keep in mind that here, we also continue to face currency headwinds, which is going to be approximately around 0.5 percentage point. So overall, I think it's an ambitious figure but it's going to be basically throughout the year fairly consistent. Operator: And the next question comes from Chetan Udeshi from JPMorgan. Chetan Udeshi: The first question was just on this timing issue that you referred to in your Ag business. I'm just curious, was that a surprise to you in the sense how it developed through the quarter? Because I was a bit puzzled, if this was known, why was this not flagged already in the last call? The second question related, and Rainer, to some extent, touched on it, you don't expect any major deviation between H1 and H2 organic growth. So is that meaning that in Q1, we should at least see a similar 6% growth, if not higher because of the timing issue, bearing in mind, you also have the impact from exit in Russia and Belarus being bigger? And third question, I was just looking at the slide, and I think, Ester, you mentioned about the new solution for oral care. Is this a completely new category for Novonesis? Or have you always been in that category? Because I don't seem to recollect having seen any offering for the oral care market. I'm just curious, is this something that is a new category for Novonesis? Ester Baiget: Thank you, Chetan. Very good questions regarding oral care, and I'll let Henrik further build on this. But mainly, this is not necessarily new solutions. What is new is the connectivity we can bring now, bringing a broader company with cross-fertilizing solutions that we have in the pipeline and then enhancing them and bringing them, truly meeting needs of the consumers and then enabling new maybe formats or spaces for our customers. So not 100% new, but just new for the customers, enabling new connections as part of bringing also a broader company with more arms and more faces and more legs in the market. Regarding the timing, no, it's not unexpected. It's mainly in Ag, where we know it's a bumpy market. These things happen. But we didn't see it in Q4, we see it Q1, it's there. And as I mentioned, and apologies, I'm repeating myself, we see a good start of the year across all areas but also here on Ag. With then the timing effect that Rainer mentioned on inventories on animal for the first half of the year that we're also going to see there. Do you want to build up on the timing, Rainer? Rainer Lehmann: Yes, and I can give some more color there. Chetan, basically, I do not expect a difference really between H1 and H2. They're both going to be within the range that we said 5% to 7%. Keep in mind, that specifically 2025, also the first quarter in 2025 really is strong comparable, right? I'm not guiding here any quarters. But for H1, H2, I expect similar growth rates. Operator: Then today's last question comes from Andre Thormann from Danske Bank. André Thormann: I just have 2. Just coming back to Agriculture, Energy & Tech. I just wanted to make sure here, it's correct that the growth, if you correct for timing is around 3% organic. And if that is true, then it's still a very meaningful deceleration in the growth rates. So what explains that other than timing? That's my first question. And then the second question is in terms of the tax rate. I just wanted to make sure it's 22% to 23%. Is that the run rate also longer term? Or is there some one-off effect in 2026? Rainer Lehmann: So I'm going to start with the tax rate and make it easy. No, this is basically around the 22% to 23% is a long term. It's basically a normalized rate, probably even to the lower end of this 22% of that range. Keep in mind the tax rate in '24 was really high due to the nontax deductible integration expenses, which were quite significant. So now we're actually in a more normalized way going forward. Ester Baiget: And Andre, building on the timing, it's good that we dwell on the quarter, and we don't look at our businesses from a quarter perspective. We delivered 6% growth in Agricultural, Energy & Tech. Particularly in this segment, there is volatility from one quarter to the other. We knew that there was a strong comparator in Tech in Q4, and Tina shared the drivers behind. And we're starting the year in a good place, and we see this segment as a driver of growth. We delivered double-digit growth in Q4 in bioenergy, and we continue to see growth across all areas in Q4 -- in 2026. We will -- it will be the same drivers. It's innovation, it's penetration, and it's continue capitalizing in the momentum and then translated into what you will see growth across the segment in 2026. André Thormann: Just to be sure, Ester, because I'm not sure I got that. So is it correct that it's around 3% if you correct for timing in Q4? Just to be sure of the numbers. Ester Baiget: And I heard you and that's your assumption. And now what we are saying is that there is an impact on timing. It is meaningful. You can make -- I mean, that's a fair assessment. But what's important for us is the 6% growth for the year and the comfort of Planetary Health Biosolutions, Agricultural, Energy & Tech to also be a driver of growth across the segments in 2026. So no more calls. And we thank you for -- no more questions, and thank you for all calling in today. Looking forward to continuing the conversations. We're pleased of where we are. We're proud of 2025. We have a strong start of 2026. And we're looking for continue the conversations with you and showing you also through the year on how we're delivering on our guidance that we put in place. Thank you so much. Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.
Itumeleng Lepere: Good morning, all, and welcome to AECI's Results Presentation for the Year Ended 31 December 2025. My name is Itumeleng Lepere, and I'm your host. With me today to present the results to you is our Interim Group Chief Executive Officer, Mr. Dean Murray; our Group Chief Financial Officer, Mr. Ian Kramer; and our Executive Vice President of AECI Mining, Mr. Stuart Miller. I would also like to welcome our Board members who are present with us in the room today. And just getting on to the matters of the day, Dean will take you through the results highlights with Ian taking you through the financial results and both Stuart and Dean will take you through the business review with Dean wrapping up with the looking ahead. And just for those that are on the webcast, please remember to type in your questions on the text box provided and we will address all questions at the end of the presentation. So without any further delay, Dean, please come on. Dean Murray: Thank you very much, Itu. Good morning to everybody, and welcome to our results presentation for 2025. As the interim CEO, it's a privilege for me to go through the results with you. I'd also like to take the time to just acknowledge the great support we've had from the Board as well as from my colleagues in the ExCo and in the businesses as well. I think everybody has put a huge amount of effort into the back end of last year to deliver the results that we have. So let's start. We've had a very good performance, outstanding, if I think of the challenges we've had in 2025. And that was really driven on the back of good operational discipline that we put in the businesses as well as the continuation of our strategy, the strategic process. So from a business point of view, the mining business had a record EBITDA. So well done to Stuart and the team. Secondly, if we look at our Chemicals business, an excellent free cash flow generation, which I'll unpack later in the presentation as well. And really, the quality of earnings in the business has really been driven on a focus on the product mix as well as our pricing and margin management, which has really delivered the EBITDA result that we see. And then lastly, of course, from a business point of view, we've completed most of the disposals that we set out to do at the beginning of the strategy. From a financial point of view, as part of the portfolio optimization, as I said previously, we've completed the sale of most of the managed businesses, generating ZAR 2.2 billion in cash for the organization. And of course, that has really strengthened our balance sheet for us going forward, gearing down from 31% to 4%. And of course, the other highlight for the year was the improved quality of earnings, the EBITDA margin, up 2% from 9% to 11%. From a sustainability point of view, I'm very happy to say that we had no fatalities in AECI last year. Our people are key to this organization, and we do operate in some very dangerous conditions. Secondly, the TRIR also improved from 0.31 to 0.2. So well done to the safety teams. We also launched our new broad-based scheme supporting our communities in the areas that we operate in. And lastly, we also launched the employee share scheme as well that we've been working on for quite a number of years. All right, so following all the work that was done last year, I think we really positioned the business and put in a strong position for growth going forward. Really, the fundamentals that we focused on, and I think this was also communicated in past presentations as well, is our people and our culture. So we had a big drive in really focusing our people working on the culture. Secondly, the portfolio optimization. So we've created a very focused organization now as well. So just for everybody's -- just for the detail, we've really focused now on the 2 businesses, which is our mining, chemical/mining business, which is explosives and mining chemicals and then our actual chemicals business, which is a combination of our Plant Health business as well as our industrial specialty and water businesses. Those businesses remain in AECI. And even the Public Water business, we have decided to withdraw from the sale process, and it will be incorporated and run within our Chemicals business going forward. And last -- sorry, then moving on to our TMO operational and functional excellence. We have now worked quite hard on the TMO projects, really a disciplined process to look at our various work streams, delivering better commercial procurement initiatives. And now we've actually taken that TMO project, and we've embedded into the business where it will then continue to make sure that we have a close alignment with business, and we've given the business the ownership of all those projects that we've been working on. And then lastly, on the internationalization front, it is key, specifically at our mining business, but it's a focused approach when it comes to internationalization as well as a very disciplined approach when it comes to allocating capital for growth. And Stuart will talk about some of those areas that we're focused on going forward. But needless to say, SADC, Africa and the Asia Pacific region still remain key for us for our growth in mining. Okay. So what we believe we've -- in terms of our long-term value creation, as I said before, we've created a good, strong foundation for sustainable growth. We have the focused portfolio, as I mentioned. And you'll see the impact of both as we go through the individual businesses and show you the numbers. We've got this big focus on the improved quality of earnings in AECI. What's important is that we found it in the past. We've looked at some of the poorer contracts that we've had. We've had a look at some of the product lines that haven't been giving us the margins, and we've addressed that. The balance sheet, which everybody will talk about, we're sitting in a very strong position. And this puts us in a good -- this puts us in a good position for looking at investment and growth going forward. And then very important to our organization is the solid cash generation so that we can reward our stakeholders accordingly. All right. So with further ado, I'll call Ian and give us a rundown on the financials. Ian Kramer: Thank you, Dean. Good morning, everybody. I think I'd also want to start with an acknowledgment to the finance team and all the effort they've put in for us to get these results over the line. We are not able to stand here this morning and present these results if it wasn't for all of the efforts of all of them. So thank you very much to all of them. Turning to the group performance. Our performance was underpinned by disciplined pricing and structural margin management that drove our strong performance in combination with excellent free cash flow generation across both the Mining and Chemicals segments. This result was achieved notwithstanding a decrease we saw in revenue or the Modderfontein operational challenges that we reported on at half year. Our revenue was 4% lower at ZAR 32.2 billion compared to the ZAR 33.6 billion in the prior year, mainly driven by lower revenues from our Mining segment. Stuart will provide you with a little bit more color with regards to that. In terms of input cost pressures in the Mining segment, it was quite muted with the ammonia price remaining relatively stable year-on-year. The average price of ammonia only decreased by 3.4% to ZAR 9,591 per tonne in the current year compared to ZAR 9,727 per tonne in the prior year. This resulted in a revenue impact of only ZAR 42 million. If I go to EBITDA, EBITDA grew sizably by 12% on the back of improved operational performance in the Mining segment and partially offset by a slightly softer operational performance in the Chemicals segment and higher losses in the Property Services and Corporate segment. This combination of reduced revenue and growth in the EBITDA resulted in the group's EBITDA margin increasing by 2 percentage points to 11% compared to the 9% of the prior year. Depreciation and amortization, excluding our impairments was slightly lower from the prior year at just over ZAR 1 billion compared to just under ZAR 1.1 billion in the prior year. Included in the number you see on the screen is impairment charges of ZAR 821 million for the year from continuing operations, and it were mainly recognized in terms of the disposals in our managed businesses segment. That is the Schirm U.S.A., the Baar-Ebenhausen and the Food & Beverage business disposals as well as from the annual impairment assessment at Schirm Germany. The remaining goodwill that sits in our books at the end of the year at Schirm Germany has decreased to EUR 6 million at year end. In the prior year, in contrast, impairment charges from our continuing operations was ZAR 377 million and a further ZAR 732 million was recognized for the Much Asphalt disposal in the prior year, which was disclosed as part of discontinued operations. Our profit from continued operations effectively remained flat at the level that we have disclosed on the screen there. Pleasingly for us, our net financing cost has decreased by 33% from ZAR 521 million to ZAR 347 million due to the reduced debt levels and a lower effective interest rate. The taxation expense for the year ended at ZAR 853 million, and it reflects in an effective tax rate of 70% compared to 71% in the prior year from continued operations or 148% if we take continued and discontinued operations together. The ETR remains elevated due to the impairments that we've booked, unutilized assessed losses at our Schirm Germany complex, non-deductible expenses and foreign withholding taxes that we pay on dividends that gets declared from the regional entities up to the parent. If we normalize for recurring tax impacts on the ETR, that drops our ETR to 38.6%, which is in line with the guidance we gave to the market throughout the year. The group headline earnings increased by 53% from ZAR 7.16 per share in the prior year to ZAR 10.98 per share. It reflects the higher underlying profitability, and it excludes the impact of the impairments that was recognized in determining our earnings per share number. Working capital lockups for the group decreased from ZAR 5.5 billion in the prior year to ZAR 4.7 billion at the end of this year. This ZAR 800 million reduction in working capital relates to a couple of things. The disposal of our Food & Beverage business contributed to a working capital release of ZAR 350 million. Furthermore, the Schirm businesses that got disposed this year added a further working capital release of ZAR 150 million, with the final piece of working capital release coming from our Chemicals segment, approximately ZAR 360 million. That was the result of a combination of accounts receivables decreasing and an uplift in accounts payables. This reduction in working capital for the group improved the working capital ratio from 16% in 2024 to 15% in 2025. Our net debt levels has decreased substantially from a position of ZAR 3.7 billion at the prior year to ZAR 465 million at the end of 2025. This net debt reduction substantially supported the group's earnings ratio -- sorry, gearing ratio to decreasing to 4%, well below our market guidance range of 20% to 40%. If you look at it from a net debt-to-EBITDA covenant ratio perspective, the decrease gets us to 0.1x, which is substantially below our covenant threshold levels of 2.5x. Capital expenditure for the year amounted to ZAR 835 million. That was mainly made up of replacement or sustenance CapEx amounting to ZAR 688 million and expansion or growth capital amounting to ZAR 147 million. Management's focus during the year was to incur capital expenditure where most needed within the group, specifically focusing on asset integrity. After a slow start to the year in terms of capital expenditure, we did see an increase in the second half of the year, especially in the last quarter, resulting in the replacement growth capital expenditure reaching spend levels of approximately 0.7x our depreciation and amortization charge for the year. Our focus in 2026 will remain to further increase these spend levels. On the expansion and growth capital side, new growth capital spend was muted throughout the year. However, again, this is anticipated to increase in 2026 as growth capital projects in the DRC, Indonesia and Australia get into full swing. The Modderfontein optimization initiatives are expected to further contribute to increased capital expenditure over the next 3 years. The year saw outstanding free cash flow generation from both the mining and the Chemicals segments. Notably, the free cash flow conversion achieved of 133% in our Chemicals segment reinforced the importance of that segment consistently supporting the group's performance through high levels of cash generation. And then finally, our return on investment capital or ROIC reflected a satisfactory increase compared to the prior year with the Mining segment, the main contributor to this uplift. If I turn to our core business financial performance, it is clear that our robust operational performance in the core businesses drove the stronger group results. Just a reminder for everybody, our core businesses consist of our AECI Mining segment, our AECI Chemicals segment and our AECI Property Services and Corporate segment. Profit from operations at our core businesses at ZAR 2.3 billion is 125% up from the prior year and substantially higher than the group profit from operations of ZAR 1.5 billion mainly as a result of the majority of the impairment charges of ZAR 821 million recognized in the managed business segment, which falls outside core business segment. The core businesses contributed 95% to the group's EBITDA and more than 80% to the group's free cash flow. With the majority of the divestment program completed, the Managed business segment will fall away in 2026 as this segment will be reallocated to the core business segments. As a result, we will discontinue to report our core businesses as it will be the same as the group performance. This slide, the net debt, you can see here the cash generation resulted in a substantial reduction in our overall debt levels, as I've previously already indicated, reducing our debt levels from ZAR 3.7 billion to ZAR 465 million. As a result of that, our undrawn facilities has increased to be in excess of ZAR 5 billion. The balance sheet strength that we now have has set us up as a group to continue to execute on our strategic focus throughout 2026. And I will ask Dean to explain and elaborate on that later in the presentation. As has become customary, this slide provides you a waterfall of the cash in and outflows affecting our net debt levels. I think it's important to note that cash generation for 2025 came from both the operational performance of the 2 major segments as well as the proceeds from our divestment program that was successfully completed. What is really satisfying to us is that our operational cash flows at ZAR 3.55 billion has been more than adequate to cover our normal net financing costs, our taxes, our working capital lockups, our capital expenditure and our dividends. With regards to our disposals, we made announcements in July 2025 with regards to Schirm U.S.A. disposal, Baar-Ebenhausen and Food & Beverage businesses. And I can confirm that all of those transactions has been concluded and all the cash proceeds has already been received. Lastly, our strong balance sheet position of the group warrants a discussion regarding our capital allocation and dividend declaration. Maintaining our balance sheet strength and continuing to apply prudent capital management will remain a priority for us. The group will continue to reinvest within our portfolio, notably our Modderfontein optimization initiatives. The Board took the decision to declare a final dividend of ZAR 1.28 for the year, resulting in a -- sorry, a final dividend of ZAR 1.28 for the year, resulting in a total dividend of ZAR 2.28 per share for the year. The total dividends for 2025, therefore, reflects an increase of 4% compared to 2024. During the year, we converted our dividend policy from a dividend yield to a dividend cover payout. This dividend payout is in line with that new policy, and it's underpinned by our capital allocation framework, which we've highlighted for you on the slide again. This level of dividend payout continues to signal our intention that we intend to continue to declare dividends that are sustainable and affordable. At the current levels of our net debt and cash available, I think it will be remiss for me not to address an issue with regards to share buybacks as a way to return value to shareholders. In thinking about this, we have taken the following into consideration. Balance sheet optimization remains a priority for us. As a result, our disciplined approach to capital allocation remains intact. This includes that we ensure that we have sufficient growth investment cash available to secure our long-term future. Our dividend payouts occur from available free cash flow before growth capital spend. Returns to our shareholders remains a priority in the form of these sustainable dividends as well as being potentially supplemented with share buybacks. Share buybacks will be considered carefully to balance providing enhanced shareholder returns and ensuring market liquidity of our shares is not compromised. Seeing that our retail shareholding is limited since 20% -- sorry, since 20 shareholders holds approximately 80% of our shares, this is a very important consideration for us in considering share buybacks. Any future share buybacks will be in line with shareholder approvals received and disclosed together with financial results as required. With that, I'm going to hand over to Stuart. Thank you. Stuart Miller: Thanks, Ian. Good morning, everybody. I'll firstly, just like to start off by also reiterating that it was an exciting year, and all our people around the world put in a huge effort to get us to where we were today. So a big thank you from me. If we start off with the headline, the headline is AECI Mining delivered a record EBITDA of ZAR 2.7 billion in 2025. That's 19% up year-on-year despite revenue declining 18%. And that contrast matters, it signals that this was not a volume-driven year. This was a structural margin reset. Revenue was impacted by a few temporary factors, adverse weather early in the year across Southern Africa and Asia Pacific and some operational constraints at Modderfontein communicated at the half. The important point is these were temporary, and stability improved materially in the second half. Despite those challenges, profitability strengthened. Profits from operation increased 35%, free cash flow increased 34% and our ROIC increased to 24% above group guidance. This tells a clear story of where mining is heading, and it's not just higher earnings, it's better-quality earnings. Three structural shifts underpinned this performance. The first one being price and product mix. We exited underperforming contracts and increased exposure to higher-margin products, particularly electronic detonators, which increased 12% year-on-year and specialty collectors. The second was cost and operating discipline. Productivity improved, contract governance tightened, and operating costs reduced in excess of 10% year-on-year. Third was our portfolio balance. Mining chemicals maintained robust margin performance, providing the stable earnings base alongside our improving explosives business. Working capital remained well contained and controlled at 14%, supporting strong cash generation and free cash flow of ZAR 1.5 billion. On Modderfontein specifically, the disruptions experienced in the first half were largely stabilized in H2. Power resilience improved and feedstock mitigation plans were put in place. The key takeaway is, we exit 2025 with a structurally stronger and more disciplined earnings base. Looking to '26 and beyond, our strategic focus areas are centralized around our world-class leading products and technologies. And this is the lens through which we're shaping this business, how we will compete, how we will invest and how we will grow. Our first priority is the Modderfontein optimization. We are moving from a phase of stabilization to optimization. And it's important to reinforce that this is not a turnaround, and it is not a step change in capital intensity. The focus is on reliability, utilization and capital discipline, but critically, optimization is also about technology leadership. We are investing in long-term competitiveness by phasing out underperforming low-margin legacy products and reallocating capital towards higher-margin growth-orientated technologies. These technologies will strengthen our product offering, deepen our customer relationships and support structurally higher returns. Modderfontein remains a strategic anchor asset for AECI, enabling leading products and technologies to be deployed to the African continent. Second, we are embedding operational excellence enabled by technology. Digital tools, process automation and improved technical standards are enhancing supply reliability, quality, safety and cost discipline. Through better maintenance planning, stronger capital governance and tighter contract discipline, we will deliver more predictable performance, protect margins and improve cash generation. Third, we will grow in key markets through product and technology leadership. A key proof point here is Asia Pacific, where despite lower volumes year-on-year, performance strengthened materially, driven by electronic detonators, improved mix and disciplined execution. Growth will be selective and return driven, not volume for volume sake. We will deploy growth capital into markets where we see the strongest returns and technology pull-through. Those include the DRC, Australia and Indonesia, as Ian has already identified. These are markets where our leading products and technologies create clear competitive advantage and support our margin-led growth. Finally, we will continue to leverage our strong, long-standing strategic customer relationships, underpinned by technology, innovation and services. Our customers value reliability. They value predictability and performance. By partnering with them with advanced products and technologies, we will continue to deploy solutions that can be implemented day-to-day that create real value. We will continue to evaluate new jurisdictions with our partners where appropriate, expanding our share of wallet without materially increasing risk. In summary, before handing back to Dean, AECI Mining enters 2026 with a record EBITDA, stronger cash flow, higher ROIC and a portfolio increasingly anchored in leading products and technologies. Our priority is now to embed that advantage and translate it into sustainable, margin-led growth that delivers sustainable and predictable earnings. Thank you. Dean? Dean Murray: Thank you, Stuart. All right. Before I continue, again, congratulations to the mining team, fantastic year, and I look forward to this year as it sees itself out. All right. So let me talk to you about chemicals. So our Chemicals business this year had an excellent cash flow generation, conversion of 133%, ZAR 1.2 billion. And really, if you look at, we're operating in quite a flat market in South Africa because the bulk of this business is South African based. We were still able to grow the revenue by 5%, but this growth in cash generation was underpinned by a record performance in our Plant Health business. More importantly is that our Plant Health business in Malawi had a record year, delivering ZAR 100 million EBITDA, which is fantastic, well done to the teams. Then our Water business, as you'll recall, we have an industrial, mining and a public water business. We had a very strong performance in water again. But specifically, our public water business had an excellent year. And we were able to clean out a lot of the bad debt and really provide a strong service in the public water space, which our country desperately needs at the moment. Then working capital, my favorite topic. Working capital improved from 18% to 14%, and that was good vigilant working capital management by the team, which also made that contribution to our free cash flow in the business. Just the one challenge we had in the chemical business was the -- one of our biggest customers in the industrial space went into business rescue. It's still an ongoing process at the moment. I did talk about this a while ago. So we've got a provision in our numbers and expected credit loss of ZAR 64 million. So as far as the business is concerned, as we've gone into this year, I think ForEx does play a big impact in our business, but I think our teams are well equipped at managing that as well. So the strategic focus for chemicals, as we mentioned before, it remains a core part of AECI's business. We really grow this business through growing our market share, increasing our product offering to the market, new principles, new products and, of course, leveraging our customer relationships. As a chemical supplier to South Africa, we are still a leading supplier in the chemical space. And again, focusing on making sure that we sweat our assets and we actually grow our market share with our customers' baskets that we offer to them. Secondly, disciplined cost and margin management is key in this business. And I think the teams have been able to demonstrate that they have this well in control over the past couple of years. In our Water and Specialty Chemicals business, we focus a lot on innovation and technology. In the water space, there's a lot of work that's taking place on mining water treatment together with our mining business, all right? And that's not just in South Africa, that's outside of the country as well. And then our specialty chemicals product range, we have a wonderful range of products, which are green products based really on supplying also reagents in the mining flotation space as well. And then lastly, the focus, we never forget it, cash is king, and we continue to deliver the excellent cash flows in the chemical business. So looking ahead, what we have done is we updated our guidance, as you will see on the slide, really the focus around EBITDA growth, and you can see the numbers in there. Also our EBITDA margins, quality of earnings that you've heard both Ian and Stuart talk about. And then again, the importance of the free cash flow generation so that we can fund the growth for the business going forward. I think very importantly, you will see and Ian has alluded to that as well, a strong balance sheet. So really, the focus now on is where we're going to invest going forward and what are the target areas that we will focus on. So in closing from my side, the foundation was established last year. We put a strategy in place. It's an ongoing piece of work, the strategy. And really, the focus will continue to leveraging our strengths. I think what's very important is we provide integrated solutions to our customers. So they're not just buying a product, they're buying a service and know-how. Secondly, innovation is a key advantage for us, particularly in our mining business. And Stuart and the team have got a lot of new products that they've been working on, and I'm sure that we'll start seeing them over time. From prioritizing the business to make sure it's resilient, we've alluded to the fact that we will invest in the asset reliability, particularly at the Modderfontein facility. It is key for our SADC mining business. There's also some work we need to be doing in our mining chemicals business because, again, a very important part of our value creation for the customers. It's very important how we focus on increasing efficiencies on the mines in terms of the extraction chemistries that we apply. And of course, our technical expertise as well, we have been investing in. What Stuart also alluded to in terms of our growth areas, it's a focused growth approach, not a shotgun approach. We are very specific in the regions that we are active in, not just the countries, but the applications of our products, the minerals that we are targeting and very importantly, the pull that we take from our big global customers as well. So in closing, our enhancing quality of earnings I love that word. It's about the quality of the earnings that we generate for our shareholders. Disciplined capital allocation, and we have a tough vigorous process, I can tell you. We cannot waste money. When we put the money into something, it's going to give us the returns that we're looking for. Value-accretive volume growth as well. Margin, product mix and cost management, which we have done quite well over the past year. And again, the key focus on cash generation. So that is my story. Thank you very much for attending. I'll hand back to Itu, and I'm sure we'll have some questions and answers. Thank you very much. Itumeleng Lepere: Thank you very much, Dean. Okay. Thank you very much all. We'll open the floor up for question and answers. If you could kindly just mention your name and the company that you're representing before stating your question. There are roaming mics. And Rowan, I'll just get a mic over to you. Rowan Goeller: It's Rowan Goeller from Chronux Research. Just a question on market share changes, please, in the Mining division, in particular, in your different parts of the world that you operate in. Could you give a sense of how you're doing in those various regions, please? Dean Murray: Stuart? Stuart Miller: Yes, sure. We saw challenged volumes throughout the world due to the wet weather in the first quarter in particular. Full year, we did see volumes grow in Southern Africa, which was positive. But overall, we saw EBITDA and margins expand in all of our regions, those being Southern Africa, Rest of Africa, LatAm and Asia Pacific. Rowan Goeller: And market share? Stuart Miller: Market share. We won in the order of ZAR 6 billion worth of contracts through the course of the year and retained another ZAR 7 billion worth of contracts. So our market share is growing. Unknown Analyst: Yes. For me, I think it's one, congratulations on the structural margin improvement despite the lower revenue, which is particularly encouraging and suggest operational discipline, which are not just the volumes. But then the question around that will be -- with the balance sheet now significantly strengthened at the net debt-to-EBITDA is looking at 0.1x. How is AECI thinking about prioritizing capital allocation between further portfolio optimizations and also around the organic growth? And also, I mean, to what Stuart you spoke about in terms of the technology and the digital, how are you looking at that, especially achieving the 2030 integrated enterprise ambition? And then the second one is also around that ambition because there, we're looking at ambition of EBITDA at between ZAR 5.6 billion and ZAR 6.3 billion. Yet the current EBITDA is looking at about ZAR 2.4 billion. And one then would look at the structural enablers that can then be brought in, in that regard. I mean Modderfontein is one of them, the optimization there. But then one would check if what are other structural enablers that AECI is looking at as most critical to achieving that step change. Dean Murray: Okay. Maybe I can start off and then I'll hand over to my 2 colleagues. So I think if you look at the work that was done by our M&A team over the past 2 years, we've done a lot of investigative work in terms of inorganic acquisitions. We've also spent a lot of time looking at the growth that we anticipate in our mining business in the various regions because there's a capital that has to be allocated in those particular areas, together with the capital allocation at Modderfontein. We're at the process where we are doing a proper disciplined approach in terms of looking how we allocate that capital that will give us the right returns. There's work that we've been doing on the continent in Australia as well as in Papua New Guinea and in LatAm. But before we do any allocation of that capital, there's a thorough process that we take through the investment committee to make sure that we're going to get those right returns. So I think over the course of the next year, I'm sure we will give some updates in terms of where we intend to put some of that investment capital there. Ian Kramer: I think I can add to it in analyzing your question, we go to our disciplined capital allocation framework. The first thing that we have signaled is the reinvestment in our existing portfolio, our organic growth, making sure that our plants are optimized as best possible, and that includes the significant exercise we're doing in terms of Modderfontein. Subsequent to that, sufficient cash flows remaining the dividend payouts and then growth capital investments. Growth capital investments happens in the markets where we are strongest, that being Southern Africa, the Africa continent, specifically the DRC and Australia and hence, the commitment that the growth capital spend that has started in those regions will continue to go through. Once that has all been concluded, that drives and feeds into over the longer period, the uplift in EBITDA performance. And that is still -- obviously, that growth capital is one of the legs to get that uplift that is still coming through then. Stuart Miller: Yes. And just adding on that, I think as we exited 2025, we did see volume improvements in Southern Africa year-on-year. And we benefited from that operating leverage. There's still more leverage there available, and that will be a key focus and priority for us, particularly in the Southern Africa region where we do have quite a heavy asset base. Outside of Southern Africa, we are continuing to deploy a capital-light model where we're putting manufacturing assets closer to customers. We see that as a strategic advantage, particularly in countries like Australia, and we'll continue to leverage that. On the question around digital, in '25, our focus was more on the cradle to the grave of our products. So looking at how we trace our products from manufacture to destruction. And 2026 is going to be more front-end facing on the business where we will start redesigning our digital platform that our customers can interface with. We do have a strong strategy around data ownership but being quite agnostic when it comes to how we collect that data. We strongly believe that our expertise lies in how we interpret that data and how we drive the continuous improvement loop with our customers as opposed to owning and developing hardware for collection. It's a very asset-intensive process, which we think there's a lot of innovation happening around the world that we can plug into with partnerships. Itumeleng Lepere: Thank you very much. Do we have any other questions in the room? Okay. I will take a few questions from the webcast. First up is Adam Esat from MIRF. I think, Ian, this one is for you. Can we get a firm commitment from Asia as to when we can look forward to a clean results with no further write-offs and minimal difference between HEPS and EPS? Yes. Maybe let's just address that one first. Ian Kramer: So the bulk of the divestitures has now been completed. There's a couple of small entities that still remains. We will only dispose of those for value where we can find value. Otherwise, it will be reintegrated into the business. The Schirm Germany restructure has been successfully pulled through the year. So we believe we have turned that corner. The only reason why I flagged the EUR 6 million goodwill is that is potentially the only further impairments we could see come through if the Schirm turnaround doesn't create this value, which we firmly believe will happen. So I think you're going to see us getting our EPS, HEPS numbers much closer to each other going forward. Itumeleng Lepere: Thank you, Ian. And just a follow-up question from Adam and a few more people asked about it. We've spoken a lot about consulting costs to transform AECI. Was the money spent on consultants well spent? And was any of the costs capitalized? And I think just to link that up with Warren Riley's question, he is asking, can you provide guidance on what that cost is going to look like going forward? Dean Murray: Maybe let me start off talking about the -- I mean, the large part of the consulting work was done with the TMO project that we put in place. The TMO project is a project that's a long-term project. I mean we saw a lot of the benefits from the TMO project in year 1, particularly out of the procurement aspect, the procurement work stream. I think more importantly, though, is that the TMO business -- the TMO process doesn't operate independently of the business. So what we have done now is that we put the TMO process back into the business with making sure that we don't lose sight of all the good work that was done. So we do still track it from the head office, but the business ownership will drive the TMO projects going forward. And look, I think the other thing with the TMO project, part of TMO was also growth projects, which required capital investment. And we haven't seen all of that return at the moment because, again, we've got a very disciplined approach in terms of how we allocate the capital. But as we go further down the line, some of those projects will start to materialize over the next year or 2. Ian Kramer: Just in terms of capitalization of those costs, obviously, we're following the accounting standards and rules around that. The bulk of that consulting fees, if not all, has been expensed and that's gone through the P&L. Itumeleng Lepere: Yes. And then Warren just asked with regards to guidance and reducing the SG&A cost looking forward. Ian Kramer: So that is certainly going to be a continued focus for us this year that we still further drive optimization as we continue our journey on enhancing the new operating model that we are rolling out on the back of that consultancy advice. Itumeleng Lepere: Thank you, Dean and Ian. And just to move on to the next question, Paul Whitburn from Rozendal Partners. How sustainable is the net working capital as a percentage of revenue? Can you hold on to these cash flow generation gains? So that's the first question. So there are a few questions here. Could you provide some granularity on the growth in volumes of explosives across the regions? I think Stuart, you can take that one. Would growth initiatives into new regions for mining result in ROIC ahead of the strong 27% ROIC generated by the business in 2025 or dilutionary to these returns? So I think maybe Ian, you can start with the net working capital. Ian Kramer: On the net working capital, obviously, there was a significant release because of the disposed businesses. Food & Beverage always had a sizable working capital element that we've now released. In terms of the rest of the business, we have put in a lot of effort to ensure that we get to the appropriate levels of working capital. I believe we have been quite successful this year and that we are comfortable that we can maintain the current levels that we've achieved at the end of the year. Itumeleng Lepere: Volumes? Stuart Miller: Volumes, yes. So across the year, we were impacted by the weather in Q1. And as I highlighted during the presentation, we see this as temporary. Last year was quite an extreme set of weather circumstances. We saw flooding in the Amandelbult region. I get told I pronounced that incorrectly, so apologies. And also a lot around Asia Pacific and in Australia, particularly, there was a 1 in 100 year weather event that went through there. That did impact our underlying volumes. So we look at ammonium nitrate equivalents generally as an aggregate. But inside that, we do have a traded portion. I always sweep that out. Traded AN is an opportunity and it's low margin. The core, which is bulk explosives delivered to customers, that dropped by about 8% as a result of that Q1 impact and recovered strongly in H2. So I don't have any major concerns with respect to volumes, and we are winning more contracts than we are losing, as I mentioned before. Itumeleng Lepere: And Dean, I think you've got the guidance sheet there on the ROIC on whether the growth projects will deliver. Dean Murray: Exactly, Itu. And if you look at the guidance that we've given in the sheet, I mean, the ROIC improvement in mining has been very good, Stuart, which we are very happy with. And we believe we will maintain that. I mean the capital projects that we -- well, let's say, the capital projects that we're looking at, at the moment, all meet our hurdle rates. Otherwise, we will not approve those projects going forward. So if I look at the work or the capital we want to put down into the DRC, Stuart, in Australia as well... Stuart Miller: If I jump in there, Dean, I think it's important just to try and articulate that a lot of this capital that's being deployed is being deployed into modular manufacturing facilities, which lean towards higher-margin more technology-enabled products. And that's the strategy, and that's going to continue to drive our ROIC. So I feel quite comfortable that mining is setting ourselves up for success when we look at the ROIC over the next 3 to 5 years. Itumeleng Lepere: Okay. Thanks, Dean and Stuart. Maybe just defect to the room if you've got any other questions in the room. Okay. In the absence of any, I will continue -- there's quite a few on the webcast. So I'll continue on the webcast. Warren Riley from Bateleur Capital. You have previously guided to a reduction in group tax rate, Ian. What is your expectation for FY '26? And interesting one. Note 8, contingent liabilities states that the group could face substantial claim in AECI Mining as well as SENS related to the U.S. PPP program. Can you please quantify the expected claims from both these proceedings? So first is on the ETR guidance. Ian Kramer: So continue to guide that recurring ETI will be between levels of 35% to 40%. I'm quite comfortable there. We are continuing our work to deal with the more complex structural matters that could reduce that to levels between 30% and 35%. And that message remains consistent to what I've previously guided. With regards to the 2 contingencies in the financial statements, the Ultra Galaxy vessel matter, there was no further developments in that case. We actually have not received a formal claim with a value. So it remains just a possible obligation, hence being disclosed as such in the financial statements. And then the Paycheck Protection Program in the U.S. The comment I want to make there is that, that is an investigation by the DOJ, not only with regards to SANS Fibers, but across the whole of the U.S. SMEs in terms of that program. We are quite confident that we have submitted our paperwork appropriately and correctly, and we're entitled to those. So we do view it as a remote obligation. Itumeleng Lepere: Thank you very much for that, Ian. The next question is from Paul Carter from Lucas Gray. It's not a long time back when you mentioned a run rate of ZAR 6 billion on EBITDA. Dean, I think this one is for you. Was the plan for 2026, has this now been lost? Dean Murray: I think, firstly, if we have a look at the, let's say, the growth plan that we have put in place, we've had a review, obviously, of our growth projections in AECI. The strategy still remains intact. We had some delays with regards to some of our capital allocation for growth. And that was really on the back of our focus being on Modderfontein, making sure that we got that plant up -- got it up and making sure it's reliable. So the growth aspirations have not disappeared. But what we have done is that we will focus on -- I'd say that the time frame is going to be out a little bit, but the projects are still there. It's a matter of how we deliver on time, particularly with our focus on the investments outside of South Africa as well. Itumeleng Lepere: Thank you very much for that, Dean. Next question was from AJ Snyman from Peregrine Capital. AJ, I think we've addressed your question on the contingent liabilities. And Marang Morudu has asked about the corporate cost, which we've addressed. That's fine. Then Tumisho Motlanthe from Coronation Fund Managers was asking about the ETR. So we addressed that. EBITDA margins of 12% in mining and 7% in Chemicals, where to -- over the medium-term? So that's his question. So EBITDA margins of 12% in mining and 7% in Chemicals, a bit of guidance on the mid-term and mid-term view. And his next question is around the dividend cover range is wide at 1.5 to 3x. What is the FY '26 thinking? And on the free cash flow and EBITDA of conversion of 57%, very complementary saying it's good, but where to next. Quite a few questions. So Ian, let's start with the first, I guess, Stuart and Dean, EBITDA margins. Dean Murray: So maybe let's start with Mining, Stuart, and then I'll cover chemicals. Stuart Miller: Sure. So I think the most comforting thing for me over 2025 was, and I've touched on it a couple of times, is we did see our volumes expand in Southern Africa. And as a result of that, we did see our profitability and margins expand, particularly in South Africa. And that was on the back of operating leverage through Modderfontein primarily. There's more embedded opportunity there for us as there is at Sasolburg, and we plan to exploit that. We will continue to drive operational excellence and reliability across those operations and continue to drive our OEE up to push more products into the market. So that's a key priority, and that's something that's going to give meaningful support to margins over the medium-term. Outside of that and talking internationally, we are -- we have sanctioned, and we are deploying, as I previously indicated, more manufacturing capital into our strategic international markets. And these are all leaning into higher-margin products such as PowerBoost and electronic detonators. So I think the margin mix for us is a favorable outlook. So I feel quite comfortable that we'll retain that over the medium-term. Dean? Dean Murray: Yes. As far as the chemical business is concerned, we've always targeted an EBITDA percentage of around 10%. We were a little bit down in 2025, and that was largely due to the expected credit loss that we had through in the numbers. But really, when you look at this business, the parts of the Specialty Chemicals business and particularly the water business, these are generally higher-value products, value accretive, good margins on those businesses. So that's where the focus is and where the growth focus is. What we did see last year in our Specialty Chemicals business is one of our biggest customers, they were down for quite some time. They had a fatality on the plant. So for 2 or 3 months, we lost in terms of supply, but that's picked up again this year. So the target for the chemicals business is always to try and beat the 10% mark. In the Plant Health business, of course, we do operate at slightly lower margins, but what's important there is obviously the payment terms that we are able to get from our suppliers. But again, we really focus on the ROIC in our Plant Health business, but we aim for 10% and above. Itumeleng Lepere: Okay. And Ian, just on the -- question is the dividend cover range of 1.5x to 3x is... Ian Kramer: So the thinking at this stage because of the level of cash we have, and the low level of net debt is that it would always be at the lower end payout of that dividend cover, so the maximum payout in terms of that policy. That is certainly how we're thinking of it, and that's what we've done for year-end. And your last question was... Itumeleng Lepere: On the free cash flow, I think... Ian Kramer: The free cash flow, we were very happy with that free cash flow conversion. It was an exceptional year. There's a couple of underlying factors that you need to consider that drives that free cash flow conversion. That is the working capital unlock. We are now at levels where that will become more muted. And then also, it is also a function of capital spend. And as we pick up on capital spend, we will see some pressure on that level of free cash flow conversion margin. But we're still very confident that we can get within that guided ranges that we've put on the slide. Itumeleng Lepere: Okay. Thank you very much, Ian. Just going to check again. We're almost out of time, but we'll check in the room. Any questions? Kiara King: Kiara King from Absa Equity Research. Just a question on ammonia supply and security. Could you provide more color into how you're thinking about that moving forward? Dean Murray: Stuart? Stuart Miller: I'll take that one. I guess that does affect me. It's a primary feedstock. Look, we're seeing ammonia supply stabilize, but it's a risk. We're seriously evaluating how we expand our import capacity. We stood that up this year. So we imported almost 10% of our demand this year, and we're going to expand our ability to do so further into the future. So in the medium-term, based on our requirements, I'm not seeing a material risk. In fact, I'm feeling more comfortable that we can get our feedstocks, whether that be from domestic supply, which is always a preference. We want to support South African made products. We want to supply South African-made products. But we do have the capacity to supplement with imported products now. Itumeleng Lepere: Okay. Thank you very much, Stuart. Just moving on to, again, Paul Carter and Adam, you said your comment has been noted on the disciplined capital management. Paul is asking spending capital on acquisitions and it was down the spine of many long-suffering shareholders. Can you state that this is indeed not top of the agenda as it appear much still needs to be done internally? Dean? Dean Murray: Yes, we can. So I think first and foremost -- yes, we have a strong balance sheet. We're sitting on -- we are in a good position. But again, you're quite right. Any investment into acquisitions will be very closely scrutinized. We still believe a lot of our growth will come out of our expansion of mining into Africa and into Australasia, where we've got strong know-how, it's right in our sweet spot, and that's where our preference will be to put capital down first. Itumeleng Lepere: Thank you very much for that, Dean. And Marang Morudu, I think Dean did talk to the point around TMO and EBITDA synergies. Then, yes, I don't have any more questions on the webcast. If anybody in the room has questions. Okay, not. Then that brings us to the close of our day. And please kindly join us outside if you're in the room, not the webcast for some refreshments. And again, thank you very much for joining us. Dean Murray: Thank you, everyone. Ian Kramer: Thank you.
Nathan Scholz: Okay. I can see our participants have now joined the call. Thank you for joining Domino's Pizza Enterprise Limited's half year results for the period ending December 2025. I'm Nathan Scholz, the Chief Communication and Investor Relations Officer, joined today by Jack Cowin, our Executive Chair; and George Saoud, who is our Group Chief Financial Officer and Chief Operating Officer. I will hand over shortly to our Executive Chairman to provide some of his opening remarks. When we get to the Q&A session at the end, if you can raise your hand, I will, as usual, hand around to the different analysts to ask a question and a follow-up, and then I'll ask to hand on to the next question and answer before coming back. So with that, I will hand over to Jack Cowin. Jack, for your opening remarks. Jack Cowin: Good morning, everyone. It's my pleasure to give you an overview on the company's first half results and progress that the company is making as part of a -- significant reset. Before I start, just a headline, the company is on track to what we have endeavored to do in getting out of the discount business and making more money for our franchisee community, which is a basic plank of the success going forward for this business. To move into kind of my commentary, the most important step in structuring the company for the future is the new management that has been established over the past few months, world-class management team second to none in the foodservice industry. Incoming Group CEO, Andrew Gregory, most recently Executive Vice President of McDonald's, a senior executive with McDonald's for 30 years, including as CEO, as ANZ, Japan experience, responsibility for plus 40,000 franchise units around the world. He will join us later this year after completing his obligations to McDonald's. George Saoud, CFO, will retain his function, plus from January '26 --2026, takes on the role of Chief Operating Officer. George joined DPE in July 2025. We have new country heads, Mr. Merrill Pereyra in Australia started in January '26, experienced long-term employee of McDonald's Pizza Hut in Asia; Mr. Abhishek Jain, CEO of New Zealand, now established as a separate market, former COO of Australia for Pizza Hut, long-term Pizza Hut executive; Mr. Phil Reed, CEO of France, started July '25 of this previously executive with McDonald's, Burger King as a franchisee and CEO of Pizza Hut Australia; Mr. Dieter Haberl, CEO of Japan, long-term resident of Japan and the retail business; Mr. Jai Rastogi, Chief Procurement Officer, deep international experience with major competitors in Australia and Asia. Mr. John BouAntoun, Chief Technology Officer, joined us in January 2026, previously Senior Technical Adviser at Deloitte. Today, we also announced that Drew O'Malley, ex-CEO of Collins Foods executive positions with AmRest in Europe has been announced as a new Director of the company. This new management team is tasked with building the business with the goal of long-term success for a business in 12 markets, 3,500 outlets, $4 billion in network sales. This group will provide the platform for growth and profitability going forward. We're very proud of being able to attract these people to our company with the experience and background that they all have in this industry. Corporate DBE earnings. At our AGM in November, we undertook to provide earnings to match earnings consensus growth forecast for the F '26 financial year, and I'm pleased to advise that we are on target to do so with the first half EBIT of $101.5 million, an increase of 1% versus the prior corresponding period. Net profit after tax of $60.1 million for the period -- $60.1 million or plus 2% -- 2.2% higher than the prior corresponding period and free cash flow of $70.6 million. We anticipate that the 2026 full year results will be in line with guidance provided at the AGM and consistent with market expectations at that time. Sales year-to-date, including the first trading week of the second half are minus 3.6% versus the previous year. We have embarked on a test in WA, which changed the business from heavy discounts to everyday pricing. The result have been a loss of customers who are heavy users driven by pricing unattractive to franchisee P&L. The loss of price-driven customers have led to a decrease in sales with an increase in franchisee profitability, which was our original objective and which we forecast would happen, and now we are seeing the results of that. The trial confirmed the benefits to franchisee profitability. We are now refining promotional activity to rebuild traffic on profitable terms. The increase in franchisee profitability has led to a national reduction in promotional discounts and an effort to enhance franchisee profits, but has led to a negative sales result. We believe that return to profitable promotions will assist in regaining the price-driven customers over the next six months to a year. Franchisee profitability on a rolling 12-month EBITDA basis has grown from 98.6% in FY '25 to $103,000 FY '26, the highest level in three years, very important. We're hopeful that these numbers will continue to grow as returns improve and lead to an increase in investment in new units and sales. Bottom line on the financials is the dropping of broad discounting will increase franchisee profits and return to sensible promotional activity, which will lead to a return of price-driven customers sales enhancing DPE profits. Progress continues with the $100 million objective in our sites of cost out with some very new contractual arrangements enhancing global profitability. There are cost pressures in various markets with regard to labor laws, which the cost out program continues to cover as well as enhancing profits. Company debt, total debt reduction from June to December of $196.1 million. Net leverage ratio reduced from 2.21x, down from 2.57x with average debt tenure of 4.5 years. Interim dividend increased to $0.25 per share, plus 16% -- 16.3% higher than the FY '25 final dividend. I'll now hand over to George to walk you through the detail behind the reset in the financial results. George? George Saoud: Thank you, Jack, and good morning. I'm on Slide 3. As Jack outlined, this half was about resetting the business and rebuilding the foundations in pricing, store economics and capital discipline. We've made deliberate decisions to strengthen franchisee returns simplify the system and improve financial discipline. We operate a leading global QSR platform. So we made a deliberate choice, strengthen unit economics first, then rebuild volume on a better base. Turning to Slide 4, delivering on our plan. As Jack said, the reset is about getting the foundations right in pricing, our cost base, leadership, and capital allocation. We're moving from broad-based discounting to targeted economics-led promotions. In the WA trial, we saw ticket and margin per order improve, volumes moderated as expected, and we refined how we deploy promotions. Globally, franchise profitability increased 4.5% to $103,000 per store, the highest level in three years, with Australia delivering even higher growth. Most of our franchise partners operate more than two stores. So when average store EBITDA lifts, that's meaningful income improvement across their portfolios. If franchise partners are profitable, the system is strong. We've actioned $55 million of cost savings, a large portion of that flows to franchisees through lower food and network costs. And importantly, we are funding this reset from within. We are strengthening the balance sheet while strengthening store economics. Just quickly on Slide 5, the CEO appointment. The Board appointed an experienced global QSR executive, Andrew Gregory, after a thorough global search. Andrew understands franchise systems and disciplined growth. There will be a proper transition when he joins us, which is no later than early August. The principles do not change. The work underway continues. Slide 6, guiding principles. This slide shouldn't surprise you. We're taking a disciplined approach with these principles guiding us as we move through this reset, so you can track how we deliver against our plan. Turning to Slide 8 and expanding on Jack's earlier commentary. Overall, NPAT was $60.1 million, representing a 2.2% growth over the prior corresponding period. The key components making up the result are as follows: Network sales of $2.04 billion represent a decline in same store sales growth of 2.5%. The decline reflects the deliberate reduction in deep discounting, largely in ANZ and Japan, prioritizing franchisee profitability. There is also the effect of reducing the number of stores from the prior corresponding period on network sales. Overall sales across each region are balanced with strong sales in Europe, offsetting the softer performance in ANZ due to the reduction in discounting. The group delivered an EBIT of $101.5 million, which represents a 1% increase over PCP, largely due to the performance in Europe and Malaysia, offsetting the reduced warehouse margin and volumes in ANZ. Our higher effective tax rate reflects the greater share of earnings in higher tax jurisdictions. From a cash flow position, the business generated $70.6 million in free cash flow, which is $40.6 million above last year. Focus and disciplined capital management has resulted in a reduction in spend on technology and digital investments and new store openings. This is driving the improved cash flows. There was a net reduction of $114.2 million and a total debt reduction of $196.1 million during the period, which -- is driven by the strong cash flows. An interim dividend of $0.25 per share to be unfranked and not underwritten. The dividend reflects our support for maintaining the balance between supporting deleveraging and reinvestment. The dividend reinvestment plan remains in place. Turning to Slide 9 on the geographic summary. Overall revenue across each market region is similar, with growth in Europe, with the same store sales of 1.3%, offsetting the decline in ANZ of minus 4.7%. As mentioned previously, the decline in ANZ reflects a lower order count in the period as the business reduced discounting and promotions to improve margin per order. In ANZ, the cost savings were passed on to franchise partners ahead of those savings being fully realized. The strong results in Germany and Benelux, and Malaysia, offset the softer trading in ANZ, Japan, and France. Whilst group EBIT is up 1% to $101.5 million, the decline in orders impacted the ANZ result by $6.3 million. This decline was offset by growth in Europe of $7.6 million and growth in Asia of $1.4 million, notwithstanding the sales decline in Asia. Overhead and cost control, as well as improved margins on orders -- assisted the improvements in Asia, as we hold many corporate stores in this region. The increase in global overheads reflects higher amounts expensed in the current period for technology and data versus the prior corresponding period. Gross technology costs are significantly down, as can be seen in our cash flow analysis, and has been a major part of our cost out program. Turning to Slide 10, cash flows. Importantly, the reset is being funded from within through disciplined cash generation. Free cash flows of $70.6 million was generated in half 1 '26 versus $30 million in the prior corresponding period, representing a $40.6 million improvement. This improvement largely relates to a $30 million cash reduction in investing activities through focused and disciplined capital management. We'll be explaining this further on the next slide. Operating cash flow improved by circa $5.8 million, and net leasing payments improved by $4.8 million as a result of store closures and the associated reduction in the number of stores. Operating cash flows of $101.2 million includes the benefits of reduced tax paid during the period, offset by higher cash payments for nonrecurring costs versus PCP and some negative working capital improvements in Europe. Slide 11, investing activities. Overall, there is a $30 million reduction in net CapEx from investing activities in this half '26 versus half '25 last year. The business has reduced investments in digital by $14 million over the prior corresponding period, reduced spend on operational systems and back-of-house capabilities by $3.5 million, and reduced spend on new store openings and acquisitions by $4.6 million. Cash inflows of $8.4 million came from store proceeds and from the sale and loan repayments. The introduction of tighter governance by investment committee approvals ensures that all expenditure has the appropriate returns back to the business and aligns with our priorities. Looking at our debt and capital management on Slide 12. Management has successfully completed debt refinancing of $1.05 billion in new facilities with better pricing and staggered maturity terms with a weighted average tenure of 4.5 years. Total debt has reduced by -- $196.1 million, and net debt has reduced by $114.2 million, with $64.4 million related to cash repayments. And there is $49.8 million relating to positive FX movements during the period. Our net leverage position represents 2.21x at December 2025, approaching our target position of just under or around 2x, with an interest coverage ratio strong at 19.8x. And as previously mentioned, an interim dividend of $0.25 per share will be paid. Slide 14 and an update on cost savings and our cost simplification program. Our cost reduction program was aimed at driving a simpler business model across technology, group support, and also investing back into operations to drive a sharper focus and execution for franchisees and customers. Our cost out program continues to track to $60 million to $70 million of annualized cost savings, with $55 million of cost savings action today. The majority of this is related to reductions in headcount, in particular in IT, procurement, and logistics savings, and other marketing and G&A expenses. Of the $60 million to $70 million in savings, $20 million to $30 million will be delivered as benefits in FY '26 and as previously mentioned, circa 33% of those benefits will flow into DPE. We have started Phase 2 of the cost out and simplification program to target indirect services in G&A, IT as well as further opportunities in food and packaging. Further analysis will be presented in the full year results. We expect benefits in the range of $15 million to $25 million annually from this initiative. Turning to Page 15, franchisee economics. This slide is at the heart of our reset. We've taken deliberate actions on cost out, on pricing and discounting and on supply chain and IT so that we can generate higher returns and reinvest in our franchise network, and it's having a positive result. Group average franchisee store EBITDA has improved 4.5% to $103,000 on an average 12-month rolling basis, the highest in three years. Let's put that in perspective. The earnings increase in franchisee store EBITDA is measured over 12 months, but the program delivered -- the program that delivered, it was largely in the past six months. Importantly, we're seeing this trend continue into this half with ANZ franchise profitability up by more than 10% higher in January this year versus the prior year. The improvement in franchise profitability has been across all markets, demonstrating our reset efforts are not regionally based, but have global benefits. At the core of our changes is ensuring we continue to deliver value for every -- for every day customers every day. On Slide 16, our value equation. Earlier, I showed the principles we're applying for this reset. This slide shows those principles in action. Historically, we leaned heavily on discounting to drive volume. That lifted transactions but diluted value. We're shifting to a more margin-accretive operating model. That is part of the reset. We're rebuilding pricing discipline so that growth is more profitable. Volume is spread throughout the week, which means franchisees can manage their labor and other costs more effectively and can focus on delivering a better product to our customers. So pricing and the value equation isn't just about one number. It means simpler menus, clearer bundles and consistent execution. We want to remove customer friction points. The objective is simple: improve customer value while strengthening unit economics. We are already seeing this in evidence. Our pricing is lifting basket size, improved consistency allows our franchisees to improve margins and customer frequency. Value-led bundles are replacing blanket broad-based discounting and CRM is becoming more targeted. In ANZ and the WA trial, it's helped us learn some of these concepts. We've accepted some short-term volume moderation to improve ticket and grow store profitability. This is not about charging more. It's about pricing transparency, offering great value through consistently executing and growing sustainably. Slide 17, Smart Offers, putting this into practice. We want Smart Offers that give great value for customers and profitable returns for our franchise partners. Historically, we used broad blanket discounting to drive volume. That lifted transactions but compressed margins and diluted store economics. We've changed that. Promotions now have to meet store level economic thresholds. They focus on margin and on carryout versus delivery. And increasingly, they are targeted through our own channels. The Saturday promotion as an example, in Australia is a good illustration. We moved from blanket discounting, including delivery to now selectively carry out or pick up offers. That protects contribution while still driving traffic. The principle is simple, unit economics first, then rebuild volume. Early signs are encouraging. Voucher dependency has reduced materially by more than half. Store profitability is improving, and we're refining as we go. It's disciplined smarter discounting. I will now hand back to Jack to talk about the trading model --trading update. Jack Cowin: Thanks, George. Turning to the trading update. You can see group same store sales for the first five weeks of the second half is negative. I'd like to reiterate comments that I made at our AGM in November. I said in the short term, SSS, same store sales will not be a valid measure as the customer offering is changing significantly from a price-driven discounted voucher-driven business to a change to everyday value pricing with higher margins. In simple terms, we're going -- we're getting out of the discount business and endeavoring to run a profit-driven business. That is exactly what we are seeing in our business today, and we believe we're on track from what that original objective was moving forward. Turning to the first weeks of trading in H2. There were some one-off unusual events that affected this short window, including some significant weather-related closures and suspension of delivery in parts of Europe. Following positive H1 trading momentum, the Netherlands experienced a significant short-term disruption from severe snow conditions over a 9-day period, followed by further 3 days of continued but less severe disruption. Germany, for the period from the 2nd to the 12th of January, a significant number of stores were either closed or operating delivery only due to significant snow resulting in materially negative sales compared to the prior year. That meant markets that were trading positive comps in the first half versus last year suddenly went to significant negative sales during this period -- five week period [indiscernible]. We also had a full period of Chinese New Year in the prior year versus this year Chinese New Year, which started on the 17th of February, which impacted on the sales during that short five week. Notwithstanding those events, the most recent last week of trading closing February 22, we had a recovery of sales, which were flat versus the prior year comparative period. Absent those one-off events, I expect sales going forward to more closely resemble the first half of the year, which is a focus on sales and improved unit economics for our franchise partners. Pleasingly, ANZ franchisee profitability was more than 10% higher than the prior year in January. So this approach is working. What matters is we are not chasing volume at any price. We are rebuilding profitable traffic. We're also not abandoning discounting either. We want Domino's to offer customers great value, but it's about getting the balance right. In ANZ, we've adjusted by bringing back some targeted offers, particularly in carryout where the economics make sense. Tuesday and Saturday activations are deliberate. This is not a return to old habits. We're rebuilding deliberately. First, fix the economics, then stabilize volumes and then grow. We have work to do to get the same store sales back to positive. That's a priority. We're not going to abandon discipline to get there. This is consistent with what we discussed previously, including at the AGM. I've said we can't have growth without adequate returns. That hasn't changed. We operate in a resilient global category with leading position in most of our markets. The brand is strong. The franchise network is strong, but the model only works when stores make money and the system generates cash. Europe is showing what disciplined pricing and operational focus can deliver. When unit economics are right, growth follows. In Australia, we're rebuilding store economics first. Japan and France need further improvement. We'll apply the same return discipline there. The key message is this. We're not running a growth at any cost portfolio. We are running a returns-led portfolio. Markets will expand when store level returns justify it. When unit economics are strong, this business generates cash and compounds. That is the base we are rebuilding. Our outlook, we said this half would be about a reset. It was. We restored pricing discipline. We simplified the cost base and we strengthened the balance sheet. Franchisee profitability is at its highest level in three years. We generated over $70 million in free cash flow. We reduced debt by nearly $200 million. That tells me the model works when it's run properly. Now we move to the next stage. Because the balance sheet is strong and franchisees are making more money, we can return to selective expansion where economics justify it. Germany is performing with positive FY '26 year-to-date same store sales and strong EBIT contribution. We will support organic store openings. In Malaysia, we are progressing refranchising across our company-owned store base that releases capital, strengthens franchisee ownership and improves return on invested capital while supporting new store and upgrades. Across the system, we expect between 20 and 40 new stores over the next 12 to 18 months, selectively and returns led, not growth for growth's sake, growth where returns make sense. We moved away from broad-based discounting. That reduced highly priced driven transactions, which was expected. We're calibrating promotions to rebuild traffic on sensible profitable returns. We will not do the shop away. This is about profitable growth not headline growth. As franchisee returns improve, that strengthens DPE's earnings. We've assembled a strong leadership team to execute this next phase. Resetting the business across -- 12 countries is not simple. It takes discipline and hard work. I want to recognize the work that George Saoud and Atul Sharma have led over the past eight months. The restructuring and financial discipline that they've driven have laid the foundation for long-term growth profitability. Foundations are stronger, growth will follow returns. I look forward to your questions. Nathan Scholz: Thank you, Jack and thank you to George as well for taking that time. As I mentioned, I'm going to start unmuting the questions. First question is up from Shaun Cousins. Sean, if you want to start off, you should be able to be unmuted. Shaun Cousins: Maybe just a clarification, please, on the guidance. Your text in your AGM announcement was a quote, we are confident that the company will exceed consensus full year NPAT bracket visible alpha for fiscal '26 as a modest increase on '25 -- to fiscal '25 and I'll make the comment that consensus, I think, was $118.7 million then. Today, you've said in your release, we anticipate that full year '26 results will be in line with guidance and consistent with market expectations at that time. Will underlying --my question is, will underlying NPAT exceed or be consistent with consensus? They're just two different statements. Are you going to beat consensus or are you going to meet it, please? George Saoud: Yes. So George here, Sean, thank you for the question. From where we stand right now, we're looking to beat the consensus at that time. Shaun Cousins: Great. So that's unclear in your statement, but clear in your answer there. And my second question is just around the WA trials. Did that, and then you highlighted the good work that's been done in Australia with profit being up for franchisees. Is the WA pricing trial and the approach that you've embarked on there, I recognize how the primacy of franchisee profitability. But is it positive for DMP shareholders because you should have lower warehouse volumes and so that should come at a cost to EBIT in the near term. Is the offset that you have fewer franchisees on support? Or you just need to have a more profitable franchise network just for a business to get going and the cost is that ANZ needs to invest money in the very near term to set the business up for growth. Just curious around the WA trials, please. George Saoud: Yes. So WA trials, franchisees are making on average more profitability out of WA and what we're seeing there. The overall objective will be that short term, it will have warehouse implications for DPE. But long term, it will reduce the financial support, and the other support provided to franchisees, which will increase the returns to DPE shareholders. Nathan Scholz: Thank you, Sean. The next person to go is Michael Simotas. Michael Simotas: First one for me, look, you're doing a lot of what you promised you would do. Franchisee profitability is up, cost out is coming through, the balance sheets improved. Now you warned us that sales would be soft, but I think the market is a bit spooked by how soft they are. Two questions relating to that. One, is this the worst of what you expect for same store sales or could it continue to deteriorate from here? And how long can you sustain same store sales declining before you'd need to make some adjustments to the pricing architecture? Jack Cowin: Michael we, with the WA result had, is driven by, and we can see this very clearly, the loss in sales for the price-driven customers. And it's going to take time to be able to bring those back. The exercise and the objective here is to get to win. They are the heavy user and as a result of that, we have lost a lot of those. Where we made it probably went a little soft in WA is we didn't have our promotion program going. We just kind of went in with everyday pricing. We now accept that promotion is part of the business, and we are now actively putting forward sensible, profitable promotions rather than no promotions which we started off with. So my kind of forecast is that we -- we can demonstrate where the customer loss is. We will get those back over the next 12 months by running sensible promotions. So we see that coming back and as I say, the most recent numbers last week, we're now back flat. The former -- decrease in profitability. I'm sorry, the decrease in sales, same store sales was now across the total business was now flat. So we're quite encouraged that we've seen a decrease in the loss of those customers the heavier. We are getting increase in check. We are -- the Net Promoter Scores are going up. So there are a lot of positive as to what's happening that this is now a stronger business than what it was 12 months ago. Michael Simotas: Okay. Yes, I think I understand the message there. And then the second one I've got is just in terms of the relationship with DPZ. I've covered your stock for a long time, and I don't think I've ever seen DPZ talk about your business as much as they did on their earnings call this week. Some could interpret that as very supportive and helping you get the business where you need to get it. Others could interpret it as putting some pressure on you. Where do you think they're positioned? How patient are they willing to be? And what sort of help can they give you to drive this process? Jack Cowin: Michael, to be very straight, I've been very impressed with the support that they've given us. You have to understand that DPE make money on sales and that -- and new stores. Those are the two drivers that influence this. What we are doing doesn't fit that model, but I think they recognize that what has to -- with the steps that we are taking are required to change this business. And so I've been very impressed with their attitude and willingness to help, and that's in motion. So as I say, they have a different incentive. Their incentive is open more stores, get higher sales. And where this business have been for the last 10 years have been going down that path of opening lots of stores and drive sales, and the missing link was franchisee profitability was being reduced. So that's what we're trying to change. And I think they understand that. And -- I think the key thing here, Michael, is long term versus short term. These decisions that are being made are in the best -- right best interest of the business long term, not short term. We could have -- we go back to giving the shop away, not doing that. And as a result of that, you read negative short-term sales loss. We know why that is. It's price-driven customers abandoning. We give sensible promotion, that will come back. Franchisees will make money, we'll open more stores. Sales will increase with more stores. That's the game plan in simple terms. George Saoud: I might just add to that, Michael. I speak to Sandeep, the CFO, on a regular basis. I spoke to him on the weekend. It's a very supportive relationship. They're coming down to the rally. They'll be here on the weekend and next week. So we have a very good relationship working through. Key areas, pricing and what we're doing through pricing, they're across. They've been very supportive. They did their own reset of pricing, and that was part of their turnaround. And I think they've taken the share price that's now up above $400. It was a lot lower 5 to 10 years ago. And the other area of support is around systems and continually improving our systems, et cetera. So very supportive and a good working relationship. Nathan Scholz: The next person, analyst to speak, I'm just unmuting Craig Woolford from MST. Craig Woolford: Can I just clarify the path of cost savings that you've got? So first, there's a couple of parts to it, just to understand the first half '26, the contribution of cost savings in that period. And then I just want to be really clear on the way you're looking at sharing those cost savings. There was commentary about the 2/3 and then it looks like some of it might be half of that. So the $60 million to $70 million figure, is that -- the rest of that likely to drop by the end of FY '27? George Saoud: Yes. Good question, Craig. So we've talked about $60 million to $70 million. We've talked about $20 million to $30 million coming into DPE -- sorry, coming to the network in FY '26. And we called out 1/3 going to DPE and 2/3 going to franchisees. And the components that make up a large part of the cost savings we've called, which is IT and significant cost reduction in IT and you can see that coming through the cash flows. But generally, a lot of those costs were capitalized. So that will come over time. They will not come through over one year. They'll come over the three to four years that we were depreciating those costs. But where you will see the benefits come through the P&L in a shorter duration would be the food and procurement and logistics savings. Those deals and the quantification of those deals are coming through the P&L for franchisees in Australia that they're getting that benefit today. Craig Woolford: So what was the cost savings in that -- in the first half? George Saoud: For franchisees or for ourselves -- Craig Woolford: Yes, the gross number. George Saoud: The gross number would have been around $13 million. Craig Woolford: Right. So it's roughly half of that. And one other cost line that did reduce quite materially in that first half was marketing expenses. It was down circa $15 million, declined faster than sales. Is that something that can continue? Or are there some limitations around advertising fund or agreements around your funding? George Saoud: We -- I mean the reduction in stores that we've had from last year has obviously meant a reduction in the marketing fund. We run through a certain percentage across each of the key markets, and they vary. So some markets, it's 4%, some markets, it's 5%, et cetera. So that percentage reflects is typically what we spend across each of the markets. Craig Woolford: But it must have dropped faster because it dropped by 12% versus network sales down 1%? George Saoud: Yes. There is a catch-up. There was an overspend a year ago. There was a large deficit that we brought in to the year that we are managing through this period. Nathan Scholz: Thank you, Craig. The next question is from Sam Teeger from Citi. Sam Teeger: What is Domino's doing to address growing consumer GLP-1 adoption? Nathan Scholz: Sorry, it was a bit soft on our end, but just to clarify, Sam, the question was -- you don't need to repeat. It was a question about the impact of weight loss drugs like Ozempic and those other weight loss drugs. Jack Cowin: I don't think we know the answer to that. If you read the articles, they talked about potentially 10% of the population are on this and reduces appetite. I don't think we know the answer. The grocery store, the foodservice business, a loss of appetite, people eat less, it's obviously going to have a factor. I don't think in Australia today, it is material. And whether or not that continues to grow, not sure. George Saoud: Maybe, Sam, if I can also just add some commentary to that. I was speaking to my colleagues at DPZ about this and their insights into it. Their view was that pizza was well placed in an environment where, one, it's an indulgent meal. So it's not an everyday occasion. So there's not the same impact that you might see of large grocery retailers. And also that they saw that pizza was well positioned given that it was a sharing occasion as well, and that somewhat put it apart. I think probably the best indicator of that is that the U.S. is probably the most advanced market in terms of take-up of GLP-1s and other weight loss drugs, and they printed a very strong same store sales number this week. So it indicates that it's not having an effect, but it's certainly something that we constantly monitor trends in terms of food changes. And I mean, we implemented vegan in Australia. We are able to tailor and adjust our menu with higher protein options, whatever our customers are looking for. Sam Teeger: Yes, some good points. I wonder if some of their success is due to market share gains, but maybe we can take that offline. I would also want to ask about many retailers are calling out Western Australia as being one of their stronger performing states. Therefore, what's the risk that what Domino's is seeing in Western Australia won't be a fair reflection of how the rest of Australia will respond to the changes, particularly in some of the East Coast states, where the consumer is under a bit of duress? Jack Cowin: You're right. WA is a very strong market. And -- but I can tell you, in January, Victoria, which is one of the weaker markets in Australia, has had substantial sales -- substantial profitability increases. And so the franchisee community, and when you see profit increasing, they are very anxious to make the change and I think in the commentary we just made, it is happening across the board in Australia, that getting out of the heavy discounting has led to an increased profitability, and that's the main thing that gets franchisees excited. So yes, WA was the test market, but it's very rapidly expanded across the country, and that's the result of -- that's where you see the decline in the sales numbers as that heavy user with lack of price-driven promotions goes away, and our job then is how do we figure it and give them back over time with time. Sam Teeger: And just checking in Victoria, it's good to hear you getting some good numbers out of that state. Have you got all the new pricing in Victoria? Is that reflective of the pricing strategy you have in WA trial? Nathan Scholz: Sam was asking if it's the same pricing strategy in WA as in Victoria? George Saoud: Likely, yes. Nathan Scholz: Okay. Thank you, Sam. Moving across to Ben Gilbert from Jarden. Ben Gilbert: Just Jack, just interested in terms of -- obviously, there's been a lot of [indiscernible] the press around M&A, all the sort of stuff. I appreciate your comments publicly that hasn't been entertaining anything. But have you looked on a divisional basis in terms of if interest pops up for Japan or Germany or France? And have you had people looking? And is it something you would consider in terms of the sale of one of the regions? Jack Cowin: The answer is yes. We're trying to run 12 different countries, different cultures, different languages, and things like this is not an easy business to run. We recognize that. And there is interest that people, and we will try and make decisions on a long-term basis as to what is the company's best interest. Can we -- can we make more money in some of the markets that we're not getting a return? One of the issues are those markets probably also don't have the profitability that would justify a good selling price. One of the key values that exists in this company is underdeveloped markets, France and Germany too in case, 400, 500, 1,000 store potential. Valuations in the market is largely based on what's the future growth prospects. If we can -- from my point of view, if we can get management correct and get the pricing, the profitability at store level, at unit level correct, and get these units, then we will look at, is this the most efficient way to run this business. So, we're very fortunate. We are associated with the largest pizza company in the world, very successful. As we've talked about before, they went through a regrowth period. The 2008, the share price of the U.S. company was $3. Today, it's $400. They got it right, and we have to do the same. We have to get the pricing, the profitability at unit level, and whether or not we can run a more efficient business by reshaping this, time will tell. But at this stage of the game, our primary objective is how do we make these businesses more profitable. Ben Gilbert: That's helpful. And just second one for me and final one. Just on Andrew's appointment, he comes very well credentialed in terms of his capabilities regarding market. But what's his remit? If he comes in and say, look, I want to take another go hard on pricing again to try and get volume back or take bit of view is he very much -- he's on board with this strategy, and we shouldn't expect any change. He's just coming in to drive that. The concern being, as you know, obviously, in the past, CEOs joining companies that have faced some challenges could often drive rebases and that's just a concern or focus, I suppose, at the moment. Jack Cowin: I can't predict what he will come in and do or say. But I can tell you that I've been very impressed with the exposure. And as I look at his background, he has run very successful businesses. He's made the right decisions. And we're not -- we're very fortunate to get a guy with his experience level, and he will not have got to where he did in McDonald's without having a clear understanding of what's in the shareholders' DBE's best interest and what is in the franchisees' best interest. So, I have no fear that he will come in and make dumb decision by wanting to change things from where we're headed because I think we're on the right track. I think you'll see that. Nathan Scholz: The next question up is from Ajay Mariswamy from Macquarie. Ajay Mariswamy: Just in terms of that Malaysia corporate store sales in terms of trying to unlock capital there. Can you give us any indication on how things are tracking on that? George Saoud: We moved about seven or eight stores at the half year, and we've got plans to do the same for the full year. We're developing a solid franchise team there to move on those stores. Every time we sell those stores and we're recycling the capital, the profitability from a DPE perspective does not reduce as we sell down stores. So, it's a win-win. We find that selling down stores and the result and impact on us, we get the capital and we continue to generate roughly the same profitability. Ajay Mariswamy: Got it. And then just secondly, on that cost out savings, you called out the $15 million to $20 million -- sorry, $15 million to $25 million in the future. Is that going to be a similar split between DPE and franchisees as it has been in the past, 1/3 to you guys and 2/3 to the franchisees? George Saoud: The majority there will go to DPE. There will be costs that are within our cost base that we will look to reduce our own costs and take those benefits. So, largely to ourselves. Nathan Scholz: Next up is Tom Kierath from Barrenjoey. Thomas Kierath: I just had a question on Asia. In the prior period, you closed a bunch of underperforming stores. I think the annualized kind of benefit or the annualized losses from those stores are like $15 million, but there hasn't been much improvement in the profitability there. Can you maybe just step through, I guess, the moving parts within that business in the different countries, please? George Saoud: Yes. I'll talk about Japan in particular because majority of the stores that we're talking about is in Japan. I think we've covered Malaysia and Malaysia has done well. We covered that through the commentary, Malaysia, Singapore and Cambodia is growing. With Japan, we closed down a lot of stores. There was an expectation of additional sales coming back into the existing network and a material uplift as a reduction of the cost out of those stores. We haven't seen that materially come through the P&L. What I would say in Japan is if you look at Japan 2019 pre-COVID, Japan was doing $53 million on about $600 million of sales. And through COVID, we significantly increased the number of stores. We increased the complexity of the business. And we've ended up in a business where we really need to go and work through to remove a lot of that complexity, et cetera, which state is doing and improve the offers. So unfortunately, we haven't seen the closure of stores impact our sales to the level we expected it to. And that is part of the network analysis we're continually looking at. But we believe in Japan, it is a market that we used to have significant profits in that we complicated after the COVID and during the COVID period. Thomas Kierath: Great. And then just second on France, like the Europe numbers are pretty good, at least Benelux and Germany, but the commentary is that France is pretty tough. Is that profitable in the half? Is it loss making? Like how are you kind of thinking about that business, in particular, that country? George Saoud: Yes. France was more a small loss. And France, I think the biggest opportunity with France is driving our sales and marketing campaigns and strategy in alignment with our franchisees and execution and compliance to those programs. And that's where Phil is doing and he's doing a really good job getting the franchisees on board. So the opportunity in France is really execution of better offers, but running the digital programs more effectively and aligning those offers and compliance of those offers with franchisees in the marketplace. There's a lot of complexity in France in the different pricing tiers and the marketing programs. It's all about simplification and building the ways of working with franchisees. Nathan Scholz: Okay. Thanks, Tom. The last questions are actually being submitted through chat, and they come from Chris Scarpato and from Ben [Moodreaux] on a similar topic. And Jack, those are that you called out 20 to 40 new stores over the next 12 to 18 months. Firstly, is that a net figure? How many stores are you planning on closing over that same period? And also, what's the longer-term franchise profitability target? Jack Cowin: There will obviously be some store closures going forward. That's the new store. I don't think we sit here today with -- we can't give you a number on store closures, George. I don't think we -- but that's kind of -- the company is -- if you look at the financial position, we've got the financial capacity to move forward and go into new markets that we think we can operate profitably and -- so the 20 to 40, I think this business is a momentum business. If we can demonstrate franchisees can make a higher return, have a shorter payback on their investment, they will want to open more stores, and that will make everybody happy. And the 20 to 40, we think -- we're relatively confident that there's enough momentum in the pipeline to do that. I can't give you a net number because we don't sit here today with anything that kind of is imminent that will -- there will be some store closures where -- for whatever reason, the store is unprofitable, franchisees -- but that's kind of -- the plan is development will follow profitable business, and that's the future. George Saoud: I just build on that. We are not expecting the size of closures at all that was done last year. I think through this reset and sort of call it transition period, those 12 new stores, I would expect that to continue and grow. Nathan Scholz: Two follow-up questions from Sam Teeger from Citi just on that store opening expectations. Is $130,000 at a group number still the target we should think about for franchise profitability, which we've shared previously was an average expectation. Is that the number we should still be thinking about for franchise profitability to drive material store openings? George Saoud: As an average, that is the number we're working towards, Sam. That hasn't changed. When you look at the sort of cost of construction and the right payback periods, that is the number that it still needs to be around $130,000 to make this sensible. Nathan Scholz: Another question from Sam. The SSS decline accelerated to -- negative 2.5% for the whole of the first half compared to negative 1.2% for the first 7 weeks disclosed to the AGM. Can you help us understand the trading environment in those final 9 weeks of that first half? George Saoud: So the first -- the first... Nathan Scholz: First 17 weeks, negative 1.2% and then accelerated to negative 2.5% for the first half. George Saoud: Yes. So as we rolled out more and more of those promotions and as they expanded, that's had an impact on our same store sales. So as we took more and more, removed more and more discounting and removed the promotions that we thought were very low marginal contribution of franchisees that's had an impact on same store sales. The key headline here though, Sam, is franchisee profitability is growing, and it's going in the right direction. Jack Cowin: Sam, I took a quick look at your commentary, and you kind of zero in on same store sales. I think what you are ignoring in taking that position is we have consciously changed the way this business is being run by getting out of the loss-making heavy discounting -- sales driven and that has -- as a result, that has reduced the customer count and same store sales. So it's not an apples-and-apples comparison that we consciously said we're going to get out of the loss-making sales that this business has had and restructure it in a manner that is profitable at the store level. And so it is not an apples-and-apples same store sales that we might think about on a consistent basis of a company that's kind of going forward. This is a conscious change, and we think we're on track to move this business into a new territory where we can expand at a profitable growth and it's driven by franchisee profitability. Nathan Scholz: Okay. Thank you, Jack, and thank you to all of our callers. We have now gone through all of the open questions and all of those analysts who put up their hands. Thank you very much for your time today. We'll be seeing many of our shareholders today and over the next couple of days at our road show. We look forward to seeing you there. The recording of this webcast today will be posted on our website as soon as the recording becomes available. Thank you very much for your time.
Operator: Thank you for standing by, and welcome to the FINEOS Corporation Holdings Plc Full-Year Results Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Michael Kelly, CEO. Please go ahead. Michael Kelly: Hello, and welcome, everybody, to the FINEOS' FY '25 Results Presentation. I'm joined here today by our CFO, Ian Lynagh. And between the 2 of us, we're going to give you an overview of the results presentation that we published on the ASX this morning. So, I'll kick on to Slide 2. And this slide really covers off our playbook, mission, vision and purpose. And it's what gives FINEOS the real clarity and alignment within our team in terms of our focus on life accident and health and in terms of our vision, in terms of protecting people from illness, injury and loss and making that accessible to everybody. And of course, our purpose, working with our carriers and employers to help them care for the people that they serve through the delivery of superior insurance technology. And more and more, we see in the life accident and health world, a move from just being insurance and protection and giving payments to more caring in terms of return to work and helping people recover from illness, but also prevention and trying to keep people healthy before the kind of the situation where they need protection even eventuates. So, we're seeing more and more of that trend of prevention in the marketplace from our own carriers. And indeed, we see that as a very positive situation. I'll turn now to Slide 3 and cover the highlights for FINEOS last year. So, subscription revenues have grown to EUR 75.6 million, and that's up 8.2% on FY '24, representing 54.6% of our total revenues. And our ARR coming into this year was EUR 78.3 million at the 31st of December, up 10% from the EUR 71.2 million on FY '24. And then total revenues was up 3.9% on FY '24, total revenue of EUR 138.4 million. But on a constant currency basis, it's up 6.3%, and it would have been EUR 141.7 million if we had reported on a constant currency basis. So, slightly above the midpoint of our guidance that we gave last year. And the gross profit of EUR 105 million. Again, gross margin, 76.2%, which is really healthy. Gross profit is up 5% on FY '24, and the gross margin is up from 75.4%. And really, we're operating at a really good gross margin level, and that's part of our target for next year, which I'll talk about at the end. Our EBITDA was EUR 30.4 million, and the EBITDA margin was 21.9%, again, representing a healthy jump of 50% up on FY '24 and the margin being up 15.2% in FY '24. And our cash position at the end of the year was EUR 27.8 million, and that was up again by over EUR 8 million. Positive free cash flow within that was EUR 6.4 million. And obviously, there's no debt in this company as well. On the EUR 6.4 million, there was an extra cash received from share options that had converted as well towards the end of last year. So, added to the EUR 6.4 million is the EUR 1.6 million in the note at the end of the page there, which brings us up to the EUR 27.8 million. Turning to the next slide, Slide 4. We're looking at the operational highlights. And of course, the free cash flow is something we promised the market in November 2024 when Ian and I came down and we did a roadshow. And we're delighted we've come through with that and a very healthy number it is, too. But we're also thrilled that we've hit a net profit as well. And we didn't promise that to the market in FY '25, but we're certainly very, very pleased with it. And really, what we're seeing in our business is we're demonstrating higher margins from the cost efficiencies and the growth that we're generating out of the business. So overall, very pleasing in terms of this business coming back into free cash flow and profitability as we move forward. Last year, we won 4 new name North American carriers, licensing the FINEOS AdminSuite for claims and Absence. I just want to stop here and point out that we have rebranded our products because as of 25.4 release of FINEOS, we actually released the full AdminSuite to all of our clients in the cloud. However, most of them are still only using claims and Absence. So, what we decided to do to make sure that our clients fully understood that underneath the water, you might say, even though they're using claims and Absence today, but underneath the covers, they have the full access to the full AdminSuite when they license the product, which is phenomenal really to be able to give them that opportunity with no pre-integrated or no big SI project that they can just switch on extra components of FINEOS. And their users and their IT people are seeing a multiplier effect out of that. So, we won 4 new names last year, albeit a little bit later than we would have liked. And certainly, the conservative nature of our industry and just what has been going on in the markets over the last 12 months or so, the deals were a little bit slower coming in. But again, we're delighted. And every deal we win is a very long-term contract. So, we signed our clients up for 5 years, and we end up doing business into the long term and actually expanding and cross-selling across the customer base. So, there's really growing evidence that FINEOS is market-leading in this employee benefit space. Group voluntary and Absence is our real key focus, and that's why we're winning the deals. Two existing U.S. clients also contracted to upgrade from the on-premise version, the old version of FINEOS Claims to the FINEOS AdminSuite for claims. And one of those was a top 10 group carrier. So again, a sizable deal for us in terms of the uplift and the momentum on both of those is going really, really well. So again, we're feeling our carriers really leaning in and increasing their commitments to us. And really, what we're doing is replacing very old infrastructure that they have with a modern core platform, cloud native, embedded AI and so on. And I'll talk about that as I go through. So, we're seeing that significant momentum growing into a lot of activity in terms of go-lives, upgrades and so on within our services and our product groups. And all of these things are moving much quicker for us as we drive the efficiency in our business and really deliver the benefits of that to our clients. So, we've also built the AI -- sorry, the SI partnerships. And we're increasingly seeing the SIs now coming up to speed and actually delivering customer success with us -- with our customers. So, you probably will see some publicity over the next few months where we'll try and bring our SIs into some of the [ PEA that ] audit we do on customer success with FINEOS and so on. So, that's going nicely. And again, we're looking to our SIs in North America now to give us the introductions and help us build relationships with our SI partners in other markets. So again, we've built that kind of confidence with our SIs, and they're very happy to lean in and work with us. You would have seen recently an announcement with PwC, where we work with EY, we work with Capgemini, and we work with other SIs as well, Deloitte's and so on. So, all of this is coming to fruition in terms of us moving more to becoming a product company. And then we're gaining a real multiplier effect from embedding AI in our product. So, we have a kind of a head start on anyone in terms of people in the industry doing proof-of-concepts and stuff like that with AI. We have a real system with a huge amount of data underneath it, which is kept real time. It's all compliant, it's secure. And therefore, when we put our agents to work on FINEOS, we're seeing the results very quickly. And our carriers don't have to spend any additional time and money looking around the corners or trying to build stuff themselves. So more and more, we feel that the embedded AI in FINEOS is going to help carriers kind of relax and go forward. But we are in a very regulated environment, and our carriers are quite concerned about AI as well in terms of not automating decisions and stuff that need to be taken by humans. And maybe causing any issues with the regulators or indeed with their clients. So, AI is definitely something that we are seeing as a huge asset for FINEOS, and we're going to basically grow the business off the back of that as we keep embedding. On the next slide, Slide 5, this one covers our people. And I won't go through this one too much, except to say that high numbers of utilization, very high employee retention rates and we're down to 1,009 people at the moment. And 16.9% of those are actually contracted in. So, we've kept flex in our workforce, which means we can cut back on our workforce or grow our workforce depending on how things go and so on. But we are in a very strong position with contractors and with partners who supply resources to us, and they've skilled up on FINEOS and are very dedicated to us. So, a good story there in terms of the people side. Slide 6 is the revenue breakdown. And again, no surprise really that North America is our biggest region. And indeed, 80% of our revenues are coming out of North America. We've had some nice wins at the end of the year, and our customers are increasingly doing more business with us in that region. However, we are very keen to look at other regions and to start the work around building ourselves up in the other regions. The EMEA region, we did lose a legacy customer, a smallish customer by U.S. standards, but still we lost that. So the revenue went down in the U.K. But again, that customer was non-strategic to us. They've been around for a long, long time with us. And services revenues, we're not aiming for a big growth in our services revenues. We're really aiming for the growth on the product side. So, they've kind of leveled off as well. So, that kind of concludes my section for the moment. I'm going to hand over to Ian, who will cover off the financial slides with you. Thank you. Ian Lynagh: Thank you, Michael, and welcome, everybody, to this full-year briefing of FINEOS. And what I'll do now is give you a bit more insight into the financial performance of the company. So if we move now to Page 8. With respect to the revenues, obviously, as Michael just said that our focus is very much on that product revenue subscription fees, growing that ARR. We've signaled to the market repeatedly over the last few years that we see services remaining reasonably flat. Didn't expect to be quite as flat as that EUR 62.2 million versus EUR 62.2 million. So, spot on the same. But the subscription revenue, what's driving that is those 4 new customers. We signed up 2 of them at the end of Q2. We signed up another 2 at the end of Q4. So, they didn't fully contribute to the growth, but they were a factor in terms of that growth. The 2 migrations, one of them was quite significant, as Michael said as well. That's going from on-premise to the cloud. And then we had the traditional upsell with customers, including indexation of pricing and some have moved up a level in terms of what they're consuming for us. So, we're very pleased with that growth in the subscription fee, which in turn gave us an ARR growth of 10%, which is very, very positive. As stated before, the initial license fee, you can see a year-on-year reduction in that. Initial license fees pertain singularly to our on-premise customers. So any time they require new licenses, then we charge a fee for that. But we have less and less of them. We have less and less activity there. So, you can see consequently the revenue going down. And as we move forward into FY '26, I don't see it getting any higher than that. I see it going down, snitching again, but it is progressively declining. So, that's the revenue side. Cost of sales, we've seen an improvement in that compared to FY '24. We did have some software costs increases. And we also had to make a provision for an estimated software spend. And just to explain what that actually means because that actually also impacted the NPAT number we gave within this presentation. And that's with our main platform provider, Amazon AWS. Back in December 2022, we signed a 5-year contract with them with a committed spend. Any of you that are familiar with the way they contract, the more you commit to, the bigger the discount you get. We made a commitment. But due to the efficiencies we've been driving over the last few years, we're spending less than that was originally anticipated. So, that's meant that when you look at the full duration of the spend, it means we're probably going to spend less in the 5 years than we originally estimated. So, we had to make a provision for that in the accounts, but the plan is we go back and renegotiate with Amazon AWS for another 5 years, sometime during the course of this year. But to comply with accounting practices, we just had to put that provision in. The full size of that provision is about EUR 2.7 million. And of that EUR 1.0 million is allocated against cost of sales. So really, that's what's impacted the cost being there. In terms of overall operating expense, our initiatives around driving efficiency, around labor being in lower-cost regions, looking at better automation through the application of AI as well as just getting economies of scale has seen the ongoing OpEx going down. So, you see a good positive outcome there year-on-year in terms of approximately EUR 5 million reduction, 6.3% reduction. And then EBITDA, very positive move on that, over EUR 10 million increase compared to the previous year. That brings us up to a margin of 21.9%. And as you know, we've committed to the market to achieve 25% in FY '27. So, we're well on track. If you go back to FY '23, that was around 9% last year, 15.2%, 21.9%. So, you can see we're really focused on trying to drive those numbers through. And as Michael said, ultimately, we've got a net profit after tax of EUR 1 million. We never signaled that to the market. We weren't targeting that directly. We were very, very focused on achieving the positive free cash flow. But needless to say, we're delighted with that and we only see that trajectory improving year-on-year. And that's a massive turnaround, obviously, from a EUR 5.8 million loss that we incurred in FY '24. Moving on to the next page. Another commitment that we made was to keep on increasing that annual subscription fee. You can see the CAGR now is at 12.3%. As I mentioned in the previous slide, we've increased our ARR by 10%. So, that's the key figure that we're looking at as well. And then, of course, we've got the big increase in terms of subscription fees. So, we increased the percentage of that. And to achieve the targets that we're talking about in '27 and '29, we need to keep on increasing that percentage. So again, we're extremely focused on that, whereas we're not as focused on revenue in terms of generating that. That's not because we don't want service revenues. It's because we want to work with the Sis. They will invoice directly. The more sophisticated we make the product, the less services are required for some of our very large customers who are going to generate even larger recurring revenue for us moving forward. They want to take on self-service capabilities rather than get the service from FINEOS for obvious reasons in terms of their cost management. So, all those things impact service fees, but for the right reasons. We had signaled back in November 2024, that kind of trajectory, that kind of scissor movement where revenues will go up and costs go down, and we flagged that we're going to see that crossing over. We're almost a touching point there in FY '24, but you can see the crossover in FY '25. And obviously, that's why we're able to relay a profit as well as a positive free cash flow situation. So, we expect to see that margin continue to increase. That trajectory is not going the opposite direction moving forward. It's going to keep going that direction. If we move on then to Slide 10, just looking at the OpEx, which you saw the headline, up above. If you look at all the line items there, excluding research and development, which I'll come back to in a moment, we can see a decrease in costs. Common theme is with respect to the headcount and where they are actually located. But there are some other elements there like on the G&A, we also see FX movement. There was a share option charge increasing it or decreasing the cost, but that was offset by an increase in software costs. And we had to get more software in the organization to run our business. And some restructuring costs that we incurred is another theme you've seen there, which is one of the consequences of moving some of the workforce to lower-cost regions. Our overall headcount year-on-year is reasonably consistent. It's just the work is getting done in different regions without degrading the quality of the work. That's been really important to us. So as we've said before, we've had overlap of resources to make sure handovers work pretty well. We have a high demand environment where customers expect an excellent service and excellent outcome. So, we've got to make sure we've been managing that very tightly, and we have. With respect to R&D, we've seen some higher software costs, which includes the provision. So, there's another EUR 0.8 million put against that in terms of that provision that I mentioned earlier on. Slightly lower capitalized R&D costs but only slightly lower, and we had restructuring costs. Most of the restructuring that we did in FY '25 related to our R&D teams. We have resources in higher cost regions, and we decided that we would look to relocate those roles into lower-cost regions. So consequently, the restructuring cost was also higher with respect to the R&D team. We, as always, reserve the right, and we will signal if events dictate that more investment is required in R&D. We are a technology company, then we will look to do that. But still in all, if we move on to the next slide, what you can see is that R&D as a proportion, and this excludes overhead costs. This is people costs. R&D as a percentage of the overall revenue is continuing to improve. We've signaled that in FY '27, we're looking to get that down to 30%. So, you can see the trajectory there is moving in the right direction. Last year was at 37% -- sorry, the year before last at 37%. And last year was at 34.7%. So, we see that continuing to improve and getting more into industry norms in terms of that percentage. We're still going to invest heavily in R&D. And as we've signaled before, we will continue to invest in the AdminSuite. There's always capabilities customers will require, particularly those customers that need to move off legacy may require some extra functionality to enable the FINEOS system to take on that business, which makes perfect sense for us in order to increase the annuity fee. But progressively, we're investing more in AI and digital capabilities and capabilities to enable better self-service and better onboarding onto our product set. So it's really exciting that we can actually switch that focus to allow customers to move on to our product set in a more effective way. So, I don't expect to decrease the amount of money we're spending in R&D, but certainly as a percentage of revenue will decrease as we've signaled and as has been evidenced here. We move on now to Slide 12. I don't want to dwell too much into the balance sheet. The next slide is going to talk about cash, and I'll talk about cash there. So, development expenditure, that's really the capitalized R&D spend is a little bit ahead of amortization. We expect that to balance out maybe in '27. It will be similar figures. There's a bit of catch-up taking place there. We've seen a slight increase as well in trade accruals, but that's really due to an increase in payroll, share option exercise gains, et cetera, and a little increase in deferred revenue, again, because of the fact that we're signing up subscription fees. So, we have some new name customers signed up towards the end of last year. So, they will be put in there along with other provisions. And there is a provision, EUR 2.4 million in relation to the software spend -- apologies, so EUR 2.7 million earlier on, I believe, it's EUR 2.4 million. So, moving on now to Slide 13. So the net cash generated from operation activities, a vast improvement there, EUR 38.6 million versus EUR 18.8 million due to the increased revenue, decreased costs. We're very, very positive. We've got some additional cash in from share options that are exercised at EUR 1.6 million. As Michael mentioned earlier on, if you add in the EUR 6.4 million, which is the positive free cash flow, we generated EUR 1.6 million on top gives you that EUR 8 million difference at the bottom line there, which is a 40.4% increase. So, we're very proud of that. We knew that, that was very important to the market. Very important to us, too. Prior to IPO, we were always a profitable company. It's very much in our DNA. We made the [Technical Difficulty] recurring revenues and getting back to a positive cash generative situation, which we plan to continue to improve on as the years go by. So, that's it from me. I'll pass back to Michael for the outlook and key priorities. Michael Kelly: Thank you, Ian. Okay. I'm going to switch over to Slide 15. And I'd just like to mention that we won a very prestigious award for our embedded AI in the FINEOS AdminSuite from the Irish Technology Association. This was an award, which was competed for by all comers. We have a lot of multinationals from the states, particularly in Ireland. It's a hub for EMEA, but also local companies. And we were really called out for the kind of thoughtful way we put the AI into the system and how it was agentic and assisted in terms of driving better outcomes and presenting users of FINEOS with an opportunity to really improve the -- I suppose, taking the CRUD out of the back office and driving more positive outcomes for customers and clients. So, we were delighted with that. That was towards the end of last year. In terms of key priorities, though, going forward, we're still very focused on Guardian who are ahead of schedule in terms of their own goals that they set for themselves. We'll continue to drive new business onto the system and make sure that everything goes on this year. But also, we're starting the migration from the middle of the year. And we're excited about that because we're in the business of legacy system retirement, and they have a multi-billion book that's going to come across to FINEOS. We're going to continue to scale and upsell large customers and again, with a focus on benefit realization of the product they have, but also looking at legacy migration and taking their legacy systems out, which with some of these carriers, the scale that they're at is a multi-year project. We've been at it now for 3 or 4 years, but we've still got some time to go. But as they grow their business on FINEOS, our fees increase. And I want to point that out in this call out, our fees are not based on per seat SaaS-type fees. Our fees are basically aligned with our customer success. So as our customers grow their business, we grow our business. And we're very much in partnership -- in a long-term relationship with these clients. We'll also increase new business sales. And our partners are starting to work with us now to identify opportunities where they think our product can fit. And so we're going to see more activities with the Sis. And as we progressively embed AI in the FINEOS platform, we're going to continue to see improved platform performance. And already, the feedback is very positive. And let's put it this way, we're in very early days in this. We're in a regulated environment, highly regulated with very conservative insurance carriers. They take years to make decisions. So, you can imagine when you bring something like this in that they're very, very keen to make sure that it's all compliant and it fits with the regulator. So again, this is going to take a few years over -- in the coming couple of years, but we're getting our customers more comfortable with this. And we have a couple of big customer meetings in March in Sydney and also in New York, and we'll be talking about this a lot more with them. We're going to continue to drive internal efficiencies through the usage of AI. And I think every company is adopting AI and taking advantage of that across the whole spectrum of the business. And then pipeline in terms of deal conversions of FINEOS Absence for employer. We have actually done a lot of work in this area in terms of making the product deployable with employers in a much simplified fashion. But we're also talking to some of our carriers about partnership around this and how we could work together because our primary goal is actually the carrier market and to make Absence a real part of the employee benefits industry. Turning to the last -- or the second last slide, I think it's Slide 17. So, revenue guidance for this year, we're going to put it out there at between EUR 147 million and EUR 152 million. And this is really supported by the strong pipeline we have in, albeit, as I said last year, we saw that pipeline. It just took a long time to get negotiations and decisions and so on done, but we're very optimistic about this year. We continue the strategy of driving operational efficiency within FINEOS, and we're going to continue to drive up that positive cash flow and profitability in the business for this year. We're also continuing to drive sales in North America, but we're actually looking to expand our product outside of our target market of North America. And we do see some opportunities to do that, particularly with the multinationals in different countries. And so we're looking at that as well at the moment. And the pipeline remains solid and very much FINEOS being the market leader in employee benefits in North America today. So switching to my last slide, Slide 18, Subscription fees. Ian and I put these guidelines out in 2024, and we're still confident we'll make these guidelines in terms of subscription fees moving up to 65% of the total revenues in FY '27 and 75% or thereabouts in 2029. R&D investment will decrease, as Ian said earlier, to 30% next year and 25% in 2029. And again, as Ian said, we reserve the right to expand that R&D if we see new opportunities. But that's the way things are trending in terms of percentage of total revenue for R&D spend. And then the gross margins and EBITDA. They're almost where we said they'd be back in 2024. They're almost there now, as you can see from last year's results, but we'll drive them on and we'll get them up to 80% for gross margin and 40% for the EBITDA. So, making FINEOS a very strong company in terms of future growth. I just lastly would like to point out the Slide 19. We have an investor roadshow, which we'll be hosting on the 25th in Sydney, and all the details are made available. And if you contact Howard or Jacque and Automic, you can get all the details. We're looking forward to it. So, that's it for me and from Ian. I think a positive year, looking forward with a very positive attitude in terms of the future. And we're open for questions now. Thank you. Operator: [Operator Instructions] Your first question comes from Tim Lawson with Macquarie. Tim Lawson: I just had one main question. With your subscription mix targets for FY '27, I won't worry about the '29 ones, just the FY '27 ones. If you look -- if you think about the sort of revenue guidance you've provided today for 2026, and I appreciate that's an overall revenue guidance rather than calling out any sort of subscription versus services number. It just seems to imply a very significant acceleration in the calendar year of '27 to hit those targets. Can you just sort of help us unpack your assumptions behind, both that near term and then the sort of medium-term number, please? Michael Kelly: Yes, Tim. Thanks for the question. I'll start off, Ian, on that one. But the way that this business is set up is, as I said, long-term contracts with milestone events in terms of things we have to do with customers as they grow their business with us. Our focus through '26 and '27 with our existing clients is going to be very much on migration and growth of their use of our product, plus the cross-selling as well. So, we've kind of got locked in revenues and foresight of events in the next year that should give us a nice lift in terms of our subscription fees into 2027. And we've got a nice pipeline as well, some of which we didn't convert in 2025, but we will convert in 2026 and beyond. So, we're feeling comfortable about the 65% revenue -- sorry, percentage next year. Do you want to add to that, Ian? Ian Lynagh: Yes. So what you're seeing there in terms of what we report in '25 was a higher contribution, almost a 5% increase year-on-year in terms of the recurring fee, subscription fee. So, we're looking to see steps continue to move as we move forward. We've also seen that the subscription fee percentage as a proportion of revenue has increased, and we expect that percentage to increase in terms of year-on-year growth on the annuity to grow in '26 as we move into '27. So, we definitely see '26 as being a stepping stone to achieve. It's not all going to be laid on '27, Tim. Secondly, to Michael's point there, we still see a significant contribution of that growth coming from existing customers. And as they upsell and a lot of them are getting very significantly through their programs of reducing legacy systems and some are really starting to get very engaged around and pushing us hard. Michael mentioned earlier on about Guardian starting halfway through the year. We have other very large customers out there pushing hard to make that happen. So, we see that as a big factor in terms of that growth. So, we do have line of sight. And the way we put our plans together is very much on a bottom-up basis as we look at the individual transactions for customers. So, we recognize that it is a significant growth, but we do have line of sight of it. It's not 100% guaranteed, but it's still there to be had. Tim Lawson: So, maybe just on that, are you sort of seeing across there for the '26 year an acceleration throughout the quarters? So, are we thinking that sort of -- obviously consistent with what you've given as guidance for in FY '26. But is the fourth quarter, for example, or second half even materially accelerated versus the first half? Ian Lynagh: I think the caveat you'd have to put in there is that these customers move at their own pace. We certainly have plans in place to close business in the first half of this year and we believe that will materialize. But it could get pushed out a bit. But firstly, if it closes in the first half, then that gives a lift to the second half automatically. And so if that second half, obviously, will get an automatic lift, and we do see more business closing in the second half as well. So, we see both halves contributing, but the first half contribution helps the second half. So just by mathematical calculation, the second half will have a better revenue outcome than the first half. Tim Lawson: Yes. I was trying to think that -- I'm trying to think about that split effectively. If you were to annualize the second half, are we going to be effectively materially -- well, I expect we will be, but like significantly above on an annualized second half, what your guidance range is because that's sort of the math that need to work to hit those '27 targets unless you have an acceleration in '27 itself, of course. Ian Lynagh: You want to? Michael Kelly: Yes. We do have both. I mean, we have big bumps in '27 as well, which we've already got locked in, in terms of our revenue forecast with existing customers, but we have them coming in, in the second half of '26 as well. And as Ian says, pipeline, we're closing now. So, you'll see more deals coming through in the first half as well. So, we're coming off the back of a good ARR, Tim. 10% growth on that, and we still see deals closing in the next couple of quarters. And then we see the second half getting even better in terms of the upside. But next year is going to be another opportunity for growth with existing customers. So, we don't make these forecasts, willy-nilly, based on a lot of new name wins and potential and so on. We're very much looking at our customer base. We're growing large chunks of business on FINEOS with these large carriers. So, we're able to be a bit more comfortable in terms of predicting. These guys are like oil tankers. They take their time to move. But once they get going, it's very hard to turn them. So you know where they're going. And we can predict that in terms of our numbers with that growth that we're seeing on our platform. Operator: Your next question comes from Richard Harrisberg with Canaccord Genuity. Richard Harrisberg: Michael and Ian, congratulations on really great result. I also just had a question on the revenue outlook. I was just curious you kind of touched on it before as sort of an existing growth in your customer, their own sort of book, which drives your revenue going forward as opposed to being on a per seat basis. How much of that sort of future revenue growth is underwritten by that, which I guess is a question on how much you expect general insurance premiums to increase on average based on historic? Michael Kelly: Yes. Well, we're expecting -- Richard, nice to talk to you again. Thanks for your question. But we're expecting by the volume of business that's coming across in terms of migrations we're working on, we're expecting their usage of the system to grow and their volume on FINEOS as in their premiums on FINEOS to grow. And that basically gives us a clip of the ticket every time we can crash through a milestone tier in our pricing. And so that's where -- that's what gives us that kind of stickiness and that long-term confidence. These are 5-year contracts with these carriers. So, they're really locked in. And to be honest, they put us under enormous pressure to get the product into shape so that they can get this migration done because their legacy systems are creaking and they know they're not going to carry them into the next world that we have with AI and so on. So, that's kind of given us the confidence in terms of the growth that we can see coming on the platform. And we also see cross-sell and up-sell to existing clients. And again, we have some of the biggest customers in the segment, the main we have in the States. So again, we'll see upside there. They won't buy a cross product until they feel that they're over the line on the products that they've already got as in it's already done and they've got everything over and so on. So, that's one thing that we've kind of been sitting patiently to kind of wait for. There's no point in selling or sending sales guys into them when they're in deep throes of migrating to FINEOS. So that kind of gives us, again, the confidence that, like, we're all positive in terms of the focus. So the system is a large system of record, very complex in terms of what it does, highly regulated. And these carriers need to get off the junk that they have in the back office, large 50-year-old mainframes wrapped up with a lot of technical debt. So, they're as motivated as we are to get them over to the cloud-native FINEOS platform. Richard Harrisberg: Yes. That makes a lot of sense. I guess maybe a different way to ask the question, just purely based on growth in volume of existing customers and excluding cross-sell, up-sell or sort of new customers signed. Is that growth what sort of gives you the confidence to get to the EUR 147 million on the lower end of the guidance? And then on top of that, the reason for the range in the guidance is the strong pipeline you guys are seeing there? Michael Kelly: Probably a good way to look at it. I'll let you answer that, Ian. But that's -- we've been conservative how we've managed expectations in the market. We don't want to upset anybody. So, we've left a range. And we are confident in terms of the projections and stuff like that, that we do put out. Do you want to answer that in any kind of other way, Ian? Ian Lynagh: Yes. I think, Richard, and Michael also, a large proportion of our confidence is derived from existing customers scaling on the system. 40%, 50%, our confidence will be around that singular element of those. So more we stay focused on those customers, the more we deliver the capabilities. We want more, we collaborate with them and Sis to help them migrate across, that provides a very strong bedrock for us in terms of how we move forward. In terms of the range, I mean, there are other factors in the range as well. We both alluded to the fact that opportunities can slide up and down. We see that. They don't often go away, by the way, but they do slide up and down in terms of time line. So, that's one of the reasons why we'll be giving a range. And another reason would be that when we look at the opportunity profile, sometimes you've got a small deal, a medium-sized deal or a large deal. And the size of those deals in terms of the revenue they can generate for FINEOS can be quite significantly different. So, that's another reason why you give a variance in terms of the range. I think the other area as well, the last one I'll mention is just around the services fees. We work on a particular deal with an SI, and they want to take on a much more expansive role. And we're looking at some of our SIs like PwC, for example, whose skill sets progressively growing so they can take on more work. So on particular day, they may take on more work than we had originally anticipated or may have performed last year. And then that can have an impact in terms of service revenues we obtain. But as long as that's contributing towards the growth in subscription revenues, we can work with that. So, all those factors contribute towards that range. Richard Harrisberg: Really appreciate all the extra color there. Maybe I'll just ask one more question. It was great seeing the operating leverage come through and especially with some of the cost efficiencies you've been putting through the business. Just looking forward to FY '26, do you think those costs are sort of expected to remain around these levels? Are there sort of further areas you can squeeze out there? Or what's the right way to think about that? Ian Lynagh: Yes. I'll take that one, Michael. I think for your planning, as you're doing you are modeling yourself and the rest of the analysts on the call and investors, I think you should be thinking about our cost overall, perhaps increasing in the range of 3% to 4%. I referred to Amazon AWS there earlier on in the conversation about driving efficiencies. We've driven a lot of those efficiencies through the product set at this point in time. So as we expand our footprint with customers, we will see the cost of sales going up with respect to that infrastructure bit. So, that's happening. Unfortunately, like everybody else, we're suffering from third parties increasing costs, and we've also put through some salary reviews. But I would plan out about 3% or 4% increase in overall costs. But internally, we're still looking at ways of driving even that down. But from a planning point of view, I'd look at it that way. Richard Harrisberg: Congrats again on an inflection year in the business. Ian Lynagh: Thank you. Michael Kelly: Thanks, Richard. Operator: Your next question comes from Siraj Ahmed with Citi. Siraj Ahmed: Can you hear me okay? Michael Kelly: Yes. Siraj Ahmed: Just first thing, maybe I missed this. Just the split between subscription and services that you're expecting next year. Can you just help us with that? I think the revenue guide that is. Yes. Michael Kelly: We guided next year. We set a set of targets for next year where revenues would -- or sorry, subscription revenues, product revenues would be 65% of the overall total revenue, meaning services is 35%. Siraj Ahmed: Sorry. For FY '26? Michael Kelly: For 2027. Siraj Ahmed: Yes. Sorry, I got that, Michael. Michael, just trying to think about next year, right? Can you give a split maybe just on the revenue next year, just between subscription and services? Ian Lynagh: I think if I could just jump in there, Michael. I think as I said, deal size can vary a bit. But I guess if you look back in time, we were approximately 50% in terms of subscription fee 2 years ago, last year, 55%. We've got to get to 65% by FY '27. You can kind of make your own assumptions of what we're trying to target as a stepping stone to get there. But we do see some variability about it. We've given guidance on total revenue, but we have to see what happens. But this year it has to be a stepping stone to getting towards FY '27. Siraj Ahmed: Okay. The reason I'm asking is maybe just a follow-up to that is, so ARR of EUR 78.3 million, right, at the end of the period. I'm guessing it's a bit lower now because of FX? Or is it still the case at EUR 78.3 million? Michael Kelly: Everything is lower, including the service. So, everything gets hit by FX. So it's kind of -- the percentages will still hold. But yes, revenues are going to go up and down in real terms based on FX. Siraj Ahmed: Sure. Yes. So the reason I'm asking is, let's say, EUR 78.3 million, it seems like -- so let's say, services is flat to slightly up. You sort of need to get closer to maybe EUR 85 million of subscription revenue, especially the step-up that you're talking about for next year, right? When you're starting at EUR 78 million, that will be like a 108% sort of conversion, right, above this versus EUR 105 million this year. So is that just confidence in the pipeline, Michael, like you mentioned that your pipeline is quite strong and you think quite a few of them will close? Or is it like you mentioned, quite a few customers are going live and so the volumes just organically picked up? Just keen to understand that conversion, right, from ARR to subscription revenue? Michael Kelly: I think it's mostly growth that we see on the platform in terms of volumes, which will lead to subscription thresholds increasing. That combined with some cross-sell is mainly what we see in front of us in existing clients, Siraj. And then, obviously, the new business, new names are kind of gravy on top as they start converting. Now, we're hoping to see a better kind of uptick in terms of new name as well, particularly in our domain market in North America. I think I have flagged in the past that because of some disastrous attempts for core system replacement from some competitive core systems vendors who came in from other domains, carriers really got burned and it kind of caused a lot of angst in the market and made it difficult for carriers to come back out again and to look to do a major migration of their legacy. We have just taken the brunt of that in terms of the backlash of that is that the carriers will freeze because they have to reset. A lot of them have gone back to legacy, those carriers that had those disasters. But they've learned a lot. And I think the next time they come out, they'll recognize a vendor that is purpose-built and ready to go for them. And of course, as we keep doing things with our own carriers, we're proving out the product and proving out that our carriers are getting good efficiencies on the product. So again, it's a slow-moving industry. It's a very big product. These projects are big. But it's very sticky on long term. And that's what's, I suppose, something that we want to call out as well. It moves slow, but it's very solid. Siraj Ahmed: Got it. Last one, just on gross margin. So, you're just clarifying, so the full year gross margin this year had a negative impact from the provision, right, which sort of unwinds next to next year from sounds of it. So, you're already at 76%. FY '27, you've retained 75%. I think that should be going up, isn't it? Just trying to understand whether there's something I'm missing. Ian Lynagh: We would expect a slight improvement in gross margin as we go through this year. But we don't want to go ahead of the target we set for FY '27, albeit we've already achieved it. But keeping around about that mark for this year, we expect it to be reasonably consistent with last year with perhaps a slight improvement. Operator: Your next question comes from Jules Cooper with Shaw and Partners. Jules Cooper: Michael and Ian, can you hear me? Michael Kelly: Yes. Jules Cooper: Yes. Absolutely. And great set of results and outlook. Michael, I just wanted to sort of dive into -- I think it was on Slide 16, the third tick mark there where you talk about a focus on legacy system migration. Now, there's a huge opportunity in the industry and particularly with your customers given their scale and I suppose, the small footprint today that you've got with those customers and you're making good progress. As we think about AI, we are hearing from lots of different vendors and customers that the improvements in velocity that they're seeing in real time, and it's only going to get faster. Do you think that -- and I know when you're migrating a book, it's not just about the speed of coding, there is all the people side and the project, the change management, et cetera. But do you sort of see this as a real moment where you can kind of unlock those legacy books that before the cost and the risk was just prohibitive and held people back? Just like to sort of get your perspective on that, if I could. Michael Kelly: Thanks, Jules. Yes, I do actually see it as a kind of moment of truth for these carriers. For years and years, they've been reluctant to take those big back-end systems out of those systems of record that they have. They've gone through the dot-com. You would have imagined they would have wanted to reinvent them so that they were totally Internet-type systems, but they did. They built front end. They've gone through the mobile phone and they built front-ends to do mobile phone transactions and a lot of technical debt around the old back-end systems. They've gone through the cloud, and some of them have been innovative enough to port from a mainframe to a cloud, Amazon or Microsoft or whatever they've done, but it's still the same old system. But the AI revolution is basically going to really threaten those old systems because AI performs on data and having the data in a real-time full kind of rich sense is what AI will drive on. And also having a modern system with the kind of workflow automation that you would expect in a modern system really gives AI all the tools that it needs to perform and move on. So in the future, we see the back office. The work in back offices is being reduced, all that paperwork and all that kind of CRUD work, I call it, that's going to be reduced. And it's going to give people more time to focus on the customer and more time to do other services as well for the clients. So over the next few years, I think AI is really going to change the industry. And being a system of record that we have today as a modern cloud-native one, we're ready to go in terms of the AI operating with us. We are in a regulated environment. So, we'll have to go as quickly or as slowly as the regulators allow, and also what's comfortable with carriers because a lot of them are very ethical and they don't want to mess around with customers. We will not be making decisions about claims. We will not be turning down underwriting opportunities for any kind of bias reasons, and we have to be really careful in terms of how things are done in FINEOS. But we're at one with our carriers. They all feel the same about this, but they all do realize that the world doesn't stand still. And those old workhorse systems that they've had for many years, they've basically gone past their sell-by date. Those who still think that they should keep them and work away are probably the ones that will disappear in the future. And the others that modernize and go forward will actually have the revenues and margins and so on to be able to buy those books of business. That's my own opinion. So, I just want to put that out there for how we think about it. Jules Cooper: Yes, you painted a really good picture there of like the pressure to migrate and move those books of business. I guess my question was more in the mechanics of it, the things that have held them back in the past as they've gone through all these. Michael Kelly: Okay. Yes. Okay. Jules Cooper: Is it sort of making it easier -- mission at the Board table to go, hey, we could actually do this now half the cost and half the time and with half the risk? Michael Kelly: So like, we've introduced AI, believe it or not, on to the back-end books of business that they've got and our SIs are working on that. So, we're using LLMs to basically stack and get ready, employers that are going to come across to FINEOS. We've been building out then on our side, tooling to allow us to validate and read all of that in. So, that will make it easier as well. And we've been working with one of our big carriers on that in partnership, and that is going well as I said of tooling. And then last but not least, you know we put a lot of money into building out the full suite and making it easy to onboard on FINEOS. In other words, that it's purpose-built and the carriers can easily put business over. We don't have a huge big project at the front end of every time we do an implementation, which is what those carriers who failed ended up doing, having to build software with those vendors. We don't have that. So, we're making it much easier to onboard, upgrade, integrate and migrate to FINEOS. And so the time has never been more crucial for them to move, but it's also never been easier in terms of our industry and the domain we focus on. Is that what you were getting at? Jules Cooper: Yes. Operator: Your next question comes from Sinclair Currie with MA Moelis Australia. Sinclair Currie: Just had a question about competition. There's been some movements among your competitors in the M&A. And I was interested maybe a little bit of an overview of how you see the competitive environment? And if you could throw in any statistics maybe around what percentage of RFPs you've been successful with or something like that, just to bring that to light, that would be really interesting? Michael Kelly: Yes. Sinclair, so look, the competitive environment within the employee benefit space, core system space in North America, it's kind of leveled off a little bit in terms of the core vendors. You would have seen that Vitech was acquired by Majesco. Majesco has kind of multiple systems that they've acquired over the last several years, addressing multiple variants of the markets across all kinds of insurance, P&C and whatever. Now, they've added pensions and the pensions book to their business. Vitech has largely retreated from the group benefits market over the past 12, 18 months, and they're really trying to focus in on their pensions portfolio. So that Vitech-Majesco, it was a merger rather than an acquisition, I believe, and purely kind of at an agreement between the 2 PEs that own the business that they would basically collaborate. So, obviously, that takes one competitor out when it comes to RFPs and stuff like that. But we kind of had seen Vitech. We hadn't seen them in the market much anyway. And look, 5 years ago, they would have been the guys that were up and coming because they're coming out of the pension space and into the group space with their admin system. And 5 years ago, we weren't ready because we were still hard at it with New York Life. Going back to what I said to Jules. We migrated 6 books of business of old systems for New York Life to give them a EUR 4.5 billion book of business on FINEOS AdminSuite for group, and they went live with voluntary this year as well. And Absence, that's the only carrier that has fully eliminated legacy. And they're still standing on the FINEOS platform for the last 3 years running that full book. So when we talk to clients, they kind of get great confidence out of that, and they do talk to New York Life and so on. And they're a good reference for us and a good client, a good partner. But a lot of our other carriers on the big end of the market are also in the process of migrating as well, and they're moving quickly to the platform. So, I think momentum is building. So, we're not seeing other vendors really of any significance in the space. But again, we see tool set P&C type vendors coming in and out, and it depends. It depends on the carrier. Some carriers get very excited about really techy, techy type software. But that tends then to be a big project build, and that's going to cost them a lot of money. So it's not necessarily the best outcome for them. But look, everybody makes their own decisions. So, I think as a mainstream vendor now in our space, we've got market dominance in terms of a big slug of the employee benefits market, and we're kind of getting the new business deals as well, and we're getting the cross-sells. But we still see several years ahead of us, where we really want to become that true partner to the employee benefits industry, that big system of record. But like with the AI and everything else, that's going to change into much more intelligent and automated system for the future carriers that will go on our system. Operator: We have a follow-up question from Siraj Ahmed with Citi. Siraj Ahmed: Michael, somewhat linked, can you just touch on the whole agentic stuff that you're trying to demo in late March? How do you think about pricing this thing? What's the economic model you're thinking in terms of this? Michael Kelly: Sorry, Siraj, I'm finding it very difficult to hear you. Can you hear that, Ian? If you can, go ahead and answer. Ian Lynagh: Is it the economic model with regards to AI? Is that what you're referring to, Siraj? Siraj Ahmed: Yes. For the agentic features you're rolling out, right, in late March that you're announcing? Ian Lynagh: Yes. I mean, the pricing model we have for our core systems is based on the premium income that the customer has with regards to all core systems, except for apps, which is based on the number of employees. The agentic AI is bolt-on add-ons that's sitting on top. Depending on the nature of it, it will be charged in different ways. So for example, we do document intelligence, document summarization. So the pricing of that is based on the number of documents that you summarize and provide intelligence on. So it's going to be very much on a unit price volume based. We're giving customers the opportunity as well to decide, for example, if I just talk about documents, which documents types, which cases they apply it against? So, they can pull the lever up and down and decide to what extent they want to use that AI capability. We also have case intelligence. So, that will be the agentic AI capability. And again, they can decide the cases or the customers, et cetera. But it will be very much on a volume basis with the opportunity for the customer to pull the lever up and down, a bit like a fuel pump. You decide how much petrol you want to put in the tank. Michael Kelly: Yes. And just to mention, we're not putting a huge emphasis on charging for all of this because we see it as built in. It's embedded. And so we really will -- it's a usage-based model, but we're not looking -- like we have to keep modernizing and keep bringing a more compelling platform to our clients. They're already paying us good money for the product. So, we'll continue to look at opportunity to increase our fees by cross-selling and up-selling. But we'll also deliver modernization within the platform continuously. And that goes back to the R&D program that we have. So, we're looking to really make a sticky long-term relationship with these carriers so that they feel very comfortable with us as partners. Operator: There are no further questions at this time. I'll now hand back to Mr. Kelly for closing remarks. Michael Kelly: Thank you, Darcy, and thanks, Ian, as well for today and coming along on this call. I appreciate all the questions from the analysts and indeed, everybody who's listened to us today. As I said, we're feeling pretty positive about this year and next year. And we're looking forward to the opportunity to present to everybody at the end of March. I think it's the 24th of March. So, please come along to that if you can, and there will be a few of us down there at the time. So it's an opportunity to meet some of us as well in-person. Thanks, Darcy. Ian Lynagh: Thank you. Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.
Operator: Good afternoon, and welcome to Huron Consulting Group's webcast to discuss the financial results for the fourth quarter and full year of 2025. [Operator Instructions] As a reminder, this conference call is being recorded. Before we begin, I'd like to point all of you to the disclosure at the end of the company's news release for information about any forward-looking statements that may be made or discussed on this call. The news release is posted on Huron's website. Please review that information along with the filings with the SEC for a disclosure of factors that may impact subjects discussed in this afternoon's webcast. The company will be discussing one or more non-GAAP financial measures. Please look at the earnings release on Huron's website for all of the disclosures required by the SEC, including reconciliation to the most comparable GAAP numbers. And now I'd like to turn the call over to Mark Hussey, Chief Executive Officer and President of Huron Consulting Group. Mr. Hussey, please go ahead. C. Hussey: Good afternoon, and welcome to Huron Consulting Group's Fourth Quarter and Full Year 2025 Earnings Call. With me today are John Kelly, our Chief Financial Officer; and Ronnie Dail, our Chief Operating Officer. We finished 2025 with strong fourth quarter results. Revenues before reimbursable expenses, or RBR, grew 11% in the fourth quarter of 2025, driven by record RBR in the Healthcare and Commercial segments. We also continued our trajectory of margin expansion, achieving 15.7% adjusted EBITDA margins in the quarter. Full year RBR grew 12% over 2024, resulting in record RBR and a fifth consecutive year of growth. We're also pleased with our progress increasing our margins in 2025, which marked our fifth consecutive year of adjusted EBITDA margin expansion. In addition, we achieved record adjusted diluted earnings per share in 2025, which grew 21% over 2024. Momentum we achieved in 2025 has carried forward into 2026 as we start the year with strong backlog and a pipeline at near record levels, even after strong sales conversions. Our market-tested strategy, balanced portfolio of offerings and strong execution by our highly talented team has delivered strong multiyear financial performance for Huron and its shareholders, consistent with the financial goals outlined at our Investor Day. I'll now share some additional insight into the progress we've made since last year's Investor Day while providing color into our fourth quarter and full year 2025 performance, along with our expectations for 2026. Please note, we placed supplemental materials on the Investor Relations page of our website with additional detail around our 2026 outlook as well as information about our AI strategy and the evolving opportunity that AI presents to drive impact for our clients and grow our business. We demonstrated that our growth strategy continues to deliver financial performance that has met or exceeded our publicly shared growth goals since 2022, and we remain committed to our 5 strategic pillars of that strategy. First pillar of our strategy is to sustain strong growth in our largest industries, healthcare and education, in which we have leading market positions. In the fourth quarter of 2025, Healthcare segment RBR grew 10% over the prior year quarter, reflecting strong demand for performance improvement, strategy and innovation, financial advisory and revenue cycle managed services offerings as well as incremental RBR growth from our acquisitions. Excluding the impact of the acquisitions and the disposition of the Studer Education business, which was divested on December 31, 2024, organic growth for the Healthcare segment was 8% on top of 18% growth in Q4 2024 over 2023. On a full year basis, the Healthcare segment achieved record RBR of $838 million, growing 11% over 2024. The increase in RBR in 2025 was driven by continued strong demand for our performance improvement, financial advisory, revenue cycle managed services and strategy and innovation offerings. The momentum we built in 2025 has extended into 2026 as market tailwinds continue for financial health transformation offerings. The increase in bookings in the second half of 2025 exceeded the same period in 2024 by more than 20%. We've also seen strong sales conversions continuing into January, extending the momentum of our recent sales activity. Across the healthcare industry, financial performance among health systems remains uneven as reimbursements remain under increased pressure, operating costs increase and workforce constraints continue to pressure provider economics. Even organizations that return to modest profitability are increasingly focused on scenario planning and balance sheet resilience, recognizing that shifts in payer mix, Medicaid and Medicare funding levels or further cost increases could quickly erode gains. As a result, health systems are prioritizing initiatives that deliver near-term financial impact while positioning their organizations for longer-term sustainability. These dynamics continue to drive demand for our healthcare offerings. Provider clients are seeking partners that can help them move beyond incremental cost actions to integrated solutions that drive growth, margin performance and liquidity, support strategic repositioning and enable care delivery and operational transformation. In parallel, health systems are accelerating the adoption of AI and automation. We're working closely with our consulting and managed services clients in this area. For example, to date, we deployed over 100 AI and automation solutions to help health systems drive speed to value, revenue growth and cost savings. In addition, we've entered into strategic collaborations with select healthcare-focused AI companies to help improve the value that our joint clients derive from deploying the new technologies. We believe our deep industry expertise, breadth of offerings and proven track record of delivering tangible results position us well to maintain our strong competitive leadership position and serve our clients across our core provider business. As we shared at our Investor Day last year, we're also focused on growing our addressable market by expanding into adjacent markets and innovating new offerings. In support of our payer strategy, during the fourth quarter, we acquired the consulting services division of AXIOM Systems, a leading IT services firm that specializes in core administration systems and digital transformation for payers and payer provider organizations. This acquisition broadens payer-focused digital offerings and enables us to better serve our clients seeking to modernize their claims platforms while leveraging connected data to improve operational performance and member outcomes. Turning next to the Education segment. In the fourth quarter of 2025, Education segment RBR was flat compared to the fourth quarter of 2024, which I will note was a tough comparison in light of the 15% RBR growth in Q4 2024 over the fourth quarter of 2023. Annual RBR in the segment grew 5% compared to 2024. For the full year, the increase in RBR was primarily driven by strong demand for our strategy and operations, research and digital offerings as well as incremental RBR from our acquisitions. Despite the more challenging operating environment for our higher education clients in 2025, we saw a 10% plus increase in bookings in the second half of 2025 over the second half of 2024. The sales momentum has accelerated into January of 2026. Higher education institutions continue to face significant pressures on revenues and costs. Many university presidents and their boards are having strategic discussions about the sustainability of their business models in light of the dynamic regulatory environment, increasing financial pressures and declining perception of the value of a 4-year degree. We believe the breadth of our client relationships, industry expertise and broad portfolio of offerings position us as one of the leading trusted advisers to senior leaders as they navigate these pressing issues. We continue to leverage our unified go-to-market approach of serving the top 200 public and private universities and systems, building upon our strong credentials and breadth of offerings to win and deliver on some of the most complex engagements in the industry. For example, we're working with a leading research university to deliver a meaningful people-enabled business transformation and the modernization of their core processes and associated technologies, including leveraging AI to position them for a more resilient future. Another client, we were selected to explore performance improvement initiatives to drive near-term financial benefit while redesigning system and campus level operating models and operations, including implementing new core administrative systems and enabling change management, positioning the institution for longer-term sustainability and reinvestment in their mission. We are confident in our outlook for sustained growth in both Healthcare and Education, anchored in our deep client relationships and our leading competitive positions in end markets that are facing ongoing financial pressure amidst disruption that's been exacerbated by the current regulatory environment. These are large, favorable end markets facing structural challenges that we believe will continue to drive strong demand for our offerings and serve as the foundation of Huron's long-term growth strategy. Our second strategic pillar is focused on growing our business in the commercial industries. The fourth quarter of 2025 Commercial segment RBR grew 37% over the prior year quarter, driven by incremental revenue from our acquisitions and strong demand for our financial advisory offerings. Excluding the impact of acquisitions, RBR in Q4 2025 grew 9% organically over the fourth quarter of 2025 (sic) [ 2024 ]. Full year 2025 Commercial segment RBR grew 27% to a record $325 million, resulting in the scaling of our Commercial business to approximately 20% of total company RBR. The increase in full year RBR was primarily driven by incremental RBR from our acquisitions as well as strong demand for our digital offerings, partially offset by declines in our strategy and innovation and financial advisory offerings. In the Commercial segment, we saw a 20% plus increase in bookings in the second half of 2025 over the second half of 2024. Similar to Healthcare and Education, we've also seen continuing strong sales conversions in January in our Commercial business, which again highlights our momentum and the strength of our offerings in the market. Commercial industries are navigating heightened complexity driven by regulatory change, cost pressure and accelerating adoption of AI-enabled operating models, driving the need for more integrated strategy and operations, financial advisory, digital and people-focused solutions. Continued organic investment and targeted tuck-in acquisitions, we strengthened our industry expertise and broadened our capabilities to deliver more integrated differentiated offerings to our clients, which has increased our win rates in this segment year-over-year. While we remain in the early stages of executing our fully integrated commercial strategy, we believe our expanding set of offerings, combined with our increasing ability to deliver measurable ROI for our clients through our performance improvement capabilities added by our Wilson Perumal acquisition and the ongoing integration of AI, data and automation capabilities into our offerings will prove to be a meaningful competitive advantage and position us for continued growth. We've demonstrated that commercial industries represent a significant new avenue of growth for Huron. Through our integrated and focused approach to investing in areas in which we have a demonstrated right to win, we believe the Commercial segment will continue to help us achieve our growth goals. Now let me turn to our third strategic pillar, advancing our integrated digital platform. Digital capability RBR grew 4% in the fourth quarter and 10% in the full year of 2025. The increase in RBR in the fourth quarter and the full year is driven by growth in commercial and education industries. Our digital capability, which represented 41% of total company RBR in 2025 remains a differentiated partner to our clients in a large growing market. Rapid evolution of advanced technologies, our clients' challenges remain, identifying opportunities for revenue growth, driving operational efficiencies and making better, faster decisions to propel their businesses forward in increasingly competitive landscapes. Our deep industry and functional knowledge, coupled with the breadth of our technology, data and analytics and change management capabilities sits at the heart of our differentiation. As technology continues to rapidly advance, we strive to shape the best solutions for the clients, whether that requires modernizing their data foundation, designing and deploying a strategy that embeds AI in their core platforms with native AI applications or custom development. It's important to highlight that AI does not create value on its own. It requires a focus on process reengineering and in nearly all cases, we focus on people to effectuate the change needed to sustain the benefits delivered by AI. We believe our ability to bring together our strategy, operations, technology and people-related offerings to reimagine operating models and redesign core business functions and processes while integrating advanced technologies will continue to position us for long-term growth. The success of our 2024 acquisition of AXIA is a terrific example of this. With the combination of our manufacturing and supply chain expertise, coupled with a broader solution set of technology and people-related capabilities to draw upon, we grew the RBR of the active business 20% in 2025 compared to 2024. Expanding digital capabilities will continue to be an important driver of growth across our business in future years as our clients continue their focus on driving growth and productivity in their own highly competitive markets. We are innovating new offerings, expanding our technology partner ecosystem as the market and technology landscape evolves. For example, our data management, analytics and AI business within digital grew RBR over 40% in 2025 over 2024, and we were recognized by one of our technology partners as an AI agent partner challenge winner for our innovative supplier AI agent use cases. Looking ahead, we'll further invest organically and inorganically to strengthen and broaden our portfolio of offerings to continue digital's growth trajectory. Our 2 final strategic pillars reinforce our focus on growing our margins and maintaining a strong balance sheet and cash flows, which continue to be a key contributor to our growth algorithm to drive shareholder value. Now let me highlight the foundation of our success, our people. I want to recognize the significant contributions of our highly talented global team. Throughout the year, our team delivered exceptional outcomes for our clients by bringing deep industry, functional and technical expertise and innovation at a time of significant disruption and regulatory change. As importantly, our team advanced our business with discipline, supported one another and further fostered our strong collaborative culture. This combination of client impact, business performance and teamwork is what continues to differentiate Huron and has fostered one of the strongest and most attractive cultures among professional services firms, which reinforces our ability to attract and retain top talent. I'm deeply grateful for the dedication to our clients, our company and to one another. Now let me turn to our expectations and guidance for 2026. As noted earlier, we placed supplemental materials on the Investor Relations page of our website that includes additional detail around the 2026 outlook as well as information about our AI opportunity. Our RBR guidance for the year is $1.78 billion to $1.86 billion. We also expect adjusted EBITDA margin in a range of 14.5% to 15% of RBR and adjusted diluted earnings per share of $8.35 to $9.15. [indiscernible], we're projecting a 9.5% RBR growth at the midpoint in 2026. Looking at our recent momentum, we're starting 2026 with the strongest hard backlog coverage of our initial annual RBR guidance in the last 5 years, reflective of strong sales growth in the second half of 2025 and early 2026. Perhaps most encouraging, our pipeline remains at near record levels even after the strong sales conversion. In terms of margins, the midpoint for 2026 guidance, we expect an approximate 50 basis point improvement over 2025, building upon the cumulative 400 basis point improvement achieved since 2020. We remain committed to achieving 15% to 17% adjusted EBITDA margins by 2029, consistent with our long-term financial objectives. We believe we will continue to drive improved profitability in our business, further building on margin enhancement levers outlined at our Investor Day, inclusive of AI and automation-driven productivity gains over time. We'll also continue to invest in areas of our business with the greatest growth potential. Midpoint of our guidance for adjusted earnings per share is $8.75, a 12% increase over 2025, which would be on top of a 21% increase achieved in 2025 over 2024. The expected increase continues our multiyear double-digit percentage EPS growth trajectory, which reflects the compounding impact of our revenue growth, margin expansion and return of capital to shareholders via share repurchases. Our focus has and continues to be on serving blue-chip clients in mission-critical, highly regulated industries for those facing significant disruption. Being a trusted adviser requires a distinct understanding of our clients' industries and business models, deep functional and operational knowledge and a people-first, client-centric approach to deliver sustainable transformation. In light of the market's increased focus on AI, let me touch upon the evolving opportunities that we see for AI in our business. We believe AI provides us with transformational solutions that strengthen our ability to address the complex issues facing our clients. Cost of failure in the execution of AI for our clients in our core industries is high, especially when those processes or use cases sit at the heart of our clients' businesses, which is patient care, student experience or the supply chain. We believe AI will strengthen our competitive advantage and expand our wallet share by integrating advanced technologies into our offerings and building accelerators, leveraging our distinct domain knowledge and IP. In addition, we'll continue to leverage AI to help drive even faster speed to value and realization of greater financial benefit for consulting, digital and managed services clients, further strengthening the ROI for clients' investments. We also see AI as an opportunity to grow our addressable market as we continue to invest in and sell our AI-focused services and solutions, which range from AI strategy and data modernization to implementation, orchestration and change management. The human element of implementing change is paramount to the success of organizations in AI-enabled transformation, especially as they redesign the way work is completed and operating models that must evolve to enable execution. We also expect to expand our technology partner ecosystem to meet our clients where they are, combining AI within core systems, native AI applications and custom development to achieve the strategic, operational and technical objectives while maximizing the return on investment. The newly formed collaboration with Hippocratic AI is a good example of how we are expanding our partner ecosystem, broadening our go-to-market reach and expanding our portfolio of offerings to serve our clients. Finally, like every organization, we're deploying AI, intelligent automation and advanced analytics to increase productivity across our client-facing and internal teams. We have and will continue to develop and scale use cases across the organization to drive efficiency gains. Let me highlight one additional point. In 2025, 67% of total company RBR was derived from outcomes-based fixed fee and recurring revenue models. That's an increase from 57% in 2022, which was when at our Investor Day, we shared our focus on expanding our margins, including the new pricing initiatives that we put in place at that time. We have a long-standing history of leveraging outcomes-based fixed fee and recurring revenue pricing models to deliver our work to clients, which we believe positions us well to capitalize on the value that AI can bring for our clients and for Huron. We believe we're well positioned to take advantage of AI and the transformation it enables. The AI capabilities alone are not enough for success. AI's impact and value are optimized when combined with our deep industry, functional and technical expertise, broad digital portfolio, demonstrable workforce transformation experience and proven track record of agility. We continue to act as a client's trusted adviser in an AI-driven world as they evolve their business models and organizations to succeed in this rapidly changing environment. Let me close by reiterating that we're off to a strong start in 2026, and we're building on the momentum that led to strong financial performance in 2025. We're excited about our prospects for achieving our revenue and profitability goals for the year as we continue to execute against the market tailwinds for our business, further strengthen our competitive position and capitalize on the market and performance-enhancing opportunities that AI offers. And with that, let me now turn it over to John for a more detailed discussion of our financial results. John? John Kelly: Thank you, Mark, and good afternoon, everyone. Before I begin, please note that I will be discussing non-GAAP financial measures such as EBITDA, adjusted EBITDA, adjusted net income, adjusted EPS and free cash flow. Our press release, 10-K and Investor Relations page on the Huron website have reconciliations of these non-GAAP measures to the most comparable GAAP measures, along with the discussion of why management uses these non-GAAP measures and why management believes they provide useful information to investors regarding our financial condition and operating results. Before discussing our financial results, I'd like to discuss several housekeeping items. First, our fourth quarter 2025 results in the Healthcare segment exclude the operating results from the Studer Education business, which was divested on December 31, 2024. Second, our Commercial segment results do include a full quarter of operating results from our acquisition of Wilson Perumal, which closed in September of 2025. And finally, our Healthcare segment results do include a partial quarter of operating results from our acquisition of the Consulting Services division of AXIOM Systems, which closed on November 1. Now I'll share some of the key financial results for the fourth quarter and full year 2025. Fourth quarter of 2025 produced RBR of $432.3 million, up 11.3% from $388.4 million in the same quarter of 2024, driven by record RBR in the Healthcare and Commercial segments. For the full year 2025, RBR was $1.66 billion, up 11.9% from $1.49 billion in 2024. Excluding the impact of acquisitions and the Studer Education divestiture, full year 2025 RBR was 7.1% over 2024. Driven by growth across all 3 operating segments, we achieved record RBR in 2025, which also marked our fifth consecutive year of achieving high single-digit percentage or better RBR growth. Net income for the fourth quarter of 2025 was $30.7 million, or $1.72 per diluted share, compared to net income of $34 million, or $1.84 per diluted share in the fourth quarter of 2024. As a percentage of total revenues, net income declined to 6.9% in the fourth quarter of 2025 compared to 8.5% in the fourth quarter of 2024. Results for the fourth quarter of 2025 include $2.2 million of acquisition-related contingent consideration charges, net of tax, as our projections for certain acquisitions have outperformed our original expectations. Results for the fourth quarter of 2024 include a $2.4 million gain, net of tax, recognized upon the divestiture of our Studer Education business. For full year 2025, net income was $105 million, or $5.84 per diluted share. This compares to net income of $116.6 million, or $6.27 per diluted share in 2024. As a percentage of total revenues, net income declined to 6.2% for full year 2025 compared to 7.7% in 2024. Net income for 2025 includes $7.7 million of noncash impairment charges, net of tax, related to the company's convertible debt investment in a third party. Net income for full year 2024 includes an $11.1 million litigation settlement gain, net of tax, related to a legal matter in which Huron was a plaintiff. Our effective income tax rate in the fourth quarter of 2025 was 29.2%, which was less favorable than the statutory rate, inclusive of state income taxes, primarily due to certain nondeductible expense items. On a full year basis, our effective tax rate for 2025 was 22.2%, which is more favorable than the statutory rate, inclusive of state income taxes, primarily due to a discrete tax benefit for share-based compensation awards vested during the year. This favorable item was partially offset by certain nondeductible expense items. Adjusted EBITDA was $68 million in Q4 2025, or 15.7% of RBR compared to $56.8 million in Q4 2024, 14.6% of RBR. For full year 2025, adjusted EBITDA was $237.5 million, or 14.3% of RBR compared to $201.2 million, or 13.5% of RBR in 2024. The increase in full year adjusted EBITDA was primarily attributable to the increase in segment operating income in all 3 operating segments, excluding the impact of segment depreciation and amortization and segment restructuring charges, partially offset by increased unallocated corporate expenses to support the growth of our business. 2025 was the fifth consecutive year of expanded adjusted EBITDA margin percentage, growing our adjusted EBITDA margins 400 basis points since 2020. This multiyear margin expansion demonstrates our continued progress towards the goals shared at our 2025 Investor Day. Adjusted net income was $38.7 million, $2.17 per diluted share in the fourth quarter of 2025 compared to $35.2 million, or $1.90 per diluted share in the fourth quarter of 2024. For the full year 2025 adjusted net income was $140.8 million, or a record $7.83 per share compared with $120.4 million, or $6.47 per share in 2024, representing a 21% increase in adjusted diluted earnings per share year-over-year. Now I'll discuss the performance of each of our operating segments. The Healthcare segment generated 51% of total company RBR during the fourth quarter of 2025. This segment posted record RBR of $221.7 million, up $19.4 million, or 9.6% from the fourth quarter of 2024. The increase in RBR in the quarter was driven by strong demand for our performance improvement, strategy and innovation, financial advisory and revenue cycle managed services offerings as well as $7.3 million of incremental RBR from our acquisitions of Eclipse Insights, AXIA and the Consulting Services division of AXIOM Systems. Excluding the impact of acquisitions and the disposition of the Studer Education business, organic growth for the Healthcare segment was 7.8% against a difficult 2024 comparison. On a full year basis, Healthcare RBR increased to 10.7% to a record $837.5 million compared to $756.3 million in 2024, which was on top of strong growth of 12.2% in 2024 over 2023. RBR in 2025 included $14.5 million from our acquisitions of Eclipse Insights, AXIA and the Consulting Services division of AXIOM Systems. These increases were partially offset by a decrease in RBR from the divestiture of our Studer Education business, which generated $13.7 million of RBR in 2024. Excluding the impact of acquisitions and the Studer Education divestiture, Healthcare segment RBR in 2025 grew 10.8% compared to 2024. The increase in RBR in 2025 was driven by continued strong demand for our performance improvement, financial advisory, revenue cycle managed services and strategy and innovation offerings. Operating income margin for Healthcare was 32.4% in Q4 2025 compared to 30.3% in Q4 2024. The increase in operating income margin was largely driven by decreases in performance bonus, salaries and related expenses for our support personnel and contractor expenses, partially offset by an increase in salaries and related expenses for our revenue-generating professionals as a percentage of RBR. On a full year basis, operating income margin was 30.5% in 2025 compared to 27.6% in 2024. The increase in operating income margin year-over-year was primarily due to decreases in salaries and related expenses for our support personnel, bad debt expense, practice administration and meeting expenses as well as revenue growth that outpaced the increase in salaries and related expenses for our revenue-generating professionals. The Education segment generated 28% of total company RBR during the fourth quarter of 2025. Education segment RBR in the fourth quarter of 2025 was flat compared to the fourth quarter of 2024. RBR in the fourth quarter of 2025 included $1.5 million from our acquisitions of Advancement Resources, AXIA and Halpin. On a full year basis, Education segment RBR grew 5.5% year-over-year to a record $500.2 million compared to $474.2 million in 2024. The increase in full year RBR was primarily driven by strong demand for our strategy and operations, research and digital offerings as well as $9.9 million of incremental RBR from our acquisitions of Advancement Resources, GG+A, AXIA and Halpin. The operating income margin for Education was 20.7% for Q4 2025 compared to 22.4% for the same quarter in 2024. The decline in segment -- the decline in operating income margin in the quarter was primarily driven by increases in salaries and related expenses for our revenue-generating professionals, third-party professional fees, restructuring charges and capitalized software expense amortization related to the development of our next-generation research suite software, all as percentages of RBR. These increases were partially offset by a decrease in performance bonus expense. On a full year basis, operating income margin was relatively flat at 22.6% compared to 22.9% in 2024. The Commercial segment generated 21% of total company RBR during the fourth quarter of 2025 and grew 36.6% over the prior year period, posting RBR of $91.9 million compared to $67.3 million in the fourth quarter of 2024. The increase in RBR in the fourth quarter of 2025 included $18.5 million of incremental revenue from our acquisitions of AXIA, Treliant and Wilson Perumal and strong demand for our financial advisory offerings. Excluding the impact of acquisitions, RBR in Q4 2025 grew 9.1% organically over Q4 2024. On a full year basis, Commercial RBR increased 27.2% to $325.1 million compared to $255.6 million in 2024. The increase in full year RBR was primarily driven by $61.6 million of incremental RBR from our acquisitions of AXIA, Treliant and Wilson Perumal as well as strong demand for our digital offerings, partially offset by declines in our strategy and innovation and financial advisory offerings. Operating income margin for the Commercial segment was 20% for Q4 2025 compared to 17.8% for the same quarter in 2024. The increase in operating income margin in the quarter primarily driven by RBR that outpaced increases in performance bonus expense and contractor expenses, partially offset by increases in salaries and related expenses for our revenue-generating professionals and restructuring charges as percentages of RBR. On a full year basis, Commercial segment operating income margin decreased to 17.2% compared to 20% in 2024, reflecting increases in salaries and related expenses for our revenue-generating professionals and contractor expenses as percentages of RBR, partially offset by revenue growth that outpaced the increase in performance bonus expense for our revenue-generating professionals. Our 2025 Commercial segment operating income margin reflected increased revenue mix shift to our digital offerings as compared to 2024 as well as certain integration expenses related to our acquisition activity during the year. Corporate expenses not allocated at the segment level and excluding restructuring charges, were $54.4 million in Q4 2025 compared to $47.8 million in Q4 2024. Unallocated corporate expenses in the fourth quarter of 2025 and 2024 included a loss of $800,000 and a gain of $200,000, respectively, related to changes in the liability of our deferred compensation plan, which is offset by the change in fair value of the investment assets used to fund that plan reflected in other expense. Excluding the impact of the deferred compensation plan in both periods, unallocated corporate expenses increased $5.6 million, primarily due to increases in salaries and related expenses for our support personnel and software and data hosting expenses. On a full year basis, corporate expenses not allocated at the segment level increased to $217.6 million, which included $6.2 million of expense related to the deferred compensation plan compared to $191.2 million in 2024, which included $5.2 million of expense related to the deferred compensation plan. Excluding the impact of the deferred compensation plan in both periods, unallocated corporate expenses increased $25.4 million, primarily driven by an increase in salaries and related expenses for our support personnel, software and data hosting expenses and third-party professional fees primarily related to our M&A activity during the year, partially offset by a decrease in legal expenses. Now turning to the balance sheet and cash flows. Cash flow generated from operations for 2025 was $193.4 million. We used $31.1 million to invest in capital expenditures, inclusive of internally developed software costs, resulting in free cash flow of $162.3 million. DSO came in at 73 days for the fourth quarter of 2025 compared to 76 days for both the third quarter of 2025 and the fourth quarter of 2024. The decrease in DSO during the fourth quarter when compared to both periods reflects the impact of collections on certain larger Healthcare and Education projects in alignment with our contractual payment schedules. Total debt as of December 31, 2025, was $511 million, consisting entirely of our senior bank debt, and we finished the year with cash of $24.5 million for net debt of $486.5 million. This was a $100.6 million decrease in net debt compared to Q3 2025. During 2025, we used $166 million to repurchase approximately 1.2 million shares, representing 6.6% of our outstanding shares as of the beginning of the year, and we used $112 million for strategic tuck-in acquisitions. Inclusive of this deployment of capital and consistent with the capital allocation objectives we discussed at our 2025 Investor Day, our leverage ratio, as defined in our senior bank agreement, was 1.9x adjusted EBITDA as of December 31, 2025. In addition, during the first quarter of 2026 through February 20, we have used $70 million to repurchase approximately 500,000 shares. Also during the first quarter, Huron's Board of Directors authorized an additional $200 million under our current share repurchase program. Inclusive of this additional authorization, we have $229 million remaining under our share repurchase program. Let me remind everyone that we have placed supplemental materials on the Investor Relations page of our website with additional detail around our 2026 outlook as well as information about our AI strategy and the evolving opportunity that AI presents for Huron. Now let me turn to our expectations and guidance for 2026. For the full year 2026, we anticipate RBR in a range of $1.78 billion to $1.86 billion, reflecting 9.5% year-over-year growth at the midpoint. Adjusted EBITDA in a range of 14.5% to 15% of RBR, reflecting an approximate 50 basis point improvement over 2025 at the midpoint. And adjusted non-GAAP EPS in the range of $8.35 to $9.15, reflecting a 12% increase over 2025 at the midpoint. We expect cash flows from operations to be in the range of $220 million to $260 million. Capital expenditures are expected to be approximately $30 million to $40 million, inclusive of cost to develop our market-facing products and analytical tools. And free cash flows are expected to be in a range of $180 million to $220 million, net of cash taxes and interest and excluding noncash stock compensation. Weighted average diluted share count for 2026 is expected to be in a range of 17.2 million to 17.8 million shares. Finally, with respect to taxes. For the full year 2026, we expect an effective tax rate in the range of 28% to 30%, which comprises the federal tax rate of 21%, a blended state tax rate of 5% to 6% and incremental tax expense related to certain nondeductible expense items, partially offset by certain deductions and tax credits. Let me add some color to our guidance, starting with RBR. The midpoint of the RBR range reflects nearly 10% growth over 2025. As Mark mentioned, because of the market demand for our offerings across all 3 operating segments, we have the strongest backlog coverage of our initial annual RBR guidance in the last 5 years. While our pipeline remains at record levels despite the recent strong sales activity, we believe we are well positioned to achieve growth in 2026, consistent with our financial objectives. With regard to our Healthcare segment, we expect low double-digit percentage RBR growth for the full year 2026, driven by high single-digit percentage organic RBR growth. We expect operating margins will be in a range of approximately 29% to 33%. In the Education segment, we expect mid-single-digit percentage RBR growth for the full year 2026, nearly all organic, and we expect operating margins will be in a range of approximately 22% to 26%. In the Commercial segment, we expect to see RBR growth in the low teen percentage range for 2026, driven by high single-digit percentage organic RBR growth. We expect our operating margins in this segment to be in a range of approximately 18% to 22% which reflects an anticipated modest mix shift back towards our consulting offerings as well as lower M&A integration expenses. We expect unallocated corporate SG&A, excluding the impact of the deferred compensation plan to increase in the mid- to upper single-digit percentage range year-over-year. Also in the first quarter, consistent with prior years, we note the following items as it relates to expenses. The reset of wage basis for FICA and our 401(k) match, our annual merit and promotion wage increases go into effect on January 1, an increase in stock compensation expense for restricted stock awards that will be granted in March to retirement-eligible employees and an increase in practice administration and meeting expenses driven by several larger team meetings that take place in the quarter. In addition, we expect an effective tax rate during the first quarter of 2026 in the 15% to 20% range. This increase in effective tax rate when compared to the first quarter of 2025 reflects an anticipated lower tax deduction for shares vesting in March of 2026. Based on these factors, we anticipate approximately 15% to 20% of our full year adjusted EBITDA and full year adjusted EPS to be generated during the first quarter. As a closing reminder, with respect to 2025 adjusted EBITDA, adjusted net income and adjusted EPS, there are several items that you will need to consider when reconciling these non-GAAP measures to comparable GAAP measures. Reconciliation schedules that we included in our press release will help walk you through these reconciliations. Thanks, everyone. I would now like to open the call to questions. Operator? Operator: [Operator Instructions] Our first question comes from Andrew Nicholas with William Blair. Andrew Nicholas: First one I wanted to ask was on Commercial. Strong quarter, total revenue growth and organic revenue growth. It looks to me like C&MS revenue was especially strong. So I was hoping you could flesh that out a little bit. Was there anything onetime in the quarter or lumpy? And what at the industry level is particularly strong in that segment? John Kelly: Yes, Andrew, no, you're right. It was a good quarter for our Commercial team. And as we noted, it was a strong quarter for our distressed financial advisory team, as you suggested. Nothing that I would call out is lumpy there during the quarter. There were some low to mid-single-digit million success fees during the quarter, but that's reflective of the size of such fees that we get in any given quarter. So I wouldn't necessarily call it out. But I think overall, we saw good momentum in that part of the business, a lot of strength from our AXIA business, which really speaks to some of the supply chain challenges that our clients are seeing in the digital area and momentum from a strategy and innovation perspective, too, both in terms of the actual results during the quarter, but then when we look at the sale -- bookings conversions during the quarter and the backlog heading into next year. So it was a strong quarter from a Commercial perspective. Andrew Nicholas: All right. And then on guidance, I guess I want to ask a question about the conservatism of guidance. It sounds like from looking at the slide deck in your prepared remarks here, that's the strongest hard backlog coverage in the last 5 years. So does that mean you just have a little bit more wiggle room to either side? Are you expecting maybe -- or giving yourself some room in the back half of the year? Just help me piece that comment together a little bit more, if you could. John Kelly: Sure, Andrew. I can start there. I wouldn't say that there's really any change in our guidance approach than we have in any given year. I think when we're at this call in February at the beginning of the year, we're always a little bit cautious because we still have a full year to project out. And so we don't like to get ahead of ourselves. So I think there was kind of the normal amount of caution from us in terms of the range, just reflecting the fact that we have to execute through the rest of the year. But certainly, based on the backlog coverage that you cited, the bookings conversions that we saw during the back half of last year as well as the start that we've had this year, plus just the overall size of the pipeline, those are all things that give us confidence in being able to achieve that guidance. And to the extent that we're able to execute as we expect, it's the type of stuff that could have the potential to push us towards the upper end of the guidance as the year goes on. Andrew Nicholas: Understood. And if I could just squeeze one more in, just on the AI topic. Is there any way to kind of quantify the number of projects or the revenue that is currently tied to or incorporates AI in some fashion? And then relatedly, anything from an economics perspective or a pricing perspective or even like a duration perspective that you've seen AI projects be different from your traditional work to the extent that more work is tied to AI or implementing AI or helping your clients with AI? Just wondering how that evolves the model, if at all? John Kelly: Sure, Andrew. Yes, happy to provide some color there. It's difficult to quantify across the entire business because we are deploying AI really across the business and in different areas. There's -- at this point, the large majority of our projects have some element of AI embedded in them. And this is not just speaking of digital projects, this is consulting projects as well as digital projects. As we look at sales conversions, thinking about it comparatively this year versus last year, there's been a noticeable shift in terms of projects that do have either how we would characterize a high component or a moderate component of AI-related delivery. And maybe the way to think about that is if you go back towards the first part of last year, maybe that was 25% of projects or something in that neighborhood that was around that size. This year, that's closer to 50%. If you look within our digital business and our data analysis business and our AI offerings specifically, that's up about 40% at this point year-over-year, which is one of the drivers of our confidence in digital growth as we head into 2026. Operator: Our next question comes from Tobey Sommer with Truist. Tobey Sommer: I was interested by your comment about having the highest backlog coverage of initial RBR guidance in 5 years. Could you frame that? I understand it's a high watermark, but I don't know what would be typical or an average and how this recent snapshot would compare to what those -- what would be typical? John Kelly: Tobey, yes, I can start there from a quantification perspective. So as you're familiar, typically at the beginning of the year, during the first quarter, you've got really high visibility. By the time you get out of the quarter into the second quarter, you've got significant visibility, but we still have work to do to close out the year. And then when you get to the back half of the year is typically when you're more in that, call it, 40% visibility range of the guidance. I would say this year, it's several percentage points higher than that really across the board. And one characteristic of some of the work that we've sold over the back half of last year are larger sorts of projects that span over multiple quarters. So it's not only giving us better visibility for the immediate quarters, that's kind of the first half of this year, but it also meaningfully improves our visibility as we get towards the back half of the year. So that's how I would quantify it, Tobey. C. Hussey: Yes. The only point I would add to what John said is just the breadth of the businesses and the coverage that it applies to, it's not that we have it equally across the board every single year, but in this particular year, it is actually quite solid across all 3 segments. Tobey Sommer: What are the areas in your portfolio where you're anticipating adding headcount the fastest here in 2026? John Kelly: Well, Tobey, I think the first thing I'd comment on is, from a Healthcare perspective, we actually made a lot of that investment in headcount in the back half of last year, and you'll see that come through in the metrics. So I think we really kind of set the stage for growth in Healthcare for next year, the guidance that we talked about with primarily the headcount that we added in the back half of last year, which doesn't mean that we won't have some additional adds, but I think a lot of that was already accomplished by the end of the year. I'd say outside of that area, two areas I'd look at would be our strategy and innovation business. We're both in the Healthcare segment as well as the Commercial segment. Right now, we're seeing a significant amount of pipeline as well as recent bookings in both of those areas where we're actively hiring to bring people in, to help support our growth there as well as within our digital capability. And I think that within digital, probably no surprise to hear, but I think employees with skills in advanced technologies and AI continue to be an area that we're investing in and to help both grow our digital business, but also to support the consulting business. And then another one that you'd see in the metrics is our managed services business, where we've added significant managed services heads towards the back half of last year and where I think you're going to see that trend continue into 2026 based on some of our recent sales in that area. Tobey Sommer: When you're talking to hospital customers, particularly those maybe in the pipeline for PI projects, what are they most focused on over the next 6, 12, 18 months to -- that influences their decision to go down that path with you or sort of hold off? C. Hussey: Yes. I think probably the best way to summarize it would be the descriptor of financial health transformation, which is a pretty broad encompassing description of a full range of things that we do, and we kind of outlined them in some of the areas of the script, but it ranges from performance improvement across all the various sub elements of performance improvement as well as the balance sheet and financial advisory, bringing better liquidity, visibility to decisions, around those kinds of things. It can lead into managed services as well as the strategy for growth aspects as well. So it's pretty all-encompassing. And I think we made a comment pretty clear that the time of incremental change to solve the bigger challenges they have, we're well past those days. We are now seeing a lot more transformational-type thinking that it spans across the full enterprise or the full institution. Tobey Sommer: If I could sneak in one housekeeping question. What do you expect performance fees to look like this year compared to last? John Kelly: I expect a little bit of an uptick there, Tobey. And so by way of providing some historical context, if you look over the past 2 years, 2024, if you look at our Healthcare segment revenues, the component of those revenues that was contingent based, was in the mid-20% range, a little bit north of 25%. This past year, in 2025, it skewed a little bit lower. It was in the low 20% range. I think our expectation at this point, which is still subject to the types of projects that we sell as the year goes on is that, that's going to probably return to more of the levels that we saw in 2024, more in that mid-20% range. Operator: [Operator Instructions] Our next question comes from Kevin Steinke with Barrington Research Associates. Kevin Steinke: Great. I wanted to follow up about your comment of selling larger projects and ask about specifically within Healthcare. I know you noted greater demand for integrated solutions. So when we're talking about larger projects in Healthcare, is it just that the performance improvement piece is larger upfront? Or are you selling more integrated work upfront? And if it's just performance improvement upfront, is the demand for integrated solutions then creating kind of a longer tail at clients as you maybe do follow-on projects in other areas with them? C. Hussey: It's a good question, Kevin. The typical way we start is we're just presented with a challenge or a business problem that we're looking for our thoughts on how we can solve it. And when we start off, sometimes they start with single areas of solution because that's what the client is bringing into focus and they can lead to other opportunities that are adjacent over time. That's very typical of what we see is that we expand as we gain relationships and understanding of their business and bring our expertise and suggestions to other areas of focus that can be impactful to them. Occasionally started on a more integrated full-scale basis, but it is really, as I said, a combination of full range of things that we do, pretty much we cover every element of their operation today. And so we're -- that I think is one of the things that makes us distinct in the market versus our competitors that we have just so many levers in multiple dimensions that we can help them, which is effective what leads to larger engagement sizes and candidly probably extend a little bit over time for longer stays at those clients. Kevin Steinke: All right. Great. John, you mentioned just the acquisition contingent consideration adjustment in the quarter. I believe you mentioned due to outperformance of certain acquisitions. Are there any particular that you would highlight there that have been outperforming expectations? John Kelly: What we've talked about, this isn't -- I probably won't get into specifics, Tobey (sic) [ Kevin ], of the earn-out considerations for those acquisitions. But certainly, we talked a lot about AXIA, which was in the fourth quarter of 2024, which has been one of the business units that -- or one of the areas of the business that's been really hot. Eclipse Insights, which we closed in June of 2025. That's been a really strong performer for us. I think as we talked about at the time, that -- the capabilities of that team in the middle revenue cycle area was just a perfect fit with what we do from a performance improvement consulting perspective. And we worked with them previously, so we knew it would be a good cultural fit. So that one is off to a great start. And then Wilson Perumal would be one more that I would highlight, and that was in September of last year, but they really bring some great strategy and performance improvement capabilities to our commercial team that together with Innosight, their capabilities and IP has really been resonating with clients together along with our digital capabilities that we have in the Commercial segment. So I think that -- if you think about that vertically from strategy to performance improvement to digital, we're seeing a lot of demand for those integrated capabilities right now in the Commercial segment. Kevin Steinke: Okay. Yes, sounds good. That's helpful. Appreciate that. And just lastly, given the recent dislocation you've seen in your stock price, I know it's your target to return about 50% of annual free cash flow to shareholders that's being accomplished through share repurchases. Is that -- are there any thoughts to maybe even accelerating the pace of repurchase based on recent movements in the stock? Or do you just kind of stick to that formula you've laid out? John Kelly: Kevin, it is dynamic. And so we do look at valuation considerations, quite frankly, both on the share repurchase and the M&A side. And certainly, when you do see the dislocation in the stock price, from our expectations, that does make it an attractive entry point for us, from our perspective, to buy shares. So I think I would expect to see more aggressive buybacks of shares at this price, and that's consistent with both what we've already done in the first quarter, but then as well as the Board authorization that we discussed in my remarks. Operator: Seeing no further questions in the queue. I'd like to turn the call back over to Mr. Hussey. C. Hussey: Thanks for spending time with us this afternoon, and we look forward to speaking with you again in May when we announce our first quarter results. Good evening. Operator: This concludes today's conference call. Thank you, everyone, for participation. You may now disconnect.