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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.
Nina Grieg: Good morning, and welcome to Grieg Seafood's Fourth Quarter Presentation. My name is Nina Willumsen Grieg, and I'm the CEO of Grieg Seafood. Together with me today is also our CFO, Magnus Johannesen. Today's agenda will cover a current status on our strategic turnaround and updates on our operational and market performance. As always, Magnus will walk us through our financial review and also share some information on the dividend after the transaction. Starting with the highlights of the quarter. This is our final presentation covering discontinued operations, and I'm pleased that the closing occurred as scheduled in Q4. It has required quite some resources and focus from our organization, and we look forward to focusing solely on Rogaland going forward. Q4 represents a solid quarter, harvesting just below 7,400 tonnes and delivering a farming EBIT of NOK 20.7 per kilo, a result we are very pleased with. I will get back to details on this in our operational review. A high priority for the management team continues to be restructuring of the company. We are continuously doing changes and improvements in our balance sheet, structure and operating model. As a result of the closing of the transaction, we have used the proceeds to repay debt, taking up a new syndicate with Nordea and SEB, and the Board has taken the principal decision to advise the general assembly to pay NOK 4 billion in distribution to shareholders. I will continue to repeat this slide and our new focused strategy. We will go from global growth to regional profitability. This shift requires disciplined execution, and we have maintained momentum also in Q4. A key operational focus for us continues to be how to best utilize the strong position we have on post-smolt and land-based. During the quarter, we announced the planned expansion at Tytlandsvik of 2 new buildings, and we are also planning to build an in-house smolt facility at Ardal. This project has been in development for a long time and will support improved performance and fish welfare throughout our value chain. We will give you more details on this in our Q1 presentation. Capital discipline is key to our new direction and investment in Grieg Seafood is kept at a minimum level during Q4 and until new strategic plans are reviewed and implemented. Having completed downsizing, we have turned our focus to absolute cost and reducing complexity. As part of that, we have defined additional cost reduction of a conservative estimate of NOK 50 million for 2026 as we target below NOK 3 in overhead cost on average. These actions are all key for us to achieve our targets. Deep diving into operations and quarterly performance in Rogaland. All our freshwater facilities, including joint ventures, delivered solid production with an average smolt weight of 1.2 kilo. Following a challenging Q3 for us, we have to say, we had a slow start for production at sea with elevated mortality into this quarter as well. However, the performance improved as lice and gill challenges eased and production was strong in the quarter overall. This allowed us to recover the lost growth and enter into 2026 with high average weights in sea and maximum MAB, actually 98% for the year on total on MAB utilization. Harvest volumes increased from Q3, resulting in all-time high harvest volume of almost 30.5 tonnes for Rogaland. Our guidance for 2026 is 31,000 tonnes for the full year and 6,600 tonnes for Q1, slightly skewed towards the end of the quarter. The farming cost for the quarter was NOK 63.6, still higher than we like, but lower than Q3. And we still have our long-term target of NOK 60. Summing up the key figures for Q4, it has been a strong quarter with an operational EBIT of NOK 152.8 million. The post-smolt we put to sea is now significantly higher than any of our peers. The distribution of smolt size has shifted dramatically over the last few years, as you can see in this chart, with more than 50% being above 1 kilo. As noted in Q3, our main objective going from '24 to '25 was to minimize the lower sized groups and only our broodstock smolt, 7% of our smolt was below 500 grams in 2025. Finding the right-sized smolt for each site is a key part of our production planning. The smolt put to sea in Q4 was 900 grams from Tytlandsvik and 1.4 kilo from Ardal on average. In 2026, we also plan to harvest 500 tonnes of fully grown fish from Ardal. This is a pilot. The fish is performing well, and it is providing valuable insights into the potential of full cycle land-based production. Turning to some comments on sales and processing. We were very happy with our achievements in this quarter. Our achieved sales price was NOK 84.3, a solid beat on the index, driven by high harvest weights, 55% contract share and strong sales performance on spot. The price experienced an upward trend during the quarter as illustrated in the middle chart. Looking at the details of the chart, it reveals that we benefited from optimal harvest timing, both for the entire quarter and on a weekly basis. We believe we are able to achieve this over time through close collaboration between production and sales. At Gardermoen, Oslo Salmon processing, it's called, construction was finalized in December, and we successfully started production in January. Initial ramp-up shows high demand for filets and access to external raw material is expected to be sufficient to maintain high production utilization in 2026, but we expect Q1 to be a ramp-up period. We are guiding a volume of 8,500 tonnes of raw material for value-added products in 2026. To ensure high utilization of this facility, we are currently seeking partners to supply external fish and also exploring partnership models for the facility itself. And with that, I leave the floor to Magnus. Magnus Johannesen: Thank you, Nina, and good morning, everyone. So I think as you might have seen already, this quarter is presented with implications from several of the processes that we have completed, but also initiated in Q4. This includes the closing of the transaction, which causes a significant inflow of cash. It's also about the hybrid bond, which has been temporarily reclassified to debt and also discontinued operations, which are still included in both our NIBD structure as well as our cash flow that we present today. We're also happy to report that we have completed what we promised in Q3, both in terms of dividend, but also in terms of closing the negotiations with Nordea and SEB, which we are very pleased to have entered into a new financial syndicate with very few days ago. And with that, I will go into the profit and loss statement. Starting on the top, we see that our sales revenue have increased 10% year-over-year. This is mainly due to higher price achievements, both from our composition of higher average weight, but also our financial contracts and physical contracts. However, it's drawn slightly below -- slightly down again from lower superior share and lower volume compared to Q4 last year. Moving then to EBIT. We see that our costs have increased slightly from what we have guided -- from what we have achieved earlier, and this is due to we have continued harvesting from a site in Q3 and had a higher capitalized cost to that inventory. This results in a higher farming cost that will also continue in Q1 as we will continue harvesting from this specific site. But we do see this as temporarily until this site is fully harvested out. But despite this, solid price performance ensures the group EBIT of NOK 142.9 million, corresponding to a NOK 19.4 EBIT per kilo. Moving then my attention to some special items in the profit and loss statement, which includes the reversal of a previous write-down on one of our licenses in Rogaland. And this is done due to the demerger of our group company that kept the licenses of Grieg Seafood Norway, where we now reversed that write-down in this quarter. Moving then my attention to the net profit for the period from discontinued operations. And this number includes a gain of approximately NOK 900 million on the sale of Grieg Seafood Canada operations and our Finmark operations. And many might wonder why this is so much further below than NOK 10.2 billion equity value, and that is simply that the assets we sold also had an outgoing value from our balance sheet, but we still have -- we still have received the cash as stated in our cash flow statement. So this is basically the sold price or the price of what we have sold minus the asset value of what we have sold. Moving on to cash flow. And as you might see, we don't have the catch function as things will have in our reporting formats. But overall, our net cash flow from operations came in at NOK 173 million for all 4 regions. This is positively impacted by operational EBITDA of NOK 408 million, but negatively impacted by changes in net working -- sorry, changes in working capital of slightly above NOK 400 million, which includes a biomass buildup of NOK 220 million across all 4 regions. And that also represents that both the regions that we have sold and Rogaland regions that we are maintaining have had good quarters in sea. Looking then at the net cash flow from investment activities. This is also significantly impacted by the transaction. And not surprisingly, this is mainly due to the net proceeds related to the sale of around NOK 9.1 billion. But if we isolate the net CapEx investments, this came in around NOK 170 million. Out of this, NOK 140 million is related to the discontinued operations, which is, of course, mainly driven by continued construction of the Adamselv facility in Finmark. But this also shows that the Rogaland region have a very well-invested value chain and has no need for significant CapEx lifts in the year to come. And for 2026, we are doing the share issue in Ardal Aqua to build the on-site smolt facility of around NOK 45 million, which is NOK 15 million lower than what we guided on previous quarter. If we then look at -- our eyes on 2027, we see that there's no significant CapEx plans except replacement and maintenance CapEx, which included here on the slide, which are conservative estimates. Going then down to net cash flow from financing, which is also heavily impacted by the inflow of cash from the transaction. All in all, when we received the settlement -- the proceeds in Q4, we distributed significant portions of this to repaying all our debt and credit lines in the previous bank syndicate. And this is quite obvious from this slide, but what is important to also note is that this does not include the bridge loan that we took on early Q4 to plug the CapEx needed for Adamselv facility in this quarter. Residual items include lease liabilities, interest costs and also the hybrid dividend. Moving then to the net interest-bearing debt. So it's -- I think it's the first time that Grieg Seafood presents a negative net interest-bearing debt position. But what this can be translated to is that we have a cash positive position that go out of Q4. So starting on the net interest-bearing debt going out of our third quarter. We see that this has been positively impacted by the operational EBITDA across all 4 regions, negatively impacted by biomass buildup and gross investments as well as the hybrid dividend. But then there's a significant increase due to the reclassification of our hybrid bond. And just to pause there for one second is that this reclassification is due to the bondholders having a right to exercise their put until 28th of January, which means that going out of Q4, this had to be classified as short-term debt. Now that we have exited this put option period, it will be once again reclassified as equity. And then it's also important to note that when we reclassified it to debt, it had to be reclassified at 105% and not 100%, but it will go back to equity as 100%. That's the technicalities that's important to note. And then you see that we have done the down payments of approximately NOK 4 billion, and we have other changes of around NOK 5 billion, which except some timing differences is purely with the NIBD going out of Q4 of negative NOK 2.4 billion, NOK 2.5 billion or alternatively a net cash positive position of NOK 2.5 billion. Also moving to one -- I just want to highlight one thing is that in Q4, the Gardermoen facility entered our balance sheet with their leasing debt that we have entered into in terms of the construction of that facility. Moving then to a topic I received quite a lot of questions about in the past months. So overall, the Board will propose to an extraordinary general assembly that the company will distribute approximately -- or not approximately anymore, actually NOK 4 billion in shareholders meeting to shareholders. And the reason why we can't share all the details of ex-date and payment date, et cetera, is that we are still awaiting the finalization of the interim balance sheet and the audit of this balance sheet, which is formality criterias in order to pay out a dividend. We do not expect this to be any issues, but it is a formality that we need to follow. However, we will say that you can expect the call for an extraordinary general assembly to be sent out by end of March, where all the details will be listed and hence, payment will be done shortly after the general assembly has been completed -- the extraordinary general assembly has been completed. And with that, I will hand over to Nina, who will take us through the future building blocks. Nina Grieg: Thank you, Magnus. As we wrap up the last quarter and under the previous Grieg Seafood structure of 4 regions, I want to highlight our key strategic building blocks going forward, strengthening, prioritizing and future-proofing our operations. Our focus in 2026 is strengthening the company and driving profitability, building the fundament for the future. Biological KPIs and performance remains the core benchmark of our success as fish farmers. Rogaland has in 2025, delivered high harvest weights, record volumes, optimal MAB utilization and an average operational EBIT of NOK 21 per kilo, if you look at the last 5 years, confirming our position as a top operator. Our goal is to further fine-tune and stabilize this. Next, we will prioritize key initiatives for growth, both on land and at sea. Our progress towards 10,000 tonnes of land-based production demonstrates our ability to execute on our strategic choices. Through 2026, we will be evaluating the next phase of our land-based production. The ongoing expansion at Tytlandsvik and the pilot at Ardal for harvest sized fish are central to this part of our strategy. Looking ahead, future-proofing means preparing for opportunities with new technology and adapting to regulatory changes that we believe will come. Our partnership since 2019 with FishGlobe has provided valuable insights on closed containment and new technology, which we will leverage in the next steps. So this fourth quarter represents a solid foundation for the future Grieg Seafood that we envision. We delivered good biological results, robust sales performance, made decisive decisions and ultimately achieved strong financial results. And with that, I welcome Magnus back to the stage, and we open for questions. Stein Aukner: Alexander Aukner, DNB Carnegie. So could you give an indication of how much of the hybrid bond has been recalled? Magnus Johannesen: Yes. So it is obvious to us that many of the bondholders still believe that the bond should remain in our balance sheet given the financial position. So it was only one bondholder that exercised the right to put -- the put on 105, and we are in dialogue with many others. But we do expect -- we are keeping all options open when it comes to both redeeming the hybrid bond through replacement capital or tender offer. But as you can also see, it has been reclassified to debt this quarter. So we need to go into the dialogue with shareholders to the bondholders and find a solution with them how we can redeem this bond. But our intention is to redeem it indeed. Stein Aukner: Okay. And the CapEx and the working capital buildup for the discontinued operations, is that already netted out in the net proceeds? Or will that be adjusted in Q1? Magnus Johannesen: That's already netted out in the -- it should already be netted out in the proceeds, yes. Unknown Analyst: [ Martin Kardal ] ABG Sundal Collier. Will the sites with the higher capitalized costs be emptied out -- fully emptied out in Q1? And how does it look on performance, cost performance on the sites from Q2 and onwards? Nina Grieg: Yes. The most challenging site will be harvested out in Q1. And we had a challenging Q3 and it -- but it was mainly this and a part of a few other sites, but it is mainly this that -- so it will be out during Q1. Unknown Analyst: And then you reiterate your long-term target of NOK 60 per kilo in Rogaland. Would that be within reach during 2026 or for the full year, given that the level will likely be a little bit high in Q1? Magnus Johannesen: I think we have shown that the biological incident or biological challenging conditions in 2025 still gave us a cost EBIT per kilo of NOK 61.7. And for 2025, we don't expect to be achieving the NOK 60 long-term target, but we are working on a positive trajectory towards that over time. Christian Nordby: Christian Nordby, Arctic Securities. You have increased the smolt weight substantially in '25 versus '24. Do we see full impact of that on your harvest guidance for '26? Or should we think that there will be more growth to come in '27 based on that? Nina Grieg: There will come some more growth in '27 based on that. Magnus Johannesen: And maybe important to mention also when a smolt size increases, we have higher costs going to biomass from land. Hence, you will see higher cost in our biomass numbers as well. All right. Anything on the web. Unknown Executive: There's one question on the web regarding if you can say anything about the total amount presented in the claim from the minority shareholder in Grieg Seafood Newfoundland AS and if there will be any legal proceedings regarding that? Magnus Johannesen: So this is a Canadian former minority. And our assessment is that this is a claim which is not substantial in amount or probability. And this specific owner had an ownership of 0.5% of the Newfoundland shares. And we do not see this as something that are -- we are not provisioned for anything of this, but we mentioned it due to the fact that it has been made a letter, but not any formal legal claim. Thank you. All right. Based on that, thanks a lot. Nina Grieg: Thank you. Have a nice day.
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 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.
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.
Denise Garcia: [Audio Gap] Please see our filings with the SEC, including our most recently filed annual report on Form 10-K, and quarterly reports on Form 10-Q for a discussion of specific risks that may affect our business performance and financial condition. We assume no obligation to update or revise any forward-looking statements or information. As a reminder, today's call is being recorded, and a replay will also be made available on expworldholdings.com. Now for a few logistics and we'll get started. For those of you joining in Frame today, welcome to our Metaverse on the web. To zoom into a specific screen, you can click on that screen and then click zoom in. If the content on the screen disappears or if you lose audio, simply refresh the page. While in Frame, if you need help, just use the help button at the bottom right to link with tech support. [Operator Instructions] Now I'll turn the fireside chat over to our speakers before opening up the call to questions. Leo, you may begin. Leo Pareja: Thanks, Denise. We've always been focused on driving eXp across every area of our business, and 2025 has been no different. This year, we expanded into 7 countries, increasing our international revenue 67% year-over-year to $147 million as our technology-driven model continues to disrupt the real estate industry and resonate with agents around the world. We're constantly improving and iterating on our value stack, and we've launched 4 significant programs this year, starting with co-sponsorship, which has been a tremendous success, elevated agent attraction to another level. The program helps drive growth and deepen collaboration between agents, offering agents the option to have 2 sponsors. Since launching the program, we've seen co-sponsorship happen across 28 countries globally, showing great collaboration amongst our agents in countries all over the globe. In our U.S. and Canadian markets, 14% of the agents have joined eXp since we rolled out co-sponsorship joining with a cosponsor, and agents that have joined with a cosponsor are 64% more productive than those without. And agents with a cosponsor have a 19% lower attrition rate. We've also introduced a commercial division in the U.K. and 2 programs to help agents differentiate their brands in specialization markets like land and ranch and sports and entertainment in addition to luxury, which has had a tremendous success. These programs have seen a combined membership increase of 48% year-over-year in 2025. Education is one of our priorities at eXp. Given our scale, we're one of the few brokerages to be able to offer best-in-quality education and access for agents to top-rated trainers and industry leaders throughout -- through eXp University, giving us a huge competitive advantage that other brokers simply cannot replicate. In 2025, we launched an AI-accelerated series, a free comprehensive 8-week training program designed to empower our agents with the most sophisticated tools at their disposal and further drive their productivity. These series have already generated nearly 4,000 program views across its 9 training sessions, demonstrating a strong appetite for these high-impact tools. We've highlighted FastCAP earlier in the year, and it continues its momentum, with nearly 20,000 agent registrations and the agents that complete the program are reporting seeing the results in both the number of appointments and agreements executed, whether it's buyer agency or listing agreements. In 2026, we're integrating realty.com for U.S. agents and Zoocasa for Canadian agents into the FastCAP program, including seller and buyer cultivation tools and leads. We have also launched the FastATTRACT program in 2025. In the 6 months since completing the first FastATTRACT pilot program, agents have had a 24% relative lift in recruiting compared to peers who haven't taken the class yet. And we continue to take a leadership position standing up for consumer choice and transparency. Holly Mabery, who was recently promoted to Chief Brokerage Officer, has joined the earnings call for the Q&A portion and can share more details on consumer choice framework and the other actions we are taking to help agents remain focused on their business in the midst of a changing real estate landscape. And finally, our most important asset, our people. We ended 2025 with 83,060 agents worldwide, up slightly from last year and a base of agents that I believe is stronger than ever as we enter the new year. During 2025, we saw growth in agent productivity and revenue accelerate through the year. We ended Q4 with a 6% year-over-year increase in productivity and 9% year-over-year increase in revenue. We also saw a year-over-year increase in the number of ICON agents for the full year of 2025. As we've shown throughout the year, we are more likely to retain productive agents. So as productivity increases, attrition improves. Our Q4 attrition was the best it's been all year in Q4, with worldwide agent attrition improving 17% year-over-year and an impressive even larger improvement of 23% year-over-year in the United States. These stats are even more impressive when you consider that the industry is contracting. Let's talk more about this trend on the next slide. In the U.S., 4% of U.S. realtors exited their membership base in 2025 based on NAR data. And while eXp's U.S. residential did experience net attrition in '25, we outperformed NAR attrition rates by 25%. Compared to our historical rates, our attrition continues to drop year-over-year. We saw a 6% year-over-year improvement from '24 and more than triple the rate in '25 with a 23% year-over-year improvement. I'll talk more about what's driving that trend in the next slide. I presented this slide every quarter this year, and the story remains consistent. Productivity drives retention. The more productive an agent is, the less likely they are to leave. In the U.S., the majority of departing agents continue to be our lowest-producing cohort and agents in the highest-producing cohorts are multiple times less likely to churn than our low-producing agents. Of the nonproductive agents that leave eXp, 63% of them leave the industry altogether, but fewer agents are leaving and our attrition rates have improved all year with 23% year-over-year improvement for the full 2025. Part of that is due to our strategy to attract teams to eXp because agents on teams are 78% more productive than individual agents and 40% of the new agents to eXp were on teams in the fourth quarter. And speaking of teams, I would like to highlight some of the teams that joined eXp in 2025, starting on the next slide. We welcomed some amazing people over the course of 2025. We added more than 25 prominent teams in the U.S. and Canada that generate over $5.5 billion in sales in 2024, while at their respective brokerages. They joined us from coast to coast, leaving traditional brokerages and indies alike, and some were booming agents that returned to eXp after realizing our value prop is hard to replicate anywhere else. And the momentum continues with more teams joining in 2026. We intend to empower our agents and build on these results going forward. Next slide, please. 2025 was a defining year at eXp as we enhanced agent productivity and retention and made significant infrastructure investments. In 2026, we expect to translate those investments into margin through disciplined execution. We will also continue to assess opportunities that accelerate growth and expand our capabilities. I will turn it over to Jesse to expand on the strategic investments we made in 2025 and share our outlook for 2026. Jesse Hill: Thank you, Leo. And now I'll walk us through our consolidated operational and financial highlights for the fourth quarter and the full year 2025, beginning on the next slide. Starting with operational metrics on a consolidated basis, we ended the quarter and the year with just over 83,000 agents, driven by strong agent retention, which drove a 17% reduction in attrition for the year. Productivity per person, or PPP, was up for the quarter and the year at 5.3, while volume ramped up throughout the year, accelerating to 8% in Q4 and 5% for the full year. The higher PPP drove sales transactions up 6% or 110,000 transactions in the fourth quarter, and there were over 440,000 sales transactions in 2025. On the next slide, I'll walk us through our financials. Starting with revenue, we generated $4.8 billion in 2025, up 4% year-over-year despite no material change in the macroeconomic environment. Revenue growth for Q4 accelerated to 9% to $1.2 billion. During the year, we invested in programs to attract and retain agents and increase productivity with more agents reaching their cap, which resulted in a gross profit of $333.6 million in 2025. Operating loss of $21.5 million for 2025 and $12.7 million for the quarter was down year-over-year, primarily driven by gross margin compression and higher investments in computer and software, partially offset by early gains that we have seen in operational efficiencies. Adjusted EBITDA of $33.2 million for 2025 and $2.1 million for the quarter continues to be positive but down year-over-year, again, primarily driven by this margin compression and partially offset by our streamlined operations. Finally, we've increased our cash position, ending the year with a healthy $124.2 million in cash on the balance sheet. On the next slide, I'll highlight our financial results by segment for the quarter. The North America Realty segment continues to be the largest revenue and profit generator for the company with revenue of $1.1 billion for the fourth quarter and $4.6 billion for the year. International continues to be our fastest-growing segment, increasing nearly 51% in Q4 and 67% year-over-year in 2025. The team did all of this while launching 7 new markets. So kudos to Felix Bravo and the international team for all of their accomplishments in 2025. Operating expenses increased in the fourth quarter, primarily due to the continued investments in our eXpcon events and increased legal expenses in the U.S., while we reduced operating expenses in other affiliated services segment as we streamlined SUCCESS operations. SUCCESS contributed modest revenue for the year with an operating loss of $6.2 million as we focused on retooling the SUCCESS platform. On the next slide, I'll review our 2025 priorities and results. During 2025, we built a strong foundation for profitable growth through several key priorities. We focused on improving operational efficiency through back-office automation so that agents can focus more on their clients. In the fourth quarter, we saw improvements on a year-over-year basis with a 6% decrease in related costs, a 7% increase in the number of agents per staff and a 12% increase in the number of transactions per staff. We made deliberate investments in AI and technology to streamline our high-volume workflows and boost agent productivity in 2025 that we expect to result in continued efficiencies that will drive margin expansion into 2026 and beyond. We also unlock new opportunities for our agents, adding to our luxury affiliate program and introducing land and ranch and sports and entertainment. These programs are expected to contribute margin expansion as they continue to ramp, and we saw a 48% year-over-year increase in agent memberships across these programs in 2025. Finally, we are focused on driving international growth by applying a scalable proven model that we developed over several years. I already mentioned the 67% year-over-year revenue growth in 2025, but I'd also like to mention that we launched these new markets more efficiently, down 37% in our launch costs compared to our original international expansion efforts. Ultimately, we strengthened our platform, improved productivity and positioned ourselves to deliver profitable growth as the real estate industry continues to evolve that is expected to result in higher sustained margins throughout the year. Now let me walk you through our ongoing priorities and our initial outlook for 2026 on the next slide. Looking ahead, we remain focused on maintaining our financial discipline to drive sustainable, profitable growth, and we are providing our initial outlook for the first quarter and the full year 2026. Starting with the first quarter, we expect revenue in the range of $960 million to $980 million, expenses in the range of $82 million to $86 million and adjusted EBITDA in the range of $2 million to $5 million. For the year, we expect revenue in the range of $4.85 billion to $5.15 billion. Regarding expenses, we expect to continue to leverage the investments we've made in technology and infrastructure, and we see this translating into operating expenses in the range of $325 million to $345 million. Finally, we expect adjusted EBITDA in the range of $50 million to $75 million for 2026. We intend to stay financially flexible. We reserve the right to invest where we see meaningful opportunities to support our agents, strengthen our technology platform and enhance long-term shareholder value. As always, our focus remains on executing with discipline, maintaining a strong balance sheet and continuing to build a more efficient, resilient and profitable eXp. And now I'll turn over the call to Glenn to wrap it up before we open up the call to questions. Glenn? Glennn Sanford: Thanks, Jesse. In 2025, I did something most CEOs don't do. I went deep into 2 of our businesses to rebuild them from the ground up. And I want to tell you why, because it reflects exactly how we think about building this company. In 2024, I focused on replatforming eXp International. And the thesis was really simple. If we build a cleaner, more scalable technology foundation, we could expand faster and cheaper. The results showed up in 2025, 7 new country launches, international revenue up 67% to $147 million and launch costs down 37% compared to our original expansion efforts. And that's really a proof point as really this founder's approach to infrastructure producing compounding returns. I took that same playbook and applied it to SUCCESS. In mid-2025, I joined as the Managing Director with really a singular mandate, don't iterate on what exists, rebuild it. We replatformed success.com entirely, relaunched coaching certification and began architecting SUCCESS as a culture and growth layer for the entire eXp ecosystem. What I learned about community design, creator tools and AI native product architecture came back directly into the eXp and gave birth to the eXp Hub, which is really our workplace replacement when that went away. This has really been a deliberate pattern. When a segment of our platform needs to be rebuilt for the next era, we go in, we apply a founder's mindset and come out with infrastructure that compounds. Now we're bringing that same philosophy to eXp itself. We're introducing the single-threaded leader framework. It's really an AI-assisted operating model where leaders with singular focus and full accountability for specific outcomes are paired with AI-assisted engineering to deliver something this industry has never seen, a genuinely high-touch agent and consumer experience running on an entirely AI-enhanced platform. The framework isn't just about leadership structure, it's about what becomes possible when you remove competing priorities and replace them with AI native tooling, smaller, more focused teams, dramatically higher output and a level of personalization at scale that no traditional brokerage can replicate because they're carrying the weight of legacy infrastructure we simply don't have. We're already in motion. I'm working directly with some of our country leaders internationally as the first cohort to pilot this framework, people who know their markets deeply and are operating with AI-assisted tools to allow them to run leaner, faster and far greater impact than was previously possible. We have more to share as the year progresses, but early work is validating exactly what we expected. Singular focus plus AI native tooling is a multiplier. We have third-party validation of how we deploy operationally. We have AI-native leaders embedding throughout the organization, and we are running leaner teams with measurably higher output than 2 years ago. 2025 was the year we proved it works. 2026 is the year we scale across every layer of the platform. Next slide, please. Really, the eXp platform, and I want to close by describing what we're actually building because I think it's really underappreciated. eXp is a platform business, 4 connected segments working in deliberate harmony, eXp, obviously, Realty North America as the engine, International as the rapidly expanding frontier, Frame VR, where you're attending today is our virtual infrastructure and then SUCCESS as our culture and growth layer. No other brokerage on earth is built this way. Our competitors, most of which are franchise systems are anchored in physical real estate, legacy commission structures and technology stacks, they can't move fast enough to modernize. They face real consolidation pressure as AI raises the cost of falling behind. We have none of those constraints. We're built, distributed and technology forward from day 1, which means we layer AI onto a clean architecture rather than retrofitting it into a broken one. What we offer agents and what no one else can fully replicate is a complete operating system for building scalable, sustainable real estate business, full stack marketing, deep ongoing personal development through success and a fully immersive global collaboration layer through Frame. Every investment we're making right now, the eXp Hub, AI Copilots, listing intelligent platform, App Store marketplace, single-thread leaders driving focused execution is designed around one goal, helping agents build businesses that grow beyond themselves, powered by the best platform in the industry. That's the eXp platform, that's the moat, and we're just getting started. Now I'll turn it back to Denise for Q&A. Denise Garcia: Thanks, Glenn. I'll kick it off with a question for everyone on the team before we open the call to questions from the audience and the analysts. Glenn, how resistant is the larger residential brokerage industry to AI? Glennn Sanford: It was a great question. So when we think about it quite a bit, the -- there's a lot of the industry that can be impacted by AI. But one of the things that's really interesting is it's this where the wisdom of the agent comes in, which is really at the table, taking a listing, working on pricing, working on marketing strategies, working with the buyer, again, understanding the neighborhoods at the local level. Those are things that AI just can't do in a great way. They don't actually live in the neighborhood. They have to sort of absorb stuff and kind of then through probability, what is the data. So the profession definitely is not going away, but the relations, the trust, the local expertise is really something very durable. But running a business is about to get radically more efficient for platforms that are ready. And we're ready. I mean we've been building this infrastructure for now for a few years to be ready while most of our competitors aren't. And that's -- and I really -- maybe I'll just reframe the question slightly differently. It's the real question isn't whether brokerage is AI resilient, it's who is positioned to win in an AI-enabled industry. And I think that's a really critical question. So here's what I see, as mentioned, many traditional brokerages carry structural complexities, whether they be commercial leases, fixed overhead, legacy technology that's spread across offices and really an entrenched way of operating that isn't able to be centralized and managed. So they're not easy to unwind or replace. They'll face real pressure to consolidate just to build the economies of scale needed to compete. And we've seen this countless times over the years with companies who have attempted to even do what we've done here, which is to build a cloud-based real estate brokerage from a more traditional place and none of them have been able to get there. So eXp, of course, has no branches. It's one company, no leases, no legacy infrastructure and the ability to really work at scale across the entire enterprise. We're built to be distributed and technology forward, which means as we adopt more AI-assisted engineering, AI-assisted brokerage models on top of our current infrastructure, we're really in a place to continue to lead rather than follow. And I think that's the real key. Denise Garcia: Great. All right. Thanks, Glenn. Leo, one for you. Can you discuss agent count in Q4? Leo Pareja: Yes, sure, Denise. Thanks for that question. Historically, going back to 2023, 2024, we have seasonality. We have agent dip count from the third quarter going to the fourth quarter. That said, we've prioritized agent productivity over agent count. So in the 4 years I've been here, that's been my hyper focus, right? And agent is not equal to an agent. If you look at real trends every year, we tend to enjoy having some of the most productive agents in the country, and we're doubling down on that. We've seen our agent productivity per person increase. And most of that has been on teams as well. So even about an hour before the call started, I zoomed into an onboarding in Houston to a 60-person independent that we'll announce at our next earnings call. That was between us and one of our legacy competitors. And so we're continuing to add entire independent brokerages, ones rolling off franchise agreements and the ones that were fully independent. We saw in 2025 that 40% of the agents that joined were on teams. And our team members are about 78% more productive than our solo agents. So our strategy has been paying off. Our productivity grew 6% year-over-year in Q4, which, by the way, was our highest quarterly growth. So it continued to accelerate. And when you look at North America, 63% of the agents that left our company left the industry. So we see this very self-fulfilling prophecy if the agents that lean in, take advantage of our tools, not only sell homes but also stay sticky, and the ones we lose tend to be at the majority quantities the ones that are not selling homes. So we're continuing to invest in our learning platform where agents can consume the content on their own pace virtually at all times and to continue to improve productivity. So -- and the one I'm probably the most proud about is how much we improved attrition. So globally, it was 17% attrition. And I mentioned earlier in my comments, 23% year-over-year. I mean, by numbers, it's roughly 6,000 agent improvement on attrition. And that's in a year where the U.S. according to NAR membership contracted 4%. So we are substantially outperforming the market from an attrition standpoint. And we don't give guidance on agent count, but I'd say that our business is stable, durable, and we have a track record that is only going to be magnified in the headwinds of the industry. So we're in a great cash position. We're able to take advantage of opportunities as we see them, and we continue to strengthen our value proposition. Denise Garcia: All right. Thanks, Leo. One for you, Jesse. You mentioned a few metrics like PPP and staff per transaction. Which metrics should we focus on in 2026 to measure the success of your ongoing priorities? Jesse Hill: Yes. Thanks, Denise. You mentioned our North Star metric is productivity per person, or PPP, which is essentially transactions per agent over a trailing 12-month period. And that was 5.3 for the year. And as long as that's moving in the right direction, we know that we're making our agents more productive and successful as well as attracting and retaining the most productive agents. A second one would be productive agent retention. Leo spoke to the total agent attrition, which improved 17% across the company and notably 23% in the United States, which is obviously, our core market. And then a third one, SG&A per unit. This is one -- it's essentially our unit economics. We, as a leadership team, pay a lot of attention to this. And we spoke throughout 2025, we invested very heavily in AI and automation, and we expect that to translate in EBITDA margin expansion into 2026, which is one of the reasons why we wanted to begin providing that forward guidance to show what we believe we can achieve with continued efficiencies in this particular metric over time. Denise Garcia: All right. Thanks, Jesse. One for you, Holly. Can you discuss the role that you're playing as the Chief Brokerage Officer and your top priorities for 2026? Holly Mabery: Thank you, Denise. I'm really happy to be here. What we found is the industry is really loud. And eXp, we are extremely clear. Between the NAR settlement fallout, RESPA scrutiny, TCPA enforcement and state-by-state legislative change, we're finding agents across the industry are overwhelmed. We've made the deliberate strategic choice. eXp will lean in where others go silent. And so we've built a compliance infrastructure before the crisis, not in response to it. And so that consistent, timely guidance, training and support is offered through our state meetings, eXp University and on-demand content. That way, no agent is left guessing. And we've developed specialty contractual forms at the state level that are absolutely focused on the consumer. Tools like our eXp broker assistant, [ Carla ], our comprehensive advertising review logics operator. This is giving agents real-time broker support that protects their business and runs 24/7. I'm excited because this is risk management at scale. It's proactive governance, infrastructure, and it protects our company, our agents and defends our brand reputation in every market we operate. We are strategically focused on not waiting to be told what to do, but set the standard. And that posture is our competitive differentiator where regulatory complexity is only increasing. But that's just table stakes when we look at top-down support. So our agent voice, that is our edge. Through our agent advisory councils at both the national and state level, we've localized feedback, informing decisions in real time. And these committees are not symbolic. They are active feedback loops for us. They're testing programs, surfacing friction, and they help us accelerate our ability to respond faster than traditional brokerage structures can. And of course, we serve 2 distinct agent populations with eXp Realty and eXp Commercial, and we're structured accordingly. The result is we're finding a culture that doesn't just retain agents, it attracts the best. So I'm very excited when we combine the proactive regulatory navigation with agent voice and feedback, we're creating conditions for sustainable growth. The agent confidence, it's driving production, production drives revenue, and that is becoming our flywheel as we look to 2026. Denise Garcia: Thanks, Holly. And now one for you, Carrie. Can you highlight some of the technology-related improvements that eXp made in 2025, and what you're focused on in 2026? Carrie Lysenko: Thanks so much, Denise. I appreciate being here. For 2025, I really want to talk about kind of 2 key areas of development. It was all about personalization and productivity. And those are 2 themes that we've already heard Glenn and Leo and Jesse talk about today. But first is the AI Copilot integration of our Mira Business Assistant in our My eXp app for agents. And we wanted to ensure that agents had a more complete overview of their business results as well as insights. This assists both solo agents, team leaders and large attractors as they continue to measure progress and growth on a weekly and quarterly basis, all while improving along the way with the analysis that Mira can deliver. And the second is Live, which is our global portal infrastructure. And this is building on our growth internationally. We want to continue to introduce opportunities for agents to prosper at eXp while decreasing their overreliance on monolithic third-party portals, especially internationally. And Live will continue to be expanded on in 2026 as we grow the consumer audience and impact to our agents globally. And then so for the future, we're really, in 2026, going to be focused on expanding that agent ecosystem. And that includes continuing to build on the eXp Hub community platform that we introduced at eXpcon in Miami that Glenn spoke about. It's really a foundation for agent groups and organizations across the globe at eXp. And this is really built by eXp for eXp platform. And it allows us to curate a really bespoke experience for our eXp agents and staff that really incentivizes community and communication to happen within our ecosystem as opposed to a potential third-party platform. Incidentally, we already have 13% of our agent base communicating and participating in the hub in these early months since we launched it. We've also introduced a marketplace app store within the hub, and this will continue to be built upon in 2026. It provides a foundation for both staff and agents to build and distribute applications and software that further support growth, productivity, similarly to how the iOS App Store supports an increased value of the iPhone. So that idea that we have a centralized app store that agents can access that focus really on how to grow their own business. Continuing to support our agents in softer and sometimes turbulent market conditions continues with our listing intelligence platform. This brings greater access to listing leads and data in markets across the U.S. and Canada. We are developing shared repositories of knowledge that further accelerate modernization of building software across all of our levels of the organization at eXp. And in a world where the cost to build continues to decrease with widespread access to AI coding tools, we want to allow for flexible long-term storage and advanced analytics with our data. We're really investing in an increasingly performant data infrastructure. It allows for secure and reliant access to business intelligence. And ultimately, it will really provide a strong competitive advantage for eXp and our agents because both shared repos as well as greater access to data throughout the organization really will be a bedrock for our single threaded leadership framework that Glenn spoke about earlier. So we're excited to get started. Denise Garcia: Great. Thanks. Now I'll open the call to our audience and the analysts on the stage here. [Operator Instructions] So first, I'll open the mic up for Tom White from D.A. Davidson. Did you have a question for us? Thomas White: Yes. Maybe a couple, if I could. I guess just on the fourth quarter revenue versus kind of gross profit growth dynamic. I think revenues were up like 9%, but gross profit was flat. And I guess when I try and think through kind of what drove the difference in growth rates there, I imagine sort of the percent of -- or number of capped transactions is a factor. But I guess I'm trying to like suss out the extent to which that higher mix of capped transaction is just sort of normal mix in your agent pool, like the better, more productive agents are the ones doing kind of a bigger chunk of the deals? Or is it sort of the impact of just some of the agent attraction stuff you guys are doing so that you're enabling sort of more agents to cap more quickly? And maybe as an aside, like how should we think about the gross margin kind of expectations that are kind of embedded in your outlook for the year? Jesse Hill: Yes, I can take that one, Tom. Thanks for the question. It's actually both. And it's probably divided down the middle. The seasonality of Q3, Q4 does see higher capping towards the later part of the year, right, to the point that you're sussing out. But it also is that we continue to attract and retain highly productive agents and then with a specific focus on highly productive teams, and that's the phenomenon that we've been talking about for a few years now, but it is continuing to apply some pressure to our margin percentage overall. I'd say I don't have the specifics on me, but it's probably about 50-50. If you just look at historic trend, you would definitely see that margin compression that happens every year in Q3, Q4 just due to the calendar year of agents capping. And then over time, if you look at that compression that we're seeing over the last couple of years from attracting more productive agents over time. And then actually -- and let me answer your guidance question or outlook on 2026. What we're currently modeling in that guidance is very similar trend to what we've seen in 2025. So slight compression, but offset partially by increased units coming through the business. And we're focusing on the improvement in unit economic to continue to drive the margin expansion on the EBITDA side. Thomas White: Okay. Maybe one more follow-up and then I can get back in the queue. But just any update on sort of thoughts about resuming the buyback. I don't know -- I think you guys were supposed to pay the second installment of the NAR settlement. Maybe it's in the second quarter, I can't remember, but just give us an update on what you're thinking there. Jesse Hill: Sure thing. And I can take that one, too. And to your point, our reduced buyback activity in 2025 was primarily driven by the NAR litigation, which we had the first tranche this past summer. We have the second tranche coming up the summer of 2026 here. So we did want to make sure that we were being good stewards and maintaining that $100 million cash threshold that we've set internally as a leadership team on the balance sheet. And so we drove that pause. We did finish with a pretty healthy $124 million. And so buyback is something, of course, long term that we want to continue to use a strategic tool in our capital allocation toolkit. But we're still evaluating in the short term what our cash needs are going to be this year and with that upcoming second tranche of the litigation. Denise Garcia: Great. I have one from the audience here, too. Could you speak to the strategic initiatives you believe will have the most meaningful impact on improving financial performance and restoring shareholder value over the next several years? Leo Pareja: Yes. No, I think I feel like this is a common question I've asked -- I get asked by agents all the time. So I'm assuming this is coming from an agent. So one of the things I employ them to do is to actually download TradingView and actually have a full sector on your phone, right? So if you're an agent and you're following eXp, I would encourage you to follow RE/MAX Incompass and all of the other public comps. And you become very aware of when the government does something, right? You'll be mining your business that then you'll kind of see the entire segment move down or up, right? If there is a good reporting on rates and good is defined by the eye of the beholder because sometimes it feels counterintuitive as they move up and down. So historically, our sector is very much tied to total transaction count. So in years where there's 4 million, the sector as a whole tends to be depressed. And in years where you have 7 million transactions, the sector goes up. Now with that said, to Glenn's comments, I think there's going to be a separation between the companies that are able to take advantage of the opportunity that AI is presenting itself. So I do think for some companies, it is a bit of lip service. We are a company that has a service that is repeatable and scalable. And I think businesses like ours, we -- if you see our performance from quarter-by-quarter last year, I think Tom was pleasantly surprised when we reported, we moved the expenses from Q2 to Q3. That is more tightly close to the guidance we've provided. And so you will see us being able to take advantage of that. And into Glenn's comments of like the last mile effect of the real estate industry, we believe will rely on high-performing agents. And not only are we going to streamline our expenses by leveraging the tools available, but we're really focused on creating and delivering tools that leverage the agents in their daily business, right? So there's going to be the leveraging from us from expense management and really cycling off of what historically has been SaaS expenses. So we're really leaning in on that, the platform that Glenn started and our engineers took over, I mean, it's 7-figure contracts. And so as we take advantage of that, I think long term, we're going to be able to improve margin, return better returns to our shareholders while keeping our flagship concept of agent-centric and building the most agent-centric company on the planet as still our North Star, but being able to take advantage of this moment in time with the technology available to us. Denise Garcia: Great. Thanks, Leo. And we have one more from the audience, also from an agent. This is probably for you, Leo. What is eXp Realty going to do to improve their toolbox and technology to attract high-volume listing teams and help the legacy agents get more listings in 2026? Leo Pareja: That's a great question, Denise. So we have been focused on listings. And for example, we just launched a pilot program in January through our FastCAP program. So our FastCAP program has really extended in reach. So since inception, we've had 20,000 registrants take it through. But [ the January ] cohort as a pilot, we partnered with realty.com and included seller jump-all leads and something like 1,800 leads were given out with multiple agents in the first 6 weeks, reporting multiple listings taken, 1, 2 listings taken in 6 weeks, which was actually even faster of an incubation period that we found. And there are several other seller products that I've been focused on integrating into our education platform. So what we're doing is we're making sure that in addition to providing tools is actually the training that accompanies it with it as we continue to scale. And so one of the concepts that I repeat because Glenn was the one who put the sentence in my head when I first got here, but I fundamentally believe it, is that we're a platform business, and that's very different than other folks. So we have initiatives with data where we really -- for the top producing teams that are highly proficient and have tech orgs inside of their businesses, we want to be able to deliver to them API capabilities. So as they build code and platforms using Vibe coding and taking advantage of the tooling that's available to them. But then we also have beautiful simple UI experiences for our solo agents that maybe don't have the scale or size or interest in building their own tech tools. So really, the concept is being able to meet agents where they're at, and we feel that way about support. So for example, agents can walk into a broker room and frame VR. They could call a 1-800 number. They could slack us. They can message us on the hub now and meet brokers where they're at or they can pick up the phone and dial a cellphone number and call their favorite broker. So that same methodology of meeting people where they're at and being agile and being able to have agents self-serve and use the tools necessary for them. Denise Garcia: Thanks, Leo. Thanks, everyone, for joining. As always, please stay connected by visiting expworldholdings.com for the latest updates on eXp news, results and events. Additionally, you'll find a recording of this call and our latest investor presentation on the Investors section of the site. This concludes the eXp World Holdings Fourth Quarter and Full Year 2025 Earnings Fireside Chat. Thanks for joining. Jesse Hill: Thanks, everyone. Glennn Sanford: Thanks, everyone.
Operator: Good afternoon, and welcome to Supernus Pharmaceuticals Fourth Quarter and Full Year 2025 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to hand the conference over to Peter Vozzo of ICR Healthcare, Investor Relations representative for Supernus Pharmaceuticals. You may now begin. Peter Vozzo: Thank you, Antoine. Good afternoon, everyone, and thank you for joining us today for Supernus Pharmaceuticals Fourth Quarter and Full Year 2025 Financial Results Conference Call. Today, after the close of market, the company issued a press release announcing these results. On the call with me today are Supernus' Chief Executive Officer, Jack Khattar, and Chief Financial Officer, Tim Dec. This call is being made available via the Investor Relations section of the company's website at www.ir.supernus.com. During the course of this call, management may make certain forward-looking statements regarding future events and the company's future performance. These forward-looking statements reflect Supernus' current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the Risk Factors section of the company's latest SEC filings. Actual results may differ materially from those projected in these forward-looking statements. For the benefit of those of you who may be listening to the replay, this call is being held and recorded on February 24, 2026. Since then, the company may have made additional announcements related to the topics discussed. Please reference the company's most recent press releases and current filings with the SEC. Supernus declines any obligation to update these forward-looking statements, except as required by applicable securities laws. I'll now turn the call over to Jack. Jack Khattar: Thank you, Peter. Supernus had a remarkable 2025 with significant progress made against our strategic objectives. The company achieved record total revenues of $719 million, delivered strong growth of 40% in revenues from our 4 growth products, successfully executed an integrated acquisition of Sage Therapeutics, obtained the FDA approval of ONAPGO and launched ONAPGO in the Parkinson's market. Our financial performance in 2025 once again underscored our emphasis on growing our core business despite the loss of exclusivity on both Trokendi XR and Oxtellar XR. With our 4 growth products, Qelbree, GOCOVRI, ZURZUVAE and ONAPGO, we have built a solid foundation for a new phase of accelerated growth for Supernus. During the fourth quarter of 2025, revenues from these 4 growth products accounted for approximately 76% of total revenues. Starting with ONAPGO, during the fourth quarter of 2025, ONAPGO generated net sales of $8.9 million, up from $6.8 million in the third quarter of 2025, and finished its first year on the market with $17.3 million in total net sales. Demand for the product continues to be healthy despite the announced supply constraints with more than 540 prescribers submitting over 1,800 enrollment forms since the launch of the product and through the end of January 2026. We have been focused on resolving the supply constraints that we discussed on our third quarter 2025 earnings call. Progress with the current supplier has been made, allowing us to resume new patient initiation while continuing to service our existing ONAPGO patients with maintenance therapy. Our current outreach effort of verifying health benefits and coverage includes more than 700 patients whose forms are currently in the queue for processing. In the fourth quarter of 2025, prescriptions grew by 29.6% and the number of prescribers grew by 28% compared to the third quarter of 2025. Switching now to ZURZUVAE. The brand had strong performance in 2025 with $32.8 million in collaboration revenues in the fourth quarter, and $53 million for the 5-month period since the closing of the Sage acquisition on July 31, 2025. Full fourth quarter 2025 U.S. sales of ZURZUVAE, as reported by Biogen, increased approximately 187% compared to the same period in 2024, and approximately 19% compared to the third quarter of 2025. The number of prescribers in 2025 doubled compared to 2024 with more than 70% being repeat prescribers. Total prescriptions in 2025 increased by more than 150% compared to 2024. Regarding Qelbree, the product had another year of robust performance with 21% growth in total annual prescriptions in 2025 compared to 2024, and as reported by IQVIA. Qelbree exceeded $300 million in net sales for the year 2025, delivering 26% growth compared to 2024. In 2025, the brand delivered double-digit prescription growth of 29% and 18% in both the adult and pediatric patient populations, respectively. For the fourth quarter of 2025, total prescriptions increased by 18% compared to the same period in 2024, while net sales increased by 9% as net sales were impacted by an annual gross to net deduction. This was due to an unexpected bill of $4 million received from one of the PBMs covering the full year of 2025, and which was fully reflected in the fourth quarter. For full year 2025, gross to net for Qelbree ended up approximately 49%. Our expectation for 2026 continues to be consistent with our previously disclosed target of 50% to 55%. Switching now to GOCOVRI. For full year 2025, net sales reached $146 million, increasing by 12% compared to 2024, and total annual prescriptions reached an all-time high of approximately 67,000, growing by 14% compared to 2024. The brand finished 2025 with strong prescription growth of 16% in the fourth quarter compared to the same period last year and with net sales of $38.6 million. Moving on to R&D. We initiated a follow-on Phase IIb randomized, double-blind, placebo-controlled trial with SPN-820 in approximately 200 adults with major depressive disorder. This study will examine the safety and tolerability of SPN-820 and its efficacy at a dose of 2,400 milligram, given intermittently twice per week as an adjunctive treatment to the current baseline antidepressant therapy. Our Phase IIb randomized, double-blind, placebo-controlled study of SPN-817 is ongoing with a targeted enrollment of approximately 258 adult patients with treatment-resistant focal seizures. This trial utilizes 3-milligram and 4-milligram twice daily doses. And for our SPN-443 program, we expect to initiate a Phase I single ascending and multiple ascending dose study in adult healthy volunteers in the second half of this year. We have completed our evaluation of the early-stage pipeline assets from the Sage acquisition. As a result, we will retain certain assets for internal development, and we will be seeking partnerships for the remaining assets. Finally, corporate development will continue to be a top priority for us as we look for additional strategic opportunities to further strengthen our future growth and leadership position in CNS through revenue-generating products or late-stage pipeline product candidates. With that, I will now turn the call over to Tim. Timothy Dec: Thank you, Jack. Good afternoon, everyone. As I review our fourth quarter and full year 2025 results, please refer to today's press release that was filed earlier today. We achieved record total revenue of $211.6 million for the fourth quarter of 2025, an increase of 21% compared to the same quarter last year. Excluding net product sales of Trokendi XR and Oxtellar XR, total revenue for the fourth quarter of 2025 increased 34% compared to the same quarter last year. Total revenue in the fourth quarter of 2025 was comprised of net product sales of $158.1 million, collaboration revenues associated with ZURZUVAE of $32.8 million, and royalty, licensing and other revenues of $20.7 million. This includes $15 million of licensing revenue recognized in the fourth quarter of 2025 related to the achievement of a regulatory milestone under our collaboration agreement with Shionogi. Please note, collaboration revenues represent approximately 50% of the sales of ZURZUVAE reported by Biogen. This increase was primarily due to the increase in net product sales of our growth products, Qelbree and GOCOVRI, as well as the addition of collaboration revenues from ZURZUVAE, and from the launch of ONAPGO in April of 2025. For the fourth quarter of 2025, combined R&D and SG&A expenses were $150.2 million as compared to $108.1 million for the same quarter last year. Operating loss on a GAAP basis for the fourth quarter of 2025 was $4 million as compared to operating earnings of $21.4 million for the same quarter last year. The change was primarily due to higher Sage operating costs in the fourth quarter of 2025, and incremental intangible asset amortization for ZURZUVAE and ONAPGO. GAAP net loss was $4.1 million for the fourth quarter of 2025 or a loss of $0.07 per diluted share compared to GAAP net earnings of $15.3 million or $0.27 per diluted share in the same quarter last year. On a non-GAAP basis, which excludes amortization of intangibles, share-based compensation, contingent consideration, depreciation and acquisition-related costs, adjusted operating earnings for the fourth quarter of 2025 was $48.5 million compared to $48.3 million in the same quarter of last year. Total revenues for the full year 2025 were a record $719 million. Excluding net product sales of Trokendi XR and Oxtellar XR, total revenue for the full year 2025 increased 27% compared to last year. Total revenues were comprised of net product sales of $626.6 million, ZURZUVAE-related collaboration revenues of $53 million, and royalty and licensing and other revenues of $39.4 million, including the aforementioned $15 million of licensing revenue received due to a regulatory milestone. During 2025, collaboration revenues represented sales reported by Supernus since the close of the Sage acquisition on July 31, 2025. Combined R&D and SG&A expenses for the 12 months ended December 31, 2025, were $591.8 million as compared to $430.4 million last year. The change was primarily due to higher SG&A expenses, including approximately $73 million of acquisition-related costs from the Sage acquisitions and approximately $50 million related to the Sage operating costs recorded since the closing of the acquisition. Operating loss on a GAAP basis for the full year 2025 was $62.3 million as compared to operating earnings of $81.7 million for 2024. GAAP net loss was $38.6 million for the full year 2025 or a loss of $0.68 per diluted share, compared to GAAP net earnings of $73.9 million or $1.32 per diluted share in 2024. On a GAAP non basis, which again excludes amortization of intangibles, share-based compensation, contingent consideration, depreciation and acquisition-related costs, adjusted operating earnings were $158.7 million compared to $183.7 million for last year. As of December 31, 2025, the company had approximately $309 million in cash, cash equivalents and marketable securities compared to $454 million as of December 31, 2024. The decrease in our cash was primarily due to the funding of the Sage acquisition, offset by cash generated from operations. The company's balance sheet remains strong with no debt and significant financial flexibility for potential M&A and other growth opportunities. Now turning to 2026 guidance. For full year 2026, we expect total revenues to range from $840 million to $870 million, comprised of net product sales, ZURZUVAE collaboration revenues and royalty and licensing revenues. Note, total revenue guidance for full year 2026 assumes approximately $45 million to $70 million of net sales from ONAPGO. As Jack mentioned, new patient initiation for ONAPGO begin in the first quarter of this year. For the full year 2026, we expect combined R&D and SG&A expenses to range from $620 million to $650 million. Overall, we expect full year 2025 (sic) [ 2026 ] operating income loss in the range of breakeven to a loss of $30 million. And finally, we expect non-GAAP operating earnings to range from $140 million to $170 million. Please refer to the earnings press release issued prior to this call that identifies the various ranges of reconciling items between GAAP and non-GAAP. With that, I will now turn the call back to the operator for Q&A. Operator? Operator: [Operator Instructions] Our first question comes from Andrew Tsai from Jefferies. John Cox: This is John Cox on behalf of Andrew Tsai. Congrats on the quarter. So -- just so we understand the current supplier can supply $45 million to $70 million of sales. And to get to that $70 million, can that be done by the current supplier? Or does the high end require you to lock in the second supplier, say, like earlier than 2027? Jack Khattar: Yes. For the current supplier, they'll be able to -- the plan is to get us supplied through 2026. So certainly, that will cover us for the guidance that we gave, the $45 million to $70 million. And then we expect the second supplier to provide us product in 2027. Now regardless of when in 2027, the second supplier comes in, the current supplier will be there for us to be able to bridge to the second supplier. So the plan is that we will have continuity of supply between the 2 suppliers with the current one covering 2026, maybe a little bit in 2027, depending on when the new supplier comes online. John Cox: Okay. And then maybe one more, if I can, on ONAPGO. To get to that second supplier, what kind of data, assuming nonclinical would ultimately be needed to obtain FDA approval. Is that kind of the ultimate gating factor here? Jack Khattar: Yes. Typically, you'll have to produce some batches at the new site or new supplier. You produce some stability data, key basic data, you put a package together, submit it to the FDA. And on an average, I mean, it could be 6 months review, 9 months review. We will get more clarity fairly soon in the next month or so. And then based on that, we will expect the approval, hopefully. So that's typically the time line and the kind of package. So the answer is yes, there will be no clinical study or data that you need to provide. Operator: Our next question comes from David Amsellem from Piper Sandler. David Amsellem: So 2 for me. First on ONAPGO, and I apologize if I missed this. I just want to clarify. So with the additional capacity, how much of underlying demand can you meet? Or maybe ask another way, can you fully clear the backlog, if you will, with the additional capacity that you now have in place? So that's number one. And then secondly, regarding the R&D organization with the integration of Sage, you mentioned you're taking on some early-stage products. And just wondering out loud, how you're thinking about prioritizing those, especially relative to your legacy pipeline assets and when we might get some updates on what you're going to bring forward into the clinic there? Jack Khattar: Yes. Regarding ONAPGO, the current supplier will certainly help us clear the backlog through the continuous supply that we will be able to have throughout 2026 and more than just the backlog, of course, and because we are initiating new patients, not just with the current situation, meaning the 1,800 forms or 700 patients in the process, of course, that number will continue to be refilled during the year as we continue to grow the number of forms and so forth. So we expect the current supplier to be able not only to clear the backlog, but also, of course, continue to provide for whatever needs we have throughout 2026 until we get the second supplier online. As far as the Sage R&D programs and so forth, I mean, these are really early-stage assets. So -- for now, we will be doing some early preclinical work, things like this to verify the activity, the mechanism of action, the selection of an indication and so forth. So there will be a lot of preclinical type of work that has to be done on these assets. So as far as prioritizing them within the portfolio that we have, we look at every product separately on its own merits from a timing perspective, market opportunity, ROI and so forth. So I mean, they will go through the same process of prioritization from a portfolio perspective. David Amsellem: Okay. And if I may just sneak in a follow-up. Does that mean with the early-stage assets you have and with your mid-stage assets in the pipeline, your BD focus is really more focused on market-ready and commercial stage assets. Is that a good way to think about it? Jack Khattar: Yes, that is correct. We are focused on revenue-generating situations, products on the market and potentially late-stage pipeline assets. So products that are in the pipeline that are at a later stage than our own pipeline. So they can get us to the marketplace or give us some other product launches, somewhere between '27 and '30, '31 time frame, that will be something that will be ideal for us. Operator: Our next question comes from Stacy Ku from TD Cowen. Stacy Ku: Congratulations on an earnings update and the ONAPGO supply update. So first, just as we think about the ONAPGO guidance for the year and the patient demand that clearly all the analysts are trying to triangulate around. Maybe first, could you talk about the learnings on the patient profile since launch? Maybe talk about the frequency of use that you're seeing. What we're trying to understand -- better understand, obviously, there's going to be a range, but how should we be thinking about the potential net pricing for a year of treatment? So that's the first question. And then when it comes to the resumption of the new patient initiations for ONAPGO, should we be thinking about that 1,800 enrollment forms is reflecting a more limited writing from clinicians despite the supply disruption? Just a bit of a point of clarification for our second question. And then the third, as we're just, again, trying to understand the enrollment forms, as the sales force is going back to the clinicians and patients, what kind of dynamics are you seeing in terms of ONAPGO demand and switches [indiscernible]. Our understanding is that behind the scenes with commercial reimbursement and infrastructure was kind of continuing even though we didn't know whether there's going to be supply or not. Happy to clarify the first question. Jack Khattar: Hopefully, I'll get all of them. I'll start with the first one. As far as the profile of the patient, I mean, these are folks that are advanced in the disease. A lot of the oral medications are not enough anymore. So they continue to have certainly a lot of episodes during the day. And they're not really well controlled with levodopa/carbidopa and with any of the other adjunctive oral therapy that they're taking. And therefore, they would be -- and in the physician's mind, they would be good candidates for subcutaneous continuous infusion for something that is different than levodopa/carbidopa, if that is the case, and that's what the physician is looking for. And therefore, they would choose something like ONAPGO, apomorphine as a molecule, as a drug for that patient. As far as the potential moving forward and where the net pricing is going to land, I mean, clearly, the product has been on the market a fairly short period of time, only 8 months or 9 months. Certainly, that will, over time, will calibrate depending on what we end up doing, if we do any contracting and so forth. But we talked historically about -- on an average, it's probably $105,000, $100,000 per year on a WAC basis per patient. Now that certainly assumes a certain usage, which we are starting to get a better feel for. I don't have the data as much as I would like to before I say that's exactly how people are using the product and how frequently they're using it. But the $100,000 typically assumes about a cartridge a day, give or take, to get to that price or cost per year -- per patient. And then the next question, I believe, was basically on the 1,800 forms and so forth. If I really understood the question, I mean, think about it, that's like a funnel, that's like a bucket of all the demand. So that's why we try to give you this number to give you an idea of what the demand is. And then clearly, as we process these forms as eventually as patients get the shipments eventually, you're going to lose some forms or some patients on the way. I mean that's typical in any process or any specialty type of product. Typically, that's what happens. And you could lose certain patients in the process for many different reasons as whether it's incomplete information, you can never finish the form or complete it, you'll be surprised sometimes how many phone calls you have to make, whether to the patient or to the doctor's office to even complete the form so that you can start processing it. And then when the hub starts processing the form and then doing the adjudication for insurance, reimbursement, you could lose some patients there. And then as time goes on, a patient may change their mind or their situation might change, medical situation. So for all these factors, clearly, the 1,800 don't necessarily end up being 1,800 patients at the end of the day. And I don't know what was it -- I don't know if there is another question after that. Stacy Ku: No, no, that's understood. I think we were hoping to hear whether or not more of these enrollment forms were being processed for reimbursement while waiting for the supply to be replenished. But understood. Just one quick follow-up to your answer on the first net pricing piece then. What kind of gross net would you have expected for a specialty product? Jack Khattar: For a product -- I mean, we've been in this space, I mean, typically, it ranges somewhere between 20% and 30% depending on the quarter, right? Because Q1 is typically on the higher end and then it decreases over time, and then the cycle starts again. I mean that's typically the range, 20% to 30%. If I were to guess, it's a pure guess at this point based on our experience in the category. Stacy Ku: Got it. And then last, if you may, if we could sneak one in on Qelbree. Just the Q1 dynamics in light of the normal seasonality and maybe some of the onetime impacts this winter, just curious how you all are thinking about the following quarter for Qelbree? Jack Khattar: Seasonality on Qelbree? Stacy Ku: Correct, for Q1. Jack Khattar: I mean Q1, typically, it's not a seasonality because of school or anything. Typically, it's your typical seasonality from an insurance point of view. And that's not just Qelbree and all products in general because of the high deductibles that patients are facing. So I mean, for the last couple of years, I think we were more like flattish from a prescription or maybe went up a little bit. So I mean it's going to fluctuate. I'm not saying that's exactly what will happen this quarter. But I mean you get some pressure. Now we also calibrate some of the co-pay business rules so we can help patients as much as possible in Q1. We typically do that to offset some of that pressure. So sometimes, we're pretty successful and actually prescriptions do grow nicely in Q1. So we'll see where we land, but nothing really unusual, I guess, I'd have to say versus previous years. Operator: Our next question comes from Kristen Kluska from Cantor Fitzgerald. Kristen Kluska: Jack and Tim, congrats on a great quarter of revenues and progress here. On ONAPGO and the second supplier, I wanted to ask if you can provide a little bit more color about the profile of the supplier. So for instance, if we see in 2027, 2028 that demand is continuing to outpace how you're thinking about it internally? Are they going to be the type of supplier that can be flexible and add more capacity for your product? How important has that component been in your decision-making when it comes to who's going to be best to supply this product? Jack Khattar: Yes. The second supplier is actually our own partner in Europe. So they have their own manufacturing facility, and that's the same facility that produces product for the European market. So it's exactly the same product. And obviously, they have significant experience in making the product. Capacity-wise, they have significant capacity, much larger capacity than the current supplier. And we're also -- I mean, have discussions with the third supplier. So I mean, our plans, obviously, is we're going to secure the supply for the long term. This is not a just 1-year situation. We want to make sure that should the demand be as large as everybody is expecting, clearly, we will have enough supply to meet that demand. So that's really the plan that we have in place and we are executing on. And that's why we feel pretty confident to the extent we can, obviously, that 2027, we should be really good for the second supplier and even beyond that. Kristen Kluska: Okay. And you had mentioned earlier that you'll have more clarity in a month or so. Is that just on what you'll exactly need to show in terms of more process runs or any comparability -- stability data, excuse me, that you need to conduct prior to getting that approved on board. Is that my understanding? Jack Khattar: Yes. I mean in the next month or so, we will be having more communication with the FDA. So we will have more clarity what are the different pieces. Again, the product is exactly the same product as is in the U.S., European and U.S. There are some differences in like specifications and things like this. But from a production point of view, it's exactly the same product. So we feel pretty good. But again, until we have that discussion, it will be difficult for us to know the exact timing and the extent of the package itself. Kristen Kluska: Okay. And then at what point during this cycle are you going to be comfortable enough telling physicians, hey, we're going to have more supply in X months from now, so you can kind of get patients towards this therapy again. I know you've talked about the fact that this community has been really supportive of you for the fact that you've worked hard for these patients. You've had 4 drugs approved for this community. So I'm just trying to understand at what point they can kind of give the patients the green light that you don't have to wait much longer a solution is coming. Jack Khattar: I mean that, in a way, it's now happening, meaning we have already communicated to physicians that we are back to normal, so to speak. We will be processing forms. We will be initiating new patients. We will be sending shipments to patients. So we want them to continue to submit forms as they had. I mean it was really remarkable the support we got it from the physician community. Last time we talked we had 1,300 forms, even despite the supply constraint, we were up to 1,800, as I mentioned in my prepared remarks. So the physicians continue to think of ONAPGO as a really -- real treatment for a lot of the patients, and they're with us, and they'll continue to serve their patients. So we're pretty much at normal. Now I can't say normal, normal because we have to work through the backlog. So I mean, things don't happen like overnight where overnight, you're going to initiate another 700 patients, right? So it's going to be over time that given the capacity we have, you have to think about nurses, initiations, all that. So we will be able to provide a little bit more update later on by May, clearly. But as far as keeping the demand and being able to serve our patients, we are in that position right now. Operator: Our next question comes from Pavan Patel from BoA. Pavan Patel: Jack and Tim, so first, congrats on the supply constraint resolution. I think this is a best case scenario. So really happy with you and the patients. I know our own survey work has shown that the demand for this product is really strong among both movement disorder specialists and patients. So my first question is, as you work through initiating these 700 patients out of the queue, should we expect a temporary drag on ONAPGO's gross to net in the first half of 2026? And will a significant portion of these patients require bridge supply or quick start programs while their benefits are being verified? And then I guess just like a modeling question, can we do more than $70 million with the supply that your current supplier is able to offer you, assuming that state and the second supplier are not online in 2026? And then just maybe one on ZURZUVAE since I think that's a topic worth hitting as well. I think the 70% repeat prescriber rate is pretty strong. So maybe as you plan your commercial efforts in 2026, are you shifting your focus towards driving deeper penetration volume among those existing repeat prescribers? Or is the priority going to be start -- start being to expand the absolute number of OB/GYNs and psychiatrists writing their first prescription? Jack Khattar: Yes. Maybe I'll start with the last question. On ZURZUVAE, clearly, I mean, we are still -- and the way we think about it, we are still launching the product. That's the mindset we always have with new products, clearly, always launching. And as we mentioned earlier, this is a market that hasn't been really prepared a lot before the product was launched because the initial indication was supposed to be MDD instead of PPD. So basically, the product was launched and the market is being built at the same time. So we still have a lot of work to do in building the market, education-wise. The brand actually enjoys a very, very high awareness, but we need to turn that awareness into action. We need to turn that awareness into confidence by physicians and to have the courage to actually screen, diagnose and treat PPD. So we will continue a lot of the great programs that Biogen and Sage had actually had started way back when they launched the product and into 2025. We will continue a lot of these type of programs into 2026. And actually, this year in 2026, and some people may have already seen the commercial, we have DTC efforts as well to educate as well the consumer and make more and more women and mothers comfortable in talking about their condition and come forward and seek treatment because there is treatment and they can really feel much better after taking a product that is only a 14-day treatment and not waiting too long for it to actually kick in only within day 3. So a lot of activity behind ZURZUVAE because we're only scratching the surface at this point as far as the potential of this product. I mean, launch to date, we treated around 20,000-plus patients. That's it. And -- as some of you probably recall, every year, you have 500,000 women who actually experience symptoms of PPD and only about half of them get diagnosed and then 60% to 70% of those are treated. So there's a lot of people there who need help and where ZURZUVAE can really help them pretty well. As far as current prescribers or new prescribers, I mean, like every other product, when it's still early in the launch, you're certainly getting a lot of new prescribers, clearly from a reach perspective. And also as time goes on, you can have more frequency on these physicians. And certainly, those prescribers who are current prescribers, actually, the data shows us that 70% of the prescribers are repeat writers. So clearly, we are getting a lot of business from the current prescribers, that speaks for, of course, also the high satisfaction level with the product and how it's performing. So once the physician actually takes that first step and has the confidence, the conviction and the courage to diagnose and treat. And once they see the results from the first patient, they tend to be repeat writers. And that's really very encouraging for the product at this stage. Moving on to ONAPGO. I mean, could we do more than $70 million? That is always potential. I mean that is also -- could happen. I don't know right now. But everything we have today, all the information we have as far as demand and everything got us to the point where we believe the range is really $45 million to $70 million. Could it be that we could go above $70 million? I truly don't know right now. Otherwise, we would have had a higher end if we had comfort that we could go above that. So we feel pretty good right now where we stand on ONAPGO and the supply situation, and that's -- so the guidance that we gave is really to help folks to see where the goalposts are on both ends. Pavan Patel: And then just on the gross to net in the first half of '26, do you think that... Jack Khattar: I'm sorry... Pavan Patel: ONAPGO... Jack Khattar: Yes. I mean for ONAPGO on the gross to net, as I mentioned earlier, I mean, it's probably going to be somewhere in the 20% to 30% again, higher in Q1 typically and lower as the year goes on because typically, Q1, you're going to have more incentives and things that will pressure the gross to net. Operator: Our next question comes from Annabel Samimy from Stifel. Jack Padovano: This is Jack on for Annabel. Congrats again on the quarter. Just quickly on the -- for the CNS pipeline products for 817 and 820, do you have anything you can give us on the pace of enrollment there for either trial and when we might be expecting top line data? And then on BD, are there any particular areas of focus you're looking at for new products? I know you've mentioned previously possibly broadening scope outside of CNS, potentially expanding into other areas like in women's health now that you have ZURZUVAE. Have those priorities changed at all? And are you looking more at stand-alone specialty commercial products or small portfolios of assets? Jack Khattar: Yes. Regarding the CNS, the pipeline on 817 and 820, I mean, 820, we just basically initiated the trial. So that's still early as far as enrollment. But you would expect an MDD trial to recruit much quicker than typically an epilepsy trial. So for 820 and 817, both trials, we're looking at data sometime in 2027. It's not going to be this year. Hopefully, as time goes on, we'll have a much better trajectory, specifically on 817 because epilepsy trials tend to be much slower from a recruitment point of view. And also, these are multicenter trials, specifically the one in 817, which is also geographically extends beyond the U.S. So typically, those are also -- could potentially be slower. So -- but data is not going to be any time before 2027. As time goes on, maybe in May or August this year, we'll be able to give you a better feel, is it first half, second half, first quarter, fourth quarter, whatever, we'll update folks as time goes on. As far as BD, absolutely. I mean, our focus has been CNS will continue to be CNS, and we're agnostic, whether that's neurology or psychiatry. And yes, we did say historically that we are willing to go outside CNS. And obviously, the Sage acquisition in a way, overlapped on both. It is a CNS product, but it got us into women's health. So clearly, that's an area we are looking at right now. And our priorities will continue to be revenue-generating, cash flow generating opportunities. And if there are any assets there that are pipeline assets, our preference would be more on later-stage assets. Again, that could potentially give us new product launches in the '27 to 2030, 2031 time frame. So that's really the prioritization that we have and what we're working towards from that perspective. And as Tim said, we have a nice clean balance sheet. So we have flexibility on whether the transaction is a product, is it a company? Is it a portfolio of products? So I mean that gives us some flexibility there, obviously. Operator: This concludes the question-and-answer session. I will now turn it back to Jack Khattar for closing remarks. Jack Khattar: Thank you for joining us on this call today. 2025 was a special year for Supernus. It marked our 20th year anniversary and the completion of our successful transition from our legacy products, Trokendi XR and Oxtellar XR. In 2025, Supernus delivered one of its best performances ever with record revenues of $719 million behind the robust performance of its growth portfolio consisting of Qelbree, GOCOVRI, ZURZUVAE and ONAPGO. Supernus has now a diversified portfolio of growth products where our future success is not solely dependent on one single product. We expect to see continued healthy growth from Qelbree and GOCOVRI, augmented by significant growth from ZURZUVAE and ONAPGO, 2 products that have been on the market for 2 years or less and have a significant market opportunity. In addition to our 4 growth products, we continue to advance our pipeline and to explore corporate development opportunities to position Supernus as a long-term growth company while generating at the same time, strong cash flows behind the strength of our expanded product portfolio and through the efficiency of our operations. Thanks again for joining us this afternoon. We look forward to providing you with updates throughout the year. Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
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.
Operator: Greetings, and welcome to the Slide Insurance Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to hand the floor over to the Slide team to begin. Unknown Executive: Thank you, and good morning. With us today are your hosts, Bruce Lucas, Chairman and Chief Executive Officer of Slide; and Andy Omiridis, Chief Financial Officer. By now, everyone should have access to our earnings release, which was published yesterday after the market closed and can be found on our website at ir.slideinsurance.com. Before we begin our formal remarks, I need to remind everyone that part of our discussion today may include forward-looking statements, which are based on the expectations, estimates and projections of management regarding the company's future performance, anticipated events or trends and other matters that are not historical facts. Forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties and other factors that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer all of you to our earnings release and recent filings with the SEC for a more detailed discussion of the risks and uncertainties that could impact the future operating results and financial condition of Slide. Our statements are as of today, February 25, 2026, and we undertake no obligation to update any forward-looking statements we may make, except as required by law. In addition, this call is being webcast, and an archived version will be available shortly after the call ends on the Investor Relations portion of the company's website at www.slideinsurance.com. With that, I'd now like to turn the call over to Chairman and CEO, Bruce Lucas. Please go ahead. Bruce Lucas: Thank you, and welcome to our fourth quarter 2025 earnings call. We appreciate your continued interest in Slide and are excited to be speaking with you today. 2025 was a significant year for Slide. We took the company public and continue to demonstrate the ability of our tech-enabled coastal specialty focus to deliver the best top and bottom line performance in our sector, and we believe the best is yet to come. We closed out the year with another industry-leading performance. We delivered fourth quarter results that materially outpaced our prior guidance for gross premiums written and net income, primarily as a result of higher voluntary sales, better retention ratios, favorable loss development and assumption activity from Citizens Insurance. Our voluntary sales in the fourth quarter showed strong performance once again, and we believe the trend for year-over-year higher top line growth will persist in 2026. For the quarter, we meaningfully accelerated our gross premiums written, which increased by 57% year-over-year to $618 million. We were opportunistic with respect to the ongoing Citizens depopulation and assumed a significant number of policies in the quarter, driving another strong top line performance. Our vast data set and technology-enabled underwriting approach allows us to find policies and citizens with very attractive return characteristics. We expect to continue to be opportunistic with respect to Citizens depopulation efforts in 2026, albeit at a lesser level as we believe there will be fewer policies that meet our criteria to assume. However, we expect to grow our gross premiums written in 2026 year-over-year as a result of higher policy retentions, higher voluntary sales and the launch of new states in the Northeast and California. In addition to our strong top line results, Slide produced $170 million in net income in the quarter, more than doubling the $75 million in the prior year quarter, which represents yet another quarterly record for Slide. Along with net income, fourth quarter return on equity was once again strong at 16.4% in the quarter. For 2025, Slide produced a 57.4% return on equity, notwithstanding the substantial capital raise in the second quarter from our initial public offering. Meanwhile, our conservative approach to underwriting and reserving continues to lead to best-in-class margins with a quarterly combined ratio of 38% versus 60.9% in the prior year period. Quite simply, our fourth quarter and full year 2025 performance was once again clear evidence of the power of the Slide business model. Our long-term value proposition continues to deliver excellent earnings and attractive returns on equity, creating long-term shareholder value. All of these accomplishments provide us with significant momentum as we progress through 2026. We have carefully and thoughtfully created a high momentum coastal specialty insurer as evidenced by our industry-leading performance, and we have the strongest balance sheet in the coastal specialty sector. Slide is the only coastal specialty insurer to surpass $1 billion in book value, ending the year at just over $1.1 billion, along with $2.9 billion of assets, only 2.9% debt-to-capital ratio and over $1.2 billion in cash and cash equivalents. Our superior balance sheet and future earnings give Slide ample capital to scale faster than its peers, which is a tremendous market advantage. We intend to use our balance sheet and profitability to further expand our geographic footprint in 2026. We have successfully established ourselves in Florida and South Carolina, but as previously mentioned, it is time to pivot toward growing our operations and bringing our unique skill set to other catastrophe-exposed markets. To that end, we continue to produce strong voluntary sales in South Carolina during the fourth quarter, and we believe this trend will continue through 2026. Importantly, we remain on track, pending final regulatory approval to begin writing by peril tailored policies in New York and New Jersey in the first half of 2026, Rhode Island in the second half of 2026, and we expect to launch an excess and surplus product in California in the next 30 to 60 days. As we diversify into these new geographies, we will utilize our decades of experience in our proprietary [ Procast ] technology to underwrite policies that enhance our portfolio, manage our concentration of risk and our reinsurance expense, all while optimizing profitability. We expect to expand thoughtfully in these new states using our large data set and balance sheet to generate growth and enhance bottom line results. We have achieved extraordinary growth from our start-up origins, far exceeding our expectations. Since Slide's launch in 2022, we have produced the best top and bottom line results of any coastal carrier in my career. Since 2022, we have achieved a 55% compounded annual growth rate in gross premiums written while delivering a 7,399% compounded annual growth rate in net income. Our track record is unmatched in the industry, but we are not resting on our prior success. We believe that there is a tremendous long-term opportunity ahead of us, and our results to date have positioned us to successfully continue on this trend moving forward. We're poised for continued growth in 2026 with double-digit increases in policies in force and gross written premiums in our expanding footprint outside of Florida. Our strategic diversification will establish Slide as a leader across multiple regions in catastrophe-exposed homeowners insurance, fueling our growth engine for years to come and delivering sustained long-term success and shareholder value. In the fourth quarter, we repurchased $20 million in equity at an average price of $16.38 a share. On our prior earnings call, I noted that Slide's earnings and balance sheet growth are substantially outpacing our prior estimates, and this trend accelerated in the fourth quarter as evidenced by $170 million in net income in the quarter versus our guidance of $115 million to $125 million. I expect our earnings to be on a strong upward trend through 2026, and we will deploy excess capital in a manner that increases shareholder value. At current trading levels, I fully expect to opportunistically repurchase our stock throughout 2026 as the company has more than enough capital to meet our business plan for growth while retiring undervalued common stock. There are several reasons why we intend to continue our share repurchases in 2026. First, as mentioned, Slide has is an abundance of capital at its disposal and the earnings power of the business is significantly outpacing our prior estimates. We expect that 2026 will produce gross written premiums in the range of $1.85 billion to $1.95 billion and after-tax net income between $455 million and $470 million. As of yesterday's closing price, Slide is trading at less than 2x book value and a sub-5 trailing P/E ratio despite producing a 57% return on equity in the prior year. Our current forward PE ratio for 2026 is similar to our trailing metrics. At these levels, it is very accretive for Slide to retire common stock that is undervalued until a more normalized valuation is reflected in our share price. Our incredible success is a team effort, and I would be remiss if I did not thank all of our employees for their relentless efforts to make Slide in the company it is today. I'm extremely proud to work with you and truly appreciate your sacrifice for our company. We appreciate your continued support of Slide. And with that, I'll now turn the call over to Andy Omiridis to provide some color on our excellent fourth quarter and full year 2025. Anastasios Omiridis: Thank you, Bruce, and good morning to everyone. For the fourth quarter of 2025, gross premiums written were $618.5 million, a 57% increase compared to $394.6 million in the prior year period. Strong top line growth was primarily driven by the acquisition of additional policies from Citizens as well as relatively consistent year-over-year renewal rates of existing written policies and a strong increase in commercial residential premiums. At the end of the quarter, we had approximately 493,500 policies in force, up 44% from 1 year ago and up 40% from September 30. In the fourth quarter, Slide assumed approximately 152,000 policies from Citizens. As a reminder, all Citizens policies assumed have different renewal dates, assume premium and renewal premium, which can create lumpiness in how premiums earn through in forward quarters. Total revenue of $347 million increased 46% compared to $238.5 million in the prior year period, primarily attributable to the assumption of policies from Citizens and renewals of existing policies driving an increase in net premiums earned. During the fourth quarter, net losses and loss adjustment expenses incurred were $27.1 million with no losses from significant storms. This compared to $59.1 million in the year ago quarter, which included catastrophe losses of $32.1 million from Hurricane Debby, Helene and Milton. The company takes a conservative approach to reserving for losses. Our loss ratio for the fourth quarter of 2025 improved to 8.3% compared to 26.3% in the prior year period, reflecting favorable prior year development. Policy acquisition and other underwriting expenses in the quarter were $42.3 million compared to $29.1 million in the prior year period. The increase was primarily attributable to greater policies in force on a year-over-year basis and greater investments in technology. G&A expenses were $51.4 million compared to $45.7 million in the prior year period due primarily to growth in staffing to support the company's continued expansion. Our combined ratio improved to 38% compared to 60.9% in the prior year period, primarily as a result of increased net premiums earned from the growth of policies in force, a decrease in cat losses from both hurricane and non-hurricane weather activity and release of reserves related to non-cat events. Net income more than doubled to $170.4 million compared to $75.1 million in the prior year period. Diluted earnings per share for the fourth quarter of 2025 was $1.23 per share. Return on equity was 16.4% during the fourth quarter and 57.4% for the full year. Turning to our balance sheet. As of December 31, 2025, we had cash and cash equivalents of $1.2 billion, an additional $481.8 million of restricted cash held for the benefit of our captive reinsurance sales, invested assets of $593.7 million and outstanding long-term debt of $33.7 million. We believe our balance sheet will enable the company to continue to profitably grow our business over the long term. In the fourth quarter, we repurchased approximately 1.2 million shares at a weighted average price of $16.38. There is approximately $80 million available under our $120 million share repurchase program. I would like to give further detail on the 2026 guidance that Bruce provided. As Bruce stated, 2025 marked a key evolution for Slide as we scaled rapidly through Citizens depopulation and began building our presence in additional catastrophe prone areas outside of Florida. In 2026, Slide expects to generate gross written premiums in the range of $1.85 billion to $1.95 billion, and the company expects to generate net income in the range of $455 million to $470 million. For 2026, top line growth is expected to be driven primarily by sustained organic expansion, including double-digit increases in policies in force and premium outside of Florida, complemented by selective growth opportunities within Florida that reach our return threshold. We expect our established presence in Florida to continue to flourish while we grow into a geographically diversified leader in catastrophe-exposed homeowners insurance. With that, I thank you for your time, and we will now open up the call for Q&A. Operator? Operator: [Operator Instructions] Our first question is from Tommy McJoynt with KBW. Thomas Mcjoynt-Griffith: The first one here is just on your opportunity going forward with continuous Citizens takeouts through the depopulation efforts. We can see that the number of policies that are with Citizens have come down a lot over the past couple of years. So can you talk about what we should expect going forward? Is there a constant sort of churn within Citizens that policies continuously get added and then become available for depopulation? Or is the opportunity set just a lot more limited going forward? Bruce Lucas: Good question, Tommy. The answer is both. So you have front-end voluntary underwriting taking place to Citizens are adding about 8,000 policies a month. Now not all of those policies are viable. But let's just say as a baseline number, there's 100,000 policies that they're adding to their portfolio annually. And then you have to look at the existing policies. The main driver as to whether or not those policies are a good fit is going to be the reinsurance cost. And so we don't know what the reinsurance market is going to do this year. By all indications, it appears to be a down pricing market, which is good for the Florida consumer. But that would open up a new tranche of policies that would look good to us. So we do think that there is ongoing opportunities at Citizens. I cannot quantify what that is at this point in time. But suffice to say, it is a smaller opportunity than what we have seen in prior years. Thomas Mcjoynt-Griffith: And then just second topic to talk about here. You alluded to it there briefly. We've certainly seen the 1/1 headlines about what happened to property cat reinsurance rates coming down quite significantly at the January 1 renewals. Can you talk about your expectations and what's embedded in your guidance for your cost of reinsurance? And just remind us sort of when it renews, is it 6/1 focused? How much of the program renews each year versus multiyear? Yes, just talk about that. Bruce Lucas: Yes. Another really good question. So we have not received quotes yet from our traditional reinsurance markets. Our reinsurance submission went out this week. So we expect to have a little better understanding of where pricing is going to fall in the next couple of months. But I will note that we did recently place a large ILS bond. It's about $320 million of limit. And that bond risk-adjusted year-over-year was down over 20%. Now I don't know if that's going to be where the traditional reinsurers come in. So I'll just avoid any guidance on that point. Suffice to say, our guidance does have a reduction in reinsurance expenses embedded within it. But we don't know the extent of what that reduction will look like until we get a little further along prior to our 6/1 renewal. Operator: Our next question is from Paul Newsome with Piper Sandler. Jon Paul Newsome: I wanted to see if you had a few more thoughts on the competitive environment. We hear just a lot about price declines, particularly in Florida, but even in other areas. And I was wondering, in your view over the last quarter, has it changed materially? Has it -- how has this affected where you're thinking about growing geographically or any other strategic changes that the environment may have led you to adjust your situation? Bruce Lucas: Yes. I mean, Paul, it's a great question. It's one I get often. We're really not seeing big swings in pricing. There are a lot of newcos that have come in very thinly capitalized. They came in thinking they'd get this great opportunity from Citizens that isn't there anymore for them in the scale that they were planning. They could always reduce rates a little bit to try to get an underwriting advantage, but that would be extremely detrimental to their bottom line results and balance sheet. Right now, the market is trending a little lower, but I'm not seeing big swings. We'll know more once we see what reinsurance pricing looks like because 70% of our premium dollar or more is actually going toward the reinsurance component in the policy premium. So that's the big needle mover, and we need a few more months to go through that renewal process to get a better understanding of what that looks like and its potential impact on rate. But I do feel confident in stating a couple of things around reinsurance. First, I believe that there is -- even with the reinsurance price decline, margins are going to be maintained. They go lockstep with one another. So bottom line numbers should be unaffected by a rate decrease. Second, there are tremendous reinsurance synergies to be gained by expanding our footprint outside of Florida and South Carolina. And that is what we are really focused on more than anything else. We expect to launch California on excess of surplus lines in the next 30 to 60 days. We are on track to launch Northeastern states, New York, New Jersey and later this year, Rhode Island. And there are a lot of other E&S pockets out there that we are going to launch later this year. So we think that even with a decline, potentially a small one in rates this year, we still believe we're on an upward momentum trend for top line growth given the diversification, new state launches and our underwriting at slide has only accelerated over the last 9 months within Florida. And so that's a good trend to have at this point. Jon Paul Newsome: Is your expectation for lower reinsurance costs in guidance prospectively mainly a function of the diversification benefit that you would get when you move outside of Florida? Or is it you're actually thinking that you've got a little bit of expectation that the actual ultimate sort of apples-to-apples prices could fall? Bruce Lucas: It's both. I mean, definitely, the latter risk-adjusted rates, I believe, will come down in 2026. I just can't comment on what the magnitude of that is going to be and certainly don't want to be in a public forum negotiating what I think that's going to be with our reinsurance partners. But I do think risk-adjusted rates are lower and our cat bond really reflects that. But you also pick up overall diversification benefit on your reinsurance tower as you spread your footprint across a wider geography. Operator: [Operator Instructions] Our next question is from Alex Scott with Barclays. Taylor Scott: First one I have for you is on some of the home affordability initiatives that are out there. Could you talk about what you're seeing in the market and how, if at all, some of that could or may not affect your plans, just given how strong your profitability has been? Bruce Lucas: Yes. I think you're probably referencing the comments by Governor Hochul in New York about 30 days ago. Let's just hope that does not happen. I mean these coastal catastrophe-exposed areas don't tend to fare well when there is a profitability cap. And the reason for that is you have no downside on losses, but you have an upside on profitability. And you really need both of those to be free market exercises because over the long haul, you're going to have some down years there on losses, you're going to have some up years, you average them together, and it becomes a very sustainable model. We'll see what the New York legislature puts in place. We're definitely focused on it because we plan on launching New York very soon. Suffice to say that once we get a better understanding of the proposals, we can give more clear guidance and comments around that market in particular. But I do firmly believe that they put in profitability gaps in New York, you're actually going to see insurers pull out of the state and create an even bigger crisis. And a great example of that would be the California admitted market. You can see it on full display. So time will tell. But right now, I don't have any other insight other than she made some comments, the governor about capping profitability of homeowners companies historically. Taylor Scott: Yes. That's helpful. And a good segue into my next question, which was potential for the E&S market in California. I know you mentioned you'd be launching that soon. And I appreciate you probably don't want to provide like break that out in the guidance, but I wanted to get a feel for how impactful you expect that to be relative to the guidance you've given. Is that a significant contributor to your 2026 premium growth? Bruce Lucas: It's a part of it. I wouldn't say it's significant, but it is definitely a part of it. What I will say is that within our guidance expectations, we do have a premium number that I'm not going to announce publicly that we expect to achieve in California this year. But if I were taking the over under on that number, I'd probably take the over. I think the opportunity there is tremendous. It's the largest insurance state in the country. There is still an admitted insurance crisis in California. Their plan is still adding a tremendous amount of exposure. So the opportunity is still very much attractive. And I think that there is a strong likelihood that we will outperform our internal expectations in California this year. Operator: Our next question is from Matt Carletti with Citizens. Matthew Carletti: Just a numbers question for me. Andy, in your comments, you mentioned there were some favorable prior period development and obviously low cat. I know there's no named storm. Do you have -- can you provide those numbers, just what the dollar impact of favorable was as well as just weather cats in the quarter? Anastasios Omiridis: Sure. So the number was $27.5 million, Matt, for the quarter. And I'm sure what was -- because it was a little muffled. What was the rest of your inquiry? Matthew Carletti: Just the cats in the quarter. I know there wasn't any named storm, but was there kind of other weather that was on the cat. Anastasios Omiridis: No, there really wasn't any -- it's literally it was -- and the breakdown was -- because we have disclosed it in the K, which comes out on Friday, it's '24, '23 and '22, but it's all prior year development and no cat changes our activity. Bruce Lucas: Yes. And typically, Matt, I'll add that fourth quarter is generally the best loss ratio quarter of the year. Provided you don't have a hurricane in October, loss ratios are always extremely low in Florida in the fourth quarter. So we're not really surprised by the result, but we did have the favorable development, PYD year-over-year of $27.5 million, which helped our numbers some. But I mean, we still produced, call it, $150 million in net income even without that. Operator: There are no further questions at this time. I would like to hand the floor back over to Bruce Lucas for any closing comments. Bruce Lucas: I would just like to thank everyone for participating on today's earnings call. Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation.
Operator: Good day, and thank you for standing by. Welcome to the Jazz Pharmaceuticals Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, John Bluth, Head of Investor Relations. Please go ahead. John Bluth: Thank you, and good afternoon, everyone. Today, Jazz Pharmaceuticals reported its Fourth Quarter and Full Year 2025 Financial Results. The slide presentation accompanying this webcast is available on the Investors section of our website, along with the press release and annual report on Form 10-K for the fiscal year ended December 31, 2025. On the call today are Renee Gala, President and Chief Executive Officer; Sam Pearce, Chief Commercial Officer; Rob Iannone, Global Head of R&D and Chief Medical Officer; and Phil Johnson, Chief Financial Officer. On Slide 2, I'd like to remind you that today's webcast includes forward-looking statements, such as those related to our future financial and operating results, growth potential and anticipated development, regulatory and commercial milestones which involve risks and uncertainties that could cause actual events, performance and results to differ materially from those contained in these forward-looking statements. We encourage you to review these risks and uncertainties described in today's press release and under the caption of Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2025, and our subsequent filings with the SEC. We undertake no duty or obligation to update our forward-looking statements. As noted on Slide 3, we will discuss non-GAAP financial measures on this webcast. Descriptions of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures are included in today's press release and the slide presentation available on the Investors section of our website. I'll now turn the call over to Renee. Renée Galá: Thanks, John. Good afternoon, everyone, and thank you for joining us to discuss Jazz's Fourth Quarter and Full Year 2025 results, as well as our outlook for 2026. I'll begin on Slide 5. Jazz had an exceptional year in 2025, representing our 21st consecutive year of topline revenue growth and underscoring our commitment to operational excellence as we deliver meaningful innovation for patients. We achieved record total revenue in 2025 of $4.3 billion. This included fourth quarter revenue of $1.2 billion, reflecting 10% year-over-year growth and our highest revenue quarter ever. We expanded our portfolio through multiple approvals and launches. Following our acquisition of Chimerix in April, we rapidly received approval of and launched Modeyso, bringing this new therapy to patients who previously had no approved drug options. From its launch in August, Modeyso generated $48 million in 2025 revenue. In October, we received approval of Zepzelca in combination with atezolizumab in the first-line maintenance setting following the strong overall survival data presented at ASCO in June. Our most significant R&D progress came with the presentation of practice-changing data from our first randomized Phase III clinical trial of zanidatamab supporting the opportunity for Zani to become the HER2-targeted agent of choice across a number of tumor types. Zanidatamab in combination with atezolizumab in chemotherapy demonstrated more than 2 years of median overall survival in first-line HER2-positive metastatic GEA, an unprecedented survival benefit for these patients whose 5-year survival rates remain below 10%. In addition to our outstanding execution on the commercial and regulatory front, we resolved nearly all major litigation for the company. We settled outstanding ANDA litigation for Epidiolex, increasing the runway into the very late 2030s, and we resolved the majority of litigation in our rare sleep franchise. These achievements are all underpinned by our strong financial position and performance, which Phil will cover later in the call. As we look ahead to the next decade and beyond, we are sharpening our strategic focus on rare disease. Our rare disease strategy is centered on strengthening our current franchises and expanding into new areas of rare disease, supported by multiple dynamics that make this space attractive for Jazz as outlined on Slide 6. Built on the capabilities we have developed over many years and our long-standing commitment to delivering life-changing medicines we believe Jazz is particularly well suited to have a meaningful impact for patients with rare disease. We look forward to announcing future pipeline advancements and new business development transactions. Our proven track record in corporate development, as outlined on Slide 7 includes a number of successful value-creating transactions in rare disease. For example, we acquired zanidatamab through a licensing agreement with a modest upfront payment. Since then, we've made significant progress with an approval in second-line BTC, practice-changing data in GEA and what is now an extensive development program across breast and other HER2-expressing cancers. With the Chimerix acquisition, in addition to securing Modeyso, we generated significant financial value by recognizing a deferred tax asset that will reduce our future cash taxes by over $200 million. And as announced in January, we sold our priority review voucher for $200 million in gross proceeds, half of which will flow to Jazz. In fact, each of the deals outlined here has added new areas of strength and expertise, which we intend to leverage to continue building a more valuable company. 2025 was an outstanding year for Jazz. One that we're proud of and one that provides us with immense confidence in the future. We are building upon this momentum in 2026 as we prepare for the potential launch of Zanidatamab in GEA and sustain the launch execution for Modeyso and Zepzelca. We also remain focused on reinforcing the differentiated profiles of Epidiolex and Xywav as the leading branded treatments for epilepsy and narcolepsy, respectively. In parallel, we continue to advance our R&D pipeline and pursue a business development strategy that is aligned with our rare disease focus, aiming to deliver durable growth and long-term value creation for patients and shareholders. I'll now turn the call over to Sam to discuss our commercial performance. Samantha Pearce: Thanks, Renee. I'm pleased to share the strong commercial execution we delivered across our diversified portfolio in 2025. Starting on Slide 9 with our rare sleep therapeutic area, which includes Xywav, Xyrem and High-Sodium Oxybate Authorized Generic royalties, we delivered more than $2 billion in total revenue in 2025, including $559 million in the fourth quarter. Xywav revenue grew 12% to approximately $1.7 billion for the year. In the fourth quarter, Xywav generated $465 million representing 16% growth compared to the same period in 2024. Our sleep team delivered exceptional performance in 2025, and we remain committed to providing a safer, low-sodium option for patients with Narcolepsy and IH? As estimated by the FDA, Xywav is superior for High-Sodium Oxybate based on the greater safety provided by a low sodium medicine. These benefits continue to resonate with physicians and patients, driving approximately 500 net patient adds in the fourth quarter and more than 2,000 net patient adds in 2025, including a 34% increase in net active IH patients. Xywav remains the #1 branded treatment for Narcolepsy and the only FDA-approved treatment for IH. Field execution continues to be supported by our disease awareness digital campaigns across both Narcolepsy and IH. These efforts are increasing awareness of these distinct disease states, the availability of Xywav and encouraging patients to engage in treatment discussions with their health care providers. We enter 2026 in a position of strength with more than 16,000 patients taking Xywav. Two generic versions of High-Sodium Xyrem are entering the market and are expected to negatively impact High-Sodium Xyrem revenues. There is also a modest step down in the royalty base from 2025 to 2026 with the Hikma authorized generic or AG with significant economics still flowing to Jazz. Given that Xywav is not AG rated to High-Sodium Oxybate, we do not anticipate a material impact on low-sodium Xywav revenue in the first half of 2026. Whilst we expect the competitive sleep landscape will evolve in the second half of the year, it's important to note in an increasingly competitive environment, Xywav remains clearly differentiated offering a safer, low-sodium profile and continues to be the only FDA-approved treatment for IH. As a separate and unique indications to Xywav, we see the most opportunity for patient growth coming from IH. Moving to Slide 10 and Epidiolex. Epidiolex reached a significant milestone in 2025, achieving blockbuster status, $1.1 billion in revenue, up 9% year-over-year with strong underlying demand, driving 7% volume growth in 2025. Fourth quarter 2025 revenue was $287 million, representing 4% growth compared to the fourth quarter of 2024. I'll note that year-on-year growth was negatively impacted by higher-than-normal inventory levels at the end of fourth quarter '24. Looking ahead, we see our greatest growth opportunity in the adult patient population, particularly through expanded reaching long-term care settings. In addition, our Navigator program, continues to meaningfully improve patient persistency, and we're focused on increasing utilization of this resource in 2026. Given the long runway for Epidiolex, we will continue to invest in additional development opportunities, including new formulations with a clear focus on driving growth in adult patients. We believe Epidiolex is well positioned to remain an important antiseizure medicine for patients over the long term. Moving to our Rare Oncology portfolio. I'll start with Ziihera on Slide 11. Ziihera is a highly differentiated HER2-targeted therapy that represents a key pillar of Jazz's future growth. We are focused on maximizing Ziihera's potential across HER2-positive cancers, supported by the strong Phase III Horizon GEA results, which exceeded existing standards of care. Beyond GEA, zanidatamab had demonstrated an encouraging activity across additional [ HER2-breast ] tumor positioning it as a meaningful multi-indication commercial opportunity. Our largest near-term opportunity is in first-line metastatic GEA, where we have the potential to launch zanidatamab in this indication in the second half of 2026. Awareness and experience in Ziihera continue to build particularly across academic centers and large community networks with additional opportunity to expand familiarity as we move into GEA and other tumor fronts. From an access standpoint, Ziihera benefits from an established permanent J-code through its FDA approval in second-line HER2-positive Biliary Tract Cancers, simplifying reimbursement and reducing administrative burden. This is complemented by our comprehensive Jazz care support services, along with flexible ordering and fulfillment options. Our existing commercial footprint, capabilities and experienced teams position us well to execute effectively in GEA and to support broader development across additional HER2-expressing achievements. Turning to Slide 12 and Modeyso. Product launched in August to the end of 2025, Modeyso generated $48 million in revenue. This strong early performance reflects the significant unmet need, high awareness driven by advocacy groups and the value physician see for patients with H3K27 mutant diffuse midline glioma. Early uptake has been driven by new patient start, largely within academic centers of excellence. As the launch progresses, we are focused on expanding use in the community setting and gaining further insights into real-world treatment patterns, including duration of treatment. Based on what we see today, we believe Modeyso recommends a compelling [ pre-serve ] opportunity of greater than $500 million in the U.S. In 2025, more than 360 patients received Modeyso, offering new hope for patients and their families facing this devastating disease which has a median survival of approximately one year from diagnosis and less than 6 months following progression from frontline radiotherapy. The launch is supported by highly experienced uro-oncology focused filed sales, medical and access teams appropriately tied to deliver targeted engagement to both personal and nonpersonal channels. In addition, our exclusive distribution partnership with Onco360, provides robust patient-centric support services, and we are encouraged by strong payer coverage and continued positive launch for Modeyso. Moving to Slide 13 and Zepzelca. In October, we received FDA approval for the combination of Zepzelca and Tecentriq, expanding Zepzelca into the first-line maintenance setting for extensive stage small cell lung cancer. This approval broadens Zepzelca's addressable market and represents an important milestone for the brand. In 2025, Zepzelca generated $307 million in revenue. In the fourth quarter, revenue was approximately $90 million, representing a 15% year-over-year growth compared to the fourth quarter '24. We believe the growth in the fourth quarter was primarily driven by initial demand in the front-line segment. Given the strength of the clinical data and the opportunity to improve outcomes for patients with extensive stage small cell lung cancer, we are prioritizing our commercial efforts on the first-line maintenance setting going forward. As we look to 2026, we expect a shift in utilization with declining second line [ move ] and increased adoption in the first-line maintenance setting. I'll now turn the call over to Rob to review the development program that is underway to zanidatamab and provide an update on our pipeline. Rob? Robert Iannone: Thank you, Sam. 2025 was a transformative year across our R&D pipeline, and we look to build on this momentum in 2026. Starting with the practice-changing data we presented at ASCO GI on Slide 15. The zanidatamab plus atezolizumab and chemotherapy arm demonstrated a clinically meaningful and statistically significant improvement in OS with more than 7 months improvement and a 28% reduction in the risk of death versus the trastuzumab control arm. The benefit was observed in PD-L1 positive and PD-L1 negative patient subgroups. Zanidatamab plus chemotherapy showed a clinically meaningful survival benefit with the median OS of over 2 years with a strong trend to our statistical significance at the time of this first interim analysis for OS. An additional planned interim OS analysis for this comparison is currently expected mid this year. For PFS, there was a clinically meaningful and statistically significant benefit in the zani plus chemo arm compared to the control arm as represented by a greater than 4-month median difference. We are moving quickly to bring zanidatamab to HER2-positive first-line metastatic GEA patients. As we previously noted, we submitted the Horizon GEA data to NCCN for inclusion in the oncology guidelines. On the regulatory front, we expect to complete the submission for our supplemental biologics license application for zanidatamab under real-time oncology review in the first quarter of this year. I'm also pleased to share that the FDA has granted breakthrough designation for zanidatamab in GEA. We expect these designations will allow us an even closer interaction with FDA and potentially greater speed to approval. Based on this, there is the potential to launch zanidatamab in GEA in the second half of this year. Our data firmly positions zanidatamab as the HER2-targeted agent of choice in first-line GEA replacing trastuzumab as the standard of care, offering unprecedented durability and survival benefits. We believe zanidatamab's role as the new standard of care will extend across multiple tumor types. And on Slide 16, you can see the robust development program that is underway for zanidatamab, which we believe has been meaningfully derisked by the strength of the GEA data. The next pivotal Phase III trial for zanidatamab is in metastatic breast cancer patients who have progressed on or are intolerant to in HER2. The treatment landscape is evolving as we anticipated, within HER2 moving into frontline metastatic breast cancer, laying the groundwork for zanidatamab potential move into the second-line plus metastatic breast cancer setting. Our EmpowHER trial represents the first clinical trial to evaluate a HER2-targeted agent after treatment within HER2. Based on early data generated to date, zanidatamab has shown clinical activity after trastuzumab-based regimens, including HER2, which is an antibody drug conjugate of the monoclonal antibody trastuzumab. We believe zanidatamab will be able to fill an unmet need in the breast cancer space and believe the compelling first-line GEA data helped to derisk the ongoing metastatic breast cancer trial. We are incredibly excited about this opportunity in breast cancer, and we are also hearing similar excitement from physicians and sites that continue to enroll patients to this trial. We expect to complete enrollment in the EmpowHER trial in the first half of 2027 with top line data anticipated in late 2027 or early 2028. As we continue to evaluate the potential for zanidatamab to be used in multiple HER2-expressing solid tumors, we're pursuing collaborations with partners to combine zani with novel therapies. For example, a Phase I trial in combination with Boehringer Ingelheim's zongertinib was recently initiated to explore the combination in metastatic HER2-positive breast cancer, along with other potential tumor types. Other earlier-stage trials continue to progress across new indications, including a potentially registrational PAN-tumor basket trial and a neoadjuvant, adjuvant breast cancer trial. We're also exploring other areas like non-small cell lung cancer and colorectal cancer. We have great confidence in zanidatamab and intend to fully maximize the value it may offer to HER2-positive cancer patients. Beyond zanidatamab, we have a number of promising development opportunities across our diversified pipeline, which are outlined on Slide 17. We have strengthened our early-stage pipeline with two recently initiated clinical trials. As we refine our strategy to focus on rare disease, in areas where we have deep expertise, we will continue to build on our research and early development capabilities. A great example of this is JZP047 which was developed in-house at Jazz, and I'm pleased to share was cleared to proceed into a Phase I study under a new IND. We initiated a Phase I healthy volunteer trial in January to evaluate JZP047 for the treatment of absence epilepsy. Building on our expertise in epilepsy and as we explore areas of growth for Epidiolex, we also initiated a Phase Ib trial of Epidiolex in focal onset seizures. Looking ahead to later this year or early 2027, we anticipate the ongoing Phase III ACTION trial will have an interim overall survival readout. This trial is designed to confirm the benefit of Modeyso and support regulatory approval as frontline therapy directly following radiation instead of waiting for signs of tumor progression before treating with Modeyso. Before I turn over the call, I will share an update on JZP441 and orexin we brought into the clinic with our partner, Sumitomo. Based on our continued assessment of this molecule, we have made the decision to stop the development of JZP441 and end the partnership with Sumitomo. As leaders in sleep, we see promise in the orexin receptor agonist mechanism of action as complementary to oxybate and Xywav as the only low sodium oxybate, and we are continuing to investigate our backup orexin program. Overall, we have a number of exciting clinical trials that are advancing across our pipeline from early stage to registrational trials, and we're looking forward to sharing further updates this year. Now I will turn the call over to Phil for a financial update. Phil? Philip Johnson: Thanks, Rob. I'll start with our top line results on Slide 19. Please note that our full financial results are available in today's press release and 10-K. In the fourth quarter of 2025, we achieved a record total revenues of $1.2 billion, with Xywav, Zepzelca, and Rylaze all posting their highest ever revenue quarter. Total revenue growth of 10% was driven primarily by 16% growth in Xywav and strong initial uptake of Modeyso. For the full year of 2025, we recorded $4.3 billion in total revenues, also a record, representing 5% growth over 2024. Full year revenue growth was driven by Xywav, Epidiolex and Modeyso partially offset by Xyrem. Turning to Slide 20. Our full year 2025 non-GAAP adjusted net income was approximately $522 million, and we reported non-GAAP adjusted EPS of $8.38. Moving to Slide 21. We're pleased to share our full year financial guidance for 2026. Our 2026 total revenue guidance range of $4.25 billion to $4.50 billion equates to growth of about 2.5% at the midpoint compared to 2025. We have strong momentum in our rare oncology and epilepsy revenues. Sales of these products totaled $2.2 billion in 2025 and in 2026, we expect double-digit growth in this part of our business, driven primarily by Epidiolex, Modeyso and Ziihera. Revenue from our rare sleep franchise on the other hand, which totaled $2.01 billion in 2025 may decline due to the evolving sleep market that Sam mentioned, including the introduction of multiple generic high sodium oxybate products. We expect total Rare Sleep revenue of $1.8 billion to $1.9 billion, which represents a modest decrease in 2025, primarily driven by Xyrem and Hikma AG revenue. Specifically with two generic high sodium oxybate products on the market, we expect a further reduction in sales of Xyrem, which generated $146 million in revenue in 2025. For the Hikma AG, there is a modest step down in the royalty rate from 2025 to 2026 with significant economics still flowing to Jazz. For branded low sodium, Xywav, we expect revenue to be flat to up mid-single digits. Moving to the rest of our guidance line items. Our non-GAAP adjusted gross margin percent guidance is 90% to 91%. This is a slight decline from 2025, primarily due to higher sales of products like Modeyso and Ziihera, driving higher royalties and to a lesser extent, the potential for higher tariffs on products imported into the U.S. Our non-GAAP adjusted SG&A guidance range is $1.26 billion to $1.32 billion. Excluding the Xyrem and Avadel litigation settlement expenses from 2025, this means we expect SG&A expenses to be relatively unchanged in 2026 as increased launch expenses from Modeyso and Ziihera in the first-line GEA setting as well as increased investment in key commercial capabilities and AI are offset by productivity efforts across our global commercial organization, lower facilities expenses and lower legal fees. Our non-GAAP adjusted R&D guidance range is $725 million to $775 million. This represents an increase over 2025, driven by increased spend for zanidatamab, both for ongoing and new studies across multiple potential indications, including breast cancer, higher expenses for [indiscernible] as we recognize a full year's worth of activity, higher spend on preclinical and early clinical programs, including JZP898, JZP815, JZP3507, formerly ONC206 and JZP053, the Saniona molecule and higher spend on advanced analytics and AI. We expect our non-GAAP adjusted effective tax rate to be between 11.5% and 13.5%. Finally, our guidance range for fully diluted shares outstanding of 65 million to 66 million. The increase from 2025 is driven by normal factors like shares issued for employee compensation and those purchased by employees via our stock purchase program as well as by accounting for our 2026 and 2030 convertible notes now that our stock price exceeds the conversion price of those notes. We've included an Excel worksheet in the Investors section of our website to help you model this impact. You'll note that we're not guiding to adjusted net income or EPS this year. This reflects both a review of questions we've received and not received from investors and analysts as well as a review of peer guidance practices. Moving to Slide 22. Our balance sheet remains strong. We continue to generate significant cash from our business, recording approximately $1.4 billion of cash from operations for the full year 2025 and we ended the year with $2.4 billion in cash and investments. Our overall financial position and robust operating cash flows provide significant flexibility to invest in value driving commercial and R&D programs as well as in promising corporate development opportunities to support our refined strategy on rare disease. I'll now turn the call back to Renee for closing remarks. Renée Galá: Thank you, Phil. I'll conclude our prepared remarks on Slide 24. 2025 represented a truly transformational year for Jazz. We delivered record financial performance, achieved multiple regulatory approvals successfully launched innovative therapies and generated practice-changing clinical data that positions us for significant future growth. Our refined strategic focus on rare disease leverages our proven capabilities and positions us to compete and win in areas where we can make the greatest impact for patients. We have the opportunity to invest in our pipeline, the growth of our commercial products and also in corporate development where we think there is a solid foundation for us to transact in our existing areas of sleep, epilepsy and oncology, as well as in other areas of rare disease. With our strong financial position, diversified commercial portfolio and robust pipeline, we are well positioned to drive durable growth and create long-term shareholder value. That concludes our prepared remarks. I'd now like to turn the call over to the operator to open the line for Q&A. Operator: [Operator Instructions] Our first question comes from the line of Jason Gerberry with Bank of America. Jason Gerberry: I just wanted to follow up, Phil, on just, I guess, the guidance around Xywav for 2026. So I believe it's flat, potentially growing mid-single digit. So is the right way to think about the dynamics there that in a flat scenario, IH is growing and maybe the conservatism to a guidance of flat is just payer contracting concessions that may need to occur? And there was some commentary about limited generic impact in the first half, but second half, I'm just wondering, I know there was like not total clarity earlier in the year on when you'd have a full line of sight on what the generic Xyrem impact is. So is there something that you're kind of reserving in the guidance conservatism wise in terms of like what the second half impact could be? Philip Johnson: Yes, Jason, thank you for the question. So as we think about the evolution over 2026 of Xywav, we come into the year really well positioned, both from a contracting perspective, the kind of net patient adds we had throughout the year, including in the fourth quarter and the recognition that patients and physicians have for the unique safety benefit that's offered by Xywav as the only low sodium oxybate. We also now have better line of sight into the timing of entry for generic high sodium oxybate products where it appears that now we've got two as we speak, that are in the process of having their launch that could have occurred as early as December 31 of last year, but is occurring now. It will probably just given the dynamics in this marketplace with the need to register physicians and patients into the REMS program take some time for those generics to build their volumes over time. That's one of the dynamics that could lead to maybe different effect on branded Xywav in the first half versus the second half. And we also have an evolving landscape more broadly in sleep where there is the potential for a couple of wake-promoting agents to be entering the market in the second half of the year. And often, we do see with new patients in narcolepsy, for example, they'll typically go on to wake-promoting agent first. They may even go through one or more of those before they would then progress on to sodium oxybate to give them some of the nighttime benefits that oxybate can offer that the daytime waking agents cannot. So those some of the dynamics that are factoring into our thinking. We're really pleased with where we're at and the outlook we have for the year. Maybe I'll just ask Sam, is there anything that she would want to complement to my answer from her commercial perspective. Samantha Pearce: I think it was a great answer, Phil. Yes, I think you mentioned we're carrying really fabulous momentum into 2026, and we have payer contracts in place for this year. We're very happy with the patient adds that we saw in 2026, 2,000 additional patients at the end of the year. And most of that is coming from IH. We actually had 34% growth in the numbers of active IH patients by the end of the year. So you mentioned around that, and we do feel as though the IH business is probably going to be the major driver of continued growth for Xywav being the only approved medication in that space. So yes, we entered the year with some confidence. We also know that what we've seen through the course of 2025 is really significant support from health care physicians and also from patients. We know patients with narcolepsy and IH, the vast majority of them have some kind of cardiovascular or cardio metabolic issue. And therefore, the low sodium option is one that is -- resonates extremely well for this particular patient type. And even with any payer action that may be taken, we do believe a strong commitment from HCPs to ensure that those patients can access a low sodium option. Operator: Our next question comes from the line of Sean Laaman with Morgan Stanley. Michael Riad: This is Mike Riad on for Sean. Are you able to provide any more color on the level of that modest step down on the Hikma royalty rate in '26 relative to last year? And then any commentary on the overall impact to the AG volume with two more generics coming on market? Philip Johnson: Yes, Mike, this is Phil. Maybe I'll handle that, the first part. We're not able to disclose the specific royalty percentages. We had said in the past that the prior royalty rate that we had for the latter part of '24 and through '25 was quite high. So I think that sort of links that there is a step down coming into 2026, but we do still have significant economics flowing to Jazz, but I can't be more specific than that. Sam, do you want to comment maybe on the AG? Samantha Pearce: Nothing too much more to add, Phil. We've -- the AG has obviously been in the market for some time. And we -- nothing much more to add to what you said, Phil, in terms of our expectations there. Operator: Our next question comes from the line of Marc Goodman with Leerink. Marc Goodman: Rob, can you talk a little bit more about JZP047, the background of the asset? Is this cannabidiol from GW deal? Or what kind of preclinical data do you have? I mean, what's the proof of concept, the mechanism, why absent seizures? Anything you're willing to give us? Robert Iannone: Yes. Thanks for the question, Marc. So we haven't yet disclosed the specific mechanism of action for competitive reasons. But I can say that it's not in the cannabinoid space. It's a novel chemical entity that we developed -- discovered and developed at Jazz. We have strong preclinical data, we believe in absence epilepsy and that will be our initial focus of development. The development starts in healthy volunteers where we think we'll get meaningful information around safety and exposures that we expect would be efficacious to derisk the asset before going into a patient population. Operator: Our next question comes from the line of Akash Tewari with Jefferies. Anastasia Parafestas: This is Anastasia on for Akash. Can you give us a little more context on that post-in HER2 breast cancer population, potential uptake? Like how big is the population what kind of treatments to patients typically take positive HER2? Any kind of context on like potential penetration, whether you consider dropping price to enhance access and the like? Robert Iannone: So I can -- Renee, would you like me to start with regard to the clinical treatment landscape there and how we're viewing that? Renée Galá: Yes. Why don't you go ahead and start with that, Rob? Robert Iannone: Yes. So we see this landscape, I think, is evolving just as we had predicted within HER2 moving to front line potentially with pertuzumab. And HER2 being an ADC that is developed on top of herceptin and possibly given with pertuzumab, it really disrupts the subsequent therapies. And so it becomes unclear what therapies to use after in HER2 after patients have had in HER2. That's the opportunity for zanidatamab where we have prior data showing activity. So we're positioning this positive HER2. We said there are about 150,000 patients with HER2-positive breast cancer in the markets that we serve. And we think it would be the first to have data in this positive HER2 setting. The study is being conducted essentially in third line plus because currently, patients get the CLEOPATRA regimen, which is chemo, Herceptin and Perjeta in HER2 is approved in the second line. But if that moves forward, you can imagine use in the second line [indiscernible]. Samantha Pearce: Just to wrap up the second part of that question. Yes, we're obviously very excited about the opportunity to bring Ziihera into the breast cancer setting. Too early for us to comment at the moment on the pricing strategy there. Renée Galá: And just to add there that, that study currently is expected to read out at the end of next year or early the following year. So we should complete enrollment next year, and we will have some time to continue to consider price, as Sam mentioned. Operator: Our next question comes from the line of Mohit Bansal with Wells Fargo. Mohit Bansal: Congrats on all the progress. Just wanted to double click on your Xywav comments regarding first half being mostly unaffected versus second half. Can you just talk a little bit more about that? So what are you expecting the competitive pressure on Xywav to be like in the second half in your guidance? And then as you get into like next year, like how do you see this franchise evolving in the face of low sodium competition? Samantha Pearce: Yes. We're obviously very pleased with the momentum that we've generated through 2025 Xywav of delivering $1.7 billion, 12% growth year-over-year, and that momentum was carried into the fourth quarter with 16% growth in the fourth quarter. I've already mentioned the numbers of patient adds that we saw throughout the year. So the messages that we've been conveying to the market are really resonating. Xywav is highly differentiated in the market, the only low sodium option, the only oxybate with an IH indication. So that gives us enormous confidence. We have good payer contracts in place as we go into the year. But of course, the landscape -- the sleep landscape is evolving. From where we sit today, knowing what we know, we know that there are two generics coming into the market to multisource generics plus we have Hikma in the market as well. We don't expect significant -- we really expect minimal impact on the Xywav business in the first half of 2026. In the second half of the year, obviously, we've got that increasing competitive dynamics. Phil mentioned that generics are likely to build their volumes throughout the year. We could see also the entry of at least one new wake-promoting agent in the market as well. So given all of those things, we may see more a different dynamic emerging in the second half of the year. But we will continue to focus on conveying the significant differentiation of Xywav, which is clearly resonating with prescribers and patients. And we'll be continuing to convey those messages to those customers. And we expect to continue to see the product being highly appreciated in the market. Operator: Our next question comes from the line of David Hoang with Deutsche Bank. David Hoang: Congrats on the quarter. So maybe a follow-up to some of the questions here on the Sleep-Wake franchise. Just in terms of your payer contracts, you mentioned that you feel confident about the ones you have in place. Is there any possibility for the payers to ask you to come back to the table to maybe negotiate over the course of the year? And could you envision any step edits or other restrictions being put into place by payers that might favor the multisource generics? Samantha Pearce: Yes. Whilst we do have good contracts in place as we enter the year, there's always the possibility that the payers may want to approach us if there's a significant event in the market with multisource generics. But one thing that is worth considering is that the rebates that the payers have for products as significant as Xywav are quite material and very significant. So of course, they'll be wanting to consider coming back to us to renegotiate and walking away from those rebates. So in order for them to have confidence to do that, of course, they want to be confident that the generics are built enough volume and support in the market. And also another consideration there is that even if the step edits were put in place, and certainly, that is an option. We know that physicians and patients really value the low sodium option. I mentioned before that well over half, about 70% of patients with narcolepsy and IH have a cardiovascular or a cardio metabolic comorbidity. And so really, the last thing is one to be giving those patients is a heavy salt dose every single day for a chronic condition. So even with a step edit, we believe that there will be a strong commitment from health care providers to move through those step edits to get to low sodium Xywav. So all of these things are possible. But I think the strength of our differentiation, it doesn't change. We're still the only low sodium option in the market and that will, I believe, will resonate with some prescribers and patients. Philip Johnson: Davis, I'll add something really quickly. We have had a small number of accounts, for example, in 2025, where the AG was put in more privileged position and basically had to step through that to get to Xywav. And we saw physicians very motivated to do that for their patients given the unique safety advantage as Xywav conveys, as Sam has mentioned, and we had leading share effectively in that account. So -- we've seen this happen at least on a small scale already. And again, it reinforces our belief that Xywav has a unique value proposition in the marketplace that neither the AG in the past or the emergence of the high sodium generics can replace. Operator: Our next question comes from the line of Brian Skorney with Baird. Brian Skorney: Congrats on the quarter. Maybe for Sam, the Modeyso launch looks really off to a much better start than I think a lot of us expected. I'm just wondering -- how do you think about these initial launch metrics? And I understand that they're early and contextualizing the greater than $500 million U.S. sales guidance, and how the ACTION study may come into play there? Do you think you need to hit in that study to achieve that guidance? Or can you get there given the current label and if ACTION were to hit, do you envision that would change the peak guidance? Samantha Pearce: Yes. Thanks for the question. Yes, we're clearly delighted with the early phase of the launch of Modeyso at $48 million in 2025, which was just 4.5 months of launch is really terrific. We -- obviously, this market is a market which has seen very little development over the last 60 years. So the launch of Modeyso was one that was highly anticipated by physicians and by patients. We had very high awareness and really strong advocacy support from patient organizations, and obviously, a very high unmet need for this treatment. So we've seen really strong uptake. I think in relation to the peak sales opportunity, we obviously, as we see the uptake and the way this product has been accepted into the market, we're increasingly confident about the $500 million peak sales opportunity. That does assume that we hit on the first-line action study to achieve that because what that means is that the product will get used earlier, immediately after radiotherapy as opposed to waiting for progression, which is the label that we currently have. There's still quite a lot that we need to understand about this market. For example, what really is the real-world duration of treatment. That's going to be quite an important factor in the overall size of the opportunity. And also, what is the true epidemiology in this market as well. We've used the best available data to do that. But obviously, the longer we're on market, the more confidence we're going to get around these areas. Testing rates is also something that we've been working on. We've seen that steadily increasing as well. So all the launch metrics are very positive, and we are increasingly confident about that $500 million sales opportunity. Operator: Our next question comes from the line of David Amsellem with Piper Sandler. David Amsellem: So maybe a bigger picture question about the sleep-wake franchise. So obviously, you mentioned 441. You are looking at other orexin agonist. But absent that, would you consider making a significant acquisition, in other words, an inorganic way of trying to extend the life of your sleep-wake franchise bearing in mind that eventually Xywav will go off patent? And maybe taking a step back, strategically, do you just simply toggle over to oncology and neuroscience and neurology more completely and look at sleep-wake as sort of a more mature franchise that you manage for cash. How are you thinking about that? Renée Galá: Yes, I'll jump in on that one. So as we look at our strategy going forward and where we're investing, we are investing in the growth of each of these current franchises, sleep and epilepsy and oncology. And we think there are multiple opportunities there, both within our current portfolio and opportunities to invest in licensing and M&A to augment those opportunities. With being specific on particular opportunities we're interested in probably isn't that helpful. I would say from a medical perspective, we're excited to see the new innovations coming from orexins. And as Rob mentioned, we continue to be active in this area in terms of early programs, but we also see there's still opportunity there in terms of really understanding is there a benefit for nighttime disrupted sleep. We seem to see right now data that points to orexins being complementary with oxybate, and we have yet to see any PSG data or otherwise on orexins that will tell us that we'll have therapies that can be fully treated without being augmented with a therapy like an oxybate that can address the nighttime symptoms, but if we just step back and look at our business and the growth drivers, we believe we have a highly differentiated product in Xywav, as Sam has described, we're in a strong position as we go into this year. We have a highly differentiated franchise in Epidiolex with multiple early-stage programs that we're advancing. A lot of opportunity across oncology whether that's Modeyso or the Zepzelca first-line approval and a really meaningful growth driver with zanidatamab that we're investing in heavily. So that's how we're thinking more broadly about our investments and where we're headed and how we think about investing across the franchises. Operator: Our next question comes from the line of Joseph Thome with TD Cowen. Joseph Thome: Maybe one on the -- it looks like another trial from the Chimerix acquisition was launched in PCPG. Can you just talk a little bit about the size of that market maybe as it relates to the market for [indiscernible] for H3K27M? And then maybe a bit of a follow-on to the last question. Obviously, with Epidiolex, you levered up the balance sheet and you work to kind of delever that over the years. You just mentioned BD several times through the call. I guess how comfortable are you to lever up the balance sheet again? Is that something that you're considering and kind of the size of the transactions, that would be helpful. Renée Galá: Rob, can you cover PCPG in terms of what we're aiming to achieve there with that study? And then maybe, Phil, do you want to jump in on the balance sheet? Robert Iannone: Sure. Happy to. So just to remind the group that 206 asset is a follow-on to Modeyso hitting the same [indiscernible] and dopamine receptors but potentially with greater potency. And we have an opportunity based on preclinical data that we have to evaluate that in pheochromocytomas and paragangliomas which are rare neuroendocrine tumors. And so this will serve as a proof of concept, at least in that tumor type, which we prioritized to demonstrate the activity of that next-generation molecule. Philip Johnson: And John, your question regarding leverage, we certainly have deleveraged substantially on a net basis, down to about 1.5 turns of EBITDA at the end of 2025. And we do have the ability to go ahead and lever up for a transaction or a series of transactions. If we find ones that are particularly compelling in terms of benefit they can bring to patients and our conviction that we can create significant value for Jazz shareholders as well. I would say over a longer arc of time, I think the expectation is that you will see debt to be less and less of the capitalization of the company over time, but I would encourage you to think of that as probably a sawtooth with some peaks as we do transactions, particularly if they're M&A, but over the long term, we'd expect that overall capitalization be more weighted towards equity and less towards debt as we move forward. Operator: Our next question comes from the line of Leonid Timashev with RBC. Leonid Timashev: I wanted to ask on Epidiolex. You mentioned both the fact that patent settlements extending the cliff out to the late 2030s, and interesting continuing to grow that franchise. So I guess I'm curious how you're seeing or what you need to do to continue to grow the adult side of that business? And maybe what you're seeing currently with adult uptick, maybe where education -- additional education is needed and sort of how you think about the size of that opportunity relative to the pediatric side? Samantha Pearce: Yes. Thanks for the question. Yes, we were delighted in 2025 to achieve $1.1 billion blockbuster status for Epidiolex, delivering 9% growth year-over-year. I think we've continued to drive really strong momentum behind this brand. With our current license indications, there still remains significant opportunity for us to make an impact. We've identified the adult segment has been a key source of future growth. We have invested that in long-term care, teams that are going to those long-term care facilities because what we do know is that there are a significant number of patients particularly LGS patients who reside in long-term care settings that have not had a definitive diagnosis of LGS. So we've invested with that team in particular tool, the rest LGS tool to help physicians diagnose those patients so that they can have the opportunity to benefit from Epidiolex. So that's a key source of growth. In addition to that, we know that persistence is the key hallmark of Epidiolex. Patients do very, very well in Epidiolex and they can stay on treatment for a long time. But if the patients have access to our JazzCares, with the nurse team that we have supporting those patients, then they stay on treatment even longer. So we're investing a lot in making sure that more patients can benefit from our JazzCares program. In addition to that, we've generated data that become data that really reinforces the benefit of Epidiolex in seizure and nonseizure -- seizure and non-seizure benefits. So there's a number of things within our existing label indication sources of growth which we're very confident in that we're going to be making investments in. And in addition to that, given the very late 2030s durability of the brand. We're also investing in other areas as well. So for example, new formulations of Epidiolex that will be particularly beneficial for adults as well as a Phase Ib trial in focal onset seizures as well. So we're excited about the potential of Epidiolex to continue to grow and bringing it to more patients. Operator: Our next question comes from the line of Ami Fadia with Needham & Company. Ami Fadia: Just on the zani breast cancer study, can you remind us if you've shared any details around the powering of the study. And ahead of the final readout, is there opportunity to see any interim data? And also maybe just remind us of the regulatory end points that we would be -- that -- all the regulatory requirements in terms of the endpoint? Robert Iannone: Sure. Thanks for the question. It's a two-arm trial, where patients are assigned their chemotherapy backbone by the treating physician and then randomized to receive either herceptin versus zanidatamab. So a head-to-head comparison of zani versus herceptin again, but in a different setting. It's 550 patients, which is listed on clinicaltrials.gov, and we have an opportunity to look at progression-free survival along with an interim analysis of overall survival before the final readout on overall survival. Operator: This concludes the question-and-answer session. I would now like to hand the call back over to Renee Gala for closing remarks. Renée Galá: Great. Thank you, operator. And just a quick reminder to our listeners. Thank you for joining in the call today. To give you a quick overview of some of our upcoming catalysts. As we've mentioned, we're really excited about zanidatamab in the breast cancer study that Rob was just describing. We also have the opportunity, as we mentioned on the call, for an approval and a launch in the second half of this year. We do plan to get our FDA submission complete this quarter, and expect an upcoming publication in a premier peer-reviewed journal with our second interim OS readout for our zani plus chemo arm B anticipated to occur mid-year. In addition to the broader development program, as I mentioned earlier, we have readout planned at the end of next year for metastatic breast cancer study or early in 2028, and we're excited about the opportunity there. Given the underlying backbone comparison is again zani versus herceptin. This year, we have the opportunity for our first full year of sales in dordaviprone and expect the ACTION trial supporting that Sam described to read out at the end of this year or the beginning of next year, and that will be our first OS readout of that study. So strong momentum coming into this year from 2025, and we do expect to announce one or more deals in 2026 on the corporate development front. So I'd like to close today's call by thanking all of our Jazz colleagues for their efforts, our partners and stakeholders for their continued confidence and support. 2025 was quite an impactful year for Jazz, and I look forward to continuing our work together in 2026. So thank you all for joining. Operator: This concludes today's conference. Thank you for your participation. You may now disconnect.
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.
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.
Therese Skurdal: We are back here at Arctic Securities in Oslo, and we are here together with our President and CEO, Trond Fiskum; and CFO, Erik Magelssen. We are joined by participants joining us on the webcast as well as physically here in Oslo. On the screen, you see today's agenda. And as always, we will conclude today's presentation with a Q&A session. If you're joining us here physically, you can raise your hand and we will be walking around with a microphone. And if you're joining us through the webcast, you can use that tool to raise your question. So with that, I will hand the word over to our President and CEO, Trond Fiskum. Trond Fiskum: Thank you, Therese, and good morning to everyone. We start with the Q4 highlights. Overall, we had a good quarter with strong earnings improvements and solid cash generation in a market that is stabilizing. Our Q4 revenues reached EUR 167 million compared with EUR 185 million in Q4 last year. This is 9.6% down from Q4 2024. However, it's up 2.8% compared with Q3. So this reflects that the market conditions are stabilizing, which is positive. Regarding profitability, we delivered a strong EBIT improvement. When we compare with Q4 last year, we have a Q4 EBIT of EUR 9.4 million and an EBIT margin of 5.6% and this is compared with EUR 1.1 million and an EBIT margin of 0.6% in the same quarter last year. It is an improvement that is primarily driven by structural cost reductions. We have some reduced warranty accruals. And we also -- it is also supported by onetime positive effects of EUR 4.9 million, that we'll come back to. Cash flow development was also solid and on an improving trend. Operating cash flow improved to EUR 11.5 million, up from EUR 4.2 million in the same quarter last year. The risk of certain warranty liabilities, they remain. They are well identified and being very actively managed with also mitigation actions in place to avoid reoccurrence. We held a Capital Markets Day in December last year, where we presented our revised EBIT margin target, the long-term EBIT margin target of 6.5% and also together with how to achieve that. Finally, the market outlook has slightly improved from the second half of '26. This is something that provides a more supportive environment for us to continue improving our financial performance. So overall, we see a stabilizing trend in revenues. We see a step change in profitability, a solid cash flow generation for the quarter and a more supportive outlook as we close '25 and move into '26. On some more details on the Q4 financials, Erik will, of course, go into even more details afterwards. Starting with the revenues, we ended up with, as I mentioned, EUR 167.5 million in Q4. It's EUR 17.7 million less than Q4 last year, 9.6%. A meaningful part of this reduction is related to a weaker dollar, EUR 6.7 million, while the remaining impact reflects basically a weaker market compared to Q4 last year, but in -- particularly in North America. As mentioned on the previous slide, we do, however, see that the market is stabilizing, which is encouraging with the increase from Q3 to Q4 of 2.8%. Moving to profitability and EBIT. In spite of the lower revenue levels, EBIT improved to EUR 9.4 million. It is a strong improvement from Q4 last year and as mentioned, a result of structural cost savings, the lower warranty accruals. And it's also important to note that this onetime effect of EUR 4.9 million is a reversal of accruals that we made. These are related to some customer contracts and operating costs and is a result of a year-end evaluation of accruals that we made across all legal entities in the group. Finally, on cash flow. Our free cash flow reached EUR 11.5 million, which is EUR 7.3 million improvement compared to Q4 last year. Again, it's a reflection of several elements, cost saving programs, net working capital reductions and generally an improved financial discipline. The cash flow development is now positive over several quarters. And we do also see that this has a positive effect on very important financial ratios for the company, that Erik will show later in the -- our presentation. Overall, a good quarter in terms of progress. There are still a lot of work that we need to do in order to get to the levels that we want on a longer term view, but it's strong indications that we are on the right track. As we reported in Q3, we did a comprehensive review of our warranty liabilities during 2025, and we did identify some additional risks. The identified cases are related to certain legacy contracts combined with management practice, or warranty management practices that were far from optimal. At this stage, the potential financial impact is uncertain. The cases are complex and the variability of potential outcomes is significant. And we have taken proactive measures to reduce future risks and to prevent a reoccurrence. It includes a significant strengthening of our warranty management practice and also an improved process to ensure that we have more robust customer contracts in place. We will provide further details on these cases once there is greater clarity. And due to ongoing discussions and negotiations with customers, we cannot go into more details at this point. We are working constructively with our customers on this and also other stakeholders to resolve this. And it's -- handling these cases is a top priority for the management, and I'm personally involved in handling some of these cases. Regarding business wins, we secured in Q4 new contracts with an estimated lifetime revenue of EUR 77.6 million. The majority of the contracts came from the business area Flow Control Systems with EUR 56 million. Drive Control Systems contributed with EUR 21 million. By customer segment, the largest segment is Commercial Vehicles, which you see on the truck, trailer and bus, which also reflects that this is our biggest customer segment overall in the company. For the full year, we secured contracts representing EUR 339 million in estimated lifetime revenues. While the business wins are lower in '25 than previous years, we have not lost any major new opportunities during the year. We do continue to have a very strong portfolio of business opportunities, and we are optimistic and confident about our future growth prospects. And also, as we communicated in Q3, we have revised our Investor Relations policy. And we will now only announce strategically important business wins for KA between the earnings calls. What we mean by strategically important business wins are those that are considered basically to be inside information, meaning business wins that are likely to have significant impact on the share price. And this is an issue that has been thoroughly discussed in the Board of Directors. It's also a policy that is in line with the Oslo Stock Exchange disclosure guidelines. And I think in particular, we want to avoid, let's say, frequent announcement of smaller contracts that are not strategic and should not have any significant effect on the share price. And this is in order to avoid unnecessary market volatility and speculations. But again, very much in line with the Oslo Stock Exchange disclosure guidelines. We want to take a look at one of the interesting contracts that we secured during the quarter. The contract itself, it's not deemed to be strategic, but it's a very good example of how we work in KA. And it's a good demonstration of our ability to innovate and to develop unique and high value-add solutions to leading global OEMs. This is a contract with a leading global OEM. It's one of the world's largest, and this is for our Twistlock coupling solution. It's a contract that in itself represents EUR 22 million in estimated lifetime revenues. And it's something that we would call a next evolutionary step of our proven and market-leading Raufoss ABC coupling system. The Twistlock system itself connects the air brake valves directly to the chassis brake chambers on the axles, and that ensures a leak-tight air supply, while still allowing continuous axle movements. It's a solution that is built on the same principles as the Raufoss ABC air coupling system and provides many of the same benefits to customers and the end users of the vehicles. A special feature of the solution is that it's a quick-connect and it saves significant time on the OEM assembly line. This is a very important part of the value proposition. And also have excellent serviceability once the truck is out in the field. Easy to replace. It also improves safety, increase overall vehicle uptime and reduce overall complexity risk and cost in the commercial vehicle air brake system. And very importantly, it's a patented solution. So it offers a unique and differentiated product that is only available from Kongsberg Automotive. So overall, it's an extension of the Raufoss air coupling system. It increases the overall revenue potential for this very important product segment. And it's also expected to be a wear and tear part that can contribute over time with attractive aftermarket sales for us. During the quarter, we had a Capital Markets Day that we held at our headquarters and tech center in Kongsberg on December 16th. We had quite a few participants, more than 50, including investors and analysts. And during the event, we presented our revised long-term EBIT margin target of 6.5% and also how we're planning to achieve that. We provided some deep dives into some of the key product segments or product areas where we believe that we are well positioned and are able to create value also in the longer term. We organized a tour of the tech center. So those that participated had an opportunity to gain some insights about our engineering capabilities and innovations. We also had a live demonstration of Kongsberg Automotive's Steer-by-Wire technology. This was installed in a demo car that was available and -- in the tech center. So participants were able to test it a little bit. I will share some of the key slides from that presentation for those that did not have the possibility to participate and to repeat some of the important messages from that event. First, we have made very important changes in the leadership in the company. Significant changes in Kongsberg Automotive was absolutely necessary. And changes in the organization like KA needs to start from the top. And this is what has been done. And we have a new Board of Directors and a new executive leadership team that brings experience, that brings determination and a clear vision for the KA's future. We have Olav Volldal, who is the Chair of the Board since December '24. He has previous experience from the company as CEO for more than 2 decades. We have Bard Klungseth, who is the Deputy Chair of the Board. He has also more than a decade of experience from KA, being a previous COO of the company. The Board has also been strengthened with several other new and very highly competent directors. And on the management side, I came in as a CEO in April. I have previous background from the company, being in several leadership positions. Erik Magelssen came in as a CFO in June, coming back to KA and coming in with a deep financial expertise and experience. And finally, in October, we had Thomas Danbolt coming in as Executive Vice President for the business area, Flow Control System, and he also had previous experience from the company, from the operations in our very important, the Raufoss facility. So this is a team that has a deep industry knowledge. It has a proven execution capability and a personal commitment to create long-term value. And most importantly, it's a team that knows what it makes -- what it takes to make KA successful. Second is a slide that is also very important for us. It's our business concept. It's very central to our vision and how to make KA successful. It is a concept that is several decades old, originally developed by Olav Volldal. There has been some minor adjustments over the last decades, but it remains -- main principles are -- remains, and it's just as relevant today as it was some decades ago. It's basically built on 4 different ingredients. One, it's a performance-oriented culture with the right people, with the right mindset, with the right values, the right competence, that can collaborate and do extraordinary things. Second, it is about unique products and solutions that clearly differentiate us from competition and that offers significant customer value. Third, it's to focus on the right market segments, attractive market segments, preferably those that are growing and where KA can be a recognized leader. And fourth, cost efficiency, which is essential in order to be competitive in this industry. When all these elements come together, that's where we find value creation potential. And the example I showed earlier, the Twistlock solution, is a good example of how these 4 ingredients come together and we're able to create value. Another important message in the Capital Markets Day was that we believe that KA is now at an inflection point, moving towards an improved trajectory. We see the indications of that in the Q4 results. We have a new leadership that is driving change. We have a turnaround program led by a new management team and a more streamlined organization. We are very much focused on execution and performance with disciplined cost management and operational excellence to deliver the better and stronger financial results. And at the same time, we're investing in growth and innovation with strategic initiatives that strengthen core technologies and accelerate our market opportunities. And we are rebuilding a high performance-oriented KA that is leaner, more agile, more customer-centric and with a culture of speed, flexibility and a customer focus that creates sustainable value for both customers, the company and shareholders. And importantly, we presented the revised long-term EBIT target of 6.5%. It is a target that is based on current EBIT level and revenue levels and also a very thorough assessment of the improvement initiatives that we have identified in the strategic plan and that we are working on. The reference level here you see is the previous 4 quarters before the Capital Markets Day, which was Q4 '24 to Q3 '25. All the different elements here are initiatives that we have identified and are -- some of them are in progress. Some of them are being assessed and being worked on, but they are all, let's say, very -- we have specific action items for all the elements. So this EBIT bridge illustrates how we're going to achieve our long-term target. The final outcome might vary a little bit, but it's a clear illustration of how we will get there. So behind all this, we have a lot of details. We're not going into that today. But it's -- I think the message here is that we have a very thorough assessment of this, and we have a good and detailed plan to deliver on this. It is something that will require a lot of systematic and hard work. And yes, I can assure you that we are very determined to succeed on this. Yes. Just a comment on the growth. You see on the right side, we have indicated that with an improved market, there is a upside potential on the EBIT margin. We have decided not to communicate any revenue targets. And the reason for that is this we can control. We can control our costs. The market development we cannot control. So -- but of course, we will make our best efforts to make sure that we can capture as much value as possible with improved market conditions. Finally, we also looked at our key priorities for 2026 and not so surprisingly, they are not so different that -- from the ones we had in '25. First, we will continue to drive cost efficiency and operational improvements. For -- we have now established very detailed plans for how to deliver improved financial results for '26. We have more than 500 different action items across the organization. Each action item has a quantified target, has an owner and a deadline, and we're following up very tightly. This is a systematic approach to a relentless continuous improvement that is key to our success. Second, we are focusing on improving -- continue to improve our cash flow. Cash generation remains a top priority. So in addition to the improved earnings, we have improvement initiatives to reduce working -- net working capital. And we are taking a very disciplined approach to investments, making sure we spend our resources wisely and where they give the best return. Third, we continue to strengthen our leadership teams and the culture. We continue to build stronger leadership capability across the whole organization on all levels and to build a stronger and a more performance-oriented KA culture. And finally, we continue to work on innovation and accelerate that and -- to make sure we have a profitable growth. This means prioritizing technologies and product areas where KA can have a competitive advantage and that with unique solutions that matches our business concept that I presented earlier. So we continue to take very, I would say, decisive actions to deliver on these priorities. We do recognize that it is a marathon. It's not a sprint. There's no silver bullets here. It's a long-term systematic effort that gives results. But I would say we are firmly underway. We have quite a few initiatives that are ongoing. We believe we have a good momentum, and we expect more tangible results ahead. Good. I will move -- We will move over to the financials. I hand the word over to Erik. Erik Magelssen: Thank you, Trond. So just first on Drive Control Systems. The revenue level was lower than in Q4 '24. And as communicated earlier, we were expecting a weaker market in the second half of '25 compared to the second half of '24. And EUR 6.4 million of the negative variance is related to currency translation effects. But as Trond commented, we do see indications of a stabilized market, but the fact that we see Q4 revenue higher than Q3. And even though we have lower sales, we record a higher EBIT in Q4 compared to the same quarter last year. This is driven by lower operating costs, lower warranty costs and reversal of prior period accruals. And this offsets the lower contribution from reduced sales volume, more than offset. So the majority of the reversal of prior period accruals that Trond mentioned was done here within DCS, Drive Control Systems. So you see in Flow Control Systems, we also have a lower revenue in Q4 compared to the same quarter last year, but the levels are closer than for DCS. We don't see that big a variance. Both for Drive Control Systems and Flow Control Systems, part of the reason of lower sales is the weak commercial market in North America. And also in Flow Control Systems, we have a higher quarter-over-quarter revenue than in Q3, so also indications of a stabilizing market. And similar to Drive Control Systems, Flow Control Systems also recorded a higher EBIT in Q4 '25 compared to '24. And this is driven by lower operating costs and improved efficient -- more efficient operations, which is good. So we do see improvements. And as Trond said, this is a continual process working on every day. I think in this EBIT bridge, you see the effect of the lower operating costs compared to the same period in '24 in the EUR 3.3 million and EUR 14.2 million. And this effectively mitigates the lost EBIT from lower sales volume. So then -- also then, when and if the market comes back, we are positioned to get uplift in margins and leverage. And as we have communicated earlier, there is a delay between when the tariff costs occur and when we get the reimbursement process with the customers, but achieving close to full compensation has been and is one of our top priorities. And you see for the fourth quarter isolated, the warranty costs were lower than in -- were lower in '25 than in '24. But for the full year, the warranty costs were around the same level. And that is one -- as one of our EBIT -- long-term EBIT targets to reduce the level of warranty costs going forward. The key reason here why there's a higher net impairment cost in '25 compared to '24 is that 2024 included a reversal of prior period impairments. So then there was an income effect in '24. And then on net income. So coming from a negative net income of minus EUR 13 million in Q4 '24 with the key effects you see in the bridge, we report a positive net income of EUR 2.8 million in Q4 '25. The higher EBIT and the lower tax expense in 2025 are the key drivers for this increase. And for the full year 2025, we report a positive net income, although small, but at EUR 0.2 million. It is also good that we don't just look at EBITDA and EBIT, but also at the bottom line. So we are coming out of this challenging year with, we can say, a positive net result, although I admit it's quite small. But of course, the priority is going -- building that further. And we also see lower interest expense. We have kind of other kind of initiatives all around the P&L. So I'm happy to report a slight positive net result for the year 2025. And we look at this bridge the same time next year, we will -- of course, ambition is to show the same trend here. So the positive result in the period and the net working capital effects, that contributes to the strong net positive cash flow of EUR 11.5 million in Q4 '25. And I think compared to the same quarter in '24, it's high cash flow from operations, lower investment level and lower cash outflow related to financing, which gives a significant and positive increase in the 12-month trend. And as we have communicated earlier, one of our key priorities is to generate positive net cash flow over time. And at the end of the day, that's more important than the results themselves. And I think you see here that also the improved cash flow and profitability also materializes in a significant reduction in net interest-bearing debt and reduction in the leverage ratio. And this leverage ratio per bond term definition is key in relation to our EUR 110 million bond where the covenant is maximum 4. And we have -- I think we have our bankers here today. So happy to announce this graph as well. I think it's a very important development for Kongsberg Automotive. And this gives us increased financial flexibility going forward. And I think this is the last before we go into the kind of summary and outlook and Q&A, that we do have reported now some improvements in return on capital employed, the ROCE. But this is, of course, far from satisfactory, also a key priority to improve. The equity ratio has increased from 30.7% at the end of Q2 to 31.3% at Q3 and now 32%. And as our improvement programs continue getting increased profitability, this will also continue to increase. And as Trond mentioned also, so it is continual work for us to achieve reductions in capital employed. And this is also an integral part of the operations in the business areas. So although we have improvements in working capital, this is -- I think, we have much more work to do in this area. Trond Fiskum: Okay. Thank you, Erik. To summarize our presentation here today, let me conclude on the summary and outlook. As a summary, we do see a strong momentum. It's positive development in terms of both earnings and cash generation, and we do see that the market is stabilizing, which is positive for us. And you see the revenue development that reflects this market stabilization, which is -- well, it creates a good environment for 2026 results. Our cost reduction programs are moving according to schedule. We are done through most of the big programs that we have announced earlier. Of course, we are working now on the continuous improvements, which also have big and major and important impacts for us. And as mentioned, the warranty liabilities, they remain, and we will provide information when we have information that we can provide. And we reaffirmed our long-term value creation ambition with the long-term EBIT goal of 6.5%. But again, we have as a top priority to restore value creation for this company. And we do believe in the future, we are very determined to make the changes that are required to realize KA's full potential. Finally, on the outlook. The margin for '26 is expected to continue an overall positive trend from '25 levels. The market outlook has improved for the second half of '26. We still want to be cautiously optimistic as just the last week's event shows that there are uncertainties and they persist. Yes. So this concludes our presentation here today, and we will open up for the Q&A session. Therese Skurdal: Thank you, Trond. Let's get started with the first question. It's for you Erik, and you have already touched upon it, but let's go ahead with this one. The U.S. dollar have weakened compared to other currencies. How does this affect the financial result of KA? Erik Magelssen: Yes, that's a good question. I think for KA, it's primarily the relationship between U.S. dollar and euro, which is important. And that -- the U.S. dollar has weakened around 16% over a 12-month period compared to the euro. So how we see that for our results, you mainly see it on the revenue level where I think we had a currency translation effect of EUR 6.7 million in Q4 and then reducing revenue. And then for the full year '25, I think it's around EUR 17 million. And that is mainly, predominantly the U.S. -- weakening U.S. dollar since we have this quite a large part of our operations in the U.S. But we also have quite a good natural hedge in the sense that we have significant cost base also in dollars. So when we look at both EBITDA and EBIT, that the currency translation is not an explaining factor. So we have quite a good balance. The other way it impacts us is that it also impacts our balance sheet. So when the U.S. dollar devalue, reduces, it will also reduce the balance sheet and then it reduces the equity we have in the U.S. when it converted to euro. And there you see a negative effect in year-end. But that will go up and down and you still -- we still have a increase in the equity ratio. So it's not in a way -- the weakening dollar has not been significant to us in a large sense on the equity. So I think we're fairly balanced on that. Therese Skurdal: How does the recent development in the U.S. tariff situation impact KA? Trond Fiskum: Yes. First of all, the tariff situation until now, we have been very -- taking a very firm position on that with our customers. And that is basically we are not in a position to absorb those costs. And ultimately, this has to be passed on to the end customer and the end consumer, which is ultimately the U.S. consumer. And as we have shown both in Q3 and Q4, we have been able to neutralize those effects, so that is also what we will work on and we're very determined to achieve that also on any new tariffs that are now coming. But the last week's events has -- the consequence of that is that we will have to again sit down with our customers, suppliers to go through the agreements and how we handle this. We are going to take the same position. And we are very confident that we will achieve and be able to neutralize the direct cost impacts of this. In Q1, it might be because of the changes that there might be some delays in getting that compensation. We have to also understand how this impacts us. We had a meeting with the broker a couple of days ago and -- the customs broker and they didn't know how to apply the taxes. So there's all kind of uncertainties around this that we have to figure out. But we will get compensation for the direct cost. So that is not our biggest concern. It's almost like business as usual in a sense because we're dealing with these kind of issues when it comes to supplier cost increases, raw material cost increases, et cetera. So we're dealing with that and handling that. And yes, sometimes there are some delays in the effect, but over time, we will get it recovered. That is part of our job. And this we can influence. Our bigger concern here, as we also flagged on the previous tariff situation, is what we cannot control, which is the market uncertainty. And this is problematic. So we're flagging that there are uncertainties, and they persist, and this is a very good example of that. So this is what we closely monitor. We have not received any feedback from our customers that this is negative, but obviously, uncertainty is not good for the market. So that is our biggest concern, and that remains our biggest concern when it comes to all the tariff discussions. Therese Skurdal: Before we go ahead with questions here from the room, let's have one more from the webcast. Do you see potential for strategic collaboration or project opportunities with Kongsberg Gruppen going forward given the overlapping technologies end market? And can this be a meaningful growth catalyst for KA? Trond Fiskum: I cannot comment on specific, let's say, customer initiatives. We are located in the same city. We have a dialogue with them and are exploring opportunities to collaborate. And it's a part of our agenda. It's nothing that has materialized into any things that we are able to announce. And then the question is, does it fit into our business concept and our vision for this company? So it's not something that is high on our agenda. But we are, of course, evaluating opportunities that could be interesting that -- where we could create value for the company. But it's most likely not the type of opportunity that would fit best with our business concept and how we are -- the direction that we're taking the company. Therese Skurdal: Is there a question here in the audience? Trond Fiskum: I can repeat the question. So the question was regarding the warranty liabilities and when we will have more clarity on that? It's very hard to say because this process can take a lot of time. And that said, we are not in a rush to conclude it. We need time to do the proper investigations, the proper negotiations. And we want to solve this in the best possible outcome for the company. Very hard to say how long time it's going to take. Some of these process can drag on for a long time, and then I mean years, potentially. It could also solve quicker. So it's very hard to see. So this is a part of the, let's say, all the variability of the outcome. It's also in terms of time. We don't know. But it's very strong focus, and we want to solve it as soon as we can, but we're not going to make any, let's say -- if we need more time in order to get to the best possible outcome for the company, we are going to take more time. Are we good? Then... Therese Skurdal: I think there's... Trond Fiskum: There's one more question. Unknown Analyst: My English isn't good enough, so I have to take the question in Norwegian. Okay? Trond Fiskum: Sure. Unknown Analyst: [Foreign Language] Trond Fiskum: Okay. The question was if the warranty accruals have been made, if the weakening U.S. dollar has any impact -- positive impact on the warranty accruals? What I can say is that if the warranty costs are in dollars, they, of course, in euro will have a lower impact. But the accruals have been made and they were made in the past. So maybe, Erik, you can comment on how the accruals itself will impact... Erik Magelssen: Yes, I'll do that. The accruals are made in each entity. So for instance, the U.S. part is made in dollars and then it's converted to euro. But it's a good question. I think that when and if any payments are made in the future, if they are made, of course, a weak dollar will kind of -- we will use the value of the euro to pay that. So it's -- that in -- just isolated in that sense, the weakening dollar is good. And the majority of the accruals are related to the U.S. side. Unknown Analyst: [Foreign Language] Erik Magelssen: I think just for, let's say, competitive reasons and the customer negotiations, I don't think we want to go into details on the specific -- yes, but it's -- yes. Therese Skurdal: Any further questions? If not, we can conclude. Trond Fiskum: Yes. Then thank you for participating on this earnings call. And also thank you to Arctic for having us here. Thank you.
Operator: Good afternoon, ladies and gentlemen, and welcome to Global Industrial's Fourth Quarter 2025 Earnings Call. At this time, I would like to turn the call over to Mike Smargiassi of The Plunkett Group. Please go ahead. Mike Smargiassi: Thank you, and welcome to the Global Industrial Fourth Quarter 2025 Earnings Call. Today's call will include formal remarks from Anesa Chaibi, Chief Executive Officer; and Tex Clark, Senior Vice President and Chief Financial Officer. Formal remarks will be followed by a question-and-answer session. Today's discussion may include forward-looking statements. It should be understood that actual results could differ materially from those projected due to a number of factors, including those described under the forward-looking statements caption and under Risk Factors in the company's annual report on Form 10-K and quarterly reports on Form 10-Q. I would like to remind everyone that the fourth quarter of 2025 closed on Saturday, January 3, 2026, representing 1 additional week in the quarter compared to the prior year. This added 4 working days to the quarter, which covered the period between the Christmas and New Year's holiday, typically our lowest sales week of any year. In addition, the first quarter of 2026 started on January 4 and will have a favorable comparison from the year ago period, which started on December 29 and included the impact of the New Year's holiday. The earnings release is available on the company's website and has been filed with the SEC on a Form 8-K. This call is the property of Global Industrial Company. I will now turn the call over to Anesa. Anesa Chaibi: Thank you, Mike. Good afternoon, everyone, and thank you for joining us. Today, I'm happy to share that 2025 was a year of significant progress for Global Industrial that included quite a bit of change to better position the company for organic growth. I'm very pleased with the way the team stepped up and embraced the changes and executed to deliver on our full year financial results. We ended the year with good momentum across the business as average daily sales grew 7.4% in the fourth quarter, driven by both volume and price improvements. We delivered strong margin performance, generated healthy cash flows and today announced an increase in the quarterly recurring dividend for the 11th consecutive year. In addition, during the quarter, Global Industrial repurchased approximately 326,000 shares at an aggregate purchase price of $9.3 million. For the full year, we delivered $1.38 billion in revenue, representing growth of 4.8%. Overall, we are very pleased with the results, and Tex will discuss the financial performance in detail. Most importantly, we made progress on strategic priorities that we believe will allow us to accelerate the pace of change to grow the top line profitably and scale the business in 2026 and beyond. In the past year, we began the transformation of our business model and outlined core objectives: first, to become a more customer-centric company; and second, to refine our go-to-market strategy, particularly in realigning our sales, marketing and merchandising teams to reframe our value proposition by industry vertical. We piloted a number of changes to refine our approach to better serve the needs of our customers and to deliver profitable growth. So what did we do? I'll start with customer centricity. Throughout 2025, we continue to reframe our approach to put our customers at the center of everything we do. By driving continuous improvement in damage reduction, quality and distribution optimization, we maintained high service levels for our customers. Retention rates across our managed account base were strong as we again prioritized the customer experience and expanded upon our e-procurement capabilities. We completed the planned rollout of Salesforce for our sales, marketing and customer service teams. Having a single unified view of the customer has enabled data-driven and faster decision-making, helping drive efficiencies and more personalized engagement with our customers. In the year ahead, we will build on these investments to move closer to the customer and further enhance the service we provide. Next, on how we reframed our go-to-market. As we look to be more intentional and focused in how we go to market, we completed a comprehensive analysis of our position and listened to feedback from customers. We challenged ourselves with tough questions and emerged with actionable next steps. Today, we have a clear understanding of our customers' needs and expectations. By incorporating their feedback, we tested and piloted targeted solutions and are now realigning Global Industrial's product assortment, strategic account focus and sales organization to deliver on our refined value propositions across multiple industry verticals. On the merchandising front, we are expanding the product assortment to ensure we are providing the right solutions and products that help customers solve their problems. This includes broadening national brand relationships to move into new product sets that we know our customers are looking for and that are complementary to what we offer today. This really is just a natural extension of what we do each and every day. Specifically, we are expanding our assortment to include maintenance, repair and operations as well as consumable products. These changes create a significant opportunity to grow our share of wallet and capture greater market share. While we are in the early stages of this effort, we have had success with our initial pilot programs and are encouraged and excited by the progress and the long-term potential. On our strategic account focus, during 2025, we deliberately shifted resources towards strategic enterprise accounts and GPOs. These relationships tend to carry higher average order values, stronger retention and greater lifetime profitability, and we successfully grew these accounts in 2025. As part of this effort, we launched account-based marketing programs targeting these customers. These results have been promising, and we have seen good momentum, sales penetration and growth. In parallel, we began to move away from nonrecurring, lower profit transactional web business. This has been the right decision as we look to better serve our customers and focus on profitable growth. This brings us to sales realignment. As we align the organization to become more customer-centric in 2025, we have changed our go-to-market approach as we entered 2026. Our inside sales team, which has strong expertise and a tenured employee base have been realigned into customer verticals. This specialization will allow us to serve customers more effectively while gaining a deeper understanding of their unique needs. These targeted defined verticals that we have prioritized include industrial, commercial, retail, public sector, health care, hospitality and multifamily. During the second half of 2025, we successfully piloted an outside sales approach, and we are now building out a dedicated team. The outside sales reps will be calling on a combination of existing accounts where we have identified significant opportunities to expand the relationship as well as new account acquisition. To enable and support these changes, we put in place a new, more targeted and intentional sales, marketing and merchandising approach. This should position us well to effectively capture greater share of wallet from existing accounts and identify new customers that we have not historically called upon. We are driving change that will help us grow and evolve the business. The team is embracing these changes. There is a positive energy throughout the company, and we are excited about where we are headed, building off the progress we have made in 2025. Now I will turn the call over to Tex. Thomas Clark: Thank you, Anesa. Fourth quarter revenue was $345.6 million, up 14.3% over Q4 of last year. On an average daily sales basis, sales grew 7.4%, double the rate of growth compared to the third quarter of 2025. U.S. revenue was up 14% and Canada revenue improved 19.7% on a local currency. This was Canada's third consecutive quarter of top line growth. And for the full year, Canada was up 9.2% in local currency. We recorded consistent growth throughout the quarter with gains across all sales channels. As we have seen for much of the year, performance continued to benefit from price capture, but in the fourth quarter, we also generated volume improvement. Order count growth remained strong among our largest and most strategic customers, while volume gains returned in our web business for the first time in 2025. As of today, we have seen momentum continue with sales currently pacing up through the first half of the quarter. We have a favorable fiscal calendar in the first quarter of 2026, which started on January 4, while the first week of Q1 2025 included the New Year's holiday. Outside of this timing benefit, we have seen continued revenue growth in the mid- to high single digits. Gross profit for the quarter was $119.1 million. Gross margin was 34.5%, up 70 basis points from the fourth quarter last year. We remain pleased with our margin performance. On a sequential basis, as expected and in line with historical performance, gross margin pulled back from the third quarter of 2025 and primarily reflects product mix and peak season freight surcharges, which we chose to not pass through to our customers. Management of our margin profile remains a key area of focus. As we move through the current cycle, our goal is to manage to price/cost neutral. We currently expect first quarter margins to show improvement on a sequential basis and be in line with prior year results. As a reminder, additional tariffs went into effect in early August, including the doubling of duties on steel and aluminum. We took a pricing action in early January 2026. Our goal is to mitigate tariff disruptions to our business and for customers, and we believe we are well positioned to do so. Our teams have done an excellent job diversifying country of origin exposure, and we continue to proactively manage price. Selling, general and administrative spending for the quarter was $99.5 million, an improvement of 20 basis points as a percentage of sales as compared to the fourth quarter last year. The increase in absolute dollars was largely due to the incremental salary and variable expenses due to the additional week in the fourth quarter. In addition, given the improved financial results, we recorded approximately $3 million in incremental expense associated with variable bonus and commission expenses as compared to last year. SG&A reflected strong general and discretionary cost control, including improved leverage within our marketing expenses. Operating income from continuing operations was $19.6 million, an increase of 35.2% in the fourth quarter and operating margin was 5.7%. Operating cash flow from continuing operations was $20 million in the quarter and $77.7 million for 2025. Total depreciation and amortization expense in the quarter was $1.9 million, including $0.8 million associated with the amortization of intangible assets. Capital expenditures were $0.8 million in the quarter and full year capital expenditures were $3.1 million. We expect 2026 capital expenditures in the range of $3 million to $4 million, which primarily reflects maintenance-related investments and equipment within our distribution network. Let me now turn to our balance sheet. As continues to be the case, we have a strong and liquid balance sheet with a current ratio of 2.2:1. As of December 31, we had $67.5 million in cash, no debt and approximately $120 million of excess availability under our credit facility. In the fourth quarter, we repurchased approximately 326,000 shares of stock. And year-to-date, we have repurchased an additional 14,400 shares for a total of $9.8 million. We currently have approximately 1 million shares available under our 2 million share buyback authorization. The stock repurchase is a disciplined way to return value to shareholders, and it highlights the Board's confidence in the long-term potential of the company as we continue to generate strong cash flows, maintain a healthy balance sheet and execute against our strategic plans. We continue to fund our quarterly dividend, and our Board of Directors declared a quarterly dividend of $0.28 per share of common stock, an increase of $0.02 per share. I will now turn it back to Anesa for closing remarks. Anesa Chaibi: Thank you, Tex. I'm proud of how the Global Industrial team executed in 2025. It was a year of change, starting with me joining the company and then with the overlay of the challenging tariff landscape. The team focused on what we could control and mitigated the risk of the things that were out of our control, all while adapting to a significant amount of change. We delivered strong performance and initiated a realignment of the organization for the future, one we believe will allow us to scale the business and accelerate our growth. We are entering 2026 from a position of strength, and we are pleased with our performance and excited about our growth strategy. The team will continue to learn, test and pivot as we look to improve and optimize our performance. I want to thank all of our associates for their hard work and dedication. The progress we made in 2025 is a direct reflection of their commitment to our customer success and to our company. Thank you for your interest in Global Industrial. Operator, please open the call for questions. Operator: [Operator Instructions] The first question comes from Anthony Lebiedzinski with Sidoti & Company. Anthony Lebiedzinski: Certainly nice to see the better-than-expected results here in the quarter. I know you said that there was both pricing and unit volume increases. Can you provide any additional color on those 2 topics? And wondering if you could also comment on how sales progressed throughout the quarter as we went from October through December? Thomas Clark: Yes, Anthony, thank you for the question. I think to answer your last question first, sales were pretty consistent throughout the quarter. We had a solid growth profile in each month in the quarter, and it was fairly consistent without a lot of volatility in the individual periods outside of what we talked about on the intro of this call with December having an additional week of sales. So that reflected higher absolute growth rates. But on an average daily basis, it was quite consistent within the period. In terms of your first question, pricing was still the majority of the growth rate, and it was up on an ADS basis mid-single digits with volume coming in at low single digits across the business in the quarter. Anthony Lebiedzinski: Got you. And then given the latest tariff announcements that we heard over the last few days, how should we think about the pricing environment and the impact, if any, on gross margins? Anesa Chaibi: Yes. Great question, Anthony. Thank you. It's very early days real time, and it's still moving around, not unlike when we had our first quarter call last year, where we knew that was potentially around the corner, and it actually took effect in April. So I would say the team has become more nimble. We've reframed countries of origin and redistributed where we source our materials, et cetera. So we're prepared for whatever or however this unfolds. But at this point, we've not changed anything fundamentally, and we will navigate our way through this as it starts to become more and more clear because as you're well aware, if you saw Friday, it was 10%, then there was implications or new headlines of 15%. So we're waiting -- we're watching and waiting and then we'll do not unlike how we executed last year to mitigate the risk as best we can. But at this point, I think we're in this with everyone else that's in the same space of just dealing with how this unfolds. So I think it's just simply a little too early to predict. Anthony Lebiedzinski: Got it. Yes. So then in terms of just your commentary earlier, and this is something that you also talked about on prior calls as well, pivoting away from transactional customers and focusing more on group buying organizations and enterprise customers. Can you share perhaps or give us some color as to how much of these larger customers, how much of these clients represent as a percentage of sales? And what's the typical kind of margin profile as we think about how this may impact your business going forward? Anesa Chaibi: Yes. I think I understand the question. I guess I'll do my best. I guess what I would say to you, the transactional customers were more episodical once and done, what have you, and we had the organization focused quite a bit of energy on that previously. And I would say what we've now done is realigned our sales teams to go and work on the accounts where we already have access to the account. It's the opportunity to gain greater share of wallet, further penetrate those accounts. The margin profile, I would say, is slightly higher, if not improved versus the area where we want to kind of migrate away from just once and done. I would say we had a lot of promotional activity last year online that what we want to do is balance that out so that it shifts and that we're chasing the right kind of profile of customer. But more importantly, what I would say we are doing now is leaning more into longer, sustainable, repeatable customers. versus more transactional as a whole. So I don't have a specific number, but I'll let -- I'll defer to Tex to chime in as well. Thomas Clark: Yes. Anthony, I'll just maybe supplement that just a bit. So I think specifically on the gross margin profile, it is going to be slightly lower, as you would imagine, with some larger customers. But when we look at the overall profitability of the customer, that's where we see it's actually going to be a more profitable overall long-term customer relationship given that you're building that relationship over time versus, again, a transactional once-and-done customer. Somebody comes once to your website then you're paying to acquire and they're having that one purchase, which all typically would have been in that low average order value range as well. So when we look at total customer contribution and profitability, this mix is going to be a benefit to the overall company margin profile going forward. In terms of ratio as a percent of sales, we haven't disclosed the individual breakouts of these segments. But again, there's going to be -- these GPOs and strategic customers are going to make up north of 20% of our volume today, but we still have a strong kind of mid-market and mid-market to large mix within our sales force as well -- or our customer base as well. Anthony Lebiedzinski: That's very helpful color. And best of luck. Anesa Chaibi: Thanks, Anthony. Thomas Clark: Thank you. Operator: The next question comes from Michael Francis with William Blair. Michael Francis: Good quarter. I wanted to start on the ADS. I just love to know how much of the growth was your own actions and share gains versus an improved market backdrop? Thomas Clark: Mike, yes, I mean, again, as reported, we're about 14% growth overall, 7.8% average daily sales. So when we think about what's going on in the market, I think the market actually performed a little better than some of us expected. We've seen things even continue to trend positively in the first quarter with things like the PMI expanding to about 50 in January. So there is market momentum. But I think when we look at our performance and we look at different break down customer penetration and order volume, we believe that we did take share in those areas by our actions. So we don't have a great view of exactly what that market grew in the period. But again, we do believe that we gained share through what our targeted actions were. Anesa Chaibi: Yes. And Michael, what I'll add is we also were very focused on improving our operational and fulfillment execution as well. And so that contributed to progress and having the right product at the right price to be able to capture the share. Michael Francis: That's good to hear. And then within that growth as well, is there any sort of recovery on the SMB side of things? Was the growth more on the enterprise side of things? Or was it kind of broad-based? Thomas Clark: Yes. So I think one thing I would add some color to that, Michael, was we did highlight that we saw some improvement in volume in our web business overall. So we actually had good marketing leverage and good web business. And the key was being very targeted in that web experience overall and making sure that our sales, merchandising and marketing teams were fully integrated in their efforts to go after the right customers. So that did drive some growth, and we had been facing some headwinds in some of that web business earlier in the year that did, I'll call it, fully anniversary by the time we exited Q3. So in Q4, we did return to growth in the web business. But again, we were very happy with the customer mix that we saw in the period. Anesa Chaibi: We also added to the assortment and the products that we took to market. So that also enabled us to pursue new customers or to further, as I said earlier, to Anthony's question, further penetrate and gain greater share of wallet of existing accounts that were already aligned with us. Michael Francis: All right. And then last one for me. I know SG&A was up substantially, and you called out the incremental compensation expense. Is there anything else to call out in there? And then the other half is as we think about 2026, how should we think about SG&A? Thomas Clark: Yes, Michael, absolutely. So again, the one key was clearly, as mentioned, we had the additional variable compensation expense in the quarter. And that's a combination of -- if we think about last year, we had a soft quarter in Q4 2024. So we actually were -- had a reduction of some of that variable comp, both on commission and bonuses. This year, you had the increase in costs. So that relative gap widened just on a relative comparison between Q4 last year. and Q4 this year. And just again, just from a pure absolute number of days period. So we had an extra week of compensation. So we had that extra 14th week in the quarter. So all variable costs and all compensation costs were increased in the fourth quarter simply because of we paid people for the last week of the year. So that's a kind of normal ordinary course. So we would expect really SG&A management and SG&A leverage continues to be an area of focus. So think about it as a percentage of sales, shooting for kind of neutral to improvements going into 2026. Operator: This concludes our question-and-answer session and today's conference call. Thank you for attending today's presentation. You may now disconnect.
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.
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.
Rosa Stensen: Good morning, and welcome to Huddly's Q4 results. My name is Rosa Stensen, and together with me is Abhi Banik. In Q4, we report revenue of NOK 64 million, representing a full year growth of 42% with revenue of NOK 211 million. The gross margin in Q4 was 44%, 47%, excluding one-offs. The quarter is the fifth consecutive quarter with reported growth. We continue to deliver on our strategic strategy and the partner growth momentum continued. In the quarter, we activated our partnership with Jabra and signed new strategic partnerships with Lenovo. At ISE in Barcelona, Huddly had a very strong presence this year, reflecting on the results of the company strategy. At ISE, Huddly was present in many new product launches. Lenovo and Jabra announced the new bundles together with us in Huddly, and we showcased our own Huddly C1 Crew. Today, I want to recap on our investment case and strategy, which can be summarized as 3 key items: the market, our products and our go-to-market and distribution. First, have a look at the market outlook. Huddly is part of a large and growing market, which by analyst is expected to grow approximately 16% until 2029. Huddly products are very well positioned for that growth. Secondly, our products. Huddly has built a platform based on an AI native architecture to allow for more engaging and intelligent collaboration. With network-connected devices equipped with AI on the edge, Huddly products work as a platform of devices that allow you to scale the system as a room and usage requires. This is solving a very basic, however, still the #1 issue when it comes to collaboration across teams or locations. Either you cannot get the equipment up and run. And when you finally do, you cannot either see or hear what's going on. This unfortunately is still reported as the #1 issue for hybrid collaboration. So how we solve for this problem is with our AI native architecture, allowing everyone to get a world-class experience from their video and collaboration rooms. So I imagine you would have a live video crew producing all of your meetings. And this is as simple as calling in from your own personal device or just by pressing a button. With the AI native Huddly Crew platform, Huddly has made that a reality. As the category leader of AI multi-camera solutions, we are very pleased to see that multi-camera is becoming the new standard, chosen as a recommended solution for Microsoft's latest archetype BOM standards. And we continue to deliver on our road map, working towards a complete modular platform for any room scenario. At ISE in Barcelona, we introduced Huddly C1 Crew, enabling Huddly C1 on the Huddly Crew platform. By adding Huddly C1 into the mix, the Huddly Crew platform has now been audio enabled. Our customers now have the opportunity to extend their Huddly C1 audio and video bar with additional camera devices, opening up for even more room scenarios than previously. The three key item -- the third key item in our strategy is distribution and go-to-market. Our product distribution can be split into 2 main categories: Strategic Partner and Channel Partner-driven distribution. The key focus in 2025 has been to activate and open new Strategic Partner distribution. This, in addition to continue to organically grow our own distribution channel. So let's first deep dive on the Strategic Partner distribution. Throughout '25, signing new strategic partnerships and activating existing has been key focus. And we have started to see the results reporting the strongest Strategic Partner revenue since Q1 '23. We are, of course, very pleased that our unique products, Huddly C1, Huddly Crew and Huddly L1, with them, we've been able to enter into direct distribution partnerships with Shure, Jabra and now latest Lenovo. With Barco, we are one of few partners chosen for the bundle certification for the new ClickShare Hub offering. These partnerships to significantly increase the global market reach for Huddly products, both in existing and new markets. And to Lenovo. So we are, of course, very proud to be chosen as a partner for Lenovo. Lenovo is a leading PC manufacturer and a strong player in the AV market. Lenovo's AI compute offering purposely built to run video conferencing systems could not be a better fit with the Huddly product portfolio. We believe the bundles are going to be exceptional offering for our customers and are going to be entering the market in Q2. One key part of our Channel and Strategic Partner distribution are meetings with our customers at events such as ISE in Barcelona in February. As we continue to deliver on our strategy, Huddly presence at ISE has never been stronger. In addition to our own Huddly stand where Huddly C1 Crew was showcased, we had a strong presence at all of our partner stands. In addition to our Strategic Partners, Shure, Barco, Jabra and Lenovo, Huddly was also present with a 5-camera crew at the Microsoft stand and recently Google Meet certified Huddly Crew and C1 were to be found at the Google stand. So if you are interested to learn more about Huddly at ISE, go find more material at our LinkedIn page. The second key distribution for our products is our own channel distribution. The Channel continued its organic growth in '25. The growth has been driven by continuous work with our key strategic resellers and distribution partners, increased product adoption and new product introductions. We also continue to further improve the ways of working internally by, for example, utilizing the latest and greatest in tooling. And to summarize, Huddly in 2025 continued to deliver on its strategy and business plan, and we look forward to further enable our strategic partnerships throughout 2026. And with that, I will give the word over to Abhi. Abhijit Banik: Thank you very much for that introduction, Rosa. I'll now, in this part of the presentation, summarize a bit about what we've been talking so far before I go into the financial details. The investment case that we presented so far in this announcement is mainly highlighted by 3 factors. The first one, attractive market, which is large and growing; number two, product leadership with our strong position within AI-enabled multi-camera solutions; and finally, go-to-market with key partners such as Lenovo, Jabra, Shure and Barco. All of this leads into our business case and what we are aiming as a financial outcome. In 2026, we estimate a revenue between NOK 450 million to NOK 550 million, gross margin of approximately 45%. This translates into cash flow positive from second half of 2026. In 2027, we anticipate revenue between NOK 625 million and NOK 725 million and in '28 between NOK 750 million and NOK 850 million. For those 2 years, we also expect a gross margin between 45% to 50%. You may notice that in the previous slide, there was a slight decline in gross margin in 2026. One of the contributing factors to this is the RAM price increases that we're currently observing. This is a market-wide trend that we're seeing, which is not only affecting Huddly, but also other AI-enabled products and also consumer electronics such as PC and electronics. Since Q4 2025, DRAM has increased quite sharply, and it is expected to continue into '26 and potentially also into 2027. The main driver for this shift is mainly due to a shift in production capacity from RAM over to high-bandwidth memory, which is quite often used in AI data centers. As a result, we do expect to see a headwind on gross margin in 2026. However, we are prepared to mitigate this risk, and we are looking at sourcing different -- from different vendors, streamlining operations and also evaluating pricing adjustments. In order to bridge the company to cash flow positive, yesterday, we launched a private placement. The aim is to bridge the company until cash flow positive in second half of 2026, and this is going to be used on continued investments in R&D, onboarding of Strategic Partners, expansion of Channel sales as well as repayment of a loan, which is due in June 2026. I will now move on to the financial details of the quarterly presentation. Revenue in Q4 2025 was a strong NOK 64 million, which is both a quarter-on-quarter and year-on-year growth, both in terms of Strategic Partners and Channel. In Strategic Partners, we do see a quite strong momentum, and we do expect this to continue in the next few quarters. In Channel, despite the increase in quarter-on-quarter and year-on-year, the revenue for that quarter was somewhat lower than expected, which was also communicated in the trading update in January, and this was mainly due to challenges in the North American market, which was again then connected to the shutdown of the federal. Moving into gross margin. Gross margin in Q4 was at 44%. And for full year, it was 46%, which is in line with targets that we have communicated for the year. However, if you exclude one-off items in Q4 2025, gross margin was approximately 47%. Let us summarize this into the P&L. As already been communicated, we had a strong revenue in the quarter, which then translates into a strong gross profit. Cost is under control. It is stable or declining. And hence, we do see quite a strong increase in operational efficiency, where EBITDA and EBIT is improving both in Q4 and for the full year 2025. During this presentation, we have heavily focused on our innovative position and our product leadership. This is enabled by the investments we are doing in R&D. We have a team of approximately 57 engineers, many of them with strong expertise within AI, machine learning, and this is a very important enabler for our product road map. This organization has enabled the shipment of C1, C1 with Crew, which is launching in Q1 and is also a very instrumental part of our growth journey going forward. Finally, I'd like to wrap up the presentation with the cash flow for Q4 2025. Cash flow from operations was improving and hit a plus of NOK 4 million in the quarter. And cash balance end of the year was NOK 69 million. As already explained, we have launched a private placement in order to ensure sufficient liquidity before we hit an estimated cash flow positive in the second half of 2026. And that concludes the presentation part of the quarterly announcement, and we will now move on to a Q&A session where we welcome questions from the audience. Rosa Stensen: Hello, and welcome to the Q&A part of our presentation today. Now our Chairman -- Chair of the Board, Jon Øyvind, has joined us for any questions we have. And we are actually already started to receive quite a lot of questions. So thank you for your interest. So we will just dive right into that. Thank you. The first question is, what is the current status of the private placement? And I think Jon Øyvind, that it's a great question for you to take. Jon Eriksen: Yes. And it's great to be here today. And we are very pleased to announce that Huddly yesterday has successfully executed a private placement, raising gross proceeds of NOK 75 million. The private placement was substantially oversubscribed, demonstrating solid interest from current shareholders as well as new investors. The price in the offering was NOK 20 per share, and this price represents a 2% lower price than the 30-day volume-weighted share price. So it was not a substantial discount from that. And we are grateful for the strong support from the shareholders who participated in the private placement. And we are also pleased to announce that there will be a subsequent offering of up to NOK 11 million which will be directed at the shareholders who did not have the opportunity to participate in the private placement. But again, we are grateful for the support from shareholders who strongly supported this private placement. Rosa Stensen: Thank you, Jon Øyvind. And then there are questions about our revenue ambitions in 2026 and with regards to the newly signed agreement with Lenovo and if there -- that revenue is taken into account into the revenue ambitions in 2026. And Abhi, maybe you can say something more about our forecasting into '26. Abhijit Banik: Yes. So we have included the best of knowledge that we have currently in terms of all our Strategic Partners plus Channel, including Lenovo, and that has been included in the estimates in our business case that has been shown in the quarterly presentation. Rosa Stensen: Thank you. And then we have a question about our revenue model, if we are -- with our Strategic Partners are selling hardware units or if we are selling Software as a Service. So obviously, we are not going to go into any details of any individual agreement with any partners. But what we can say overall is that the revenue model for Huddly is that we are on a unit-based revenue sales. Another question is about the margins and working capital. So how do you expect the total gross margin from Q2 to develop? And will this impact the need for increased stocking or working capital in the ramp-up phase? Abhi, this is a typical one for you. Abhijit Banik: So it's referring here to also the Lenovo agreement. So as has been stated, it's included in the estimates that we have provided to the market. We also communicated in the use of proceeds that due to the growth phase we are currently now, there is a working capital requirement because we are ramping up revenue. So that is included in the financing need, which we have just done a private placement for. Rosa Stensen: And then there is a question about our private placements and the shareholder loan. There is about, can you give us an updated view of our cash flow and liquidity? How long do we expect the current cash to last? Abhijit Banik: Yes, I can take that. So we have just provided an updated view on that in the announcement that we had yesterday and the presentation today. So we have just raised the money that we currently believe is sufficient to bridge the company to cash flow positive from second half of 2026. Rosa Stensen: And then a question for me. Huddly has made a strong progress on the product side, but you still invest heavily in R&D in a very competitive market. Do you see any risk in keeping up this pace of innovation? And how do you think about balancing long-term growth with shareholder expectations, especially if ongoing funding will be needed to support R&D? So the capitalization of R&D in Huddly has been quite stable over time, but we are actually seeing quite strong results of that. And I think ISE is maybe one example of that progress. So Huddly is a leader in the multi-camera space with Huddly Crew. That was evident at ISE. What we also see is that we are attracting Strategic Partners such as Shure, Barco, Lenovo and Jabra that are coming to Huddly to support there with their product offering. Going forward, we believe that the level of the investments we are doing are healthy to both keep up with competition. And that's what is accounted for in our future plans in the updated business case. We'll see if there are any more. Let me see. We'll give you some time to see if there are any more questions coming in. No. Then I think we just give you 30 more seconds if there is any more. Otherwise, you can always reach us at ir@huddly.com or in the chat form. So we will come back and answer any questions that you might have. Well, one last one. Then -- is the Lenovo partnership the reason why you forecast significant growth in 2026? As we have stated, we are not going to go into any specifics on any specific of our partnerships. But what we -- the significant growth in '26 is a combination of all of our partnerships and distribution agreements, both on the Channel side and Strategic Partner side. So this is our best outlook, Abhi, as we have today and not particularly one partner more than other. And with that, then I think that was the last one. So please reach out to us at ir@huddly.com in case you have any additional questions. Thank you.
Najat Khan: Good morning, and thank you so much for joining us. I want to start by briefly framing where Recursion Pharmaceuticals, Inc. is today in its journey and evolution. Over the past decade, Recursion Pharmaceuticals, Inc. has built something truly special: a differentiated platform pioneering the integration of large-scale biological data generation, machine learning, and compute to better understand the complexity of biology. We have also deliberately strengthened the foundation in chemistry and AI through the acquisitions of Excientia, Valens, and Cyclica, creating a truly powerful foundation. Today, we are at an important inflection point. We are harnessing everything that we have built to date to do two things. Number one, translating insights into evidence—evidence that this platform, the use of AI end to end, can generate medicines that matter—and we are doing this both across our wholly owned portfolio and through our partnerships. With strong momentum across both fronts, I am excited to share some of the updates today. In parallel, we are also continuing to advance. Today, we have what I like to call a trifecta that is required to make impactful medicines: AI-driven biology, AI-enabled chemistry, and AI applied to clinical development. We continue to invest to ensure we are defining the standard for how AI is applied across the full life cycle of R&D. As we look across the sector, we are encouraged by the broader momentum in the field—new models, flares, partnerships being announced—but the industry is clearly entering a new phase where value is being defined not only by the models you build and the collaborations that are announced, but by actually translating those into capabilities, into real application, and measurable impact. The important question now is not only what you build, but what you can unlock, and that is the chapter Recursion Pharmaceuticals, Inc. is in. Our focus is on unlocking that value, using AI end to end consistently to generate better targets, better molecules, and advance programs faster with repeatability. The ultimate goal is to deliver medicines that matter. This quarter reflects that focus. We are making progress across all fronts. First, on the clinical side, with a first positive proof of concept with FAP. On the partnership side, a fifth milestone with Sanofi reflecting our growing joint portfolio tackling highly challenging targets; we are excited to share more about that today. And the continued evolution of our end-to-end AI platform. Last but certainly not least, disciplined execution, which is something we talked about at JPM, has now extended our cash runway into early 2028. There is a lot to cover today. We will be making some forward-looking statements on this call, so please refer to our filings for more information. We always at Recursion Pharmaceuticals, Inc. start with the end in mind, and for us, as I said before, it is medicines that matter, that are truly differentiated. To do that, you have to use the right data, models, compute, and more. There is a lot of talk about data, but what really matters is data that is high quality and fit for purpose, and at Recursion Pharmaceuticals, Inc., our foundation has been building high-quality data at scale, not just one type of dataset, but multimodal across the board. This is where pioneering the lab-in-the-loop—pioneering the wet and dry lab—has become incredibly important so that we not only generate data, but then we generate purpose-built models that we test, learn, and improve. We sit in a sweet spot of being able to leverage both public data and our proprietary private data. That is incredibly important to ensure that our models are impactful, insightful, and unique. On top of that, the importance of not just having the ingredients, but actually having a team who knows how to use it well—teams that are bilingual, fluent in science and in AI. I want to add a third lens: it is also important to have reps under your belt, to know what good looks like, and having talented teams that have reps is one of our core differentiators. The ultimate secret sauce is how it all comes together—having an integrated end-to-end operation that is a continuous learning loop all the way from novel biology or novel insights through to the clinic. For many of us who have actually made medicines and have focused on this, which is a humbling effort, we all know that improving one decision in R&D is simply not enough. It is the compounded impact of better decisions across molecules and biological insight all the way through the clinic that makes the difference. That is how you truly change not just the outcome, but also the time and cost and how you do things, and that is what we are focused on at Recursion Pharmaceuticals, Inc. What does that result in? First, in our clinical development, we have a diversified portfolio. We are very encouraged by our first AI-enabled clinical proof of concept with FAP, which has the potential to be a first-in-class therapy for FAP, and we also have additional programs behind that. In our discovery portfolio, we also have another diversified set of programs. Specifically, on the partner piece, we have brought in over $500 million in upfront payments and milestones; we will share some additional updates today. Every single milestone we achieve not only improves the economics, but is also a validation of the platform and a validation that we are learning fast in terms of what works and what does not to make our platform ever more intelligent. Let us talk about the platform. I am going to share this slide every time we have an earnings call because this is so core to what we do. Number one, being end to end, as I said before, is critical. You have to connect biology and chemistry to ultimately the patient, which is really where the rubber hits the road. That is where we are going. It is important to innovate not just on data generation, but also on your models. We have state-of-the-art foundation models not just in phenomics, but transcriptomics, and we are pulling those together in emerging virtual cell efforts that we are focused on. We are continuing to innovate on additional frontier models in the chemistry space, as well as our newly built clinical development AI platform. Again, it is that integration and how you harness it to unlock value that matters the most. In terms of our strategic pillars, we have three main areas that we are doubling down on in this new chapter. Number one, tangible proof points—this is so important both from our clinical portfolio as well as our partner programs. Second, in parallel, continuing to invest surgically in our platform grounded in areas that will enable us to have more of those proof points. Third, pairing that bold ambition that we have with disciplined execution: how do we do more with less? One area that is really important for us is we like to track our wins and learnings as we go through each of these pillars. You will get used to seeing that going forward. First, in our first pillar—making progress around the clinical pipeline as well as our partner programs—FAP is really important data for a disease that has no approved therapies to date, with durable and meaningful polyp burden reduction. Second, we will highlight our Sanofi collaboration. As a reminder, this is where we are tackling challenging targets in I&I and oncology and leveraging our AI component and chemistry component of our platform to design novel compounds. We just achieved our fifth milestone to date. This is an example of the repeatability of our platforms around using AI to develop chemistry molecules and small molecules. Our second pillar is focused on our platform. We look across the portfolio for “green shoots,” proof points where we are seeing that we can do things better and faster. One example is in our AI-enabled chemistry platform. When we look across the portfolio, we are synthesizing 90% fewer compounds than what we see in industry—about 300 versus 2,500 compounds—because we are predicting more and making less. This is where in silico approaches should be guiding us, and we are seeing that happen. We are doing this two times faster, with an average of 17 months versus 42 months for industry. We will keep pushing on this. In biology, we talk constantly about the amount of unknown biology. We are generating first-in-industry maps of biology—these huge atlases where we are trying to uncover unknown biology. This is in partnership with our great partners at Roche Genentech—two back-to-back maps that were just accepted—and now the team is hard at work translating those maps into novel biological programs. Our third pillar is momentum with discipline. We have a lot of things we want to do, but we have to do it with discipline and good financial stewardship—financially and operationally. We have seen a 35% reduction in pro forma operating expenses year over year. This comes from multiple areas: sharper focus on our portfolio, optimizing our G&A, and improving our platform efficiency, such as reducing the number of compounds we synthesize and increasing our speed. We are excited to share that we have extended our runway to early 2028. Let us dive into each of these pillars a little more, starting with our wholly owned pipeline. We have a diversified portfolio. I will categorize differentiation in three ways. Number one, programs with novel biological insight from our platform. Number two, programs with emerging biology—interesting biology that is unconquered and not validated yet—where we have developed optimized programs. Number three, areas with validated biology but where significant unmet need still exists from a patient perspective. We always track which components of our platform we are using across our various programs. Starting with platform-derived novel biological insight, we have two programs in that category. First, FAP—REC4881, or REC-4881. There is significant unmet need as there is nothing approved for these patients. This is a disease hallmarked by hundreds of polyps, each and every one of which is precancerous, with a 100% risk of colorectal cancer by the time you are 40. There are more than 50,000 addressable patients in the US and EU. The Recursion Pharmaceuticals, Inc. differentiation is using the phenomics—the early version of the phenomics platform—to ascertain in an unbiased fashion that MEK1/2 inhibition could work in FAP. We have completed our Phase 2 study with a positive clinical POC, which we shared in December. Our next steps are on track to initiate FDA engagement on the registration path in 2026. We also have another program with similar elements from a differentiation perspective: RBM39. RBM39 augments what could be potentially important in genomically unstable cancers, impacting a wide patient population. The differentiation for Recursion Pharmaceuticals, Inc. came from uncovering this MOA and the connection it has to CDK12, which is known to be important for DDR modulation. For many decades, it has been challenging to target because of the similar homology with CDK13. Right now, that program is in Phase 1 monotherapy dose escalation, and we expect to share an early Phase 1 update on safety and PK in 2026, later in the year. Moving to emerging biology that is unconquered, where we can optimize programs: CDK7 and ENPP1. For CDK7, it has been known for a long time to be an important central master regulator of both cell cycle control and transcription, with a wide variety of patient populations that are addressable, given its centrality in oncology. Others have tried this target before, and one of the key challenges has been optimizing the PK/PD and the therapeutic index. That is where we have leveraged our AI chemistry to optimize molecules, especially around gut permeability. We are also leveraging our platform to figure out which patient populations should benefit most from CDK7 inhibition. We finished our Phase 1 monotherapy dose escalation, maximum dose has been selected, and we are in progress on the combination study focused on second-line platinum-resistant ovarian cancer, with more data expected in 2027. ENPP1 loss or certain mutations lead to challenges with bone mineralization, leading to fractures and pain—another lifelong disease that starts very early. The Recursion Pharmaceuticals, Inc. differentiation is focusing on a molecule that can be oral because what is available today for patients and some investigational agents is enzyme replacement therapy that requires a huge patient burden with subcutaneous injections, sometimes multiple times a week. We designed a molecule for ENPP1 suitable for chronic dosing, especially in hyperphosphatasia, with IND-enabling studies ongoing. We expect to have a go/no-go decision in the second half of this year. The third category focuses on validated biology but significant unmet need still exists. MALT1 is validated from a target perspective in B-cell drivers, but challenges have been around tolerability. We leveraged our platform to design molecules that could design away from some of the UGT1A1 and other targets that have been seen, which will become increasingly important with combinations with BTK inhibitors and others. We have Phase 1 monotherapy dose escalation ongoing, with an early Phase 1 update on safety and PK in monotherapy expected in the first half of 2027. Another program with a similar theme is LSD1, known to be an epigenetic regulator, preventing or inhibiting some of the differentiation you see in solid tumors such as small cell lung cancer and also AML, with some validated data seen in AML recently. The differentiation here is designing out challenges around tolerability that have led to DLTs and not being able to dose high enough, such as thrombocytopenia. This Phase 1 monotherapy dose escalation is in startup, and next steps are to have an early Phase 1 update on safety and PK in monotherapy expected in 2027. Another program in late preclinical is our PI3K H1047 mutant selective. PI3K in general is an important oncogenic mutation linked to resistance and relapse. We used our platform to design a molecule that would be much more selective—over 100x selectivity over wild-type PI3K—which leads to fewer tolerability challenges that cause dose interruptions and reductions. This is in IND-enabling studies with a go/no-go decision expected in the second half of this year before we consider a Phase 1 initiation. I would like to double click on REC-481 and our PI3K program. For REC-481, we had our clinical POC late last year. There are no approved therapies. In our Phase 2, three months on treatment with 4 mg QD of this MEK1/2 inhibitor, we saw significant polyp burden reduction at 43% median, with 75% of patients responding—one of the higher polyp burden reductions to date. AEs were in line with MEK1/2 inhibitors; the majority were Grade 1–2 rash and CPK, with no Grade 4 or 5 to date. When patients were off treatment for three months, we saw continued durable polyp burden reduction, in some cases deepening, with a significant portion of patients responding. We are on track to initiate FDA engagement in 2026 to discuss the registrational study design. We have started enrollment of the 18-and-over cohort; previously we shared data for 55 and over. We are also advancing dose optimization efforts inspired by the durability data. We expect additional clinical data in 2027. For our PI3K H1047 mutant selective program, PI3K is a very important target across multiple solid tumors. Current PI3K inhibitors have been constrained by hyperglycemia, metabolic toxicity, dose interruptions, dose reductions, and limited treatment duration. Our differentiation and thesis focus on H1047 mutant selectivity with 100x more selectivity over wild type, potentially minimizing risk for AEs. To do that, we designed a molecule with exquisite selectivity. We started with X-ray structures where we had proprietary structural insight and leveraged our MD simulations—this is where compute becomes really important. Our molecular dynamics simulations revealed a novel pocket. We then used our generative 3D modeling efforts and machine learning to design molecules and novel scaffolds for this novel pocket, and used other ML approaches to rapidly design our cycles to achieve exquisite potency and selectivity. We designed 242 compounds across 13 cycles in 10 months. Compared to industry standards, this is fast. Preclinical data show dose-dependent tumor regression for our compound, with significant regression comparable to Scorpion and much better than Piqray. We also saw synergy with CDK4/6 inhibitors, the standard of care today. Additional data versus other assets such as capivasertib showed improved tumor regression with low dose of our asset versus high dose capivasertib. On tolerability, in naïve wild-type mice we did not see impacts on hyperglycemia markers versus Scorpion and Piqray. In obese diabetic rats, we did not see hyperglycemia or metabolic liability even at supra-efficacious doses for our asset versus Scorpion and Piqray. Clinical validation of improved tolerability is critical to confirm this expansion thesis. The study is in IND-enabling with a go/no-go decision for Phase 1 in the second half of this year. We will also do more around our partnerships. Proof points come from both our internal portfolio and our partners. To date, we have achieved over $500 million in total cash inflows from our partnerships—both upfronts and milestones—with recent momentum. Each program we are working on has potential for over $300 million in milestones and tiered royalties per small molecule program, with some royalties up to double digits. We are very excited to unveil our joint portfolio with Sanofi. Sanofi has been a fabulous partner. We are showing multiple programs—five—along with multiple early discovery programs. This is a diversified pipeline focused on challenging targets in I&I and oncology, with molecules that have the potential to be first in class and/or best in class, addressing specific unmet needs. To date, we advanced five lead packages delivered by Recursion Pharmaceuticals, Inc. across five programs and accepted by Sanofi, totaling about $34 million in milestones to date, in addition to the $100 million upfront—$134 million so far. We have important work ahead with later-stage discovery milestones over the next 18 months. Discovery is probabilistic; some will work and some will not. It is the repeatability and the ability for our platform to have multiple shots on goal that is critical. Double clicking on one of these: our platform is not about one data, one model, one asset—it is about a suite of them used for the problem at hand. We start with the problem first, and then we have flexibility and optionality across our models to get to the best outcomes. Our latest oncology program milestone leveraged both physics-based approaches to understand protein flexibility and identify novel pockets, and machine learning algorithms to rapidly execute design–make–test cycles and find highly potent molecules now progressing to the next stage. None of this can happen without a unique and differentiated platform that is an ever-important work in progress. Our biology insight foundation includes over 50 petabytes of high-quality multimodal data. We build state-of-the-art foundation models across phenomics and transcriptomics, and combine them as fusion models—connecting genetics, transcriptomic, proteomic, phenomic, and patient data. We leverage this to create novel proprietary datasets (biology maps) internally across different therapeutic areas, as well as in neuroscience and GI/oncology with Roche Genentech, fueling our discovery pipeline. In chemistry, novel small molecules are harder than they look. We use in silico approaches to generate over 100 million molecules, with synthetically aware design. We start with the target product profile and design for what can be a true drug that matters. Ninety percent of these molecules are generated, scored, and prioritized by our models. We increasingly leverage automation and agentic orchestration to get things done better and faster and in a more unbiased approach. Across the portfolio, we synthesize on average 330 compounds versus 2,500 in industry, and we do it in 17 months on average versus 40+ months for industry, going from target to advanced candidate. As a result, we have over 10 development candidates across our internal portfolio and are getting to that line with our internal and partner programs as well. Our newly built emerging clinical development AI platform begins with a strong data foundation: 300 million-plus real-world lives through internal work and integrated ecosystem data partnerships. Some early results include improving enrollment rates by 1.3x to 1.6x and starting studies faster by up to three months. Our platform can generate a heat map for potential patients across the US, then drill down to state, three-digit ZIP, and site levels, including data around site experience, competing trials, and available patient counts with inclusion/exclusion filters. This is precision operations, starting with the patient in mind. With that, I will now turn the call over to Ben Taylor, our CFO, to go through some of our financials. Ben Taylor: Thanks, Najat. 2025 was a year of financial transformation for the company. As a part of the integration, we decided to rebuild all of our corporate systems from the ground up. This was really important because we wanted to be able to apply the same level of discipline and rigor to our strategic decision-making that we do to all of our scientific decision-making. We looked at how every dollar in the company goes toward a specific quantifiable outcome, and that is how we were able to achieve the efficiencies that we did over the last year while still advancing a portfolio of five clinical programs, hitting different partners’ milestones, and really investing behind the growth in our platform as well. All of that comes back to focusing on those investments across our pipeline and technology portfolio that have the best risk/return and that are going to give us the most impact for the investment that we are making. That is how we were able to come back and have a 35% year-over-year reduction from pro forma 2024 to 2025 and even come in 10% below the guidance that we originally provided in May. We ended the year with $754 million in cash. Looking forward, operating expenses—our 2026 cash—are expected to be under $390 million. Cash operating expenses is a non-GAAP measure that we are going to be using to give you guidance. We have a lot of noncash expenses in our P&L, and so we wanted to provide something that showed what our cash profile might look like going forward. This is coming directly off of our cash flow statement. If you look at operational cash flow and then you add back our inflows from partnerships and transaction costs, you will be able to get directly to this guidance number. In addition, last year it was really exciting to see that we crossed $500 million in cumulative partner inflows. We expect to continue to achieve those going forward. In fact, we hit our first milestone earlier this month already, and so we do include probability weighting of some of those milestones in our cash flow projections going forward. The really exciting part is not only were we able to exceed our efficiency expectations, but that actually means we are extending our cash runway. We are updating our guidance to early 2028 as of now. With that, I will hand it back over to Najat. Najat Khan: Thank you so much, Ben. We will wrap it up by saying, looking ahead, we have a very broad set of catalysts coming up, and it is going to be a busy next 18 to 24 months. This year, we are on track for our initial engagement with the FDA on REC-481. We are looking forward to that, and also initial data—early safety and PK—for RBM39. We have go/no-go decisions for PI3K and ENPP1, which are both in IND-enabling. We will also have additional data for REC-4881 early next year, and then combo data expected for our CDK7 program, as well as more early safety and PK data from MALT1 and LSD1. Recall for both of those, we designed the assets to be more tolerable, so these are going to be important. Partner catalysts will be very important: our partnerships with Sanofi across multiple programs progressing into more later-stage development candidate and other milestones, and in addition, these maps of novel biology extracting into new programs with Roche Genentech. We continue to invest and push the boundaries in our platform, defining what industry standard really looks like for making medicines using AI, and as Ben mentioned, pairing that important work with disciplined execution. We have pivoted toward an outcomes-based budget where we test what value creation every dollar can drive—doing more with less. I will close by saying thank you so much for the time. Our focus will always remain on value creation for patients—they are the ones we ultimately serve—and also our shareholders. Thank you again for listening. We will now open for questions. I will also have our CSO, Dave Hallett, joining us as well, in addition to Ben Taylor. We have questions from Sean at Morgan Stanley and Priyanka at JPMorgan, and from Brendan at Cowen. There are many questions around REC-4881—understanding what potential registrational pathway may look like upon alignment with the FDA, how we are thinking about providing a regulatory update, and the updated patient population. It is a long question; I will break it into pieces. In terms of the regulatory update, as I mentioned, we are on track for that initial engagement with the FDA in 2026. That is going to be really important in terms of the potential design for the registrational study, patient population, and endpoints. We have a very compelling dataset in terms of durability and polyp burden reduction. In addition, we also have natural history data. Coupled together, it is going to be really important for us to have conversations with the FDA. Second, around the updated patient population: as I mentioned, the 18-and-over arm is already recruiting, and we are also looking at dose optimization schedules given what we saw with our durability data. More data on that is coming in 2027. As we have meaningful updates across both fronts, we have done webinars ad hoc; we like to be real time and transparent. When we have more meaningful outcomes and updates, we will share them with the Street. Next question from Alex at Bank of America: it looks like the cost optimization measures really started to take hold in Q4. Any one-offs that helped in the quarter, or are these levels the expectation for the go forward? Ben, do you want to take that? Ben Taylor: Sure. Happy to. Yeah. Thanks, Alex. I agree with your data. It is really about efficiency more than cost cuts. We have hit a point where we have gone through all of the integration. I would assume that is all complete. There are no big one-offs on the system side. We come in with the attitude that we want to continue to find ways for every dollar to make more of an impact in the following years and months than it did previously. When you come in with that attitude, you start to find ways to do more with less. That is where we expect to be able to continue growing our pipeline, investing heavily behind our platform, and moving things forward while still hitting those cost targets that we put out there. Najat Khan: Great. Thank you, Ben. The only thing I will add is the piece around rapid go/no-go decisions and how we are doing that—the mentality and the mindset—and also understanding the variety of areas we are working on and what the value proposition across the different areas is, which evolves as you generate more data. Thinking like an investor is really important—being agile around capital allocation—and that is what we will continue to do, driven by data. Next question: NVIDIA—what was the rationale in terms of the divestment? Do you plan to seek other technology partners? Does NVIDIA now have proprietary insights from the models you have trained, etc.? It is important to decouple two parts. One is the investment from NVIDIA, and one is our collaboration—our technical collaboration—with NVIDIA. The technical collaboration with NVIDIA continues. Some of you might have just seen we are going to be highlighted in a lightning round for NVIDIA’s upcoming GTC presentation with HyRes, with Recursion Pharmaceuticals, Inc. being a pioneer in how to leverage automation. This wet and dry lab is not just words; this is actually in action. This is how we do millions of experiments a week. Our collaboration with NVIDIA “Runner 2,” one of the fastest supercomputers in life sciences, underpins examples from PI3K—using machine learning and molecular dynamics. Our partnership with NVIDIA could not be any stronger. In terms of the divestment, if you look at the public 13F filings from 2025, it is really a shift in NVIDIA’s investment portfolio to more larger on-strategy supercomputer data center efforts. It is a portfolio shift, and we were not the only company; other decisions were made as well. It is a collective shift to more on-strategy investments—large, billion-dollar-plus investments. On seeking other technology partners: we have a strategic partnership with Google in cloud compute. We have a partnership with NVIDIA on machine learning, models, and on-prem compute. We have always been one of the pioneers in bridging the world of tech and science, and we will continue to do that. One more question from Georgia: with the recent positive preliminary efficacy data for REC-481 in FAP and the achievement of your fifth milestone with Sanofi, what specific metrics or historical comparison from your current clinical portfolio best demonstrate that Recursion Pharmaceuticals, Inc. is improving the probability of clinical success or speed of development compared to traditional discovery methods? I am going to hand it over to Dave Hallett to get us started, and I am sure we can add more comments as well. Dave Hallett: Thank you, Najat, and good morning and good afternoon to those of us in Europe. I will start from the discovery perspective. During the last presentation, Najat highlighted a number of themes: repeatability of delivery, specifically highlighted in the burgeoning Sanofi pipeline we are building together. This is a repeatable platform that is delivering both best-in-class and first-in-class solutions for challenging targets. As we highlighted above at JPMorgan and again in this presentation, the speed of delivery—if you look at the metrics in terms of the numbers of novel compounds that we synthesize and test and the speed that we are getting to these development candidates—further demonstrates the role technology plays in accelerating delivery. The proof is ultimately in the clinic, and we are very excited for patients in terms of FAP. This is the first example from our platform where we have been able to demonstrate that a compound that came from Recursion Pharmaceuticals, Inc. has shown clinical proof of concept, and the goal over the coming months and years is to show repeatability in that frame as well. Najat Khan: Thank you, Dave. To add a broader perspective, looking at Recursion Pharmaceuticals, Inc., we have five-plus clinical programs, a diversified portfolio on the clinical side, and a diversified portfolio on the discovery side. It takes time and effort to build a platform. These datasets did not exist; the models did not exist. We are not a one- or two-asset biotech; we are a tech-bio for a reason, which is what Dave mentioned: we are focusing on repeatability and scalability, making this more engineering-focused, using agents or automation to do things better and faster, taking toil out of systems to supercharge our scientists to do the hard work of drug discovery and development. Drug discovery and development is inherently probabilistic—most things do not work. We have a 90% failure rate. Multiple shots on goal are important. Two worlds—tech and bio—have not really come together before, and we are not just building models that are interesting, but actually applying models that unlock value. We constantly look at metrics and stats—the team knows I call them green shoots—whether it is the number of compounds we synthesize (90% less than industry), the speed, the cost of our INDs. We do the same in the biology platform and in clinical development, where we are seeing improvement in enrollment. There is much work to be done, but this is what gets us excited. It is hard, but incredibly challenging and rewarding work. Thank you to our partners and shareholders, and most importantly to patients who are willing to take a bet on us and our programs and who are waiting. We are working as hard as possible to forge a new era of how medicines are made for patients who are waiting. Thank you again for joining us today, and we look forward to sharing more.
Kevin Grant: Ladies and gentlemen, thank you for your continued patience. Your meeting will begin shortly. At any time today, please press 0, and a member of our team will be happy to help you. Welcome to Luxfer Holdings PLC's fourth quarter and full year. This morning, we will be reviewing Luxfer Holdings PLC's financial results for the fourth quarter and full year ended 12/31/2025. I am pleased to be joined today by Andrew William Butcher, our Chief Executive Officer, and Stephen M. Webster, our Chief Financial Officer. Today's webcast is accompanied by a presentation that can be accessed at www.luxfer.com. Please note any references to non-GAAP financials are reconciled in the appendix of the presentation. Before we begin, a friendly reminder that any forward-looking statements made about the company's expected financial results are subject to future risks and uncertainties. We undertake no obligation to update any forward-looking statements as a result of new information, future events, or otherwise. Please refer to the safe harbor statement on Slide 2 of today's presentation for further details. During today's call, we will be providing adjusted fourth quarter and full year 2025 financial results, excluding the recently sold graphic arts business and 2024 legal recoveries. Now let me introduce Luxfer Holdings PLC's CEO, Andrew William Butcher. Please turn to Slide 3. Andy, please go ahead. Andrew William Butcher: Thank you, Kevin. And good morning, everyone. Thank you for joining us. As we close out 2025, I am pleased to describe Luxfer Holdings PLC's performance for the year as successful, disciplined, and even better than we expected at the outset. This sustained positive earnings growth reflects the traction of the operating model we have built over the past several years. I am particularly pleased with the way the organization navigated external during the year, including exchange rate volatility, while continuing to execute at a high level. For the full year, again delivered sales growth while maintaining a consistent operating leverage and strong profitability. EBITDA totaled $51,900,000, up 4%. And adjusted earnings per share was $1.11, up 12% year over year, reflecting our ability to drive earnings through consistent execution and portfolio positioning. We also generated strong free cash flow of $26,200,000 and continue to distribute capital to shareholders. Results for the year were driven primarily by sustained momentum in the electron business, particularly across defense and aerospace applications. Demand for our UGRE and MRE platforms, magnesium aerospace alloys, and certain specialty industrial applications gained in strength as the year progressed and served as a catalyst for full year results. Indeed, the Magtech Solutions team overcame capacity constraints during the year to deliver record volume levels, including the benefit of an add-on to normal annual demand. Within gas cylinders, performance reflected variability in certain end markets, including clean energy, healthcare, and first response programs, although again specialty industrial applications showed improvements. Importantly, the team continued strengthening the underlying cost structure and improving operational efficiency. Across the business, we continued advancing our optimization initiatives, including progress on the Riverside Centre of Excellence and the Powder Saxonburg Centre of Excellence. These initiatives are designed to streamline the footprint, simplify operations, and enhance long-term efficiency. While the financial benefits are expected to begin materializing in late 2026, this year marked meaningful execution progress against these structural priorities. To summarize, 2025 demonstrated our ability to execute, manage the portfolio effectively, and enhance earnings quality and profitability amid uneven demand conditions, reinforcing again the strength of Luxfer Holdings PLC's core operations and value creation strategy. Cated and consistent with our focus on long-term shareholder value, following the completion of the accelerated strategic review the Board has continued to evaluate strategic alternatives. This evaluation remains ongoing. Before turning the call over to Steve, I would like to thank our associates across the organization, their commitment, and execution throughout the year. Their efforts were critical to delivering these results. With that, I will ask Steve to walk through the fourth quarter and full year financial results in more detail. Stephen M. Webster: Thanks, Andy, and good morning, everyone. Let us turn to Slide 4 for a review of our fourth quarter and full year 2025 consolidated financial results. Looking at the fourth quarter, adjusted sales were $90,700,000, down 5.5% year over year. As shown in the sales bridge, pricing actions contributed $1,600,000 and foreign exchange provided a $1,100,000 tailwind. These positives were more than offset by an $8,000,000 headwind with lower demand in clean energy, automotive, and countermeasure flares. For adjusted EBITDA, positive pricing was more than offset by the impact of lower volumes, resulting in the reduction from last year's quarter. Despite the lower sales level, adjusted EBITDA for the quarter was $13,000,000 ahead of our expectations, with an adjusted EBITDA margin of 14.3%. For a full breakdown, please see the detailed water in the appendix on Slide 12. Now turning to the full year, adjusted sales were $371,200,000, an increase of 2.5%. Adjusted EBITDA totaled $51,900,000, up 4.2%, with an adjusted EBITDA margin of 14%, representing an improvement of 25 basis points compared to 2024. Adjusted earnings per share were $1.11, an increase of 12.1%. Cash from operations totaled $33,900,000, supporting a $9,900,000 reduction in net debt to $31,100,000. We ended 2025 at approximately 0.6 times leverage, providing significant balance sheet strength and strategic flexibility. With that, let us turn to Slide 5 for a closer look at Electron's fourth quarter and full year 2025 results. Turning first to the fourth quarter, sales were $46,900,000, down 1.3% year over year, reflecting lower activity in certain select end markets. Despite the modest reduction in sales, we were pleased that adjusted EBITDA margin remained at a high level of 19.6%, supported by favorable mix and continued focus on higher value aerospace and defense programs. For the full year, Electron made a meaningful contribution to overall results. Sales were $196,400,000, up 11.6% versus the prior year, while adjusted EBITDA totaled $36,900,000, an increase of 16%. Adjusted EBITDA margin expanded to 18.8%, reflecting the continued weighting towards higher margin applications. Full year performance for Magnus Magnesium Aerospace Alloys remained a constant contributor to the. In addition, demand for MRE and UGREs also remained at elevated levels during the year, including the benefit of an add-on to normal annual demand, resulting in record sales volumes. Taken together, these dynamics underscore the earnings power of the electron business, and its ability to perform across varying demand environments. With that, let us turn to Slide 6 for our gas cylinders fourth quarter and full year 2025 results. Looking at the fourth quarter, sales were $43,800,000, down 9.7% year over year, driven primarily by lower SCBA and alternative fuel volumes. Despite the lower sales level, gross margin improved to 17.4%, reflecting favorable mix and operational execution. Adjusted EBITDA for the quarter was $3,800,000, with profitability holding relatively stable. For the full year, gas cylinder sales were $174,800,000, down 6.2%. Adjusted EBITDA for the year was $15,000,000, with an adjusted EBITDA margin of 8.6%. While volumes were lower, margins were supported by favorable mix, strong pricing actions, and continued operational efficiencies. Throughout the year, the business benefited from improved activity in higher margin specialty industrial applications, helped offset continued softness in clean energy and variability in healthcare. Full year comparisons were also affected by elevated U.S. Air Force deliveries in the prior year. The results for the year included higher legal and operational expenses concentrated in the period, including costs associated with one-off employment-related matters and certain customer accommodations. Overall, Gas Cylinders' 2025 performance reflects solid execution through a period of lower demand, actions taken during the year position the business to $370,000,000. Year over year revenue pressure reflects several timing dynamics, including the expected absence of an MRE add-on, temporary softness in high-end automotive applications, short-term headwinds within space programs, and some pull forward into 2025. That said, we expect continued strength in high margin core aerospace and defense markets. Adjusted earnings per share are expected to be in the range of $1.5 to $1.2 with a midpoint of approximately $1.12. Adjusted EBITDA is expected to be in the range of $50,000,000 to $55,000,000, reflecting continued margin stability and, later in the year, the benefit of action currently underway at our Riverside Centre of Excellence. Turning to cash and capital deployment. We expect cash flow of approximately $20,000,000 to $25,000,000 in 2020. Capsule expenditures are expected to be above normal levels, between $15,000,000 and $20,000,000, primarily supporting optimization initiatives, growth opportunities, and productivity improvements. We expect a tax rate of approximately 23%, interest expense of $3,000,000 to $4,000,000, and net leverage at approximately 0.7 times. As previously mentioned, approximately $2,000,000 of orders were pulled forward from 2026 into quarter four of last year, ahead of the Pomona to Riverside optimization initiative. And we note the equipment moves and commissioning during quarter one will cause inefficiencies. As a result, combined with normal seasonality, and tougher first quarter comparisons, expect quarter one earnings to be softer than the prior year. Regarding FX sensitivity, the average GBP exchange rate in 2025 was approximately 1.32. Our 2026 planning assumption is 1.35, represents an approximate $0.02 headwind to earnings on a constant currency basis. In addition, our 2026 guidance excludes non-recurring advisory costs associated with the Board's ongoing evaluation of strategic alternatives, which we expect to be reflected as one-time expenses during the year. Overall, our outlook reflects thoughtful planning and the structural actions already underway. And we believe we are well positioned to navigate 2026 while maintaining strong margins and a robust balance sheet. With that, I will turn the call back to Andy. Andrew William Butcher: Thank you, Steve. Please turn to Slide 8. Luxfer Holdings PLC remains sharply focused on sustained profitable growth. Over the past several years, we have strengthened the portfolio, streamlined our footprint, and reinforced our operating model to perform through the macroeconomic cycles while improving the long-term earnings profile of the business. Our strategy centers on specialized materials, engineering value-added niche applications, and disciplined execution, underpinned by the Luxfer Holdings PLC business system which drives innovation, commercial excellence, and operational rigor. We expect to deliver steady performance in 2026, supported by core aerospace and defense demands and the structural actions being implemented across our footprints. While temporary off-cycle demand shifts moderate short-term growth, our streamlined cost base positions us to convert any incremental volume into improved earnings. At the same time, we are advancing new product introductions within Electron, including specialized safety and defense-oriented applications, while also launching next-generation gas cylinder products into the SCBA and space arenas. Looking ahead to 2027, several dynamics are expected to become more favorable. We anticipate the beginning of a new multiyear SCBA replacement cycle, the return of high-end automotive platform activity as model cycles reset, and the potential for another MRE add-on year. Combined with the full benefit of efficiency initiatives already underway, these factors position the business to translate revenue growth into higher profitability. In short, we believe Luxfer Holdings PLC's positioned to navigate 2026 while maintaining margin strength and building toward a more favorable growth environment in 2027. With that context, I will turn to our closing side to summarize today's key messages. Please turn to Slide 9. Our value creation strategy is grounded in disciplined execution while also positioning the business to capitalize on evolving end market trends. In 2025, we delivered another year of earnings growth, margin expansion, strong cash generation, reinforcing the quality of the portfolio. Electron's defense and aerospace platforms were key drivers of performance, demonstrating the strength of our higher value applications. Gas cylinders navigated program timing and end market variability while executing pricing actions and continuing to strengthen its cost structure and competitive position. Structural actions across the footprint are beginning to enhance efficiency and position the business to perform through changing macroeconomic conditions and shifting customer demand. As we look ahead, the headwind shaping 2026 are primarily timing related, not structural. As those factors normalize, we see a clear pathway to renewed and accelerated top line growth and earnings expansion. Overall, we remain confident in Luxfer Holdings PLC's positioning, the durability of our earnings profile, and our ability to create long-term shareholder value. I will now turn the call back to the operator for questions. Nikki, please go ahead. Thank you. Operator: We will take our first question from Stephen Michael Ferazani with Sidoti. Please go ahead. Your line is open. Justin: Good morning. This is Justin on. Thanks for taking questions. Starting on fourth quarter performance, what is driving the continued strength in electron margins? Andrew William Butcher: Yes. Thank you, Justin. We are very pleased with our Q4 performance. Indeed, the 2025 result. There were good demand throughout the year through our more differentiated products. Aerospace, defense, especially magnesium alloys, magnesium heaters, specialty oil and gas, all of those supported the strong margins in Electron along with strong manufacturing output and led to that adjusted EPS that we saw for the full year up 12% above $1.1. Justin: Very helpful. And as a follow-up to that, how should we think about electron margin trajectory in 2026? Do you anticipate margins to be sustained at current levels? Or is there potential for further expansion? Stephen M. Webster: This is Steve. Good morning. I mean, if we look at Electron margins, we always talk about an EBITDA margin of around 20%. And you can see we have been approaching that in 2025, helped by some very strong mix, Andy has mentioned. I would imagine the margin to continue roundabout that percent, that 20% mark. Clearly though, the mix can be a bit variable, but I think with the combination of some of the programs we are putting in place in terms of the restructuring programs, a 20% margin remains the target. And I think we will be fairly close to that as we continue throughout the year. Andrew William Butcher: You perhaps hinted there, Justin, this is Andy about what white drive an upside scenario. So not currently modeled in our, in our guidance. But some of the upsides could come from overperformance in core defense and aerospace. Maybe a military add-on for SRH, busy hurricane season. And the costs on the cost side, of course, we are working on that restructuring project. So we saw if we saw less disruption there or a faster realization of benefits those would all be potential upsides not currently included in our guidance. So we will be very focused on maximizing the performance in both the business units. Justin: Great. Thanks for all the color there. Maybe turning to the gas cylinder segment. It is noted that benefits from the North American gas cylinder plant consolidation and the magnesium powders plant investment are expected in late 2026. Can you provide any additional color on the impact of these benefits? Stephen M. Webster: Sure. Yes, thank you. So as a reminder, we announced last summer that we would be relocating the aerospace and life support product lines in Pomona, California to our Riverside, California facility. And the savings there are up to $4,000,000 once fully executed. Right now, we have gone through the equipment moves. Those started in mid-December and will be substantially complete by the end of the quarter. We are already seeing some initial limit production underway there. The other program is our electron powder center of excellence, where currently we are operating two manufacturing locations in the U.S. for magnesium powder, and we have identified and are actioning an opportunity there to invest very significantly in our Saxonburg site, over $6,000,000 worth of CapEx. That project we also expect to complete before the 2026. And the efficiency and automation benefits there are worth around $2,000,000. That is included in our guidance. Justin: Okay, great. Thanks for the color again. Maybe looking ahead to 2026 and beyond, I know you briefly mentioned earlier about new product developments. Maybe could you elaborate on those? Andrew William Butcher: Yes. So in our electron business, let me give an example of some of our magnesium solutions. Products during the course of the year. Building on the success of our commercial late check detection products, we are already putting into the market now a detection product for organophosphates. And that is planned to be followed later in the year with some detection products around nerve agents such as Novichuck. And then on the cylinders side of the business, we have a range of next generation products. I was lucky enough to visit one of our SCBA customers recently. And they are very excited about the potential of our next generation products there. We have also got a new range being introduced for the space market later in the year. Justin: Exciting. And know, how has adoption trended with the, detection product that you have put into market? Andrew William Butcher: Yes. So let us check. So a relatively small commercial products that is sold through online and through some of the big box stores. And that is used to help people identify lead that might be present in HELP house paints before they go through a restructuring program. So this is small, low million dollars worth of volume. But it is the start of a platform, a range of new products for Magtech Solutions. Justin: Got it. Now turning to capital allocation. Given that leverage well under 1x, can you discuss 2026 capital deployment priorities? Stephen M. Webster: Yes, it is Steve again. I think you will have seen from the guidance slide that the capital expenditure projection is elevated for '26. We spent around $8,000,000 in 2025, which is a little low for us and really represents more sort of maintenance CapEx. Going into 2026, we are projecting $15,000,000 to $20,000,000. I would say a third of that is down to the restructuring, centers of excellence projects that Andy has mentioned. So that is partly the reason for elevated CapEx. We have also got some exciting growth programs that we are looking to fund as well. So number one, accelerated or increased CapEx. Otherwise, certainly in terms of dividend program, that continues at the similar level. We have a normal level of share buyback, which typically runs at around $2,500,000 annually. We would maintain that. We also have an opportunity to do additional opportunistic buybacks should the circumstances arise. We have approval from the Board for that. And we also maintain a program of looking at bolt-on type M and A, both centrally with myself and also the business units tasked with looking at opportunities. So I would say it is fairly a normal expectation in terms of what we normally do. Justin: Got it. And in terms of that M and A, how are valuations in spaces you might be looking? And maybe if you could touch on any flavor for the size of businesses you might be looking at. Andrew William Butcher: Yes. So this is Andy. So we operate an M and A framework that we call SOAR, and that is applied in all of the business units, and their task with looking at range of synergistic potential M and A activity that would support our overall strategy of profitable growth. But typically these are, stress these are bolt-on acquisitions up to $80,000,000 I might say. Thanks, Justin. Justin: Thanks for taking questions and good luck in 2026. I will turn it back. Operator: Thank you. There are no more questions in the queue. At this time, I will turn the call over to CEO, Andrew William Butcher for final remarks. Andrew William Butcher: Thank you, Nikki. Luxfer Holdings PLC is well positioned with a durable earnings profile, clear priorities for value creation. Our focus remains on disciplined execution and maximizing shareholder returns. Want to thank our associates for their performance throughout the year and thank you for your continued support. Operator: Thank you. This concludes Luxfer Holdings PLC's fourth quarter and full year 2025 earnings call. A link to a recording of this webcast will be available on the Luxfer Holdings PLC website at www.luxfer.com. Thank you for your participation. You may now disconnect.
Operator: Good morning, and thank you for standing by. My name is Tina and I will be your conference operator today. At this time, I would like to welcome everyone to the LifeStance Health Group, Inc. Fourth Quarter 2025 Earnings Call. At this time, all lines are in a listen-only mode to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Please limit questions to one and one follow-up. To withdraw your question, press star 1 on your touch tone phone. To ask a question, simply press star 1 on your touch tone phone, then press star 1 again. It is now my pleasure to turn today's call over to Monica Prokocki. Please go ahead. Monica Prokocki: Thank you, operator. Good morning, everyone, and welcome to the LifeStance Health Group, Inc. Fourth Quarter 2025 Earnings Conference Call. I am Monica Prokocki, Vice President of Finance and Investor Relations. Joining me today are David Bourdon, Chief Executive Officer, and Ryan McGroarty, Chief Financial Officer. In addition, Ken Burdick, our Executive Chairman, is also with us. We issued the earnings release and presentation before the market opened this morning. Both are available on the Investor Relations section of our website at investors.lifestance.com. In addition, a replay will be available following the call. Before turning over to management for their prepared remarks, please direct your attention to the disclaimers about forward-looking statements included in the earnings press release and SEC filings. Today's remarks contain forward-looking statements, including statements about our financial performance, outlook, business model, and strategy. Those statements involve risks, uncertainties, and other factors, as noted in our periodic filings with the SEC, that could cause actual results to differ materially. Please note that we report results using non-GAAP financial measures, which we believe provide additional information for investors to help facilitate the evaluation of current and past performance. A reconciliation to the most directly comparable GAAP measures is included in the earnings press release tables and presentation appendix. Unless otherwise noted, all results are compared to the comparable period in the prior year. I will now turn the call over to David Bourdon, CEO of LifeStance Health Group, Inc. David? David Bourdon: Thanks, Monica. And thank you all for joining us today. 2025 was an exceptional year for LifeStance Health Group, Inc. We delivered robust organic revenue and visit growth, driven by continued expansion of our clinician base as well as noteworthy improvements in productivity, all of which translated to delivering on our mission of expanding much-needed access to outpatient mental health services. As a result, our team of 8,000 clinicians delivered care to over 1,000,000 patients and conducted nearly 9,000,000 visits during 2025. It starts and ends with the quality care delivered by our LifeStance Health Group, Inc. clinicians. Patients continue to provide great feedback on their experience. In 2025, LifeStance Health Group, Inc. achieved a patient net promoter score of 84 and our over 570 centers consistently had high Google ratings averaging 4.7 stars. In terms of financial results, this was a year of outperformance, milestones, and records for LifeStance Health Group, Inc. For both the fourth quarter and the full year, we once again exceeded each of our guided metrics, capping a year of consistent outperformance. We generated mid-teens revenue growth for the full year through clinician growth of 9% as well as a remarkable 7% improvement in clinician productivity in the second half of the year. We achieved double-digit adjusted EBITDA margins for the full year for the first time as a public company, a milestone that reflects both the operating leverage in our model and the consistency of our execution over the past three years. We delivered positive net income and earnings per share for the full year, reaching this key milestone as a public company one year ahead of our expectations. Finally, 2025 was a record year for free cash flow generation, demonstrating the strength of our operating model and our ability to invest in the business while creating long-term value. Ryan will provide more color on our financial performance. Our results in 2025 bolster the confidence we have as we carry strong momentum into 2026. Turning to operational execution. We made great strides in 2025 to drive improvements in the performance of the business. Earlier in the year, we outlined several initiatives designed to better fill the time clinicians make available to see patients, and as these initiatives were implemented, their impact became increasingly evident in the back half of the year. For example, we implemented process improvements around clinician scheduling to better utilize available capacity. We also launched a cash incentive program that rewards clinicians for improving quality and productivity. In addition, we expanded patient access through shortened booking lead times, which improved show rates, and made enhancements to conversion of phone calls to booked appointments by new patients. We also strengthened patient engagement with a new platform that enhances patient acquisition and retention. Importantly, these initiatives have now delivered consistently improved results since implementation in the back half of the year, reinforcing the durability of the improvements. Turning to technology. 2025 marked an important year of progress in how we use digital tools to support patient access, clinician experience, and operational efficiency. Throughout the year, we applied digital and AI solutions in targeted, practical ways to improve the experience for both patients and clinicians. From a new patient phone booking perspective, we implemented a new AI technology solution to support our scheduling team, which facilitated stronger appointment conversion and operational efficiency. We are improving the clinician experience and enhancing the care our patients receive. An example of this is we piloted AI-assisted documentation for clinicians. The early results show reduced administrative burden, enabling clinicians to work more efficiently and spend more time on patient care, while also supporting improved satisfaction and retention. We are also using digital and AI tools that are benefiting operational excellence, including revenue cycle management. Examples of this are the digital patient check-in tool, AI, and robotic process automation that were instrumental in delivering strong cash collections. Overall, our approach to technology in 2025 was intentional and disciplined, using digital and AI for business enablement and decision support to drive engagement, productivity, and scale while improving the satisfaction for patients, clinicians, and our non-clinician teammates. Turning to 2026 and beyond, we will continue building on our progress in advancing our operational and clinical excellence by focusing on several initiatives that support our long-term growth and scalability. First, we completed our EHR discovery process and made a decision to transition to a best-in-class vendor. This is an important step in advancing our long-term operating model for continued scale and positioning the business. The new EHR will be instrumental in supporting clinicians and patients to improve both their experience and clinical outcomes. In addition, we expect the new EHR to improve interoperability, which will benefit growing health system partnerships. We will begin working through the implementation in 2026 and expect the transition to the new EHR during 2027. Second, technology will continue to be an important enabler to delivering on our commitments this year. With an emphasis on applying AI and digital tools, we expect to build on the progress we made in 2025 by expanding technology solutions that improve access, clinician productivity, and operating efficiency. We are starting the year with additional use cases in customer service and revenue cycle management along with expansion of initiatives like AI clinical documentation and workflow management. Third, we remain focused on attracting new patients and better converting those inquiries to visits. An example of this is provider and partner referrals. We are making additional investments in this channel in 2026 through increased talent resources to support that opportunity with a new operating model that improves local market support, a core differentiator of our growth model. In addition, we have seen improved online conversion of new patients with our care matching pilot and expect to implement it across all of our state practices this year. In closing, I am very proud of the progress we have made as a company this year. As we enter 2026, we do so from a position of momentum and confidence. Looking ahead, we are well positioned to meet the increasing demand for high-quality mental health services and patients moving to insurance from cash pay for affordability. We will continue to extend our leadership in outpatient mental health care by pairing continued innovation with disciplined execution. Before turning over to Ryan, I want to take a moment to acknowledge Ken Burdick. Ken has been and will remain an integral part of LifeStance Health Group, Inc.'s journey. In addition, I appreciate and value his continued mentorship. I would like to turn it over to him to share a few words regarding a change in his role at LifeStance Health Group, Inc. Ken? Ken Burdick: Thanks, Dave. I transitioned to the Executive Chair role in March 2025. During the past year, I have been incredibly impressed with the way in which Dave has stepped into the CEO role and Ryan has taken the reins as CFO. The performance of the business in 2025 speaks volumes of their leadership, and the quality and cohesion of the entire leadership team. In light of the confidence that I and the entire LifeStance Health Group, Inc. board have in the leadership and direction of the business, I will be transitioning to the role of Non-Executive Chair of the LifeStance Health Group, Inc. board next month. I could not be more proud of Dave and his team, nor could I be more confident about the future for LifeStance Health Group, Inc. The financial and operational discipline that has been incorporated into the culture of purpose and passion that has always existed at LifeStance Health Group, Inc. is a powerful combination that will drive sustained success for years to come. With that, I will turn it back to the team. Ryan will now walk you through the financial results. Ryan? Ryan McGroarty: Thanks, Ken. I am pleased with the team's operational and financial performance in the fourth quarter, which exceeded our expectations. We delivered solid growth across revenue and visit volumes, as well as a record adjusted EBITDA margin driven by operational execution. For the fourth quarter, revenue grew 17% year over year to $382,000,000. Revenue exceeded our expectations primarily due to better-than-expected total revenue per visit and, to a lesser extent, visit volumes. Visit volumes of 2,400,000 increased 18% year over year. The outperformance was primarily driven by better-than-expected clinician productivity. Our visits per average clinician increased 7% year over year. We grew our net clinicians by 44 in the fourth quarter, and 657 for the full year, bringing our total clinician base to 8,040, representing growth of 9% year over year. The level of net clinician adds in the fourth quarter was based on an intentional effort to balance the existing capacity of our clinician base and new clinician hires. This strategy was effective as demonstrated by the strong visit and revenue performance in the quarter. It increases our confidence in this approach going forward. Total revenue per visit of $160 was roughly flat year over year and modestly ahead of our expectations. For the full year, we delivered revenue of $1,424,000,000, up 14% year over year, driven entirely by visit volumes. Turning to profitability. Center margin of $126,000,000 in the quarter increased 15% year over year and was 33% as a percentage of revenue. This exceeded our expectations primarily due to the revenue beat as well as slightly lower spend. Full-year center margin of $461,000,000 grew 15%. Adjusted EBITDA of $49,000,000 in the quarter was very strong and exceeded our expectations. This 49% year-over-year increase resulted in our adjusted EBITDA as a percentage of revenue of 12.8%, the highest in our history as a public company. The outperformance in the quarter was primarily attributable to favorable center margin and slightly lower G&A spending than expected. For the full year, adjusted EBITDA was $158,000,000, increasing 32% year over year, with margins increasing 150 basis points to 11.1%. We have continued to deliver on our commitment to drive operating leverage in G&A as we maintain a disciplined approach to expanding margins while supporting sustainable growth. As Dave mentioned earlier, we finished the full year with positive net income and earnings per share. This achievement was delivered a year earlier than we expected and is a key milestone in our journey as a public company. Turning to liquidity. We generated robust free cash flow of $47,000,000 in the fourth quarter and $110,000,000 for the full year, exceeding our expectations due to better-than-expected earnings and the dedicated efforts of our collections team. We exited the quarter with a strong balance sheet, including a cash position of $249,000,000 and net long-term debt of $266,000,000. We have additional capacity from an undrawn revolver of $100,000,000. We are pleased with our leverage ratios, with net and gross leverage of 0.2x and 1.8x, respectively. We have significant financial flexibility to run the business and fully execute on our strategy. Additionally, this morning, we announced that our board of directors has authorized a share repurchase program allowing us to repurchase up to $100,000,000 worth of our outstanding shares. We will fund this program with cash on hand. With a strong balance sheet, meaningful free cash flow generation, and leverage levels that provide ample financial flexibility, we believe this share repurchase program is an attractive and highly efficient way to deploy capital and create long-term shareholder value. At the same time, M&A continues to be a priority and we have resources dedicated to exploring opportunities in a disciplined manner. In terms of our outlook for 2026, we expect full-year revenue of $1.615 billion to $1.655 billion, center margin of $526,000,000 to $550,000,000, and adjusted EBITDA of $185,000,000 to $205,000,000, with the midpoint representing an 11.9% margin, or almost a point of margin expansion. Our annual guidance assumes year-over-year revenue growth driven primarily by higher visit volumes combined with low- to mid-single-digit increases to total revenue per visit. As for phasing, our guidance contemplates a revenue split of roughly 50/50 in the first and second half of the year, with the second half slightly higher. For the first quarter, we expect revenue of $380,000,000 to $400,000,000, center margin of $118,000,000 to $132,000,000, and adjusted EBITDA of $39,000,000 to $45,000,000. In terms of earnings, the first quarter is seasonally impacted by higher payroll taxes. Additionally, we expect stock-based compensation of approximately $60,000,000 to $70,000,000 in 2026. As a reminder, we announced in May that we would be sunsetting our stock-based incentive program for clinicians and replacing it with a cash bonus incentive program. The impact of this change was expected to result in a decrease in stock-based compensation of roughly $10,000,000 per year. We are seeing this benefit for the first time beginning in 2026 and will continue to see a reduction over the next four years as the existing tranches of clinicians vest. Regarding free cash flow, we expect to once again generate meaningful positive free cash flow for the full year 2026. Additionally, we expect to open 20 to 30 new centers this year. As Dave mentioned, we recently completed our EHR discovery process, and are moving ahead with implementation this year. During 2026 and 2027, we expect this implementation to represent a use of cash of roughly $20,000,000 to $30,000,000. Much of this spend will be capitalized or adjusted in EBITDA as it is non-recurring. Any P&L impact associated with these activities has already been included in our 2026 guidance assumptions. As we look beyond 2026, we continue to expect revenue growth in the mid-teens based on low- to mid-single-digit annual rate growth combined with low double-digit volume growth. We expect to continue to expand operating leverage through the G&A line and now expect to reach mid-teens adjusted EBITDA margins by fiscal year 2028. We believe this trajectory underscores the strength of our platform combined with favorable macro mental health trends, and gives us confidence in our ability to consistently deliver growth and expanding margins over the coming years. With that, I will turn it back to Dave for his closing comments. David Bourdon: 2025 was an exceptional year for LifeStance Health Group, Inc. Our results demonstrate the dedication of each of our clinicians and team members and the resilience of our model. We enter 2026 with strong momentum to continue expanding access to high-quality, affordable mental health care. We will now open for questions. Operator: To ask a question, simply press 1 on your telephone keypad. Please limit questions to one and one follow-up. Our first question comes from the line of Craig Hettenbach with Morgan Stanley. Please go ahead. Craig Matthew Hettenbach: Yes, thanks. And just to start, Ken, echoing your comments, nice to see that the execution of the team kind of playing out and the strategy. Dave, maybe just building on that, the inflection in productivity in the back half of the year and your comments about durability, can you just talk about this year and as we play it forward, just how that is impacting the business? David Bourdon: Yes. Good morning, Craig. Thanks for the question. In regards to the productivity initiatives, we talked about a number of them last year, and what you are seeing is the durability in those, whether it is the improvements that we have made in our phone scheduling team for new patients, the new cash incentive program that we have for clinicians that are tied to quality and productivity, all those kinds of initiatives that we put in, it was not just a Q3 lift. We actually saw it build into Q4. And so we are very happy with the productivity improvements and the durability that we have seen including as we have stepped into 2026. Now having said that, just at a macro level, just a reminder is that we are guiding to about 15% revenue growth in 2026. And the growth algorithm of that is still we expect low double-digit visit growth, and that is going to come primarily from net clinician adds with some complementary benefit from productivity. And then in addition, we will see low- to mid-single-digit revenue per visit growth coming from the payer rate increases. Craig Matthew Hettenbach: Got it. Then just as a follow-up, when you think about the path to 15% EBITDA margin and you spoke a lot about some of the technology investments, as a management team, how are you looking at the ROI kind of payback and the investments you are making, translating into the model. Ryan McGroarty: Yes. Sure, Craig. This is Ryan. I will jump into that question. I appreciate you starting off highlighting what our long-term guide is overall. Again, I think we have been able to demonstrate a history of delivering on our results. As it relates to investment, we are very disciplined in our approach in other technological solutions, looking at whether it is an AI enablement solution, looking at the return profile of the investment, and making sure that it pencils out to be able to drive the leveraging we are looking for from an operating perspective. So, again, very disciplined and thoughtful process that we have in terms of looking at investments. Operator: From JPMorgan, your next question comes from the line of Lisa Gill. Please go ahead. Lisa Christine Gill: Thanks very much and good morning. I just really wanted to follow up on your comments around the visits per clinician being up 7%. You made some earlier comments around digital and AI. Can you talk about how that is playing into those visits per clinician? David Bourdon: Yes, Lisa, good morning. It is Dave. I will take that one. So there are really two aspects to this. The first was that we worked with the clinicians to get more capacity on their calendars so that they gave us more availability to be able to see patients. And that has been a multiyear journey for us. And it is really nice to see the benefits of that. Now the converse of that is then the clinicians said, okay, we are giving you more capacity, now we want you to use it. We want to see more patients. And obviously if they see more patients, they also make more income. And so they were asking for us to fill more of the time on their calendars. So we worked with them around schedule optimization, basic practice enablement, and practice management initiatives. That was one aspect of it. And then the other is then increasing the flow of new patients. We have talked about some of those things like improving the conversion of the phone calls that we get from people seeking care to booking an appointment, and some of the AI tools that we put in place there last year improved that conversion rate by 5%. We have a number of initiatives that are driving improved new patient conversion. Then as we step into this year, one of the initiatives that I mentioned in my prepared remarks is our new care matching algorithm and tool, and we really believe by improving the matching, we improve the therapeutic alliance between the clinician and the patient. What we have seen from the early results of the pilot is improved conversion both not only from phone call but also from online scheduling, and as once we get that patient in the door, they are actually stickier and we believe we will see better health outcomes on the back end of that as well. Lisa Christine Gill: That is great. Dave, just as a follow-up, in your first answer to the question, you talked about low- to mid-payer rates. I know one of the initiatives that Ken had was cleaning up some of the managed care relationships. Can you talk about where you are on that path? Is it where you want to be? And low- to mid-payer rate sounds like a positive. Do you have good line of sight to that over a multiyear period of time? David Bourdon: We do. First of all, we are pretty much complete on the journey of cleaning up the payer contracts. Over the last three years, we have probably reduced the number of contracts by 50%. It is a meaningful improvement. The genesis of that, or the reason we did that, was really around administrative efficiency. We wanted our team to focus on the relationships that mattered, and so that was really the driver of that. We have largely completed that, Lisa. As far as the payer rate increases and the durability of that low- to mid-single-digit, we primarily use an approach of annual rate discussions with the payers. We will from time to time, depending on the situation, lock in a multiyear arrangement similar to what a hospital system would do with a payer, but for the most part, we are more annual contracts with the payers, and we are having very constructive conversations with them. So, again, feel very good about that low- to mid-single digits and being able to achieve that in the coming years. Lisa Christine Gill: Great. Congrats on the great results. Operator: Next question comes from UBS from the line of Kevin Caliendo. Please go ahead. Kevin Caliendo: Thanks. Good morning, guys. Thanks for taking my question. Just want to go into the comment about moderating the net adds in the quarter and the efficiency. Does that mean that you could have added and this is a more measured approach to making sure your efficiency and onboarding was in the best shape possible? Is there a backlog? And I guess the follow-up to that is how should we think about the adds organically versus M&A versus what is exciting in this new buyback that you announced, which I think will be very well received. David Bourdon: Yes. I will take that one, Kevin. There are a few parts to that. First of all, as far as the Q4 clinician adds, I think where you were going with that is we are having an intentional balance between the adding of new clinicians versus taking advantage of the capacity that we have with our existing clinicians. Our priority is to take advantage of that capacity on the existing clinicians first, because of two reasons. The first is I actually believe by doing that, we will improve their satisfaction, and eventually, that will turn into better retention. The other is it is a win-win for both the clinician and the company. It is just a more efficient way for us to be able to run the business. So that has been an intentional balancing act. Again, what I mentioned earlier is that we still believe for our growth algorithm as we step into 2026 and in the coming years, the primary driver of visits will continue to be clinician net adds, with improvements in productivity being complementary but not the major driver. As far as M&A goes, the first thing I want to make the point on is this: there is no material M&A included in our 2026 guidance. It does continue to be a priority and we do have an active pipeline. At the same time, we are going to be very disciplined, and we are focused on opportunities that are both strategic and financially make sense. It is an interesting environment right now. We see this with the larger companies, revenue in the $75,000,000 to $250,000,000 range. They have valuation expectations that are dislocated from reality. At the same time, as we are going down market, those opportunities seem to have more appropriate valuations, and we are targeting those kinds of companies for geographic expansion. I would expect to see some of those smaller tuck-ins. But, again, that is not going to materially move the needle on the financials in 2026. What it does is it positions us well for future-year growth. Kevin Caliendo: Got it. Thank you. Operator: And from Jefferies, next question comes from the line of Jack Slevin. Please go ahead. Jack Slevin: Hey, thanks for taking the question. I wanted to ask about the 2026 guide and some of the commentary around the EHR implementation. Looking at the conservative approach and all the execution you all have been undertaking recently, how does some of the G&A stack in the initial guide—it looks like EBITDA drop-through is going to be a bit lower—so I was just curious if you could speak a little bit more to the process of implementing that EHR and if there is anything specific on the cost side we need to be thinking about there. Ryan McGroarty: Yes. Sure. Jack, appreciate the question, and good morning. I will start off with the EHR, and then I will talk a little bit in terms of G&A in totality between 2025/2026 and the growth rates. First and foremost, as I mentioned in my prepared remarks, the overall EHR implementation—we wanted to put out the representation of the cash usage, and as I mentioned, it is $20,000,000 to $30,000,000. Most of these costs will be adjusted through EBITDA or capitalized. We are in the early stages of the journey to implementation of a new EHR, which we are all really excited about. When you look at G&A in totality, in 2025 our growth rate was 7%, which is unnaturally low when you peg it against the growth rate of the business. If you recall and you go back to our original guide, our original guide was closer to 10%. When you look at our full-year guide from a G&A perspective, what it implies is we are at 13%, which stacks up well against the 15% overall growth rate. You are able to leverage your operating expenses, but at the same time, it provides us flexibility as it relates to being able to continue to make the investments in growth and capabilities where Craig went earlier, to ensure that ROI pencils out. Overall, that is the cause of the step-up year over year. Jack Slevin: Okay. Got it. Really helpful. And then maybe just as a follow-up, thinking about some of the M&A commentary, to take a step back a bit, can you maybe just level-set on any sort of KPIs or things you think about as you look at organic growth in the business versus M&A opportunities? I would think the hurdle rates are getting higher because of the broad network you have and your track record of being able to add on the organic side, but I was not sure if there is any way you can think about even return profiles or other things on growth via those two vectors, given where the portfolio stands right now. Thanks. David Bourdon: We just talked a minute ago about M&A. I think, just to pile on with a few comments, certainly from the financial perspective, we have a profile around multiples on EBITDA and things like that, with hurdle rates which we are not going to publicly disclose, but we do have financial metrics that we are very disciplined on. The down-market opportunities are the ones that are currently the most attractive to us, and it is attractive primarily for geographic expansion. We do not see doing small tuck-ins in geographies where we already have a meaningful presence. The economics are actually much more attractive for us to just grow those organically. Jack Slevin: Okay. Helpful. Appreciate the color. Operator: Your next question is from the line of Richard Collamer Close with Canaccord Genuity. Please go ahead. Richard Collamer Close: Yeah. Thanks for the question. Congratulations on a great year. Dave, in the past, you talked about differentiation and optimization phase. That included, I guess, several strategies like specialty services and expansion. I am interested in how that has progressed, and then also becoming the referral partner of choice—what you are doing there—maybe more details in terms of payer relationships and provider organizations with respect to referrals. David Bourdon: Thanks for the question, Rich. There are a number of components there, so I will try to hit them all. So first of all, to your point around specialty services, that is an important part of our future growth story. We are doing that because what we want to be able to do is holistically treat the patient, treating the patient holistically and driving to a better health outcome. And the kind of those core services, or if they need additional services so specific to specialty—just to ground you—we had previously talked about it as about $50,000,000 of revenue. We are targeting $70,000,000 of revenue for 2026, so about a 40% increase, and that is consistent with how we have talked about that business segment in the sense that it would grow at a rate larger than our core book of business. That growth is primarily coming from treatment-resistant depression services of SPRAVATO and TMS. Just a couple of things I would mention is this is low capital intensity. We are leveraging our existing centers, and we think this is a tremendous opportunity for us in the coming years, and it is going to contribute to both growth and margins. That was on the specialty. In regards to being the partner of choice, I will stick primarily to the medical providers because we addressed that a little bit in our prepared remarks. We are continuing to invest in those resources, everything from a technology perspective in how we interface with them and the unique requests we get from, for example, a health system, as well as we are investing in additional feet on the street. We have implemented a new operating model to make those resources even more local to be able to support our state practices and drive increased referrals from the medical practices. We feel really good about that. We also mentioned last year the Calm relationship, and I think that was more about the signal of a different kind of referral partner than our typical PCP or hospital system or those kinds of referral sources. I think it is just an exciting example of a different opportunity that we think we are uniquely positioned for because of our large scale, the focus on the patient experience and outcomes, as well as our hybrid model of both in-person and virtual. Those kinds of services and characteristics are very appealing to some of these national digital players. Operator: And from William Blair, your next question comes from the line of Ryan Daniels. Please go ahead. Matthew Mardula: Hello. This is Matthew Mardula on for Ryan. Thank you for taking the question. I just want to touch up on the answer to the last question. Can you provide an update on how the patient referral segments have been trending, and then how should we think about the momentum with patient referrals into 2026? I know demand outpaced supply in the industry, but I want to focus on those newer initiatives, like the partnership with Calm and then additional investments in the provider and partner referrals for 2026. The main point of my question is are you expecting to see maybe a newer or a different type of patient because of these patient referral segments? Thank you. David Bourdon: This is Dave. I will take that. In regards to the referrals, this is a primary channel for us to get new patients. It is one of the things that differentiates LifeStance Health Group, Inc. versus many of our competitors in the outpatient mental health space, and we only spend about 2% of our revenue acquiring new patients. That is a very efficient model. The way we are able to do that is through these referral programs with the medical practices. That continues to grow commensurate with the business, so I would not point to anything that is unique there from a growth rate perspective. In regards to the update on Calm, it is still early days on that relationship. I think both sides are still working together to optimize that partnership. We are getting new patient volume from the Calm relationship, but it is not at a level that is very meaningful at this point. We expect it will build in the coming months and years, but it is not something that is going to meaningfully move the needle for us in 2026. As far as the demographics go, one of the reasons that the partnerships with some of these large digital players like Calm are intriguing to us is because we do believe that will attract a younger, more digitally native type demographic than what we have historically had at LifeStance Health Group, Inc. It is a completely different demographic. Operator: Your next question comes from the line of David Michael Larsen with BTIG. Please go ahead. David Michael Larsen: Hi. Can you please talk a bit about the EMR? Who are you using now, who are you going to be switching to, and then what capabilities do you expect to get from this new EMR? For example, will the workflow be easier? Will this contribute to even more physician productivity? And then any thoughts on reporting from the new EMR? What do you hope to get from that one that you do not get from your existing one? Thank you. David Bourdon: Yes, all of the above, David. Thanks for the question. First of all, we have a practice. We do not mention other companies on our earnings call, so I am not going to talk about where we are today or where we are going from an EHR perspective. But to take it up a level, we put a lot of work in over the last year in regards to the discovery process, which we have now completed, and we have decided upon a new EHR vendor. A new one—it will be going away from our existing one. It is foundational for the future. At a high level, it is about unlocking advancements in both clinical and operational excellence. From a clinical perspective, it is going to improve workflows. I think of things like care pathways and that next best action to support our clinicians, being able to tie in new AI point solutions, as well as a much better patient experience both from an administrative as well as a care perspective. There is a lot around the EHR that is core and foundational to where we want to take the company over the next five years. We are going to begin the planning now and throughout this year, and then we expect the rollout to be next year. David Michael Larsen: Okay. That is great. That is very helpful. Thank you. And then with regards to the payer relationships, a lot of times health plans will view mental health providers as ancillary providers and will spend a lot of time with the large acute care medical centers and maybe some of the large physician groups. Based on my experience, mental health has been more of a price taker from the handful of large dominant commercial plans in each city. Can you maybe just talk about that? Are you a price taker where they are like, okay, here are the mental health rates, here is the fee schedule, that is what you get? Or is it much more of a collaborative approach? Any discussion around the quality care you are providing to the patients, fewer ER admissions, improvements in cost of care? Thanks very much. Just want to make sure you are not a price taker. Thanks. David Bourdon: As far as the payer relationships, what I said earlier is I think we are having constructive conversations with most payers. There is always going to be tension. There is tension in all providers across the entire healthcare ecosystem and payers, but that is a normal level of tension. The thing I would point you to in regards to outpatient mental health is that the payers are still getting a lot of pressure from their employer clients and their members for access to in-network outpatient mental health care. That is really the balance to the pricing conversation and what leads to those constructive dialogues. For the more thought-leading payers, the ones that are now thinking about quality and outcomes in addition to access, those are the payers that I think have really gotten their head around the mind-body connection and that there is opportunity for even increased mental health utilization leading to a total cost of care reduction. David Michael Larsen: Thanks very much. I am a big believer, obviously, in mental health and how we keep people productive and at work and improve the total health of the market. So thanks very much. Congrats on a good quarter. Operator: And from Barclays, our next question comes from the line of Peter Warndorf. Please go ahead. Peter Warndorf: Yes. Hey, thanks for the question. I just wanted to touch on the 20 to 30 new center adds that you guys are expecting this year. I know you said that the costs are accounted for in guidance, but is it right to assume that those come on with lower margins? Just trying to get a sense for the cadence of margins throughout the year. Thanks. Ryan McGroarty: Yes, Peter. This is Ryan. Appreciate the question. You got it right. Overall, 20 to 30 new centers do come on with a lower margin profile, but that is fully contemplated in the guidance and what we put out to the market. Again, we look at it as a very nice accelerator in our overall growth strategy in terms of where we decide to plant a flag for a new center. The return profile is relatively quick on them too. You get the initial period where it is lower, but then it gets up to normal at a relatively fast pace. Peter Warndorf: Got it. Thanks. Then maybe just one quick follow-up from a high level on the competitive landscape. Are you seeing anybody get more or less aggressive? Is there anything worth calling out on the competitive landscape early in the year? David Bourdon: I would not point out anything in particular that is new in the competitive landscape. First of all, it is and remains a very competitive environment for attracting and retaining clinicians. They have lots of choices. That is not new. That is the environment we have been in now for years. When I think about the competitive dynamics, because it is such a fragmented industry, it is really a very local conversation. At the local level, we have competitors, but there is not anyone across the nation that I would flag for you. Peter Warndorf: Great. Thank you. Operator: And from KeyBanc, we have a question from Steven Dechert. Please go ahead. Steven Dechert: Hey, thanks for the questions and congrats on a solid quarter. I just wanted to ask one around visits per clinician. Sequentially into 2026, how should we think about the move into 1Q from the level you were at in 4Q? Thanks. Ryan McGroarty: Yes. I appreciate the question. This is Ryan. When you look into 1Q from an overall revenue perspective, the revenue step-up from Q4 to Q1 is approximately $8,000,000, which is 17% year over year, which I went through in the prepared comments earlier. When you think about the actual step-up in visit volume, you can think of that as net clinician adds, where Dave went earlier, being the driving force between the sequential growth and then supported by rate. Those are the key components that you build from Q4 into Q1. As Dave mentioned, we have high confidence in the durability as it relates to productivity, in terms of what we are doing from a practice management perspective around productivity as an enabler. Steven Dechert: Okay. Thanks. Then I want to ask one around free cash flow. I think previously you had guided to it being down in 2025, but it was actually up. Did any of those de novos in 2025 get bumped into 2026? And then are you expecting free cash flow to be up in 2026 versus 2025? Ryan McGroarty: Yes. There is always timing and movement between new centers just in terms of being able to fully execute on the implementation. I would call that relatively minor. Think about the 20 or 30 centers as kind of consistent with what we have been doing here for a bit. About free cash flow, free cash flow did exceed our expectations in 2025 at $110,000,000 versus 2024 at $86,000,000. As we think ahead, and Dave went through this earlier, this is a super capital-efficient business. We expect to be positive again in 2026 as we continue to grow our adjusted EBITDA, consistent with the guidance that we put out there. Again, this is a relatively new phenomenon for us, being in the last two years, being free cash flow positive, and we are pleased with the progression and happy that our expectation is we will again be free cash flow positive in 2026. Operator: From BMO Capital, our final question comes from the line of Sean Dodge. Please go ahead. Sean Dodge: Dave, your comments on technology and using that to drive savings—I would imagine a big chunk of your costs are related to the clinicians and occupancy costs, but if we add up the support costs, the things you mentioned like the scheduling, credentialing, the revenue cycle, the labor-intensive stuff—what proportion of your cost base is that? So things that are addressable or impactable with technology over time. And then maybe how much of that you think you can actually drop out over the coming years? Any thoughts on what inning we are in with all this? Ryan McGroarty: Yes. Sean, this is Ryan. I appreciate the question there. I would handle this question by grounding you in our long-term growth algorithm. As it relates to mid-teens revenue growth, we expect center margin to expand out to the mid-thirties from the low-thirties where it sits today. Part of the center margin expansion is from leveraging things like your occupancy cost, plus the G&A line. In the G&A line, that is getting at the crux of your question—being able to drive efficiencies to be able to pull out costs and get the leverage. That is part of the long-term guidance that we put out today, where with the new part of our algorithm you can think of that as both expansion of center margin plus the G&A line, and overall we expect to be in mid-teens EBITDA by 2028. We feel really confident in our ability to do that. We have proven our ability to implement technology to drive a lower expense base. Sean Dodge: Okay. Understood. Thanks. Operator: With no further questions in queue, I will now turn the call over to CEO, David Bourdon, for closing remarks. David Bourdon: Thank you, operator. I would like to thank our nearly 11,000 mission-driven teammates who make sure that our patients get the quality care that they need and they deserve every day. I continue to be inspired by the passion and the resilience that you all bring. Our services are needed more than ever, and we look forward to furthering the positive impact that we can have on the millions of Americans whose lives can be improved by the high-quality mental health care services that LifeStance Health Group, Inc. provides. Thank you for joining us today. Operator, that will conclude our call. Thank you. Operator: Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.