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Operator: Welcome to the Evolent Earnings Conference Call for the Fourth Quarter ended December 31, 2025. As a reminder, this conference call is being recorded. Your host for today's call are Evolent -- are Seth Blackley, Chief Executive Officer; and Mario Ramos, Chief Financial Officer. This call will be archived and available later this evening and for the next week via the webcast on the company's website in the section titled Investor Relations. This conference call will contain forward-looking statements under the U.S. federal laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. A description of some of these risks and uncertainties can be found in the company's reports that are filed with the Securities and Exchange Commission, including cautionary statements included in our current and periodic filings. For additional information on the company's results and outlook, please refer to our third quarter press release issued earlier today. Finally, as a reminder, reconciliations of non-GAAP measures discussed during today's call to the most directly comparable GAAP measures are available in the summary presentation available in the Investor Relations section of our website or in the company's press release issued today and posted in the Investors Relations website, ir.evolent.com and the Form 8-K filed by the company with the SEC earlier today. In addition to reconciliations, we provide details on the numbers and operating metrics for the quarter in both our press release and supplemental investor presentation. And now I will turn the call over to Evolent's CEO, Seth Blackley. Seth Blackley: Good evening, and thank you for joining us. Earlier today, we released strong Q4 results with revenue and adjusted EBITDA both landing in the upper half of our guidance range. Our performance reflects disciplined execution and continued momentum across our 3 value-creation pillars of strong organic growth, expanding profitability and disciplined capital allocation. Before I get into detailed updates on each pillar, I want to comment on our outlook for 2026 and the overall state of the union at Evolent. First, Evolent is retaining and growing its customers. In addition, we're adding market share through new partners, and we're forecasting the business will grow by approximately 30% in 2026. These factors point to a large market opportunity and validate that we believe Evolent is the leading solution to support payers as they balance quality and affordability in specialty care. Oncology, in particular, remains a challenge for health plans seeking to balance affordability and quality with very high trends expected for many years to come. For 2026, we expect that approximately 65% of our company revenue will come from oncology, up from 36% in 2025, and we expect our oncology product to continue to be the core of our growth in years to come. If you think about why our oncology product is growing so rapidly, we believe it's the combination of very high annual trend that our health plans are experiencing and the incredible opportunity to reduce clinical variability. As an example of clinical variability in oncology, our analysis suggests that for one tumor type, which is second line treatment for non-small cell lung cancer, oncologists today follow more than 200 different prescribing patterns. Variation is we believe it's not supported by the evidence and that can result in substandard outcomes for patients and unwarranted cost for the system. Evolent's value to our customers is our proven ability to engage with treating oncologists and guarantee the quality and cost benefits from reducing this variability. This market dynamic as well as our large new business pipeline makes Evolent well positioned to see outsized growth in the years ahead. Further, we've been able to successfully renegotiate contracts and convert them into the new enhanced Performance Suite model, which includes revenue rate adjustments for certain medical expense factors outside of our control as well as MER corridors to protect the downside. When we embarked on the effort to move our contracts to the enhanced Performance Suite model, there were a lot of questions from investors about our ability to successfully achieve this change while retaining customers and continuing to grow. The fact that we now have approximately 90% of the Performance Suite revenue under this new model, have retained all of our key customers and have signed 2 major new customers this past year under the enhanced model, answers that question in an emphatic way. As we mentioned at the outset of this renegotiation process, our expectation for margins for the enhanced Performance Suite model will be approximately 10% and as opposed to 15% under the old model. As we've rolled out this model, we're seeing opportunities to target margins higher than 10% in some cases, if we feel comfortable with the additional downside exposure. And in other contracts, there are opportunities to eliminate almost all the downside exposure if we will accept a lower maximum margin. While we will make these trade-off determinations as part of a disciplined underwriting process around each contract, our existing mature contracts will tend to run above 10%. But as we expand, we'll target future Performance Suite opportunity for the entire book around a range of 7% to 10% as we continue to prioritize adjusted EBITDA and cash flow predictability over maximum margin. Still, as Mario will discuss, getting to a target margin of 7% to 10% would create a very significant tailwind for the business in the years to come. Turning to the outlook for 2026 specifically, we're forecasting $2.5 billion of revenue at the midpoint, representing revenue growth of approximately 30%, and our adjusted EBITDA guide is $125 million at the midpoint. The adjusted EBITDA outlook has 2 significant impacts embedded for '26 ahead of the potential tailwind I described earlier. Both of these impacts hit primarily in the first half of 2026, and we believe that our run rate adjusted EBITDA in the fourth quarter of 2026 will be over $150 million. Those 2 factors impacting 2026 adjusted EBITDA are as follows: first, our 2026 Performance Suite launches are expected to generate approximately $900 million of 2026 revenue with go-live dates in Q1 and Q2, representing 37% of total 2026 revenue. The 2026 Performance Suite cohort revenue estimate has increased from our previous estimate a few months ago, $550 million, driven by large shifts in our customer membership and by scope expansion of one of the new contracts. At the same time, we saw several of our legacy cohort Performance Suite partners lose significant membership and open enrollment, so our total revenue forecast continues to center around $2.5 billion despite outsized growth from the 2026 cohort. In addition to the increase of new revenue, we decided to take a more conservative guidance approach given the size of these new contracts in 2026. Mario will provide further color on the impact and the timing of those contracts in his comments. The second major factor impacting adjusted EBITDA for 2026 is that the One Big Beautiful Bill has eliminated approximately $40 million of contribution from expected exchange membership disenrollment and customer plan closures. That impact is at the very highest end of the range we estimated at the end of last year. And with one of our largest customers seeing reduced exchange membership up to 60% and our next largest exchange membership book down approximately 40%. Some of this reduction is as a result of the lost subsidies, but we're seeing more of it from decisions the specific plans in our customer base made to shrink exposure to the exchange risk pool. You can see the combined effect of these 2 items on Page 8 of the pack. Finally, we've been aggressive on efficiency by getting the benefits of AI and other automation across 2025. As we previously communicated, we did slightly exceed the $20 million Q4 2025 annualized savings number we had talked about on previous earnings calls. And we're continuing our cost efforts in 2026, now targeting SG&A, AI and other automation savings. These efforts included a large RIF already announced just a few weeks ago. Our 2026 cost structure efforts modestly improved H1 2026 EBITDA, but ramped fully by the second half of the year. Mario will share more details on the 2026 cost point in his section. Despite these aggressive cost actions, we decided to budget the year and guide around a multiyear opportunity. Accordingly, we have protected a number of product, technology and sales investments in the P&L that weigh on 2026, but we believe will have a positive impact over time. While we're pleased with our revenue growth, we understand our first half 2026 EBITDA is disappointing on the surface due to the One Big Beautiful Bill impact as well as the addition of our new contracts. But as I mentioned, we're confident in the ramp across 2026, and we believe we'll have a very large multiyear tailwind for the business as our 2026 contracts mature and the exchanges likely return to growth over time. Now let me turn back to give you a few more detailed updates on each pillar, starting with our first pillar of organic growth. Today, we're sharing the expansion of a previously announced partnership, and we're disclosing another new contract signing. First, we're excited to share that the large oncology partnership we announced in November is with Highmark. We're obviously thrilled to have been selected by such a marquee plan. Since November, we have also expanded the partnership to additional geographies and capabilities. This contract is expected to go live on May 1, and we expect it will contribute over $550 million of revenue in 2026 and over $800 million in 2027. As we will discuss in more detail later in the call, the structure for this contract is like Aetna, under our enhanced Performance Suite model. Finally, we feel there are several exciting expansion opportunities with Highmark across these lines of business for oncology and across all lines of business for new specialties, and we look forward to earning that opportunity through strong performance with this initial launch. And second, we're announcing today that we have launched our Performance Suite in oncology in an additional state with an existing national partner. Beyond these signings and the robust pipeline I mentioned earlier, we're seeing very high renewal rates as well. Across 2025, we've retained specialty T&S logos covering over 98% of 2025 revenue, and through a turbulent industry cycle, we have successfully moved our key Performance Suite relationships to the enhanced Performance Suite model. Said simply, our current customers are opting to stay and expand with us even as we require more protective terms, and we're adding market share through new logo signings. We feel all of this data points to the value we can create and to the durability of our company. Turning to our second pillar of profitability. We continue to focus on both medical and operating expenses as described earlier. I did want to add several additional pieces of data here. In 2025, our medical expense ratio, or MER, came in slightly better than expectations at 89%, excluding our Evolent Care Partners business, representing an improvement of just under 700 basis points versus 2024, even amid another year of high trend. We believe this performance reflects strong execution and pathway management, physician engagement and alignment with our partners. Mario will walk you through how we're thinking about our 2026 MERs for both new business and the legacy cohort. But I think you'll see that we're making 2 basic assumptions for the year. First, we estimate the 2026 cohort will run at 103%, inclusive of new reserves and the total cohort will run at approximately 93%. We're assuming that 2026 oncology trend will remain high, in line with the 2025 trend. In total, we believe these assumptions are conservative and set us up to meet or beat our numbers across the year. In our final pillar of capital structure, I'm pleased that we ended the year with strong cash generation. That, combined with the strategic divestiture of our Evolent Care Partners asset enabled us to end the year with net debt of $782 million, below our expected range of $805 million to $840 million. With no maturities until late 2029, we believe our balance sheet strength supports near-term leverage and a clear path to long-term delevering. Before I hand it to Mario, let me say a few words about the macro environment. We've been saying for several quarters now that demand for Evolent services has never been greater. We believe this is borne out in our new business wins as we take share and grow our customer footprint. And this reality continues to be true. The managed care industry, our core customer base is in the middle of a multiyear margin recovery cycle. To manage their own profitability targets, we see health plans are turning to companies like Evolent that have proven solutions to lower cost while improving quality for their members. At the same time, as we're expanding our business with new partners, the industry is navigating through a period of contracting membership, which presents near-term headwinds for our business as well. We believe we have a clear strategy for navigating through this dynamic moment. First, we will use this moment to seek to capture share, expanding our customer footprint under strong terms. Demand for our product is such that we can be selective in our partnerships and highly disciplined in our underwriting. Second, we will use our scale and customer volume to drive operating efficiency within our products, enabling us, we believe, to deliver margin expansion over time. We've committed to using technology and AI from our Machinify asset acquisition to get to our long-term goal to automatically approve 80% of baseline authorization volume across our products, an outcome that we believe will improve patient and provider experience while driving down our cost structure. We made great progress on this front in 2025, seeing our imaging auto authorization rates in key test areas go up dramatically in areas where we deploy this technology. For example, through this optimization, our real-time auto authorization rate for chest CT scans rose by over 11 points and cervical spine MRI rose by 16 points. In 2026, we'll be deploying additional AI capabilities that will provide additional auto authorization increases. Third, we'll continue to innovate our product and its value for our customers to ensure that we are the leading specialty platform in the market. As an example of our product investments, one of our Blue Cross partners recently published data showing an approximately 40% reduction in hospitalizations and ER visits for patients who use our new cancer navigation solution. And fourth and finally, we will achieve these goals within the context of our current balance sheet, continue to prioritize debt paydown as our primary capital allocation focus. I do believe we have the right plan and incredible Board and team and the right product to meet this moment, and I remain highly confident in Evolent's future. As I hand it to Mario to go over the numbers, I would just note that Mario has been at, at Evolent across the last 90 days. He's already had a huge positive impact on the company, and I'm highly confident in his leadership and approach going forward. Mario? Mario Ramos: Thank you, Seth. I'm excited to be here and energized by the opportunity ahead. Let me begin with Q4 2025 financial performance. Q4 revenue totaled $469 million and adjusted EBITDA was $37.8 million, which exceeded the midpoint of guidance. After adjusting for our ACO divestiture, baseline fiscal year 2025 revenue was $1.77 billion and adjusted EBITDA would have been approximately $141 million. Next, let's review our 2025 medical expense ratio, or MER, which represents Performance Suite claims as a percentage of Performance Suite revenue. For the full year, MER was 89%, excluding ECP, with oncology trend tracking in line with expectations. In the fourth quarter, MER was 95%, excluding ECP, driven primarily by out-of-period true-ups as we recognized a full year of savings shared with clients. While these timing items temporarily elevated MER, underlying medical trend remained stable throughout the year, demonstrating the consistency of our results and reinforcing our strong momentum heading into 2026. I know we have not discussed MER in great length in the past. However, given that Performance Suite revenue will represent more than 2/3 of our business in 2026 and beyond, MER will become the most transparent and consistent way to evaluate performance, but we will provide you with greater visibility into changes in MER going forward. Turning to 2025 expenses. Outside of the MER calculation, such as non-claims cost of revenue and SG&A, non-claims expenses totaled approximately $765 million for the year and approximately $190 million for the quarter. Our quarterly non-claims cost was lower as a result of cost initiatives and lower expense accruals and more than offset the elevated MER for the quarter. We expect non-claims costs to be meaningfully lower in 2026 as efficiency initiatives continue to materialize. More detail on that shortly. Turning to cash flow and the balance sheet. Our cash flow from operations was $39 million and total net change in cash and cash equivalents increased by $48 million, bringing year-end cash to $152 million. We finished the year with net debt of $782 million, below the range we discussed during the last call. Please note that this did include a $15 million overpayment from a client, which when repaid, will negatively impact 2026 cash flow. Finally, we recorded a large noncash goodwill impairment due to market valuation declines, which has no impact on EBITDA or cash flow. Let me now turn to our outlook where there are 4 main topics shaping 2026. First, we expect strong Performance Suite growth, with revenue reaching an all-time high. While this increase in revenue creates a powerful foundation for EBITDA acceleration, it also creates a temporary headwind in 2026 due to our reserving methodologies and the timing of implementation of the new contracts. Second, Specialty T&S 2026 performance is experiencing a significant headwind from exchange membership declines consistent with the entire industry. Excluding this impact, we expect the Specialty T&S business to deliver modest underlying growth in 2026. Finally, I will also discuss administrative services as well as the impact of our cost reduction efforts. With these items in mind, let me dive into our revenue and adjusted EBITDA guidance for the year. Overall, our revenue outlook is $2.4 billion to $2.6 billion, driven primarily by new Performance Suite launches, reflecting both higher membership and a more favorable PMPM mix towards Medicare. We have a bridge on Page 7 of the earnings deck showing the key drivers of 2026 revenue compared to 2025. The significant Performance Suite revenue increase from new contracts to be launched during the year is partially offset by approximately $100 million of lost revenue from existing Performance Suite clients due to exchange-related membership contraction and some plans exiting unprofitable markets. We also continue to see solid T&S revenue growth across both existing and new accounts. However, this growth was more than offset by the decline in exchange membership associated with the implementation of the One Big Beautiful Bill. As Seth noted, while we did experience sufficient organic growth to offset the decline from a membership standpoint, there was unfavorable mix shift within these members, which contributed to a reduction in blended PMPM and total revenue. Finally, we did experience some churn in our administrative services business, notably related to one customer who was acquired by a large national plan that subsequently in-sourced our services. As we've noted before, the administrative services business represents a legacy portion of our portfolio, and we continue to manage it efficiently while focusing our strategic efforts on the higher growth Performance Suite and Specialty T&S businesses. We do not believe our remaining administrative services contracts have that same acquisition-related risk that impacted us in 2025. Let's now turn to our 2026 adjusted EBITDA guidance. Our adjusted EBITDA outlook for the year is $110 million to $140 million. Page 8 of the earnings deck provides a bridge summarizing the key drivers of the year-over-year changes in adjusted EBITDA at the midpoint of guidance, and I will walk through each of the components now. Starting with the Performance Suite and assuming the midpoint of guidance, we expect the existing Performance Suite business to contribute $35 million of additional profitability despite the decline in revenue discussed earlier. This improved performance is driven by the continued realization of savings from our clinical programs, our clients' rationalization of underperforming markets and the impact of the contract amendments Seth described earlier. On the other hand, while our new launches will drive meaningful adjusted EBITDA acceleration over time as they scale, they are creating a $25 million headwind to 2026 adjusted EBITDA at the midpoint of guidance, reflecting the timing of implementation and our conservative reserving approach. This represents a shift from our prior expectation of roughly breakeven performance in 2026 and is driven by 2 key factors. First, we have an appropriately conservative approach to reserving for new contracts despite our significantly improved processes and new contract protections. Over time, we expect this headwind to dissipate as reserves are released, but this does create some pressure in the first few months of the new contracts. Second, the losses of the midyear launches are higher than expected because of higher-than-expected membership volumes. This is offsetting some of the positive lift from other new contracts that are launching very early in the year. As you can see on Page 9 of the earnings deck, the new contracts will temporarily raise our 2026 medical expense ratio. As a result, we expect MER to be approximately 93% at the midpoint of 2026 guidance compared to 89%, excluding ECP in 2025. We do expect MER to rise at the start of the year due to higher reserve requirements associated with new contracts being implemented on January 1. We then see MER continuing to climb and peaking in the third quarter as we onboard Highmark and further strengthen claims reserves as well as experience normal seasonality. From there, we expect MER to steadily improve through year-end as we realize modest in-year savings from our clinical programs and realize other favorable accruals in Q4. Overall, this progression provides a clear and positive path towards sustained margin expansion as our new contracts mature. It is important to note that our underlying medical claims are expected to remain roughly consistent throughout the year. We're not assuming a rapid clinical improvement in 2026 even as our teams work to drive performance gains. Due to our new contract reserving methodology and the expected progression of MER throughout the year, we anticipate that EBITDA will be 70% weighted towards the back half of 2026. In addition, at the midpoint of our guidance, we expect $20 million in adjusted EBITDA in the first quarter with a $10 million to $15 million sequential improvement per quarter in both Q3 and Q4. This pattern is fully aligned with the timing of our contract implementations, the reserve dynamics in the early part of the year and the growing benefit of our operating initiatives as the year progresses. As our newly launched contracts mature and our clinical and operational programs take hold, we believe we are well positioned to deliver this earnings trajectory with increasing momentum across 2026 and beyond. It is also worth noting, as we discuss 2026 guidance, that our new contracts include significant downside protections. And because we are reserving these contracts at elevated MER levels, we believe our downside exposure in 2026 is very limited. Our Performance Suite MER is the most direct indicator of how the business is progressing throughout the year and how we are tracking relative to expectations despite some occasional in-year volatility. While MER can already be derived from our 10-K, we will be introducing enhanced disclosures to provide even greater transparency for investors. Moving on to Specialty T&S. One of the major factors affecting 2026 EBITDA is the contraction in exchange membership resulting from the One Big Beautiful Bill. This creates a onetime $40 million headwind to Specialty T&S revenue in 2026, consistent with the high-end possibility of a 40% decline in exchange membership we discussed on our last call, net of acuity shifts. While future changes in subsidies or exchange enrollment, either before or after the midterms could provide upside, our current outlook reflects the full impact of this contraction. Excluding the impact of exchange membership, T&S at the midpoint of guidance is expected to contribute $5 million of incremental revenue and margin in 2026, driven by growth in membership. Unfortunately, this new membership growth is unfavorable from a revenue mix standpoint, so it is not sufficient to offset exchange-related membership losses. However, this does show how demand continues to grow for our Specialty T&S solutions. Finally, Administrative Services churn, as mentioned earlier, is meaningful, but is being more than offset by a $50 million year-over-year workforce reduction and efficiencies gained across the enterprise. This includes the $20 million saving we realized by Q4 2025 that Seth mentioned earlier. Speaking of expense reductions, let me provide additional clarity on those ongoing efforts, which is a big area of focus for our team going forward and discuss how they will flow through our 2026 financials. With the previously mentioned expectation of 93% MER for Performance Suite, we project approximately $1.7 billion of medical claims expense for the year. The remaining expense base, which includes cost of revenue, excluding medical claims, but including medical device costs and SG&A is expected to be approximately $675 million at the midpoint of guidance. This $675 million reflects a $90 million reduction from 2025 levels. Approximately $40 million of the decrease is driven by the divestiture of Evolent Care Partners, while the remaining $50 million reflects the impact of our efficiency initiatives already in motion, including targeted cost actions taken across the organization. So if I put it all together, I expect our Q4 run rate EBITDA to be at least $150 million. Should we achieve the Performance Suite 7% to 10% target margin on the forecasted $2.2 billion annualized Performance Suite revenue exiting 2026, we expect to generate roughly $160 million to $220 million in total margin. This is roughly $30 million to $100 million higher than the approximately $125 million of Performance Suite contribution that is in the midpoint of the 2026 guide. We believe this potential tailwind is the most important factor that will drive shareholder returns over the coming years. Finally, as you can see on Page 6 of the pack, the enhanced Performance Suite contract structure can create asymmetric upside for shareholders over time. Specifically, if you look at the new launches for 2026, we are forecasting these new contracts to run at 103% MER for the year at the midpoint of the guidance. In the event of a 7% MER degradation to 110% MER, that would drive a negative $13 million EBITDA impact. However, a 7% improvement to just 96% MER or getting less than half of our target margin would drive a $57 million EBITDA improvement. Please note that because we expect adjusted EBITDA to build throughout the year, our leverage ratios will be higher earlier on and should begin to decline meaningfully in the second half. It is important to note that we are confident our current balance sheet and debt terms provide ample flexibility to manage this temporary dynamic as we ramp these large new contracts. Turning to cash flow, an item we're watching very closely. We anticipate generating at least $10 million to $20 million in cash flow from operations after paying approximately $60 million in cash interest expense. Part of the decrease from 2025 is the client overpayment from Q4 that we mentioned earlier as well as $11 million of previously classified dividends, which are now reclassified as interest expense and moved into cash flow from operations. We also expect to invest between $25 million to $30 million in software development and CapEx in 2026. With these financial considerations in mind, let me close with a brief comment on the organization. I want to acknowledge the exceptional work of the Evolent team and where we stand as a company. While there is a significant amount of work ahead, I believe we're well positioned to execute at a high level and accelerate growth as our new partnerships come online throughout 2026. We have a strong foundation, a disciplined financial plan and a team fully aligned around delivering for our partners and driving sustainable value for our shareholders. I'm confident in our ability to navigate the near-term challenges and to capitalize on the substantial opportunity in front of us. With that, operator, we can open the line for questions. Operator: [Operator Instructions] The first question will come from Charles Rhyee with TD Cowen. Lucas Romanski: This is Lucas on for Charles. Can you help us understand a little bit more about the rationale and what's driving the conservative approach to reserving? Presumably, this is for the CVS contract. It's our understanding that initially, you guys are reserving for a 0% MER because your fees match the expected acuity of the population you're about to serve. But here, we're looking at an MER of 103%. I guess, can you help us understand what's driving this? You said new membership is expected to drive this MER higher. It's also our understanding that the enhanced contract allows you to retrospectively adjust the fees for this change in acuity. I guess why is that still driving a loss here, if that makes sense? Mario Ramos: Yes. So the first thing I'll point out is when we have new contracts, we do reserve, and we have a different level of reserves and ongoing business. So that's a big part of what you're seeing with the ramp-up, and we have $900 million of new business revenue this year. So it's a very meaningful part of our profitability. These initial reserves are more conservative. In the beginning, there are lots of new data flow implementation that could impact the profitability and the claims coming through. So this framework is not new. It's something we've developed over the last couple of years. So -- and follows GAAP. The other piece, as you can see on the EBITDA bridge is when we do that and we ramp up IBNR, there is an explicit margin that's added. It's about $13 million. And that's just again, good reserve accounting that we have, and that's why the new contracts typically have that impact. Operator: The next question will come from John Stansel with JPMorgan. John Stansel: I wanted to quickly hone in, I know it's early, but given kind of some of your early indicators, what you're seeing with the new membership early on this year behavior, or anything kind of different than you saw last year? I know last year kind of progressing in line with your trends. Seth Blackley: Yes. John, it's Seth. I'll take that one. So let's start with exchanges. I think I mentioned on the call, we're assuming about a 40% reduction. And the early indicators we're getting from our client base are consistent with that. And we're obviously in touch -- close touch with our clients. That number is obviously very different than if we had a different footprint of clients. I think more of that decline is from our clients proactively choosing to step away from risk pools as opposed to numbers not renewing because the subsidy changes or something like that. And I think, again, that one feels like a reasonably conservative assumption. We won't know for sure until in Q2 how the members fully enroll or not. But I think that's it on exchanges. We're trying to be quite conservative. On MA, I'd say it's mixed. We have a couple of clients who exited a bunch of markets and lost membership materially. We have a couple of clients who gained a lot of membership net. It was sort of a push for us across the year and then Medicaid has been kind of status quo and not much change there. Operator: The next question will come from Daniel Grosslight with Citi. Daniel Grosslight: Just a housekeeping question to begin with. It looks like stock-based comp has been pretty variable over the past few quarters. I'm just curious how we should be modeling that? And then my real question is on capital deployment for '26, just given the limited free cash flow that you do have available, and it does seem like you are focused on deleveraging. If you just look at the debt markets right now, especially for you guys, you seem to be particularly dislocated, let's call it. And you're trading -- your debt is trading at a significant discount. So I'm curious what your propensity is to go into the open market and buy down debt. Obviously, you have to be careful about messaging all that, but curious on how you're thinking about liability management, given how steep of a discount your debt is trading at? Mario Ramos: Yes. So on the stock comp, I wouldn't change your assumptions. I think we're going to be in line with what you guys have seen in the past for the year. It's a good question. We see the same thing. We're obviously very aware of how our convert is trading. It's not -- right now, we're focusing on deleveraging by making sure we can execute. We also have, as I said, a very good, strong, flexible balance sheet, even though leverage is higher than we would like. And we also have some cash and undrawn capacity. So we feel like we're in a good position, but it is difficult just given the dynamic of the ramp up this year to go out and do much other than what we're doing, which is focused on the business. Obviously, if there are any opportunities to do good liability management and add shareholder value that way, we will look at it and weigh that against other things like cash on the balance sheet. But we are very aware of that dynamic, Daniel. Operator: The next question will come from Jailendra Singh with Truist Securities. Jailendra Singh: First, a quick clarification. Just trying to reconcile your comment about second half. At one point, you said that you expect fourth quarter run rate to be around $150 million, but you're also expecting 70% of '26 EBITDA to come in second half, which would imply a much higher run rate. Is there something a dynamic between Q3 and Q4, we should be aware of? Or are there some nonrecurring items in second half which should not be part of annual run rate? So that's a quick clarification, if you can. But my main question is around, can you talk about your oncology cost trend expectations for '26? And if you can update like how did you end up on 25% compared to your 12% expectation you had for the year. Mario Ramos: Sure. Yes, that's a very good question. Yes, there are some reversals in the reserve in the fourth quarter and contractual impacts. Not a huge amount, but that's why there's a little bit of a difference between the implied Q4 number that you may be calculating and what Seth said is the implied run rate at that point. So that's part of the reserve requirement process this year with the new business. So there is a little bit of that happening. On your second question, yes. So we are seeing sort of very stable trend on the oncology side on both really across the board. And we have looked at 2026 in a very similar trend level as 2025. I will say given one of the things that we -- that Seth talked about and we have in the earnings deck, our contracts now work in such a way that not every point of trend is the same. We have a number of different mechanisms to adjust trend for things out of our control. So a 15% trend as long as it's being caused by the change event metrics that we have in our contracts, may not be a big headwind for us. So we will continue to provide flavor with trend because that will impact MER, but we just want you guys to keep that in mind. The way our contracts work now. There are some very specific things that accrue to us on the trend side, and it really depends where the change is coming from. Seth Blackley: Yes. And Jailendra, the last thing I'd add on the oncology trend side, I think the baseline that we saw across '25 and what we're expecting for '26, again, is consistent, not up or down in '26 relative to '25. And we -- again, '25 came in roughly where we thought. Operator: The next question will come from Jared Haase with William Blair. Jared Haase: Appreciate all the details as it relates to the EBITDA outlook. Maybe I'll ask one on the pipeline. And I think there was a bullet point in the earnings deck you mentioned the late-stage contract opportunities that could provide additional upside here in 2026. And so I just wanted to sort of flesh that pipeline opportunity out a bit more, kind of understand how that's weighted to Performance suite versus T&S. And then I guess a specific part of the question here would be, if that is weighted to larger Performance Suite deals, could that potentially lead to an additional drag in the back half of the year if those do come to fruition? Seth Blackley: Yes. Thanks for the question, Jared. So a couple of things on the pipeline. I'd say, I think I've been saying this for maybe 1 year, 1.5 years about the challenges that managed care companies have do translate into pipeline activity for us. And it's definitely bearing out, growth rate this year, the size of the pipeline. It continues to be really balanced, Jared, to be honest, between Performance Suite and Tech and Services. We have some very significant Tech and Services opportunities. We haven't announced and talk about 2 big Performance Suite opportunities today, but there are a number of both that could affect the growth rates over time. I think we feel really good about the growth rates over time. I would not worry about announcing a new Performance Suite deal that creates a new drag on '26. That is not something that we're going to be doing this year with the new Performance Suite contract. I think there are some go-lives on the Tech and Services side that could provide some modest upside. But I think the thing you should take away is that the '26 framework is pretty well locked down at this point. We don't have go-gets that really that we need to go figure out on the revenue side. And so really, all of this I'm talking about is for '27, and it's a nice blend of Tech Services and Performance Suite. Operator: The next question will come from Jessica Tassan with Piper Sandler. Jessica Tassan: Mario, congrats on the first official earnings call. So we appreciate all the new disclosure, but obviously, we've been kind of burned by the Performance Suite business before. So just why should we be confident that the 103% MLR on new contracts in '26 reflects conservatism versus inadequate pricing on new business? And then just I think your 2025 results kind of imply about a 9% OpEx burden on Performance Suite revenue to get to approximately a 2% Performance Suite EBITDA margin. Just what is the MLR and OpEx combo to get us to those 7% to 10% long-term target margins in the Performance Suite? Seth Blackley: Jess, I'll take the first one. So look, I think the main thing that I would focus on with respect to the new business is the structure of the contract. And we have a slide in the pack that shows you the asymmetry of how that works, number one. Number two, at 103% we're definitely underwriting out of the gates, we think at a very conservative place. And being able to apply the combo of conservative underwriting and a good contract does create that asymmetry that we talked about and the third -- last factor that Mario will comment on his run is I think we've taken all that and also applied it to how we guided for the year, meaning you got accounting policies and reserving and 103% does a certain set of things and then just generally how we land on the guide across all the factors of the business. We tried to orient towards conservatism and new CFO, part of that, I think, is a good and healthy dynamic in terms of being conservative. So that's how I'd start. And then on the OpEx thing. I think the thing you got to think about is flow-through economics, that 2%. I didn't totally track all the math. But each incremental dollar of care margin in the Performance Suite disproportionately going to fall to EBITDA, Jess, because there is some variable OpEx, but it's not -- it's more of a fixed cost investment on a lot of that. And so I think the 7% to 10%, we feel really good about. I think we're achieving that today on the legacy cohort as, for instance, and feel really good about being able to get there with the whole book over time. Operator: The next question will come from Jeff Garro with Stephens. Jeffrey Garro: I'll stick on the MER front and trying to think about that 89% actual performance for 2025? And then the 93% expectation for the full book of business for 2026 that has the drag of $900 million at that 103%. And my implied math is there's -- on the remaining Performance Suite business from '25 to '26, there's some improvement, pretty modest, but would love to hear you explain more about the specific drivers of improvement and opportunity even beyond what's kind of underwritten in that 93% full year '26 expectation for the remaining Performance Suite business, much of which is already on those new contract structures. Mario Ramos: Sure. I think it's just along the same things we've talked about. It's -- because we have so much new business upwards of $900 million we expect this year in new Performance Suite business, and as typical, we're not unusual. We are reserving. We have to build up reserves. We have to build up IBNR over the first few months. And because, as I said, the new relationships, new data flow, just the teams working together, we do have a framework that tends to be more conservative on the reserving side. That doesn't last all that long, before -- especially contracts that start in the middle of the year. Once you get over that initial reserving, you actually start looking at some benefits. And so part of what you're seeing in the fourth quarter, is reversal of some of that. And the base business has continued to perform well. That's why the blend is at 93%, which is worse than last year. It's primarily the new business driving up MER, offset by continued good performance on our existing cohort. Seth Blackley: Yes. And Jeff, I think part of the question too is, okay, how does the existing cohort get a little bit better? And there's some ongoing clinical initiative, but there's also some contractual things. I'd say the majority of the improvement is what I would call contractual in nature, which gives us a lot of confidence in it as opposed to go get on the clinical side. Operator: The next question will come from Matthew Gillmor with KeyBanc. Matthew Gillmor: Just following up on some earlier questions. I'd be curious if you could just orient us around some of the swing factors in terms of the high end of the EBITDA guide versus the low end. Is trend on oncology costs are the main one to think about? Or are there other sort of factors that you'd orient us around? Mario Ramos: I think it's MER to start with, which is why we've started talking more about it, why we're disclosing it in a different way in our financials really is about MER, especially as we sit here, we have -- we think we have a good view of membership aside from any other exchange issues. We feel very good about where we are. And then it's the evolution of can we accelerate the savings that we're projecting. Again, as I said, trend can be a factor. We feel like we're being appropriately conservative on those metrics, especially given the new contract provisions where not every 1 percentage of trend is the same. We have a lot of levers to protect us in case trend is heading the wrong way for things that we don't control. So that is the biggest swing factor by far. Operator: The next question will come from Richard Close with Canaccord Genuity. Richard Close: A couple of questions. Seth, earlier on, when you talked about exchanges, you said something about return to growth over time. And I'm just curious what goes into that comment? And then a follow-up with Mario. Just your thoughts, you've been here 90 days, I guess, on the ground. It sounds like your fingerprints are on the guidance and some of the new disclosures. Just curious maybe your thoughts in terms of any changes you're thinking about going forward, that would be helpful. Seth Blackley: Yes. I'll start on the exchange and then pass it to Mario. So Richard, what I'd say there's 2 things on exchange. One is, if you go just look at how consumers have bought that product, in the marketplace. It has had growth to it that go outside of subsidy swings, and there is interest in the product generally. So we have this dislocation from subsidies being pulled back and risk pools are getting shifted. I think over time, the idea of consumers using it to buy product probably will come back over some time period. And whatever the growth rate that will be, that will be. Second factor is more of a wildcard, but should there be a change in the midterms or legislation or anything like that to adjust how subsidies work that could be more of a step-up in membership, which we're obviously not counting on either of those 2 things in the '26 number, but it could be something in the out years. Mario Ramos: Yes. And it's been a great 90 days or a long 90 days. I'm just -- if anything, I'm more excited to be here than I thought I'd be. The team is amazing. I think what we do is at the heart of what we need more of to fix what's wrong in health care. So all that feels really great. I've tried to partner with Seth and figure out a way in how we communicate with all of you and our other investors with more clarity, transparency and how it directly correlates to what you're seeing in the financial statement. So I think if anything, I will try to continue to do that. The MER, in my mind, gets us quite a bit of the way to a place where we're doing that. But we will continue to look at new and improved ways to try to communicate with you guys so you can understand how our business is performing and holding us accountable. Operator: The next question will come from David Larsen with BTIG. David Larsen: Can you talk about what your mature Performance Suite EBITDA margins look like? What is that percentage? How long does it take to get there? And then just over time, like in 2027, 2028, 30% revenue growth, that's high, that's great. But it seems like it's coming at the cost of margin degradation and free cash flow. So why not grow revenue, let's call it, like 10% or 15% year-over-year and focus on more EBITDA growth, EBITDA margin growth and free cash flow and debt pay down? Mario Ramos: I think on the -- we're not going to talk -- we don't talk about EBITDA margin, but we can talk generally about our sort of existing book of business. And when you look at the MERs that we're disclosing today around the new cohort and what we had at the end of 2025, you're getting to a pretty good care margin. We've talked around 7% to 10%. The existing book is doing a little bit better than that, partly because of what Seth said, we're getting some contractual adjustments that improve our base rate, which aren't temporary, but they won't happen every year. They'll stay there. They just won't happen every year. So for the whole book of business, I think we're feeling very good about how it's performing. And I think I'll let Seth comment on the focus profitability versus growth. I just -- to me, coming in, understanding the Highmark relationship, some things are just -- they're great for the business, and it may create short-term pressure. But long term, we want to create value. We know that we can lay this out for you guys, so you see the huge opportunity we have in front of us with that partnership with the current revenue this year, even though from a profitability standpoint, we will have to execute to get it to the point that we know we can like the rest of the business that we have. Seth Blackley: Yes. And David, I'd add just one other thing, which is the Performance Suite we think, is the best way to create value for our partners, which we got to start with them. And we think it's more economically attractive on a per life basis for us as well. And so I think, particularly when you have the enhanced model, more predictability and the like, you're willing to go through a period of investment to get there. It's kind of what Mario just said. But I do think it's important that the pie of value is bigger under the Performance Suite than Tech and Services. And so when you choose between those 2 products, we've -- the enhanced Tech and Services, we think is the better of the 2 products. If the client wants Tech and Services, we'll obviously do that. We'll do whatever they are interested in doing. And then in terms of the investment ramps and the like, again, I think to Mario's point, you find a partner who's a great partner and they're interested in creating a partnership together. You do that because it's going to create value over time. And so I think we're making the right decisions to maximize the value of the company. Operator: Next question will come from Matthew Shea with Needham. Matthew Shea: I appreciate the update that 90% of the Performance Suite contracts now have the enhanced protections and MER corridors. But of the 10% that have not migrated, you noted the scope is limited and protections are not economically warranted. Could you just update us on what is in that 10%? And it sounds like that will stay without protection. So how are you thinking about those contracts longer term? Would you eventually look to migrate or sunset those? Or do you have confidence in them even without the protections? Seth Blackley: Matthew, I would expect almost all of those to move to the enhanced as well. And maybe there's a couple of percent of the 100 that never migrate, but I think it's going to be high 90s at some point would be my guess. I can't guarantee that. I think that's where it's headed. And I think it's the right call for our partners and the right call for us. It kind of gets everything into a standard structure. So that's how I think about it. Operator: The next question will come from Sean Dodge with BMO Capital Markets. Sean Dodge: Maybe just on the cost efforts you mentioned, Mario, for 2026. You said you expect $50 million of that to be captured within the year. Just the time line on those? Are those going to unfold pretty ratably across the year? Are they more kind of early year or later year kind of more heavily weighted? And then I guess, just how should we think about the run rate benefit of those going into 2027? Mario Ramos: Yes. And those are baked, obviously, in the adjusted EBITDA guidance into the cost base that is implied by the guidance. I would say, Seth talked a lot about getting $20 million last year in AI and automation initiatives. Those already happened at the end of 2025. So of the $50 million, $20 million were done then. We did another big portion of the remaining $30 million in early this year. And there will be a piece that we will continue to get throughout the year. So it's largely running through. And as I said, when you look at what we've guided to and the cost base implied by that, the $50 million is in there. There isn't a ton of wrap or additional run rate because they were mostly -- they will almost be done early in the year. Operator: The next question will come from Kevin Caliendo with UBS. Kevin Caliendo: I appreciate the downside protection of your new contracts, but I really want to understand when you are signing new business, what kind of IRR or ROIC are you modeling out or shooting for? And I guess maybe it's not as high as it used to be because you have lower downside. Obviously, there's risk-reward here. But when you're modeling this out, what are you aiming to achieve? Like what's the target return? And how do you think about when that return is going to come about? Year 1, year 2, year 3, et cetera? Just trying to understand from a modeling perspective, how to think about it, how do you guys think about it, and how we should think about it in terms of total returns. Seth Blackley: And -- let me add a little bit more color to how we think about these contracts, which I think will partly answer your question. There's a spectrum from Tech and Services, right, where it's -- there's no investment and no downside all the way to the Performance Suite enhanced model where you might have 10% margin, but you have some downside. There are things in between. And we are underwriting around our cost of capital at Evolent. You don't want to be over 20% cost of capital return, which gives you space in between our cost of capital and a good return. And again, you have to look at how much downside exposure is there in the opportunity versus how much upside is. But that's how we would think about it as clear at a 20% hurdle rate at least. Operator: The next question will come from Ryan Halsted with RBC. Ryan Halsted: Just my question is, again, focusing on the MER, Obviously, a key KPI and oncology cost trends is also clearly a big contributor to that. I mean is there -- for the portion of the risk that you are controlling or at risk for, is there a good way of looking ahead at kind of what would be the swing factors into that portion, whether it be -- is it prescribing patterns of higher costs therapeutics? Is that sort of the piece of the oncology cost trends that you're still most exposed to, I guess, or in control of? Seth Blackley: Yes. Great question. So yes, we think about it as follows: probably 80% of what we're exposed to are in charge of managing would be the therapeutic. And 20% would be other costs, which might be radiation therapy or things like that. Within the therapeutic exposure that we have, we carve out new drugs and indications or things that are not in our control. So things that would be in our control would be for a given cohort of patients that are receiving similar types of treatment, what is the average cost of the therapeutic in that case, plus the 20% of other. And that's really how we think about it. I think that's our unique value proposition is being able to manage the therapeutic dosing selection, timing et cetera. You guys know -- I'll use checkpoint inhibitors as an example that everybody understands, have been very high cost drugs like KEYTRUDA or OPDIVO or others. The duration of that is the patient on it for 90 days, 120 days, 150 days? If it's not working, are you able to get on to a new therapy quicker? What's the number of vials or dosage that are open, et cetera. It's all of those decisions, which again are very tied to the patient profile and the genome and deeply clinical decision-making, which is really the core of the clinical work we do. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Seth Blackley for any closing remarks. Seth Blackley: Thank you for joining tonight. It's great to have Mario and the team, and I just want to say a big thank you to the entire Evolent team. It's been a lot going on over the last 1.5 years. Our team is highly committed to the mission of this company, I'm really proud of them, and I'm very confident that the team and I and the Board are going to deliver for our shareholders, and I'm excited about that. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Bernard Berson: Good morning, good evening, everybody. Thanks for joining the Bidcorp results for the Half year ended December 31, 2025. I'm Bernard Berson, the CEO of Bidcorp. Joining me will be David Cleasby, our CFO. I promise to make this shorter than Donald Trump's State of the Union address a little bit earlier. And I promise I'm not going to award myself any Bidcorp medals of honor, although I definitely deserve quite a few. I definitely do. Let's get straight into these results. I'll just take you through the high level of them. David will then take you through the financial detail. I'll come back and talk a little bit about the past 10 years. 2026 marks 10 years since the unbundling of Bid Corp from Bidvest. We'll talk a little bit about the outlook. Q&A, which will be the normal format, but please send your questions in through the normal mechanism, and we'll get to those at the end. And then hopefully, we can wrap up and I can go have my dinner. So let's go straight into it. You know who Bidcorp is. If you don't know who Bidcorp is, you're probably on the wrong call. We are a global food service business. We like to update the market on a regular basis. So you know as much about the business as possible. Our last update was towards the end of November. So we really are just filling in only a few gaps over here, which I find very interesting that -- yes, we're only filling in a few months' worth of differential, yet there's still some commentary that we overachieved on certain things and underachieved on certain things. So I think there's way too much micro analysis that goes on over a very short period of time. And what I would like to stress, particularly later when we look at the 10 years is this is a marathon, it's not a sprint. And sometimes, you can't look at the results just in the isolation of the last 3 months since our last update or even of 6 months. You need to take a longer view on certain things, and it's about the longer-term trajectory, not necessarily what transpired in 6 months. However, we're very happy with the performance of our business over 6 months. I'm not trying to make any excuses. I think we've performed exceptionally well in a pretty tough environment. Globally, in the markets we operate, it's certainly not strong. Economic activity isn't strong. There's a lot of uncertainty a lot of the jurisdictions, and we can go through them individually in a while, are negative, not positive. So for us to deliver revenue growth of 7.1% in rands, which is 6% in constant currency, I think, is a very solid result. Bearing in mind food inflation is maybe 1% to 2% of that 6%. It is very difficult to get a handle on what inflation actually is across the portfolio of countries and across the basket of product that we sell, which doesn't run the same as published inflation numbers. So we're very happy that we are seeing real growth in an environment that we don't think is growing by much. So constant currency revenue up 6%. Gross margins are relatively stable. There are a few environments where they are a little bit down for certain reasons, competitive reasons, some that they're up. But overall, we've maintained our GP margins. Our trading profit is up over 8% in rands, 7% in constant currency. Once again, we're very happy with that. Trading margin has trended up slightly from 5.3% to 5.4%. I'd say slightly, it's -- 5.4% is probably at world-class levels anyway. So every 10 bps that you can get out of this are hard sport. It's not an easy -- we're not coming off a low base. We're coming off a really very well-developed, well-defined strong historical base. So to increase off that base, we are very satisfied with and believe our teams have done a great job to get us there. So the result of all of that is, we've got HEPS up by 8.5% in rands, which is 7% up in constant currency, which is a little bit better than we indicated in November when we spoke to you more or less in line with our expectations. And like I say, economic conditions out there aren't favorable. They're not terrible. I don't think we should be over-negative about them, but they certainly aren't running hot. It is just tough going in most geographies. So overall, we're very satisfied with these results. Our teams have done a great job around the world. Almost every business has performed well, there are 1 or 2 that haven't for various reasons, and we're happy to talk about those. But we are a portfolio of 34 -- 32 countries, 20 businesses, I believe, over those countries. And obviously, in any period, you're going to get 1 or 2 that don't perform for certain reasons and 1 or 2 that are going to shoot the lights out for various different reasons. So my thanks do go out to the team. We do have a very stable management team, which I believe is part of our success. It's a team we bought into our strategy, who are all firmly aligned with the path that we're on, who understand what our offering is. And we've stuck to the path. We've elaborated the path that we're on. And that's what we're doing. And I think the teams have delivered upon that and executed once again very admirably. So my thanks go out to the 31,000 team members around the world, ably led by our very small management team, a very top management team who once again have done a great job. So thank you to all of those on the call, all those not on the call. It doesn't happen because of me or because of David, sometimes it happens despite me and David, and it's very much because of the great team that we have around the world, who are passionate and enthused, and have bought into the strategy of how we grow this business. If we move on to the segmental analysis of the business. First off, we have Australasia. Now you may recall over many, many, many, many, many, many years, Australasia was the star performer and certainly led the charge and certainly supported the group through many years. And I guess, over the last year or 2, that's taken a little bit of a breather. And for what was our largest segment to be flat, I think under the circumstances is a remarkable achievement that it hasn't gone backward, bearing in mind some of the conditions out there. So the two businesses have performed very satisfactorily in constant currency. And once again, we look at constant currency, the rand moves as the rand moves. We have no control over that. Revenue between Australia and New Zealand is up 4.5%. And we're very happy with that. In that, New Zealand's revenue growth is very minimal and Australia's revenue growth is approaching about 5%. From a profitability point of view, New Zealand had a very tough start to the year, and we've spoken about that. However, we did see conditions there change in about October, and we've seen, I'm going to say, a strong performance from our New Zealand business, which matches our expectations from about October onwards and hopefully, that trend continues. That's a two-pronged issue. Tourism has returned. I think the consumer is in a bit of a better place that bounced off the bottom. But also, we did take some measures when things weren't so great in the business, and we have looked at our margins and who we're selling to and the pricing we're selling to and are we -- do we need to sell to certain customers that does it just make sense to have those relations. And also, we looked at our cost base and trimmed the cost base down a little bit. So the New Zealand business is now looking at a very strong recovery. We're optimistic about that. The Australian business is doing fine. We are seeing revenue growth. Profitability growth is a little bit slow. Once again, when you look at the trend over a number of years, that business is double the size of what it was pre-COVID. It's probably more than double the size of what it was pre-COVID. So to maintain that and to wait for the next growth phase is the position we're in, in Australia at the moment. And I have no doubt that will come. The Australian economy is probably flat at best. It's not terrible, but it's certainly not great out there. What we are seeing in, not only Australia, but a lot of markets, is the consumer is under pressure. And as a result of that, there's a lot of downtrading into the QSR segment. And by design and by choice, we service very little of the QSR segment. So we're not benefiting from that, and we have no regrets about that. Because as soon as the economy does improve a little bit, we have no doubt that the pendulum swings back towards the type of business that we're heavily engaged with and invested in, and we'll see the strong benefits of that. So from an Australasian point of view, profitability is basically flat year-on-year in the 6 months. We're pretty confident about the look forward. Particularly in New Zealand, we think we'll be pretty buoyant and Australia will follow within 6 months, maybe a year. Moving across to the United Kingdom. We are seeing sequential improvement there. I noted sequential is the new buzzword that everybody uses. I'm not actually sure what it means. But we're definitely seeing sequential improvement with our margins ticking up from 3.4% to 3.5%. Now before all of you say, "Well, only 0.1%, when are you going to get to 5%? When are you going to get to 6%?" The answer to that is we'll get there when we get there. That's really hard game in the U.K. There's very little positive news that comes out of the economy. We don't operate in isolation. We don't operate in a bubble. We're not magicians. We very much operate in the reality of the market we're in. And I think under the circumstances of the U.K. market and those of you who cover the other U.K. stocks will understand this, I think our business has performed very, very well. Revenue up 5.8% in constant currency, profitability up almost 10%, off a reasonable base last year. And yes, it's not where we want it to be yet, but we are making progress. In all the business pillars we do have in the United Kingdom, we are making some progress. We definitely are seeing improvement. And actually, to my point earlier about the QSR channel, the U.K. business is probably the one that we are most heavily skewed towards the QSR channel. We do have a few of those customers. So we are getting the benefit of that. But once again, that doesn't overly excite us because long term, that's probably not going to be sustainable. That growth won't be sustainable, and it's not where we want to position our businesses for the long term. And like I say, we don't measure things on a week-to-week basis and make decisions on a week-to-week basis. That's a much longer view. So we're happy with where the U.K. is. From our business point of view, I'm still hearing lots of very negative news about the U.K. economy, about the consumer, about the sentiment out there. The hospitality industry is really under pressure. We are seeing that in our hospitality type of numbers. Fortunately, we've got a large nondiscretionary type of business as well with health care, aged care, government, education, et cetera. So we're very satisfied with the U.K. It is tough going, but we are making progress and seeing improvements. Europe had another great performance, and that's following on from a few years of strong performance. So we have a trading margin there, almost at 6%, which is wonderful. The question now is, how we get back to 7% in a period of time, but it all becomes much more difficult. The low-hanging fruit has been picked and now it becomes more difficult. So we've got a revenue growth of 7.6% in constant currency and profitability -- trading profit up nearly 12%. Europe's a combination of many different businesses at different stages of development, and it's a microcosm of a portfolio within itself. The Western European, the Benelux businesses, I guess, performed very stably, reliably, gave us good growth, but in reasonable numbers. Spain and Portugal remain work in progress and will remain work in progress for quite a few years. We're still building the base there. We're still getting the foundation correct. We're still looking for suitable acquisition. We're still building the team and building our regional presence. So those will take time. They're not causing us any stress. They are going the way they need to go. They just haven't scaled up to the extent that we expect them to quite yet. Italy was a standout performer, which probably was expected. We put the investment in the year or 2 before. We've made a few changes, and we're very pleased with the outcome of that, and that business has grown very strongly. The Czech Slovak Hungary business continues to perform very well for a mature business and both top line and bottom line growth. Poland remains a very exciting market for us with good growth. We are going to have to reinvest in Poland. Many years ago, we spoke about having to grow into our skin. We made that investment. We grew into it and now it's too tight. Yes, we've grown to that capacity plus we're operating at max, and we are going through that investment phase again to expand our presence in Poland, but it's a very strongly performing market, it's a strongly growing market, and we're very enthused about that. And the Baltics continue to perform very adequately, relatively small market. I think the addressable population is only 4 million or 5 million, but the business is stable, profitable and is a nice business now performing the way it should. Emerging markets is a mixed bag, very difficult to look at the overall numbers. We have revenue up 4.1% and profitability up 5.2%. Standout performance of South Africa once again. I think we're at about 15% profitability growth in South Africa across the Bidfood business and the Crown business. The bakery business, which is equity accounted, also performed very satisfactorily. So in a not great market, the teams have once again delivered fantastically well, which does create a blueprint for us around the world that notwithstanding the fact that economies might not be fantastic, there's still opportunities out there to be explored. And we don't have dominant market share in any market. We don't sell all products to all customers. There are levers we can pull in all countries and certainly, South Africa shows us how that can be done. South America was very pleasing as well. We're starting to see some good growth come out of that. I think the economies there have generally improved. And all 3 of them, Brazil, Argentina and Chile performed relatively well. Those businesses still aren't at the scale we'd like. And we don't know which ones we'll scale up first. Somewhere like Argentina is a little bit more tricky or contentious than maybe a Chile or a Brazil. Brazil might be more attractive because it's a bigger market. Chile, we've been there longer and have a very established business that's now starting to perform very well. Middle East is going through a little bit of an adjustment phase. There was a large customer that exited Saudi and went to a logistics model. It was great for us to ride the wave with them, but we always knew that was going to come to an end. And we are now reengineering our business to be a more sustainable type model that more closely resembles the UAE market. In the UAE, we're doing very, very nicely. It's a very stable, strongly performing business and now we need to get Saudi to that. Turkey remains a very challenging market. We're seeing good revenue growth. But from a macroeconomic point of view, it's tough. You've got very high inflation. You've got very big increases to the cost base. You've got government interference in a lot of things. We have a very small business, and small businesses require investment to get them to scale, and we're still going through that trauma. Moving over to Asia. I'll start with the good. In Asia, Malaysia is performing very well. We're very enthused about Malaysia and the prospects there. We did make an acquisition beginning of the financial year, which expanded our portfolio into ambient products, moving a little bit away from premium chilled and frozen to broaden the range, broaden the customer base and change the nature of the business to be a more broad line foodservice distributor, and that performed very well. We're very enthused about that. Singapore remains a work in progress. We are making progress. There's still some restructuring going on. The business is performing satisfactorily, but not to its potential, and that will take another year or 2 or 3. Singapore as a country, I think, is probably struggling a little bit. I think they've lost a little bit of that tourism stopover airline hub type of business, although when you look at the expansion plans of Changi Airport, you wouldn't believe that. But there is definitely some local pressure in the short term there, but the business is doing fine. Greater China continues to be tough going, particularly Mainland China. Very quickly, and I think I might have spoken about it before, we were an importer of expensive foreign Western type product, mainly dairy type of product, and beef and protein out of Europe, Australia, New Zealand, America, South America. And China has very much decided to go to a more local procurement type of model from a country point of view. There have been quite a few retaliatory tariffs put in, particularly on European dairy. And it's very difficult now to import that product into China. And not only have we seen the price of the product go up and the import of it become very difficult, but the principles, our suppliers have also tried to protect their position and moved away from an exclusive distributor type model, which they had before and have opened up to multiple distributors to try and maintain their volumes. It's a very short-term strategy because all they're doing is they're filling the pipeline of multiple wholesalers with inventory. And then you've got multiple wholesalers trying to give the stuff away because it's got a date having an expiry and the clock is ticking. So we've seen our margins being crushed quite significantly in China on imported product. We have shifted a little bit to local product and have been relatively successful in that, but we can't do that quick enough to replace the lost volume of imported product. The Hong Kong business is relatively stable in a very flat Hong Kong market. And the Hong Kong market then was also impacted by that high-rise tower fire, which caused the cancellation of a lot of Christmas type parties and festivities. So they had a really flat December. So that had an impact there. So I think I've gone through the segments. Overall, our team have done great. We're very happy with it. I'm going to hand over to David to talk about the financial highlights. David Cleasby: Thanks, Bernard, and good morning to everyone. Thanks for taking the time to listen to us. First up, obviously, thanks to all our people around the world in terms of delivering the results. And thanks, I guess, more in particular from my perspective to the finance teams as well as the corporate team who have put it all together. So thanks. As usual, in terms of IFRS, there are no changes. The accounting policies are consistent and they're consistently applied, so no issues there. The constant currency, just to remind you, we use it as the true measure of the performance of the businesses. We don't have a dominant currency. So it's every currency or results of that particular business in the currency, but at last year's rate. So it does give us a like-for-like comparative. And that's obviously how we measure the business and how we judge performance in the business in their home currencies. And the result, obviously, will fluctuate. And as you've seen, I'll talk a little bit about that later. And hopefully, I don't repeat too much of what Bernard sort of alluded to already. I think from my perspective, the quality of the result is particularly good. They're very clean. I think you can see from the difference between earnings per share -- headline earnings per share, there's very little extraneous issues in the group, some, I guess, cleanups of some businesses in terms of rationalizations within countries and within portfolio. So that's obviously an ongoing basis -- ongoing issue and will continue. But there's very little from that perspective. A little bit of inflation accounting, but really doesn't account too much. So from a quality of earnings perspective, we are happy. Just some of the highlights, I guess, revenue growth up 7.1% in rands, gross profit stable at 24%, trading profit up 8.1% and 7% in constant currencies. I'll talk a little bit about that later. 8.5% of HEPS growth and nearly 7% in constant currency. Dividend up 10% almost, and I'll talk a little bit about that because that's basically ahead of our normalized earnings growth as well as a little bit low cover. Pleasingly, returns have stabilized, I guess, from where they were a year ago. So we are starting to see the benefits of the investments that have been made over the past while, and that's always something that is going to happen. As one invests, who takes a bit of time to utilize the capacity and at the throughput and therefore, you've got the cost base, but you haven't got the revenue coming through as yet. Free cash flow is an odd. I think what we've seen is basically a balanced free cash flow period where cash generated by operations has been offset by the investments into working capital, into acquisitions and into capital investments. So I'll talk a little bit about that later. And our net debt to EBITDA is slightly below where it was a year ago. In terms of the more detailed P&L, revenue up 7%, nearly 6% in rands and Bernard has spoken about Australasia's contribution. So just to bear in mind, that's nearly 20% of the group. So I think for the rest of the businesses, they've done particularly well. Gross profit at 24%, largely stable. I think the issue is that the businesses have to trade. We are a trading business. They will make calls depending on trading conditions that they see in their markets. And you're going to get a little bit of sometimes trading margin for volume. And that's just a reality, I guess, of the trading environment, but we're very happy. I mean you can see that some businesses are slightly down. Bernard spoke about particularly China where margins have come up significantly. So overall, we're very happy that the rest of the businesses have made up some of those shortfalls. Expenses have been well managed. You see the cost of doing business from our perspective has fallen. And I think that's more than offset the slight decline in the gross profit. And if we look at the constant currency, OpEx growth of 5%, we can still see we're getting some leverage because gross margins have grown by slightly more than that at 5.4%. Group trading profit at 8.1% in rand, nearly 7% in constant currency. And I spoke, the margins have increased a little bit, and we managed to trade through the costs and offset that against the slightly lower gross margins. For those things slightly below the trading profit line, the non-IFRS net interest in constant currency is up a little bit. I'm hopeful that we are seeing the top of the interest rate cycle from our perspective at this particular point in time. I think as we go forward, our expectation is good cash generation. And therefore, we should see that moderating and hopefully, come down a little bit. Effective tax rate, it is mix dependent, but it's absolutely within guidance at 26.7%. And just to note that I think we noted at the end of 2025, the results, the Pillar 2 detailed tax exercise has really had a negligible impact on the group. We pay full taxes in almost every jurisdiction around the world. So those from SARS who are listening, unfortunately, there's not a big take from Bidcorp. A couple of items, as I said, were really comprised some asset impairments relating to sort of almost in-country portfolio rationalizations and no big issues there. HEPS is up 8.5%, but EPS 16.6% and that's really largely attributable to the prior year impact of the exit of Germany. So that's really just to note. Currency volatility at 1.6%. Benefit in this period, obviously, the currencies and what you get is a little bit all over the place at the moment. The P&L is done on average, and that's obviously looking back over the last 6 months, whereas the balance sheet is measured on a closing period end number. And in the P&L's case, there was a slight benefit. But certainly in the balance sheet impact, there was a decline or an appreciation from a rand perspective in the balance sheet. On the cash flows, yes, I think just generally a pretty strong result from our perspective. Cash generated by operations was up 8% before working capital. If you take that after working capital of 9%, was up somewhere around 27%. So the business continues to generate really good cash flows. Working capital, I think, overall, a pretty good performance, not perfect, but in a group on a decentralized basis, you're never going to get a perfect result. And when you do, you've got no real opportunity to improve. I mean we measure working capital across 3 measures, firstly, an absolute impact. And in this period, the absorption, which is typical of our first half of the year, we had ZAR 2 billion of absorption, but against ZAR 2.7 billion last year. So give that a tick. On a days basis, they've come down from 12 days to 10 days. So that's also positive from our perspective. And the last one is our sort of internal measure, which is working capital as a percentage of revenue. It's really just measures how much working capital we've got invested in terms of the growth we're achieving, and that's also come down in the period versus the prior period. So I think the businesses have done a good job in this space. Investing activities, we've indicated that these will taper off, obviously not going to naught, but they have come down a little bit. A lot of it is still going into new capacity, but there's also quite a lot of maintenance CapEx in this period. And a lot of that is -- or some of that is actually replacement depots where yes, there is some additional capacity, but the majority of it is replacing facilities that we have. Our intention remains to own our facilities where it's feasible, where we can. And I guess we're strategic and we still own around 73% of the property portfolio. Acquisitions, four in the period. The cash cost in this period was about ZAR 0.8 billion. Contribution to revenue 1.3% and 1.2% to trading profit. So not a great contribution; some contribution, obviously, but we'll see the benefit of that as we do as the businesses are integrated and become more efficient. Net debt is slightly down. I think if we look at it in pound terms, it's basically flattish. We definitely are seeing the cash generation starting to improve against the prior period on a day-to-day basis. And I'm sure we'll see that improve even further as we go into the second half of the year. In terms of the balance sheet, I won't dwell on this too much. It's still strong and conservative, as I say, as we like it. Solvency and liquidity ratios are all good. In fact, they're very good and, obviously, well within all our covenants. There are no real issues with the debt maturity profiles. We do have an RCF, which is, I guess, standby facility, and we're renewing that and that will hopefully conclude in the next month or 2 or 3. But generally, from a balance sheet perspective, we're very happy. And this is what we think a very competitive advantage from a group perspective to have the balance sheet as strong as we've got it. In terms of financial guidance, I think I'm not going to go through all of this, but I think things to note, rand depreciation has obviously accelerated a little bit in the last 2, 3 months, and that is likely to have some impact on the rand results. But once again, we look at these businesses and the group results on a constant currency basis because we've really got no control over what happens to the rand. It's either good or it's bad or it's indifferent. Cash generation into the second half of the year, that's consistent with our normal trading cycle, and that's our expectation going forward. Our capital investments, we have guided to 1.5% to 2% over the next 12 to 18 months, that's still our expectation. Bernard, I know, will argue and say, well, that's not good, but that's the reality. We have been through a period of investment. And I'm sure that we're going to see the benefits of that coming forward. And at some point in time, I guess we are going to see the investment cycle start again as we absorb the capacity we've recently created. Returns, I've spoken a little bit about. They have stabilized, and our expectation is that they will get a little bit better going into the second half and into the period ahead. Our January results were as expected and following the normal annual pattern. And just to remind everyone, we do have winter in the Northern Hemisphere. So it's not a great period from that perspective, and it was particularly cold this year. Cash generation as we go forward, I think I've alluded to our expectation is it should be good. We are seeing a slightly reduced levels of capital investments. At this point in time, one can't talk about the acquisitions pipeline. But as we sit here today, that is what it is. My expectation is we should reduce debt levels a little bit further. And this obviously gives the group an opportunity to return excess capital to the extent we generated to shareholders in a structured and sensible way. With that, we obviously need to -- we're conscious of the need to balance the returns -- the reinvestment into the group as well as shareholder returns, which is obviously important. So from our perspective, the businesses are in great shape and certainly our expectation of further real constant currency growth into the second half of the year. And on that note, I'll hand back to Bernard for going with the presentation forward. Bernard Berson: Thank you. Thanks, David. I thought it's a good idea just to dwell on this for a few moments because, as I said at the beginning, I think it's a point of exercise looking at issues on a 2 monthly basis or a 3 monthly basis and saying we're 0.2% in the forecast and we are 0.1% ahead of consensus and all these other wonderful very short-term targets that you look at. And you need to take a longer-term view, you need to step back and say, what does the overall long-term reality look like? And I think we've delivered on what we said we would. And that's I call it boring. I get criticized for that, and I'm being told to call it stable and consistent and reliable, et cetera. But when you look at it from 2016 to 2025, bearing in mind, we went through COVID, which was particularly evident in our business. And we don't need to go through that other than we're not trying to look for sympathy here. The reality is, we did have 2 years that were just totally out of sequence, and we then had to regroup and move forward again. But when you look at all the metrics, almost all the metrics over that period, yes, there's very little you can criticize now. I know some of you saw, but it looks like your ROFE is tracking a little bit lower. And yes, it is at 25% and almost probably track up again at 26%. And then you look at the return on equity, the return on invested capital, they're improving again. The distribution to shareholders, a 19% compound annual growth over the 9 years. Earnings, 10% compound growth, a ROFE of over 50%. Yes, the graphs are all heading the right way. They're good looking, longer-term trends, and that's what we're focused on. It's absolutely not on what the next 3 months are going to do despite the fact that there is this pressure to always report. And you've always got this unrealistic what's happening on a quarter-by-quarter, month-by-month, 6-month by 6-month basis. Like I say, and I can't emphasize it too much, it's a much longer cycle than that, and we're very well on that path. And when you look at the trends, they're all absolutely heading the right way, and we're thrilled with the outcome of what our teams have achieved since the unbundling in 2016. The business is in great shape. We've got a strong portfolio around the world. We've still got opportunities for growth. We've got some wonderfully stable businesses that are strongly cash generative. We've got some great opportunities for growth in some of the smaller businesses. So we're very happy with that. Just talking a little bit about the strategic outlook, and then we'll get to the Q&A. We're not going to tell you anything radical. We're not going to tell you anything amazing. I know you people, financial analyst type people, you get very excited about chip stories and the announcement of new chips. We could say we're announcing a new chip, but it will just be a 10-millimeter straight cut deep fry chip that's not really going to change the world, unlike NVIDIA's chips, which will change the world. So sorry about that. Our chips aren't the same type of chips. We do what we do. We continue to move our businesses along the continuum. That's a continual movement on the continuum. Each business is at a different phase. Each business is committed to moving along that. And that journey takes however long that journey takes. There's not a predictable path to it. You have to get the building blocks in place correct and then you move along that journey. And I think our results, when you compare us to our peers, when you look at the consistency and the predictability and reliability of our numbers, I think it validates what we're doing. What we really don't do is show you all this pro forma adjusted normalized stuff. Whatever happens, happens, it's all in the numbers. We're not trying to extract things and say that they're not normal. And if it didn't happen this way and if that had happened and if the sun had shown a little bit more and if we hadn't relocated that and if we hadn't opened that, then our profitability would have been a certain number. We are where we are with whatever moving parts are moving out there at the moment. So these numbers are as normalized as they ever are because with every business, not everything goes according to plan all the time. So you're always going to have these extraneous things happening. You're always going to have some costs that are extraneous. That's just part of life. And I think it's a little bit disingenious to try and justify what your business would look like in an ideal world because there is no such thing as an ideal world. We operate in reality. So we're confident where we are. We expect things to continue more or less along the same path, if the world continues on the same path as well. There is volatility. There is geopolitical volatility. We can't control that. We can't control economics. We can't control what governments do. One of the issues that we are noticing is some of the cost pressures we are seeing in our businesses are government imposts, particularly coming through the labor line, where there's increasing social securities and postretirement benefits and minimum wages and employee entitlements, et cetera, which aren't offset by productivity gains. So all that government is doing is finding the lazy way of making good on their shortfalls and passing the cost on to business. And we see that happening in many jurisdictions. So when we look at our labor costs on a per unit basis, they're going up. But it's actually not because we're paying our people that much more. It's because you've got all these on costs that government are unilaterally transferring to business in many, many jurisdictions, which I think is lazy and inefficient. But it is what it is, and we can only do what we can do. Bernard Berson: What I am going to do is run through the questions, which we'll then hopefully answer a whole lot of other things. Let me just find them all. I'm just going to go through them in the order that I got them here. Are there any larger acquisitions in the pipeline and what geographies and sectors are of particular interest with respect to M&A? At this point in time, there's nothing of major consequence that we're considering. And even on the smaller bolt-ons at this particular point in time, the pipeline is relatively small and constricted. There's a disconnect at the moment between vendor expectations and what we think things are valued at. So until there's a change in that and either we're prepared to pay more or vendors are prepared to accept less, there's a little bit of a standoff. And we don't have a huge number of bolt-ons. That's a temporary basis. That's a temporary situation. It will rectify itself in some point in time. We're certainly not chasing anything. If something is exceptionally strategic, we'll look at it. If it's opportunistic, we'll only pursue it at a correct value accretive price. I mean what is interesting is as our share prices has moderated, and it's not only ours, it's our peers as well, and obviously, that's changed over the last few weeks, our multiples have come down. So clearly, the multiples we're prepared to pay for businesses, all that our competitors, our peers are prepared to pay for businesses is coming down as well. And the vendors need to factor that into their thinking that takes a little bit of time. Can you quantify the impact on margin from new large U.K. contract and infrastructure investments? Well, I think it's pretty self-evident that we've seen an improvement in the U.K., some of it which must be attributable to the Whitbread contract that we activated at the end of September. One of the interesting things is, we brought on new infrastructure in the U.K. in about September in Worcester. And because we had a new contract that was rolling out at the same time, it had no negative impact. If you recall 2 or 3 years ago, we must probably had a GBP 5 million to GBP 10 million negative as a result of rolling out additional infrastructure, whereas this year, we've absorbed it with the new contract wins in the rollout. So I think it's been a very positive, and we have greater infrastructural capability now in the U.K. What are the value-added opportunities being evaluated in Australia? I'm not sure why you're picking on Australia because we're looking at value-added opportunities around the world. One of the things we do, do is we see what's working in other businesses and copy. The other side of that is these things take time. It's not all that easy to start a factory and start manufacturing something, know what you're doing, take on the volume and for it to be profitable. So these things all have a ramp-up period. They have an investment phase. They might take a year, they might take 2 years, they might take 3 years before they come to fruition. So in Australia, in particular, because you asked the question, we are looking at a few. I'm not going to give you the detail because that is strategic benefit to us as to what we're doing. But we certainly do look at what works very well in other markets around the world and see how we can roll that out in each of our markets, and that's part of our continuum. That's part of the IP that we have where our businesses share things that work and don't work. What is the CapEx expectation for the full year and going forward, does Bidcorp need higher capital intensity versus history to keep growth rates at similar levels? We'll definitely see our CapEx this year lower than the prior year, the prior few years. And I really think what happened over the last few years is, there was a catch-up after COVID. There was minimal investment made for 2 or 3 years. And then you just have to catch it up. And some of that was in fleet, some of it was in infrastructure, some of it was in MH&E, but we don't see elevated levels for a while. So I think we're in a phase now where the CapEx will probably run between 1.5% to 2% of revenue on an ongoing basis. There might be spikes in that, bearing in mind, there's infrastructure spend. Infrastructure spend is lumpy and it's over a number of years. If you want to put up a new facility, you think about it now and you might open it in 3 or 4 years' time. Interestingly, in Portugal, we actually occupied our new facility extension a week ago. We started building that thing, I think, 4 years ago. But through council planning and bureaucracy, we've only just got in. So these things are long term. You talked to Australia improving on a 6- to 12-month view. Any concerns around the impact of inflation ticking higher again and interest rate hikes? Of course. Of course, we're concerned. We have seen there was a 0.25 point hike a month ago. There's probably going to be another one based on the inflation reading today. Energy prices are out of control, insurance prices are out of control. So of course, there's a downside risk, but we remain the eternal optimist. We still think the Australian business has many other levers to pull, and we've got a great business there, which will be fine. Can you provide some color on the turnaround in New Zealand between Q1 '26 and Q2 '26 and specifically how margins trended relative to the H1 '26 reported level? That's a way too complicated question. It happened in about October, and we saw a revenue improvement on a week-by-week basis of about 5% that just suddenly spending increased. And of course, we'd love to attribute it also to our teams and everything we've done, and some of it is attributable to our teams. But obviously, some of it is just macroeconomic. But our New Zealand business went backward last year slightly and went backward in the first few months of this year, and we're now seeing it operating at the levels it was before, plus a little bit more. So we're very confident that the New Zealand business at this point in time has seen a very strong recovery back to its traditional margins and possibly even a little bit better. Dare I ask about the future of China in the portfolio? You can ask, you won't necessarily get an answer. Does the strong cash generation, given you are moving past the U.K. CapEx and consistency of your earnings, not warrant having a capital structure with more debt? It's something we're looking at. We're looking at buybacks when our share price was running at ZAR 400, it made sense to look at buybacks. We are looking at the best structure. What we do with dividends, what we do with capital returns? So that's very much an active work stream, and it is getting attention. What is the group's preference for returning excess capital to shareholders? Do you favor special dividends or share buybacks? I actually don't favor special dividends at all because I think they are one-off sugar hits. So I think it needs to be in a sustained high dividend payout or share buybacks or a combination of both. Share buybacks have to be accretive, and that depends on the share price and also the tax treatment of the debt that you're going to use for the share buybacks. So we're still in a debt position. We're not in a cash positive position. We're in a net debt position. Obviously, you want to be in a net debt position. So you have to make sure it's tax effective in order for it to be accretive. So if it's accretive and at the right share price, buybacks absolutely make sense. You mentioned there are more headwinds and tailwinds, which implies weaker second half constant growth. How does one read this together with Jan, Feb running slightly ahead of 1H? This is Arena. I'm going to be in big trouble however I answer this. I think you're picking on our words and you're being a little bit pedantic about the semantics. There are more headwinds and tailwinds. That's just the reality of the geographies, the economics that we operate in. However, we are confident that we, all things being equal, will maintain the momentum that we have run with in the first half. So I wouldn't read too much into those wordings saying that we're negative about the second 6 months. All we're saying is, it's not party time out there. It's not all beer and skittles and sun and games. It's tough work. It's a slog, but we're confident that we've got the right ammo and the right teams in place doing the right thing that will continue the trajectory. Maintenance CapEx ZAR 2 billion versus D&A ZAR 1.2 billion previously. You've guided to ZAR 1.25 billion business. Will this normalize or are we in a new normal as a result of ESG investment, PPE inflation, et cetera? I think the reality is we're in 1.5% to 2%. And building costs are probably 50% to 70% more than they were pre-COVID for the same building. And certainly, we haven't seen food price inflation on the top line of that, which runs through to MHE and everything else. Yes, ESG does add a whole lot of cost. Electric trucks are 3x the cost of ICE vehicles. We don't know what the long-term total cost of ownership is because nobody does. So yes, that impacts your CapEx upfront. But realistically, it's 1.5% to 2%. Will you consider share buybacks? Spoken about that. Great result, but I'd like to ask if net profit margins will reach 5% or more in the future? I'm actually not sure what the net profit margin is. Actually, that's not a number I'm familiar with. I know our trading margin is 5.4%. I'm not sure what the net is. David, put you on the spot. David Cleasby: 3.5%, I think. Bernard Berson: It's 3.5%. So we've got to get to 5% after tax. Well, that's an anonymous attendee. If you want to help us achieve that, we're very willing to hear how we can do it. I'm not sure how you get from 3.5% to 5% after tax. Do you have an outlook on food inflation in South Africa in particular? I'm actually going to give that one to David because I don't have a granular view on the food inflation outlook in South Africa. David Cleasby: I mean, we're seeing somewhere around 4% in some businesses. And certainly, in the Crown space, we've seen actually deflation in the space. I mean I think it's in that 3% to 4% range, but it depends. Foot and mouth had some impact on certain categories like meats and the like, which are 30% to 40%. So it really depends on the basket reselling and how that impacts us. But those are the 2 sort of spaces, I guess, that we're seeing from our businesses. Bernard Berson: European region margins saw a strong uptick this period. Is this trend sustainable into the second half? Can you call out, which regions aided this improvement? I think we went through that. Strong performance from Italy, very acceptable performance from Netherlands and Belgium, strong performance from Poland, strong performance from Czech, Slovakia, Hungary. So we do think it's sustainable. We don't think there are one-offs in there that won't be repeated. But once again, it goes to the macroeconomic environment. And are there any events out there that we don't know about that are going to impact the European environment? At this point in time, we're very comfortable with where the business is tracking. You noted that February sales to date have been tracking above the H1 constant currency run rate, excluding New Zealand, which are the markets there is currently that H1 trajectory? Once again, please don't read too much into the short term. You've got Chinese New Year, was a few weeks later this year than last year. That obviously has an impact. It has an impact in February because it was -- Chinese New Year was in January last year and in February this year. And Chinese New Year is not only an impact on the Chinese business, but it also does impact the other Asian businesses. Ramadan is at a different time this year. I think it's a month earlier to what it was last year. That has an impact. You've got the Winter Olympics that happened, and that had a bit of an impact in Italy. It's not hugely material, but it had a bit of an impact. So please don't read too much into that comment. Broadly, our sales growth is tracking where our sales growth has been tracking. There's no major deviation either up or down on a longer-term trend basis. How much operational capacity do you have absorbed any rising fuel price? How much of your current margin is benefiting to a lower fuel price? The direct cost of fuel, diesel, actually isn't a major driver in the business. Obviously, it has some type of impact, but it's actually very small. Electricity is a far greater impact. But labor is still 60% to 70%, I think it's about 70% of our input is labor. And then you've got occupancy cost, rental and then you've got electricity and then you've got motor vehicle costs. So it really isn't a major swing factor either way. And that's why we don't really talk about it when fuel prices go up or fuel prices come down. It's not something that has a material impact, particularly that it's not materially moving. So yes, pricing is 10% or 20% lower, but it's not 10% of what it was. So it really isn't making a differential. Should we expect the usual seasonality for this year's results? Absolutely. There's nothing that's changed in the structure of the business. What we do see in the second half of the year is Easter. And I think Easter might be a week or 2 later this year than it was last year. And you also see the start of the European summer. If that weather doesn't kick in, that has an impact. But once again, that's an uncontrollable. If they have a strong start to summer, we see the benefit of that in May and June. If they don't, we don't get the benefit in May and June. I guess the other big kicker that happens every year in the second half is in the Australasian division, and that's just the accounting for rebates and customer rebates and supplier rebates, et cetera, which is very consistent from year-to-year. So there's no reason that won't be the same this year in terms of the seasonality effect. Plans to enter any new countries, geographies, Scandinavia, Canada, for example? If the right opportunity arises, we'll look at it. What we have learned is that if you're going to go into a new market, you want to go in of significant scale. Greenfields or very small businesses are very difficult in new geographies. It's a long road to travel. So we are looking for -- if a new country does present itself, it needs to be an acquisition of reasonable scale, and those just haven't happened. We did have a look at something, and I'm not going to specify where. We did have a look at a business which is relatively large in a new geography. And we didn't pursue that. We did a lot of work on it. We didn't pursue it. And in hindsight, it was the correct call to have not pursued it for a number of reasons and don't ask for details because I'm not going to give you any details, but we're very happy with our decision not to feel pressurized to make acquisitions. At the time, it looked okay. It was a market that theoretically was okay. But in hindsight, at this point in time, I think we made the right decision. Maybe in 5 years' time, we'll say it wasn't the right decision. But right now, where we sit, that was correct. So to answer the question, we will only get into new geographies with the correct start-up. You can even see in somewhere like Hungary, where we're doing greenfields supported by our Czech business. That's a tough, tough game. It's profitable, but it's scaling up exceptionally slowly. It's hard work. Would you say that Bidcorp is mostly the same business now as it has been over the last 10 years? That's a very interesting question because the answer to that is yes and no. It's a very similar business, but we absolutely have changed our strategic focus in terms of that continuum of where we see the business and where our aspirations are and how we're going to get there. So we very much moved away from just being a carton mover and a volume mover. And 10 years ago, we had a very large business in the U.K., selling to the logistics, the QSR operators, which we got out of. It was a huge amount of revenue, a huge amount of work and not a lot of contribution. Over the years, we've spoken about the rebalancing of the customer portfolio. And so when you look at our portfolio now, it's very different to what it was 10 years ago. We're still selling the same things. We're still selling baked beans and salmon, but to a far more focused defined customer grouping. The value-add opportunity is significantly more important to us now than it was 10 years ago. So a much more prominent part of our profit portfolio and the drivers of growth than it was 10 years ago. The investment in infrastructure means that we're able to deliver on these other strategic imperatives because we have this philosophy of being 30 minutes away from 90% of our customers, whereas a lot of our competitors take a more traditional approach and more, I don't know what you'd call it, a financial consultant approach of having very big facilities, which are theoretically more economically efficient than multiple smaller depots. But we've moved to that model of having multiple smaller ones close to the customer, which we think is giving us the correct return and giving us the growth trajectory. So we're a very similar business with the same people who were here 10 years ago. The team is fundamentally the same. But I think our strategy is far more laser-focused and far more refined. And I also think there's a much larger emphasis on technology than there was before. And a lot of that technology sits behind what we do. So we're not a technology company. But a lot of what we're doing and a lot of the efficiencies that we get, a lot of the ability to manage this business comes about because of the technology we have embedded in the business and continue to invest in and to spend money on and to experiment with and to develop on a global basis. And that's going to become more and more important. However, this isn't a technology business. It's not going to be a technology business because it's very much one of those good old-fashioned physical businesses, which maybe the investor community realized over the last few weeks that these businesses are what they are. But they are reliable, stable businesses that do adapt to technology. And absolutely, you need technology. But hopefully, they're not going to be totally disrupted by technology because you still need product and you still need to trade and you still need to buy and sell and you still need to service the customers' requirements. Would you say your market share gains are mainly from geographic expansion, eg, Italy or taking share in existing areas of focus? The growth has been almost in every market. So the revenue growth has been in every market. Yes, New Zealand, I think, was one of the few large markets that didn't have revenue growth, but they will start seeing that. So we believe we're gaining market share in most markets that we operate in. So it's not one market or another that's totally screwing the numbers. It's balanced across the portfolio, offset by 1 or 2 markets. In fact, there's one market that's going back, which is the Greater China market, where our share definitely is going back and our volumes are going backward. But everywhere else, we're seeing growth. I think that's everything. Let me just check. No more questions. That's great. Thank you, everybody. We'll give you an update again in May. And I will tell you once again, not to worry about each 3 months in isolation that this is a marathon, not a sprint. We need to look at 10-year trends, not 1 month, 2 months, 3 months deviations from Alpha estimates. I've got no clear what people are talking about, but clearly, it's very important. And it's more about the longer-term trend of what we're doing, the sustainability of what we've built, the quality of the underlying business and how that's going to continue to grow in the future as it has over the last 10 years. So a big shout out to our teams around the world. Thank you very, very much. Fantastic results. Thank you for all your hard work, efforts and achievements. Thank you to everybody for joining the call, and we will catch up again in May. So thank you very much, everybody.
Leroy Mnguni: Good morning, ladies and gentlemen. I'm Leroy Mnguni, Head of Investor Relations for Volterra Platinum. Thank you for taking the time to join us for our 2025 final results, both in person and online. Let me start by welcoming our Board members who are here with us in the room today as well as our executive leadership team. From a housekeeping perspective, we do not have any fire drill planned for today. Therefore, if you hear an alarm, we request that you exit the venue safely through the doors at the back. For those of you that are near the front, please note that there are exits on either side of the venue on the lower level as well. Our fire marshals and security officials will be stationed outside the venue and will escort us to a designated assembly point. To draw your attention to the cautionary statement, I would encourage you to read it carefully in your own time. Now for the agenda for today. Craig Miller, our CEO, will take you through a brief overview of the significant milestones achieved during 2025, followed by a review of our operational and market performance. Sayurie Naidoo, our CFO, will then take you through the financial results. Finally, Craig will wrap up the presentation. As usual, we've allocated time for Q&A at the end of the presentation. I'll now hand over to Craig. Craig Miller: So thank you, Leroy. Good morning, everybody. And once again, thank you for joining us. I'd like to begin by reflecting on safety. So tragically, we lost 2 of our colleagues in work-related fatalities during 2025. Mr. Felix Kore at Unki Mine on the 20th of April and Mr. William Nkenke at Amandelbult's Dishaba mine on the 22nd of July. We extend our sincerest condolences to their families, friends and colleagues. The lessons learned from these tragic incidents are being implemented across our organization. And while we mourn these losses, we also recognize that we've made good progress on safety overall, and we've achieved a number of milestones at our operations, including 14 years without of fatality at Mototolo, 13 years at Mogalakwena and 9 years at Amandelbult's Dishaba mine. We've also improved our total recordable injury frequency rate by 11% to the lowest level in our history, placing us in the leading quartile amongst our peers. Safety remains our highest priority with our unwavering focus on achieving zero harm. Our teams are committed to proactively preventing injuries, and we will not compromise on safety under any circumstances. We're also fully dedicated to delivering on the commitments that we have made. And with that in mind, I'm delighted to say that 2025 was an exceptional year for Valterra Platinum despite navigating a challenging external environment. Some of the progress highlighted here reflects discipline in action from strengthening our operational excellence to executing consistently across all of our strategic priorities. Most significantly, we launched as an independent company, having successfully completed the demerger from Anglo American plc as well as our secondary listing on the London Stock Exchange. Subsequently, Anglo American plc sold their remaining minority interest, fully completing their divestment from Volterra Platinum. Our simplified organization structure has been well embedded with a reconstituted executive committee focused on the delivery of the strategy with clearly understood accountability lines. We've reinforced our operational capabilities through the recruitment of critical skills and services, and we will have exited all of the transitional arrangements with Anglo American by the end of 2026. Our reconstituted Board comprising of 11 nonexecutive directors and 2 executive directors brings the required diversity of experience and expertise. Our relentless pursuit of operational excellence has delivered a really good performance, having exceeded our production guidance despite the weather-related impacts experienced in the first half of the year. Financially, we exceeded our targeted cost savings in 2025, which has brought our total cost and capital savings delivered over the last 24 months to ZAR 18 billion. I'm particularly pleased with this result given the macroeconomic factors impacting our cost base. Our entire organization is focused on maintaining this cost and capital discipline, notwithstanding the higher commodity price environment. And as we've previously said, each of our assets plays a well-defined role in the portfolio, and I'm glad to report that they have all contributed to the progress during 2025. Our extensive endowment of mineral resources provides an exciting growth prospects for Valterra Platinum, and I'll take you through the progress that we've made developing these projects, particularly Sandsloot and Der Brochen in just a few slides. We continue to actively seek opportunities with industry players to drive demand to ensure the long-term success of our industry. Over the past year, we've maintained our focus on enhancing PGM usage in mobility, jewelry and investment. And on the industrial front, the recently announced partnership with Johnson Matthey and Sibanye-Stillwater is evidence of our commitment to working with industry players to grow industrial demand. And we would certainly welcome other producer peers to join us in this venture and of course, not to preclude us from working with other fabricators in other areas. And finally, the recognition of Mogalakwena by the initiative for Responsible Mining Assurance with a 50 accreditation means all of our mining operations are now accredited. This is a rare global feat that sets us apart in the mining industry and reaffirms our commitment to embed sustainability into absolutely everything that we do. So now let's dive into the detail of our performance. I am encouraged to see the delivery of our strategy has led to an improvement in our underlying performance. While we've obviously benefited from the increase in the PGM basket price, the drivers of which I'll walk through a little bit later, the 68% increase in EBITDA is substantially supported by our internal actions as well as that macroeconomic price environment. And consistent with our commitment to drive down our all-in sustaining costs in real terms, we've consistently driven down that all-in sustaining cost and have maintained this at below $1,000 per 3E ounce. Our balance sheet has strengthened materially over the second half from a ZAR 4.5 billion net debt position at the end of June to an ZAR 11.5 billion net cash position at the end of the year, reflecting the outstanding free cash flow generation. This has allowed us to pay a special dividend on top of our base dividend, bringing the total dividends for the year to approximately ZAR 12 billion. It's certainly not just our shareholders who are benefiting from the additional value that we are creating. As you can see, Valterra Platinum continues to be a significant contributor to both our local communities and the broader South African economy through the combination of local procurement, capital investment, social investment and of course, salaries, wages, taxes and royalties. All in all, we've contributed more than ZAR 83 billion to our stakeholders. Valterra Platinum is truly playing its part in sharing value to better our world. So turning to a bit more detail on our operational performance. We outperformed on operational delivery this year due predominantly to the improved performance in the second half of 2025 when our operations demonstrated far greater stability and efficiency underpinned by our focus on safe and responsible mining. A record number of tonnes were milled at Mogalakwena, which helped to more than offset the weather-related decline at Amandelbult, resulting in total tonnes milled increasing 1% year-on-year. Amandelbult's strong second half performance, aided by the faster-than-anticipated ramp-up to steady-state volumes exceeded guidance with total production at 484,000 ounces. Our mass pull improved by 9% compared to 2024, underpinned by notable improvements at Mogalakwena as well as Amandelbult. Overall, our refined production, which was supplemented by inventory optimization, exceeded our 3.4 million ounce guidance. Sales volumes included refined margin -- refined inventory destocking totaling close to 3.5 million ounces. So delving now into the performance of some of our assets. Mogalakwena's pit optimization efforts led to a clear improvement in its operational performance. Our strip ratio has declined 22% to 4.5x. This means that we mined 15% more volumes despite an 8% reduction in total tonnes mined. The efficiency improvements have allowed us some flexibility in the selection of ore grades. So in line with our value over volume strategy, we've been able to process some of the lower-grade stockpiles while still reducing unit costs. This has resulted in the lower head grade, which was offset by higher tonnes milled, delivering similar ounces to what we achieved in the prior year. I'd like to take a brief moment to really emphasize that these developments provide a significant value-enhancing opportunity for Mogalakwena. We can mine fewer tonnes and supplement the expert ore with surface level lower-grade ore stockpiles, resulting in lower operating cash costs, while our volumes are maintained within our guided range. But most importantly, we can keep this Tier 1 asset anchored in the bottom quartile of the cost curve. Other operational excellence initiatives at Mogalakwena have resulted in notable improvements in both mining and in concentrating activities. We've seen a 9% advance in drilling efficiencies and a 15% improvement in redrills, while our load and haul efficiencies have improved 24% and 18% year-on-year, respectively. These positive developments have started to materialize in lower operating costs and together with the benefits of higher co-product revenues has resulted in an 8% reduction in our all-in sustaining cost to $835 per 3E ounce. And so no doubt, you're all keen for an update on the Sandsloot underground, not only because it's genuinely exciting, but because it has the potential to truly move the needle. Here's a reminder of why this project has the potential to be a significant strategic catalyst for Valterra Platinum. Our declines begin at the base of the Sandsloot open pit, providing close access to the reef. This substantially reduces project lead time and lowers capital intensity compared to other projects in the industry. Unlike other Bushveld complex reefs, its height is between 40 and 120 meters with a 45-degree dip on average, characteristics well suited for bulk underground mechanized mining. At 4 to 6 grams per tonne, the reef is materially richer than other mechanized mines in the PGM industry. Growth uplift is driven by higher grades rather than increasing volumes, enabling us to leverage the existing concentrator and tailings facilities. This approach will save us billions in upfront CapEx and costs. And this year, we plan to commence trial mining, which will provide critical inputs to our comprehensive feasibility study. The conclusion of the prefeasibility study has reinforced our confidence in the 10% to 50% uplift in Mogalakwena PGM volumes and a 10% to 20% reduction in costs that we've previously communicated, numbers that we believe will truly move that needle. With the scale of the opportunity in mind, over the past year, we've made great progress in bringing this closer to reality. The team has completed a further 30 kilometers of exploration drilling, which has informed the total upgrade of 13 million ounces to measured and indicated mineral resources, which is available for future ore reserve conversion. The underground development has advanced a further 3.2 kilometers, while the team also successfully completed the pass for the ventilation shaft 1. Trial processing of the bulk ore stockpile is underway, which has accumulated to approximately 80,000 tonnes by year-end. And we've invested about ZAR 1.4 billion in CapEx to advance the project, while over the medium term, our CapEx guidance remains unchanged. I really hope that you're as excited about this as we are given the potential of this opportunity for Valterra. So moving on to Amandelbult. I am incredibly proud of how our teams responded to the flooding. Not only did their decisive actions ensure safe and responsible evacuation of all of our employees, they also accelerated the dewatering well ahead of plan and enabled a faster-than-expected ramp-up to normalized production. So a huge thank you to everyone that was involved. And as I've mentioned, this has enabled Amandelbult to exceed its revised guidance in the second half of the year with the second half performance outperforming that of what we achieved in 2024 despite Tumela mine only reaching steady state by September. This performance highlights the strong operating potential of this asset with our 2026 guidance indicating an approximately 25% recovery. Despite the severe flooding impacts, Amandelbult delivered positive free cash flow, further supported by the insurance proceeds. The resilience of the quality of this ore body with its favorable prill split and rich chrome products driving the highest basket price in the PGM sector at around $3,000 per 3E ounce at current spot levels. So moving on to Mototolo. The Der Brochen project development has progressed well through 2025 with all development ends successfully intersecting the reef having navigated the [indiscernible] zone. Total develop more than doubled, reinforcing the long-term optionality and sustainability of the operation. We also achieved a 9% increase in immediately available ore reserves, enhancing near-term operational flexibility. At Mototolo, our operational excellence initiatives delivered a 12% productivity uplift. Despite the dilution from the development tonnes, production remained consistent with that of the prior year. So looking ahead, the ramp-up of the new, more efficient Der Brochen mine with the continued improvement in chrome recoveries and further optimization of the 3 declines are expected to drive Mototolo's cost further down the cost curve. Our processing operations have also seen improvements beginning with our upstream performance. We achieved a 1% to 2% improvement in concentrator recoveries at both Amandelbult and Mototolo, aligned with our strategic objective to enhance recoveries and improve margins. At Mototolo, recoveries -- sorry, beg your pardon, at Mogalakwena, recoveries remained flat, a notable achievement given the 13% reduction in our mass pull. Amandelbult's 7% reduction in mass pull also contributed to the reduction across the business. And I have already mentioned Mogalakwena's record milled tonnes were supported by the ongoing improvements in plant availability and proactive investment into reliability. And so now for the much anticipated update on the Jameson Cells. Sorry, that was like really dramatic, I'll take a sip. We have optimized the plant to further deliver improvements following the first half commissioning. And we are expecting additional improvements at the Mogalakwena concentrators on top of the 13% I've just mentioned as optimization continues and the plant's annualized impact is realized. We're also really encouraged by the almost 1 percentage point improvement in the adjusted North concentrator recoveries since the commissioning. And while the recovery uplift was not the primary objective of the introduction of the Jameson Cells, the team is optimistic that further improvements may follow. So to put that impact into perspective, volumes at the Mogalakwena North concentrator declined 14%, while concentrate grade increased 16%. Importantly, there are many wider benefits to the mass pull reduction. In 2025, we saw a 21% reduction in trucks transporting concentrates, a 4% decrease in smelter electricity consumption and a corresponding 5% reduction in CO2 emissions, delivering an estimated cost saving of about ZAR 123 million with additional savings expected in 2026, commensurate with further improvements in mass pull. So now turning to our markets. There were several positive developments in the PGM markets during 2025. While we've all seen the overall increase in the basket price, it's important to note that there were multiple factors that contributed to the increases with a few dominant drivers standing out. Firstly, the year began with moderate price gains owing to a weaker U.S. dollar. Prices accelerated as the market tightened over concerns about tariffs and weaker mine supply. And although primary supply normalized in the second quarter, stronger price gains followed from May onwards with a large price differential with gold prompting strong Chinese buying. This was then accentuated in June and July by renewed tariff concerns, prompting further sizable U.S. imports. The second half of the year benefited from strong investor purchasing, driven by the debasement trades and the launch of the Guangzhou Futures Exchange. Specific factors also contributed, such as a robust hard disk purchasing in ruthenium and the recovery of rhodium demand, particularly in the fiberglass applications. And while price movements were dynamic, they were firmly underpinned by market fundamentals; tightening supply, stronger-than-expected demand as automotive sales prospects improved and inventories that proved less abundant or more tightly held than many had anticipated. The second half of 2025 was an exceptional period for PGM prices. The full basket price ended the year 86% higher than at the start of 2025. All metals contributed to this increase with platinum, palladium and rhodium being the largest contributors. There are 2 potential bullish drivers already making an impact. You may remember that we called these out specifically at our Capital Markets Day last year. Firstly, BEV penetration forecasts have been revised downwards, particularly in Europe and the U.S.A., markets where vehicles are heavily loaded with PGMs. Political developments in both regions have further supported the internal combustion engine vehicle demand. Meanwhile, the price of platinum rose considerably, but it is still trading at a substantial discount to gold. This has enabled platinum jewelry to gain market share in several key geographies and heightened interest in substituting PGMs for gold in various industrial applications. Our total supply and demand outlook for PGM markets points to continued tightness in the medium term. We expect global car sales to continue growing alongside an expanding world economy. Downward revisions to BEV growth in key markets are also supportive. Mine supply is expected to decline over the medium to long term, though at a slower pace than previously anticipated due to higher prices. Elevated prices will also encourage recycling volumes, but still face headwinds. And importantly, even at current price levels, new mine projects are unlikely to come online soon nor will vehicles be scrapped any earlier. Structural constraints to materially higher supply, therefore, remain. Our outlook is broadly consistent with prior expectations. And in 2026, we anticipate a sizable deficit in platinum, while palladium's anticipated surplus again fails to materialize. Beyond that, platinum should remain well supported, while palladium and rhodium will shift more to balance, but at an uncertain pace. These balances exclude investor demand, which enjoyed strong tailwinds in 2026. PGMs are increasingly recognized not only as critical minerals, but a safe haven assets, reinforcing their strategic appeal. I'll now hand you over to Sayurie to take you through the financials. Sayurie Naidoo: Thank you, Craig, and good morning, everyone. I am pleased to be reporting a strong set of financial results for 2025. Despite the demerger activities and headwinds faced during the year, our performance underscores the robustness of our business and the strength of our operating model in driving long-term value creation. To summarize our performance, revenue increased 7% year-on-year to ZAR 116 billion, driven by the uplift in the PGM basket price. This was partially offset by lower sales volumes, reflecting reduced M&C production, mainly from Amandelbult and the prior year's larger release of built-up work-in-progress inventories. Our disciplined cost management approach delivered a further ZAR 5 billion of operational and corporate savings, more than offsetting inflationary pressures. As a result, EBITDA increased 68%. And on the back of this, the company generated sustaining free cash flow of ZAR 20 billion. This meant we ended the year with a strong net cash position of ZAR 11.5 billion, boosted by a stronger second half. In line with our disciplined and balanced capital allocation framework, the Board has declared all net cash as a final dividend, equating to ZAR 43 per share. The company delivered a solid EBITDA performance despite the operational challenges in the first half of the year. EBITDA was supported by a 26% stronger PGM dollar price of $1,852 per ounce, partially offset by the strengthening of the rand. Input cost inflation of 5.4% reduced earnings by ZAR 2.8 billion, while royalty expenses reduced earnings by a further ZAR 1.1 billion, in line with higher revenue. Our success in delivering on our cost-out initiatives made a significant contribution to the uplift in earnings. As you are aware, earnings were also affected by the one-off demerger-related expenses, which have been largely completed and the impact of the Amandelbult flooding event, although insurance proceeds mitigated the majority of that impact. Mining operations contributed ZAR 29 billion to EBITDA at a mining margin of 38%, while POC and toll contracts contributed ZAR 9 billion at a margin of 21%. Since launching our operational excellence drive, we have delivered a decisive reset of our controllable cost base, which is down 18% since 2023. The ZAR 5 billion saved in 2025 was achieved across several areas, including consumables optimization of ZAR 2.2 billion, ZAR 1.4 billion from labor and contractors, reflecting the flow-through benefits of the operational restructuring undertaken in 2024 and a further ZAR 1.4 billion as a result of the simplified operating model post the demerger and other corporate cost reductions. As a result of our cost-out program, we achieved a cash operating unit cost of ZAR 19,488 per PGM ounce, in line with our revised guidance. Guidance for 2026 is ZAR 19,000 to ZAR 20,000 per PGM ounce, reflecting a partial inflation offset from ongoing cost-saving initiatives and increased production from Amandelbult. We are also targeting a further ZAR 1 billion to ZAR 1.5 billion in cost savings for 2027 as a result of the demerger with some of these benefits expected to materialize in 2026. Full year capital expenditure amounted to ZAR 17 billion, at the lower end of our guidance. Sustaining capital expenditure was ZAR 12.5 billion with a primary focus on asset maintenance, furnace rebuilds and mining equipment replacement. Sustaining capital also includes capitalized waste stripping, which declined ZAR 1 billion from 2024 due to lower waste tonnes mined, consistent with our value over volume strategy. Discretionary capital of ZAR 4.5 billion was directed to Sandsloot underground development and drilling as well as surface infrastructure and development at Der Brochen. We also commenced work on the repurposing of the Mortimer smelter. As we move into 2026, total capital expenditure is expected to remain broadly in line with 2025 at ZAR 17 billion to ZAR 18 billion. This is ZAR 1 billion to ZAR 2 billion lower than our previous guidance of ZAR 19 billion, again, reiterating our continued commitment to cost and capital efficiency. Of this, ZAR 12.5 billion will be incurred in sustaining capital to maintain asset integrity and ZAR 4.5 billion to ZAR 5 billion on discretionary capital. Turning to the impact of our cost and capital efficiency on all-in sustaining cost, which was $987 per 3E ounce, below guidance and flat year-on-year. Notably, this represents a 13% decrease from 2023, underscoring our cost control. I would like to highlight that going forward, we have revised our calculation methodology for all-in sustaining cost to include life extension capital to align with our updated capital definitions. On this basis, the all-in sustaining cost for 2025 was $1,039 per 3E ounce. Looking at the cost curve on the right-hand side of the slide, all of our own mine assets are firmly in the first half of the cost curve. Amandelbult's strong co-product credits, together with the benefits of the insurance proceeds have contributed to its positioning in the second quarter despite the impacts of the flooding. Our 2026 all-in sustaining cost guidance is around $1,050 per 3E ounce, assuming an exchange rate of ZAR 17 to the dollar. The company closed the year with a robust balance sheet, ending in a net cash position of ZAR 11.5 billion. Since 30th June 2025, the company generated cash from operations of ZAR 28 billion. And of the total ZAR 17 billion capital expenditure, ZAR 9 billion was incurred in the second half of the year, alongside the payment of the interim dividend. I have already talked to the one-off cash impacts relating to the demerger, which had an impact of ZAR 2.9 billion in the second half. We also received ZAR 2.5 billion in insurance proceeds. The flood claim is now in its final stages, having reached the end of the indemnity period, and we anticipate receiving the final payment during the first half of 2026. Liquidity headroom at the end of the period was ZAR 43 billion. Our banking group remains broad and strong, comprising both local and international institutions with committed facilities in both rand and the U.S. dollar. 2025 marked a major milestone for our stand-alone journey as we secured our inaugural global credit rating from S&P, achieving investment-grade status. In addition, we established a domestic medium-term note program, enabling us to issue listed debt in the South African bond market. This will provide an opportunity to diversify our debt funding sources and potentially lower our cost of borrowing. And in line with our capital allocation framework, the Board has declared a final dividend of ZAR 11.5 billion or ZAR 43 per share, comprising a base dividend of ZAR 23 per share or ZAR 6.2 billion, in line with our policy of 40% payout of headline earnings and a special dividend of ZAR 20 per share or ZAR 5.3 billion. This brings our total 2025 dividend to ZAR 12 billion or ZAR 45 per share. This marks our 17th consecutive dividend since reinstatement in 2017, affirming our commitment to industry-leading and consistent shareholder returns. I will now hand you back to Craig to wrap up. Craig Miller: Thanks very much, Sayurie. And to conclude, so our strategy remains clear and disciplined, maintain capital efficiency, drive cost reduction and maximize cash generation to enhance shareholder returns. Over the last number of years, we have invested consistently to maintain both asset integrity and reliability, which will enable us to sustain and grow our own mine production, improving margins. And as a result of the new ways of working and our discipline in terms of capital efficiency, we expect medium-term capital, as Sayurie has said, to stabilize at between ZAR 17 billion and ZAR 18 billion, inclusive of growth investments. This does position us distinctly from our peers who are raising CapEx guidance to arrest declining production profiles. With a stable capital base, our leverage to free cash flow at spot prices is significantly enhanced. So to illustrate, had current spot prices prevailed throughout 2025, free cash flow would have been about 240% higher. We have consistently demonstrated the delivery of our strategy and disciplined capital framework, returning excess cash to shareholders through dividends. The track record speaks for itself. Over the past 5 years, we have returned almost twice as much in dividends as our peer group combined. And so that you are left in no doubt, we offer a distinct investment proposition. Our substantial resource endowment provides exceptional longevity across our Tier 1 operations. With a high-quality, reliable and efficient processing infrastructure, our ability to create value throughout the value chain sets us apart within the sector. Our strategy is clear. Our experienced leadership team is well positioned to continue optimizing the business, unlocking value and delivering strong operational outcomes. And we remain firmly committed to disciplined cost and capital management to safeguard the integrity and sustainability of our assets while executing our growth agenda effectively. And with a robust balance sheet and strong cash flow generation, we're well placed to sustain those industry-leading returns to shareholders. I think it's fair to say that Valterra Platinum has certainly demonstrated in its first year of independence that we are a company that delivers. In 2025, we delivered on all our strategic priorities. We reinforced our skills and technical capabilities across the business and executed operational excellence activities with discipline and set the company up to accelerate those growth projects. I'am truly excited about the momentum that we have brought into 2026 and our unwavering focus on value creation for all of our stakeholders. That concludes our presentation. So thank you once again for joining us. I hand you back to Leroy to facilitate the questions and answers. Leroy Mnguni: Thank you, Craig. I think we'll start in the room. There are a couple of revolving mics. The first hand was Chris. If you could please introduce yourself before you ask your question as well, please. Christopher Nicholson: It's Chris Nicholson from RMB Morgan Stanley. I've got a couple of questions around volumes, and I think Mogalakwena in particular. I noticed that you trimmed your production guidance for your own mines for 2027. Could you just chat to what's driven that trim? Second question might be linked to that. At your Capital Markets Day last year, you were talking about grades at Mogalakwena from the open pit getting back to 3 grams a tonne, supporting 1 million ounce profile. We're still a little bit below that. Is it still your expectation that you get back to 3 grams a tonne? And then final one, also probably linked to that. I see you put a comment there on the lease on the Baobab plant expiring at the end of '25. I think we did know about that. So it's not a surprise. But I just wondered at these prices and just with the profitability of Mogalakwena, whether it made sense to try and extend that in any way, even if you had to put more CapEx into the tailings dam or incentivize Sibanye to do so. Craig Miller: Thanks, Chris. I'll answer some of the questions, and I'll ask perhaps Willie and Agit also just to comment on and reemphasize that value over volume strategy that we have in Mogalakwena and then also Agit, if we can just talk through the Baobab and the improvements that we've seen through North concentrator, improved recoveries and why we've sort of -- well, we've ended the Baobab contract. I think certainly, as we've said around our M&C volumes for next year between 3 million, 3.4 million ounces and into 2027, slightly lower. And that is on the back of us maintaining Mogalakwena's production at between 900,000 and 1 million ounces. And that's really our focus. And I've touched on that value over volume strategy, and I think Willie can articulate that in more detail. But that's what we fundamentally believe is the right sort of approach for us because it really drives that all-in sustaining cost. And we need to maintain that throughout the journey of Mogalakwena, sort of certainly in the lower half of the cost curve. And that's what really enables us to be able to do that. We've also maintained our production at Amandelbult at that sort of 580, 650 sort of mark. And that's what we'll sort of maintain. That continues to keep the longevity of Amandelbult intact, particularly from a Tumela and Dishaba perspective. And that's really what those sort of the 2 sort of revisions are there. But you'll see that we've guided now. We've moved away from guiding around the grade. So we've given you guidance around the actual production profile. And so that then enables us to be able to manage just how we extract the value through processing some of those lower-grade ore stockpiles, reducing the amount of volume that we actually mine, particularly at Mogalakwena and therefore, continue to drive its all-in sustaining cost to where we fundamentally believe it should be for this Tier 1 asset. So Willie, I don't know if you want to add anything in terms of the sort of the approach in terms of how we think through the grade. Kimi has got your mic ready. Willie Theron: Good morning, everybody, and thanks for the question, Chris. I think I'm not going to belabor the point on the all-in sustaining cost that Craig has already spelled out. I think a big component, if you look at Mogalakwena in particular, is the low-grade ore stockpile. It's sitting roughly on 5 million tonnes. That is a key deliverable aspect that we have stripped in essence, waste, where we stockpiled the low-grade ore. And our approach in terms of this value over volume is to, over time, for the next few years, and [indiscernible] made the percentage right about 35% to use that as part of the blend into the concentrators. But even at about 35% on average that we use it as a blend into the concentrators, we maintain a 5 million tonne stockpile on the low-grade ore. And this is why this value over volume and driving the all-in sustaining cost to maintain that position. And also from what I've spoken now, that's only from an open pit point of view. That is not taking into consideration anything that we do at Sandsloot. So the 900,000 to 1 million that Craig is referring to is open pit and with a 35% on low-grade ore stockpile as part of the blend and maintaining that at about 5 million tonnes. It's significant differentiator in terms of that ore body. Craig Miller: Thanks, Willie. Agit, do you want to just comment on Baobab and just how we're thinking North and South. Agit Singh: Yes. Thanks for the question, Chris. So obviously, we did consider Baobab with regards to the future of Mogalakwena with regards to milling. But first of all, Baobab was not the cheapest concentrator in our portfolio. And North concentrator and South concentrator has got a significant amount of effort over the last couple of maybe 1 to 1.5 years. And that effort has come through significantly around the way we operate the plant from a throughput point of view. So the more throughput we can get through North or South, the better it is for us from a unit cost point of view. It links back directly to what Willie and Craig has been speaking about with regards to the blending strategy and keeping the ounce profile. So we're very confident that with the North and South concentrator and the work that we've done with regards to the feed that we're putting into North and South, the work that we're going to be doing at the South concentrator around the refurbishment, the work we've already done at the North concentrator with regards to the Jameson cells and optimizing that flotation circuit that we will be able to deliver what we need to deliver with regards to the blending strategy that we have coming through from Willie and the team. So it's a very well-integrated thought process that we've taken from mining all the way down through the concentrators. Leroy Mnguni: I think the next hand was Gerhard and Arnold. Gerhard Engelbrecht: Gerhard Engelbrecht from Absa. Maybe just two questions is, how do you think about your debt levels at this point in the cycle? So do you have a targeted debt range or debt-to-equity or net debt-to-EBITDA? Or how can we think about debt going forward and how you then utilize cash? And then maybe if you can just remind us of the insurance payment, the quantum of that, that you expect in this half. Sayurie Naidoo: So we've guided in terms of our net debt-to-EBITDA at about 1x -- less than 1x through the cycle. However, at current prices, as we've declared our dividend of ZAR 11.5 billion, that gets us to a cash-neutral balance sheet. And we believe that, that is actually the prudent approach, which will actually strengthen our balance sheet and ensure that we can even sustain it in a lower price environment. Craig Miller: And then the insurance. Sayurie Naidoo: On the insurance proceeds, as we said, we've received ZAR 2.5 billion so far. However, we are still in discussions in terms of what the total quantum of that insurance proceeds will be, but we expect to receive that in the first half of the year. Arnold Van Graan: It's Arnold Van Graan from Nedbank. Two questions for Sayurie. The one is on your cost savings. I mean that's a phenomenal number, saving ZAR 5 billion and then ZAR 1.5 billion going forward. So I guess my question is, where is that coming from? And how sustainable is it? I know we've talked about this before, but I guess my question or concern is that some of this comes back into the system over time. So that's the one question. Second question relates to Unki. It looks like there's a bit of a cash lockup there currently. It doesn't matter now given where prices are. But yes, just give us a sense of how you're addressing that and how you see that playing out? That's it for me. Sayurie Naidoo: Sure. So just in terms of our cost savings, so it's really in 3 broad categories. So the first one, if I look at the total ZAR 12 billion, about ZAR 5 billion of that is from supply chain and procurement benefits. So we've reviewed all our supply chain contracts over the last 2 years, we've been able to get lower pricing. A lot of this is from prior to COVID or during COVID, where we had escalated pricing in some of the consumables, we were able to reduce a lot of that. So these are sustainable pricing. Obviously, they would increase with inflation going forward. But from an operating perspective, that's where we found a lot of the efficiencies. The labor and contractor reductions. So we undertook a restructuring in 2024. So that was about 2,700 people at Amandelbult. So that is a sustainable reduction in labor. We've also reviewed all our contracting companies, and we took out about 450 contracting companies. So that's sustainable reductions. We also did some review of our corporate costs. And as I said earlier, there were some demerger-related cost savings that we were able to realize as well. But a lot of the savings that we've also achieved is as a result of the operational excellence work that we've done. So the mass pull benefit that Agit has been working on in processing, the pit optimization at Mogalakwena, all of that has been sustainable cost reductions. So mass pull, for example, a ZAR 250 million annualized cost benefit that we'll realize from that. The pit optimization, we've been able to bring down waste stripping costs by about ZAR 1 billion so far and another ZAR 1 billion going forward. And then the demerger-related costs, the ZAR 1 billion to ZAR 1.5 billion that we expect to come, that is really from the simplified operating model as a stand-alone company, simplification of some of the systems that we've got, our IT systems, for example, moving to an outsourcing arrangement for some of our shared services. So that's where we're seeing some of the reductions that we expect to realize in the next 2 years. So really sustainable cost savings. Going forward, as we've guided, you expect -- we will continue to look for initiatives to offset inflation, again, mass pull, renewables that will come through from the Envusa project this year. So that will offset about -- that will give us about a 10% reduction on the current Eskom tariffs that we're getting. So there will be continued cost optimization initiatives to ensure that we maintain that cost discipline as a business. So as you see, our cost is relatively flat over the next year. And then in terms of the Unki, so we do have -- so as part of operating in Zimbabwe, our export proceeds is a retention mechanism. So 30% of our export proceeds are retained in local currency. In the last year, we haven't been able to access some of that. So it's about $100 million that hasn't been able to be accessed by us. However, and you'll see that we've obviously recognized a provision on that. But we have been engaging with the Reserve Bank as well as the Ministry of Finance, and we are receiving some funds in 2026 so far, and we do expect to receive that over the next couple of months. Leroy Mnguni: There's a question from David. Unknown Analyst: David [indiscernible] from Phoenix research. I would just like to, first of all, congratulate the technical and the mining people. First of all, congratulations on getting Amandelbult up and running so quickly. Very impressive, very impressive. And secondly, also, congratulations on the Jameson Cells. When I saw that number of 40% reduction in mass pull, that's quite amazing. So if I may lead my first question on that one is, is that in any way transferable to the other concentrators? I mean, obviously, I know that the metal mix is very different, but is that at all transferable? And then just a very general question. On the Merensky Reef, are there any plans to mine more Merensky Reef at all? I mean, it's now UG2. I'm talking about the East and West Limb, are there any plans to mine Merensky projects? Craig Miller: Thanks, David. Thanks very much for the question. I'm going to try my best to answer them, and that will be my team members giving me a report card in terms of whether I've been paying attention. So in respect of the Jameson Cells, so clearly, they've been really successful at Mogalakwena, at the North concentrator. Agit referenced the refurbishment of South. And so we will look to see whether we can install the Jameson Cells at the South concentrated Mogalakwena. So that process is underway, and we're evaluating it. I think it's less impactful at Amandelbult, particularly just given the scale of Amandelbult and the installed capacity. But our real primary focus is really then driving that efficiency at Mogalakwena. That looks to be our biggest opportunity at the moment. Did I get that right? Good. And then on Merensky, I think our primary focus is really around continuing on the UG2 routes. There's not a great deal of Merensky that we have immediately available, just given sort of what we've mined out at Amandelbult and in particular focus for us at Der Brochen and Mototolo on the Eastern Limb. Those are sort of -- our key focus will be around the UG2. Leroy Mnguni: We've got Steve in the back. Steven Friedman: It's Steve Friedman from UBS. Firstly, congrats on the strong results. Maybe just a follow-up on the capital allocation framework question and more regarding the prepayment, specifically around the remaining duration. I know this is something that's been extended previously. But if you could sort of give us some indication on that. And understanding this is a volume-based contract. So very much that value will be linked to PGM prices and FX, if you could give us some sort of sensitivity on what that means in the current environment? Sayurie Naidoo: Sure. So our customer prepayment at this point, it's about ZAR 12.8 billion. You're correct, it is linked to price and FX. So it's probably increased about ZAR 1 billion since 2024 as a result of that and volumes were relatively stable on that. In terms of the renegotiation, so it comes to an end in 2027. However, we are in negotiations with the customer, and we don't have any reason to believe that we won't be able to extend the customer prepayment. It may be on different volumes and different period, but it's still something that we firmly include in our working capital numbers. Leroy Mnguni: I see no further hands in the room. Can we please go to the conference call and see if there are any questions there? Operator: We have a question from Adrian Hammond of SBG Securities. Adrian Hammond: Yes, well cone on solid results and outlook, Craig, your payout was significantly higher, I think, than the market expected. So give us some guidance on how we should expect future payout of dividends. I noticed 70% is what you used to pay in the last bull market. And is this something we should be expecting going forward? For Sayurie, you've been quite explicit on the cost savings for another ZAR 1 billion to ZAR 1.5 billion over the next 2 years. But I do note you're certainly seeing more benefits from the Jameson Cells. And should there be other benefits as well that perhaps your ZAR 1 billion, ZAR 1.5 billion is still a conservative number. And I just want to clarify when you mentioned earlier that the Mogalakwena pit optimization on waste stripping was banked at ZAR 1 billion, but a further ZAR 1 billion going forward. Just correct me if I'm wrong, if that's further ZAR 1 billion is in your current guidance. And then Hilton, perhaps premature to ask that your customer prepayment with Toyota is still being negotiated. But do you foresee additional volume offtake in that agreement going forward? And perhaps you just give us an update on customer flows and orders for PGM autocat businesses and as well as the minor metals. Craig Miller: Thanks, Adrian, for the questions. So I'll take the easy one. So I think, Adrian, as we've indicated, just once again, quality of the assets that we have, our focus around operational delivery, investing in the assets that we have and really maintaining that asset integrity and reliability really sets us up well. And as a consequence of that, that enables us to be really deliberate and focused around how we return value to shareholders. And so in line with that discipline and our capital allocation, any excess cash that we generate, we would look to return that to shareholders. And so as Sayurie said, we've done it for 17 consecutive periods where we've paid a dividend and we've paid specials. And I think you can expect a continuation of that discipline for periods to come. And so we'll wait to see what happens in July when we report the half year results. Sayurie Naidoo: Adrian, on the waste stripping, yes, that's already in our guidance in the ZAR 17 billion to ZAR 18 billion in the medium term. And then just in terms of cost savings, so the ZAR 1 billion to ZAR 1.5 billion, that's coming from corporate cost reduction. And as we've mentioned, there will be continued benefits from operational excellence. So your mass pull initiatives, the renewables. We're looking at some low-cost country sourcing, so alternative sources of some consumables from a supply chain perspective. So all of that will partially offset inflation. So input cost inflation, about 6% we're forecasting for 2026, but we expect that our costs should be below the 6%. So yes, there will be some more operational initiatives that will offset inflation. Hilton Ingram: Yes, Adrian, on the prepayment, as Sayurie indicated earlier, right, in the middle of negotiations. So we're going to be as quiet on the subject as we can be, but we expect to see volumes at least in line with what you'd expect given the pressures in the automotive industry and increases in recycling. But we'll work hard at that. And so more news to follow later. In terms of -- what are we seeing in terms of customer flows? You've seen the duty announcements out of the U.S. That means there's some rebalancing of portfolios going on in amongst customers. And so we're seeing changes in geographic flows as a result of that and inquiries that you'd expect us to be seeing in line with those geographic flows. But we expect that to balance themselves out around the globe and not have a material impact on supply-demand balances. And then minor PGM demand, we've seen healthy demand for contracts in that space, and we're still seeing good flows. Leroy Mnguni: Any further questions on the call? Operator: We have a question from Nkateko Mathonsi of Investec Bank. Nkateko Mathonsi: Well done from my side on a very good set of numbers, especially I concur with Adrian, especially on the dividend, that was a surprise versus what the market was expecting. Another congratulations on inventory optimization that has allowed you to continue liquidating inventory from your processes. I mean, my first question is how much room do you still have to squeeze the pipeline going forward? At this point in time, it looks like it is creating [indiscernible] in the processing infrastructure, but that has been very positive for at least the past 2 years. I just want to know how should we think about it going forward? And then my second question is on Sandsloot and the prefeasibility study. Is there any indicated CapEx that we should work on as far as Sandsloot is concerned from that prefeasibility study? And then also on the better terms on the extension of the tolling contract by 5 years. Are you able to give us a bit of an indication as to the increment on that contract and how we should look at it going forward? Craig Miller: Thanks, Nkateko. Thanks very much. At least you like the dividend. So let me start on the inventories. I couldn't agree with you more that the processing team seems to find additional ounces. But I really do think that we've really optimized the pipeline now, and that's really sort of come through in terms of the optimization and the higher refined ounces that we achieved in 2025. We have indicated previously that we do have some inventory that is sitting in what we term wax. So that's material that has -- that you'll know better than me, comes out of the converter plant and that we haven't been able to treat to date. And as a consequence of that, we are repurposing Mortimer to be able to treat that material in addition to be able to just processing normal ongoing concentrate. So we do have some inventory and you'll see that come through in our 2027 number. So if you -- to Chris' earlier point, you've seen that slight reduction in our M&C volumes. But actually, our refined volumes in 2027 are maintained at 3 million to 3.4 million ounces. And so you see that liquidation coming through there as a result of Mortimer. So that's really where that will come through. But I think more broader in terms of do we have [indiscernible] and all the rest of it of inventory. We haven't found it, but we'll certainly keep looking. But genuinely, I think, we've optimized as much as we can at the moment. In terms of the feasibility study for Sandsloot, that continues, and that's underway. And so our capital guidance for the expenditure around that to ramp up Sandsloot to around about that 2 million, 2.5 million tonnes is maintained at that sort of ZAR 1.5 billion to ZAR 2.5 billion. Just remember, there might be some years that we'll spend slightly more because we need to build workshops, we need to purchase some equipment or something. But that broad range of between ZAR 1.5 billion and ZAR 2.5 billion is maintained from what we shared with you back in the middle of last year. And on the tolling contract, yes, we have extended the tolling contract with Sibanye. So that would have come to a conclusion at the end of 2026. We have extended that by another 5 years. Both parties have the opportunity to end that after 3 years. And I think to use Richard's words, I think it's on materially better terms than what they're currently paying at the moment. Leroy Mnguni: Operator. Are there any further questions? Operator: We have a question from Benjamin Davis of RBC Capital Markets. Benjamin Davis: Great set of results. Just a couple of questions from me. One on the CapEx guidance, very much going against the grain in terms of going down. I was just wondering if you could give any kind of what drove that delta from ZAR 19 billion to the ZAR 17 billion, ZAR 18 billion? And also given the price environment, is there any upside risk to that number in terms of kind of additional projects that are under evaluation, smaller projects? And then second question, just wondering if there is any evolution in the thinking around Modikwa? Craig Miller: Thanks, Ben. Do you want to do CapEx? Sayurie Naidoo: Yes, sure. So our previous CapEx guidance was around ZAR 19 billion. But there's a few aspects. So the one is once we concluded the feasibility study -- the prefeasibility on Mogalakwena underground, we were able to just redefine that CapEx. So that's where we got to the ZAR 1.5 billion to ZAR 2.5 billion. Due to the value over volume strategy, our waste stripping, as I mentioned, that's been reduced. So you see lower tonnes -- waste tonnes mined. As a result of that, you have lower HME replacement capital as well that will be required. So that's the other area. There's been some further optimization, for example, on the Mortimer repurposing project that has done more optimization as well at Amandelbult and Unki in terms of some of the capital spend there. The other area that's also benefited us is as a stand-alone company, how we actually execute on our projects. So we've been able to build in quite a bit of efficiencies there just in terms of using internal teams as opposed to third parties, just in terms of scoping and defining our scopes and being quite focused around that. So that's also been able to contribute towards that reduction, and that's how we were able to achieve the lower end of our guidance this year as well. Craig Miller: So yes, we agree, Ben, that's certainly sort of countercyclical, as I pointed out in terms of what we're seeing elsewhere. But yes, I think we will certainly maintain that cost and that capital guidance and it's important that we maintain that through the cycle. So very much focused around making sure that we operate within that envelope. I think specifically as it relates to Modikwa, to your question, I think one of Sayurie's slides actually illustrated just in terms of where our all-in sustaining cost was and where we're all positioned on the cost curve. The one outlier in the second half of the cost curve is Modikwa. And so we're not particularly happy, and I know our partners are not in terms of the performance of Modikwa and just how that sort of -- where it sits on the cost curve. And so therefore, we need to continue to evaluate how we improve its performance, how we rethink through what the operating structure is there, and we'll continue to evaluate our options, specifically as it regards to Modikwa in the coming months. Operator: We have a question from Ian Rossouw of Barclays. Ian Rossouw: Two questions. Just first one on the Sandsloot project. If you do go ahead and approve the project in 2027, how can we expect the CapEx to change in '28, I guess, versus current guidance? And then just wanted to talk about the working capital just in the second half, I guess there was still some build in inventories if you strip out the prepayment and obviously, the receivables sort of based on prices. But how should we think about the working capital this year outside of probably the inflows you'll see from the prepayment due to higher prices? Craig Miller: Okay. Do you want to do working capital and then... Sayurie Naidoo: Yes. So in terms of working capital, so the customer prepayment, as I did indicate, that is influenced by price and FX. So as prices increase, you will see an increase in the customer prepayment. On the other one that's influenced by price and FX is your purchase of concentrate. So that's your inventory as well as your creditor. So those should offset each other because -- so from a price impact, so that should be relatively flat. So it's really just your customer prepayment where you'll see an increase in working capital. Craig Miller: And then just on Sandsloot. I think from our perspective, so the investment is taken -- the decision to invest in Sandsloot is taken in the first half of next year. Our expectation is that you'll continue to see that ZAR 1.5 billion to ZAR 2.5 billion expenditure sort of take place for us to ramp up to that sort of 2 million, 2.5 million tonnes. So that's what you can expect to sort of see in terms of annual CapEx associated with the Sandsloot development. Clearly, obviously, as I said, you might see 1 year a little bit higher than that ZAR 2.5 billion because we've got to spend on the workshops and all the rest of it. But I think importantly, as we then start to position that, whatever that capital profile looks for Sandsloot is then -- you could see then a reduction in our waste stripping capital and some of the capital associated with the open pit at Mogalakwena. So that's where the real benefit starts to play itself out. So you process this higher-grade ore, and then we're able to reduce the amount of material that we have to move in the open pit. And so you'll see that benefit coming through as part of the decision to invest in Sandsloot. But that ZAR 1.5 billion to ZAR 2.5 billion, if you take that, you model that, that will be great. Please just make sure that you model that 10% to 20% uplift in production as well. Ian Rossouw: Okay. That's great. And maybe just coming back. So any shift in inventories expected this year? Or is that broadly stable now just on working capital? Craig Miller: Yes. No, I think your inventories, we've sweated that drag. So yes, I think your inventories are more or less sort of back to normal levels. Leroy Mnguni: Any further questions? Operator: We have no further questions. Leroy Mnguni: Right. There's a few questions that have come through online. Rene from NOA Capital says ZAR 11.5 billion net cash. I really believe you would do it a year ago. So thank you, Rene. He's got a question for Hilton. He's asking, what is your pick for the best performing PGM in 2026? And then sorry, Hilton, while you answer that, we've had a couple of questions on recycling. If you could please elaborate on some of the headwinds to a recovery in recycling, what are some of our expectations are in an increase in recycled supply given the higher PGM prices as well, please? Hilton Ingram: Thanks, Rene. I think the right answer to your question is it starts with an R as in Rene. Yes. So I'm going to go with it starts with an R. And then on recycling, we all know that recycling rates are driven by scrappage rates of vehicles. We know that vehicle prices are high. We know that cars are lasting longer than people would expect. We know that there's sort of technological or technology uncertainty in terms of do I replace my car with another ICE vehicle? Do I replace it with a PHV? Do I replace it with ICE? Or do I just hang on to what I have. So those are all playing out through the market, right? And yes, the value of an auto catalyst is up. It's not up to the same extent as it was in 2022. And the value of the auto catalyst isn't a player in people's decisions to recycle cars. So we think scrappage rates are unaffected by the value of the catalyst. What is affected by the value of the catalyst is the pull-through of inventory, right? So if people had scrapped cars, cars were sitting in the junkyard and they hadn't taken the catalyst off straight away. Now you're incentivized to go and get that catalyst off the cars and pull that inventory through. And as a result of that, we do have recycling numbers up last year and likely up this year. But there will be payback for that over time with reduced growth rates in recycling. So hopefully, that answers both of those questions, Leroy. Leroy Mnguni: Thank you. There is -- we've had a similar question, but I think it's worth asking this again just to emphasize the point. So it says the Board has paid out 71% of headline earnings in 2025, well above the 40% policy. How should investors think about the balance between sustaining market-leading dividends and funding growth projects like Sandsloot underground ahead of the H1 2027 investment decision? Sayurie Naidoo: Sure. So I mean, as Craig said, I'll reiterate it. So there's been no change to our dividend policy. That's still at 40% of headline earnings. However, as part of our capital allocation framework, if we've got excess cash after we've actually invested in sustaining CapEx after we've paid our base dividend, after we've invested in the Mogalakwena underground and all our discretionary projects, whatever cash is there, we'll look to return to shareholders. So there's been no change to the policy. But we'll balance growth and we'll balance returns to shareholders. Craig Miller: But I think it's important that we also just emphasize that the CapEx that we have that we've given that ZAR 17 billion to ZAR 18 billion, that includes the ZAR 1.5 billion to ZAR 2.5 billion for Mogalakwena for the underground, yes. So that is our capital envelope. Leroy Mnguni: Thanks, Craig. And then I just got to filter through all the requests for trucking contracts, even though we're reducing the amount of trucks on. We've got a question from Shashi from Citibank. How much is the benefit of mass pull reduction on FY '26 operating cost guidance? Can we expect a further benefit into 2027 as well? Sayurie Naidoo: Yes. So on an annualized basis, it's about ZAR 250 million. Leroy Mnguni: Thank you. I think a lot of other questions are just repetitions of what we've already had. So maybe do one last call in the room. Anything on the conference call? Operator: No questions from the conference call. Leroy Mnguni: Over to you, my leader. Craig Miller: Is it me again? So once again, thank you very much for joining us today. Really, I think it's fair to say that we've really had a really transformative year in 2025 on a number of fronts. And we have a great deal of excitement and opportunity within our business in terms of continuing to really be that leading PGMs producer. And so the important thing for us is as we execute on what we need to do, that we do maintain that cost and that capital discipline. And that's exactly what my team and I are focused around. So if I can also just express my sincere thanks not only to the Board for helping us navigate what was 2025, but also to the executive team in terms of how they've showed up and really helped make a change to our business, but most importantly, to the whole team of Valterra Platinum for their enormous efforts and diligence last year and really turning last year into a really successful year and onwards and upwards from here. Thank you.
Leroy Mnguni: Good morning, ladies and gentlemen. I'm Leroy Mnguni, Head of Investor Relations for Volterra Platinum. Thank you for taking the time to join us for our 2025 final results, both in person and online. Let me start by welcoming our Board members who are here with us in the room today as well as our executive leadership team. From a housekeeping perspective, we do not have any fire drill planned for today. Therefore, if you hear an alarm, we request that you exit the venue safely through the doors at the back. For those of you that are near the front, please note that there are exits on either side of the venue on the lower level as well. Our fire marshals and security officials will be stationed outside the venue and will escort us to a designated assembly point. To draw your attention to the cautionary statement, I would encourage you to read it carefully in your own time. Now for the agenda for today. Craig Miller, our CEO, will take you through a brief overview of the significant milestones achieved during 2025, followed by a review of our operational and market performance. Sayurie Naidoo, our CFO, will then take you through the financial results. Finally, Craig will wrap up the presentation. As usual, we've allocated time for Q&A at the end of the presentation. I'll now hand over to Craig. Craig Miller: So thank you, Leroy. Good morning, everybody. And once again, thank you for joining us. I'd like to begin by reflecting on safety. So tragically, we lost 2 of our colleagues in work-related fatalities during 2025. Mr. Felix Kore at Unki Mine on the 20th of April and Mr. William Nkenke at Amandelbult's Dishaba mine on the 22nd of July. We extend our sincerest condolences to their families, friends and colleagues. The lessons learned from these tragic incidents are being implemented across our organization. And while we mourn these losses, we also recognize that we've made good progress on safety overall, and we've achieved a number of milestones at our operations, including 14 years without of fatality at Mototolo, 13 years at Mogalakwena and 9 years at Amandelbult's Dishaba mine. We've also improved our total recordable injury frequency rate by 11% to the lowest level in our history, placing us in the leading quartile amongst our peers. Safety remains our highest priority with our unwavering focus on achieving zero harm. Our teams are committed to proactively preventing injuries, and we will not compromise on safety under any circumstances. We're also fully dedicated to delivering on the commitments that we have made. And with that in mind, I'm delighted to say that 2025 was an exceptional year for Valterra Platinum despite navigating a challenging external environment. Some of the progress highlighted here reflects discipline in action from strengthening our operational excellence to executing consistently across all of our strategic priorities. Most significantly, we launched as an independent company, having successfully completed the demerger from Anglo American plc as well as our secondary listing on the London Stock Exchange. Subsequently, Anglo American plc sold their remaining minority interest, fully completing their divestment from Volterra Platinum. Our simplified organization structure has been well embedded with a reconstituted executive committee focused on the delivery of the strategy with clearly understood accountability lines. We've reinforced our operational capabilities through the recruitment of critical skills and services, and we will have exited all of the transitional arrangements with Anglo American by the end of 2026. Our reconstituted Board comprising of 11 nonexecutive directors and 2 executive directors brings the required diversity of experience and expertise. Our relentless pursuit of operational excellence has delivered a really good performance, having exceeded our production guidance despite the weather-related impacts experienced in the first half of the year. Financially, we exceeded our targeted cost savings in 2025, which has brought our total cost and capital savings delivered over the last 24 months to ZAR 18 billion. I'm particularly pleased with this result given the macroeconomic factors impacting our cost base. Our entire organization is focused on maintaining this cost and capital discipline, notwithstanding the higher commodity price environment. And as we've previously said, each of our assets plays a well-defined role in the portfolio, and I'm glad to report that they have all contributed to the progress during 2025. Our extensive endowment of mineral resources provides an exciting growth prospects for Valterra Platinum, and I'll take you through the progress that we've made developing these projects, particularly Sandsloot and Der Brochen in just a few slides. We continue to actively seek opportunities with industry players to drive demand to ensure the long-term success of our industry. Over the past year, we've maintained our focus on enhancing PGM usage in mobility, jewelry and investment. And on the industrial front, the recently announced partnership with Johnson Matthey and Sibanye-Stillwater is evidence of our commitment to working with industry players to grow industrial demand. And we would certainly welcome other producer peers to join us in this venture and of course, not to preclude us from working with other fabricators in other areas. And finally, the recognition of Mogalakwena by the initiative for Responsible Mining Assurance with a 50 accreditation means all of our mining operations are now accredited. This is a rare global feat that sets us apart in the mining industry and reaffirms our commitment to embed sustainability into absolutely everything that we do. So now let's dive into the detail of our performance. I am encouraged to see the delivery of our strategy has led to an improvement in our underlying performance. While we've obviously benefited from the increase in the PGM basket price, the drivers of which I'll walk through a little bit later, the 68% increase in EBITDA is substantially supported by our internal actions as well as that macroeconomic price environment. And consistent with our commitment to drive down our all-in sustaining costs in real terms, we've consistently driven down that all-in sustaining cost and have maintained this at below $1,000 per 3E ounce. Our balance sheet has strengthened materially over the second half from a ZAR 4.5 billion net debt position at the end of June to an ZAR 11.5 billion net cash position at the end of the year, reflecting the outstanding free cash flow generation. This has allowed us to pay a special dividend on top of our base dividend, bringing the total dividends for the year to approximately ZAR 12 billion. It's certainly not just our shareholders who are benefiting from the additional value that we are creating. As you can see, Valterra Platinum continues to be a significant contributor to both our local communities and the broader South African economy through the combination of local procurement, capital investment, social investment and of course, salaries, wages, taxes and royalties. All in all, we've contributed more than ZAR 83 billion to our stakeholders. Valterra Platinum is truly playing its part in sharing value to better our world. So turning to a bit more detail on our operational performance. We outperformed on operational delivery this year due predominantly to the improved performance in the second half of 2025 when our operations demonstrated far greater stability and efficiency underpinned by our focus on safe and responsible mining. A record number of tonnes were milled at Mogalakwena, which helped to more than offset the weather-related decline at Amandelbult, resulting in total tonnes milled increasing 1% year-on-year. Amandelbult's strong second half performance, aided by the faster-than-anticipated ramp-up to steady-state volumes exceeded guidance with total production at 484,000 ounces. Our mass pull improved by 9% compared to 2024, underpinned by notable improvements at Mogalakwena as well as Amandelbult. Overall, our refined production, which was supplemented by inventory optimization, exceeded our 3.4 million ounce guidance. Sales volumes included refined margin -- refined inventory destocking totaling close to 3.5 million ounces. So delving now into the performance of some of our assets. Mogalakwena's pit optimization efforts led to a clear improvement in its operational performance. Our strip ratio has declined 22% to 4.5x. This means that we mined 15% more volumes despite an 8% reduction in total tonnes mined. The efficiency improvements have allowed us some flexibility in the selection of ore grades. So in line with our value over volume strategy, we've been able to process some of the lower-grade stockpiles while still reducing unit costs. This has resulted in the lower head grade, which was offset by higher tonnes milled, delivering similar ounces to what we achieved in the prior year. I'd like to take a brief moment to really emphasize that these developments provide a significant value-enhancing opportunity for Mogalakwena. We can mine fewer tonnes and supplement the expert ore with surface level lower-grade ore stockpiles, resulting in lower operating cash costs, while our volumes are maintained within our guided range. But most importantly, we can keep this Tier 1 asset anchored in the bottom quartile of the cost curve. Other operational excellence initiatives at Mogalakwena have resulted in notable improvements in both mining and in concentrating activities. We've seen a 9% advance in drilling efficiencies and a 15% improvement in redrills, while our load and haul efficiencies have improved 24% and 18% year-on-year, respectively. These positive developments have started to materialize in lower operating costs and together with the benefits of higher co-product revenues has resulted in an 8% reduction in our all-in sustaining cost to $835 per 3E ounce. And so no doubt, you're all keen for an update on the Sandsloot underground, not only because it's genuinely exciting, but because it has the potential to truly move the needle. Here's a reminder of why this project has the potential to be a significant strategic catalyst for Valterra Platinum. Our declines begin at the base of the Sandsloot open pit, providing close access to the reef. This substantially reduces project lead time and lowers capital intensity compared to other projects in the industry. Unlike other Bushveld complex reefs, its height is between 40 and 120 meters with a 45-degree dip on average, characteristics well suited for bulk underground mechanized mining. At 4 to 6 grams per tonne, the reef is materially richer than other mechanized mines in the PGM industry. Growth uplift is driven by higher grades rather than increasing volumes, enabling us to leverage the existing concentrator and tailings facilities. This approach will save us billions in upfront CapEx and costs. And this year, we plan to commence trial mining, which will provide critical inputs to our comprehensive feasibility study. The conclusion of the prefeasibility study has reinforced our confidence in the 10% to 50% uplift in Mogalakwena PGM volumes and a 10% to 20% reduction in costs that we've previously communicated, numbers that we believe will truly move that needle. With the scale of the opportunity in mind, over the past year, we've made great progress in bringing this closer to reality. The team has completed a further 30 kilometers of exploration drilling, which has informed the total upgrade of 13 million ounces to measured and indicated mineral resources, which is available for future ore reserve conversion. The underground development has advanced a further 3.2 kilometers, while the team also successfully completed the pass for the ventilation shaft 1. Trial processing of the bulk ore stockpile is underway, which has accumulated to approximately 80,000 tonnes by year-end. And we've invested about ZAR 1.4 billion in CapEx to advance the project, while over the medium term, our CapEx guidance remains unchanged. I really hope that you're as excited about this as we are given the potential of this opportunity for Valterra. So moving on to Amandelbult. I am incredibly proud of how our teams responded to the flooding. Not only did their decisive actions ensure safe and responsible evacuation of all of our employees, they also accelerated the dewatering well ahead of plan and enabled a faster-than-expected ramp-up to normalized production. So a huge thank you to everyone that was involved. And as I've mentioned, this has enabled Amandelbult to exceed its revised guidance in the second half of the year with the second half performance outperforming that of what we achieved in 2024 despite Tumela mine only reaching steady state by September. This performance highlights the strong operating potential of this asset with our 2026 guidance indicating an approximately 25% recovery. Despite the severe flooding impacts, Amandelbult delivered positive free cash flow, further supported by the insurance proceeds. The resilience of the quality of this ore body with its favorable prill split and rich chrome products driving the highest basket price in the PGM sector at around $3,000 per 3E ounce at current spot levels. So moving on to Mototolo. The Der Brochen project development has progressed well through 2025 with all development ends successfully intersecting the reef having navigated the [indiscernible] zone. Total develop more than doubled, reinforcing the long-term optionality and sustainability of the operation. We also achieved a 9% increase in immediately available ore reserves, enhancing near-term operational flexibility. At Mototolo, our operational excellence initiatives delivered a 12% productivity uplift. Despite the dilution from the development tonnes, production remained consistent with that of the prior year. So looking ahead, the ramp-up of the new, more efficient Der Brochen mine with the continued improvement in chrome recoveries and further optimization of the 3 declines are expected to drive Mototolo's cost further down the cost curve. Our processing operations have also seen improvements beginning with our upstream performance. We achieved a 1% to 2% improvement in concentrator recoveries at both Amandelbult and Mototolo, aligned with our strategic objective to enhance recoveries and improve margins. At Mototolo, recoveries -- sorry, beg your pardon, at Mogalakwena, recoveries remained flat, a notable achievement given the 13% reduction in our mass pull. Amandelbult's 7% reduction in mass pull also contributed to the reduction across the business. And I have already mentioned Mogalakwena's record milled tonnes were supported by the ongoing improvements in plant availability and proactive investment into reliability. And so now for the much anticipated update on the Jameson Cells. Sorry, that was like really dramatic, I'll take a sip. We have optimized the plant to further deliver improvements following the first half commissioning. And we are expecting additional improvements at the Mogalakwena concentrators on top of the 13% I've just mentioned as optimization continues and the plant's annualized impact is realized. We're also really encouraged by the almost 1 percentage point improvement in the adjusted North concentrator recoveries since the commissioning. And while the recovery uplift was not the primary objective of the introduction of the Jameson Cells, the team is optimistic that further improvements may follow. So to put that impact into perspective, volumes at the Mogalakwena North concentrator declined 14%, while concentrate grade increased 16%. Importantly, there are many wider benefits to the mass pull reduction. In 2025, we saw a 21% reduction in trucks transporting concentrates, a 4% decrease in smelter electricity consumption and a corresponding 5% reduction in CO2 emissions, delivering an estimated cost saving of about ZAR 123 million with additional savings expected in 2026, commensurate with further improvements in mass pull. So now turning to our markets. There were several positive developments in the PGM markets during 2025. While we've all seen the overall increase in the basket price, it's important to note that there were multiple factors that contributed to the increases with a few dominant drivers standing out. Firstly, the year began with moderate price gains owing to a weaker U.S. dollar. Prices accelerated as the market tightened over concerns about tariffs and weaker mine supply. And although primary supply normalized in the second quarter, stronger price gains followed from May onwards with a large price differential with gold prompting strong Chinese buying. This was then accentuated in June and July by renewed tariff concerns, prompting further sizable U.S. imports. The second half of the year benefited from strong investor purchasing, driven by the debasement trades and the launch of the Guangzhou Futures Exchange. Specific factors also contributed, such as a robust hard disk purchasing in ruthenium and the recovery of rhodium demand, particularly in the fiberglass applications. And while price movements were dynamic, they were firmly underpinned by market fundamentals; tightening supply, stronger-than-expected demand as automotive sales prospects improved and inventories that proved less abundant or more tightly held than many had anticipated. The second half of 2025 was an exceptional period for PGM prices. The full basket price ended the year 86% higher than at the start of 2025. All metals contributed to this increase with platinum, palladium and rhodium being the largest contributors. There are 2 potential bullish drivers already making an impact. You may remember that we called these out specifically at our Capital Markets Day last year. Firstly, BEV penetration forecasts have been revised downwards, particularly in Europe and the U.S.A., markets where vehicles are heavily loaded with PGMs. Political developments in both regions have further supported the internal combustion engine vehicle demand. Meanwhile, the price of platinum rose considerably, but it is still trading at a substantial discount to gold. This has enabled platinum jewelry to gain market share in several key geographies and heightened interest in substituting PGMs for gold in various industrial applications. Our total supply and demand outlook for PGM markets points to continued tightness in the medium term. We expect global car sales to continue growing alongside an expanding world economy. Downward revisions to BEV growth in key markets are also supportive. Mine supply is expected to decline over the medium to long term, though at a slower pace than previously anticipated due to higher prices. Elevated prices will also encourage recycling volumes, but still face headwinds. And importantly, even at current price levels, new mine projects are unlikely to come online soon nor will vehicles be scrapped any earlier. Structural constraints to materially higher supply, therefore, remain. Our outlook is broadly consistent with prior expectations. And in 2026, we anticipate a sizable deficit in platinum, while palladium's anticipated surplus again fails to materialize. Beyond that, platinum should remain well supported, while palladium and rhodium will shift more to balance, but at an uncertain pace. These balances exclude investor demand, which enjoyed strong tailwinds in 2026. PGMs are increasingly recognized not only as critical minerals, but a safe haven assets, reinforcing their strategic appeal. I'll now hand you over to Sayurie to take you through the financials. Sayurie Naidoo: Thank you, Craig, and good morning, everyone. I am pleased to be reporting a strong set of financial results for 2025. Despite the demerger activities and headwinds faced during the year, our performance underscores the robustness of our business and the strength of our operating model in driving long-term value creation. To summarize our performance, revenue increased 7% year-on-year to ZAR 116 billion, driven by the uplift in the PGM basket price. This was partially offset by lower sales volumes, reflecting reduced M&C production, mainly from Amandelbult and the prior year's larger release of built-up work-in-progress inventories. Our disciplined cost management approach delivered a further ZAR 5 billion of operational and corporate savings, more than offsetting inflationary pressures. As a result, EBITDA increased 68%. And on the back of this, the company generated sustaining free cash flow of ZAR 20 billion. This meant we ended the year with a strong net cash position of ZAR 11.5 billion, boosted by a stronger second half. In line with our disciplined and balanced capital allocation framework, the Board has declared all net cash as a final dividend, equating to ZAR 43 per share. The company delivered a solid EBITDA performance despite the operational challenges in the first half of the year. EBITDA was supported by a 26% stronger PGM dollar price of $1,852 per ounce, partially offset by the strengthening of the rand. Input cost inflation of 5.4% reduced earnings by ZAR 2.8 billion, while royalty expenses reduced earnings by a further ZAR 1.1 billion, in line with higher revenue. Our success in delivering on our cost-out initiatives made a significant contribution to the uplift in earnings. As you are aware, earnings were also affected by the one-off demerger-related expenses, which have been largely completed and the impact of the Amandelbult flooding event, although insurance proceeds mitigated the majority of that impact. Mining operations contributed ZAR 29 billion to EBITDA at a mining margin of 38%, while POC and toll contracts contributed ZAR 9 billion at a margin of 21%. Since launching our operational excellence drive, we have delivered a decisive reset of our controllable cost base, which is down 18% since 2023. The ZAR 5 billion saved in 2025 was achieved across several areas, including consumables optimization of ZAR 2.2 billion, ZAR 1.4 billion from labor and contractors, reflecting the flow-through benefits of the operational restructuring undertaken in 2024 and a further ZAR 1.4 billion as a result of the simplified operating model post the demerger and other corporate cost reductions. As a result of our cost-out program, we achieved a cash operating unit cost of ZAR 19,488 per PGM ounce, in line with our revised guidance. Guidance for 2026 is ZAR 19,000 to ZAR 20,000 per PGM ounce, reflecting a partial inflation offset from ongoing cost-saving initiatives and increased production from Amandelbult. We are also targeting a further ZAR 1 billion to ZAR 1.5 billion in cost savings for 2027 as a result of the demerger with some of these benefits expected to materialize in 2026. Full year capital expenditure amounted to ZAR 17 billion, at the lower end of our guidance. Sustaining capital expenditure was ZAR 12.5 billion with a primary focus on asset maintenance, furnace rebuilds and mining equipment replacement. Sustaining capital also includes capitalized waste stripping, which declined ZAR 1 billion from 2024 due to lower waste tonnes mined, consistent with our value over volume strategy. Discretionary capital of ZAR 4.5 billion was directed to Sandsloot underground development and drilling as well as surface infrastructure and development at Der Brochen. We also commenced work on the repurposing of the Mortimer smelter. As we move into 2026, total capital expenditure is expected to remain broadly in line with 2025 at ZAR 17 billion to ZAR 18 billion. This is ZAR 1 billion to ZAR 2 billion lower than our previous guidance of ZAR 19 billion, again, reiterating our continued commitment to cost and capital efficiency. Of this, ZAR 12.5 billion will be incurred in sustaining capital to maintain asset integrity and ZAR 4.5 billion to ZAR 5 billion on discretionary capital. Turning to the impact of our cost and capital efficiency on all-in sustaining cost, which was $987 per 3E ounce, below guidance and flat year-on-year. Notably, this represents a 13% decrease from 2023, underscoring our cost control. I would like to highlight that going forward, we have revised our calculation methodology for all-in sustaining cost to include life extension capital to align with our updated capital definitions. On this basis, the all-in sustaining cost for 2025 was $1,039 per 3E ounce. Looking at the cost curve on the right-hand side of the slide, all of our own mine assets are firmly in the first half of the cost curve. Amandelbult's strong co-product credits, together with the benefits of the insurance proceeds have contributed to its positioning in the second quarter despite the impacts of the flooding. Our 2026 all-in sustaining cost guidance is around $1,050 per 3E ounce, assuming an exchange rate of ZAR 17 to the dollar. The company closed the year with a robust balance sheet, ending in a net cash position of ZAR 11.5 billion. Since 30th June 2025, the company generated cash from operations of ZAR 28 billion. And of the total ZAR 17 billion capital expenditure, ZAR 9 billion was incurred in the second half of the year, alongside the payment of the interim dividend. I have already talked to the one-off cash impacts relating to the demerger, which had an impact of ZAR 2.9 billion in the second half. We also received ZAR 2.5 billion in insurance proceeds. The flood claim is now in its final stages, having reached the end of the indemnity period, and we anticipate receiving the final payment during the first half of 2026. Liquidity headroom at the end of the period was ZAR 43 billion. Our banking group remains broad and strong, comprising both local and international institutions with committed facilities in both rand and the U.S. dollar. 2025 marked a major milestone for our stand-alone journey as we secured our inaugural global credit rating from S&P, achieving investment-grade status. In addition, we established a domestic medium-term note program, enabling us to issue listed debt in the South African bond market. This will provide an opportunity to diversify our debt funding sources and potentially lower our cost of borrowing. And in line with our capital allocation framework, the Board has declared a final dividend of ZAR 11.5 billion or ZAR 43 per share, comprising a base dividend of ZAR 23 per share or ZAR 6.2 billion, in line with our policy of 40% payout of headline earnings and a special dividend of ZAR 20 per share or ZAR 5.3 billion. This brings our total 2025 dividend to ZAR 12 billion or ZAR 45 per share. This marks our 17th consecutive dividend since reinstatement in 2017, affirming our commitment to industry-leading and consistent shareholder returns. I will now hand you back to Craig to wrap up. Craig Miller: Thanks very much, Sayurie. And to conclude, so our strategy remains clear and disciplined, maintain capital efficiency, drive cost reduction and maximize cash generation to enhance shareholder returns. Over the last number of years, we have invested consistently to maintain both asset integrity and reliability, which will enable us to sustain and grow our own mine production, improving margins. And as a result of the new ways of working and our discipline in terms of capital efficiency, we expect medium-term capital, as Sayurie has said, to stabilize at between ZAR 17 billion and ZAR 18 billion, inclusive of growth investments. This does position us distinctly from our peers who are raising CapEx guidance to arrest declining production profiles. With a stable capital base, our leverage to free cash flow at spot prices is significantly enhanced. So to illustrate, had current spot prices prevailed throughout 2025, free cash flow would have been about 240% higher. We have consistently demonstrated the delivery of our strategy and disciplined capital framework, returning excess cash to shareholders through dividends. The track record speaks for itself. Over the past 5 years, we have returned almost twice as much in dividends as our peer group combined. And so that you are left in no doubt, we offer a distinct investment proposition. Our substantial resource endowment provides exceptional longevity across our Tier 1 operations. With a high-quality, reliable and efficient processing infrastructure, our ability to create value throughout the value chain sets us apart within the sector. Our strategy is clear. Our experienced leadership team is well positioned to continue optimizing the business, unlocking value and delivering strong operational outcomes. And we remain firmly committed to disciplined cost and capital management to safeguard the integrity and sustainability of our assets while executing our growth agenda effectively. And with a robust balance sheet and strong cash flow generation, we're well placed to sustain those industry-leading returns to shareholders. I think it's fair to say that Valterra Platinum has certainly demonstrated in its first year of independence that we are a company that delivers. In 2025, we delivered on all our strategic priorities. We reinforced our skills and technical capabilities across the business and executed operational excellence activities with discipline and set the company up to accelerate those growth projects. I'am truly excited about the momentum that we have brought into 2026 and our unwavering focus on value creation for all of our stakeholders. That concludes our presentation. So thank you once again for joining us. I hand you back to Leroy to facilitate the questions and answers. Leroy Mnguni: Thank you, Craig. I think we'll start in the room. There are a couple of revolving mics. The first hand was Chris. If you could please introduce yourself before you ask your question as well, please. Christopher Nicholson: It's Chris Nicholson from RMB Morgan Stanley. I've got a couple of questions around volumes, and I think Mogalakwena in particular. I noticed that you trimmed your production guidance for your own mines for 2027. Could you just chat to what's driven that trim? Second question might be linked to that. At your Capital Markets Day last year, you were talking about grades at Mogalakwena from the open pit getting back to 3 grams a tonne, supporting 1 million ounce profile. We're still a little bit below that. Is it still your expectation that you get back to 3 grams a tonne? And then final one, also probably linked to that. I see you put a comment there on the lease on the Baobab plant expiring at the end of '25. I think we did know about that. So it's not a surprise. But I just wondered at these prices and just with the profitability of Mogalakwena, whether it made sense to try and extend that in any way, even if you had to put more CapEx into the tailings dam or incentivize Sibanye to do so. Craig Miller: Thanks, Chris. I'll answer some of the questions, and I'll ask perhaps Willie and Agit also just to comment on and reemphasize that value over volume strategy that we have in Mogalakwena and then also Agit, if we can just talk through the Baobab and the improvements that we've seen through North concentrator, improved recoveries and why we've sort of -- well, we've ended the Baobab contract. I think certainly, as we've said around our M&C volumes for next year between 3 million, 3.4 million ounces and into 2027, slightly lower. And that is on the back of us maintaining Mogalakwena's production at between 900,000 and 1 million ounces. And that's really our focus. And I've touched on that value over volume strategy, and I think Willie can articulate that in more detail. But that's what we fundamentally believe is the right sort of approach for us because it really drives that all-in sustaining cost. And we need to maintain that throughout the journey of Mogalakwena, sort of certainly in the lower half of the cost curve. And that's what really enables us to be able to do that. We've also maintained our production at Amandelbult at that sort of 580, 650 sort of mark. And that's what we'll sort of maintain. That continues to keep the longevity of Amandelbult intact, particularly from a Tumela and Dishaba perspective. And that's really what those sort of the 2 sort of revisions are there. But you'll see that we've guided now. We've moved away from guiding around the grade. So we've given you guidance around the actual production profile. And so that then enables us to be able to manage just how we extract the value through processing some of those lower-grade ore stockpiles, reducing the amount of volume that we actually mine, particularly at Mogalakwena and therefore, continue to drive its all-in sustaining cost to where we fundamentally believe it should be for this Tier 1 asset. So Willie, I don't know if you want to add anything in terms of the sort of the approach in terms of how we think through the grade. Kimi has got your mic ready. Willie Theron: Good morning, everybody, and thanks for the question, Chris. I think I'm not going to belabor the point on the all-in sustaining cost that Craig has already spelled out. I think a big component, if you look at Mogalakwena in particular, is the low-grade ore stockpile. It's sitting roughly on 5 million tonnes. That is a key deliverable aspect that we have stripped in essence, waste, where we stockpiled the low-grade ore. And our approach in terms of this value over volume is to, over time, for the next few years, and [indiscernible] made the percentage right about 35% to use that as part of the blend into the concentrators. But even at about 35% on average that we use it as a blend into the concentrators, we maintain a 5 million tonne stockpile on the low-grade ore. And this is why this value over volume and driving the all-in sustaining cost to maintain that position. And also from what I've spoken now, that's only from an open pit point of view. That is not taking into consideration anything that we do at Sandsloot. So the 900,000 to 1 million that Craig is referring to is open pit and with a 35% on low-grade ore stockpile as part of the blend and maintaining that at about 5 million tonnes. It's significant differentiator in terms of that ore body. Craig Miller: Thanks, Willie. Agit, do you want to just comment on Baobab and just how we're thinking North and South. Agit Singh: Yes. Thanks for the question, Chris. So obviously, we did consider Baobab with regards to the future of Mogalakwena with regards to milling. But first of all, Baobab was not the cheapest concentrator in our portfolio. And North concentrator and South concentrator has got a significant amount of effort over the last couple of maybe 1 to 1.5 years. And that effort has come through significantly around the way we operate the plant from a throughput point of view. So the more throughput we can get through North or South, the better it is for us from a unit cost point of view. It links back directly to what Willie and Craig has been speaking about with regards to the blending strategy and keeping the ounce profile. So we're very confident that with the North and South concentrator and the work that we've done with regards to the feed that we're putting into North and South, the work that we're going to be doing at the South concentrator around the refurbishment, the work we've already done at the North concentrator with regards to the Jameson cells and optimizing that flotation circuit that we will be able to deliver what we need to deliver with regards to the blending strategy that we have coming through from Willie and the team. So it's a very well-integrated thought process that we've taken from mining all the way down through the concentrators. Leroy Mnguni: I think the next hand was Gerhard and Arnold. Gerhard Engelbrecht: Gerhard Engelbrecht from Absa. Maybe just two questions is, how do you think about your debt levels at this point in the cycle? So do you have a targeted debt range or debt-to-equity or net debt-to-EBITDA? Or how can we think about debt going forward and how you then utilize cash? And then maybe if you can just remind us of the insurance payment, the quantum of that, that you expect in this half. Sayurie Naidoo: So we've guided in terms of our net debt-to-EBITDA at about 1x -- less than 1x through the cycle. However, at current prices, as we've declared our dividend of ZAR 11.5 billion, that gets us to a cash-neutral balance sheet. And we believe that, that is actually the prudent approach, which will actually strengthen our balance sheet and ensure that we can even sustain it in a lower price environment. Craig Miller: And then the insurance. Sayurie Naidoo: On the insurance proceeds, as we said, we've received ZAR 2.5 billion so far. However, we are still in discussions in terms of what the total quantum of that insurance proceeds will be, but we expect to receive that in the first half of the year. Arnold Van Graan: It's Arnold Van Graan from Nedbank. Two questions for Sayurie. The one is on your cost savings. I mean that's a phenomenal number, saving ZAR 5 billion and then ZAR 1.5 billion going forward. So I guess my question is, where is that coming from? And how sustainable is it? I know we've talked about this before, but I guess my question or concern is that some of this comes back into the system over time. So that's the one question. Second question relates to Unki. It looks like there's a bit of a cash lockup there currently. It doesn't matter now given where prices are. But yes, just give us a sense of how you're addressing that and how you see that playing out? That's it for me. Sayurie Naidoo: Sure. So just in terms of our cost savings, so it's really in 3 broad categories. So the first one, if I look at the total ZAR 12 billion, about ZAR 5 billion of that is from supply chain and procurement benefits. So we've reviewed all our supply chain contracts over the last 2 years, we've been able to get lower pricing. A lot of this is from prior to COVID or during COVID, where we had escalated pricing in some of the consumables, we were able to reduce a lot of that. So these are sustainable pricing. Obviously, they would increase with inflation going forward. But from an operating perspective, that's where we found a lot of the efficiencies. The labor and contractor reductions. So we undertook a restructuring in 2024. So that was about 2,700 people at Amandelbult. So that is a sustainable reduction in labor. We've also reviewed all our contracting companies, and we took out about 450 contracting companies. So that's sustainable reductions. We also did some review of our corporate costs. And as I said earlier, there were some demerger-related cost savings that we were able to realize as well. But a lot of the savings that we've also achieved is as a result of the operational excellence work that we've done. So the mass pull benefit that Agit has been working on in processing, the pit optimization at Mogalakwena, all of that has been sustainable cost reductions. So mass pull, for example, a ZAR 250 million annualized cost benefit that we'll realize from that. The pit optimization, we've been able to bring down waste stripping costs by about ZAR 1 billion so far and another ZAR 1 billion going forward. And then the demerger-related costs, the ZAR 1 billion to ZAR 1.5 billion that we expect to come, that is really from the simplified operating model as a stand-alone company, simplification of some of the systems that we've got, our IT systems, for example, moving to an outsourcing arrangement for some of our shared services. So that's where we're seeing some of the reductions that we expect to realize in the next 2 years. So really sustainable cost savings. Going forward, as we've guided, you expect -- we will continue to look for initiatives to offset inflation, again, mass pull, renewables that will come through from the Envusa project this year. So that will offset about -- that will give us about a 10% reduction on the current Eskom tariffs that we're getting. So there will be continued cost optimization initiatives to ensure that we maintain that cost discipline as a business. So as you see, our cost is relatively flat over the next year. And then in terms of the Unki, so we do have -- so as part of operating in Zimbabwe, our export proceeds is a retention mechanism. So 30% of our export proceeds are retained in local currency. In the last year, we haven't been able to access some of that. So it's about $100 million that hasn't been able to be accessed by us. However, and you'll see that we've obviously recognized a provision on that. But we have been engaging with the Reserve Bank as well as the Ministry of Finance, and we are receiving some funds in 2026 so far, and we do expect to receive that over the next couple of months. Leroy Mnguni: There's a question from David. Unknown Analyst: David [indiscernible] from Phoenix research. I would just like to, first of all, congratulate the technical and the mining people. First of all, congratulations on getting Amandelbult up and running so quickly. Very impressive, very impressive. And secondly, also, congratulations on the Jameson Cells. When I saw that number of 40% reduction in mass pull, that's quite amazing. So if I may lead my first question on that one is, is that in any way transferable to the other concentrators? I mean, obviously, I know that the metal mix is very different, but is that at all transferable? And then just a very general question. On the Merensky Reef, are there any plans to mine more Merensky Reef at all? I mean, it's now UG2. I'm talking about the East and West Limb, are there any plans to mine Merensky projects? Craig Miller: Thanks, David. Thanks very much for the question. I'm going to try my best to answer them, and that will be my team members giving me a report card in terms of whether I've been paying attention. So in respect of the Jameson Cells, so clearly, they've been really successful at Mogalakwena, at the North concentrator. Agit referenced the refurbishment of South. And so we will look to see whether we can install the Jameson Cells at the South concentrated Mogalakwena. So that process is underway, and we're evaluating it. I think it's less impactful at Amandelbult, particularly just given the scale of Amandelbult and the installed capacity. But our real primary focus is really then driving that efficiency at Mogalakwena. That looks to be our biggest opportunity at the moment. Did I get that right? Good. And then on Merensky, I think our primary focus is really around continuing on the UG2 routes. There's not a great deal of Merensky that we have immediately available, just given sort of what we've mined out at Amandelbult and in particular focus for us at Der Brochen and Mototolo on the Eastern Limb. Those are sort of -- our key focus will be around the UG2. Leroy Mnguni: We've got Steve in the back. Steven Friedman: It's Steve Friedman from UBS. Firstly, congrats on the strong results. Maybe just a follow-up on the capital allocation framework question and more regarding the prepayment, specifically around the remaining duration. I know this is something that's been extended previously. But if you could sort of give us some indication on that. And understanding this is a volume-based contract. So very much that value will be linked to PGM prices and FX, if you could give us some sort of sensitivity on what that means in the current environment? Sayurie Naidoo: Sure. So our customer prepayment at this point, it's about ZAR 12.8 billion. You're correct, it is linked to price and FX. So it's probably increased about ZAR 1 billion since 2024 as a result of that and volumes were relatively stable on that. In terms of the renegotiation, so it comes to an end in 2027. However, we are in negotiations with the customer, and we don't have any reason to believe that we won't be able to extend the customer prepayment. It may be on different volumes and different period, but it's still something that we firmly include in our working capital numbers. Leroy Mnguni: I see no further hands in the room. Can we please go to the conference call and see if there are any questions there? Operator: We have a question from Adrian Hammond of SBG Securities. Adrian Hammond: Yes, well cone on solid results and outlook, Craig, your payout was significantly higher, I think, than the market expected. So give us some guidance on how we should expect future payout of dividends. I noticed 70% is what you used to pay in the last bull market. And is this something we should be expecting going forward? For Sayurie, you've been quite explicit on the cost savings for another ZAR 1 billion to ZAR 1.5 billion over the next 2 years. But I do note you're certainly seeing more benefits from the Jameson Cells. And should there be other benefits as well that perhaps your ZAR 1 billion, ZAR 1.5 billion is still a conservative number. And I just want to clarify when you mentioned earlier that the Mogalakwena pit optimization on waste stripping was banked at ZAR 1 billion, but a further ZAR 1 billion going forward. Just correct me if I'm wrong, if that's further ZAR 1 billion is in your current guidance. And then Hilton, perhaps premature to ask that your customer prepayment with Toyota is still being negotiated. But do you foresee additional volume offtake in that agreement going forward? And perhaps you just give us an update on customer flows and orders for PGM autocat businesses and as well as the minor metals. Craig Miller: Thanks, Adrian, for the questions. So I'll take the easy one. So I think, Adrian, as we've indicated, just once again, quality of the assets that we have, our focus around operational delivery, investing in the assets that we have and really maintaining that asset integrity and reliability really sets us up well. And as a consequence of that, that enables us to be really deliberate and focused around how we return value to shareholders. And so in line with that discipline and our capital allocation, any excess cash that we generate, we would look to return that to shareholders. And so as Sayurie said, we've done it for 17 consecutive periods where we've paid a dividend and we've paid specials. And I think you can expect a continuation of that discipline for periods to come. And so we'll wait to see what happens in July when we report the half year results. Sayurie Naidoo: Adrian, on the waste stripping, yes, that's already in our guidance in the ZAR 17 billion to ZAR 18 billion in the medium term. And then just in terms of cost savings, so the ZAR 1 billion to ZAR 1.5 billion, that's coming from corporate cost reduction. And as we've mentioned, there will be continued benefits from operational excellence. So your mass pull initiatives, the renewables. We're looking at some low-cost country sourcing, so alternative sources of some consumables from a supply chain perspective. So all of that will partially offset inflation. So input cost inflation, about 6% we're forecasting for 2026, but we expect that our costs should be below the 6%. So yes, there will be some more operational initiatives that will offset inflation. Hilton Ingram: Yes, Adrian, on the prepayment, as Sayurie indicated earlier, right, in the middle of negotiations. So we're going to be as quiet on the subject as we can be, but we expect to see volumes at least in line with what you'd expect given the pressures in the automotive industry and increases in recycling. But we'll work hard at that. And so more news to follow later. In terms of -- what are we seeing in terms of customer flows? You've seen the duty announcements out of the U.S. That means there's some rebalancing of portfolios going on in amongst customers. And so we're seeing changes in geographic flows as a result of that and inquiries that you'd expect us to be seeing in line with those geographic flows. But we expect that to balance themselves out around the globe and not have a material impact on supply-demand balances. And then minor PGM demand, we've seen healthy demand for contracts in that space, and we're still seeing good flows. Leroy Mnguni: Any further questions on the call? Operator: We have a question from Nkateko Mathonsi of Investec Bank. Nkateko Mathonsi: Well done from my side on a very good set of numbers, especially I concur with Adrian, especially on the dividend, that was a surprise versus what the market was expecting. Another congratulations on inventory optimization that has allowed you to continue liquidating inventory from your processes. I mean, my first question is how much room do you still have to squeeze the pipeline going forward? At this point in time, it looks like it is creating [indiscernible] in the processing infrastructure, but that has been very positive for at least the past 2 years. I just want to know how should we think about it going forward? And then my second question is on Sandsloot and the prefeasibility study. Is there any indicated CapEx that we should work on as far as Sandsloot is concerned from that prefeasibility study? And then also on the better terms on the extension of the tolling contract by 5 years. Are you able to give us a bit of an indication as to the increment on that contract and how we should look at it going forward? Craig Miller: Thanks, Nkateko. Thanks very much. At least you like the dividend. So let me start on the inventories. I couldn't agree with you more that the processing team seems to find additional ounces. But I really do think that we've really optimized the pipeline now, and that's really sort of come through in terms of the optimization and the higher refined ounces that we achieved in 2025. We have indicated previously that we do have some inventory that is sitting in what we term wax. So that's material that has -- that you'll know better than me, comes out of the converter plant and that we haven't been able to treat to date. And as a consequence of that, we are repurposing Mortimer to be able to treat that material in addition to be able to just processing normal ongoing concentrate. So we do have some inventory and you'll see that come through in our 2027 number. So if you -- to Chris' earlier point, you've seen that slight reduction in our M&C volumes. But actually, our refined volumes in 2027 are maintained at 3 million to 3.4 million ounces. And so you see that liquidation coming through there as a result of Mortimer. So that's really where that will come through. But I think more broader in terms of do we have [indiscernible] and all the rest of it of inventory. We haven't found it, but we'll certainly keep looking. But genuinely, I think, we've optimized as much as we can at the moment. In terms of the feasibility study for Sandsloot, that continues, and that's underway. And so our capital guidance for the expenditure around that to ramp up Sandsloot to around about that 2 million, 2.5 million tonnes is maintained at that sort of ZAR 1.5 billion to ZAR 2.5 billion. Just remember, there might be some years that we'll spend slightly more because we need to build workshops, we need to purchase some equipment or something. But that broad range of between ZAR 1.5 billion and ZAR 2.5 billion is maintained from what we shared with you back in the middle of last year. And on the tolling contract, yes, we have extended the tolling contract with Sibanye. So that would have come to a conclusion at the end of 2026. We have extended that by another 5 years. Both parties have the opportunity to end that after 3 years. And I think to use Richard's words, I think it's on materially better terms than what they're currently paying at the moment. Leroy Mnguni: Operator. Are there any further questions? Operator: We have a question from Benjamin Davis of RBC Capital Markets. Benjamin Davis: Great set of results. Just a couple of questions from me. One on the CapEx guidance, very much going against the grain in terms of going down. I was just wondering if you could give any kind of what drove that delta from ZAR 19 billion to the ZAR 17 billion, ZAR 18 billion? And also given the price environment, is there any upside risk to that number in terms of kind of additional projects that are under evaluation, smaller projects? And then second question, just wondering if there is any evolution in the thinking around Modikwa? Craig Miller: Thanks, Ben. Do you want to do CapEx? Sayurie Naidoo: Yes, sure. So our previous CapEx guidance was around ZAR 19 billion. But there's a few aspects. So the one is once we concluded the feasibility study -- the prefeasibility on Mogalakwena underground, we were able to just redefine that CapEx. So that's where we got to the ZAR 1.5 billion to ZAR 2.5 billion. Due to the value over volume strategy, our waste stripping, as I mentioned, that's been reduced. So you see lower tonnes -- waste tonnes mined. As a result of that, you have lower HME replacement capital as well that will be required. So that's the other area. There's been some further optimization, for example, on the Mortimer repurposing project that has done more optimization as well at Amandelbult and Unki in terms of some of the capital spend there. The other area that's also benefited us is as a stand-alone company, how we actually execute on our projects. So we've been able to build in quite a bit of efficiencies there just in terms of using internal teams as opposed to third parties, just in terms of scoping and defining our scopes and being quite focused around that. So that's also been able to contribute towards that reduction, and that's how we were able to achieve the lower end of our guidance this year as well. Craig Miller: So yes, we agree, Ben, that's certainly sort of countercyclical, as I pointed out in terms of what we're seeing elsewhere. But yes, I think we will certainly maintain that cost and that capital guidance and it's important that we maintain that through the cycle. So very much focused around making sure that we operate within that envelope. I think specifically as it relates to Modikwa, to your question, I think one of Sayurie's slides actually illustrated just in terms of where our all-in sustaining cost was and where we're all positioned on the cost curve. The one outlier in the second half of the cost curve is Modikwa. And so we're not particularly happy, and I know our partners are not in terms of the performance of Modikwa and just how that sort of -- where it sits on the cost curve. And so therefore, we need to continue to evaluate how we improve its performance, how we rethink through what the operating structure is there, and we'll continue to evaluate our options, specifically as it regards to Modikwa in the coming months. Operator: We have a question from Ian Rossouw of Barclays. Ian Rossouw: Two questions. Just first one on the Sandsloot project. If you do go ahead and approve the project in 2027, how can we expect the CapEx to change in '28, I guess, versus current guidance? And then just wanted to talk about the working capital just in the second half, I guess there was still some build in inventories if you strip out the prepayment and obviously, the receivables sort of based on prices. But how should we think about the working capital this year outside of probably the inflows you'll see from the prepayment due to higher prices? Craig Miller: Okay. Do you want to do working capital and then... Sayurie Naidoo: Yes. So in terms of working capital, so the customer prepayment, as I did indicate, that is influenced by price and FX. So as prices increase, you will see an increase in the customer prepayment. On the other one that's influenced by price and FX is your purchase of concentrate. So that's your inventory as well as your creditor. So those should offset each other because -- so from a price impact, so that should be relatively flat. So it's really just your customer prepayment where you'll see an increase in working capital. Craig Miller: And then just on Sandsloot. I think from our perspective, so the investment is taken -- the decision to invest in Sandsloot is taken in the first half of next year. Our expectation is that you'll continue to see that ZAR 1.5 billion to ZAR 2.5 billion expenditure sort of take place for us to ramp up to that sort of 2 million, 2.5 million tonnes. So that's what you can expect to sort of see in terms of annual CapEx associated with the Sandsloot development. Clearly, obviously, as I said, you might see 1 year a little bit higher than that ZAR 2.5 billion because we've got to spend on the workshops and all the rest of it. But I think importantly, as we then start to position that, whatever that capital profile looks for Sandsloot is then -- you could see then a reduction in our waste stripping capital and some of the capital associated with the open pit at Mogalakwena. So that's where the real benefit starts to play itself out. So you process this higher-grade ore, and then we're able to reduce the amount of material that we have to move in the open pit. And so you'll see that benefit coming through as part of the decision to invest in Sandsloot. But that ZAR 1.5 billion to ZAR 2.5 billion, if you take that, you model that, that will be great. Please just make sure that you model that 10% to 20% uplift in production as well. Ian Rossouw: Okay. That's great. And maybe just coming back. So any shift in inventories expected this year? Or is that broadly stable now just on working capital? Craig Miller: Yes. No, I think your inventories, we've sweated that drag. So yes, I think your inventories are more or less sort of back to normal levels. Leroy Mnguni: Any further questions? Operator: We have no further questions. Leroy Mnguni: Right. There's a few questions that have come through online. Rene from NOA Capital says ZAR 11.5 billion net cash. I really believe you would do it a year ago. So thank you, Rene. He's got a question for Hilton. He's asking, what is your pick for the best performing PGM in 2026? And then sorry, Hilton, while you answer that, we've had a couple of questions on recycling. If you could please elaborate on some of the headwinds to a recovery in recycling, what are some of our expectations are in an increase in recycled supply given the higher PGM prices as well, please? Hilton Ingram: Thanks, Rene. I think the right answer to your question is it starts with an R as in Rene. Yes. So I'm going to go with it starts with an R. And then on recycling, we all know that recycling rates are driven by scrappage rates of vehicles. We know that vehicle prices are high. We know that cars are lasting longer than people would expect. We know that there's sort of technological or technology uncertainty in terms of do I replace my car with another ICE vehicle? Do I replace it with a PHV? Do I replace it with ICE? Or do I just hang on to what I have. So those are all playing out through the market, right? And yes, the value of an auto catalyst is up. It's not up to the same extent as it was in 2022. And the value of the auto catalyst isn't a player in people's decisions to recycle cars. So we think scrappage rates are unaffected by the value of the catalyst. What is affected by the value of the catalyst is the pull-through of inventory, right? So if people had scrapped cars, cars were sitting in the junkyard and they hadn't taken the catalyst off straight away. Now you're incentivized to go and get that catalyst off the cars and pull that inventory through. And as a result of that, we do have recycling numbers up last year and likely up this year. But there will be payback for that over time with reduced growth rates in recycling. So hopefully, that answers both of those questions, Leroy. Leroy Mnguni: Thank you. There is -- we've had a similar question, but I think it's worth asking this again just to emphasize the point. So it says the Board has paid out 71% of headline earnings in 2025, well above the 40% policy. How should investors think about the balance between sustaining market-leading dividends and funding growth projects like Sandsloot underground ahead of the H1 2027 investment decision? Sayurie Naidoo: Sure. So I mean, as Craig said, I'll reiterate it. So there's been no change to our dividend policy. That's still at 40% of headline earnings. However, as part of our capital allocation framework, if we've got excess cash after we've actually invested in sustaining CapEx after we've paid our base dividend, after we've invested in the Mogalakwena underground and all our discretionary projects, whatever cash is there, we'll look to return to shareholders. So there's been no change to the policy. But we'll balance growth and we'll balance returns to shareholders. Craig Miller: But I think it's important that we also just emphasize that the CapEx that we have that we've given that ZAR 17 billion to ZAR 18 billion, that includes the ZAR 1.5 billion to ZAR 2.5 billion for Mogalakwena for the underground, yes. So that is our capital envelope. Leroy Mnguni: Thanks, Craig. And then I just got to filter through all the requests for trucking contracts, even though we're reducing the amount of trucks on. We've got a question from Shashi from Citibank. How much is the benefit of mass pull reduction on FY '26 operating cost guidance? Can we expect a further benefit into 2027 as well? Sayurie Naidoo: Yes. So on an annualized basis, it's about ZAR 250 million. Leroy Mnguni: Thank you. I think a lot of other questions are just repetitions of what we've already had. So maybe do one last call in the room. Anything on the conference call? Operator: No questions from the conference call. Leroy Mnguni: Over to you, my leader. Craig Miller: Is it me again? So once again, thank you very much for joining us today. Really, I think it's fair to say that we've really had a really transformative year in 2025 on a number of fronts. And we have a great deal of excitement and opportunity within our business in terms of continuing to really be that leading PGMs producer. And so the important thing for us is as we execute on what we need to do, that we do maintain that cost and that capital discipline. And that's exactly what my team and I are focused around. So if I can also just express my sincere thanks not only to the Board for helping us navigate what was 2025, but also to the executive team in terms of how they've showed up and really helped make a change to our business, but most importantly, to the whole team of Valterra Platinum for their enormous efforts and diligence last year and really turning last year into a really successful year and onwards and upwards from here. Thank you.
Operator: Good day, everyone, and welcome to CCU's Fourth Quarter 2025 Earnings Conference Call on the 25th of February 2026. Please note that today's call is being recorded. At this time, I'd like to turn the conference call over to Claudio Las Heras, the Head of Investor Relations. Please go ahead, sir. Claudio Heras: Welcome and thank you for attending CCU's Fourth Quarter 2025 Conference Call. Today with me are Mr. Felipe Dubernet, Chief Financial Officer; and Carolina Burgos, Senior Investor Relations Analyst. You have received a copy of the company's consolidated fourth quarter 2025 results. As usual, the call will start by reviewing our overall results, and then we will then move to our Q&A session. Before we begin, please take note of the following statements. The statements made in this call that relate to CCU's future financial results are forward-looking statements which involve known and unknown risks and uncertainties that could cause that outperformance or results could materially differ. This segment as well should be taken in conjunction with the additional information about risks and uncertainties set forth in CCU's annual report in Form 20-F filed with the U.S. Securities and Exchange Commission, and also at the annual report submitted at the CMF. It is now my pleasure to introduce to Mr. Felipe Dubernet. Felipe Dubernet: Thank you, Claudio, and thank you, you all for joining the call today. During 2025, CCU posted a strong set of results in its main operating segment while it faced a particularly challenging year in Argentina and in the wine business, especially during the second half of this year. Isolating the nonrecurring gain from the sale of a portion of land in Chile in 2024, consolidated EBITDA decreased 2.9%. On pricing segment, Chile posted a robust 7.8% EBITDA growth, which was diluted by the 29.5% contraction in International Business operating segment and a 14.9% drop in the wine operating segment. In addition, net income was down 16.3%. Under the same criteria and isolating Argentina, consolidated EBITDA would have grown mid-single digits in 2025. In terms of business scale, consolidated volumes reached 36.2 million hectoliters, expanding 7.3% versus 2024. Organic volumes increased 0.6%, fully driven by the Chile operating segment, which expanded 1.1%, recovering growth after 3 consecutive years of contraction. In terms of our strategy, during the year, we moved forward in our strategic 2025-2027, a strategic plan and its 3 pillars: Profitability, Growth and Sustainability. Regarding profitability, as mentioned, our core operating segment, Chile expanded EBITDA by 7.8%, well above inflation and EBITDA margin grew 48 basis points, while we keep growing in high-margin innovation and the dividend efficiencies in every aspect of the business. Regarding our Growth pillar, we strengthened our regional footprint by successfully integrated in Paraguay, PepsiCo's beverage portfolio and snacks distribution. Furthermore, we posted volume growth in our water business in Argentina in a tough business scenario and increased our [ beer scale ] in Colombia. Also to meet evolving consumer trends, we posted double-digit growth in low alcohol and ready-to-drink beverage products in Chile, innovating and consolidating our leadership in this high growing cost category segment, which involves beer, wine and spirits in the context of soft industries. Regarding Brand Equity, we recorded a solid performance in Chile, increasing brand equity levels being key to expand overall market share. Finally, as of sustainability in our Juntos por un Mejor Vivir strategy within the [ current ] pillar, we kept reducing industrial water consumption. Regarding the [ profitability ] pillar of our strategy and in the year that we celebrated 175 years of history, we reached important milestones. We obtained a high level of employee satisfaction, got certified in Chile and Argentina as a Top Employer by the Top Employers Institute, moving up in cadet ranking of citizen brands and got rewarded as one of the companies with best practices in corporate governance by the survey La Voz del Mercado 2025. From a quarterly perspective, Consolidated volumes rose 0.6% fully driven by the Chile operating segment. Our financial results were below last year, mostly explained by a challenging business scenario in Argentina, together with a high comparison base in [indiscernible] country and headwinds in the wine operating segment. This was partially compensated by our main operating segment, Chile, which continued in a positive part of results. Consolidated EBITDA contracted 17.2% where the 6% expansion in the Chile operating segment was more than offset by the 44.5% and 45.2% EBITDA contraction in the international business and wine operating segment, respectively. Net income contracted 25.7%. Consolidated EBITDA isolating Argentina would have expanded low single-digit in the quarter. In terms of our segment performance, in quarter 4 2025, the Chile operating segment top line expanded by 5.5% as a result of 4.1% increase in volumes and 1.3% higher average prices. Volumes were boosted by non alcoholic categories. Average prices were driven by the revenue management efforts, offset by negative mix effects. EBITDA has reached 6% mostly due to a 9.1% gross profit expansion, partially offset by 10.1% higher MSD&A expenses. Regarding gross profit, the rise was driven by higher volumes, lower cost pressures related to favorable prices in some raw materials with the exception of [ our NIM ] and the appreciation of the Chilean peso against the U.S. dollar which is positive on U.S. dollar linked costs, partially compensated by higher costs from our PET recycling plant [ circular ]. On the other side, MSD&A expenses funded mostly associated with higher distribution expenses [indiscernible] larger marketing expenses to support revenue. In International Business Operating segment, net sales recorded a 36.3% decrease, mostly driven by lower average prices and a 4.6% volume contracts, highly driven by a high single-digit contraction in the beer industry in Argentina. The decrease in average prices in Chilean pesos was driven by Argentina, impacted by negative translation effect, pricing below inflation through the year and negative mix effect. The later was partially compensated by efficiencies. [ In all ], EBITDA dropped 44.5%. The Wine Operating segment posted a top line contraction of 16.8% driven by 9.7% drop in volumes, together with 7.9% decrease in average prices. Lower sales was driven by both exports and domestic markets. The weaker average prices were mostly explained by stronger Chilean peso and its negative impact on export revenues and negative mix effects in the portfolio, partially compensated with the revenue management initiatives. EBITDA contracted 45.2% also impacted by the higher cost of wine. Regarding our main joint venture and associated business. In Colombia, volumes reached 2.4 million hectoliters in 2025, increasing 6.1%. We continue to build a robust brand portfolio and sales execution in Colombia which is the path to long-term volume and financial [indiscernible]. Now I will be glad to answer any questions you may have. Operator: [Operator Instructions] So our first question is from Fernando Olvera from Bank of America. Fernando Olvera Espinosa de los Monteros: The first one is regarding the volume growth seen in Chile this quarter, if you can comment if this was favored by the alliance with Nestle highlighted in the press release. And some additional questions, sir, if you can share what was the performance of beer during the quarter and also how these low alcohol products that you have mentioned will favor volume performance in 2026. Felipe Dubernet: Yes. We -- thank you, Fernando, for your question. Yes, we have a robust growth in Chile growing 4.1% driven, as we highlighted, by the non-iconic category. However, our spirits unit view a mid-single digit thanks to a very good performance on all the non-alcohol ready-to-drink flavored products of that category. So it was a very good quarter where we do overall market check in the quarter. So -- and this drove good growth in the overall set. Regarding the year -- the quarter, in general terms was good. We experienced flat volumes against the same quarter of 2024. And seasonally adjusted, was a bigger quarter than quarter 3, let's say, seasonally adjusted. So experiencing seasonally adjusted growth the [ beer category ]. You are asking a more overall question regarding alcohol consumption. The capital alcohol consumption decreased mid-single digits something like 4%. We are still calculating because it depends on the population estimates. So -- but overall, decreased 4%. Regarding, specifically, in beer, we come back to 2019 per capita consumption. But following, as we highlighted consumer trends we are delighted of the growth, and we are experiencing in all our low-alcohol ready to drink flavored products portfolio, which grew [indiscernible] the 20%, more than 20% and reaching in the Chile operating segment, practically 7% of the mix. And this encompasses proposition on beer as mixers. We are very satisfied of the growth we are experiencing in the [ Stone ] brand and all these different labors. And also in the spirits, where all the low-alcohol flavored products are growing practically 25%. So the consumer is moving towards these products. And fortunately, we have a high innovation grade on that specific category and where CCU has more than 80% of market share of the overall market. Operator: Our next question is from Felipe Ucros from Scotiabank. Felipe Ucros Nunez: Thanks, operator. [Foreign language] Thanks for the space. A couple of questions on my side. One, a little more short term and the other one a little more long term in nature. So the first one on SG&A in Chile, you've been generally posting improvements in your SG&A to sales ratio over the last couple of years. So I was a bit surprised to see you back track this quarter. SG&A grew a little bit faster than sales, and you did mention in the release that it came partly from investments in marketing. So can you comment on this and whether you expect to continue this investment at a higher level? And also, if you could talk to us a little bit about where that investment is going? Perhaps it's just additional spending to give some impulse to the [ RTD ] category that is new for you? Or perhaps it's something you're having to do in beer to keep it at neutral volumes? And then the second question, a little bit longer term, it has to do with the fact that beer has been lagging nonalcoholic beverages for quite some time at this point, right? And there's probably more than one thing at play here. So just wondering if you can comment about the different rates of volume growth that you expect there. In a tough environment, it's expected beer would underperform because it's more discretional. But there's also this structural migration from consumers away from alcoholic beverages. So just wondering if you can comment on the difference between those two factors and how it's impacting you looking ahead. Felipe Dubernet: Felipe, thank you for your question. Regarding the marketing investment, it was mainly driven by the year. As also we had a low comparison base in quarter 4. So it was a temporary -- [ more ] investment in quarter 4 2025 compared to quarter 4 2024, and essentially went to support our premium portfolio. So I think this is to build a stronger premium portfolio because at the same time, price growth in beer was in the quarter in line with inflation, which is very good, a little bit above inflation. So it's a different combination on the P&L, but nothing to worry about. Regarding your question more on the long term, we think in the future, our winning non-alcoholic portfolio will continue to grow with especially water business in both a pure -- plain water. We had a tremendous success on [indiscernible] strong gas proposition. Also, we continue to grow at a high rate on our favored or enhanced water portfolio with [ brand mass ]. So all of these is driving the growth on our colleague that should grow in line with private consumption in our view. And especially the category where we did. Regarding alcohol, the situation, as I mentioned in the previous question, in the year, specifically, we come back to the per capita consumption in 2025 that we had in 2019. But bear in mind that 20 years ago, per capita consumption in Chile in 2014 was 44 liters per capita, in 2019, 52 liters per capita and in '25, 52 liter. So I think overall, this category, we cannot forecast the future, but should stabilize the overall beer category around 0% to 1% growth and would be driven by the low alcohol beer propositions. We recently launched in January with great success Cristal Ultra but also we lead specifically the low alcohol ready-to-drink portfolio of flavored products or mixers, which I mentioned in the previous question, growing a lot. So this would certainly sustain growth in the near future. But again, these are projections and -- but we are following consumers closely all the consumer trends. That's [indiscernible]. Felipe Ucros Nunez: If I could do a quick follow-up on the first one. Do you expect this higher marketing spend? I know there was a comparison base, but should we expect it to grow at more historical levels going forward? Or do you expect a higher marketing spend going forward? Felipe Dubernet: No. The marketing range would be the same. Operator: Our next question is from [ Guilherme ] [indiscernible] from [ Apple Capital ]. What is your pricing strategy in Chile going into 2026 for alcoholic and for non-alcoholic beverages? To what extent do you plan to raise prices or do you plan to take advantage of lower cost pressure to be more aggressive in gaining share? Felipe Dubernet: Overall, the company historically is aiming to grow prices in line with inflation. As in the last years, you know our input cost inflation was much higher than inflation. We have some lag in terms of recovering profitability that we have in the past. Still, we have this lag. So overall, our aim is to take every revenue management initiative. But this could be by rising prices, which is the less sophisticated answer to your question in terms of pricing, but also launching higher-margin innovation. In fact, the portfolio that is growing, the low alcohol ready to drink flavored products are at a premium in the case of beer compared to the mainstream beer. So you could increase prices or your revenue per hectoliter in different ways. But bottom line, the aim is not gaining share to pricing or promotions, more sustaining the market share in the long term through brand equity and marketing investments and high-quality produce rather than trying to gain share with aggressive promotions. So the aim is to increase prices. But always, you have a market of competition, but the aim is to increase prices in line with inflation. Operator: Our next question is from Constanza Gonzalez from Quest Capital. Constanza González Muñoz: I have two questions. The first one regarding the environment in Argentina. Could you give us more detail about the trend in construction that you are expecting for this year? Some recovery in the volumes? And secondly, I would like to ask you about the CapEx for this year. Thank you. Felipe Dubernet: Thank you, Constanza, for your question. Hope you are doing well. Yes. Regarding Argentina, the alcoholic industry was very soft, I would say, declining industry we are in the year have affected specifically also beer and not -- even wine was more dramatic but in beer, we have a decline in this. And the thing is that towards the end of the year, we saw some runway improvement. During the quarter, we had a terrible November in terms of weather because every weekend we have rain. So with rain, you don't do barbecues, you don't drink beer. So at the end, we have this terrible weather. Despite this terrible November, seasonality adjusted volumes in quarter 4 compared to quarter 3 improved 4%. This is what sustained my statement that we saw a gradual improvement. We don't know, we don't have clarity if we exclude the weather we had in November, maybe this would be an improvement of high single-digit seasonally adjusted. Today, we are seeing, let's say, a gradual recovery in terms of volume in Argentina. It was -- two questions -- second question [indiscernible]. Costa, could you repeat the second question because I had a sound problem. Constanza González Muñoz: Sure. I asked you about the CapEx that you are expecting for this year. Felipe Dubernet: Yes. Regarding CapEx, we will be investing depreciation. No more than appreciation. Operator: Our next question is from Aldo Morales from BICE Inversiones. Can you please explain if this negative inflection point in Argentina in ARS seems to continue over the next quarters. Also, can you please explain how persistent could be this negative pricing scenario in wine [ VSPT ]? Felipe Dubernet: Aldo [indiscernible] you. So Aldo, yes, 2025 -- yes, in a broader perspective, in 2023, our prices, our beer prices in Argentina were above inflation. In 2024, slightly above inflation. We saw big numbers. And in 2025, we were below inflation. So 2025 in terms of price was not a good year for beer in Argentina. Although, looking at the future, we have increased prices in December, effective in January so that this would lead some improvement in profitability in the near future, along with gradual improvement. I mentioned that we saw towards the end of last month. Regarding the other question regarding why, this is due to mix effects mainly in exports. As in the domestic market, we increased prices above inflation. So it was mostly due as export prices and was due to mix effects. Operator: Our next question is from Thiago Bortoluci from Goldman Sachs. Thiago Bortoluci: Thanks, Felipe, for the presentation and for the questions. I would just like to move back to the discussion on pricing in Chile, right? During your remarks, you mentioned that essentially beer prices are growing with inflation. Your headline prices are growing a bit below inflation, which suggests all else equal that your price mix for nonalcoholic is negative, right? Obviously, there are a lot of moving parts here. I would just like to understand how much of this is mix, how much of this is like-for-like and more importantly, particularly for non-alcoholic, what's the strategy going forward? Felipe Dubernet: Overall prices -- the Chile operating segment increased price by 3.5% in the year. Price effect was something like 4.3% and mix effect something like 0.8% that was the impact of mix [indiscernible] product. In the last quarter, we have more mix effect due, as I said, accelerated water sales during the quarter. Regarding specifically in non-alcoholic, as I mentioned, the pricing strategy would be to at least increase prices in line with inflation. Operator: Our next question is from Martin Zetzsche from Fundamenta Capital. How should we think about margins in Chile finishing in 2026, given the favorable levels for the Chilean peso? Felipe Dubernet: Martin, I will not provide a specific number for margin or during 2026 is forward-looking. But as you mentioned in your question, we are facing favorable effects in Chile, which would certainly impact positively our raw material and this would come more in effect in quarter 1 of this year because we carry out some inventory in quarter 4 of specific raw materials such as [indiscernible] because this is why you didn't see, as a full extent, the benefit of having a lower exchange rate in Chile. However, there are also some [ signals ] in some raw materials, specifically aluminum, where we are seeing high, very high prices, above $3,000 per tonne aluminum comparable of what we saw in 2022. So that's a bit of concern, but this should be more than compensated by exchange rate, as you pointed out. So taking into account this, we should be seeing a favorable EBITDA margin, positive expansion of EBITDA in 2026. But again, this is based on assumptions that could change during the year. Operator: Our next question is from Alvaro Garcia from BTG. Alvaro Garcia: Felipe, I was wondering if you can maybe comment on the nonalcoholic front in Chile, on the performance of Pepsi Max, maybe how it's positioned relative to Coke Zero or to other competitors in China. So maybe specific commentary on maybe some of the better-performing products in Chile would be helpful. Felipe Dubernet: Yes. In Chile, we do have Pepsi Zero, we do not have Pepsi much. To highlight, Pepsi Zero is doing very well, tremendous success in Chile. In fact, the coverage of soft drink category grew in the last quarter low single digit, which for this category of being Chile, a high cost -- high consumption level of [ CSP ] is a very good growth in Chile. And of course, Pepsi has been increasing brand equity and market share in the last few years. So overall, but what is really driving the category, the water business, especially enhanced water products are growing double digit during the quarter and other products such as ready to -- specifically functional brings growing mid-single digits. Operator: Our next question is from Nicol Helm from MetLife Investments. Can you elaborate on your financial policy going forward in terms of net leverage and capital allocation? S&P has maintained the company on negative outlook for some time. Do you expect to preserve the current rating? And are there any specific measures you're taking for this? Felipe Dubernet: Thank you, Nicol, for your questions. If I understood well, you are asking about net financial debt EBITDA ratio? Yes, the aim is to maintain the notch that we are having with the risk [indiscernible] so it's something below a ratio of 2. Today, we are finishing with 2. In terms of net financial debt to EBITDA is to maintain or even decrease if the business do better. But we don't have a specifically policy on that. But however, the aim is to maintain the specific notch that we have within the risk announced. Operator: We'll now move on to our final question from Santiago Petri from Franklin Templeton. Hello. Thanks for the presentation. could you guide us on your raw material cost expectations for 2026? What impact would that have on your margins? Felipe Dubernet: Santiago, yes, specifically, we'll answer the question more for Chile. Starting by the -- what has been positive today, as we mentioned in previous question, is the appreciation of the Chilean peso. We have some sensitivity on that, that each 1% appreciation is something about [ to CLP 4,000 million ] of better results at the consolidated basis because it's also considering the offset we would have in the export revenues we had in the wine business. So is positive on that, but I would not predict, of course, the exchange rate scenario. But if this is maintained, we are talking about a significant amount of money. Last year, the average rate was CLP 953 on this year, now the spot is CLP 960. So we are talking about 10% of significant amount of money. But this, as always, is being compensated by higher aluminum prices that we are suffering and higher PET recycling prices. As you know, we have a loan in Chile where 15% of the plastic bottles should have reached the local recycling PET and prices on that are the higher in Latin America. So to answer your question, we are seeing, overall, a positive scenario on input cost, thanks to exchange rates. Operator: Thank you. We would like to thank everyone for the participation today. I will now hand it to the CCU team for the closing remarks. Felipe Dubernet: Okay. Thank you. Same to you all for attending today. To conclude, in 2025 in context of soft industries, we posted solid performance in our main operating segment, Chile, recovering volume growth after 3 years of volume contraction and expanded EBIT and EBITDA margin. However, consolidated results were weaker due to a difficult macroeconomic scenario in Argentina, together with the contraction in the beer industry in this country and strong headwind in the wine business. We look to the future with optimism as CCU's core strength remain solid. Our focus will be on continue developing our 2025-2027, the strategic plan reinforcing our three strategic pillars, profitability, growth and sustainability with a special focus on profitability through revenue management efforts and efficiency and high-margin innovation growth. Finally, I would like to send my gratitude to all our more than 10,000 employees in a special year for our company as we celebrated our 175-year anniversary. Their dedication and commitment with the said CCU principles: Excelencia, Entrega, Integridad [indiscernible] have been key to navigate challenging times. We will continue to work to ensure sustainable and profitable growth for CCU. Thank you all, and I wish you a wonderful afternoon. Operator: That concludes the call for today. We'll now be closing on the lines. Thank you, and have a nice day.
Operator: Good morning, and welcome to the Owens Corning Q4 FY '25 earnings call -- '26. My name is Carla, and I will be coordinating your call today. [Operator Instructions] I will now hand you over to Amber Wohlfarth to begin. Please go ahead when you're ready, Amber. Amber Wohlfarth: Good morning. Thank you for taking the time to join us for today's conference call and review of our business results for the fourth quarter and full year 2025. Joining us today are Brian Chambers, Owens Corning's Chair and Chief Executive Officer; and Todd Fister, our Chief Financial Officer. Following our presentation this morning, we will open this 1-hour call to your questions. [Operator Instructions] Earlier this morning, we issued a news release and filed a 10-K that detailed our financial results for the fourth quarter and full year 2025. For the purposes of our discussion today, we have prepared presentation slides summarizing our performance and results, and we'll refer to these slides during this call. You can access the earnings press release, Form 10-K and the presentation slides at our website, owenscorning.com. Refer to the Investors link under the Corporate section of our homepage. A transcript and recording of this call and the supporting slides will be available on our website for future reference. Please reference Slide 2, where we offer a few reminders. First, today's remarks will include forward-looking statements that are subject to risks, uncertainties and other factors that could cause our actual results to differ materially. We undertake no obligation to update these statements beyond what is required under applicable securities laws. Please refer to the cautionary statements and the risk factors identified in our SEC filings for more detail. Second, the presentation slides and today's remarks contain non-GAAP financial measures. Explanations and reconciliations of non-GAAP to GAAP measures may be found in our earnings press release and presentation available on the Investors section of our website, owenscorning.com. Third, Financials and metrics for current and historical periods discussed on this call will be for continuing operations, except for 2025 capital expenditures and cash flow measures, which include amounts related to glass reinforcement. For those of you following along with our slide presentation, we will begin on Slide 4. And now opening remarks from our Chair and CEO, Brian Chambers. Brian? Brian Chambers: Thanks, Amber. Good morning, everyone, and thank you for joining us today. During our call this morning, I'll provide a brief overview of our fourth quarter and full year 2025 results and then highlight the actions we've taken throughout the year to deliver consistently strong performance while positioning Owens Corning for future growth. Todd will discuss our fourth quarter and full year financial results in more detail, and I'll come back to share our outlook for the first quarter and end market expectations for the full year. 2025 was a year of progressively more challenging market conditions with weakening U.S. residential trends and distribution destocking in the back half of the year. This included a uniquely quiet storm season in the second half with no major storms making landfall in the U.S. for the first time in a decade which weighed heavily on nondiscretionary roofing repair demand. Despite this backdrop, our team continued to successfully execute our enterprise strategy. delivering strong margins and making great progress on key initiatives to enhance our operational efficiency and accelerate our organic growth. I'll share more about our financial performance and strategic highlights in a moment. But first, I'll begin with our unconditional commitment to safety. Throughout 2025, we delivered improved results through our Safer Together operating framework. Our recordable incident rate for the year was 0.60, which is industry-leading among U.S. manufacturers. Notably, more than half of our sites operated injury-free, a reflection of the deep personal commitment our employees bring to working safely every day. Turning to our financial performance. We delivered fourth quarter results consistent with our enterprise guidance with revenue of $2.1 billion and adjusted EBITDA of $362 million with an adjusted EBITDA margin of 17%. For the full year, we generated revenue of $10.1 billion and adjusted EBITDA of $2.3 billion with an adjusted EBITDA margin of 22%. Through a combination of our strong market positions, improved operating efficiencies and favorable product mix shifts, we are generating higher margins on lower market volumes. Our higher earnings profile and working capital focus also enables us to generate significant operating and free cash flow. And through our disciplined capital allocation strategy, we returned $1 billion through dividends and share repurchases in 2025 and have returned over $4 billion of cash to shareholders since 2020. In December, we announced a 15% dividend increase, tripling our quarterly per share payout compared to 5 years ago. This marks our 12th consecutive year of dividend growth and supports our Investor Day commitment of returning another $1 billion of cash to shareholders by the end of 2026. In the near term, we are proving that the structural improvements and strategic choices made over the past few years to reshape Owens Corning into a leading building products company are delivering significantly better financial results within weaker markets. At the same time, we are also creating multiple paths for revenue and earnings growth as market conditions improve, and we see the benefits of our capacity additions and growth initiatives. As part of our effort to reshape and focus the company. We have made major strategic moves to shift into more residential product categories that leverage our customer and channel expertise and further strengthen our long-term financial performance. This includes completing the sale of our business in China and Korea which streamlined our geographic footprint and announcing the divestiture of our glass reinforcements business, which serves industrial markets. We've made steady progress in advancing regulatory approvals towards closing, which we expect to take place in the next few months. We also continue to make good progress integrating our new Doors business. As we have discussed on previous calls, the market environment has been challenging for Doors, with lower housing starts and softer discretionary R&R activity pressuring demand with the added disruption from tariffs. Despite this environment, our team has executed well, streamlining operations, reducing costs and increasing our share of wallet with customers through a more integrated market approach aligned with our commercial strategy. We are exceeding the $125 million in run rate enterprise cost synergies we committed to by mid-2026, and are on track to deliver an additional $75 million of structural cost improvements within our operations including our recent decision to sell a small distribution business to a major customer. While near-term results are being weighed down by weak market demand, our team is strengthening the business in ways that will significantly grow the earnings and cash flow of the company as markets recover. Moving forward, we see additional opportunities across the enterprise to grow revenue and earnings as we begin to realize more benefits from a broader residential product offering with an increased repair and remodel focus that now accounts for more than 50% of our revenue including a significant portion from nondiscretionary reroofing. With an attractive set of complementary building products, we are unlocking the full power of the enterprise to accelerate our performance by leveraging a set of capabilities that are truly unique to Owens Corning and create the OC Advantage. Our iconic brand, unparalleled commercial strength, leading technology and winning cost position, all of which combined to strengthen our market leadership and create multiple paths to deliver revenue and earnings growth. Owens Corning has industry-leading brand awareness and favorability with homeowners and contractors. This creates exciting pull-through opportunities for our products as we invest to expand its use and impact. Our iconic brand, recognizable by the color pink and The Pink Panther and supported by 90 years of history in building products, provides a high-quality, trustworthy platform for customers that creates loyalty and differentiates us in the market. This brand trust has been highlighted through several recognitions, including being named America's most trusted insulation brand and receiving the Women's Choice Award as a most trusted and recognized roofing brand for 9 consecutive years. Our unparalleled commercial strength is driven by deep channel expertise, unmatched customer partnerships and a downstream engagement model that helps our contractors, builders and dealers win and grow in the market, while creating pull-through demand for our distribution partners. One example of this is our Pink Advantage Dealer Program, which supports growing the estimated 4,000 privately owned lumber and building materials dealers across the U.S. In 2025, we grew program enrollments 38% by leveraging the learnings from our roofing contractor engagement model and utilizing a more integrated product and marketing offering, featuring our residential insulation, roofing and doors. In 2026, we expect to continue increasing enrollments, creating more loyalty to OC products and significantly increasing our revenues. Applying a similar model to homebuilders, we are also realizing new opportunities to grow our business through the use of our integrated product offering and enhanced marketing tools. Our leading technology continues to fuel growth through customer-focused innovation and process improvements. In 2025, we launched over 30 new or improved products, maintaining our 20% plus product vitality index by continuing to expand our R&D capabilities to bring new solutions to the market faster to meet customer needs. To help accelerate the pace of innovation even further, in the fourth quarter, we announced the promotion of José Méndez-Andino to the roll of Chief Innovation Officer. He will lead a center of excellence in innovation, reflecting our focus on product and process leadership to drive organic growth. Last, our winning cost position reflects best-in-class execution, network optimization and vertical integration to drive cost efficiency and productivity gains supporting our commitment to deliver a mid-20% adjusted EBITDA margin profile over the long term. Through our factory modernization initiative, we continue to improve our manufacturing cost position and increase capacity through targeted capital-efficient investments in our manufacturing network, several of which came online in 2025. In Roofing, we started up our new highly efficient laminate shingle line in Ohio and a high-speed nonwovens line in Arkansas. In Insulation, we expanded our capabilities to serve the growing demand for XPS foam insulation with a new low-cost plant in Arkansas. And in Doors, we are applying our enterprise operational playbook to drive significant structural cost improvements through network optimization actions, including the closure and consolidation of five manufacturing and fabrication facilities as well as focused automation and productivity investments. We are also enhancing our winning cost position through the use of advanced analytics and AI to drive efficiency, support customer growth and strengthen market leadership. For example, we are applying AI through the use of supply chain optimization agents that help us respond quickly to network adjustments and maintain strong service levels at reduced cost. This capability is being used in our North American fiberglass insulation business today, but will be scaled to our other businesses throughout the year. To accelerate our digital efforts, Annie Baymiller was recently promoted to the role of Executive Vice President and Chief Information Officer. She will lead the advancement of our digital technology capabilities and next-generation tools, including generative and agentic AI that will be instrumental to unlocking new capabilities and generating additional value. Before I turn it over to Todd, I want to thank our team for their outstanding efforts in 2025. Owens Corning was again named one of Wall Street Journal's top 250 Best-Managed Companies, ranking 73rd overall and 10th in customer satisfaction. This recognition reflects the dedication of our team to support our customers and drive the success of our company. In summary, while 2025 was a challenging year for our markets, our performance demonstrated the strength of the company we have built. Our team stayed focused, working safely, controlling our costs, helping our customers win and grow and delivering on our capital allocation commitments. Through disciplined execution, we generated market-leading financial results and continued investing in the growth of the enterprise. As we begin 2026, we are excited by the opportunities we see to continue growing the company and creating value for our customers and shareholders through the execution of our enterprise strategy and implementation of the OC Advantage. With that, I'll turn the call over to Todd. Todd Fister: Thank you, Brian, and good morning, everyone. As Brian shared, we are navigating soft end markets in all three businesses while demonstrating the resilience of our earnings, cash flows and return of cash to shareholders. Despite near-term market headwinds, we have multiple paths to deliver strong results by leveraging the OC Advantage, delivering on the multiple organic growth investments in new highly efficient manufacturing plants and executing our strategic plans to deliver the full potential of the Doors business. The impact of these structural improvements and investments will be amplified as residential markets recover later in 2026 and into 2027. I'll begin with Slide 5 and review our results for continuing operations for the quarter and full year. In the fourth quarter, we executed well despite weaker market demand in each of our three businesses. We continue to outperform prior cycles in Roofing and Insulation while delivering overall results in line with guidance. For the full year, we delivered adjusted EBITDA of $2.3 billion at a margin of 22%, marking our fifth consecutive year of 20% plus EBITDA margins. For the year, adjusting items totaled $1.2 billion, primarily due to $1.1 billion of noncash goodwill impairment charges in our Doors business during the third and fourth quarters. These impairments were driven by updated macroeconomic assumptions in our valuation model, given near-term market softness that continued to weaken and do not reflect a change in our longer-term expectations for the earnings potential of the business. Acquisitions with goodwill are particularly sensitive to impairment when market conditions worsen as we have seen in Doors. Turning to Slide 6. For the year, we generated $1.8 billion of operating cash flow and returned $1 billion of cash to shareholders. Free cash flow for the fourth quarter was $333 million, and free cash flow for the full year was $962 million, down $283 million from last year, primarily due to higher capital additions. Full year capital additions were $824 million, with roughly half of our capital focused on long-term cost efficiency and growth. Our return on capital is 12% for the 12 months ending December 31, 2025. As a reminder, at our Investor Day last year, we gave a long-term target of mid-teens or better return on capital. While currently below mid-teens, there is no change to our long-term target. Year-end debt-to-EBITDA was 2.1x at the low end of our targeted 2 to 3x range. At year-end, the company had liquidity of $1.8 billion, consisting of $345 million of cash and $1.5 billion of availability under our bank debt facilities. During the fourth quarter, we returned $286 million to shareholders through share repurchases and dividends. Throughout the year, we repurchased 5.9 million shares supporting our Investor Day commitment of $2 billion in cash returned to shareholders in 2025 and 2026. In December, the Board declared a cash dividend of $0.79 per share, an increase of approximately 15%. Our capital allocation strategy remains centered on generating strong free cash flow, delivering mid-teens return on capital, returning cash to shareholders and maintaining an investment-grade balance sheet while investing in high-return growth opportunities. Now turning to Slide 7. I'll provide additional details on our segment results. Starting with our Roofing business. We benefited from the strength of our commercial team and their work with our contractors which allowed us to outperform the market in 2025, although the market slowed significantly in the back half of the year. Fourth quarter sales were $774 million, down 27% from the prior year primarily due to lower shingle volumes. The U.S. asphalt shingle market declined a similar percentage year-over-year, driven by unusually low second half storm activity and a reduction in inventory levels at distribution. Our volumes were in line with the market. The significant decline in volume resulted in EBITDA for the quarter of $199 million, down from prior year. While pricing remained relatively flat in the quarter, inflation continued, resulting in negative price/cost. Additionally, due to the weaker markets, we took production curtailments to manage inventory and perform maintenance. We recognized some impact of the curtailment in Q4 and will have a bigger impact in Q1 as we sell through the higher cost inventory. Despite the significant decline in the market, EBITDA margins for the quarter were 26%. For the full year, Roofing delivered sales of $4.4 billion, down 4%. The U.S. asphalt shingle market declined approximately 10% for the year, with a strong first half followed by a much weaker second half as a result of very weak storm demand. Our contractor engagement model continued to support demand, resulting in volumes that outperformed the market overall. Full year EBITDA was $1.4 billion with strong EBITDA margins of 32%, supported by positive pricing that more than offset inflation and curtailment. Turning to Slide 8. The Insulation business delivered another strong year, achieving its fifth consecutive year of 20% plus EBITDA margins. Fourth quarter revenues were $916 million, down 7%, driven by the sale of our building materials business in China as well as lower volumes in North American residential and nonresidential markets. Europe remained stable and benefited from currency tailwinds. Insulation generated fourth quarter EBITDA of $186 million, down $42 million year-over-year. Slightly negative pricing and modest inflation resulted in negative price/cost for the quarter, and we continue to curtail assets to manage inventory levels. EBITDA margins were 20%. For the year, Insulation delivered net sales of $3.7 billion, down 6% compared to prior year. The decline was primarily due to lower North American residential demand and the divestiture in China. Positive pricing and strong manufacturing performance partially offset inflation and downtime. Full year EBITDA was $848 million with a margin of 23%. Moving to Slide 9, I'll provide an overview of the Doors business. Throughout the year, the Doors market continued to be extremely challenged due to the weakness in both new construction and unusually low existing home sale that negatively impacted remodeling activity. The business generated fourth quarter revenue of $486 million, down 14% from the prior year, driven by lower volumes across both new construction and discretionary repair/remodel. Additionally, the previously announced sale of a non-core components facility in Oregon resulted in a $13 million revenue headwind in the quarter. On an annual basis, this business generated revenues of approximately $50 million. EBITDA was $33 million with EBITDA margins of 7%. Price/cost remained negative as modestly positive price was more than offset by continued inflation, particularly due to tariffs. For the full year, Doors net sales were $2.1 billion, and EBITDA was $232 million with an 11% margin. Despite market headwinds, the integration continues to progress well. We have achieved our $125 million enterprise run rate synergy commitment to date, with approximately 40% captured within Doors and 60% captured across the broader enterprise. Demonstrating our ability to scale the OC Advantage through the same playbook that has structurally improved Roofing and Insulation over time. Additionally, as Brian shared, we've taken a number of actions to improve the network efficiency of the business to drive an additional $75 million of cost improvements. These are just starting to show in our earnings. Across the company, our gross tariff exposure in 2025 was approximately $110 million that was mitigated to a net tariff impact of approximately $30 million, primarily in the Doors business. Our sourcing and supply chain teams continue to demonstrate agility in mitigating tariff exposure and preserving margins. Looking ahead to Q1, based on tariffs in place at the start of the quarter, we anticipate approximately $20 million of gross tariff exposure that will net to an impact of roughly $10 million after mitigating actions, primarily in the Doors business. We are monitoring the dynamic tariff environment due to the recent Supreme Court decision which could have an impact on our overall tariff exposure as the situation evolves. Moving on to Slide 10, I will discuss our full year 2026 outlook for key financial items, all of which exclude the impacts of our glass reinforcement business. General corporate EBITDA expenses are expected to be approximately $245 million to $255 million. We expect our 2026 effective tax rate to be 24% to 26%. Depreciation and amortization is expected to be approximately $680 million. Capital additions are expected to be approximately $800 million in 2026. Over half of this capital will be deployed in strategic investments we are making to expand capacity and improve efficiency. We expect CapEx to remain elevated in the near term as we work towards completing the high-return capital-efficient projects underway. We remain optimistic about our ability to return significant cash to shareholders as markets recover and our results show the benefits of recent investments and structural improvements. I'll now turn the call back to Brian to discuss our outlook in more detail. Brian Chambers: Thank you, Todd. Our results in 2025 continue to demonstrate the strength of the company. Our strong commercial positions, improved operating efficiencies and favorable product mix shifts positioned us to deliver market-leading financial performance as we work through a weaker demand environment. For 2026, we expect the near-term market environment to remain challenging with conditions improving in the second half of the year. Even within these market conditions, we are confident in our ability to generate strong financial results with multiple levers to pull to outperform the market. Turning to our first quarter outlook for the market. We expect North American residential new construction and discretionary repair and remodel activity to remain soft, reflecting the lowest level of quarterly housing starts in the past 6 years and unusually low existing home sales. Within Roofing, we expect to see weaker manufacturing shipments resulting from lower storm carryover and delayed restocking activity. Nonresidential construction activity in North America is expected to be relatively stable. With softness in certain commercial categories, offset by strength in institutional and infrastructure-related projects. And in Europe, market conditions are anticipated to remain stable, while volumes remain below mid-cycle levels. stable market trends and favorable currency tailwinds are supporting improvement, particularly in Insulation. As Todd shared, we remain disciplined in our inventory management with lower demand. As a result, we will see the production curtailment we took in Q4, work its way through the P&L in Q1, most notably in Roofing as we sell through higher cost inventory. Given this market outlook, we anticipate first quarter revenue from continuing operations of approximately $2.1 billion to $2.2 billion, in line with Q4. We expect to generate adjusted EBITDA margin from continuing operations in the mid-teens. While the near-term environment remains challenged, we expect to see improvements in many of our end markets as the year progresses. Overall, for the full year, we expect North American residential new construction activity to be relatively flat versus 2025. And with a favorable mix shift toward single-family homes. For discretionary repair and remodeling activity in North America, we anticipate demand to be up slightly with a more challenging comp through Q2 that improves in the back half of the year. In Roofing, we expect the slow start in Q1 to continually improve throughout the year with full year demand in line with historical averages, reflecting a more normal level of in-year storm activity. For nonresidential construction in North America, we expect to see activity improve throughout the year. And in Europe, we anticipate market conditions to gradually improve with currency benefits throughout the year. Based on this view of our end markets for 2026, our full year outlook for revenue and adjusted EBITDA is largely aligned with current consensus estimates. Now consistent with prior calls, I'll provide a more detailed business-specific outlook for the first quarter. Starting with Roofing, we anticipate ARMA market shipments to be down low 20% versus the prior year, reflecting a historically quiet second half 2025 storm season, which reduced storm-related repair demand carried into 2026. Delayed distributor restocking activity and more severe winter weather in many parts of the country, impacting repair and remodel as well as new construction activity early in the year. We anticipate our roofing shingle volumes to be down in line with the market in Q1. And resulting in a revenue decline of low 20% versus prior year. While near-term demand is pressured, we expect nondiscretionary reroofing demand to improve throughout the year with more normalized weather patterns. In components and nonwovens, we anticipate volumes to decline with reduced shingle demand. Pricing is expected to be down slightly to start the year, while inflation continues to pressure price cost. Earlier this month, we announced an April price increase for our roofing products, which we would expect to see realization on in Q2. From a cost standpoint, we anticipate production curtailment costs carried over from Q4 and incurred in Q1 to result in roughly $30 million of headwind as we see higher cost inventory flow through the P&L. Additionally, we expect to incur modest inflation, including some tariff headwind that we are starting to see for the roofing underlayments we produce and import from India. Overall for Roofing, we expect first quarter EBITDA margin of low 20%, down from Q4, primarily due to the curtailment cost carryover. In Insulation, we anticipate first quarter revenue to be down mid- to high single digits versus the prior year. This is primarily driven by lower residential volumes and the sale of our building materials business in China. As a reminder, this business had approximately $130 million of revenue annually and we completed the sale midyear 2025. In our North American residential insulation business, we expect revenue to be down low double digits year-over-year, reflecting a step down in housing starts and continued market uncertainty. For North American nonresidential, we expect revenue to be largely in line with prior year. And in Europe, we anticipate revenue to increase, driven by relatively stable demand and continued currency tailwinds. Overall, for the Insulation business, we expect price to be down slightly year-over-year, driven primarily by targeted actions in the North American residential market made last year partially offset by positive price in our nonresidential business. While inflation and production curtailments persist, strong operational performance and prior structural cost actions position the business to deliver EBITDA margins just below the 20% level achieved in Q4, even in a softer demand environment. Turning to our Doors business. We expect the market to remain challenged to start the year with continued weakness in discretionary repair and remodel spending and low levels of new residential construction. We anticipate first quarter revenue to be down mid-teens versus prior year, driven primarily by lower volume and the strategic sale of our Oregon components facility and company-owned distribution business, which combined had annual revenues of approximately $150 million. Pricing is expected to be down slightly, while inflation, including tariffs continues to pressure price cost. Importantly, we are realizing the impact of our enterprise synergies and expect to begin seeing the benefits of our network optimization scale throughout the year, which will help offset market headwinds. As a result, we expect EBITDA margin in the first quarter to be in line to the 7% we delivered in Q4 on similar demand. With that review of our businesses, I want to close out by recognizing the strong results our team delivered in 2025, while positioning Owens Corning for 2026 and beyond. The actions we have taken over the last few years and are continuing to take today are setting the stage for meaningful earnings and cash flow growth as markets improve. We continue to expect secular trends including pent-up demand for new housing, the growing need to renovate and remodel older existing housing, and the demand for more energy-efficient homes to create meaningful growth opportunities for OC. And with our attractive set of complementary building products we will leverage an integrated go-to-market strategy and unique set of capabilities within the OC Advantage to deliver strong financial results and strengthen our market-leading positions. We have built multiple paths to drive revenue growth and achieve 20% or more adjusted EBITDA margins, mid-teen returns on invested capital and significant cash flow. The new OC is built to outperform in today's market and in the future. With that, we would like to open the call up for questions. Operator: [Operator Instructions] And our first question comes from John Lovallo with UBS. John Lovallo: I guess how comfortable are you with your visibility into 2Q to 4Q? I believe that you're on track to meet the consensus estimates? And then which estimates are you referring to specifically? Brian Chambers: John, I'd say the visibility is kind of a ramp-up based on the market expectations that I just spoke about. I think we expect as I kind of walk through the businesses, the roofing demand profile to continue to increase throughout the year as we get to a more kind of normalized roofing year with weather patterns in the back half that represents kind of more normal storm demand. So we're assuming that kind of market progression. I think in the discretionary repair/remodel, we expect a challenging first half that gets better in the back half, as we see kind of continuing improvements there, and hopefully, more people investing in repair and remodeling of their homes. And then on the new construction front, we expect a pretty flat environment year-over-year with a little bit of opportunity on the single-family front, which creates a little bit more volume with both our Doors and our Insulation business. So I think our outlook in the near term is pretty clear to start the quarter. We're seeing volume progression improve throughout the quarter in all three of our businesses. So that gives us confidence. We're seeing the cost improvements coming through the P&L. So near term, we feel very confident. Over the longer term, I think we're going to see and expect to see some market improvements that are going to help drive some of the volumes and overall environment for us. So I think that's our view as we kind of come into the year and why we wanted to give visibility to a guide of kind of this general consensus estimate. So if we look across all the estimates that have been created for the company. We think the average is right in line with kind of how we see the year playing out on a full year basis. Even though it's a little weaker start, we expect that to progressively improve quarter-over-quarter throughout the rest of the year. Operator: And the next question comes from Michael Rehaut with JPMorgan. Michael Rehaut: I wanted to focus actually on the CapEx guide for $800 million. I wanted to understand, particularly given the divestiture of the glass reinforces business, which was a more capital-intensive business. What types of investments are contemplated in the $800 million that sounded to be a little bit more growth-oriented or productivity-oriented. And also how you think about an ongoing normalized annual run rate for CapEx in 2027 and beyond? Todd Fister: Mike, this is Todd. I'll take this one. So when you look at the $800 million, you're correct, that does exclude the impact of the glass reinforcements business. So this is across the Roofing, Insulation and Doors, building products core. When you look at what's in the $800 million, it's largely the previously announced projects for Roofing and for Insulation in Prattville and Kansas City that are driving that number to be higher than it has been historically. When we look at both of those investments, there are investments that support growth, especially in the Roofing business, but also in Insulation. And there are investments that support ongoing cost efficiency and productivity as we upgrade the overall fleet of assets that we have. Those are really temporary, though. I mean we're making those investments. They're onetime investments in our business in both Roofing and in Insulation. So when we look at the long term, we go back to the guide that we gave at our Investor Day that we would expect to return to about 4% CapEx as a percentage of revenue on a structural basis going forward. We've got a couple of years of stepped-up CapEx in '26 and '27 to get us through some of these major projects that we've already announced. But on an ongoing basis, we end up with a fleet of assets that have lower structural capital requirements on an ongoing basis than what we have today. So we're confident in that step down back that we guided to at Investor Day. But to your point, a slight step-up in '26 and '27. Operator: And the next question comes from Stephen Kim with Evercore ISI. Stephen Kim: Yes, I guess first question would be -- I guess, the question would be on your D&A kind of surprised us, it looks like it kind of missed your targets. Could you just talk a little bit about where that upside surprise occurred? What drove it? And then you mentioned in Roofing that your price -- you put a price increase through in April or effective April and should benefit in 2Q. So I just want to make sure I'm clear. Are you assuming that, that price increase or some part of it sticks in your guidance for the full year? Todd Fister: Thanks, Stephen. I appreciate the question. I'll take the D&A question and then turn it over to Brian for the Roofing price context. So when we looked at D&A, there's a few things that came in a bit higher on capital projects as we think about completing those and having that come through into our results for the year. Largely, we were in line with the guide that we gave overall for D&A. So there's not a whole lot of news there really. There's always some normal noise in D&A on a quarter-to-quarter basis. But our view would be we're in line with the guide, and we would expect to be in line with the guide that we just gave on today's call for 2026 as well. Brian Chambers: And then, Stephen, on Roofing pricing, you saw in our guide, we expect pricing to be down slightly to start the year. But I'd say overall, pricing has held up relatively well to start the year. We've made some targeted moves just to address some of the competitive gaps as we start the year, but nothing dramatic. And I'd say nothing unusual to the moves that we make to start the year given some of the regional variations we see in our price points and some of the product demand. So nothing unusual there to start the year and relatively good pricing visibility and stability. So in terms of the outlook, yes, we've announced a price increase for April 1. I would say we do expect to see some realization beginning in Q2 and moving through the rest of the year, historically, where we see a constructive roofing market, and we expect that to occur this year with Roofing volumes kind of in historical 10-year average ranges, more normalized seasonal weather patterns. And then when we do expect to see continued inflation in the business. So historically, we've been able to get some realization from a spring price increase where we've seen good demand trends and inflationary trends that we're able to offset with price increases. So we would expect to see some realization from that increase as we go through the year. Operator: The next question comes from Anthony Pettinari with Citi. Anthony Pettinari: In Roofing, given we had kind of a strange year last year with no storms and weak demand in the second half. Is it possible to talk a little bit more about sort of where channel inventories are? Have those been kind of completely drawn down? Or are they kind of maybe more seasonally normal? And I'm wondering, related question, if you could talk about the impact of maybe severe weather in December and year-to-date, if that is near-term negative, long-term positive or any view on that? Brian Chambers: Yes. So maybe I'll start with that one first. Yes, I think some of the restocking delays is tied to just a really rough start and a lot of winter weather throughout the country which is impacting the ability to get on the roof and do any work, particularly in southern areas of the country, but also impacting the ability for distributors to buy inventory and bring it in. So that has impacted some of the restocking activity to start the year. But I would say, over the course of the year, generally a tough winter results into some additional repair and reroofing activity as the year goes along. So it could potentially give us some volume upside as we take through the year. You're right, and last year was a very different kind of pattern of demand throughout the year. We saw a pretty significant drop off in the back half of the year to our guide that we gave in the fourth quarter. And on last call, I did indicate that I thought that would kind of spill over into this year in terms of a slower start. But to answer your question on destocking, now we think that destocking was really at an end of the year phenomenon for just distribution to kind of reset their inventory levels to close out the year. And I said I expected that restocking to kind of come back. Last quarter, we talked about half of that volume decline in Q4 tied to lower out-the-door sales, weaker storm demand, about half tied to destocking, we thought that would come back. And we still expect that in terms of our guide. But I do think that's going to be kind of a Q1, Q2 ramp-up on the restocking efforts. But we've not seen any permanent kind of changes in inventory levels that distribution is holding. We think that's going to be a ramp-up to get to seasonal inventory levels that they're going to want to carry to service demand, and we expect that to really increase again in the back half of Q1 to close out Q1 and then really to start Q2. Operator: The next question comes from Matthew Bouley with Barclays. Matthew Bouley: I wanted to ask about this contractor pull-through opportunities you were speaking about. Obviously, that's been a hallmark of the Roofing business. It sounded like you're speaking to leveraging that across the rest of the company and maybe doing the same with homebuilders. So I'm curious if you can lay out, I mean, is this really specifically a change or an enhancement to what you've been previously doing? And then kind of remind us what the benefits were in Roofing that you would be looking to replicate elsewhere. Brian Chambers: Yes. This is a big area that we're very excited about. When we talk about unparalleled commercial strength, and it's been a focus and a hallmark of our ability to create downstream demand with contractors, builders, dealers that create pull-through then for our distribution partners. And so we've had a very successful contractor engagement model. We've talked about it a number of times. We increased that contractor network. We did that so in 2025 as well. And it's really based on not just a product offering, but training, merchandising, marketing, co-branding, digital support services. So it's a full suite of services that really help our contractors win and grow in the market with our products and our brand. And so we've leveraged those learnings to say, how can we take that then to lumber and building material dealers, more than 4,000. These are family run, generally smaller dealer networks that will service rural areas with a broad product offering. Roofing, Insulation and Doors. So the engagement model, we've taken some of the parts of training and merchandising and co-branding from our roofing contractor engagement. We brought that over to the dealer side and have brought that into the market this year with really a lot of interest and a lot of support and a significant increase in enrollments of dealers now that are committing to the OC brand and the full suite of products, because they're very complementary to what they're taking into the market. So 38% increase in enrollments. We think that we can continue that kind of double-digit rate of enrollment increase in '26. That creates a lot of pull-through and some significant revenue opportunities for us. So I think we're excited about that. It's kind of a green shoot. If I go back to John's earlier question, when we think about the progression of the year playing out for us as well, clearly, we want to see some market improvements but there are a lot of self-help initiatives on both the commercial and operational front that are going to kind of roll through the rest of the year. This would be one of them. As these enrollments engage as we start to see product demand pull through when we get into the season, we think that's going to drive some incremental revenue for us. And then I also commented on the builder front, we're kind of taking that model as well now and taking that to homebuilders. Again, a full suite of residential products, Insulation, Roofing and Doors, valuable iconic brand that the builders can use to co-brand some merchandising capabilities. So we're excited on how this downstream and pull-through model is really growing, and we're starting to see some early indications through enrollments that we think are going to lead to product pull-through and additional revenue as we go through the rest of the year and beyond. Operator: And the next question comes from Trevor Allinson with Wolfe Research. Trevor Allinson: The question is on the full year potential for Roofing. 1Q is going to be down pretty significantly, as you've articulated, but you've got some pretty easy comps in the back half of the year. Just with that in mind, how are you thinking about full year revenue potential in Roofing? Is a flat year still on the table? Or does it really weak 1Q due to lack of storms here set you back too far for that to be a realistic scenario in 2026? Brian Chambers: Yes. Not sure if we get back all the way to a full year kind of depends on how the dynamics play out. But I'd say from a volume standpoint, again, we think it's going to be a weaker start. But I would say it's pretty consistent with what we saw emerging in Q4. So when I talked about our guide in Q4 stepping down and a weaker Q1. So I would say there is nothing new in our near-term market outlook that has changed from when we were on the last call. I think we expected a slower ramp up to start the year. So I think that wouldn't impact. I think if you think about the volume progression, we would expect to see, I think you would see Q2, Q3, Q4 more in line with 10-year averages. That would be our expectation as we go through the year after a slower start. And that is going to lead to some revenue growth opportunities sequentially throughout the year, but not sure if it will get us all the way back. I think that's going to depend largely on the market dynamics, if we see a stronger storm season, some higher opportunities there, and a little bit on the pricing dynamic and see how that plays out through the rest of the year. Operator: And the next question comes from Philip Ng with Jefferies. Philip Ng: You called out some targeted pricing action in Insulation and Doors. Brian, perhaps you can give us a little more perspective on size and the magnitude? Were there price gaps that you want to close out? And from here on, increasing demand is still a little murky. Should we expect price stability? And were there any share gain opportunities as a result of this? Brian Chambers: Yes. I'd start, and maybe I can have Todd come in on some of the Insulation pricing. On Doors, again, I'd say pricing has held up relatively well in a pretty challenging demand environment, which is, I think, a positive sign in terms of the value of the doors and how that can progress going forward with a little bit of upside volume and some potential pricing opportunities later in the year and into next. So I'd say that they are very targeted moves, very regional moves on the Doors front and nothing terribly dramatic, but really responding to more competitive pressures to start the year and to reset some programs to start the year with some of the growth initiatives we have in place. But I would say, overall, fairly stable to finish the year and to start the year, some targeted moves to address some of those competitive gaps and program adjustments we were going to make. But I think it gives us a platform for growth potentially as we go forward and we get into a more constructive demand environment, the opportunity for some pricing going forward. Todd Fister: And Phil, I'll give a little more color on the Insulation side. When we look at the non-res part of insulation, we're still in a fairly constructive pricing environment, where we're able to get price in parts of that business that you see coming through our results in Q4 and our guide in Q1. When we look at res, I would describe these targeted actions is fairly normal targeted competitive responses that we have in the market. Nothing really unusual. Despite the weakness that we've seen in single-family starts and lagged starts overall. It's been a relatively stable pricing environment overall in res. But we're still absorbing significant inflation. So we are seeing margin compression in that business, as a result of some of the targeted price actions that we've taken, but also the inflation in labor and materials that we continue to absorb in the business. But overall, I'd describe it as a relatively stable pricing environment in res and still positive and constructive in non-res. Operator: The next question comes from Sam Reid with Wells Fargo. Richard Reid: I believe on the prepared remarks, you alluded to some asset curtailment on the Insulation side. So maybe just characterize and perhaps quantify the level of curtailment there that you might have undertaken in Q4 and maybe early Q1? And then also, any views on industry capacity utilization and not to be greedy, but perhaps a split on how that might look in that batts and rolls versus loosefill. Todd Fister: Thanks, Sam. I appreciate the question. So let me start with how we're operating the business right now on the assets, and then I'll give color on capacity utilization. So we previously announced we curtailed one of our manufacturing plants in Utah already. We did that relatively early in the process to get that production out to manage our inventory levels. And we've been continuing to manage inventory levels carefully through the end of the year. The back half of '25 was a bit of a catch-up, though, because the market did decline in the back half versus the first half. So we were sitting on more inventory than we wanted coming out of Q2 that we then work down progressively in Q3 and Q4, and then we anticipate working down inventory again with curtailment in first quarter. Now we do have some normal seasonal build that we do in the first quarter to support the season. So we're also contemplating that. The curtailment that we're taking, it tends to be more hot idle curtailment versus cold idle curtailments. In Nephi, we took completely cold. We furloughed employees in the manufacturing plant. And other plants were taking hot idle, which means we're not producing, but we're leaving the furnaces operational so we can start up when the market recovers. When we look at the overall magnitude of this, I mean it's a big impact for us. It was a big impact in the back half of last year including the catch-up that we had to do from the first half where we built a bit of inventory. And it's also a significant impact for us in Q1 of '26 in the guide. When we look at capacity utilization for the industry, it is different for batts and rolls then loosefill. Loosefill is tight right now. We've seen a couple of our competitors have some operational challenges that we've been able to take advantage of in Q4 and into Q1. But it also means our inventory levels are low because we did everything we could to support customers in that period. We are in free supply for batts and rolls. So there is available supply in that space. Overall, for the industry, what we've said historically is we think industry capacity can support 1.4 million to 1.5 million starts. When you look at the mix of single-family and multifamily, single-family has been fairly weak. Multifamily has been a little better. A single-family start has about 30% more pounds of insulation than a multifamily start. So we're probably at the higher end of that 1.4 million to 1.5 million range in terms of what the industry could support today. So you can do the math based on the housing starts and where we landed in Q4 and Q1, it's below the 90% level which historically has been more constructive for price in res, but we're probably somewhere in the 80s based on that math. Operator: And the next question comes from Mike Dahl with RBC Capital Markets. Michael Dahl: I just want to go back to Roofing, a 2-part question. On the volume declines, is that what you're seeing already year-to-date? Because I appreciate the weather has been difficult and there's still some carryover dynamic, but our sense is that sell-through volumes haven't been down quite that much broadly speaking. And then the second one being kind of dovetailing that into price that you do expect to get price realization on the April increase, how quickly do you need to see volumes come back in March or April to see that in your view? Because it seems like it would be a tough setup with a little sequential price fade and volumes down 20-plus for two straight quarters to get a lot on that. Brian Chambers: Yes. No, I appreciate the question. Just in terms of the volume side, just on the -- some of this is going to be a little bit of a year-over-year comp. So I would agree, I think everything that we talk about with our customers, I think the sell-through is down, but not down as much. But if you look at kind of the restocking activity last year versus what we're seeing the pace of restocking this year, that is down a little more. So it's a combination of lower out-the-door sales and then a little bit on a year-over-year comp of just less inventory restocking that we're seeing in the quarter. Now again, I don't think that's a permanent issue, I think that flows into some higher volumes in Q2. I think it's a little bit of just timing. And the rough weather to start has actually kind of slowed that restocking activity down in the northern parts of the country. It's tough to even start that in January and here in early February. So we think it's going to be more loaded into March to close out the quarter and then to start April. So when we look at our order entry and our backlogs, they continue to grow throughout the quarter. We expect to have a pretty good March shipping pattern emerge. And then we think that's going to continue into April and early May. So I think the setup to restock is in place. It's just being a little delayed, and that's why it's impacting a little bit more of the year-over-year decline from our manufacturing shipments. But again, I think that environment sets us up where we think it would be constructive to realize some incremental pricing as we expect demand to improve. And as I said, I think as we go through Q2, Q3, we expect that to continue to improve. We're seeing inflationary pressures that we need to overcome. So I think that's something that we would expect to start to get some realization into Q2 and beyond with the pricing announcement. Operator: The next question comes from Brian Biros with Thompson Research. Brian Biros: Can you just revisit the synergies from the Doors acquisition? It sounds like you're still on track to realize those even in a tough environment that probably wasn't factored in at the time of the purchase. So maybe just remind us how those synergy targets are being achieved in the absence of growth or even in the absence of a flat environment for that business? Brian Chambers: Yes, happy to kind of walk that through. So at the time of the acquisition, we said that we expected about $125 million of cost synergies through the acquisition. Those are going to be primarily OpEx-related synergies as we brought the businesses together. We expected about 40% of that to realize in the Doors P&L, about 60% throughout the rest of the enterprise. And in my comments, Todd's comments, we're on track to achieve that and actually exceed that by mid-2026. We probably see now visibility to maybe even $10 million to $15 million more upside to that as we go through the first half of the year. So I think the team has done great work finding those operational cost synergies and with respect to a weaker demand environment, that has not slowed us down in terms of looking for those operational cost efficiencies, and we've been able to drive those and realize those through the P&L. I think in addition to that, we talked about another $75 million of operational cost synergies really tied to our manufacturing network. So about 1/3 of that tied to network optimization, about 1/3 tied to automation, about 1/3 to kind of general productivity initiatives that we have in place. And we've announced some closure consolidations. So we're right on track to delivering on that $25 million to $30 million of additional operational cost improvements through network optimization. We think that feathers in through the year, but we think we finished the year on that run rate. And then we still have opportunities around productivity, automation, some of those other efficiency gains that we're applying that we think, again, scale through the rest of the year. So disappointed in the market opportunity, and we certainly have been challenged by market volumes and the volume deleverage. But from an operational cost and the structural cost improvements we expected to put into the business, those are in place and actually, I think, exceeding what we thought we could achieve, which gives us a really great cost platform as we see market volumes improve. We see our organic growth initiatives increase. We really think we see some great incremental operating leverage as we take the business forward. Operator: The next question comes from Susan Maklari with Goldman Sachs. Susan Maklari: My question is around your commitment to shareholder returns. Can you talk about how you're thinking of that given the environment that we are all in, the target you set out at your Investor Day for $2 billion over 2025, 2026. And I guess within that, are there any potential divestitures that you're thinking about today as you look across the entire business? Anything else that you think of that could be non-core in there? Todd Fister: Thanks. I appreciate the question. So we remain committed to the $2 billion return of cash to shareholders in '25 and '26. We returned about $1 billion last year in markets that are similar to what we expect to see in '26. We increased our dividend 15% in December to also support continued growth in our dividend, as Brian highlighted earlier in his comments. So we remain committed to what we said at Investor Day. We're in a very good spot from a leverage standpoint at 2.1x EBITDA at year-end. So we have ample capacity both in terms of the really strong operating cash flows we continue to see in the business even in these down market conditions as well as our balance sheet. When we look at divestitures, as Brian highlighted, we have a small divestiture. We just completed in our Doors business, the Doors distribution business. We also are continuing to work on the glass reinforcements divestiture. So both sides are working actively through regulatory work to get clearances as well as all the work to make sure we're set up for a successful day 1 post close on glass reinforcements. Operator: And our final question comes from Adam Baumgarten with Vertical Research Partners. Adam Baumgarten: Just curious on the Insulation side, how long you plan to curtail production given the weakness in the markets? And then switching gears to the non-res side, maybe where you're seeing strength, where you're seeing maybe relative weakness and positioning in terms of the data center construction wave and how you can kind of share in that. Todd Fister: Thanks, Adam. Let me start with the second part of that on the non-res side. We do continue to see strength in data centers as well as in industrial process applications for our insulation materials. So when you look at some of the pipe and mechanical insulation that we sell, when you look at the FOAMGLAS product line globally, those are really nice products for us. We're seeing strength in some institutional markets as well. There are some pockets of weakness. Some of it is related to just overall economic uncertainty and some project delays that are occurring, in particular, in our Latin America business, which is part of our North American non-res. But overall, we would describe that as good demand for our products, especially on the data center side and the industrial side. When we look at curtailment, we're matching our production to what we anticipate needing for the peak season that we have. So we're going to be disciplined in our management of inventory and working capital to make sure we're managing cash flows appropriately through the year. But we also want to make sure we have an eye towards supporting our customers in the market when the market does come back. And we're balancing both of those when we think about the curtailment choices that we're making today. Operator: And being conscious of time, we will conclude the question-and-answer session. And I will hand back over to you now, Brian, for any final comments. Brian Chambers: Thanks, Carla. Well, I want to thank everyone for making time to join us on today's call and for your ongoing interest in Owens Corning, and we look forward to speaking to you again on our first quarter call. Thanks, and have a safe day. Operator: This concludes today's call. Thank you, everyone, for joining. You may now disconnect. Have a great rest of your day.
Operator: Good day, everyone, and welcome to CCU's Fourth Quarter 2025 Earnings Conference Call on the 25th of February 2026. Please note that today's call is being recorded. At this time, I'd like to turn the conference call over to Claudio Las Heras, the Head of Investor Relations. Please go ahead, sir. Claudio Heras: Welcome and thank you for attending CCU's Fourth Quarter 2025 Conference Call. Today with me are Mr. Felipe Dubernet, Chief Financial Officer; and Carolina Burgos, Senior Investor Relations Analyst. You have received a copy of the company's consolidated fourth quarter 2025 results. As usual, the call will start by reviewing our overall results, and then we will then move to our Q&A session. Before we begin, please take note of the following statements. The statements made in this call that relate to CCU's future financial results are forward-looking statements which involve known and unknown risks and uncertainties that could cause that outperformance or results could materially differ. This segment as well should be taken in conjunction with the additional information about risks and uncertainties set forth in CCU's annual report in Form 20-F filed with the U.S. Securities and Exchange Commission, and also at the annual report submitted at the CMF. It is now my pleasure to introduce to Mr. Felipe Dubernet. Felipe Dubernet: Thank you, Claudio, and thank you, you all for joining the call today. During 2025, CCU posted a strong set of results in its main operating segment while it faced a particularly challenging year in Argentina and in the wine business, especially during the second half of this year. Isolating the nonrecurring gain from the sale of a portion of land in Chile in 2024, consolidated EBITDA decreased 2.9%. On pricing segment, Chile posted a robust 7.8% EBITDA growth, which was diluted by the 29.5% contraction in International Business operating segment and a 14.9% drop in the wine operating segment. In addition, net income was down 16.3%. Under the same criteria and isolating Argentina, consolidated EBITDA would have grown mid-single digits in 2025. In terms of business scale, consolidated volumes reached 36.2 million hectoliters, expanding 7.3% versus 2024. Organic volumes increased 0.6%, fully driven by the Chile operating segment, which expanded 1.1%, recovering growth after 3 consecutive years of contraction. In terms of our strategy, during the year, we moved forward in our strategic 2025-2027, a strategic plan and its 3 pillars: Profitability, Growth and Sustainability. Regarding profitability, as mentioned, our core operating segment, Chile expanded EBITDA by 7.8%, well above inflation and EBITDA margin grew 48 basis points, while we keep growing in high-margin innovation and the dividend efficiencies in every aspect of the business. Regarding our Growth pillar, we strengthened our regional footprint by successfully integrated in Paraguay, PepsiCo's beverage portfolio and snacks distribution. Furthermore, we posted volume growth in our water business in Argentina in a tough business scenario and increased our [ beer scale ] in Colombia. Also to meet evolving consumer trends, we posted double-digit growth in low alcohol and ready-to-drink beverage products in Chile, innovating and consolidating our leadership in this high growing cost category segment, which involves beer, wine and spirits in the context of soft industries. Regarding Brand Equity, we recorded a solid performance in Chile, increasing brand equity levels being key to expand overall market share. Finally, as of sustainability in our Juntos por un Mejor Vivir strategy within the [ current ] pillar, we kept reducing industrial water consumption. Regarding the [ profitability ] pillar of our strategy and in the year that we celebrated 175 years of history, we reached important milestones. We obtained a high level of employee satisfaction, got certified in Chile and Argentina as a Top Employer by the Top Employers Institute, moving up in cadet ranking of citizen brands and got rewarded as one of the companies with best practices in corporate governance by the survey La Voz del Mercado 2025. From a quarterly perspective, Consolidated volumes rose 0.6% fully driven by the Chile operating segment. Our financial results were below last year, mostly explained by a challenging business scenario in Argentina, together with a high comparison base in [indiscernible] country and headwinds in the wine operating segment. This was partially compensated by our main operating segment, Chile, which continued in a positive part of results. Consolidated EBITDA contracted 17.2% where the 6% expansion in the Chile operating segment was more than offset by the 44.5% and 45.2% EBITDA contraction in the international business and wine operating segment, respectively. Net income contracted 25.7%. Consolidated EBITDA isolating Argentina would have expanded low single-digit in the quarter. In terms of our segment performance, in quarter 4 2025, the Chile operating segment top line expanded by 5.5% as a result of 4.1% increase in volumes and 1.3% higher average prices. Volumes were boosted by non alcoholic categories. Average prices were driven by the revenue management efforts, offset by negative mix effects. EBITDA has reached 6% mostly due to a 9.1% gross profit expansion, partially offset by 10.1% higher MSD&A expenses. Regarding gross profit, the rise was driven by higher volumes, lower cost pressures related to favorable prices in some raw materials with the exception of [ our NIM ] and the appreciation of the Chilean peso against the U.S. dollar which is positive on U.S. dollar linked costs, partially compensated by higher costs from our PET recycling plant [ circular ]. On the other side, MSD&A expenses funded mostly associated with higher distribution expenses [indiscernible] larger marketing expenses to support revenue. In International Business Operating segment, net sales recorded a 36.3% decrease, mostly driven by lower average prices and a 4.6% volume contracts, highly driven by a high single-digit contraction in the beer industry in Argentina. The decrease in average prices in Chilean pesos was driven by Argentina, impacted by negative translation effect, pricing below inflation through the year and negative mix effect. The later was partially compensated by efficiencies. [ In all ], EBITDA dropped 44.5%. The Wine Operating segment posted a top line contraction of 16.8% driven by 9.7% drop in volumes, together with 7.9% decrease in average prices. Lower sales was driven by both exports and domestic markets. The weaker average prices were mostly explained by stronger Chilean peso and its negative impact on export revenues and negative mix effects in the portfolio, partially compensated with the revenue management initiatives. EBITDA contracted 45.2% also impacted by the higher cost of wine. Regarding our main joint venture and associated business. In Colombia, volumes reached 2.4 million hectoliters in 2025, increasing 6.1%. We continue to build a robust brand portfolio and sales execution in Colombia which is the path to long-term volume and financial [indiscernible]. Now I will be glad to answer any questions you may have. Operator: [Operator Instructions] So our first question is from Fernando Olvera from Bank of America. Fernando Olvera Espinosa de los Monteros: The first one is regarding the volume growth seen in Chile this quarter, if you can comment if this was favored by the alliance with Nestle highlighted in the press release. And some additional questions, sir, if you can share what was the performance of beer during the quarter and also how these low alcohol products that you have mentioned will favor volume performance in 2026. Felipe Dubernet: Yes. We -- thank you, Fernando, for your question. Yes, we have a robust growth in Chile growing 4.1% driven, as we highlighted, by the non-iconic category. However, our spirits unit view a mid-single digit thanks to a very good performance on all the non-alcohol ready-to-drink flavored products of that category. So it was a very good quarter where we do overall market check in the quarter. So -- and this drove good growth in the overall set. Regarding the year -- the quarter, in general terms was good. We experienced flat volumes against the same quarter of 2024. And seasonally adjusted, was a bigger quarter than quarter 3, let's say, seasonally adjusted. So experiencing seasonally adjusted growth the [ beer category ]. You are asking a more overall question regarding alcohol consumption. The capital alcohol consumption decreased mid-single digits something like 4%. We are still calculating because it depends on the population estimates. So -- but overall, decreased 4%. Regarding, specifically, in beer, we come back to 2019 per capita consumption. But following, as we highlighted consumer trends we are delighted of the growth, and we are experiencing in all our low-alcohol ready to drink flavored products portfolio, which grew [indiscernible] the 20%, more than 20% and reaching in the Chile operating segment, practically 7% of the mix. And this encompasses proposition on beer as mixers. We are very satisfied of the growth we are experiencing in the [ Stone ] brand and all these different labors. And also in the spirits, where all the low-alcohol flavored products are growing practically 25%. So the consumer is moving towards these products. And fortunately, we have a high innovation grade on that specific category and where CCU has more than 80% of market share of the overall market. Operator: Our next question is from Felipe Ucros from Scotiabank. Felipe Ucros Nunez: Thanks, operator. [Foreign language] Thanks for the space. A couple of questions on my side. One, a little more short term and the other one a little more long term in nature. So the first one on SG&A in Chile, you've been generally posting improvements in your SG&A to sales ratio over the last couple of years. So I was a bit surprised to see you back track this quarter. SG&A grew a little bit faster than sales, and you did mention in the release that it came partly from investments in marketing. So can you comment on this and whether you expect to continue this investment at a higher level? And also, if you could talk to us a little bit about where that investment is going? Perhaps it's just additional spending to give some impulse to the [ RTD ] category that is new for you? Or perhaps it's something you're having to do in beer to keep it at neutral volumes? And then the second question, a little bit longer term, it has to do with the fact that beer has been lagging nonalcoholic beverages for quite some time at this point, right? And there's probably more than one thing at play here. So just wondering if you can comment about the different rates of volume growth that you expect there. In a tough environment, it's expected beer would underperform because it's more discretional. But there's also this structural migration from consumers away from alcoholic beverages. So just wondering if you can comment on the difference between those two factors and how it's impacting you looking ahead. Felipe Dubernet: Felipe, thank you for your question. Regarding the marketing investment, it was mainly driven by the year. As also we had a low comparison base in quarter 4. So it was a temporary -- [ more ] investment in quarter 4 2025 compared to quarter 4 2024, and essentially went to support our premium portfolio. So I think this is to build a stronger premium portfolio because at the same time, price growth in beer was in the quarter in line with inflation, which is very good, a little bit above inflation. So it's a different combination on the P&L, but nothing to worry about. Regarding your question more on the long term, we think in the future, our winning non-alcoholic portfolio will continue to grow with especially water business in both a pure -- plain water. We had a tremendous success on [indiscernible] strong gas proposition. Also, we continue to grow at a high rate on our favored or enhanced water portfolio with [ brand mass ]. So all of these is driving the growth on our colleague that should grow in line with private consumption in our view. And especially the category where we did. Regarding alcohol, the situation, as I mentioned in the previous question, in the year, specifically, we come back to the per capita consumption in 2025 that we had in 2019. But bear in mind that 20 years ago, per capita consumption in Chile in 2014 was 44 liters per capita, in 2019, 52 liters per capita and in '25, 52 liter. So I think overall, this category, we cannot forecast the future, but should stabilize the overall beer category around 0% to 1% growth and would be driven by the low alcohol beer propositions. We recently launched in January with great success Cristal Ultra but also we lead specifically the low alcohol ready-to-drink portfolio of flavored products or mixers, which I mentioned in the previous question, growing a lot. So this would certainly sustain growth in the near future. But again, these are projections and -- but we are following consumers closely all the consumer trends. That's [indiscernible]. Felipe Ucros Nunez: If I could do a quick follow-up on the first one. Do you expect this higher marketing spend? I know there was a comparison base, but should we expect it to grow at more historical levels going forward? Or do you expect a higher marketing spend going forward? Felipe Dubernet: No. The marketing range would be the same. Operator: Our next question is from [ Guilherme ] [indiscernible] from [ Apple Capital ]. What is your pricing strategy in Chile going into 2026 for alcoholic and for non-alcoholic beverages? To what extent do you plan to raise prices or do you plan to take advantage of lower cost pressure to be more aggressive in gaining share? Felipe Dubernet: Overall, the company historically is aiming to grow prices in line with inflation. As in the last years, you know our input cost inflation was much higher than inflation. We have some lag in terms of recovering profitability that we have in the past. Still, we have this lag. So overall, our aim is to take every revenue management initiative. But this could be by rising prices, which is the less sophisticated answer to your question in terms of pricing, but also launching higher-margin innovation. In fact, the portfolio that is growing, the low alcohol ready to drink flavored products are at a premium in the case of beer compared to the mainstream beer. So you could increase prices or your revenue per hectoliter in different ways. But bottom line, the aim is not gaining share to pricing or promotions, more sustaining the market share in the long term through brand equity and marketing investments and high-quality produce rather than trying to gain share with aggressive promotions. So the aim is to increase prices. But always, you have a market of competition, but the aim is to increase prices in line with inflation. Operator: Our next question is from Constanza Gonzalez from Quest Capital. Constanza González Muñoz: I have two questions. The first one regarding the environment in Argentina. Could you give us more detail about the trend in construction that you are expecting for this year? Some recovery in the volumes? And secondly, I would like to ask you about the CapEx for this year. Thank you. Felipe Dubernet: Thank you, Constanza, for your question. Hope you are doing well. Yes. Regarding Argentina, the alcoholic industry was very soft, I would say, declining industry we are in the year have affected specifically also beer and not -- even wine was more dramatic but in beer, we have a decline in this. And the thing is that towards the end of the year, we saw some runway improvement. During the quarter, we had a terrible November in terms of weather because every weekend we have rain. So with rain, you don't do barbecues, you don't drink beer. So at the end, we have this terrible weather. Despite this terrible November, seasonality adjusted volumes in quarter 4 compared to quarter 3 improved 4%. This is what sustained my statement that we saw a gradual improvement. We don't know, we don't have clarity if we exclude the weather we had in November, maybe this would be an improvement of high single-digit seasonally adjusted. Today, we are seeing, let's say, a gradual recovery in terms of volume in Argentina. It was -- two questions -- second question [indiscernible]. Costa, could you repeat the second question because I had a sound problem. Constanza González Muñoz: Sure. I asked you about the CapEx that you are expecting for this year. Felipe Dubernet: Yes. Regarding CapEx, we will be investing depreciation. No more than appreciation. Operator: Our next question is from Aldo Morales from BICE Inversiones. Can you please explain if this negative inflection point in Argentina in ARS seems to continue over the next quarters. Also, can you please explain how persistent could be this negative pricing scenario in wine [ VSPT ]? Felipe Dubernet: Aldo [indiscernible] you. So Aldo, yes, 2025 -- yes, in a broader perspective, in 2023, our prices, our beer prices in Argentina were above inflation. In 2024, slightly above inflation. We saw big numbers. And in 2025, we were below inflation. So 2025 in terms of price was not a good year for beer in Argentina. Although, looking at the future, we have increased prices in December, effective in January so that this would lead some improvement in profitability in the near future, along with gradual improvement. I mentioned that we saw towards the end of last month. Regarding the other question regarding why, this is due to mix effects mainly in exports. As in the domestic market, we increased prices above inflation. So it was mostly due as export prices and was due to mix effects. Operator: Our next question is from Thiago Bortoluci from Goldman Sachs. Thiago Bortoluci: Thanks, Felipe, for the presentation and for the questions. I would just like to move back to the discussion on pricing in Chile, right? During your remarks, you mentioned that essentially beer prices are growing with inflation. Your headline prices are growing a bit below inflation, which suggests all else equal that your price mix for nonalcoholic is negative, right? Obviously, there are a lot of moving parts here. I would just like to understand how much of this is mix, how much of this is like-for-like and more importantly, particularly for non-alcoholic, what's the strategy going forward? Felipe Dubernet: Overall prices -- the Chile operating segment increased price by 3.5% in the year. Price effect was something like 4.3% and mix effect something like 0.8% that was the impact of mix [indiscernible] product. In the last quarter, we have more mix effect due, as I said, accelerated water sales during the quarter. Regarding specifically in non-alcoholic, as I mentioned, the pricing strategy would be to at least increase prices in line with inflation. Operator: Our next question is from Martin Zetzsche from Fundamenta Capital. How should we think about margins in Chile finishing in 2026, given the favorable levels for the Chilean peso? Felipe Dubernet: Martin, I will not provide a specific number for margin or during 2026 is forward-looking. But as you mentioned in your question, we are facing favorable effects in Chile, which would certainly impact positively our raw material and this would come more in effect in quarter 1 of this year because we carry out some inventory in quarter 4 of specific raw materials such as [indiscernible] because this is why you didn't see, as a full extent, the benefit of having a lower exchange rate in Chile. However, there are also some [ signals ] in some raw materials, specifically aluminum, where we are seeing high, very high prices, above $3,000 per tonne aluminum comparable of what we saw in 2022. So that's a bit of concern, but this should be more than compensated by exchange rate, as you pointed out. So taking into account this, we should be seeing a favorable EBITDA margin, positive expansion of EBITDA in 2026. But again, this is based on assumptions that could change during the year. Operator: Our next question is from Alvaro Garcia from BTG. Alvaro Garcia: Felipe, I was wondering if you can maybe comment on the nonalcoholic front in Chile, on the performance of Pepsi Max, maybe how it's positioned relative to Coke Zero or to other competitors in China. So maybe specific commentary on maybe some of the better-performing products in Chile would be helpful. Felipe Dubernet: Yes. In Chile, we do have Pepsi Zero, we do not have Pepsi much. To highlight, Pepsi Zero is doing very well, tremendous success in Chile. In fact, the coverage of soft drink category grew in the last quarter low single digit, which for this category of being Chile, a high cost -- high consumption level of [ CSP ] is a very good growth in Chile. And of course, Pepsi has been increasing brand equity and market share in the last few years. So overall, but what is really driving the category, the water business, especially enhanced water products are growing double digit during the quarter and other products such as ready to -- specifically functional brings growing mid-single digits. Operator: Our next question is from Nicol Helm from MetLife Investments. Can you elaborate on your financial policy going forward in terms of net leverage and capital allocation? S&P has maintained the company on negative outlook for some time. Do you expect to preserve the current rating? And are there any specific measures you're taking for this? Felipe Dubernet: Thank you, Nicol, for your questions. If I understood well, you are asking about net financial debt EBITDA ratio? Yes, the aim is to maintain the notch that we are having with the risk [indiscernible] so it's something below a ratio of 2. Today, we are finishing with 2. In terms of net financial debt to EBITDA is to maintain or even decrease if the business do better. But we don't have a specifically policy on that. But however, the aim is to maintain the specific notch that we have within the risk announced. Operator: We'll now move on to our final question from Santiago Petri from Franklin Templeton. Hello. Thanks for the presentation. could you guide us on your raw material cost expectations for 2026? What impact would that have on your margins? Felipe Dubernet: Santiago, yes, specifically, we'll answer the question more for Chile. Starting by the -- what has been positive today, as we mentioned in previous question, is the appreciation of the Chilean peso. We have some sensitivity on that, that each 1% appreciation is something about [ to CLP 4,000 million ] of better results at the consolidated basis because it's also considering the offset we would have in the export revenues we had in the wine business. So is positive on that, but I would not predict, of course, the exchange rate scenario. But if this is maintained, we are talking about a significant amount of money. Last year, the average rate was CLP 953 on this year, now the spot is CLP 960. So we are talking about 10% of significant amount of money. But this, as always, is being compensated by higher aluminum prices that we are suffering and higher PET recycling prices. As you know, we have a loan in Chile where 15% of the plastic bottles should have reached the local recycling PET and prices on that are the higher in Latin America. So to answer your question, we are seeing, overall, a positive scenario on input cost, thanks to exchange rates. Operator: Thank you. We would like to thank everyone for the participation today. I will now hand it to the CCU team for the closing remarks. Felipe Dubernet: Okay. Thank you. Same to you all for attending today. To conclude, in 2025 in context of soft industries, we posted solid performance in our main operating segment, Chile, recovering volume growth after 3 years of volume contraction and expanded EBIT and EBITDA margin. However, consolidated results were weaker due to a difficult macroeconomic scenario in Argentina, together with the contraction in the beer industry in this country and strong headwind in the wine business. We look to the future with optimism as CCU's core strength remain solid. Our focus will be on continue developing our 2025-2027, the strategic plan reinforcing our three strategic pillars, profitability, growth and sustainability with a special focus on profitability through revenue management efforts and efficiency and high-margin innovation growth. Finally, I would like to send my gratitude to all our more than 10,000 employees in a special year for our company as we celebrated our 175-year anniversary. Their dedication and commitment with the said CCU principles: Excelencia, Entrega, Integridad [indiscernible] have been key to navigate challenging times. We will continue to work to ensure sustainable and profitable growth for CCU. Thank you all, and I wish you a wonderful afternoon. Operator: That concludes the call for today. We'll now be closing on the lines. Thank you, and have a nice day.
Operator: Good morning. My name is Ludy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Topaz Energy Corp. Fourth Quarter and 2025 Results Conference Call. [Operator Instructions] Thank you. Mr. Staples, you may begin your conference. Marty Staples: Thank you, Ludy, and welcome, everyone, to our discussion of Topaz Energy Corp. results as at and for the period ended December 31, 2025. My name is Marty Staples, and I'm the President and CEO of Topaz. With me today is Cheree Stephenson, CFO and VP Finance. Before we get started, I refer you to the advisories on forward-looking statements contained in the news release as well as the advisories contained in the Topaz annual information form and within our MD&A available on SEDAR and our website. I also draw your attention to the material factors and assumptions in those advisories. We will start this morning by speaking to some of the recent and fourth quarter 2025 highlights. After these opening remarks, we will be open for questions. 2025 marked another year of impressive growth for Topaz, highlighted by a 17% increase to royalty production, 20% higher infrastructure revenue and a 10% increase to our year-end 2025 reserves. Topaz's fourth quarter royalty production averaged 23,400 boe per day and increased 15% from the prior year, which was driven by record oil and liquids production of 6,900 barrels per day in the quarter. Full year 2025 royalty production of 22,400 boe per day increased 17% over 2024, which was driven by 11% higher liquids production and 19% higher natural gas production. In 2025, we saw an estimated $2.8 billion of operated capital invested on our acreage, which led to a record 694 gross wells drilled, or 25.3 net, which is 10% higher than 2024 and represents a meaningful record 17% share of total Western Canadian Sedimentary Basin 2025 drilling activity. We also saw a 22% increase in total wells brought onstream in 2025 over 2024. This operator-funded development was demonstrated through our annual reserve report, which evaluates Topaz's proved developed producing and probable developed reserves before any future undeveloped locations Topaz's year-end 2025 total proved plus probable reserve of 55.7 million boe increased 10% from 2024 driven by 50% and 10% growth in the Clearwater and Northeast BC Montney. Operator-funded drilling extensions and improved recovery generated 11.9 million boe of additions, which replaced our 2025 royalty production volume of 8.2 million boe by a peer-leading 1.5x at no cost to Topaz. In the Clearwater specifically, operator-funded activity replaced royalty production by 3x in 2025. Over the past 2 years, we have seen our Clearwater reserve life index double as a result of waterflood performance that continues to enhance heavy oil recovery. During the quarter, drilling activity on our acreage remained strong as 190 gross wells, 6.8 net, were drilled and 17 gross wells were reactivated. In total, 248 gross wells were brought on production during Q4 2025, which represents a 7% increase over Q4 2024. Based on our operator drilling plans, we expect that the current 27 to 30 active drilling rigs on our royalty acreage will be maintained through the first quarter of 2026. In Q4, topaz generated royalty production revenue of $62.5 million, representing 72% of Topaz's total revenue with 28% or $24.2 million contributed by our infrastructure assets. Topaz generated fourth quarter cash flow of $80.6 million or $0.52 per share, 6% higher than Q4 2024, and free cash flow of $79.7 million or $0.52 per share, which increased 11% from Q4 2024. Our Q4 2025 net income of $32.7 million was 64% higher than Q4 2024 driven by 15% higher royalty production, 10% higher processing revenue and other income, 4% lower cash expenses and a 47% higher realized hedging gain. During 2025, Topaz realized a $19.8 million hedging gain driven by a $15.1 million natural gas hedging gain equivalent to $0.44 per Mcf. Topaz distributed $52.4 million of dividends at $0.34 per share during the quarter, which represented a 65% payout ratio and a 5.1% trailing annualized yield to the fourth quarter average share price. Through the full year, topaz paid $207.7 million in dividends at a 66% payout ratio, which represents a 4% increase on a per share basis over 2024. Since our inaugural dividend during the first quarter of 2020, Topaz has paid $6.62 per share in dividends. We have announced our 2026 guidance estimates of 23,500 to 23,900 boe per day of average royalty production and $92 million to $94 million of processing revenue and other income. Topaz expects to exit 2026 with net debt-to-EBITDA of 1.2x and generate a 68% payout ratio, which remains sustainable through the end of 2026 at $0 AECO and USD 55 WTI attributed to the fixed revenue provided by our infrastructure portfolio and hedging contracts in place, which are available in our most recently filed MD&A, as well as the quality and strength of our diversified asset portfolio. At this time, we're pleased to answer any questions. Back to you, operator. Operator: [Operator Instructions] Your first question comes from the line of Jeremy McCrea with BMO Capital Markets. Jeremy McCrea: Marty, quick questions here on M&A. Can you describe what the market looks like now versus where it has been in the last couple of years? And why -- like part of your growth has been through M&A, and what makes you confident that you could see a lot of deals potentially this year? And just kind of a bit of a follow-up here. Where do you think those deals may occur actually? Marty Staples: Yes. Jeremy, thank you for the question. I think like most years, it seems like it starts out fairly soft until the quarters get done. People understand what maybe their budgets might look like. We did complete a deal in the latter part of December in 2025, smaller deal, $8 million on a fee royalty acquisition. Have seen some leasing on that acquisition already so we're pretty confident that there's probably more to do there. It was about 30,000 acres of land kind of right in the heart of the Duvernay play. Overall, we're very proactive on deals right now. I think what kind of we see into Q1, Q2 is probably some reactive ideas where maybe some bank-led processes start to kind of appear. And so overall, I think we're going to continue to be active this year. On most years, we look at about $2 billion in opportunities. We've been very active already in 2026 looking at some different opportunities. And we're fairly agnostic to whether it's infrastructure or royalty opportunities. I think the win for us has been a combination of both of them. So we'll continue to look where we can be useful. And if we see some capital cuts start to happen into Q1, we think that there's probably some opportunity on the infrastructure side. But like I said, we're open to either sides of those M&A opportunities. Operator: [Operator Instructions] We do have our next question coming from the line of Jamie Kubik with CIBC. James Kubik: Can you just talk a little bit about the reserves and the changes that you saw this year? How much more is there left to be booked on the waterflood improvements in the Clearwater? And how much was, I guess, derived from just delineation in that play? Can you just talk about some of the shifts on that side, Marty? Cheree Stephenson: Jamie, it's Cheree. I'll take this one. Marty can chime in. But we definitely saw some significant bookings. We do think that within the Clearwater specifically, there was some catch-up from prior as the reserve evaluators really now have enough years of data in order to sort of acknowledge and back up the waterflood results. I wouldn't say they booked what they're seeing in full effect. There's still some room for further adds and reflection of the results to date. But we were definitely pleased with the recognition and the performance of the assets. Obviously, our reserve report is a bit limited as it does not include undeveloped future locations. So we don't get the full effect of what's going on with the waterflood. But we do believe there is incremental value attributed to what's been done to date for future years. And we do see the operators continuing to extend more and more of their budgets into the waterflood because it's working as we expect to see, maybe not quite this type of effect, that 50% increase within our Clearwater reserves next year, but definitely something that's in excess and positive. As a takeaway, when we think of our reserve book and the reserve replacement we were able to achieve this year, it was about 1.5x on the entire portfolio. Within Clearwater specifically, it was at 3x reserve replacement. And over the last 2 years, we've seen a doubling of the reserve life index. So 3 years went to 6 years. And remember, again, that's just the developed wedge of the reserves. Marty Staples: If you think about our two main operators, Headwater and Tamarack, coming out with some very positive revisions to, I would say, the 2P numbers in excess of 50% on both of them, it really paints a nice road map for us for the future. And so I think you saw Headwater around 52% on a 2P reserve uptick. And then this morning, Tamarack came out with 56%, replacing 534% of production. That looks really positive for Topaz. And so we're excited to see those results and get an indication of what the future brings for our future bookings. Operator: [Operator Instructions] And we currently have no further questions at this time. I would like to turn it back to Mr. Staples for closing remarks. Marty Staples: Thanks, everyone. Great 2025. And look forward to chatting with you on the Q1 call in May. Take care. Operator: Thank you, presenters. And ladies and gentlemen, this now concludes today's conference call. Thank you all for joining. You may now disconnect.
Operator: Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Adecco Group Q4 and Full Year 2025 Results. [Operator Instructions] I would now like to turn the call over to Benita Barretto, Head of Investor Relations. Please go ahead. Benita Barretto: Good morning. Thank you for joining our conference call today. I'm Benita Barretto, the group's Head of Investor Relations. And with me are the Adecco Group's CEO, Denis Machuel; and CFO, Valentina Ficaio. Before we begin, please take note of the disclaimer on Slide 2. Today's presentation will reference both GAAP and non-GAAP financial results and operating metrics. This conference call will include forward-looking statements, which are based on current assumptions and, as always, present opportunities as well as risks and uncertainties. With that, I will now hand over to Denis. Denis Machuel: Thank you, Benita, and a warm welcome to all of you who joined the call today. And let me open with the full year highlights on Slide 4. The group has consistently delivered on its ambitions and targets in 2025. In terms of market share, the group gained 245 basis points relative to key competitors with ongoing positive momentum. On a full year basis, the group's revenues were up 1.3% year-on-year, gross profit was stable, and the group delivered an industry-leading 19.2% gross margin, evidence of the benefits of its diversification strategy. The group has managed costs and capacity with discipline. G&A overheads were further reduced by EUR 23 million, bringing our total net savings to nearly EUR 200 million when compared to 2022's baseline. And productivity increased 3% year-on-year. In turn, the group generated EUR 693 million of EBITA and stayed within the EBITA margin corridor on a full year basis at 3%. Cash generation was strong with 102% cash conversion ratio, operating cash flow of EUR 613 million and free cash flow of EUR 483 million. Importantly, the group improved its leverage ratio, ending the year at 2.4x net debt-to-EBITDA, down 0.2x year-on-year and down 0.6x sequentially. Let's turn now to Slide 5. And on the left side, we highlight our consistent outperformance relative to key competitors across the past 3 years. And the chart on the right side shows volumes steadily improved throughout the year with flexible placement and outsourcing volumes in the Adecco GBU rebounding from decline to growth. Management's focus on customer satisfaction, digital innovation and recruiter productivity, integral to our strategy, is driving strong top line and volume momentum ahead of market trends. Let's move to Slide 6, where we set out the progress we are making with the run-and-change agenda, strengthening execution muscle across operations day by day, while investing in digital solutions and new services to drive future growth. There are many points on this slide, so let me highlight only a few. Beginning with the Strengthen Run priorities. The group has made significant progress in 2025. The Adecco North American turnaround gained traction. Full year revenues were up 12% and the EBITA margin expanded 230 basis points year-on-year. In line with the group's digital strategy, Adecco further expanded its Talent Supply Chain approach to 144 large clients, adding 42 in Q4 alone. By centralizing, automating and digitizing processes effectively, the Talent Supply Chain delivered a meaningful 550 basis points year-on-year improvement in fill rates. In Akkodis, restructuring in Germany has locked in EUR 58 million run rate savings. And LHH's Career Transition business continued to successfully expand in the SME segment, increasing the number of companies served by 17%. The group's Change agenda also progressed. Adecco now has 6 recruiter agents live within the Talent Supply Chain structure in the U.K. and in France. The U.K. agents have achieved approximately 15% time savings in recruiting processes, and this is an encouraging start. And we will roll out agents across key markets in 2026 to scale these benefits. And while there is further work to be done in Akkodis Consulting, France's value creation plan improved performance with the unit growing ahead of market and achieved a 7% margin run rate, up 160 basis points year-on-year. And in LHH, targeted investments in Ezra digital coaching platform drove 42% revenue growth and a record pipeline at year-end. Moving to Slide 7. On this slide, we detail the firm progress made in the turnaround of Akkodis Germany. Management took decisive restructuring action in 2025, achieving EUR 58 million in annual cost savings on a run rate basis by year-end. This included reducing the cost of sales by EUR 43 million and SG&A expenses by EUR 15 million, with EUR 8 million saved through real estate consolidation across 26 locations. Last wave of rightsizing effort is in flight, lowering headcount by approximately 600 in total. In addition, select noncore assets were exited, eliminating approximately EUR 3 million of negative EBITA. The program incurred onetime charges of EUR 46 million in 2025 but has already delivered around EUR 15 million of in-year P&L benefit. As a result, Akkodis Germany achieved a healthy 5.4% EBITA margin run rate at year-end. The group expects incremental savings to crystallize in the P&L during 2026, in particular during H1. With the organization being rightsized, management's focus in 2026 will shift to rebuilding the top line, supported by encouraging new client wins across sectors such as aerospace, defense and life sciences. In short, the group has made strong progress in stabilizing Akkodis Germany, positioning it for sustainable profitable growth going forward. Slide 8 sets out the Board of Directors' dividend proposal. We are retaining our attractive shareholder remuneration with a dividend of CHF 1 per share for fiscal year 2025. This represents a 46% payout ratio, in line with our established dividend policy of paying out 40% to 50% of adjusted earnings per share. Shareholders will have the option to receive the dividend either in cash or in newly issued shares. With this proposal, the group provides attractive returns to shareholders, including the option for qualifying shareholders to participate in the group's future growth in a tax-efficient way. The optional scrip dividend aligns with and supports the group's capital allocation priorities, which remain unchanged. It allows shareholders to increase their investment in the Adecco Group while enabling the company to retain cash for growth and prioritize deleveraging. Now let me hand over to Valentina for the Q4 results. Valentina Ficaio: Thank you, Denis, and a warm welcome from my side. Let's begin with Slide 10 and an overview of the group's strong Q4 results. The group delivered further significant market share gains, leading key competitors by 395 basis points. Revenues reached EUR 6 billion, rising 3.9%, our best quarterly performance this year. Gross profit grew 4% to EUR 1.1 billion with a healthy 19.1% margin, stable on an organic basis. Our disciplined execution drove good operating leverage. We were pleased to see a strong productivity improvement of 11% and to deliver a strong drop down ratio of over 80%. In turn, the group's EBITA was EUR 225 million, up 20%, with a 3.8% margin, up 60 basis points. Let's now discuss the GBU developments, beginning with Adecco on Slide 11. Adecco delivered a strong performance with revenues at EUR 4.8 billion, up 4.9% and improved sequentially. Flexible placement revenues increased by 4%. Outsourcing was very strong, up 14%, and MSP was up 6%. Permanent placement, however, was 6% lower. Adecco's healthy gross margin was driven by firm pricing, client mix and lower permanent placement volumes, and productivity improved 6%. The EBITA margin improved 40 basis points to 4%, mainly reflecting higher volumes and strong operating leverage, supported by G&A savings and agile capacity management. Adecco's drop down ratio this quarter was robust at over 50%. Let's now move to Adecco at the segment level on Slide 12. In Adecco France, revenues were 2% lower, stable sequentially and ahead of the market. Logistics continued to weigh, while autos and manufacturing were strong. The EBITA margin of 4.4%, up 10 basis points, mainly reflects client mix and benefit from SG&A savings plans. Revenues in Adecco EMEA, excluding France, were up 4% and sequentially improved. Most territories achieved good growth and outperformed competitors. Looking at the larger markets. Revenues were up 3% in Italy with solid activity in logistics, financial services and consumer goods. Revenues in Iberia were up 7%. Food and beverage, autos and financial services were strong. In the U.K. and Ireland, revenues declined 1%, a good result in a challenging market. The result was weighed by lower logistics and public sector demand despite strength in IT tech and financial services. Revenues in Germany and Austria were up 2%, well ahead of competitors, with strength in autos, consumer goods and defense. The segment's EBITA margin of 3.9% was 50 basis points higher, mainly reflecting strong operating leverage and good cost mitigation. Turning now to Slide 13. Adecco Americas delivered 21% revenue growth. North America revenues increased 23%, well ahead of the market, mainly due to strong activity from large clients. In sector terms, consumer goods, food and beverage and autos were notably strong. Latin America revenues were up 19%, led by Colombia, Peru and Brazil. By sector, logistics, financial and professional services and retail were strong. The Americas EBITA margin of 3.3% expanded 150 basis points, reflecting client mix and strong operating leverage from higher volumes. Adecco APAC remained strong with revenues up 7%. Revenues rose 6% in Japan, 14% in Asia and 7% in India. Australia and New Zealand returned to growth with revenues up 2%. APAC's EBITA margin of 4.3% mainly reflects the timing of income from FESCO. Let's now focus on Slide 14 and Akkodis' strengthened performance. Akkodis' revenue were 1% lower and sequentially improved. Consulting & Solutions revenue were up 2%, marking a return to growth for this service line. In EMEA, revenues were flat. Germany was 7% lower, driven by autos headwinds. However, revenues in France were up 3% and ahead of the market in aerospace and defense and autos. And the U.K. and Italy performed notably well. North American revenues were up 3%, ahead of market, supported by further modest improvement in tech staffing demand. And Consulting & Solutions grew 46%. Revenues in APAC were 4% lower. Japan's result was heavily influenced by trading day differences. On an adjusted basis, revenues were up 5%. Revenues in Australia were 10% lower in a tough market. Akkodis' EBITA margin of 7% was 90 basis points higher, mainly reflecting benefit from the turnaround in Germany. Let's move to Slide 15. LHH has executed well and delivered highly profitable growth. LHH's revenues were up 2%. In Professional Recruitment Solutions, revenues were 3% lower, taking share in a subdued market. Recruitment Solutions gross profit was flat with the U.S. 3% lower and Rest of World up 4%. Permanent Placement was up 4% and productivity was 8% higher. Career Transition was robust with revenues up 1%. U.S. revenues were 2% lower on a high comparison, while the U.K. and Switzerland were strong, and the pipeline remains healthy. Revenues in Coaching & Skilling rose 27%. Ezra's revenues were very strong, rising 68% while General Assembly's B2B business grew 31%. LHH's EBITA margin was 9.7%, up 510 basis points. The year-on-year development is flatted by the absence of charges recorded in Q4 '24 related to the wind down of General Assembly's B2C activities. On an underlying basis, the margin expanded 230 basis points, reflecting positive mix and volumes and strong operating leverage with productivity up 12%. Let's now turn to Slide 16. Gross margin was healthy at 19.1%, stable year-on-year on an organic basis. The group's gross margin was driven by negative FX impact of 10 basis points; 20 basis points negative impact coming from flexible placement, mainly reflecting client and country mix; 10 basis points negative impact from permanent placement, reflecting lower activity in Adecco; and a 30 basis points positive impact in Outsourcing, Consulting & Other Services, mainly driven by Akkodis Germany. Let's now look at Slide 17 and the group's EBITA bridge. At 3.8%, the EBITA margin excluding one-offs was strong, rising 60 basis points year-on-year. The result was driven by a 10 basis points negative impact from FX, a 30 basis points favorable impact from Akkodis Germany and, furthermore, excluding Akkodis Germany, a stable gross profit contribution at healthy levels, an encouraging 50 basis points positive impact from operating leverage, including G&A savings as well as strong productivity improvement, and a 10 basis points negative impact from the timing of FESCO income. Among key metrics, SG&A expenses excluding one-offs as a percentage of revenues was 15.4%, down 70 basis points, while G&A costs were just 3% of revenues. Productivity, measured as direct contribution per selling FTE, rose 11%. Moving to Slide 18 and the group's cash flow and financing structure. The last 12-month cash conversion ratio was strong at 102%. Full year operating free cash flow was EUR 613 million. Free cash flow was EUR 483 million. Both outcomes are strong given the group's continuous improvement in revenues. In Q4, operating cash flow was EUR 476 million, a modest EUR 15 million decrease from the prior year period. This outcome reflects strong collections and favorable timing of payables, partly mitigated by working capital absorption for growth. We have maintained discipline regarding payment terms and are very pleased to report that the group's DSO improved 0.4 days to 51.8 days, remaining best-in-class. Capital expenditure was EUR 50 million, and free cash flow was EUR 426 million, a modest EUR 20 million decrease from the prior year period. The group also strengthened its balance sheet. Gross debts were reduced by EUR 280 million in 2025, supported by the repayment of CHF 225 million senior bond in Q4. At the end of Q4, net debt was EUR 2.29 billion, EUR 186 million lower. Leverage ratio improved to 2.4x, down 0.2x year-on-year and down 0.6x sequentially. The group is firmly committed to bringing the net debt-to-EBITDA ratio to 1.5x or below by the end of 2027, absent any major macroeconomic or geopolitical disruption. On Slide 19, we provide our near-term outlook. The group has seen continued positive momentum in volumes this quarter to date. For Q1, the group expects gross margin and SG&A expenses, excluding one-offs, to be broadly stable sequentially. As a reminder, the prior year period benefited from the timing of FESCO income. We are rigorously executing the group's strategy and run-and-change priorities, focusing on market share gains while managing costs and capacity with discipline to drive profitable growth. And with that, I hand back to Denis. Denis Machuel: Thank you, Valentina. And let me conclude with Slide 20 and key takeaways. We launched the agility advantage value creation path and run-and-change agenda at our November Capital Markets Day. We are successfully executing against group strategy and driving momentum. During 2025, the group delivered on its full year margin commitment, captured market share and return to revenue growth. And we are encouraged to see continued positive momentum in volumes to date this quarter. Moreover, as we successfully advanced our strategic priorities, the group's financials are improving, underpinning an improvement in the year-end net debt-to-EBITDA ratio, which was down 0.2x year-on-year and 0.6x sequentially. We remain firmly committed to achieving a net debt-to-EBITDA ratio at or below 1.5x by year-end 2027. With this said, thank you for your attention, and let's open the lines for Q&A. Operator: [Operator Instructions] Our first question comes from the line of Andy Grobler with BNP Paribas. Andrew Grobler: Just a couple from me, if I may. Firstly, just on free cash. It was very strong in Q4 led by payables. Could you just talk through what you did to drive that and whether any of that is going to reverse into early 2026? And then secondly, just a slightly broader one around client behavior. Are you seeing any change in client behavior in terms of their desire for flexibility, in terms of the interactions they're having with you? Or do they remain broadly pretty cautious in those end markets? Denis Machuel: Thank you, Andy. And Valentina is going to answer the first part, and I'm going to answer your second question. Valentina Ficaio: Andy, on free cash flow, it was a very strong performance. You've seen that we landed on EUR 483 million and the conversion ratio was very strong, above 100%. And it's particularly strong, this performance, if we consider that we've done it on the back of a year and, most importantly, a Q4 where we were growing. And you know that our business absorbs working capital when we grow at this level. If I try to unpack a bit what are the most important components, fundamentally, it all goes down to very strong working capital management. We've been very diligent on collections. And you've seen how our DSO continues to be very strong. We are down year-on-year. It's not easy to keep going down on year-on-year in this market. So we're very pleased with that. And in terms of AP, yes, we did have some favorable timing on payments, but we've also done quite a lot of job in terms of carving out overbalancing, negotiating payment terms. And you really start to see how the impact of that comes through also in our AP management. So overall, we are very pleased and we continue to be laser-focused on working capital. When you think about 2026, I would -- I really think about free cash flow generation this year to -- the behavior to be similar. Just as a reminder, seasonally, our H1 is an outflow versus an H2 that is an inflow. So that's the way that I would model it. But again, laser focused on working capital because that's the key of our strong free cash flow performance this quarter. Denis Machuel: And as far as what our clients are telling us, we see pretty good momentum, particularly on flex. I must say, Adecco is firing on almost all cylinders. We have soft results in France and the U.K., but apart from that -- even though in France, we are ahead of the market. But apart from that, we're really, really strong. And we see momentum, we see demand for flexible workers across the board, across geographies. It's says something also a little bit about, of course, the uncertainty that we live in. But the economy is pretty good. So there's demand. There's work to be done. And we are surfing on that. We're surfing on that through, of course, our sales dynamism we serve because we have very strong delivery engine. And that makes me very confident. There's one sign, which is interesting, is we see a little bit of a pickup in permanent recruitment in LHH. It's 4%. It's not big yet and we start from your volumes, but it's a little bit positive. But overall, I'm very, very optimistic on the momentum that we have. We have a great momentum as well in outsourcing, you've seen double-digit growth. I think the market is there to support our development. Andrew Grobler: Can I just ask one quick follow-up? Just on LHH and in RS in particular. You noted that perm was growing, but gross profit was down in that segment. So that suggests that your kind of gross margin in your contract temp businesses is lower. Could you just talk through what's going on in that segment, please? Denis Machuel: Well, actually, you've got to look at LHH as in 2 dimensions. There is perm and flex on one side and there is the U.S. and outside of the U.S. In the U.S., we are minus 3%. In the rest of the world, we are plus 4% overall. So that says something about the geographic differences. But overall, I mean, let's be clear. We are -- the whole industry is operating at pretty low historical level. But we are -- what we do is we are outperforming the market, which matters to me. Valentina Ficaio: And I would also add that as you look overall at the performance, you see also how LHH has really worked on productivity to offset also some of these elements. And LHH productivity was up 12% in Q4 and their sales FTE was down 4%. So you see how they are acting also on what Denis just mentioned. Operator: Your next question comes from the line of James Rowland Clark with Barclays. James Clark: My first is just on the answer you just gave about good momentum. Just to be clear, I understand you've taken a lot of market share in the last few quarters. Is that momentum comment about you specifically taking share? Or do you think that's more market-based? If you could help sort of parse those two elements, that would be great. Secondly, on EBIT margins in 2026, I think consensus has got 30 to 40 bps of margin growth. Are you comfortable with that? And could you help us bridge that improvement across organic gross margin, which looks to be under pressure going into this year but also then offset by SG&A? So I'd love just to get your sense on the moving parts to achieve that margin, if you're comfortable with it. And then finally, on leverage, you're guiding to down to 2.5x by the end of '27. So you've got to lose 0.5x a year between now and then. Do you see that as a linear progression or faster in '26 and '27 or vice versa? And if so, why? Denis Machuel: Thank you, James. And I'm sure Valentina will be super happy to take the EBITA and leverage questions, and I'm going to talk about the momentum. Two things here. As much as I believe that the way we operate, the way we've put in place a very strong sales dynamic, which is -- which we adjust as per market conditions, as per the industry we are facing, et cetera, as per the geographies, and we have also put a very strong delivery engine that helps us gain share from our own merits and that makes me very confident for the future, I also believe that it's overall the market conditions that are also improving. And we have been through some difficult quarters in, I would say, end of 2024 and beginning of 2025. And we see an overall better traction on the markets. And on that, we are well positioned because we've done all the hard work to strengthen the muscle in sales, strengthen the muscle in delivery. So it's -- I would say it's a bit of both that help us grow as we do. Vale, now on EBITA? Valentina Ficaio: And I'll build on the comments that Denis just mentioned about momentum just to give you some more flavor on guidance for Q1 EBITA. So I think that what you mentioned, James, is reasonable. And the way that I think about our Q1 EBITA is the continued positive volumes behavior gives us confidence in terms of revenue outlook. And gross margin is broadly stable sequentially. If you think also about the comparison year-on-year is we have a 20 basis point headwind coming from FX. You may remember that last year in Q1 '25, this represented a tailwind. So that gives you a flavor why also year-on-year Q1 gross margin is actually broadly stable. And in terms of SG&A, our normal seasonality from Q4 to Q1 usually see SG&A going up by EUR 10 million, EUR 15 million. So the fact that we're guiding for broadly stable tells you about the cost discipline that we continue to enforce. And you saw that we've mentioned the FESCO income because we assume FESCO to continue to contribute positively on a full year basis. But the timing last year, it can vary. And last year, it happened in Q1. On a full year EBITA, we don't guide overall, but I think this gives you a bit the moving pieces that you need to model in terms of getting there, and the assumption that you mentioned are quite reasonable. Moving to leverage. I think it's -- the free cash flow generation, the performance that we had -- the trajectory of the performance that we had throughout 2025 delivered good delevering, 0.2 year-on-year and sequentially, 0.6. The path to 1.5 is clear. We don't guide specifically on '26 and '27. But clearly, the levers that we have in our hands, and we are already pulling are modest growth. You've seen how growth has dropped through in operating leverage over the past quarters. We expect that to continue throughout the next quarters. And then we have additional benefits coming from Akkodis Germany, but also other elements like the turnaround in North America, like the improvement in France that will continue to help us get there, as we've shown you in the last -- in recent quarters. Operator: Your next question comes from Suhasini Varanasi with Goldman Sachs. Suhasini Varanasi: Just one question for me, please. I just wanted to clarify the exit rate and momentum that you saw year-to-date because I think your slide on -- Slide 5 seems to suggest at least on the GBU, Adecco GBU front, the momentum is continuing to improve in year-to-date. Just at that GBU level and at the group level, can you please clarify how the exit rate has looked compared to the 3.94% growth that you reported last quarter? Valentina Ficaio: Suhasini, I'll take this one. Just to give you a sense, the exit rate was very much aligned with the quarter leverage, so at group level. So I hope that's helpful to give you a sense. Operator: Your next question comes from the line of Simon LeChipre with Jefferies. Simon LeChipre: First question. Looking at your Q4 results and if we exclude Akkodis, so gross margin was down 30 bps on an organic basis and SG&A was probably flat organically. And in prior quarters, it seems you were able to offset the gross margin pressure through cost savings. So does that mean it is no longer the case? And I mean, how should we think about the future quarters in terms of the relation between margin performance and SG&A? Secondly, in terms of your Q1 gross margin guidance, so stable sequentially. So I would assume the seasonal effect from Q4 to Q1 is negative. It seems you're also talking about like FX negative impact being a bit stronger. So how would you offset these 2 factors to get to a stable gross margin sequentially? And last thing on AI. We see more and more evidences of how AI can make the business more efficient. So I would assume this suggests some deflationary effect on top line. So how do you think about the net bottom line impact in the future? Like do you think your SG&A would continue to reduce? And would that be enough to offset this potential deflationary trend on the top line? Denis Machuel: I'll take the AI piece and Valentina will be very happy to take the gross margin question and the FX. Valentina Ficaio: So starting with your 2 questions on gross margin, Simon. I think when you think about the performance that we had in Q4 at 19.1%, it's a very healthy level. It's industry-leading. And it reflects a number of components. It's not just Akkodis, right? There's firm pricing and client mix, and there's GBUs mix that contribute positively to the gross margin buildup. Yes, Akkodis Germany is a component of it, but it's not the only one. And then there's clear added value in the gross margin that comes from the service lines that have higher gross margin profile, like outsourcing, like Ezra. You've heard us mentioning a number of service lines that have grown double digit in Q4, and will continue to do that. So there are a number of levers that we can continue to work on, Akkodis Germany is one of them, to work on our gross margin and keep it at this stable levels. When you look at -- and by the way, permanent placement continues to be subdued clearly. When permanent placement picks up, it is a further lever that we can capture because we will capture permanent placement growth when it comes, and that's another further lever we can pull. When you think about Q1, let me just take a moment to walk you through the elements. You've called out FX. It's correct. As I was mentioning before, actually it was a tailwind in Q1 last year. So you do have a 20 basis points gap when you look at it from a Q-on-Q perspective. And then we again have several pieces because there's modest impact coming from perm and flex, but there's also a modest positive impact coming from the other service lines. So that is why we continue to say it's really broadly stable even on a year-on-year basis. Because if you take out the FX, we are continuing to see how the benefits of the other service lines of Akkodis that we are implementing is affecting the modest client mix that we have in flex and perm. Simon LeChipre: Sorry, may I have just a quick follow-up on GM and also on SG&A. So it was minus 1% organically year-on-year in Q4, so I think mainly driven by Akkodis. So does that mean like the Adecco GBU, as you know, is now trending kind of flattish year-on-year? Valentina Ficaio: No. We continue to see the same performance. We call out Akkodis when we mentioned that because we want to call out the nice progress that we've done in the restructuring and the fact that most of it, it is coming through SG&A but it's broad-based. And you've seen it also in our productivity numbers. They're up in all of the GBUs, not just in Akkodis. And in our G&A over sales, that is just 3%, and that is not just Akkodis. It's broad-based. Denis Machuel: Let me take now the AI impact. And I think there is a top line impact, positive impact and also an impact in productivity that's going to help our profitability overall. On the top line, I believe that AI is really an opportunity for us. Remind you, we are in a fragmented market. So the more optimized we are in how we deliver our service through AI, the better we can gain share. And I'll give you two examples. We've embedded generative AI into our Career Studio in LHH. And when people use Career Studio with AI powered, they find a job 32 days earlier than the ones who don't. This is creating value for our clients. This has helped us penetrate bigger, faster our clients. So this has a positive impact on the top line. If I look at the way we deliver with our AI agents in the U.K. on our recruitment, we have fill rates that have improved 550 basis points, okay? So this is an impact. We have improved our time to submit by 24% quarter-on-quarter. This helps us be more efficient, deliver more. So -- but a positive impact on the top line. In doing so, we have operating leverage, as Valentina was saying. And in terms of how we optimize our cost, of course, we will progressively embed AI into our processes. We embed AI in our middle and back office, and this is going to create also efficiencies. So I believe that AI will have a positive impact both on the way we capture market share and in the way we improve our profitability. Operator: Your next question comes from the line of Remi Grenu with Morgan Stanley. Remi Grenu: Denis, Valentina, just one question remaining on my side. Focusing a little bit on North America and the very high growth there. I mean, the acceleration came in Q1 and Q2 last year, if I remember correctly. So can you help us unpack a little bit the performance there, if it's been driven by a few contracts and if we then should expect some kind of annualization of these benefits in Q1 and Q2 this year? Just trying to understand a little bit from the 20% organic growth you're currently growing out in that country, what we should expect in terms of potential normalization over the next few quarters? Denis Machuel: Yes. Thank you, Remi. Yes, if I go back to history, Q1, we were minus 1% year-on-year. Q2, we are plus 10%. Q3, we are plus 21%. And Q4, we are plus 23%. So of course, this is -- we're very pleased. This shows that all the efforts that we've put in the turnaround plan in the U.S. is delivering. We have productivity improve by 10% and we have a very strong dynamic on the large accounts. We also are positive in the SMEs, but that's the point where we need to focus our efforts because the growth in our large accounts is a bit higher than the growth on small and medium companies. So to your point, yes, I mean, we -- let's be clear, we started from a low base, okay? So we are -- I mean, this double-digit growth rates are encouraging. But as we anniversary some of the wins of the large clients, we will go more towards more market trends to sort of a bit of a normalization. Still our focus and our efforts will be to gain share, to be ahead of the market. And I'm quite positive that we can achieve that, but probably not to the extent that we've had this year. We have good traction in customer goods, in retail, in autos, in food and beverages. So I mean, there's traction in the market. The economy in the U.S. is still pretty good. So we will serve on that. We are much stronger than we were 2 years ago. And yes, you can expect growth, probably not with such a differential with the market. Remi Grenu: Understood. And just maybe building up a little bit on the question from Simon on the operating cost guidance for Q1. I mean, I'm a little bit surprised by the comment on stability. So can you help us a little bit quantify the building blocks to get there? I mean, discussing with some of your competitors, it feels like that they are forecasting some wage inflation around 2% or a little bit more than that. The higher volume of activity, the 4% organic growth and positive momentum probably would mean under a normal cycle that you need to invest a little bit more in resources. So yes, so can you help us a little bit on that stability of operating costs? And I'm just trying to understand as well if to what extent you think that stability comments and these cost efficiencies are already driven by AI initiatives, or if it's just about Adecco removing some of the inefficiencies in the cost base that you had there and had to address? Denis Machuel: Let me start by a little bit of how we strategize that growth. And you heard me say in the past that what we try is to be very, very granular in the way we inject the resources that are linked to the dynamic of the market. And if I talk markets, it's by country. It's even by region in a country. It's by industry in a particular region, a particular country. So really adjust with the -- through this empowerment that we've put in place years ago, that's what we -- we let people adjust very precisely to the market conditions. Yes, we will need to invest in some places, but we are also cautious in some others. And that's how we operate. And definitely, we will -- we have improved our cost inefficiencies. We've really readjusted our SPs. We have adjusted our G&A. So I think we are continuously optimizing the resources, and I think AI will nicely help us on that. Now on the building blocks for Q1. Valentina Ficaio: And just to give additional color, Remi. On the operating cost sequentially stable. It's all about cost discipline, right? The continuous focus on productivity and G&A gets us there. If you look for a second at Q4, I think it's also very helpful to see how we have performed. Productivity was up broad-based, plus 11 at group level. But if you look at each GBU, Adecco was plus 6, LHH was up 12 and Akkodis, even with Germany soft, capped 90% utilization rate approximately. So -- but if you look at our employee -- group employees, they are actually slightly down. So that tells you how we are combining very well growth with good cost discipline and good productivity. And that gives you a sense of why we guide for this to continue to be stable as we continue building on these 2 clear levers that has been key to the operating leverage that you've seen in our results. Denis Machuel: And just to complement on AI. Yes, we see a 30 bps improvement when we serve the clients by -- through AI initiatives. But it's not at the scale that I want to see. We said that we would cover 60% of our revenues by agentic AI over time by the end of 2026. I mean, it's progressing. We yet have to fully scale. So more to come. We'll keep you updated on the progress. I remain prudent in the impact of AI because there is no magic in AI. It's hard work. You need to scale it. I think we have all the levers and the foundations, but let's see how it goes. But the trend is positive. Remi Grenu: Okay. And the last question is on the SME, which you referred to, Denis, I think, in one of your previous answers, saying that you need to address this segment better. Is the issue market related? Is just the momentum between the 2 markets, if you see separate them between SME and large enterprise, is still very, I mean, diverging a lot in terms of volume of activity? Or is there any initiative at Adecco's level which you need to implement to be better at serving this cohort of client? Because it has implication, obviously, for gross margin and profitability, I guess. Denis Machuel: Yes. Well, actually, we've really doubled down in the past couple of years in how we serve the large clients and enhance Talent Supply Chain and enhance all that. We still have a pretty good dynamic in SMEs. But this is a place where we accelerate our efforts because we know, to your point, that it's very accretive to our margin. So I think we are in a good place in how we roll out all our technology into our Talent Supply Chain, and we are also rolling out progressively the technology through our branches. I believe that the strength of branch network is that proximity, that deep understanding of the local ecosystems. And that's one of the top priorities for 2026 is to inject as much energy and technology into the SME segment as we have done in the large accounts. Operator: Your next question comes from the line of Simon Van Oppen with Kepler Cheuvreux. Simon Van Oppen: I have a question on margins. We see margins in all divisions strengthening in Q4, most significantly in Akkodis and LHH, especially on an underlying basis. Can you unpack a little bit the main drivers for the strengthening of your margins by division? And what do you expect in terms of margin for each division in 2026? And in extension to that, should we expect more one-offs in 2026? And if so, roughly by how much by division? Denis Machuel: Valentina? Valentina Ficaio: Thank you, Simon. So let me explain a bit around each GBU and how they evolved in terms of margin, and then we can also quickly touch on formal one-offs guidance. I think what is the common denominator among the 3 GBUs improvement is volumes up, operating leverage drop through. That is clearly -- and if I take for a moment Akkodis out, it's a clear denominator, right? And then if I take one GBU apart, you have Adecco that grew materially, right? You've seen how in Q4, it's up almost 5% with pockets that are even double digits. And clearly, the Adecco story is a story around strong operating leverage but also diversification with service lines like outsourcing that grew double digits, to give you a sense. And it always comes on the back of good cost discipline, healthy operating leverage and the improvement in margins. In LHH, you've seen us mention that there's an element of the improvement year-on-year that is because we had headwinds last year. So it is a 500 basis point improvement, but in fact, underlying is half of it, 250, which is still a very significant improvement. And it's mainly coming from CT continuing to performing very well, but also the contribution of other lines like Ezra and like the B2B business in GA that have grown double digits, and they come with very healthy high gross margins. And then finally in Akkodis, clearly, the main driver of the improvement in performance is Akkodis Germany and the fact that we are progressing well in the turnaround. In terms of one-off costs, the guidance that we're giving you is down from EUR 60 million this year to EUR 40 million next year. The EUR 60 million clearly this year is mainly coming from the Akkodis Germany turnaround. And so we're basically guiding next year to be lower in one-offs, mainly because Akkodis Germany is basically completed. Operator: Your next question comes from the line of Gian-Marco Werro with ZKB. Gian Werro: Two questions from my side. The first one is on the gross profit margin in flexible placement. I would appreciate if you can dive there a little bit deeper into this development of 20 basis point decline year-over-year. Can you maybe elaborate, please, on the gross margin dynamics in the temporary staffing, especially in your key markets like France, Germany and also the U.S., please, just to grab a little bit there the dynamics, how is it evolving, still increasing, stable or declining? And then second question is on AI also. Denis, I appreciate your optimistic tone about the opportunities lying here. But very frankly speaking, don't you also see also, of course, some headwinds here of jobs that become redundant, like many operations of warehouses, IT, white collar back-office work that, in my view, is certainly also affecting your top line negatively. I would appreciate if you can just talk briefly about the dynamics that you observe in the industry. Denis Machuel: So I'm going to start by answering your questions on AI, Gian-Marco, and then Valentina will talk about the gross margin. Fundamentally, we don't see any impact of AI at this stage. We know that as all technology evolutions that are happening, some jobs are going to be impacted, some destroyed, but so many are going to be created. That's what history tells us, okay? And for the moment, if you look at the numbers coming from Career Transition, okay, which is the world leader in outplacement, 1.4% of the people are telling us that they've been laid off due to AI. That's it, okay? And 12% say, yes, there was a bit of AI coming in. So to date, there's no massive impact, no impact of AI. And let's be clear, and I'm not the only one to say that, a lot of companies are doing layoff plans pretending that is coming from AI because it makes them look good, okay? But fundamentally, this is not the case, okay? So now nobody knows within 3 or 5 years what's the relationship between the jobs destroyed and the jobs created, okay? If you look back 10 years ago, nobody was talking about cloud architects, nobody was talking about content moderation. And these jobs have been created because of the digital world, et cetera. So this is going to come as well with AI, okay? So I believe that because of this, I'd say, massive reshuffling of the labor market, this is a massive opportunity for us to upskill, reskill, move people around, accompanying people in their agility. That's what we are here for. And AI is not new. It has been now around for more than a couple of years. And look at our numbers, okay? So we are trending nicely in this world of AI. We are reshaping the future of work in this AI era, And we are well placed to accompany our clients on their agility that is necessary with AI. So that makes me very confident. Now on the gross margin. Valentina Ficaio: So the year-on-year development you were asking about, Gian-Marco on flex. First of all, it's a modest impact. Overall, the flex gross margin remains quite healthy. We are happy with pricing. It stays firm. We have a positive spread bill-to-pay rate. And so the modest impact that you see is fundamentally client and country mix. And just to build on the question that you were asking about, what about countries, France, U.S.? It is really all about how do we grow, right? So sometimes in some countries, but also in some industry, we may see one client segment growing faster than the other. It's the case right now, as Denis was mentioning, in France and North America. But what is really important is that, as that happens, we also operate on cost base, right? Because these are also clients that come with a lower cost to serve. So the most important thing when we think about margin, yes, it's the gross margin, but it's also the mix that we have between SMEs and large and the drop-through on the overall margin. Gian Werro: Okay. But no specific comments you want to make here on the 3 countries I mentioned, about the development of the gross margin? If it's stable or you mentioned that most probably... Denis Machuel: The trends in these 3 countries are aligned with the overall trend of the GBUs, yes. Operator: Your next question comes from the line of Karine Elias with Barclays. Karine Elias: I just had a quick one on the hybrid. I believe on your third quarter conference call, you mentioned your intention to refinance at the time the hybrid. Just wondering whether that's still the case. Valentina Ficaio: Thank you, Karine. Yes, so the refinancing, you're correct. We are refinancing the hybrid. We are in progress of doing that. We are constantly in the market to understand when is the right moment to execute. But you should expect that to be happening. Operator: Your next question comes from the line of Andy Grobler with BNP Paribas. Andrew Grobler: Just one follow-up, if I may. Just on the dividend. You moved to the option of the scrip. What drove that decision? And to what extent is that part of the plan for getting to 1.5x leverage by the end of next year? Denis Machuel: Thanks, Andy. So let me put the overall perspective. The group has a very clear framework on capital allocation and a clear dividend policy. Every year, of course, depending upon the results, the annual performance, the Board evaluates all options within that framework and within dividend policy to provide what the Board believes as the best outcome for shareholders. And this year, the decision has been made to propose the choice between the payment in shares or payment in cash, which we believe is the right balance between our deleveraging priority on one side and also retaining cash for growth. So we also felt that this is an optionality that is financially attractive for our shareholders, for qualifying shareholders on the tax side. So I think it's a pretty good decision for shareholders. Now on the... Valentina Ficaio: On the leverage. Denis Machuel: The leverage, yes. Valentina Ficaio: As Denis mentioned, the scrip is an option, completely independent from the path that we've discussed to reach our 1.5. That path is based on performance, growth, operating leverage, the turnarounds that we're doing. The scrip is an option and it's independent from that. Operator: I will now turn the call back over to Denis Machuel, CEO, for closing remarks. Denis Machuel: Thank you very much, everyone. We really appreciate your presence today. So just to wrap up, I think our 2025 results make me very confident for the future. I must tell you that our teams are energized and they are focused on delivering performance. So yes, we still have a lot to do. But the momentum that we've created and which continues at the beginning of 2026, as we said, puts us in a very good place, in a very good place to deliver profitable growth moving forward and to delever. With that, thanks a lot for having been with us today, and speak to you next time. Have a great day. Thank you. Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
Operator: Welcome to the HSBC Holdings plc Investor and Analyst Presentation for the 2025 annual results. We will begin in 2 minutes. [Operator Instructions] Please note that it will not be possible to ask a question if you are joining via the webcast link on the HSBC website. Ladies and gentlemen, welcome to HSBC Holdings plc's 2025 annual results webinar for investors and analysts. For your information, today's webinar is being recorded. At this time, I will hand the call over to Georges Elhedery, Group CEO. Georges Elhedery: Welcome, everyone. Thank you for joining us. As we celebrate the year of the horse, [Foreign Language]. Our 2025 full year performance was strong. It was a year in which we performed, transformed, invested for growth. I will discuss our strong strategic progress today. First, the strong momentum in our 2025 performance. Second, the execution of our 3 strategic priorities where we are progressing at pace and with discipline. And third, the new growth and return targets we are setting out today for 2026, '27 and '28. So first, the full year earnings. My comments will exclude notable items and the comparisons will be year-on-year on a constant currency basis. In 2025, there were $6.7 billion of notable items. You are already aware of these from prior quarters. They are set out on appendix Slide 36. So first, we delivered strong earnings. Group revenues grew 5%. Profit before tax rose 7%, reaching a record $36.6 billion. Return on tangible equity was 17.2%. And we delivered 3% cost growth on a target basis in 2025, in line with our cost target. Second, we delivered strong growth. Our deposit balances grew 5% with deposit growth in each of our 4 businesses. Our deposit base is a core strength. It contributes the lion's share of our banking NII. We also grew fee and outcome. In Transaction Banking, it grew by 4%. Elevated market activity demonstrating the power of our deep international network, which gives access to 86% of world trade flows, alongside our product and service expertise. In Wealth, it grew by 24%, reflecting our leadership position in the world's fastest-growing wealth markets and continued investment in our products and proposition. And we are investing for strategic long-term growth. We completed the $13.7 billion privatization of Hang Seng Bank. This brings together to 255 years of history and heritage, combining global reach and local depth. It reflects our confidence and conviction in Hong Kong's future growth. And third, we delivered strong returns to our shareholders. We announced a full year ordinary dividend per share of $0.75, up 14% on 2024. Let's turn straight to the progress we are making on strategy execution. In October 2024, I set out a clear agenda to unlock HSBC's full potential. To do so, we now run the bank on 4 core complementary businesses, 2 home market businesses, U.K. and Hong Kong, and 2 international network businesses, Corporate and Institutional Banking and International Wealth and Premier Banking. Each business is growing. Each is generating above mid-teens return on tangible equity and each is building on a strong foundation for future growth. We are focused on 3 clear priorities, and we are moving at pace with each one, be simple and agile; two, drive customer centricity and three, deliver focused sustainable growth. Now let's look at each priority in turn and our progress. First, simple and agile. The first step in unlocking HSBC's full potential is reengineering to reduce complexity and cost. Structure and strategy are now aligned. Accountability is sharpened and roles deduplicated. In 2025, we reduced net managing director positions by circa 15%. We are taking $1.5 billion of annualized simplification saves straight to the bottom line with immaterial revenue impact. We expect to have taken action to deliver these saves by the first half of 2026, 6 months ahead of plan. We are also making positive progress with the reallocation of circa $1.5 billion from nonstrategic or low-returning businesses. The medium-term intent being to reallocate these costs to areas of competitive strength and generate accretive returns. In 2025, we announced 11 business or market exits. Completed and announced exits account for $0.7 billion in annualized cost savings with around $1 billion of associated revenue $0.6 billion remains an active execution, including those under strategic review. Then following the privatization of Hang Seng Bank, we are increasing reallocation costs to $1.8 billion, reflecting an additional $0.3 billion of reported basis cost synergies across HSBC and Hang Seng Bank. We will direct this $0.3 billion to growth opportunities in Hong Kong. We are also streamlining and upgrading our operating model by simplifying the bank at scale and retiring nonstrategic applications. And we are reengineering whilst focusing on resilience and risk management. Next, priority number two, drive customer centricity. Our 4 businesses are built on customer trust. Our investments to improve customer proposition and experience are yielding results. Net Promoter Scores have improved or remained top ranked in our home markets. In Hong Kong, we added 1.1 million new to bank customers. Taking the total number of customers to more than 7 million. Our U.K. business lending -- our U.K. business banking lending grew 13% year-on-year, excluding COVID loan runoff. In CIB, corporate surveys have positioned us as a market leader in trade, in payments and in foreign exchange. In IWPB, we attracted net new invested assets of $80 billion. Next, priority #3, investing to deliver focused, sustainable growth. Our Hong Kong home market is a dynamic economy, a top 3 global financial center and a thriving trade gateway. It is the super connector between Mainland China and the world. And it is set to become the world's leading cross-border wealth hub by 2029. The privatization of Hang Seng Bank enables us to scale capabilities and drive growth across both banks for all customers. We have the ambition, and we have comprehensive plans to deliver $0.9 billion of benefits through reported synergies and unlock of opportunities by 2028. It is an investment for growth. And if we move beyond Hong Kong and look at HSBC's other core strength, we are in Asia, Middle East powerhouse. Asia and the Middle East are increasingly central to global trade and capital flows. Global trade is being rewarded. Asia's growth is increasingly powered by intra-Asia demand. Asia is buying Asia. The Middle East is scaling as a global capital trade and investment hub. Its integration with Asia is accelerating. The Asia-Middle East corridor is becoming a defining access of global growth. Wealth creation across Asia and the Middle East is also structurally strong. That is why we are investing to consolidate our powerhouse position and capture these growth opportunities. We are also investing to connect the world, scaling our capabilities, building new capabilities and supporting customers secure commercial advantage from real-time services. Our customers are making real-time 24/7 payments across 35 markets. They're also using frictionless tokenized deposits and payments in 4 markets, including the U.K. with more to follow. And we are pioneering the future of finance. Last month, the U.K. Treasury selected HSBC's distributed ledger technology as its preferred platform for its U.K. Digital Gilt pilot. Next, our people and technology. We see innovation and culture that's core to our competitiveness, and we are investing in both. We are scaling AI adoption first, to empower our colleagues second for end-to-end process engineering and third, to enhance customer experience. Our customer relationships are built on trust. AI strengthens how we act on that trust, personalizing service at scale. The strong culture turns a clear strategy into results, and we are investing to nurture a high-performance culture. All our senior leaders and the broader managing director cohort have attended our new group-wide leadership training. Finally, let's turn to our new targets for 2026, '27 and '28. 2025 has been a year in which we have performed, transformed and invested for growth. This gives us the confidence to set out new growth targets. We will target revenues growing year-on-year every year, rising to 5% in 2028, excluding notable items. We will target return on tangible equity of 17% or better in each year from 2026 to 2028, excluding notable items and a dividend payout ratio of 50% for each year, excluding material notable items. To conclude, we are creating a simple, agile, growing bank built to generate high returns. We are executing our strategy with discipline and precision. We are delivering growth, we are investing for growth and we are confident we can navigate uncertainty from a position of strength. That is why we are confident in setting these new targets and in our ability to continue delivering for our shareholders. Let me now hand over to Pam. Thank you. Manveen Kaur: Thank you, Georges. Thank you, everyone, for joining. We have had another strong quarter, which reflects the positive progress we are making towards creating a simple, more agile growing HSBC. We are investing for growth. Throughout this presentation, I will exclude notable items and focus on the fourth quarter numbers compared to the same period last year on a constant currency basis. Let's turn straight to the highlights. In the fourth quarter, revenues grew 6% and to $17.7 billion. This was driven by broad-based growth in banking NII and fee and other income. Profit before tax was $8.6 billion, up 17%. Our customer deposit balances stand at $1.8 trillion, an increase of $78 billion when we include held-for-sale balances. Full year return on tangible equity was 17.2%, achieving our mid-teens or better target. In 2025, we maintained tight cost discipline, managing target basis cost growth to 3%, in line with our cost growth target. Turning to capital and distributions. Our CET1 capital ratio was 14.9%, up 40 basis points in the quarter, reflecting our organic capitalization and expectation not to initiate any further buybacks for up to 3 quarters following October's announcement of our intention to privatize Hang Seng Bank. As Georges said, this strong performance allows us to announce ordinary dividends for the year of $0.75 per share, an increase of $0.04 on the prior year. Turning to our business segment performance. We grew full year revenue by 5% to $71 billion. Each of our 4 businesses grew revenues. Each grew deposits, deepening customer relationships. Each returned a mid-teens or better return on tangible equity, excluding notable items. We are pleased to be making such positive progress firm-wide. Moving next to our privatization of Hang Seng Bank. On 9th October, we announced our intention to privatize Hang Seng Bank. We are pleased to have completed on 26th January, sooner than our initial expectation of the first half of 2026. This slide explains the financial rationale. Let's walk through it, starting with a $13.7 billion purchase price. The removal of the $3.8 billion minority capital inefficiency takes you to the $9.9 billion of common equity Tier 1 consumption. The removal of the capital inefficiency is around 1/4 of the purchase price. The $9.9 billion CET1 consumption is equivalent to buying back 4% of group shares at the point of announcement. Next, we show the $0.8 billion minority interest in the P&L and the $0.5 billion of pretax synergies from the privatization. Together, the minority interest and the synergies contribute more than 4% to our profit, beating the buyback threshold. On top of this, we see potential, further revenue and cost upside of $0.4 billion enabled by the privatization. Then on the right of the slide, we see good growth in Hong Kong in the years ahead. Having 2 fully owned banks positions us well to capture this growth. As we said in October, we are acquiring a business with structurally high pre-impairment margins. And while we are not calling the credit cycle, we believe it is a cycle. Let's now turn to banking NII. Our full year banking NII was $44.1 billion. In the fourth quarter, banking NII of $11.7 billion grew $0.7 billion. $0.4 billion of this growth was in Hong Kong, including the recovery of HIBOR during the quarter. Banking NII in the fourth quarter included a positive benefit of around $100 million for items that we do not expect to repeat. We expect full year 2026 banking NII of at least $45 billion with the impact of expected lower rates more than offset by deposit growth and the tailwind from our structural hedge. Next, to wholesale transaction banking. This year has really validated the strength of our franchise in a range of economic market and tariff situations. We have deepened customer relationships, and our global network has helped our customers navigate volatility and uncertainty. In the quarter, security services grew fee and other income 6%, reflecting higher market valuations and new mandates. Payments grew 3%, driven by new mandates and payment volumes. In particular, international payments. Foreign exchange increased by 1%, reflecting strong client flows and higher levels of volatility. This was a good performance given the strong prior year comparison. Trade was down 5% in the quarter, but it was stable over the full year. I would note the first half was particularly strong, given advanced ordering as we supported clients to navigate a fast-changing landscape. We continue to see growth in volumes, and strong client engagement. Let's now turn to Wealth, including the new disclosures we are setting out today. We are very pleased with the 20% year-on-year fee and other income growth to $2.1 billion. And we are very encouraged that this was driven by all 4 income areas, which shows the sharpening of our strategy is working. Asset Management grew 14% and Private Banking grew 8%. Investment Distribution also performed well, up 14%, reflecting strength in our customer franchise in Hong Kong. Our Insurance CSM balance was $14.6 billion, up 21% versus the prior year. We continue to attract net new invested assets with $7 billion in the fourth quarter. Today, we are giving you new disclosures, which you will see through on this slide. These better show the strength of our relationship with our customers, including both their deposits and invested assets. We are focused on capturing the full wealth opportunity, and we will now report Wealth balances and net new money. I appreciate that the Wealth balance figure is similar to the invested assets. But I would highlight two changes to note. You will see these set out on Appendix Slides 31, 32 and 33. We have added $608 billion of Premier and Private Bank deposits to the invested assets. That is offset by taking out $580 billion of asset management, third-party distribution assets. This is a good business, but it does not reflect our wealth customers. Adjusting our disclosure in this way also means our Wealth business is more easily comparable to the broader peer group. These new disclosures will replace the existing ones from the first quarter of 2026. We saw net new money in the quarter of $26 billion, of which $19 billion was in Asia. And Wealth is not just a Hong Kong story. It runs across our Asia and Middle East franchise with double-digit invested asset growth in Singapore, Mainland China, India and the UAE. Next to credit. Our ECL charge this quarter was $0.9 billion. There was no material impact from Hong Kong commercial real estate in the quarter. On Slide 29, you will see we have updated the commercial real estate disclosures. Movements in the fourth quarter were in line with our expectations. of a full year 2026 ECL guidance is around 40 basis points. This is at the higher end of our typical range, reflecting the economic outlook and remaining pressures in parts of retail and office commercial real estate in Hong Kong. Let's now turn to costs. We delivered 3% target basis cost growth in the full year, hitting our cost goals while making the space to invest in the bank was a key theme of 2025. It will be again in 2026. We have taken actions to realize $1.2 billion of annualized simplification savings with immaterial revenue impact. This is ahead of our original time line of $1 billion by the year-end 2025. On a realized basis, we have taken $0.6 billion of the simplication saves into the full year 2025 P&L. Together with ongoing discipline, this allows us to guide for 1% cost growth on a target basis for 2026 while reinvesting in the business. Next, to customer deposits and loans. We had another strong quarter with deposit growth of $50 billion. We saw good growth in each of our 4 businesses. Loans increased by $5 billion. The U.K. was again the standout with another quarter of growth in mortgages and commercial lending. Our U.K. business is well positioned to support growth in the U.K. economy. We are particularly pleased with the momentum in our commercial loan book where we see significant potential, particularly in infrastructure, innovation, social housing and mid-market direct lending. Now turning to capital. Our CET1 ratio is up strongly to 14.9%, primarily reflecting good organic capital generation. Although after the balance sheet date, I draw your attention to the impact of the Hang Seng Bank privatization which is 110 basis points in addition to the 10 basis points already incurred in the fourth quarter. We have set this out in the appendix Slide 27. As a reminder, we said when announcing the offer on 9th October that we expected to suspend buybacks for up to the next 3 quarters. That is, of course, dependent on underlying capital generation. With strong profitability and current modest loan growth we remain highly capital generative. A decision on future share buybacks will be taken quarterly, subject to a non-buyback considerations. Let's next turn to the full year defaults. Excluding notable items, and at constant currency, revenues grew 5% to $71 billion. Profit before tax was $36.6 billion, up 7% year-on-year to a record high. Return on tangible equity was 17.2%, achieving our mid-teens or better target. Our strong performance allows us to announce ordinary dividends for the year of $0.75 per share or $12.9 billion. Let's briefly return to the new targets Georges set out earlier before I close on guidance. We made clear and positive progress in 2025. That is why we are now raising our ambition to target 17% return on tangible equity or better, excluding notable items in each year from 2026 to 2028. We will also target year-on-year revenue growth in each year over the period, rising to 5% in 2028 compared to 2027, excluding notable items. And as you would expect, we maintain our discipline of a 50% dividend payout ratio, excluding material notable items and related impacts. Finally, to guidance. This slide gives you our guidance mainly for 2026. We saw revenue momentum continue in January, including in Wealth. On the slide, you see banking NII of at least $45 billion. Our revenue ambitions for our Wealth business are contained within our revenue target. We have, therefore, removed grow fee and other income at a double-digit percentage CAGR from our guidance. We see an ECL charge of around 40 basis points, broadly stable on 2025. We expect to constrain cost growth to 1% on a target basis. This benefits from our organizational simplification and allows us to continue to invest in the business. There is no change to our CET1 target range of 14% to 14.5%. In 2026, we will deliver the $1.5 billion of savings from the reorganization. We are well on track with the $1.5 billion of reallocation costs which will be redirected towards priority growth areas. We are now adding the expected $0.3 billion of Hang Seng Bank cost synergies to the original $1.5 billion of reallocation costs, taking this to circa $1.8 billion. On Hang Seng Bank specifically, we see $0.5 billion of revenue and cost synergies to be achieved by year-end 2028 as well as an additional $0.4 billion of potential further upside enabled by the privatization. To achieve this $0.9 billion, we will incur a restructuring charge of $0.6 billion from the Hang Seng privatization which will be a material notable item. To close, as I said to you last year, I am fully focused on discipline, performance and delivery. Discipline means prioritizing with precision, maintaining strong cost control and ensuring investment rigor for growth. Performance means gearing our financial strategy towards achieving our new returns target. Delivery means ensuring we remain agile and resilient, enhance operating leverage and are always well positioned to support our customers. This is exactly how we will continue to run the bank. With that, we are happy to take your questions. Alastair? Alastair Ryan: Thank you, Georges. We'll take any questions from the room here in Hong Kong first. If I can ask you to introduce you to your company, and there's been the hard part, constrain yourself to two questions each, please. That goes for people on Zoom as well as people in the room. Anyone would like to ask a first question here? Yes, we'll take a question from Nick. Nicholas Lord: It's Nick Lord from Morgan Stanley. I'll put it in one question in two parts, if that's okay. I'm just interested in your revenue target by 2028 of achieving 5% revenue growth. And I just wonder if you could talk about some of the components of how you would get there. Presumably, Wealth is part of that. And so maybe you could talk about the Wealth trajectory and how sustainable that is. Presumably, at some stage, we're going to see sort of a kick in of sort of the development of markets in Asia, and that market's business can grow more. So I wonder if you could talk a little bit about how you want to grow that markets business in Asia. Georges Elhedery: Thank you, Nick, for the question. I'm going to share some high-level comments as we are looking at the growth opportunities, and Pam can take you through the various components. The first thing is we have delivered growth in 2025. And we have delivered growth, as we mentioned, across all our businesses and all our key metrics, including deposits, loans, including fee income and Transaction Banking and Wealth and this is reflected in our revenues growing at 5%, 2025. The second item to call out is if you look at our footprint. We're actually basically aligned to the strong structural growth opportunities. Hong Kong, we've called it out, and we are basically consolidating our leadership position to capture these growth opportunities with the privatization of Hang Seng among other. Asia and Middle East, structural growth opportunities in Wealth, but also Asia and Middle East hitting record volumes and shipments for trade, Asia is buying Asia and we are -- our footprint allows us to capture these growth opportunities. The U.K., we've seen the strongest loan growth in 2025, and we have indicators to believe that there is a possibility for this trend to carry on. This is the strongest loan growth we've seen in the U.K. for many years, but it's also the strongest store growth we've seen across all our businesses that we have seen in the U.K. And then the last thing I would put, we are investing for all these growth opportunities. We're putting now investment from within our cost base. We're putting investment from the additional costs we are taking in 2026. And we will be putting even further investments from the reallocation of the $1.8 billion as we free up these costs back into those core areas where we can grow. And this is what's giving us this confidence to give you the growth targets of revenue growing year-on-year every year rising to 5% in 2028. Pam? Manveen Kaur: Thanks, Georges. So firstly, in 2026, we expect broad-based growth in revenue across all our businesses, but just unbundling a little. In banking NII, as we have said, we expect a low single-digit growth fundamentally driven through deposits. Yes, there are pockets of growth in loans, but so far, we've just seen in the U.K. market. Overall, we expect that growth in Wealth and Transaction Banking and our fee-generating businesses will continue to be very positive. As we go beyond '26, we do expect balance sheet growth should again in Asia and other markets, not just in the U.K. Of course, we are seeing growth in the U.S. already, but we are not a big player in the U.S. market, domestic growth. And we are continuing to invest in our fee businesses and our investment plans are multiyear plans. So it's not just for growth for 1 year. It's a very strong building block for growth through the period we have called out and beyond. Particularly in markets like Hong Kong, in the U.K. and other key markets for us in Asia and the Middle East. Alastair Ryan: Thank you, Nick. Thank you. Any further questions in Hong Kong. We'll go straight to Zoom. The first question on the Zoom then, please, is with Joe Dickerson at Jefferies. Actually I've announced yourself, Joe. Joseph Dickerson: Good set of results, guys. Just a quick question on the costs. If you look at the 2026 number that you've given the kind of 1% growth. I know you've got your recycling how do you think about when you peel that back and what's the metabolic rate of growth in costs, particularly coming from investments because you clearly have some global peers who have accelerated their investments around AI. So I was just curious how you think about that. And then secondly, a nitpicky question, but what rate of HIBOR have you assumed in the banking NII guide of greater than $45 billion? Georges Elhedery: Okay. Thank you very much, Joe, for your questions. On let me make some high-level considerations how we look at costs, and I'll ask Pam to comment then on cost and then on hypo rates. And I shared a bit earlier, but I want to emphasize, first, within our workspace, there's a proportion set aside for investments for change the bank, investments, digital capabilities, additional people, hires, relationship managers, wealth advisory, et cetera, of course, generative AI efficiencies. That's within our cost base. Second, the fact that we're adding costs adjusted for these savings, half of that additional cost will go towards payroll inflation, but the other half will go towards additional investments. And then third, the recycling of those $1.8 billion, which is commensurate to about 5%, 6% of our cost base will go back into those areas of investment for growth. So we believe we have ample capacity to invest and deliver the growth that we are setting ourselves, setting targets to deliver against. Then the next thing I would say about cost is that it's important, Joe, to -- we are committed to cost discipline, we are confident in our ability to deliver cost discipline. And as you've seen for our 2025 results, we have met our cost target. So I think that's an important guide also as you look at our cost guidance for 2026. Pam? Manveen Kaur: Thank you, Georges. So firstly, I would note that we are ahead on our simplification saves because the plan and the actions we have taken have come through sooner than what we had originally outlined. This gives us incremental saves of $700 million in full year '26. So that has been a consideration in the overall 1% cost growth envelope. And as Georges said, as we have divestments happening, we are continuously redeploying those -- reallocating those costs to our priority growth areas. What's really important for us is that our investment rigor is focused on our strategic priorities. That's what we've done in 2025. That's what we will do going forward. And these are committed plans, which are multiyear plans. They don't go back and forth every year. So that's all part of the overall cost envelope guidance we have given for this year. And again, we're only giving guidance for this year only, but we expect to maintain a cost rigor on a continuous basis. In terms of assumptions, we have used the end January forward rate curve for our banking NII guidance for all major currencies. So in terms of HIBOR just to note a couple of points. Our HIBOR volatility that we saw in Q2 and Q3 when HIBOR is at 1% has an impact of about $100 million on banking NII. The moment HIBOR sort of stabilizes as it did in Q4 and indeed this year, although it has fluctuated a little bit around the 2.5% mark, that is captured in our guidance. And we look at a few plausible downside scenarios as well before we give a full guidance. Alastair Ryan: Thank you. Our next question on the Zoom is from Ben Toms at RBC. Benjamin Toms: Firstly, on your RoTE guidance of greater than 17%. I'm just looking for some commentary about how sustainable you feel that guidance is beyond the announced planning horizon. So how much do you feel this guidance isn't all weather guidance post all the investments that you've been making into the business? And then secondly, on the Hang Seng synergies on Slide 13, can you mind just talking a little bit around why you've adopted 2 buckets that you've labeled synergies and upside. Is the upside bucket basically where there's a lower degree of certainty over the synergies? So what type of synergies fall into each bucket would be useful. And presumably, there's no incremental restructuring costs associated with the upside bucket on top of the $0.6 billion. Georges Elhedery: Thank you very much, Ben. On the Hang Seng guidance, what I will share is we do have the management ambition, and we do have comprehensive sets of plans to achieve the full $0.9 billion upside with the restructuring costs that we've called out. I'll let Pam give you the details. On the RoTE guidance, we are not guiding beyond our horizon, but you should always assume that we are ambitious. Pam? Manveen Kaur: Thank you, Georges. And just to say on our RoTE guidance, we continue to see a positive momentum in our businesses. And as we said earlier, we are investing for growth. But of course, the targets are only for 3 years. So in terms of the Hang Seng synergies, you're quite right, the $500 million is what I would call the reported synergies following accounting rules. The $400 million synergies are depending to some extent of markets and customer behavior. So there is some degree of uncertainty, and they don't strictly fall between what is considered to be accounting reported synergies. So that's the reason why they're too separate. Both these synergies, the plan to get that $900 million benefit is by the end of '28. And the restructuring cost of $600 million covers the benefits across both buckets. And now beyond that, we actually believe, as it says on the slide that at some stage, the credit cycle will be normalized. So there will be some benefit coming from there. There will be more growth in lending as well as overall Hong Kong growth, which we will continue to be very well positioned for because of the redeployment of the cost allocation that we have, there will be a fair chunk that obviously goes into Hong Kong, which is a core market on our strategy. Alastair Ryan: Yes, we have a question in the room next, Melissa. Sorry, you're allowed to introduce yourself fully. Melissa Kuang: I'm Melissa from Goldman Sachs. Just two questions. In terms of the strategy that you have, the rising to 5% revenue growth. Just wanted to see if you can give about CAGR growth instead. So we can understand the pathway there. In terms of that, I suppose, will it be coming largely from the nonbanking NII portion? Or will it be from the banking and NII? So that's my first question. On the second question, perhaps on the restructuring cost at HSP of $0.6 billion. Can you just give a little flavor about what is it that we are doing in terms of the restructuring that we need such a cost focusing on in terms of delivery and then how we will see the revenue synergies. And in terms of the revenue synergies can it be as quick as next year? Or will it be more heavy into 2028 as per your 3-year guidance rising to 5%? Georges Elhedery: Thank you very much, Melissa, and Pam can address both questions. Manveen Kaur: Thank you, Georges. So firstly, we've said that revenue growth is positive each year, but it's also progressive and reaching out to 5% by '27 to '28. In terms of the underlying building blocks we said to you that in 2026, where we have given the guidance on banking NII, it's a low single digit. So therefore, similar to the prior year, we will see more positive growth momentum on the fee-generating businesses. And beyond 2026, Banking NII, of course, we look and see where the guidance is, where it is, where the rates are and what's the timing of the rate cuts as we go into '26, but we are continuing to invest in our fee-generating businesses so we see that momentum in those businesses, including Wealth, which really underpins this revenue growth and wholesale transaction banking to continue. And I'm hoping that at some stage, we'll see a little bit more of growth on the balance sheet in terms of lending beyond U.K. that we have already seen. Now in terms of the restructuring costs. There are a couple of elements that drive it. One is there's some organizational alignment. So there will be some roles, which will evolve and teams that will be realigned, but a large chunk of this is really in terms of technology. So the investment in technology so that we can better harmonize our technology and better get results from the technology investment we have across both the Green and the Red brand. And this is really quite critical for us in order to achieve the overall ambition of the $900 million because it's the $900 million ambition just to reiterate, it's not just a cost story. It's a revenue and a cost story, and this is an investment for growth, and that's how we look at it. And we plan to spend restructuring costs of $600 million across the 3 years. And of course, this will be spread through these 3 years, we are not saying any more. In terms of revenue synergies, we strongly believe that by the privatization of Hang Seng Bank, our ability to be able to provide a broader product proposition into the Green band is highly enhanced. So we'll have better Wealth products for our retail customers. We have capital markets and broader wholesale transaction banking products for the wholesale customers, but more importantly, we will be able to have access for the same international network that we have for the Red brand also within the Green brand. And last but not least, we will have more balance sheet flexibility in terms of how we leverage our treasury capabilities, but also in terms of upstreaming and downstream capital, and this will all be done over the next 3 years. Alastair Ryan: Thank you. We'll go back to the Zoom. The next question will be from Aman Rakkar at Barclays. Aman Rakkar: I had two questions, please. So one is around capital. It looks like a decent chance that you'll be within your target CET1 range in Q1 based on historical and perhaps projected capital generation kind of estimates. Obviously, it raises the prospect as to whether you might be able to reintroduce buyback earlier than planned. I don't know if you're able to kind of comment on whether that's a realistic or plausible scenario. But I guess more specifically, just interested in the capital allocation thought process from here? Clearly, your stock is trading at a level now where the return on investment around buyback might be beaten by alternative uses of uses of capital. Obviously, you did it with Hang Seng, but should we be thinking about inorganic growth as well as the compelling organic growth within your footprint? And then I just wanted to ask around banking NII, please. Clearly, that kind of Q4 jumping off point is flattered by $100 million. I don't know if there's anything else that you direct us to kind of strip out of that number in terms of deposit catch-up or the impact of HIBOR. And I was particularly interested in what your deposit growth assumption is that sits behind the guidance you've given '26, please, because I think that could be a sensitivity around the ultimate outturn of banking NII in '26. Georges Elhedery: Thank you, Aman. Pam is best placed to answer both, but I want to share a few thoughts about our philosophy on capital. First, we remain capital-generative as you've seen from our targets, but also as we've experienced over the first 1.5 months in the year in 2026. So we're very pleased to see that our capital generation is strong. But our first priority is now restoring the CET1 ratio following the privatization of Hang Seng, which we estimated to take us 3 quarters. But of course, we do that assessment quarter-by-quarter. But I don't want to point out to the increased dividend we are paying this year, $0.75, $0.45 on the fourth quarter, which is on a full year basis, 14% higher than last year. So we are distributing through dividends. What I wanted to share about the discipline how we use capital, we've shared it in February 2025 Aman, we've set ourselves 4 key criteria. They are a high bar, and we strictly adhere to them in the way we look at inorganic opportunities. In so far, that these 4 criteria are met like in the case of Hang Seng privatization, then we will consider inorganic. But if one of these criteria is defeated, then our preference will be to utilize or return any excess capital back to our shareholders in the form of share buyback. Pam? Manveen Kaur: Thank you, Georges, and thank you, Aman, for your questions. So firstly, as Georges said, we continue to remain highly capital generative. We've had a good start to the year, as I called out earlier in my remarks. But as you know, we look at our share buyback decisions on a quarterly basis, and that will be a quarterly process. The starting point is clearly our target operating range, which we are working hard so that we can replenish capital that has been deployed in the Hang Seng Bank privatization. That's the first priority, as Georges said, and that CET1 operating range remains 14% to 14.5%. That's the one which underpins all the targets and guidance we have given today. Just to clarify, in terms of our priorities from there on, of course, the priorities are 50% is the dividend payout ratio, which we have again reaffirmed. We would like to see balance sheet growth, and we want to invest for growth. That's if we can have growth at the right return levels. Our distribution priorities hence have not changed, and share buyback remains for us a useful tool to deploy surplus capital irrespective of where the share price is. So I think that's an important consideration for us going forward. Next question. On banking NII, you're right, there was a $100 million non-repeat items. So if you take that out for modeling purposes, you come to $11.6 billion. There are no other one-offs. There was a higher HIBOR quarter-on-quarter, and HIBOR also stabilized. And that's why, as you remember, third quarter when we gave a more cautious outlook because we don't know where HIBOR would be. But having seen HIBOR stabilize, it gave us the upbeat on our banking NII results. We also saw low betas on saving accounts in Hong Kong. And very importantly, we saw strong deposit growth, and we do expect this strong deposit growth to continue to be a key driver in 2026 along with the tailwinds of the structural hedge similar to last year and redeployment at higher rates. The only thing to bear in mind is that for this year, clearly, in Q1, given that there will be 2 days less there will be a headwind of $300 million in Q1. We have assumed, obviously, the rate changes, both that we've seen to date as well as projected for the year. But a lot depends on, as you can imagine, the timing of those rate changes, particularly in the U.S. dollar and sterling. Alastair Ryan: So we'll take the next question back on Zoom, Amit Goel at Mediobanca. Amit Goel: So two for me. The first one, just coming back on the upgraded RoTE targets. the 17% plus. I just want to check in terms of how you're thinking about that on a kind of year-on-year-on-year basis for '27 and '28. I mean are you thinking that RoTE kind of continues to improve? Or are you thinking more 17% is kind of a very acceptable and a good level and so any additional upside you would look to reinvest? And within that, I kind of note that on the LTIP, you've kind of brought up the lower end of the kind of the boundary performance to, I think, to 16.5% from 14%, but the 18% of the top end hasn't changed. So I appreciate that's done by the compensation committee. But I'm just kind of curious how you're thinking about what appropriate or sustainable level of return is. And then secondly, again, just coming back, maybe more clarification on the Hang Seng Bank kind of benefit and restructuring charge. So I mean, I guess, I was curious, really, for a bit more detail on the $0.4 billion of additional benefit, I guess, from an accounting standpoint, can't be treated as a synergy what exactly that is? And within the restructuring charge, I think previously you said that there's actually going to be more of a less staff, natural -- there will be more natural attrition and redeployment. So there'd be very limited kind of day kind of costs. So I'm just curious what you're spending that money on? Georges Elhedery: Perfect. Thank you, Amit, very much for your two questions. Pam can address them, but just to talk about LTIP briefly. This is indeed the remuneration committee consideration. It reflects the performance that we will achieve in '26, '27, '28, which aligns to the guidance we're giving you. So there isn't more we can say at this stage. Apart from that, it is more ambitious and reflects our ambition to the business. Manveen Kaur: Thank you, Jordan. Thank you for your question. So firstly, yes, we have ambitions and our target is 17% plus each year. We are not giving a trajectory, whether it's the same or progressive but of course, we continue to grow our business and invest in it diligently, but the target is just 17% plus each year. In terms of our -- the Hang Seng, firstly to call out, these are both benefits we are getting from a cost perspective but also a revenue perspective. So classically, what you would see in terms of cost synergies and all the restructuring is actually severance costs, that is not the case here. Because there is so much focus on revenue as well, a lot of the restructuring will be in terms of investment from a technology perspective. The cost synergies themselves, of course, there will be some realignment and evolution of roles and individual areas. It's not something which is going to lead to severance or staff reductions. There could be some rule changes, clearly. There will be some scale in product manufacturing and there'll be some technology harmonization. Now when we think in terms of the 2 bits with the $500 million, the $400 million and why it so, clearly, from a cost synergies perspective, it's easier to call out. Revenue synergies, there are greater haircuts, but we do have very detailed comprehensive plans on how we are going to drive these revenue synergies. And those plans underpin the $400 million even though they were a haircut in the $500 million and just in total, to reiterate because there are lots of numbers going around. I appreciate that. Think of it as a $900 million benefit in those 2 buckets with different degrees of accounting rules and different probability of expectations and then an overall restructuring cost of $600 million to achieve that total. Georges Elhedery: And Amit, we are a net investor in people in Hong Kong. We are also investing in technology in Hong Kong to capture all these growth opportunities we have been talking about. Therefore, we do not expect, anticipate or plan any program of redundancies. We do, though, expect that some roles may need to evolve, and we are basically committing to training, reskilling to make sure that our own colleagues have these growth opportunities, career opportunities to be able to capture these roles in which we will be investing over the duration of our program of 3 years. Manveen Kaur: That's a meaningful number that we have already included in that $600 million restructuring costs for training and reskilling of our colleagues as their roles change and evolve. Alastair Ryan: Thank you. Will stay on the Zoom with Kian Abouhossein from JPMorgan. Kian? Kian Abouhossein: First of all, Georges, congratulations. I have to say you really driving the bank to a better process and discipline. We haven't seen in HSBC before, if I may say so. To the questions, tech stack, can you go a little bit more into detail? You gave a number in 2022 that you're spending about 20% on IT as a percentage of expenses. Wondering if we should think about similar ballpark. Within that, can you go a little bit under the hood and discuss where are you on cloud transmission are you done? Where are we on platforms? Are you done? Or what platforms still have to be produced new or integrated data management? So I really want to understand a little bit what you're doing on the tech side. And then CRE, this is still an area where I'm a little bit uncomfortable. Stage 3, CRE China 18% coverage, 16% on Hong Kong -- 14% sorry, on Hong Kong, stage 3. Can you talk a little bit where you want to drive that to? And clearly, I heard Pam's remarks about provisions and CRE was mentioned. Georges Elhedery: Perfect. Thank you, Kian, for your two questions and for your feedback. I'm going to take your tech question. Pam will cover the Hong Kong CRE. And I think it's a very important question. Thank you for asking it. We're indeed driving both performance and transformation with discipline, with precision, and we are doing it at pace. And we're very glad to see that the results of both performing, growing and transforming is delivering at pace, as you've seen in our 2024 numbers. So in terms of tech, you could broadly assume that 20% is the cost that we are spending on technology. But the way we're talking technology now is, number one, we are thinking about all those legacy or nonstrategic applications, which are consumers of run-the-bank costs, consumers of maintenance costs, patching costs, license fees that we are going to very proactively demise at scale. And we're very pleased to be able to say that we've demised more than 1,100 applications this year -- well, in 2025, this is more than 1/3 of the about 3,000 applications that we have deemed nonstrategic and looking to demise. Just to give you a perspective, we run about 10,000 applications, 9,000 actually, of which 3,000 are flagged to demise over the horizon between now and 2028, and we're moving at pace for that. Now that demise will allow us to free up investment capacity to put it in new technology and new capabilities in tech space. Cloud transformation, I think we are quite mature on cloud. I think we've moved from a cloud-first strategy where we moved many of our applications to cloud to now a more mature and therefore, more sophisticated approach to cloud by looking at optimization of hosting of applications. And therefore, we would look at any new applications or our existing stack, where it is better at. If it is on cloud where the majority is, then it will be on cloud, and then we will look at portability capabilities and resilience capabilities. And if it is on-premise, then or in the private cloud, then we will look at that. So I think we have matured our cloud approach, and we're already in a place where we want to be, but of course, we'll continuously evolve it. If you ask me where is the biggest investment going into the new technology today, it is definitely going into generative AI. I want to just take a minute to explain how we're thinking about generative AI because that's quite important. We're looking at generative AI in 3 work streams. They're on the Slide 8 of the pack. The first work stream is we're making generative AI available to all our colleagues in time, 85% mostly now enabled to make sure that we are helping our colleagues upgrade themselves and become future-ready. The first thinking is how can we bring our whole colleague population with us in becoming future-ready, generative AI enabled. They will have generative AI tools that they can use. They will have coding assistance or vibe coding assistance for those among our engineers, 31,000 already enabled, and we are seeing immediate productivity gains. We're seeing 60% speeding up in our unit testing. We're seeing 5x faster patching of code, patching of vulnerabilities and code, thanks to all these capabilities. This is our first mission. All our colleagues to benefit, to be trained, to be upskilled, to become future-ready, better version of themselves, more productive, better outcome for our customers. The second work stream in generative AI is fundamental reengineering of our processes end-to-end. 50 of those processes are already under review. Some of them have already delivered and finished, such as onboarding and KYC, but all sorts of processes, including fraud detection and prevention, credit applications, capital allocations and what have you data -- visas and what have you to allow generative AI to help us redesign the process in a much simpler way and also allow gen AI to be integrated in the process to process data in a much more efficient way. The result of which is a more productive bank, more efficient bank and a safer bank with stronger controls, and more importantly, a very simple bank that will be able to ultimately deliver to our customers closer to near real time or real time at the highest possible standard that's available for us. And that is an ongoing journey. The third work stream we're taking in generative AI is how we enhance customer experience at the customer touch points. So this is our relationship managers, wealth advisers, contact center operators. As they engage with customers, generative AI tools already rolled out, as you can see on the slide, will allow them to personalize at scale, to tailor-make, to customize at scale at the highest possible standards for our customers close to real time in a way that can allow us to deliver our capabilities to customers in a much more seamless, faster, better way. Customer experience will be materially enhanced. Now today, we will have operators using this generative AI at the service of our customers, but you can envisage that in a few years' time, we could possibly put these generative AI tools straight for utilization by our customers. Those are the 3 work streams. What I want to say though is that we're doing this with safety and security at the forefront. We're doing this in a way that we can review, monitor and audit everything we're doing in the space as a critical standard, and we're doing this in a way to keep control, resilience and human accountability always there because we are a regulated industry and our customers' trust is the most important asset, and we will do everything to make sure customers trust is always protected and nurtured. Thank you for that question. I'll hand over to Pam on Hong Kong. Manveen Kaur: Thank you, Kian. So just looking overall in our guidance, around 40 basis points guidance for 2026 considers all our portfolios. And of course, Hong Kong commercial real estate as well as the very small residual amount of China commercial real estate, and we look at a range of plausible downside scenarios before we give you this guidance. So just unbundling a bit. The China commercial real estate portfolio has really come down. It's now less than $1.5 billion, and our ECLs this year for this was below $200 million. So in that context, the names that have left that portfolio that's left, we feel much better about it compared to where the other portfolio was when we first started with it. Now when you think in terms of Hong Kong commercial real estate, firstly, I'm going to give you a bit of an update on the 3 segments within this Hong Kong commercial real estate portfolio and then how we look at the names, particularly the credit impaired names. Now the first one, we've been calling it for a year, and now I'm very pleased to say that the residential component of Hong Kong commercial real estate is near normalized. And I say that because whether I look at in terms of price increases, HPI has been up 5% year-on-year in 2025. But more importantly, we've seen a 10% growth and also sales volume. Rentals have already stabilized both in terms of the rental demand as well as the rental pricing. Now when we look at retail and the office space, of course, there are pockets of distress in it. But just as a broader context, we saw retail sales also in Hong Kong in May turn into positive. And they are now up year-on-year at 6.6%. But of course, this alone is not going to solve the problems of the retail sector because peoples retail shopping patterns have changed. They don't necessarily need to go to shops on malls, et cetera. Having said that, as there is more consumption in Hong Kong, we are seeing this shift from shopping places being changed into more food and beverage and so on, but there will be pockets of stress in it, and that will be coming from mainly oversupply at this point of time. Now office is the sector we are watching very carefully, because recently, we have seen both in terms of rental demand and in transactions for the best properties with the best spec in central in the best areas, there are some green shoots. But the downside is, at this point of time, vacancy rates starts are still around 17%. So that's what we will be managing through and following up very, very carefully. Having said that, in Hong Kong, we are not a distressed seller. It's a market we are deeply embedded in. We really understand well. But we are very resilient in terms of how we do our valuations. So we go and look at valuations, including distressed valuations. And we look at with our collateral position, and we stay well collateralized. And we've been following through this very closely over the last couple of years. The one metric, which I personally follow, though my job has changed now, is what happens to credit impaired names. And the exposure that you need to focus on is credit impaired names, which have an LTV over 70%. Now this number has grown and it now stands at $1.9 billion. But the ECLs against it have also grown, and they have grown to around $900 million. And if you go back quarter-on-quarter, that differential between the ECL number and the exposure sits around $1 billion number. So that's where you think your risk is. And of course, you have to see if some of the substandard names don't fall down and so on. So overall, I would say, given what we are seeing and particularly to notice that in this quarter, we had a stage 3 against one name, but the macro environment in Hong Kong was positive. And as a consequence, through IFRS 9 calculation, those 2 almost offset each other. So in that broader picture, we feel very comfortable with the 40 basis point guidance. Alastair Ryan: We will take Rob Noble at Deutsche Numis next. Robert Noble: Just on net -- sorry, noninterest income in 2026, what are the negatives in noninterest income for next year? So if you were to grow the same level, which was, I think, the low teens in 2025, you would blow through 5% revenue growth in '26, let alone in 2028. So why aren't you -- why are we much more positive on revenues than you're kind of sat now? And then secondly, just on Hang Seng, what's the difference in the local capital requirements in Hong Kong and the U.K.? Does the transaction change anything in terms of minimum group regulatory requirements and how we manage capital through the group? Georges Elhedery: Okay. Rob, thank you very much. Let me address your first question, and Pam may add to it and address definitely the Hang Seng capital question. So the 90% or more of our noninterest income, and therefore, our fee or other income is driven by transaction banking and Wealth. So looking at the dynamic in these 2 will give you a good perspective of how our non-NII is evolving. Transaction banking, we've reported full year growth of 4% year-on-year. We are seeing continued momentum in this space. We are a leader in practically all the aspects of transaction banking that we prosecute with our clients. We've been voted by 30,000 of businesses as the leader in payments, both in products, services and technology. We've been 9 years consecutively a leader in trade. We've been voted by corporates using foreign exchange as the leader in servicing them with foreign exchange. We continue investing in this space. We continue expecting resilience in this space, in particular in trade. And I can talk more to trade if desired. As you look at Wealth, Wealth remain unequivocally one of the strongest growth opportunities, in particular, one, given our footprint, where we are focusing on Asia and the Middle East and the underlying growth in Asia and the Middle East of Wealth is very strong and our ability to capture more market share is very strong. We're already a leader in Wealth in Asia, if you look at Wealth balances. And that's an area where we can benefit from this underlying structural growth opportunity. And second, Wealth because we are also accelerating our investments in this space. You've seen we've launched 26 or 27 wealth centers in 2025, taking the total to 64. We're hiring relationship managers, wealth advisers. We're empowering ourselves with generative AI wealth capabilities. We're building technology. We're creating a comprehensive set of products, and we continue investing in this space. So we do believe they remain -- Wealth remains a very strong growth opportunity, albeit we have dropped the guidance on that. And the idea is to give you an overall revenue guidance, which is better encompassing the overall opportunities and probably more relevant for your forecasting. Pam? Manveen Kaur: Thank you, Georges. So firstly, the only comment I'll make on Wealth is, as Georges said, we are very comfortable in our broad-based product proposition. But the only thing we need to remember is that this year, with how the markets have performed, therefore, on some of the Wealth that is generated through transactional kind of activity, we just have to see how that progresses in next year. We're not going to make a call out on how volatile or otherwise markets are going to be in 2026. So if there's anything that's what would have been a good consideration because we have to look at plausible downsides clearly in giving our guidance as opposed to just a base case or an optimistic case. So that's all I would say on that. Now from a Hang Seng capital perspective, we have already got the $3.8 billion benefit, which comes from the disallowed minority capital, which we don't need to have an impact on our CET1 anywhere. So that's a positive straight on. But generally, in a broader picture, across all our subsidiaries, which are 100% owned, we do have more flexibility in terms of how we move our capital, whether it's upstreaming or downstreaming, obviously, subject to what we consider the mark-to-market outlook is, where our portfolio is and subject to sort of regulatory discussions. So all in all, it does give us a better ability to move capital around the group and be more efficient in the deployment of capital. Alastair Ryan: The next question we will take again from the Zoom is [ Chen Li ] at China Securities. Unknown Analyst: I have a question about preservation of Hang Seng Bank. Could you provide further information about the growth opportunities? I want to know that in which aspects of the Wealth Management business will have more -- stronger synergies with Hang Seng Bank? And what are other outlooks for the Wealth balances and the Wealth Management margins? Georges Elhedery: Okay. Chen, thank you very much. I'll hand over to Pam, but remember what we said at the announcement on the 9th of October of our intent to privatize Hang Seng is these are commitments we are holding. Hang Seng Bank will retain its own authorized institution and governance. It will retain its own brand in Hong Kong, of course, as a major community bank and the largest local bank. It will retain an independent customer proposition that will compete in the market for all customers. It will retain its branch network. And that proposition will remain intact with a distinctive cultural strength and customer proposition, customer experience strength that Hang Seng has been known for, for practically a century in Hong Kong. What we are driving through these privatizations is better efficiencies in cross-selling or better efficiencies in aligning back office or manufacturing capabilities that are not related to the customer proposition. Pam? Manveen Kaur: Thank you, Georges. So firstly, as Georges has said, that the positioning of Hang Seng Bank as an iconic community bank in Hong Kong stays. What we will endeavor to do is that post the privatization, we don't have that arm's length relationship restriction that prevents us to do more in terms of product proposition offerings and cross referral to our customers and also in terms of the investment dollars that we spend, we can't spend them if it's on the same product, on the same customer journeys seamlessly across both the Red brand and the Green brand. So that gives us a very good position that as these 2 stand-alone brands, our ability to lean into the growth in Hong Kong and the macro opportunities, including cross-border will be available to the broadest customer base while maintaining that community element of service for those customers. So that's how we are looking at it. And we will look at, obviously, Wealth products as well as pricing margins so that we can really make them more easily available for our customers. Georges Elhedery: Chen, we are the market. We are the market leader in Hong Kong, undisputed. We are consolidating and cementing this leadership. Hang Seng Bank privatization will allow us to consolidate that leadership even further in all sorts of a broad range of products and services. And we have a leadership position in capturing these growth opportunities that Pam was talking about in Hong Kong as a super connector between the Mainland and the world, as poised to become the leading cross-border wealth hub on the planet before the end of the decade. And it's really a privilege to be in the position we are in to be able to capture this with the full HSBC and Hang Seng propositions. Thank you, Chen. Alastair Ryan: So I will take the next question from Ed Firth at KBW. Edward Hugo Firth: I just had two questions. One, just talking about the HIBOR benefit in Q4 for your net interest income. I think one of your peers talked about it as a temporary benefit. And I guess I'm not close enough to the franchises and how you price, et cetera, domestically. But I guess, do you know -- is there anything peculiar about you or some of the peers about the way you repriced CASA accounts or something in Q4, which would mean that yours should be sustained, but somebody else's might be temporary. So I guess that's the first question. And then the second question is, I guess, it's slightly an extension of Rob's question. I'm not quite sure what is so specific about 2028 that means you can get 5% revenue growth there, but I assume you don't feel you can before then. And I know that at the moment, in '26, we've got some headwinds from interest rates, but you've also got a very strong tailwinds around things like Wealth Management, Pam highlighted that. And '27, I guess, should be a reasonably normal year. So I'm just wondering, is there something that I need to think about that you can see that is happening from '28 and beyond that will make your revenue growth better that we're not seeing today? Georges Elhedery: Okay. Thank you very much, Ed, for your two questions. Pam, do you want to address that? Manveen Kaur: Yes. So let me just unbundle the situation with regard to HIBOR. So in the fourth quarter, HIBOR stabilized. And we had called out in the prior quarters that in 20 -- and I'll come to Q1 in a second. That in Q2 and Q3, HIBOR was very volatile. And we were looking at the comparison for a HIBOR close to a 1% where it has an impact of about $100 million in terms of banking NII on a monthly basis and then stabilizing to something which is in the 2% mark. We look at HIBOR on a 1-month HIBOR basis. We feel very comfortable as long as HIBOR is around 2.25%, 2.5% and so on. I fully recognize that in -- and I don't know what other peers would say, like what tenor of HIBOR rate is most relevant for them. I'm just telling you from our perspective. Now in Q1, HIBOR has fallen, but we have to see the context. There's been a range of IPOs that normally happens. When there's that demand for HIBOR fluctuation, but it has fluctuated within a narrow range. So the impact isn't there. Also, last year, in Q4, there was a benefit of lower betas. So when HIBOR went up, the same impact wasn't there on the savings rates. Of course, we'll have to look at betas, how they evolve. And then we have a very strong deposit franchise. And I think that's a differentiator in terms of the CASA level that we have, in terms of our accounts. And therefore, we have a good positioning where that deposit base helps us on the banking NII more than most of our peers. Obviously, in terms of both banking NII this year and also our ambition, it's the rate headwinds. And as I said earlier, it's the timing of the rate headwinds. If they're delayed, of course, it becomes less of a headwind. If they are earlier, then there is more sensitivity to it. So I would say from a Wealth business, as I also alluded to earlier, yes, the growth is very strong whether its asset management, Wealth products, insurance, it's broad-based growth. But last year, there was a great advantage or a tailwind coming from markets, which gave us a lot of uplift on the transactional-based fee income. We can't assume that for this year. Of course, if markets stay well and that happens, then that's a positive tailwind. So that's how I would look at it. Georges Elhedery: Yes. And I would look at '28, not specifically as the year '28, but as what would we believe our long-term structural opportunity to grow. It's our guidance for '28, but we've delivered 5% revenue growth in '25. We've delivered 4% in '24. So it's just the footprint we are in and the capabilities for us to capture the growth is there. Manveen Kaur: And we like to be cautious to we have to consider downside scenarios as well. We don't always take the best case. That's all I would add. Alastair Ryan: Many thanks. We have probably time for a couple more questions. We'll take Alastair Warr at Autonomous next. Alastair Warr: Two questions. Back to Hang Seng Bank, I'm afraid. You touched on potential upside from asset quality improving. I just wondered if that's something you're thinking about in terms of maybe more active steps? Or is this just about being patient with the property cycle? And then just on the Wealth side for a second question. It looks like there's a bit of a slowdown in the new account opening in the fourth quarter if you've got 1.1 million for the year and you were running at about 300,000 a quarter. Is that just seasonal or anything changing there that we should be aware of? Georges Elhedery: Thank you, Alastair. Pam, you can. Manveen Kaur: So just in terms of the asset quality, the comment I made was that if you look at Hang Seng's pre-impairment margins, they've been very strong. If you look at what Hang Seng's ECL charges have been prior to '22 versus in '24, '25 and even the run rate for the first half of the year and then what's consolidated for the full year, that's what I meant by the overall improvement, and that would be both for Hang Seng Bank as it would be for HSBC Red brand, and that's the only way to look at it. In terms of our own policies or processes and how we manage exposures, both for the Red brand and Green brand, they are highly aligned, how the rigor we follow through them, I don't expect any of that to give us either a tailwind or a headwind. So in terms of the new-to-bank customers, yes, it was 1.1 million, just to clarify for the Red brand. And the fourth quarter also had a good number. We believe that this new-to-bank customers is a huge growth opportunity for us. However, we are trying to be now a little bit more selective on the acquisition because we have now had a 3-year trend on how the acquisition has happened in between the lower end of the customer base and the more premier. We have added a fee for the new-to-bank customers who have a balance less than HKD 10,000. And because of that, we expect that there would be slightly slower acquisition in 2026. But the focus on our affluent customers is going to continue. The focus of the improvement in our overall income, whether it's through deposits, Wealth products, insurance is very healthy coming from these new-to-bank customers. So we don't see any change. We just don't want people to say that every month is going to be like 100,000 number because it's like almost like a ticker number because that's what the trend was. There will be fluctuations and changes month-to-month and quarter-to-quarter, but nothing material to call out as such. Alastair Ryan: We'll take Kendra Yan at CICC. Jiahui Yan: My question is kind of related to micro side. As the newly nominated U.S. Federal Reserve Chair has proposed interest rate cuts and balance sheet reduction. Could you please share your macro assumption behind the future 3 years guidance? And are there any risks that we need to pay attention to? Georges Elhedery: Yes. Thank you, Kendra. We can do that, Pam? Manveen Kaur: Yes. So just as I said earlier, Kendra, when we look at our guidance, we look at plausible downside scenarios. That include interest rate cuts, both quantum as well as duration. This time around, as we said, the starting point for the guidance for this year was the January year-end cuts, but we also stress test our portfolios on a regular basis for a range of scenarios. And we consider those and the impact on ECLs also on a weighted average basis when we look at our overall portfolios. We have looked at the -- some of the macro I would say, recent news, whether it's to do with private credit or otherwise because as I said earlier, we look at second and third order risks that may come from some sort of a macro event or issue, even though our own underwriting practices are very stringent and very rigorous in this respect. What I will say is that despite the evolving scenarios that you are facing on tariffs and trade, our business has been really quite resilient. And that has -- overall, it is up 2% year-on-year in 2025. In a complex market as this landscape evolves, our relationships and engagement with clients gets even stronger. We have taken market share in corridors through -- in Hong Kong, U.K., Asia overall as supply chains are moving and corridors are shifting. So I would say, overall, if I think in a macro sense, there are headwinds and tailwinds as well as for the world at large, but also for HSBC. We look at specific idiosyncratic factors that could impact us, any risk concentrations we may have in our home markets, and that's all part of our guidance. And that's why I said to you earlier or to the earlier question that when we give our guidance and our targets, we like to be rightfully conservative. But the most important thing is through this period, we have made an assumption that we will continue to invest for growth. We have the right strategy. We have the right priorities. We have the focus to retain and win market share and we will continue to do that with the basic underlying principle that Georges called out earlier, we are here to serve our customers, and it's the strength of our relationship with our customers that gives us the confidence for our guidance and targets. Alastair Ryan: Yes. Thank you, Georges. So we'll just take a final question today from Katherine Lei at JPMorgan. Katherine Lei: Okay. My question is still on revenue side, right? I think the 5% revenue growth in 2028 and then the above 17% RoTE guidance, I think there's 2 key drivers. One will be on NII and then the other will be on Wealth. But my question is that on NII, what is -- like what gives HSBC the confidence that on the sustainability of the deposit growth? Because one trend we noted is that, say, for example, in China, with RMB appreciation and also China start to taxing its citizen globally, will that actually slow down, say, for example, Chinese nationals coming to Hong Kong to open new accounts and then the money flow movement? So can we be more a bit specific on what are the key drivers and then the key path on the deposit growth? This is number one. Number two, I think is still on -- number two is on Wealth and on that trend, right? So what do you think that will have an impact on our Wealth as well? Georges Elhedery: Okay. Thank you very much, Katherine. Let me address them in reverse order. I'll speak a little bit about Wealth, and I'll share some thoughts about deposits and Pam can give you additional granularity to address your question. Wealth remains structurally a very important growth opportunity for HSBC, as we said specifically that we are aligning our Wealth footprint, Asia and Middle East to where the Wealth is growing fastest in the world in Asia and the Middle East. Also our ability to capture wealth all the way from the premier customer base, which is the affluent middle class all the way to the high net worth means we have a better catchment of all these opportunities. We're also present in a number of onshore markets such as China onshore. We are the leading international wealth manager in China, Mainland China onshore, which is not dependent to flows outside China, for instance. We're investing in India. We, of course, have big wealth hubs in places such as Hong Kong, of course, Singapore, the UAE and a number of other markets. The challenges possibly to anticipate is there is a turnaround or a change in the overall outlook of investment because inevitably, wealth will depend on the underlying performance of the invested markets. And if there is -- today, there is a strong resilience in these markets, which is what we -- our customers are also looking at. But that is, of course, always a risk that we need to be watchful of. We're also investing to gain share. We're investing to diversify the product offering and to diversify the wrapper offering all the way from insurance to asset management to other forms of brokerage, et cetera. So that we are able to meet the varying wealth customers' needs in how they look at their investment requirements. Finally, we're also investing in generational wealth, specifically supporting transfer to the youth or the next generation or transfer between wealth centers in a way our footprint allows us to do that is competitively very strong compared to a number of our peers who are offering wealth from very, very few number of hubs, okay? That's the wealth. Now with regards to deposits, Pam will give you a better answer in the details you're asking for, but let me tell you one thing about deposit. It is the foundational product on which our customers' trust is expressed with HSBC, and this is how we look at it. Customers trust us with their deposits. That's the starting point of any possible service and proposition in transaction banking, payment, financing and otherwise. So we cherish this asset class. We have always cherished it, through thick and through thin, in good rates and bad rates, and we will always focus on what it takes to make sure our customers trust us, the financial strength, the level of service so that we earn their trust with their deposits. When you look at our deposit base, it has grown in every business. It has grown, and we are highly surplus liquidity in every currency, every major currency, in every major geography. So there is a deep rooted across our 4 businesses and across all the geographies where we operate. a deep-rooted trust, which we nurture to support customers giving us their deposits and using us as their deposit bank by preference or by excellence that can support, if you want, our outlook on our deposit growth. Pam? Manveen Kaur: Thank you, Georges. And Katherine, a really good question to close on. We have seen deposit growth, as you've seen in our new disclosures on Wealth across the spectrum of our customer base, premier, private bank, retail in every market, in every jurisdiction, even when there isn't a home market, and that really underpins the growth that we are seeing in our banking NII. We have taken very conservative trajectory on loan growth. I'm hopeful at some stage, loan growth will also pick up, which will then also support the banking NII if from an interest rate perspective, the timing of the interest rate becomes a headwind in one of those plausible downside scenarios. We have a structural hedge, which is continuing to be a tailwind given all the work we did a few years ago. We will also continue to build on the structural hedge, even though the largest increases we have done are -- have been behind us now. So if I look at all of these things in the round, and I look at the momentum of the business that we have seen in the first sort of 7 weeks of this year, that gives us confidence for our banking NII guidance for 2026. If you underpin that just based on the fourth quarter, obviously, it will give you a number of [ $46 billion ]. But we are not calling that out because we are very cognizant of the headwinds on interest rates. And you're right, the interest rates in the U.S. is down 50 basis points, U.K., 25 basis points just year-to-date with further 2 to 3 rate cuts to happen. So with that, I think in the round, we feel very confident that the banking NII, which is, again, the trust of our customers and what we are doing everything to preserve that trust and to build on those relationships, because I'll just end with one thing. We are fundamentally a relationship bank. We have a full-service suite of products we offer to our customers. So for our guidance, for our targets, we look at that full range. We are not a product proposition-based bank, in which case, some of the comments you made will obviously be a bigger headwind. Georges Elhedery: Perfect. Thank you, Pam, and thank you, Katherine, for your last question. Thank you, everyone, for joining us. We are pleased to report strong revenues, strong profit, strong returns and strong distribution to our shareholders. We are confident we can navigate the challenges ahead of us from a position of strength, and this has allowed us to put ambitious targets about our revenue growing every year for '26, '27, '28 rising to 5% in '28 as well as our return on tangible equity delivering 17% or better every year over that period with a 50% dividend payout ratio, all excluding notable item. Thank you very much for joining us this morning or this afternoon, and I hope you have a good day. Manveen Kaur: Thank you. Operator: Thank you, ladies and gentlemen, for joining today's webinar. You may now disconnect.
Operator: Good morning. My name is Annis, and I'll be your conference call facilitator today. At this time, I would like to welcome everyone to the BTB Real Estate Investment Trust 2025 Fourth Quarter and Annual Results Conference Call for which management will discuss the quarter ended December 31, 2025. [Operator Instructions] Should you wish to follow presentation in great detail; management has made a presentation available on BTB's website at www.btbreit.com/investors/presentations/quarterly meeting presentation. [Operator Instructions] Before turning the meeting over to management, please be advised that some of the statements that made during this call may be forward-looking in nature. Such statements involve numerous factors and assumptions and are subject to inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections and other forward-looking statements will not be achieved. Several important factors could cause BTB Real Estate Investment Trust's actual results to differ materially from the expectations expressed or implied by such forward-looking statements. These risks and uncertainties and other factors that could influence actual results are described in BTB Real Estate Investment Trust management discussion, analysis and its annual information form, which were filed on SEDAR+ and on BTB's website at www.btbreit.com/investors/reports. I would like to remind everyone this conference is being recorded. Thank you. I will now turn the conference over to Mr. Michel Leonard, President and Chief Executive Officer, accompanied today by Mr. Marc-Andre Lefebvre, Vice President and Chief Financial Officer; Mr. Charles Dorais, Vice President of Finance; and Ms. Stephanie Leonard, Senior Director of Leasing. Mr. Leonard, you may begin the conference. Michel Léonard: Thank you very much. The year at a glance, we own $1.2 billion of real estate. Close to 60% of our value of the real estate was externally appraised in 2025. Regarding our investment activity, obviously, we're still focused on industrial assets with strong fundamentals, and we do have a pipeline in order to create opportunities to maximize the value of our portfolio. During the year, we disposed of 3 non-core assets, the first one in Quebec City, the second one in Saskatoon and the last one, a 50% interest in a retail property located in Terrebonne, Quebec. When we look at our leasing activity, the total amount of square footage under lease renewals and new leases concluded during the year is 742,000 square feet, of which 470,000 square feet represents the lease renewals with an increase in rent -- average rent value of 10.6% and new leases at 268,000 square feet. We concluded the year with an occupancy rate of 91.3%, a little bit lower than the year before and mostly caused, and Stephanie is going to get into this, but mostly caused by the fact that we weren't able to re-lease the property that is 132,000 square feet located in Laval, representing a little bit more than 2% of our occupancy. Regarding the densification, we're still active in changing zoning for certain sites that we own. And regarding the mortgage debt ratio, it lowered at 51.3% and the total debt ratio lowered again at 57%. Our payout ratio on FFO basis is 73.9% and on AFFO basis is 77.3%. ESG, we did release our ESG report, the second ESG report back in June '25, reporting on the activities for the year 2024, and our full report on ESG is available on our website. We did obtain during the year certification -- 13 certifications for BOMA BEST for the properties -- our properties located in the province of Quebec. It's not that we weren't active in the other provinces. It's just that the other provinces, the certifications were not up for renewal. So with this, I'd like to turn the conversation to Stephanie to go through the report on the leasing activity. Stephanie Leonard: All right. Good morning, everyone. For those of you joining us online on our online presentation, we are currently at Page 8 of the presentation. So as Michel mentioned, our total leasing activity, which is the combination of new leases and lease renewals, totaled 472,000 (sic) [ 742,162 ] square feet for the year, of which 260,000 were new lease transactions and 474,000 are attributed to new lease renewals -- to lease renewals. Just to note that I am rounding up or rounding down on these numbers. Out of our new lease activity, 116,000 were concluded in our suburban office segment, 110,000 square feet were concluded in our Industrial segment, and 42,000 square feet were concluded in our necessity-based retail segment. Out of our most noteworthy transactions this year, so for 2025, we concluded a new lease with Kraft Heinz Company, representing 80,000 square feet in our Industrial segment located in Montreal, a 30,000 square foot transaction concluded with Value Village in our necessity-based retail segment also in Montreal, in addition to a 30,000 square foot lease signed with XCMG Canada in our Industrial segment located in Edmonton, Alberta. It's important to note that all 3 of these tenants' leases came into effect the day after the previous tenant's lease ended, therefore, not affecting our occupancy rate in the sense that the transactions kept our occupancy rate stable. We swiftly replaced the departing tenants without any downtime, therefore, creating no new vacancy. In addition, these replacements resulted in an increased NOI for their respective properties. During the year, we also did see a couple of tenants that elected to expand their premises in our portfolio. For instance, the Government of Canada increased their office footprint with us by roughly 14,000 square feet in Quebec City, bringing their total occupancy just shy of 23,000 square feet over a 15-year lease with us. In addition, the City of Saint-Jean-sur-Richelieu, more specifically the local police station, increased their footprint by just under 4,000 square feet, bringing their occupancy to 23,000 square feet with us. And lastly, Field Effect software company increased their footprint by 3,000 square feet, resulting in a 19,000 square foot total footprint with us in Ottawa and in our suburban office segment. Our lease renewal -- our total lease renewal activity for the year amounted to 474,000 square feet renewed for the year, of which 252,000 square feet were renewed in our suburban office segment, 214,000 square feet were renewed in our necessity-based retail segment and 400 -- sorry, 7,422 square feet were renewed in our Industrial segment for the year. It's important to note that our lease renewal activity not only included leases coming to maturity during the year, but also lease renewals signed with tenants whose leases come to maturity in the years 2026 and thereafter. Therefore, we're actively working to solidify our tenancies prior to their expiry. Important lease renewals were concluded during the year with Aubainerie for 30,000 square feet in our necessity-based retail segment in Montreal. With Hewlett Packard for roughly 30,000 square feet in our suburban office segment in Montreal. Again, with the Government of Quebec for a CLSC representing roughly 27,000 square feet in our suburban office segment in Montreal. And finally, with Canada Post for our suburban office segment located in Quebec City, representing roughly 22,000 square feet. In terms of our rental spreads for the quarter, we achieved a 6.7% average increase in our renewal rate or 10.6% for the year, which outshines our yearly performance since 2023. We were able to increase rents in our suburban office segment by 5.8% for the quarter or 12.4% for the year. And for an necessity-based retail segment, we increased rents by 7.8% for the quarter and 6.4% for the year. And it's important to note that there was no industrial lease renewals concluded during the quarter. Our occupancy rate, as Michel mentioned, at the end of the year stood at 91.3% a 20-basis point decrease compared to Q3 2025. As mentioned, the tenant replacements that we did conclude do not impact our occupancy rate. Although our occupancy rate does not decrease, we do not see the impact of these transactions through occupancy. Therefore, our occupancy rate is not always indicative of the quarterly or yearly leasing efforts concluded. In addition, we're still carrying that 2.2% impact of our 132,000 square foot vacancy in Montreal. During last quarter, we announced that we were in discussions with the group for the entire premises. Since last quarter, we are still working with the client, but their scope is ever changing. And you'll understand by this, this is a large international tenant. In addition to this client, we do have others in the pipeline that are interested for part of the space. So at this time, we're still working with the client and working with new clients. The other impact on our occupancy rate can be noted by a 28,000 square foot vacancy that we recorded in Ottawa. This was a known departure by a Government-based tenant whose funding was unfortunately not renewed. Leasing efforts are well underway for their space, which is easily subdividable, which creates better opportunities in the market. The second impact to our occupancy rate is due to a 24,000 square foot vacancy in Edmonton in our Industrial segment. Avison Young is currently mandated to lease the space, and we do have traction on it. It's important to note that the tenant that was departing, they were building their own building. Therefore, that's why they ended up leasing. And lastly, we have another 33,000 square foot space in Edmonton, which the previous tenant was in recurring default of the lease. And in order to mitigate our risks, we elected to terminate the tenant's lease. These events are unfortunate, and sometimes we do have to make decisions to terminate leases, therefore, creating vacancies that we don't necessarily want but we need to in order to protect the REIT and to protect our rights as well. Overall, coming out of 2025, we were able to seize opportunities to protect our occupancy rate, increase and align our properties and solidify good tenancies for our portfolio. As 2026 is underway and with the return to office mandates, we're seeing sustained activity in our respective markets with good opportunities within the financial sectors as well, which we do hope to be able to capitalize on. And on this note, I would like to turn the presentation over to Marc-Andre for a financial overview. Marc-Andre Lefebvre: Thank you, Stephanie. Good morning, everyone. So the results for the year reflect healthy leasing activity and stable rental income, demonstrating the resilience of our business. For the fourth quarter, rental revenue stood at $32.3 million, a decrease of 1% compared to the same quarter last year. NOI and cash NOI both decreased by 4.4% and 5.1%, respectively, compared to the same quarter last year. Looking at cash same-property NOI, it decreased by 3.3% for the quarter compared to the same period last year. The quarterly decrease is driven by the industrial and office segments. The industrial segment was impacted by a planned departure at the end of Q3 of a tenant occupying over 24,000 square feet in Edmonton, also by free rent granted to a new tenant, XCMG in the industrial segment again and based in Edmonton and the impact of the new lease negotiated with the group of investors who purchased Lion Electric. Regarding the Office segment, the quarterly decrease is due to free rent granted to new tenants during the quarter in Ottawa and non-recoverable one-time expenses. Now looking for the year, NOI remained stable compared to 2024, while cash NOI increased by 1.9%. The increase in cash NOI is related to several factors, including: #1, a $1.1 million lease cancellation payment received by an industrial tenant with a planned departure at the end of the first quarter of 2026, a partial lease cancellation payment of $1 million recorded in the first quarter of the year from a tenant in the suburban office segment, and that space has already been re-leased. #3, a higher lease renewal rental rates; and four, a decrease of $0.7 million as a result of the dispositions concluded during the year. FFO adjusted per unit was $0.097 for the quarter, a decrease of $0.012 compared to the same quarter last year. This reduction was mainly driven by a decrease of $0.8 million in NOI. Adjusted -- AFFO adjusted per unit was $0.088 for the quarter, a decrease of $0.013 compared to the same quarter last year. For the year, AFFO adjusted per unit was $0.388, an increase of $0.007 compared to last year. The increase is mainly explained by a $1.5 million increase in cash NOI, a $0.5 million decrease in administrative expenses, a $0.3 million increase in expected credit losses and lastly, a $0.5 million increase in accretion of non-derivatives liability component of the convertible debentures. We maintain our distribution to unitholders at $0.075 per unit for the fourth quarter, which represents an annualized distribution of $0.30 per unit. The AFFO adjusted payout ratio was 77% for the year, a decrease of 1.4% from 2024. As previously mentioned by Michel, the value of our investment properties remained stable at $1.2 billion at the end of the quarter. BTB externally appraised 58% of its properties based on fair market value. So this exercise resulted in a loss of $4.7 million or 0.4% of the total portfolio value. The weighted average cap rate for the entire portfolio remained stable at 6.7% compared to the year-end 2024. During 2025, BTB disposed of 3 properties for gross proceeds of almost $20 million. Net proceeds were close to $14 million. This amount takes into account the balance of sale of $1 million related to the disposition of 1170 Lebourgneuf Boulevard, an office property located in Quebec City. We concluded the quarter with a total debt ratio of 57%. The weighted average term and average interest rate on our mortgage portfolio was 2.3 years and 4.5%, respectively. Finally, at the end of the quarter, we held over $5 million in cash and $25 million was available under our credit facilities for total liquidity over $30 million. So this completes our presentation, and we will now open the call to questions. Operator: [Operator Instructions] Your first question comes from Matt Kornack with National Bank. Matt Kornack: Just with regards to the industrial lease in the Montreal area, could you give us a sense as to what you think the potential timing would be as to whether you go with someone new or this existing international tenancy? Michel Léonard: It's a little bit difficult because what we find is that decision-making process is very, very long these days, especially with this international tenant. And so we've been very patient. And it's like -- it would be wrong for me to give you a date or a moment in which we believe that the property would be leased. But we do believe that during 2026, the property will be -- will find a user. Matt Kornack: Okay. And then maybe just more broadly for the portfolio as you look out over this coming year, obviously, the macro is always volatile. But do you have a sense as to whether there are any kind of known larger nonrenewals, any known larger potential leases, how we should think about kind of occupancy and your leasing spreads trending for the balance of the year? Michel Léonard: For the balance of the year, in our radar, there's only one lease that we know is not going to be renewed. It's in Ottawa. It's with the federal government. It's a department of the federal government that is basically consolidating somewhere else. And we haven't heard from the government whether they have another user in mind for the space. So the lease is up in -- at the end of August. And so we haven't begun any discussion regarding a user for that space. So the address of the building is 2204 Walkley Road, and it's roughly 100,000 square feet. And this would be the only -- so far, this would be the only known departure that -- of significant traction that we know. Matt Kornack: Okay. And then, I mean, the stock has obviously traded quite well. There's various things that work there. But can you give us a sense as to whether your capital allocation outlook has changed? I think, obviously, you still trade at a discount to NAV -- to your NAV, but it's maybe a little tighter than it has been. Would you look at equity as a potential way to grow the portfolio? Or kind of how are you thinking about growing BTB and making it a relevant or more relevant entity? Michel Léonard: Relevant or more relevant. That's nice. Thank you. The -- I mean, crystal balling this is, I think that you have a better crystal ball than we do on that front regarding public markets. But it is obvious that if we -- if the stock continues gaining momentum, we would be in a position that we could raise capital and finally continue on our growth after COVID. And this would be very important to us. And so we're hopeful that this opportunity may occur in '26 or in '27 for sure. And we've always stated that our goal was to be at 60% industrial and raising capital would definitely help us purchase industrial assets in order to get closer to our goal of being 60% industrial. So it's very -- your question is difficult to answer in the sense that it's crystal balling the market. But yes, you're right. We do enjoy good traction right now in the market. I think that money that was kept aside in -- for the last 4 years is probably jumping into real estate these days. And so we're hopeful that investors will recognize our value and that will help us, as you use the term to become more significant. Matt Kornack: Fair. And then just on the industrial focus. Obviously, the markets changed. Montreal, I think, in particular, is a little bit more challenging these days given some new supply and maybe weaker demand with Amazon and some of the other changes that have taken place there. But necessity-based retail seems to be exceptionally strong. Does that change where you'd want to be today? Or is it now the pricing to buy retail? So industrial is looking still kind of interesting from a scaling standpoint? Michel Léonard: Well, we've looked at 3 opportunities on the retail front in the course of 2025. And as you just stated, the cap rates are going down in the -- in acquisitions in the sense that what we thought that we could purchase at a 6.5% cap rate is now at 5.5% or maybe closer to 6% or one opportunity was at 5%. We sold the retail property that we owned at a 50%, interest at a 5.6% or 5.8% cap rate. I'm just going from memory, so please don't quote me on that cap rate. But I know it was -- the first number is a 5%. So we do -- I mean, we would look at acquiring more retail. We will not look at acquiring more office. On the contrary, we're disposing, but we're still focused on looking at industrial assets. And I know that right now, the -- and you're right in saying that they've built a lot of brand-new properties in the Montreal area, Greater Montreal area and -- causing availability. But we understand that some of those are being leased. So that's -- it is -- it seems to be performing. I don't think that the rents are in accordance with the pro forma rents that they forecast when it was time to put the shovel in the ground. I think that they've come down, and it's probably hurting the developer or developers. So overall, I think that given our cost of capital and so on, it's probably the right time for us to jump into industrial. If you remember a few years back, there are some properties that were sold at a 3.5% cap rate in the Montreal area. And those are no longer in existence because the 3.5% was something that like a ship on the ocean. So overall, I think that the market is coming back for us in allowing us to purchase industrial assets. Unfortunately, we need to reduce our cost of capital in order to jump into necessity base. And as you're probably aware or have read that necessity base were under retailed, whether in the Greater Montreal area or Ottawa or even overall in Canada. So that becomes a difficult segment to invest in when your cost of capital is as high as ours. Matt Kornack: That's fair. I mean, I guess, would it make sense then maybe to monetize if you can get something with a 5 in front of it from a retail standpoint and deploy that into maybe, call it, 6% to 7% stabilized industrial cap rate for good new product and do that accretively if you can't necessarily access the equity markets today? Is that a consideration? Or do you like maintaining that retail component? Michel Léonard: It is definitely a consideration, Matt. Operator: Your next question comes from Pammi Bir with RBC. Pammi Bir: Just a couple of maybe quick ones for me. Just on the Walkley building, have you started the re-leasing process there? And -- or is the federal government potentially looking to find another, I guess, department, as you kind of mentioned. So just kind of curious on that property. Michel Léonard: The answer is yes to both outcomes in the sense that we have mandated Colliers in order to seek new tenancy. We have tenants that have already walked the building, potential tenants. And in this case, we're -- as I mentioned, it's 100,000 square feet. And right now, we have a tenant that walked the property for 50,000 square feet. Regarding the federal government, they don't necessarily want to speak about it until 6 months prior to the end of their term. So we're getting close to it. And so we're hopeful that we'll have a conversation on that front. We read the papers as much as everybody on the call reads the paper in the sense that it seems that they're lacking space, that they don't know where to go back to their office space as a result of the mandate that the federal government has given to its employees. So we're reasonably confident that -- and we know that our property meets the criteria of the federal government as far as office taking. And so we're quite hopeful that they will look at seriously at our building. Pammi Bir: Yes. I guess it sounds like there's some optionality there or maybe some potential to get it back. But it is a rather large building. What would sort of be the ballpark impact to NOI if it is fully vacated, I think you mentioned at the end of August? Michel Léonard: I think an easy number to put is roughly $30 a square foot on a gross basis as the impact. Pammi Bir: Okay. And how would you sort of characterize the vacancy in that particular segment of the market? Michel Léonard: From what we understand from the brokers is that we are well located in order to find a new tenancy within the property. Stephanie Leonard: If I could also add, Pammi, our zoning for the building is quite generous. So it kind of opens up the landscape for us to be able to think about other users than a traditional, let's say, private sector office building. Operator: At this time, there are no further questions. Please go ahead, Mr. Leonard. Michel Léonard: Thank you very much for attending our Q4 '25 conference call. As you could see, we do have a good traction in '25, recording a good increase in rents regarding our lease renewals and the new leases concluded as well. The necessity-based segment is performing extremely well, as we've discussed on this call. The industrial assets, I mean, are very stable for us. But as far as leasing, we had some challenges, and we talked about it. And we saw that our SPNOI for the year has increased by 2%, which is still a good increase. And -- however, we saw that our necessity-based segment, we saw that the SPNOI increased by 6.9%. So overall, I think that we're on the right footing in order to go through 2026, and we are addressing our vacancies, and we definitely are hopeful that we are going to end the year on a higher note than the end of 2025. So thank you very much for attending this call this morning. We appreciate your support, and we'll see you really soon on our reporting of the first quarter of 2026. Thank you. Operator: Ladies and gentlemen, this concludes today's conference call. You may now disconnect.
Operator: Greetings. Welcome to the Atlanta Braves Holdings Fourth Quarter and Year-end 2025 Earnings Call. [Operator Instructions] As a reminder, this call is being recorded. At this time, I would like to turn the call over to Cameron Rudd, Vice President of Investor Relations. Cameron Rudd: Before we begin, we'd like to remind everyone that on today's call, management's prepared remarks may contain forward-looking statements. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. A number of factors could cause actual results to differ materially from those anticipated, including those set forth in the Risk Factors section of our annual and quarterly reports filed with the SEC. Forward-looking statements are based on current expectations, assumptions and beliefs, as well as information available to us at this time and speak only as of the date they are made, and management undertakes no obligation to update publicly any of them in light of new information or future events. During this call, we will discuss certain non-GAAP financial measures, including adjusted OIBDA. The full definition of non-GAAP financial measures and reconciliations to the comparable GAAP financial measures are contained in the Form 10-K and earnings press release available on the company's website. Now I'd like to turn the call over to Terry McGuirk, Chairman, President and CEO of Atlanta Braves Holdings. Terence McGuirk: Welcome, everyone, and thank you for joining our fourth quarter and year-end 2025 call today. With Spring Training underway, we are energized about the year ahead. I've been to our North Port, Florida spring training facility over the past two weeks and I'm pleased with the progress of the team and the pieces we have in place. Walt Weiss, our new manager is working hard in building team momentum as we look towards opening day. We believe we are well positioned with a strong roster in the organizational depth to be competitive this season. We continue to focus on improving our team with the ultimate goal of competing and winning another world series for our fans. As I stated on our last call, we are driven to return to our long tradition of winning and championships. And Alex Anthopoulos, our President of Baseball Operations, has done an excellent job navigating this off-season and adding some key free agents to the team. To that end, we're excited about the addition of Robert Suarez, who was just named by ESPN as the believer in baseball and will form one of the best back ends of a bullpen in the majors when paired with Raisel Iglesias. We also have Jorge Mateo and Mauricio Dubón, who both can play anywhere on the diamond and will be anchoring the shortstop position until mid-May. When Gold Glover and newly signed Ha-Seong Kim, returns from a finger entry. Dubon has also won a Gold Glove as a utility infielder in two of the last three seasons. We were also pleased to strengthen our formidable bullpen with the signings of Tyler Kinley and Joel Payamps. We are adding these talented players to an already elite roster that includes Reigning National League Rookie the Year, Drake Baldwin, Reigning Gold Glove winner, Matt Olson, former National League MVP, Ronald Acuña Jr., and former Cy Young winner, Chris Sale, who we signed to an extension earlier this week, along with the standout players and fan favorites, Austin Riley, Spencer Strider, and many, many more. Also, catcher Sean Murphy is recovering nicely from hip surgery last September and is making great strides towards rejoining the team in the early part of the season. We firmly believe we have all the pieces we need to make a postseason run this year and compete for a World Series title. And we're not alone in that belief. Fan graphs picked us to compete for a World Series title and named us the #2 preseason team in the entire majors in their power rankings just behind the Dodgers. Now let me address one more important issue that emerged as we started this year, local media broadcast. As you all know, the industry has been working through the ongoing saga of the decline of Main Street Sports. With Main Street out of the way, the Braves now have our local TV rights back and instead of going through a third-party regional sports network to monetize these rights, we will be stepping into the Main Street role in directly handling the distribution, production and revenue generation of the full season of gains ourselves. We are fortunate to have much of this expertise in-house at the Braves and are confident that we will be able to produce, distribute and deliver our games and additional Braves content in a way that is compelling and serves our fans very well. We have one of the largest television territories in baseball, spanning multiple states, which affords us the opportunity to optimize our financial outcome, a factor that provides us an advantage that no other Main Street team has. Our goal to be sure that every fan who wants to watch an Atlanta Braves game can do so. The demand for our product remains incredibly high, which makes the job of reengineering the distribution system much easier. Yesterday, we announced the launch of our new distribution and streaming platform, BravesVision, introducing our fans to the new platform for Braves broadcast. Before I turn the call over to Derek, I would like to thank our fans, our team, the entire organization for their continued support and efforts and recognize that it is through hard work and dedication that we continue to be one of the elite franchises in all of Major League Baseball and across all professional sports. With that, I'll turn it over to Derek to walk through our operating performance ticketing trends and outlook, including more detail on the local media rights topic. Derek Schiller: Thank you, Terry, and good morning, everyone. I will start with one of our most pressing topics as we head into the final weeks before the start of the regular season. For our organization, our priority throughout the whole process around media rights has been clear. We wanted to maximize reach and availability for fans, while protecting our economics given the popularity and value of our team. As Terry mentioned, we are excited to launch BravesVision, a multimedia platform owned and operated by the team, which will serve as the official home of our local television broadcast beginning this season. And bringing our broadcast back under control, our initial focus in 2026 will be our pregame show, our in-game presentation and post-game content. Importantly, we will maintain full creative oversight of the production, as well as the sales, marketing and distribution of the venture. We have an experienced team that is talented and motivated so we are confident in our ability to deliver for our fans and excited to see what our operating team can do. BravesVision will allow fans to watch us on multiple platforms, including many of the same television providers where fans are used to watching our games. With all games available on a streaming platform in partnership with MLB. Importantly, Gray Media will remain our partner. Starting already with spring training, Gray Media will broadcast 15 spring training games, a 50% increase after the successful partnership last year. In addition, Braves will partner with Gray Media to simulcast a selection of regular season games alongside BravesVision. These free over-the-air telecasts will be available on Peachtree TV's Atlanta's CW and Peachtree Sports Network in Atlanta and throughout the Southeast through Gray's network of broadcast stations. This broadcast partnership highlights the Braves commitment to engaging fans across Braves Country. In addition to local Braves television broadcast, the team will appear in nationally televised games this season with various MLB broadcast partners, including FOX, FS1, ESPN, TVS, NBC Peacock, and Apple TV. As we have said in the past, there is tremendous value in our expansive fan base and serving our fans is our top priority. We believe this is also in the best long-term interest of our team and our shareholders. With this resolution in place, our focus now shifts to execution, optimizing outcomes across subscriber reach, distribution, advertising and streaming options while continuing to ensure fan access. I'd like to turn now to last season and what we're taking it from as we head into the new year. Despite the season on the field in 2025, we delivered record-breaking regular season ticket sales and sponsorship revenue underscoring the enduring strength of the Braves brand and the unwavering passion of our fans and partners. We also sold the fourth highest number of tickets in the past 25 years, which reinforces the tremendous loyalty we have from our Braves country fan base. Heading into the 2026 season, we're encouraged by strong ticket demand, having already sold more than 1.9 million tickets across seasons, groups, hospitality packages and single game inventory. Our premium clubs continue to be sold out, and there is a robust wait list on all seasoned product offerings, exemplifying one of the most sought-after season ticket memberships in MLB. Within ticketing, we have also been able to optimize our process through a combination of pricing strategy, product segmentation and improved inventory management. We are continuing to invest in ticketing analytics so we can better measure demand elasticity by game, opponent, day of week and seating category. That work is already improving marketing efficiency and conversion helping us put the right offer in front of the right fan at the right time. Importantly, it also supports our premium and group strategy, which we view as meaningful leverage for revenue quality. Looking ahead, we are focused on improving our on-field competitives, while also building momentum in the Battery Atlanta as a multi-use destination that drives year-round engagement and revenue. We see our business and baseball strategies as aligned. A competitive team supports demand and our broader development platform supports durability across cycles. The Battery also continues to perform as a multi-use destination and our strategy centered on diversifying demand drivers and broadening our calendar to increase repeat visitation is working. With over 380 total events and concerts held in 2025, we reinforced the Battery Atlanta and Truist Park as a premier destination in the Southeast, even outside of the Braves home schedule. Of these 380, we hosted 144 events across the common areas of our campus, held 147 events at the Coca-Cola Roxy and added another 95 game day in Truist Park events. This breadth of year-round events is another shining example of why we believe we operate one of the most unique partnerships in professional sports. To that point, we continue to expand our nongame day schedule events throughout the season. As an example, after a successful 2-game series last year, we're excited to host the Savannah Bananas for three games this year, further expanding this unique experience at our ballpark. We also recently announced that we will be hosting Braves Country Fest on June 13 in partnership with Live Nation. This features performances by Cody Johnson, Ella Langley, Ernest and Mackenzie Carpenter, among others. And in addition, Noah Kahan will be performing at Truist Park on July 27. These examples then more reiterate our ability to attract top-tier events to our ballpark and campus throughout the year and we look forward to continuing our positive momentum with additional concerts, community events and other activations. Looking forward to 2026, we are confident on our ability to deliver to our fans across Atlanta and across the entire Southeast. We continue to focus on improving our fan experience at the ballpark, as well as the overall experience across our campus. The launch of BravesVision is something that we believe will be a defining moment for our franchise and our fans. Our expansive television market territory is one of the largest professional sports and gives our team options that few others do. With our media rights resolved ahead of the season, we are excited about the future this brings and focusing on creating the best possible product. With that, I'll turn it over to Mike to provide updates on the Battery and our real estate strategy. Mike Plant: Thank you, Derek, and good morning, everyone. Let me start by reinforcing Derek's comments on our real estate strategy. We continue to view the Battery as a long-term platform that diversifies our business, broadens our audience and supports durable growth over time. In 2025, we welcomed nearly 9 million visitors to the Battery mostly in line with our levels from 2024, even as baseball attendance was softer last season. For us, that's a strong indicator that our awareness is increasing, given all the events we've hosted and other offerings we've added around the Battery and that the destination value proposition is resonating beyond game days. From a tenant perspective, in the Battery, 2025 was a record year. Our tenants collectively achieved a new annual sales milestone of approximately $137 million across just 30 doors, which we believe ranks among the most successful mixed-use operations in the country. We also continue to strengthen our tenant lineup with the openings of the new Truist Securities building, walk on Sports Bistro and Shake Shack, among others. We are excited about J. Alexander joining the Battery in 2026. From a portfolio standpoint, PennantPark was a key contributor this year. We successfully acquired and closed the property and ended the year at approximately 90% occupancy, an impressive increase from the low 80% range at closing in April. In the fourth quarter alone, we closed just under 50,000 square feet of new deals and have a very strong tenant pipeline into 2026. Across the Battery more broadly, we had a strong year of continued transformation, including meaningful capital investments aimed at improving the guest experience and long-term functionality of the campus. The pedestrian bridge connecting the Henry project to the Battery is nearing completion, which will further enhance connectivity, expand our parking operations, and improve overall flow throughout our growing footprint. We are still opportunistic as we evaluate future transactions and believe our record speaks for itself as we look to optimize the portfolio over time. Importantly, we continue to command rent premiums across our retail, office and hotel assets, with rates above markets supported by demand, engagement and performance. Tenant engagement also remains strong. We continue to secure early lease extensions and receive daily inbound interest from prospective tenants, which gives us confidence in the depth and quality of our pipeline. From a financial standpoint, I'm pleased to report that mixed-use development revenue continues to perform well and represented approximately 13% of the company's total revenue in 2025. We are currently generating over $100 million in revenue on an annualized basis as our mixed-use development revenue continues to expand its role as a meaningful contributor to our team and franchise value. With that, I'll now turn over the call to Jill to walk through our financials in detail. Jill Robinson: Thanks, Mike. Before I begin, I want to remind everyone that a majority of our revenue is seasonal and is aligned to the baseball season. Our final 2025 home game was in the third quarter. We are pleased to report that 2025 was a strong financial year for our organization. Total revenue in 2025 was $732 million, this was an increase of nearly $70 million from $663 million in 2024. As a reminder, the company manages its business based on the following reportable segments, baseball and mixed-use development. Baseball revenue was $635 million in 2025, up from $595 million in 2024. This revenue increase was driven by a combination of increased event, broadcasting and other revenue. Baseball event revenue was $358 million in 2025, up from $348 million in 2024, primarily due to contractual rate increases on season tickets and existing sponsorship contracts, as well as new premium seating and sponsorship agreements, offset by attendance-related reductions in revenue. Broadcasting revenue, which includes national and regional revenue, was $189 million in 2025, up from $166 million in 2024. Other revenue was up by $8 million to $42 million in 2025 compared to $34 million in 2024, primarily due to events held at Truist Park, including two Savannah Bananas games. Next, our mixed-use development revenue was $97 million in 2025, a $30 million increase from $67 million in 2024. This was primarily driven by a $27 million increase in rental income due to new lease commencements and in-place leases acquired with PennantPark and, to a lesser extent, sponsorship and parking revenue. Adjusted OIBDA was $108 million in 2025, an increase of nearly $70 million from $40 million in 2024. This improvement was driven by an increase of $44 million in baseball adjusted OIBDA and an increase of $23 million in mixed-use development adjusted OIBDA due mainly to the increases in revenue in both segments and reduced baseball operating costs. Mixed-use development adjusted OIBDA serves as a proxy for net operating income. Additionally, we have invested in two Battery hotel properties as 50% joint ventures, which are accounted for as equity method investments. Our share of earnings in these investments is not included in mixed-use development adjusted OIBDA but still represents an important part of our operations. Our operating loss was $14 million in 2025 compared to a loss of $40 million in 2024. This improvement was primarily due to increased revenue, partially offset by a $30 million noncash impairment expense associated with the termination of the long-term local broadcasting agreement, and increased depreciation and amortization. As of December 31, 2025, the company had $100 million of cash and cash equivalents. Nearly all of our cash and cash equivalents are invested in U.S. treasury securities, other government securities or government guaranteed funds, AAA-rated money market funds and other highly rated financial and corporate debt instruments. And with that, operator, let's open the line for questions. Operator: [Operator Instructions] Your first question today comes from the line of David Joyce from Seaport Research Partners. David Joyce: Congratulations on standing up BravesVision. I was wondering what sort of OpEx or CapEx was reflected in your financials before sort of getting that up and running? Or is it more going to be reflected here in the first quarter? And then secondly, if you could remind us, please, on the blackout rules for the local TV and streaming opportunities. I know that your press release mentioned that there was some no blackout issues. But just remind us of that, please. Jill Robinson: David, this is Jill. In response to your first question about OpEx and CapEx for the broadcasting business, historically, we haven't shared information at that level in our financial statements. We do share with you broadcast revenue. So I really can't speak to that at this time. Looking forward, as we launch BravesVision, you should expect to see more detail about the financial results of this new operation starting in Q2. Derek Schiller: Yes. And I'll take the second one. It's Derek. The blackout rules and the way that we referenced them really pertain primarily to the streaming platform. So as we launch Braves.TV, which is in partnership with Major League Baseball. In effect, if you are a subscriber of Braves.TV, you can watch anywhere inside of the territory as part of our local broadcast opportunities. And should you leave the home television territory outside of the Southeast, our five, six state area. So long as you're a Braves.TV subscriber, you will be able to watch the Braves games wherever you travel inside of the United States. If you are an MLB.TV subscriber, so you have an out-of-market package, you can watch both inside and outside the territory, which is why we referenced the blackout restrictions the way that we did. David Joyce: Appreciate it. And if I could kind of follow on to the media rights aspect. Obviously, with the CBA coming up later this year and other leagues looking to redo their national rights deals. What are your updated thoughts on how things are evolving? And what's the probability that Major League Baseball would want to perhaps negotiate back these local media rights from you later on since they are handling a number of other teams? Terence McGuirk: This is Terry responding. Yes. As you know, our next national media opportunity is 1/1/29. That will be the next time all of our national rights come up. Rob Manfred, the commissioner, has been quoted, I think, in saying that our best opportunity to possible -- best opportunity would be to aggregate all of our rights like the NBA, like the NFL, like CACI. And that is still a strategy that is not clear yet as to how we'll play that. But the commissioner will be leading that negotiation and that strategy discussion among the owners, and we will surely keep our shareholders and our analysts up to speed when that happens. Operator: [Operator Instructions] Your next question comes from the line of Barton Crockett from Rosenblatt Securities. Barton Crockett: Let me see, one of the things that I -- just stepping back, I'm just kind of curious about in terms of the financial cash flow profile of the Braves this year versus years past. In this year, you just reported, you -- the free cash flow was, I guess, a negative $25 million or so, if I've got that right. And when you look ahead to '26, there's $100 million-ish or so of local broadcast revenue that might be somewhat less as you go through this transition, maybe, maybe not. And then you've got some incremental tax impacts that could be coming up from the tax laws that limit kind of deductibility of salaries to high-paid employees like your star baseball players. And so I was just wondering if you could talk a little bit about how you see free cash flow trending going forward? And if there's a deficit, how you see kind of financing that? And given your position as kind of a public company versus others where you've got the pockets of billionaires to kind of finance it, does this put any pressure on you guys competitively, do you think? Jill Robinson: Yes. Thanks for the question. As we think about cash flows, we do tend to think about this in terms of our two businesses, baseball and the real estate business. On the baseball side, what we've said on a few occasions is that our goal is always to reinvest the profits from our team performance and from the operations of baseball into the team. We believe the team is the biggest asset we have that can drive top line growth for the company, and that's generally what our focus is. Now that said, over the past couple of years, we have launched master planning project across the stadium, we're adding increased offerings to the stadium, specifically in premium areas and other hospitality areas we believe those things are already driving great returns and paying dividends for us. On the baseball side, we think of things a little bit differently as we're continuously evaluating opportunistic investments in real estate that we can add to our portfolio, similar to what we did last year on PennantPark. Now as you look forward, I think without disclosing too much here, you may see a difference in how the cash flow comes in with us running the business now as opposed to outsourcing the media business to FanDuel like I said earlier, you'll begin to see a little bit more of how that plays out when the business really begins to operate in Q2. Barton Crockett: Okay. But I guess I'll leave some of that aside. Maybe just one more kind of detailed question. I think there's been some discussion about the changes in tax laws around deductibility of high salary kind of employees and that being a new kind of tax impact for maybe a publicly traded sports franchise like the Braves that the privately owned franchises don't face. I was wondering if you could talk about the materiality of that for you guys. And given that there are -- there is at least maybe another corporate enterprise out there that has some teams that's publicly traded, is there any possibility for you guys to get together with others to lobby for that law to be treating both private and public ownership more fairly? Derek Schiller: It's Derek. I'll jump in on this one. We're obviously aware of the 162(m) issue that you're referencing. We've looked into it. We understand what's out there, and we're working on that. I don't think it's appropriate at this point in time to comment on that because we're still in the midst of those discussions and what we're trying to do with that. But certainly aware of what's out there and what we need to do to try to figure that out. Operator: And at this time, there are no more questions in queue. I will now turn the call back to management for closing remarks. Derek Schiller: So I'll close it out. It's Derek. On behalf of the entire management team, I want to thank everybody for participating in today's call, and we look forward to seeing you -- hearing from you again soon. We're 30 days from opening day. I hope you're all paying attention. We're excited to get the season started and look forward to seeing you on March 27 for our opener. Bye-bye. Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: Good morning, good afternoon all, and thank you for joining us today for Aena Full year '25 Results Presentation. My name is Sami and I'll be coordinating your call today. [Operator Instructions] I'll now hand over to your host, Carlos to begin. Please go ahead, Carlos. Carlos Gallego: Good afternoon, and welcome to our 2025 results presentation. This is Carlos Gallego, Head of Investor Relations. It's a pleasure to be with you again following our conference call last week regarding the regulatory proposal. Today, we are presenting our 2025 results, our Chairman and CEO, Maurici Lucena, will be hosting this session, together with our CFO, Ignacio Castejon and myself, who will review the main highlights of the results presentation, which you can already find both on our website and on the CNMV website. After that, we will open the floor to your questions. [Operator Instructions] Without further delay, I will now hand the call over to Maurici Lucena. Thank you. Maurici Betriu: Thank you very much, Carlos. Good afternoon, everybody. Thank you for joining us for the presentation of our annual 2025 financial results. It is a very important satisfaction for the top management to present these results because as you have seen in the communication to the market, they are record financial results. And it's our 3 year in a row that we achieved this record. And as Carlos said, this presentation follows the presentation we did last week regarding the DORA III Aena's proposal. So as usual, I will start with traffic. 2025 was also in terms of volume, the third year in a row with the highest traffic ever in Spain. We are very proud of this achievement and not only because of the volume, but also because we know it's very difficult to manage with a high quality of airport services such record volume, and we achieved both, the record of volume and I would say, a high-quality service -- airport services, excuse me. So in total, Aena Group traffic reached almost 385 million passengers. And in Spain, in the Spanish airports that belong to Aena, the figure was more than 321.5 million passengers. And as you also know, our traffic estimate for the present year for 2026 in Spain is an increase of 1.3% and to us, this is a natural estimate because we think that we have overcome the, let's say, overshooting phase of the traffic evolution after the pandemic. And now we enter into, let's say, more normal phase of traffic -- of airport traffic. And it's a combination of -- the way we see the economy, the way we see not only the Spanish economy, but very -- especially the economies of our principal foreign markets. I'm referring to the U.K., Germany, France and so on. And also that in 2026 and especially in DORA III, we will, in certain days in certain aspects, face constraints because the infrastructure -- because Aena's airports are approaching its -- or many Aena's airports are approaching its technical limits, and this is the strong reason why we propose within DORA III to enter into a very strong new phase of investment. I don't want to be dramatic in the sense that I think that these constraints on the side of our airports. I mean, they will exist, but they will not be very important. They just introduce subtleties in the way we are calculating our estimates for the future. If I now move to Brazil and to the U.K., you know that in 2025, our traffic in Luton was 17.6 million passengers. In Brazil, in one concession, almost 29 million passengers, in the other concession, almost 17 million passengers. And in terms of financial performance, I will just -- I would like just to highlight that our total revenue in 2025 was almost or reached almost EUR 6.4 billion. Our EBITDA was close to EUR 3.8 billion. And all in all, the net profit exceeds or exceeded in 2025, EUR 2.1 billion, which is a record. And as consequently, you know that the Board of Directors it was yesterday, proposed the payment of a gross dividend of EUR 1.09 per share. And on the commercial side, we experienced a very robust growth last year. I would like to stress that in the duty-free business line, for example, 3 lots, Canary Islands, the North of Spain and Andalusia-Mediterranean. These 3 lots ended 2025 above the contractual MAGs, and this is a very important achievement because this makes feel both very comfortable Aena and the duty-free companies. And as you know, we have just started the complete renovation of the food and beverage activity in Barcelona, in the Barcelona Airport. And on the real estate side, total revenue grew by 20 -- by 10.5% in 2025. And in the international arena, I think that we are -- we are satisfied because we are -- we would like to, if possible, to increase a little bit more the contribution of the international activity in the total EBITDA. But so far, we have achieved an EBITDA that in the consolidated figure was close to EUR 400 million. And I think that this is a significant EBITDA, and this is a satisfaction but because you know that we would like in the long-term to have a better balance between Spain and the rest of our international markets. And also concerning the international activity, I would like to highlight that by the end of last year, Aena obtained the most financing in the Brazilian airport sector. This will allow us to finance the CapEx of the new concession, the BOAB concession. And also internationally, you know that in December 2025, we acquired a significant participation in the U.K. in the -- respectively, in Leeds and Newcastle Airports. This is an achievement because we naturally feel very comfortable both expanding our activity in Brazil and in the U.K. because if we expand our activity, we set in motion our, let's say, extraordinary efficiency because of the functioning in the network. Okay. Now I move to financial issues. Last month, in January 2026, we launched a second bond valued at EUR 500 million with a maturity of 10 years. We are very satisfied with the financial conditions because I think that they demonstrate that in the bond markets where Aena was relatively virgin, we have very rapidly achieved the confidence of the market. And I think that the conditions of this second bond reflect the -- well, I would say that the financial assets of Aena. In terms of ESG, I would like only to mention that in 2025, Aena achieved a reduction of almost 75% of emissions of Scope 1 and 2 compared to 2019. And finally, I would like to just refresh the main messages associated to our DORA III proposal that we communicated last week. You know that the government of Spain through the Council of Ministers, they have a deadline in September 2026 to approve the definitive DORA III. And you know that our aim has been to translate into volume of investment, distribution among airports, the evolution of tariffs, OpEx, WACC and so on. We have translated, I was saying, our new cycle of investment in terms of the regulatory scheme. And this is -- this will be a complete different phase for Aena. It will be the first time in the last 20, 25 years that we enter into a very strong investment cycle. I would like to remind that in pure financial terms, this is good news because we will significantly increase our WACC, our regulated assets base in more than EUR 5.5 billion. And this is -- this should be the increase in the enterprise value. Of course, taking into account that the WACC, the OpEx, the risks and so on, they all are, let's say, reasonable. In other words, if the figures of the final DORA III approval by the government, along with the real Aena performance during DORA III, if all this makes sense, we will significantly increase the enterprise value. And this is good news, knowing that we face some risks, but we are very confident that the experience and our past performance demonstrate that we are a reliable company that will develop and materialize DORA III successfully. And you know that the key projects in DORA III, they cover the airports of Madrid, Barcelona, Malaga, Alicante, Tenerife Sur, Valencia, Ibiza, Lanzarote, Bilbao, Tenerife Norte, Menorca and Melilla. And in terms of the OpEx that I know very well that worries you, in my opinion, too much. But this regulated OpEx it is -- is just a consequence of how the economy is moving and the new phase in which Aena will -- into which Aena will enter. What do I mean by this statement? Well, I'm referring that the new OpEx is -- reflects the inflation, experience but experienced by the Spanish economy and by the way, by the world economy, the increase in the minimum wage and very specifically, the new resources we require to address the investment challenge, the increased traffic. The increased traffic also implies a little bit more OpEx, more regulatory requirements in terms of safety, maintenance and quality of airport services. This also costs money. And finally, you know that many of our airports are aging. They are aging well, but they are aging, and this means more open -- more OpEx to maintain them. And again, we have said this many times, but we are convinced that when you enter into a phase with important investment and important expansions of many airports, we have to compatibilize the new traffic, new record volumes of traffic in the future with the investment. So to compatibilize successfully these both very important ingredients, this future record traffic with the CapEx, the expansion of the infrastructures, we need a little bit more of OpEx. And for Aena, it's been, let's say, a lesson what has happened in recent years in Palma de Mallorca. The renovation, the whole renovation of the airport has been a success, but we have learned that will be -- that all the rest of things being equal, we need to spend a little bit more money to ensure that the passenger experience is better than it has been in Palma de Mallorca. In Palma de Mallorca, we will finish the renovation before expected. It will cost a little bit less than expected, but one lesson learned has been that for the future expansions of airports, we will need a little bit more money, just a little bit more to increase the passenger experience. And finally, you know that our WACC is simply a consequence of the turn of the monetary policy across the world. And finally, our average increase proposed all in all, is just EUR 0.43 every year. This regardless of the -- this boring and I don't know how to describe is noise that made by the airlines. When you compare the increase we propose with the increase in the prices of flight tickets, well, I think that this is perfectly eloquent of the difference. And regardless of this very modest increase we propose in terms of airport charges to cover this complete transformation of Spanish airports that will endure 3 decades, these new airports. I think that they will be used in the coming 3 decades. Regardless of this increase, the charges of Aena's airports in Spain will remain highly competitive. And particularly, they will remain the most competitive aeronautical charges in Europe. And this is very good news, and this is a commitment that we will accomplish. And thank you very much, and we will join you back in the Q&A session. Ignacio Hernandez: Thank you very much, Maurici. Hi, everyone. This is Ignacio Castejon speaking. Let me go through some of the information that we have included in the presentation shared with all of you earlier today. Let's go to Slide 8 on traffic, on the Spanish platform, I would like to share with all of you that the traffic is mainly explained -- traffic growth, sorry, is mainly explained by the growth rates of the international markets. International markets grow at circa 6%, while the domestic market decreased by 0.3%. There might be many reasons related to supply and demand considerations impacting the domestic market, but that decrease is what has happened this year. With respect to the 6% growth in the international market, I would like to share that, as you know, long-haul market is still a much smaller segment than European or Spanish markets. However, Asia, Africa, Middle East and South America, LatAm have delivered growths of 41%, 19.5%, 13% and 7.4%, respectively. So very impressive growth rates in the long-haul market arena. If we look at Europe, our largest market, excluding Spain, our main 4 markets grow as follows: the U.K. at 4%; Germany, 1.8%; Italy at 9.2%; and France at 3.1%. Let's go to slide -- let's keep sorry on Slide 8, but let's have a look at the financial performance of the company in the following minutes. As mentioned by the Chairman, total revenue rise to -- by 9.5% up to EUR 6.4 billion Compared to 2024, thanks to the positive evolution of passenger traffic as discussed earlier, the continued improvement in the commercial activity, especially the revenue per pax growing to EUR 6.43 per pax and also the contribution coming from the international activity, especially one related to the construction services on the IFRIC 12, that is neutral of [indiscernible] standpoint. Excluding these IFRIC 12 accounting adjustment, revenue for the group would have grown at 7%. Let's move to Slide 9 on the cost. As we have been informing all of you through the year, total operating expenses have been going up, growing at a higher rate than traffic or even traffic plus inflation. Total operating expenses at group level grew by 11.1%, up to EUR 2,650 million with personnel expenses increasing by 8.8% and other operating expenses going up by 13.1%. If we exclude the impact of IFRIC 12 in Brazil, the increase would be materially different, would be 4.9% for the whole group. If we look at the Spanish network, total OpEx, total operating expenses grew by 6%, reaching EUR 2052.4 million. The increase, as in the case for the group, was driven by the increase in staff costs and also in other operating expenses. In the following slides, I will devote more time to other operating expenses for the Spanish network. But let me go to Slide 10 before in order to speak about EBITDA. EBITDA level reached EUR 3,785 million, sorry, representing an increase of 7.8% compared to 2024. This resulted in an EBITDA margin of 59.3%, 90 basis points lower than in 2024. The margin has been impacted because of the IFRIC 12 accounting rules. So excluding this impact, the EBITDA margin for the whole group -- for the consolidated group would have improved by 50 basis points to 61.4%. All in all, the net profit of the group rose to EUR 2,136 million. That's an increase higher than 10% compared to 2024, reflecting, sorry, the strong operating performance, the EBITDA growth, but also the impact coming from the new estimate and a change, therefore, in the useful lives of some of the fixed assets in Spain that has resulted into a more reduced or a lower amortization -- and depreciation and amortization expenditure of around EUR 68.5 million. Net cash generated from operating activities increased by 1.5%. However, this comparison is affected by the positive tax effect that we had in 2024 related to the offsetting of the losses from a tax standpoint, of course, coming from the COVID. The consolidated net debt to EBITDA ratio of the group stood at 1.46 well below the 1.57 recorded in 2024. In this sense, please let me recall that back in September, Moody's Rating Agency upgraded Aena long-term issuer rating and senior unsecured rating to A2 from A3. And 7 weeks ago, Fitch Ratings affirm Aena rating at single A. Let's move to Slide 11. If we look at the performance of the group by the different business lines, and let's start with the total aero revenue. This total aero revenue increased by circa 5% to EUR 3,346 million. The dilution, you know the revenue that we are not able to get basically comparing the rate that we are able to charge in 2025 has been EUR 100.4 million, so lower than the 1 in 2024. This dilution will be recovered in a couple of years, as you know, further our regulation. On the commercial activities contribution, please let me share with you a good first -- a good set of news because this is the first year in which we were able to exceed -- sorry, the EUR 2 billion figure in revenues for the commercial and the real estate revenues. On the international front, the contribution in terms of EBITDA coming from the international activities was EUR 383 million. Let's go to -- let's analyze in more detail the commercial performance. So let's move to Slide 16 and 17, if that's okay for all of you. So the Chairman and CEO have already highlighted the significant growth in sales that the company has had. Let me have a look at the ordinary revenue figures that have had an increase of circa 10%, 9.9%, with commercial revenue going up by 9.6% in the real estate business by 14.3%. As I was saying earlier, this increase is explained by traffic, but also by the unit revenue coming from the commercial and real estate activities, that has gone up from EUR 6.1 to EUR 6.4 per pax. There are several reasons why we think we are delivering this performance. Basically, the growth has been driven mainly by the material progress in the remodeling works and the additional commercial surface that we have added to our activities, especially in duty-free, where most of the works in Madrid and Barcelona are done. Also the introduction of new business concepts, the arrival of new brands that fit with our passenger profile, the more lucrative conditions of the latest contract that we have awarded, we'll cover that point later. The strong performance of the mobility-related services, car rental and parking, as you know, the continued increase in demand for VIP lounges and also the development of many real estate initiatives, especially in cargo and hangars. Let's discuss in more detail some of these business lines on the commercial front. If we look at duty-free, sales in this business line raised by 15 -- sorry, 0.3% with the total revenue for this business line, reaching EUR 535 million. Variable rents plus MAGs increased by 7.7% to EUR 433 million. As the Chairman was explaining earlier, we are very satisfied with the performance because we have 3 lots that have already exceeded the minimum annual guarantee rents. And we were short by around 10% in another lot. So hopefully, in 2026, once most of the commercial activities in the Palma Airport are finished, as explained by our Chairman earlier, we should be able to get closer to that MAG in that specific lot of the [ Valaris ]. If we look at the F&B activity, sales increased by 6.1% and unit sales by 2.1%. Total revenue grew by 8.5% to EUR 352 million, thanks to higher penetration rates, average and higher average ticket prices and also with having more commercial service available to our passengers. If we have a look at the mobility activity, car park total business grow -- revenue grew by 8.7% to EUR 221 million. And this is a very interesting piece of information because as we were saying earlier, domestic traffic have been going down. So all this performance is mainly related to the company making available more parking spaces and also how we are managing the ticket prices in this business activity. If we look at the car rental activity, sales increased by 6.7% and total business revenue by 23.9%, up to EUR 256 million. This fantastic performance is driven by the new contract that, as you now enter in operation in November 2024. If you look at the commercial performance in the last quarter of the year, I have read some of your opinions this morning, we are already taking into account the last weeks of 2024 with the new car rental activity, and that would explain why the car rental activity in the last quarter, mainly the last weeks of the year, the performance 2025 versus 2024 has shown a lower growth rate. And the main reason is because in those weeks, months of 2024, we were already -- the new contract were already binding and was already being taken into account in the -- in our accounts. VIP services, an amazing trend has continued through the whole year with total business revenue rising by 31.5%, reaching to EUR 104 million. The income per passenger has gone up by 26.6%. VIP lounges that account for 82% of the total revenue of the business line basically managed to deliver an increase in the number of our clients by 16% and the average ticket growth by 13%. Real estate, as I was saying earlier, an increase of about 41%, mainly driven by cargo hangars, but also the new contract terms and conditions related to our FBOs activity. Let's go to Slide 18, where we show the minimum annual guaranteed rents that the company has secured by contract. Please, let me remind all of you that we are not taking into account any renewal of contracts in this information. That's why you see a decrease in trend once we sign -- once that contract expires, all the MAGs related to that contract are removed from this information, but not the new contracts that might replace those future contracts. You can also see in this slide, information related to all the new awards that took place in 2025 related to Specialty shops and F&B, where you can read the material increases proposed and signed by our operators and concessionaires in those activities. Material increases are therefore expected in -- because of those units in 2026 according to the information coming from these tenders. Let's go to Slide 19 and 20. There, you can see some further information on the other operating expenses related to the Spanish network. As the Chairman was explaining earlier and as we explained last week, the trend related to other operating expenses in Spain is a trend in which those expenditures are going up, especially related to maintenance, security and PRM services. You will see that in the last quarter of this year, there have been some increases a bit higher in some of these categories than the one that you have seen in the first part of the year -- in the first 9 months of the year. And for example, in the case of PRM, they are related to contractual arrangements related to the whole year, not only to this specific quarter. If we move on to financial consideration, Slide 21, you will see some further information on the net debt and gross debt position and cash position of Aena, the mother company, but also the consolidated position. On the consolidated position, gross debt, gross financial debt have moved up. The reason behind that is basically the financial -- the financing that we have raised in Brazil, mentioned by the Chairman earlier, BRL 5.7 billion. And with respect to the ratio that I have also seen some of your notes earlier this morning, that you can see the net debt to EBITDA in the mother company has gone down materially from 1.59 to 13.1. That ratio in the consolidated group has gone down, has gone down to 1.46. And some of you were saying that, that was a reduction lower than the one that you were expecting. Please let me share with all of you that there is a significant amount of cash that has been invested in very short-term deposits in Brazil. So all that financing that we have raised. And according to accounting rules, we -- that -- and how we calculate this ratio, that cash is not part of this ratio. It's a short-term financial asset that because we are not planning to use in the next 90 days, from an accounting standpoint is not part of the item cash and cash equivalents. If we were taking into account all that cash, short-term financial assets, sorry, as part of our cash position, the ratio of 1.46 would be around 1.35, 1.36. I hope that now is more clear with respect to that item. Let me move on to the financial -- sorry, to the international platform. So I'm moving to Luton and Brazil, Slide 20 -- 22 for Luton. Luton Airport traffic grew by circa 5%. So 17.6 million passengers went through our facilities in the U.K. EBITDA stood at EUR 186.8 million, an increase of 20.3%. If we were removing the impact coming from a compensation related to the reconstruction of the parking structure, EBITDA would have grown by 11.1% at our Luton facility, still a double-digit increase in our London airport. Let's go to Slide 23 and 24 to talk about ANB and BO or BOAB. Passenger traffic in ANB increased by 5.7%, circa to 16.8 million passengers. EBITDA at that airport increased by 19%, high -- a very material increase with the margin also going up from 43.2% to 57.4%. This margin takes into account the IFRIC 12 accounting adjustment. If we were removing that adjustment, the EBITDA margin for 2025 would be 61%, a very high margin for our ANB activities in. If we go to Slide 24, passenger growth was 5.1%, reaching circa 29 million passengers in our concession in Brazil, in our BOAB concession in Brazil, with EBITDA growing by 13.1% to BRL 678 million. EBITDA margins are materially impacted because of the IFRIC 12 accounting rules. If we were removing that impact, EBITDA margin could be at 63.4%. You know that we keep executing our mandatory CapEx in that concession, especially in the Congonhas Airport, and we are planning to deliver all those construction works in June 2028 for that airport further to our obligations in our concession agreement. And please let me remind all of you that we managed to attract circa EUR 400 million from our international activities from BOAB and also from Luton coming from repayment of shareholder loans, but also coming from dividends and fees. And that would be at the end of my presentation. So I think we are ready to start the Q&A session of the conference call. Thank you very much. Operator: [Operator Instructions] Our first question comes from Tobias [ Froom ] from Bernstein. Unknown Analyst: Beyond what you've just said, could you remind us which other commercial contracts will be open for tender in the short to medium term, just to gauge the upside for commercial? Maurici Betriu: Thank you very much, Tobias, for your question. On the commercial front, as you know, we launched the advertising tender some weeks ago. The tender is moving on. The financial impact of the new contracts that would be signed following that tender would really happen in 2028 because as the advertising existing or the current advertising contracts for most of the -- our airports are expiring that year, except for the Palma Airport that is expiring, terminating this year. That's why we are launching this advertising lot altogether in this year. With respect to other commercial activities that we are planning to launch in the following weeks, there are some airports such as Malaga and Gran Canaria in which we are planning to renovate the commercial offer, and that will be happening through the year. Let me finish just stating or making the Chairman refer to the Barcelona F&B activity. That's a process that is -- has been awarded recently. And the financial impact of that process will be seen in 2026 because of all the MAGs that have been contracted for that activity. On the real estate activity, we are very active, as mentioned by the Chairman and also in my summary in cargo, in hangars, also other real estate actions that the company is launching. So there might be some financial improvement coming from that activity as well. And I think that would be a fair summary of what you might expect on the commercial front in the following months, Tobias. Operator: Our next question comes from Luis Prieto from Kepler. Luis Prieto: My question is the following. There is now full visibility on the CapEx plans for the next 5 years domestically. But could you please give us an overview of what this CapEx should amount to over the same period of time internationally, given the relevance of BOABs works and potentially Luton's expansion? Ignacio Hernandez: Luis, this is Ignacio speaking. With respect to Luton Airport, well, at this moment in time, the contractual committed CapEx that is mandatory to Aena Group through that subsidiary is mainly maintenance CapEx because the -- as you know, we are the concession holder in that airport, and our concession is expiring in 2032. So limited CapEx on that front. Having said that, Luis, as all of you know, there is a DCO that has been granted to the Luton Borough through the company called Luton Rising that DCO grants the possibility to expand that airport and the expansion could be material, taking into account the maximum level of capacity that has been granted according to that DCO. But that CapEx, as a result of that DCO is CapEx that wouldn't be mandatory or committed CapEx for that subsidiary of Aena Group. So at that moment in time, that is not CapEx that is part of our forecast. With respect to our willingness to participate in that expansion, as we have always seen -- said, sorry, getting involved in the expansion of Luton for Aena is something attractive, but always subject to the attractive terms and conditions. We are hopeful that, that will be the case because it would be a win-win situation for Luton, for Luton shareholders and for the Luton Borough. But that's still something that is ongoing and it has not been resolved yet. We are always available to discuss and try to reach a positive agreement with the grantor in that respect. But so far, that has not happened yet. With respect to our Brazilian assets, as we have been disclosing on ANB, most of the CapEx -- most of the material CapEx has been delivered, has been constructed by our subsidiary. That's why you can see in the presentation a material decrease in the slide, I think it's 23, CapEx figures for that subsidiary are very limited because most of the construction activity that was mandatory according to the concession sign has been done. However, in the case of Congonhas, as you were highlighting in your question, there has been an increase in CapEx, EUR 250 million in 2025. Total CapEx figure for that portfolio for all the construction activity, if I remember, well the figure, was a bit north of BRL 4 billion -- BRL 4.4 billion, around 50% was related to Congonhas and the other 50% related to the other portfolio of airports that are part of that subsidiary. Mandatory CapEx milestones, we have to deliver most of the activity of the construction activity, sorry, excluding Congonhas through 2026 and the one related to Congonhas, the milestone according to our concession agreement is by 2028. Sorry for my long answer, but that should provide all of you a good picture on the CapEx for the whole group. Operator: Our next question comes from Cristian Nedelcu from UBS. Cristian Nedelcu: My question is on the DORA III traffic forecast. Having in mind that some of the investor community out there has concerns regarding the risk of AI disruption leading to potential increases in unemployment rates on white collar. It seems to me that it's harder than usual to forecast the next 5 years of traffic. So having this in mind, could you tell us a bit how you are thinking about this risk in your traffic forecast? And is this a topic of discussion with CNMC or DGAC? Does this come up at all when talking about the traffic forecast? Maurici Betriu: Cristian, thank you very much for the question. That's an interesting topic that and we could be talking for hours on the different types of impacts that AI may have in airports, in the economy and in governments. So it's difficult for me when you are seeing those movements in the equity and debt capital markets impacting technology companies, software companies and many other industries to be specific about how that might impact traffic at Aena. And we have some impacts, some of them will be positive, other negatives. But at this moment in time, it is something that as a company, we are following as a senior management, management in the IT teams and of course, that we will take into account. Depends on the week and depends on the day of the week, you can see that one specific industry is impacted in one way or the other. These days, it seems that companies like Aena are being positively impacted because we are considered a hard asset company, transport company, but that might change next week because of how the sentiment evolves in the market these days. With respect to our conversations on this topic with the regulators, all the discussions with the regulators, as you know, are confidential because our consultation process with the regulators and the airlines is confidential. So apart from the information that we have disclosed about the CAGR on traffic and our general views on that evolution explained by the team last week -- by the senior team last week, we cannot disclose further details discussed with the regulators. Operator: Our next question comes from Elodie Rall from JPMorgan. Elodie Rall: So my question would be on OpEx. So clearly, you're guiding for OpEx to rise in particular in DORA III, but also in '26. It'd be helpful to have a magnitude or an idea of the magnitude of the increase in OpEx. Maybe you can start with a bit of a split in the different OpEx group like staff, supplies or the OpEx, that would be helpful to understand the moving parts. Ignacio Hernandez: Hi, Elodie. This is Ignacio. Thank you for your question. And of course, we can devote some time to the performance of OpEx for 2025, and we can also share some views and -- our views, sorry, on the future further to the information disclosed to the market last week on the DORA. If we look at 2025, and I'm referring to, for example, the evolution, the performance of staff costs or HR cost that we have delivered a growth of around 9%, if I am not wrong. Basically, what is behind that growth is what we have been trying to share with all of you. The company is adding more people. So the number of FTEs is going up, has been going up this year. And given the new cycle that the company is about to start in the following months, sorry, we will keep adding more FTEs to the company in many different fronts, operational, headquarters so that we can ensure that the delivery of our DORA III plans and our future strategic plan is -- happens in a positive manner for everyone. We are not only adding FTEs, but also the cost from a pure monetary standpoint is going up. Payrolls are going up. And the main reason is basically agreements affecting all of the staff of Aena. That's public information. That has gone up by around 2%. But also the company has signed a new collective agreement with the unions, and there are a number of initiatives that have been agreed by the company with the agreement of the unions, and that is also impacting our staff cost line at Aena level. And that's mainly what is behind the increase of that 10%. There are other elements that we don't control, such as the increase in the social security cost that this country and therefore, Spain has approved and because of all the increases in salary FTEs and the removing -- removal, sorry, of the caps on the social security front that are also impacting our line in this specific cost item. So this trend is something that has happened in 2025 that you have seen through all the quarters, and we don't expect a different change in this trend in the following months, Elodie. If we look at the other operating expenses that is the other big cost item and we look at 2025, you have information in the Slide 26 that we are projecting, but you also have the information on other operating expenses for quarter -- for the last quarter and for the first 9 months of 2025. And as we said some months ago, some cost items such as maintenance, security, PRM services, all these cost items because of growth in traffic, because of implementation of new regulatory requirements, because of increasing costs that we are seeing and that will be higher in the future in order to maintain the quality levels that we want to maintain and that are mandatory to us because of our regulation and that will be mandatory to us because of the DORA III, because of the congested infrastructure that we are managing in some cases, and that will be even more difficult in the future. Because of trends that we are seeing in the context of our industry, PRM, penetration rates of PRM, passengers per plane, per flight are going up. So the number of people that are requiring these services are materially going up, and therefore, that's impacting that activity. And finally, VIP lounges, we are -- as we were discussing through my remarks -- my earlier remarks, this business line has been one of the main reasons of the growth in the commercial revenues, but we are very serious about maintaining the quality standards that our passengers demand. And therefore, we are improving the service there. That's why you are seeing the increase in that cost item for the whole year about 32%. In this specific quarter, 38%. Why? Because of a new contract that has been awarded, if I remember well, in Madrid -- in our Madrid facilities. There have been a couple of positive movements in the last quarter -- one in this quarter and one in the third quarter of the year. That's why you can see there a decrease of EUR 28 million. If we were removing that trend, the increasing of our other operating expenses this year would have been a bit higher. So the trend is there. This trend, sorry, is there. I want to be very frank and transparent. The company is doing its best to be the most efficient company in the industry, and that is confirmed by the OpEx per pax levels that we disclosed last week and that we -- and that they are available if you want to have a chat with us. If you compare our OpEx per pax levels with any other airport operator that is comparable to us, we are the lowest by far. EBITDA margins are still on the very high side of the industry. So the commitment of the management is there. But we cannot neglect as a management team that the trends in the industry are changing, legislation is more demanding. The company is going to manage and is starting to manage big construction projects, and that's impacting and will be impacting the cost items, the OpEx cost items of the company has impacted and will be impacted in the near future. Operator: Our next question comes from Harishankar from Deutsche Bank. Harishankar Ramamoorthy: Just one on the change in the policy on useful lives, if I may. When I look at the tables that you've provided in the reports, I think the one visible change is on other installations and housing, but that's probably not the key driving factor here. Maybe is it that you've moved the needle within the broader range of useful lives in each category, and that's what is prompting the EUR 6 million to EUR 9 million of reduced amortization. Maybe if you could give us some color there on what prompted this and how material is this in the context of different categories of assets? And also, how much of this EUR 6 million to EUR 9 million goes towards the regulated segment? Ignacio Hernandez: Thank you, Hari. This is Ignacio speaking. Happy to clarify your question on -- related to the assets. The company manages and monitors all the asset lives. Basically, our infra team is monitoring those asset lives. And when we identify potential deviations between the accounting tax lives of the assets versus reality, we launched a specific report with the support normally of third parties in order to confirm that what we are seeing in reality is an industry -- is also happening in the industry. So that has been the case this year. We have seen that in some of our assets, useful lives were longer than the ones that we are using for accounting and tax reasons. With respect to the assets, sorry, that have had the largest contribution in terms of reduction of the depreciation expenditure has been the one related to surface access and also the ones related to aprons and the pavements in the air side. Those have been the ones that have moved the needle. So I will check the annual accounts, but I think that was clear. Sorry, it was not clear from your reading, Hari. With respect to the asset regulated base, basically, asset regulated base follows -- generally speaking, follows accounting rules. So this potential reduction in the depreciation expenditure this specific year, this might be resulting into a higher asset regulated base at the end of the year than the one that we were expecting before this adjustment. Taking into account that this adjustment this year is getting -- has been -- has accounted for EUR 68 million, next year will be a bit lower. So it will not be an adjustment that -- will not be a recurring adjustment as material as the one that we have seen this year because it will get lower and lower in the following years. Thank you for your question, Hari. Operator: Our next question comes from Andrew Lobbenberg from Barclays. Andrew Lobbenberg: This one, I suspect, is for the bus and not meaning to excite you. But if we can look back to the episode at the end of last year where there was the effort by the PP to put through this legal case through the Senate that was going to stop your tariffs increasing, but then it was cut off and it didn't get passed through the Congress, which makes complete sense to me. I mean, watching that whole episode, I was bewildered. How did it happen? Why did it happen? Why were you being treated as a political football, at least that's what it looked like to me. And I mean, why did it happen? And how much confidence can you have that you're not going to have some random regulatory or political intervention in the coming year as we work through the DORA process? Sorry if it's a bit vague, but I think you get the question, I hope. Maurici Betriu: Thank you for the question. This is Maurici Lucena. Well, probably this is a very good question. I just think that the general sentiment in Spain is that airports work very well. And regardless of the noise, especially the noise that comes from the airlines, I think that the politicians agree with this good functioning of the airports. You know that in Spain, the air -- well, the airports and the air activity is even more important than in other countries because of its very high weight in terms of the economy because we are a very touristic country. And as a single sector, tourism is the most important sector within the Spanish economy. So -- and everybody knows that for the tourism to function well, they need planes and they need airports. So I think that this ultimately protects the airport model. The PP -- the Popular Party initiative was very weird and bewildering as you've said, because the Popular Party is the father of the regulatory framework. So this is what really surprised me. And we have -- and I personally, we have publicly acknowledged the -- well, let's say, the good decision that this new framework signified back in 2014. So I think that now that it is clear that Aena is entering a very important CapEx cycle with the renovation expansion of many, many airports I think that everybody is, let's say, more aware that the model needs to be robust because Aena, and I personally, we have said that we need this model to be robust, solid, protected because otherwise, we could not enter into this new investment phase. I think that we have had strong reminders by our private shareholders, especially TCI. We publicly answered the concern of TCI. We were crystal clear. So all in all, answering directly your question, I'm very confident that this won't happen again because I think that saying it, in other words, too much is at risk. And I think that this risk is now more clear than it was when the Popular Party surprisingly launched this political initiative. So -- and the government, the Ministry of Transport, the President, the government, they are all very aware that the model functions well, that Aena is a very good company and that it means we need trust, we need stability because what we will do in the coming 10 years is very important, both for Aena, but especially for Spain. Thanks. Operator: Our next question comes from Dario Maglione from BNP Paribas. Dario Maglione: Just a quick one, a follow-up. So it's a bit technical. On the D&A, you mentioned the EUR 69.6 million lower D&A. Most of it is in the Aviation segment. So D&A for the Aviation segment for the full year was EUR 557 million for 2025. What shall we expect in 2026? Ignacio Hernandez: Dario, this is Ignacio speaking. I think we are -- if you are referring to the savings on the depreciation expenditure in 2026, that's a number that we have estimated. That's a number that we know is lower than the EUR 68 million, significantly lower. And that's how I would answer your question, Dario. Dario Maglione: Okay. So it should be a lower depreciation compared to 2025? Ignacio Hernandez: You are referring to the total amount of amortization, Dario? Sorry, based on your follow-up, I just want to confirm. You are referring to the total amount of the expenditure or the impact that we had this year, just to clarify Dario and avoid confusion. Dario Maglione: The total amount in 2026 for D&A. What should we expect? Ignacio Hernandez: Okay. Sorry, my answer was related to the specific impact that I was explaining in my previous question. Dario, I would assume a very similar level of depreciation and amortization for 2026 to the one that we have had in the 2025. Operator: Our next question comes from Marcin Wojtal from Bank of America. Marcin Wojtal: Yes. My question is again on DORA III, if you allow me, what are the next steps, if you could remind us? And should we specifically expect any feedback from a CNMC or DGAC on your DORA III submission before the summer, perhaps like a draft determination or some commentary that would be released publicly? Or we are essentially waiting for the final publication in September, and there is essentially one publication and nothing comes before that. Ignacio Hernandez: Marcin, this is Ignacio speaking. Sorry, I was on mute. Well, the company has been working in a very diligent manner in order to speed up the process as much as possible with a very long consultation process that started right after the summer of last year. So it has been a long consultation process, but our goal has been putting all the information about our proposal available to the different stakeholders and regulators as early as possible. There is a deadline for the cabinet that is the end of September. That's a formal deadline included in the regulation and that's the date that is there. With respect to other reactions coming from supervisors or regulators, in the previous DORA process, in the previous DORA II process, there was a non-binding report, if I remember well, published by the CNMC discussing a number of items related to the proposal that became publicly available. I understand that, that is going to be the process this time as well. With respect to specific days, publication dates of that report, let's -- I cannot be definitive in that matter. Let's wait. Let's be hopeful that given that we have shared that information a bit earlier than the previous year, we can have those report -- those non-binding reports becoming available a bit earlier than in the previous process. You were also asking about next steps or next milestones. As explained by the Chairman in his opening remarks, there will be a process now of setting information with the different regional coordination committees or discussion about the specific projects that will impact and will benefit the regions. Thank you, Marcin. Operator: Our next question comes from Jose Arroyas from Santander. José Arroyas: I wanted to ask you about the commercial revenue per pax trends in connection with the information you provide on Slide 32. In the presentation or throughout your presentation, you explained that the reason for the slowdown in Q4 was largely due to car rental, and that was very clear. But I wanted to ask you specifically about the slowdown in the revenue per pax trends in duty-free and in specialty shops, any trend you can highlight to us? Maurici Betriu: Thank you, Jose Manuel. And thank you for the question. With respect to specialty shops, I think that's a business line within the retail arena that is the one that has been, I would say, the most impacted because of disruption of e-commerce, et cetera. And also because within that business line, we have some activities that are, for example, exchange -- currency exchange, sorry, I was thinking in Spanish, apologies for that. And that is being impacted a lot as well. So the trend is there. What we are trying to do is also providing a hybrid concept. So mixing the retail concept of duty-free F&B and specialty shops to avoid or to try to maximize the return coming from the 2 business lines that we are seeing the most exciting or the most promising ones such as F&B and duty-free in that front. With respect to duty-free activities, it's true that this quarter, the performance has been a bit lower than in other quarters. There might be some accounting adjustment because this is the month, the end of the year when we take advantage in order to adjust the 12-month minimum annual guaranteed rent for the whole year, and there are some adjustment there. Also, the months of the year -- this quarter of the year is not the summer part of the year. So the trend is also a bit more negative. Having said all that, if I look at the sales in the duty-free activity still at double digit. If I remember well, Jose Manuel, was around 13% of sales increase that compared to traffic or compared to other activity levels of the company has been very, very high. Let's see how 2026 evolves. We are confident that a duty-free line for 2026 should reflect the new openings in Palma. This news -- this summer season for Palma for duty-free now that all the duty-free units will be opening that airport will be positively contributing to this business line. And that has not been the case in 2025, regardless of the very last weeks of the year that are very low season for Palma. Thank you for your question, Jose Manuel. Operator: We currently have no further questions. So I'd like to hand back to Carlos for some closing remarks. Carlos Gallego: Thank you, Sami. As there are no further questions, we would like to conclude today's call. The Investor Relations team remains at your disposal for any additional information or clarification you may require. Thank you very much to all of you, and have a great afternoon. Thank you. Operator: This concludes today's call. We thank everyone for joining. You may now disconnect your lines.
Operator: Welcome to Hayward Holdings Fourth Quarter 2025 Earnings Call. My name is Carrie, and I will be your operator for today's call. [Operator Instructions]. Please note that this conference is being recorded. I will now turn the call over to Kevin Maczka, Vice President, Investor Relations and FP&A. Mr. Maczka, you may begin. Kevin Maczka: Thank you, and good morning, everyone. We issued our fourth quarter and full-year 2025 earnings press release this morning, which has been posted to the Investor Relations section of our website at investor.hayward.com. There, you can also find the earnings slide presentation referenced during this call. I'm joined today by Kevin Holleran, President and Chief Executive Officer; and Eifion Jones, Senior Vice President and Chief Financial Officer. Before we begin, I would like to remind everyone that during this call, the company may make certain statements that are considered forward-looking in nature, including management's outlook for 2026 and future periods. Such statements are subject to a variety of risks and uncertainties, including those discussed in our most recent Forms 10-K and 10-Q filed with the Securities and Exchange Commission that could cause actual results to differ materially. The company does not undertake any duty to update such forward-looking statements. During today's call, the company will discuss non-GAAP measures. Reconciliations of historical non-GAAP measures discussed on this call to the comparable GAAP measures can be found in our earnings release and the appendix to the slide presentation. All comparisons will be made on a year-over-year basis unless otherwise indicated. Additionally, I'd like to highlight a change in accounting principle. During the fourth quarter of 2025, we changed to a preferred presentation of warranty costs from SG&A to cost of sales. This change has no impact on net sales, operating income, net income or adjusted EBITDA. The change has been applied retrospectively to all periods presented and affects cost of sales, gross profit and SG&A expense. Tables outlining this presentation change are included in our earnings press release and in the appendix to the earnings slide presentation. I will now turn the call over to Kevin Holleran. Kevin Holleran: Thank you, Kevin, and good morning, everyone. It's my pleasure to welcome all of you to Hayward's fourth quarter earnings call. I'll begin on Slide 4 of our earnings presentation with today's key messages. Hayward delivered strong fourth quarter and full year 2025 results, outperforming expectations and extending our momentum. Our team executed at a high level across the organization, translating into sales and earnings growth, continued gross margin expansion and robust cash flow generation. I'm pleased to report that our net sales increased 7% in the fourth quarter against a very strong prior year comparison. Gross margin expanded and adjusted EBITDA increased 4%, demonstrating our ability to drive profitability even as we continue to invest in the business. Our full year performance was strong across all key financial metrics. Net sales increased 7%. Gross margin achieved a record 48% and adjusted EBITDA grew 8%. These results underscore the success of our business development strategies and the durability of our aftermarket-driven model. Cash flow generation was exceptional, enabling a further meaningful reduction in net leverage to 1.9x by year-end. At the same time, we're executing on our strategic priorities. We're investing in innovation, operational excellence and customer experience while maintaining a strong financial profile. These actions are strengthening our competitive position and supporting long-term value creation. 2025 also marked the 100-year anniversary of Hayward's founding in 1925, a remarkable milestone and testament to our resilience. It was important to us that we honor that legacy with strong performance in our centennial year, and I'm proud to say we did exactly that. As we enter our next century, we do so with a solid foundation for future growth and an unwavering commitment to our customers. Looking ahead, we enter the new year with confidence in the strength of our business and our ability to execute our strategic growth initiatives. For the full year, we expect continued sales and earnings growth with net sales increasing approximately 4% and adjusted diluted EPS increasing approximately 6% to 12%. Turning now to Slide 5, highlighting the results of the fourth quarter and full year. Net sales in the fourth quarter increased 7% to $349 million against a strong prior year comparison of 17% growth. Gross profit margins continued to expand and adjusted EBITDA increased 4%. Adjusted EBITDA margin of 29.4% was reduced largely due to the increased variable compensation costs associated with better-than-expected performance. Adjusted diluted EPS increased 7% to $0.29. For the full year 2025, net sales increased 7% to $1.122 billion and adjusted EBITDA increased 8% to $299 million, each exceeding our most recent guidance. Profitability was strong with gross margin increasing to 48% and adjusted EBITDA margin increasing to 26.7%. Adjusted diluted EPS increased 15% to $0.77. Overall, this performance reflects solid growth and margin expansion, balanced against targeted strategic investments in the business to support long-term value creation. Turning now to Slide 6. I'd like to share some strategic accomplishments from the year. 2025 was an important and successful year for Hayward, our centennial year and one in which we delivered on our financial commitments while further strengthening our position as a premier company in the industry. I'm extremely proud of our team's performance, and I want to thank all of our valued customers and vendor partners for their efforts throughout the year. Our aftermarket model focused on serving a large installed base of existing pools with regular equipment replacements and upgrades represents roughly 85% of our total sales and continues to prove its resilience. We generated another year of solid growth and profitability through a challenged macroeconomic backdrop in which new pool construction in the U.S. approached post-GFC lows. From a financial standpoint, we delivered robust growth in sales and double-digit increases in both adjusted diluted EPS and free cash flow, enabling a meaningful reduction in net leverage to 1.9x. At the segment level, North America delivered record margins. Canada continued its strong performance, and we were very pleased with the performance of ChlorKing in the first full year of ownership, strengthening our position in commercial pool equipment. Europe and Rest of World showed a solid recovery in sales and margins, reflecting the benefits of our organizational realignment and operational focus. As I reflect on the post-pandemic period for the industry, we have now delivered 2 consecutive years of top line growth aligned with our long-term algorithm, 6% in 2024 and 7% in 2025, alongside meaningful margin expansion and balance sheet delevering. Further, looking back to before the pandemic, our 6-year CAGRs from 2019 to 2025 are approximately 7% for net sales and 10% for adjusted EBITDA, underscoring the sustainable organic growth trajectory we believe our business can deliver over time despite some year-to-year variability. Beyond our financial results, we executed on key strategic growth initiatives to further strengthen the foundation for Hayward's next century of growth. As a technology leader, we increased our disciplined investments in research, development and engineering to support growth-enhancing innovation. We launched several differentiated products during the year, including the introduction of OmniX automation ecosystem. I'll discuss this in more detail on the following slide. Hayward has a long-standing culture of operational excellence and continuous improvement, and we demonstrated our capabilities again in 2025. We successfully mitigated the impact of tariffs, realigned our supply chain and continue to derisk our sourcing footprint while making strategic investments in automation and productivity. We also continue to elevate the customer experience. We recently expanded the network of Hayward hubs, opening one in California in the fourth quarter, and our fifth hub is scheduled to open in Florida soon. We also increased training and support for dealers and trade professionals. After a successful pilot program, we are now scaling up the use of AI-enabled technical service agents to improve efficiency and service quality for our customers. These efforts are supporting successful dealer conversions and share gains. Turning now to Slide 7. Last year, we first introduced you to OmniX, an industry-first automation platform providing wireless connectivity and app control for a suite of products without the need for central controller. This strategy directly addresses the need of the approximately 3.5 million U.S. pools with little or no automation, offering a seamless path to modernization. Today, I'm excited to share another key step in building out the OmniX ecosystem. Now every new Hayward variable speed pump and gas heater is OmniX-enabled. As homeowners replace older equipment, they will get automation as standard, lowering the barrier of large upfront cost and making aftermarket upgrades more accessible. With more OmniX-enabled products on the horizon, our ecosystem will continue to offer robust aftermarket upgrade options, driving further growth and giving pool owners even more ways to enhance and enjoy their pools over time. Additionally, our new OmniX products feature a common intuitive universal display. For pumps, this also includes universal communications, supporting seamless aftermarket integration with existing non-Hayward automation systems. On Slide 8, innovation in the aftermarket remains core to our strategy given the large addressable market for efficient connected products. Here, we showcase several new products, each designed to unlock significant aftermarket upgrade opportunities for Hayward either by providing access into new product categories or by broadening compatibility with competitive systems. Starting on the left-hand side of the slide, we've expanded our variable speed pump line with superior performing OmniX-enabled 4-horsepower models for large residential and small commercial pools. This is a key established segment of the pump market not previously served by Hayward. Our new ColorLogic LED landscape lights allow homeowners to create coordinated custom color effects across the pool, spa, water features and now their surrounding landscape. The TracJet pressure cleaner shares many of the same performance elements as our successful TracVac suction cleaner, fast cleaning and improved access to hard-to-reach spaces. Entering the pressure cleaner category opens up another segment of the automatic cleaner space for new and replacement installations. In Europe, new pumps have been introduced as direct drop-in replacements for the extensive installed base of competing products, presenting a promising opportunity to increase market share. Finally, we've also expanded our pool lighting product line. These lights present an excellent aftermarket alternative for trade professionals seeking robust lighting solutions compatible with non-Hayward systems. Collectively, these new products unlock incremental aftermarket opportunities by enabling easier upgrades, replacements and conversions across both Hayward and non-Hayward pool pads. Turning now to Slide 9. I'd like to briefly revisit the strategy we're executing to drive growth and value creation in 2026 and beyond. Hayward is fundamentally a growth company built on a strong and reliable organic growth engine complemented by disciplined inorganic opportunities. On the organic side, our product management and engineering road maps are focused on delivering innovative, energy-efficient and highly automated solutions that elevate the pool ownership experience. This includes industry-leading technology platforms like OmniX, positioning us at the forefront of connected intelligent pool solutions. We continue to enhance the overall customer experience through investments in sales and marketing programs, additional Hayward hubs as well as hosting premier industry events that reinforce our leadership and deepen engagement across the channel. Our commercial pool and industrial flow control businesses, though smaller in scale, are high-quality, high potential contributors to our portfolio. We are experts in water movement and treatment solutions, focused on accelerating profitable growth in these attractive categories that scale our core capabilities. We have a proven track record of expanding margins from already strong levels. Over the past 6 years, our gross profit margin has expanded more than 700 basis points from 41% to 48%. We continue to see long-term margin upside supported by 4 pillars: productivity gains, a richer mix of higher-margin technology products, operating leverage from increased capacity utilization and proactive price/cost management. Finally, as we've emphasized, we maintain a balanced and disciplined approach to capital allocation, prioritizing organic growth investments while pursuing strategic acquisitions that enhance our product portfolio, expanding our geographic reach and strengthening customer relationships. In summary, we are confident that our strategy positions Hayward to deliver sustainable, profitable growth and compelling shareholder returns in the years ahead. With that, I'd like to turn the call over to Eifion to discuss our financial results in more detail. Eifion Jones: Thank you, Kevin, and good morning. Turning to Slide 10. We're pleased with our quarter 4 financial results. Net sales rose 7% to $349 million against a strong prior year comparison of 17% growth, mostly on price gains to offset inflation. Gross profit grew 10% to $169 million. Gross margin improved 160 basis points year-over-year and 70 basis points sequentially to 48.5%. As discussed, we changed warranty accounting, moving costs from SG&A to cost of sales, lowering gross profit and SG&A, but not affecting net sales, net income or adjusted EBITDA. Under the prior presentation method, gross profit margin would have been 52.1% for the quarter. Adjusted EBITDA increased 4% to $103 million with a margin of 29.4%, a decrease of 80 basis points year-over-year. During the quarter, we incurred increased variable compensation, reflecting strong annual performance, onetime legal expenses and further investments into our sales and advanced engineering teams. The effective tax rate was 9%, down from 14%. Adjusted diluted EPS rose 7% to $0.29. Turning to Slide 11. For fiscal 2025, net sales increased 7% to $1.12 billion and were ahead of expectations. Growth came from 5% price gains and 1% from ChlorKing acquisition. Gross profit rose 11% to $539 million. Margin was up 170 basis points to a record 48%. Under the prior presentation method, gross margin would have shown 51.5%. We increased research, development and engineering spending by 6% to $27 million. Sales, general and administrative expenses grew 14% to $247 million, mainly from higher compensation expenses, the execution of our sales and customer care investment plans and the integration of ChlorKing. Adjusted EBITDA rose 8% to $299 million, and the margin increased 30 basis points to 26.7%. The effective tax rate was 18%. Adjusted diluted EPS grew 15% to $0.77. Moving to Slide 12 for a discussion of our quarter 4 segment results. North America sales were up 8% to $309 million, mainly from price gains. U.S. sales were up 8%, Canada was up 10%. We saw a strong in-quarter and early buy demand for 2026. Gross margin was up 80 basis points to 50.1%. Europe and Rest of World sales held approximately steady at $41 million, 5% FX gain offset lower prices and volume. Europe sales up 7%, Rest of World down 9%. Gross margin was up 590 basis points to 35.8%. Adjusted segment income margin up 350 basis points to 16.3%. On Slide 13 for a review of our full year segment results. North America sales were up 7% to $959 million with 6% higher pricing and ChlorKing's contribution. U.S. and Canada up 7% and 6%, respectively. We were pleased to see the Canadian performance continue to improve. Gross margin was up 150 basis points to 49.9%. Adjusted segment income margin was consistent with the prior year at 32.4%. Europe and Rest of World sales were up 4% to $163 million, driven by 2% volume and 2% FX gains. Europe up 5%, Rest of World up 3%. Gross margin was up 230 basis points to 36.7%. Adjusted segment income margin up 280 basis points to 17.4%. Commercial and operational actions improved performance across the segment. Turning to Slide 14 for a review of our balance sheet and cash flow. Free cash flow increased 20% as a result of improved profitability and working capital management, reducing net leverage to 1.9x and increasing liquidity by $164 million. This strengthens our ability for continued organic investment, strategic M&A opportunity pursuit, capital return while maintaining disciplined leverage. Moving to Slide 15. For capital allocation, we balance strategic growth investment with shareholder returns while maintaining prudent leverage. As an OEM, we prioritize organic investment into our manufacturing and supply chain footprint, followed by strategic M&A while remaining opportunistic for share repurchases. In the fourth quarter, we made a modest anti-dilutive repurchase of $4 million. Turning to Slide 16 to discuss our outlook for 2026. Net sales are expected to increase approximately 4%, and we're introducing adjusted diluted EPS guidance of $0.82 to $0.86. We expect free cash flow in the region of $200 million, exceeding 100% of net income, inclusive of modest working capital improvement, net interest expense of approximately $45 million a normalized effective tax rate around 24% and increased CapEx of approximately $40 million as we continue to focus on upgrading our operational capabilities. We're confident in our ability to execute in the current climate and remain positive on pool industry growth given the strength of the aftermarket. With that, I'll turn the call back to Kevin. Kevin Holleran: Thanks, Eifion. I'll pick back up on Slide 17. Before closing, I want to thank the team again for their performance. Hayward delivered another strong quarter and year. We've achieved 2 consecutive years of solid growth and 6-year CAGRs of 7% for net sales and 10% for adjusted EBITDA, underscoring the strength and resiliency of our model. At the same time, we delevered the balance sheet to under 2x while investing in the business. As the macro environment evolves, our unwavering confidence in the fundamentals of our aftermarket-focused business and our proven ability to execute positions Hayward to capitalize on emerging opportunities and deliver substantial long-term value for our shareholders. We concluded our first 100 years with momentum, and we're energized by the many opportunities that lie ahead for Hayward. With that, we're now ready to open the line for questions. Operator: [Operator Instructions] Our first question will come from Ryan Merkel with William Blair. Ryan Merkel: Nice job this quarter. I want to start with the fourth quarter beat. Can you just talk about what the source of the upside surprise was in 4Q? And then secondarily, can we use normal seasonality as we think about modeling first quarter '26? Kevin Holleran: Ryan, I'll turn it over to Eifion to talk about the seasonality. But as for the fourth quarter, there were a lot of positives and for the full year for that matter. Notably, early buy, it turned out well for us. We received incremental orders year-on-year. And overall, we shipped a lower percentage of those orders in the fourth quarter because of stronger in-quarter demand despite comping off a heavy prior year due to the weather and the hurricanes in Q4 of '24. Obviously, that would result in carrying over a larger order file into Q1 of 2026. I think when you look at how the orders or how fourth quarter played out, we were pleased to see high single digit or even in the case of Canada, low double-digit year-on-year growth with U.S. up 8%, Europe up 7% and again, Canada up 10%. So those are 3 really big markets, important markets for us. And then posting record gross margin in fourth quarter at 48.5% on the operating performance are things that I think we're real proud of. But like any year, when you close out fourth quarter, it gives you the opportunity to reflect on the full year. And with 2025 being our 100th year, something that very few companies get to experience, it's allowed me to step back and take some perspective. And overall, I would just say the resilient performance of the organization is something that I'm really proud of, and I want to thank all my colleagues for inside of Hayward. The market is not giving much right now, but the team really did deliver across all major financial and strategic metrics last year. As you well know, new construction has been down 4 consecutive years, and it's really been cut in half from the 2021 high, yet net sales were up 7% last year and a similar 7% for the 6 years ending 2025, delivering record gross margins at 48% is a real highlight. Adjusted EBITDA, 10% CAGR, as I said in the prepared remarks, delivering 300 basis points over that 6-year period. And I don't want to leave out free cash flow last year. It represented nearly 150% of net income from profit performance and working capital improvements around specifically receivables and inventory. So strategically, the team has done a great job around innovation. I spent quite a bit of time in prepared remarks talking about some of those great products that are finding their way into the market. Investments around sales and service and not to be left out derisking the supply chain, all posted positive outcomes for us. So as I put a bow on 2025, our Centennial, I really think it does affirm Hayward's core strengths around disciplined execution, cycle-tested business model that's tied to the installed base and aftermarket demand as well as implementing a growth strategy that's delivering results. So a lot to be proud of. And again, I applaud the team for such strong performance. Around seasonality? Eifion Jones: Seasonality, Ryan, we expect a normal year. I mean, as you know, Q1 and Q3 are the lower top and bottom line result periods for us and Q2 and Q4 are the high result periods. Gross margins -- we expect to modestly expand in 2026 with greater gains, I would say, in the second half based on the cumulative effects of the operational improvements we will deliver in the year. So a normal seasonal year with Q1 and Q3 being lower, Q2, Q4 being higher. Ryan Merkel: Got it. All right. That's great. And then just a quick follow-up on the guide. Can you just talk about your assumptions for aftermarket, new pool and if there's any channel dynamics we need to think about, that would be helpful. Kevin Holleran: Yes. From a channel standpoint, I don't think there's anything really to note there. We felt good about year-ending inventory levels from a days on hand standpoint across our largest channel partners, no shadow inventory from what we can tell. And I just think that we've all gotten much better about managing those inventory levels coming through the COVID experience a few years back. As for demand that's informing the guide, I would say it's fairly normal demand for what we've seen in 2025. We're not calling for new construction to necessarily get better. I don't think that would be prudent at this point with what we see. And we continue to see the aftermarket or we expect the aftermarket to continue to perform, particularly with some of the new products that we're bringing that I think can offer solutions to the aftermarket for upgrade and automating their pad. Operator: Our next question comes from Rob Wertheimer with Melius Research. Since we don't have a response, we'll go next to Jeff Hammond with KeyBanc. Sorry, we'll go to Nigel Coe with Wolfe Research. Nigel Coe: Okay. maybe just going back to the 1Q comment. Just wondering if there's any -- obviously, we've had some pretty severe weather in the Northeast and a bit colder in the South as well. So any impacts to note there and maybe good or bad impacts to note? And I just want to confirm, Kevin, you mentioned that there's a bit more weighting on the early buy program in 1Q versus 4Q this year? Kevin Holleran: Yes. What I had said to Ryan's question, Nigel, was that we -- as a percent of what was received or collected through the early buy program last year that a smaller percentage of that was shipped in Q4. As for Q1, we're not going to get too granular on it. But yes, it's been a rough winter. I would say several weeks ago, there were some frozen conditions in some markets that aren't accustomed to that. By and large, the team is seeing very little in terms of equipment replacement coming from that. I don't think a great deal of work is done this time of year in the Northeast, but very little will be done until this storm passes -- so it's -- I would say, overall, the winter has been more severe through the first 2 months of 2026 than what we have seen in prior years. Nigel Coe: Okay. And then maybe just a quick update on the tariff situation. There's obviously been some changes ongoing. And then just bring up to speed on the supply chain realignment as well. Eifion Jones: Sure. I mean, look, tariffs in '25, it was a challenging year. I think at this point, we are declaring victory on that specific battle, but obviously, a new year potentially new challenges. What I would say, though, before I get the fullness of the answer here is we have to call out just how extremely proud Kevin and I are of the entire Hayward team on the way they handled, I'd say, tariffs in 2025. It took the entire team to deliver success here. A lot of moving pieces, and we declared victory with a record gross margin at the end of 2025. But getting back to the question, look, we've demonstrated we can manage offsetting tariffs with price increases and then aggressively focusing on operational improvements. We have reduced our dependency on China from 10% entering 2025 down to approximately 3% by the end of the year in terms of U.S. cost of sale exposure to China. It comes with the cost. We do recognize that moving out of China comes with an incremental cost. It's probably costing us incrementally $5 million to $6 million or about a 1.5% price cost increase in cost of sales. We're still digesting, I would say, the recent SCOTUS ruling and the response from the President. But based on initial view of how tariffs are looking from those comments, we believe we've covered the exposure in our guidance and don't see any additional threat -- there's some puts and takes by country, but we believe on a net basis, we're fully covered within the guidance that we've given. I think what we've demonstrated, Nigel, is tariffs have become for us a managed variable and not a year-by-year structural headwind. We can deal with it. We've previously mentioned how we're handling our Chinese operation. We'll downsize that facility. Folks there are listening to this call. They're a great team, and we'll recalibrate that facility to service our rest of world business. Operator: We'll go next to Mike Halloran with Baird. Michael Pesendorfer: It's Pez on for Mike. I wanted to talk a little bit about the increased investments here. Obviously, a notable step-up in CapEx. You talked about the increased investment in RD&E, talked about the increased investment in customer success and operations. Maybe just give us a little bit more color, where is the spending going, particularly on the CapEx side? It's a pretty notable jump. And then any color you can give on the raised investments that you're spending broadly at the centralized level. Eifion Jones: Yes. Let me take the CapEx and then turn it over to Kevin. We've communicated Pez over the last couple of years that we're likely to step our CapEx investment program. Historically, it's been 2% to 3% of revenue. We've communicated we have ambition to upgrade our U.S. manufacturing footprint, and we're doing that. We're doing it sequentially around the 3 sites that we have. We took a step up in 2025 with CapEx just tipping over $30 million. We've communicated $40 million in terms of 2026. This reflects upgrading, automation, modernizing and a little bit of onboarding of assets as we come out of Asia. We think it's a good step forward for these facilities. More to come as we step through 2026 in how we communicate success around what we're doing here. But at the end of the day, we still remain a very light CapEx business even at these slightly increased levels. So it's not going to be a large consumer of cash. And as we made in our prepared remarks, cash flow for 2026 is still going to be above 100% of net income, approximately $200 million. So it's not a large consumption of cash here, but it's a great step forward in the operational capabilities of our U.S. footprint. Kevin Holleran: As for the investment, Pez, yes, we've really been consciously investing back into the business, I'd say, over the last, call it, 18 months or so, specifically around a few key areas around R&D and then around the customer experience, sales and marketing. We think it's the right decision to invest in the downturn. So we're better positioned to benefit when the market recovers. As for early indications in terms of feedback and payback, you saw in the prepared remarks a long list of new products that are hitting the market that are really innovation breakthroughs as well as specifically targeting the established aftermarket out there. Some of these are new category entrants for us. A 4-horsepower is not a product that we participated in. So that's kind of blue sky opportunity for us. And we've really been out of the pressure cleaner market for some time as well. On top of that, though, more drop-in replacement for competitive product in the aftermarket is all the result of that investment. As for the front end, we have some great feedback coming out of the field around some dealer conversions around product training. You heard me talk in the prepared remarks about the establishment of the hubs, which are fit-for-purpose training centers in large markets. So we believe that this is reinforcing our innovation reputation and it's having the service trade out there best trained to handle Hayward product and install Hayward product into the marketplace. Michael Pesendorfer: Great. That's super helpful. And then just following up on the new product. Where do we stand from a vitality index perspective? Where are we looking to go? And then how does the making of OmniX and automation standard impact the ASP of the product portfolio? Eifion Jones: Yes, Pez, I'll touch on the vitality index. We continue to make improvements there. As we mentioned in our prepared remarks, we have a lot of good new products on the slate that will contribute to revenue and profitability in 2026, and it will elevate up our vitality index year-over-year. We remain focused on investing. We've stepped our RD&E investment protocol inside the income statement as well as on the balance sheet, supporting our facilities with the necessary assets to get after some of these new product platforms. So we're very encouraged now with the momentum that we're gaining in terms of products that have been introduced in the last 3 years, which are in our revenue profile for 2026. Kevin Holleran: As for OmniX and how it plays into a fully connected pad out there, we believe that majority of new builds will continue to go to fully wired, fully connected with an omni control panel installed at that time. But I think that OmniX also plays to the affordability concern out there that if someone wants to still have an automated pad at time of new build that they can do that a bit more affordably than maybe the fully connected product pad out there. So we love bringing new products into this ecosystem and bringing automation to the -- what we estimate to be about 3.5 million in-ground pools in the U.S. that don't have any form of connectivity or automation to it, and that's an enormous TAM expansion opportunity for us and for the whole industry to bring automation. Operator: And moving next to Brian Lee with Goldman Sachs. Tyler Bisset: This is Tyler Bisset on for Brian. Just first, on your 4% sales growth guidance for the year, how much of that is predicated on a return to positive volume growth versus continued price increases? Eifion Jones: Yes. I mean we've assumed in terms of guidance approximately 3% global net price gain year-over-year and modest volume growth. The pricing will be a little bit higher inside the United States than outside the United States, where we see more modest price increases. As you know, we don't realize all the price given discounts, but plus 3% price and modest volume growth year-on-year with FX being somewhat neutral. Tyler Bisset: Super helpful. And while you guys expanded gross margins in the quarter, adjusted EBITDA margins declined a bit, and you partially attributed that to targeted strategic growth investments. Should we expect these investments to persist throughout '26? And then I also noticed you didn't provide any EBITDA guidance for the year. Do you plan to provide that later in the year? Or directionally, are you expecting EBITDA to increase year-over-year? Eifion Jones: Let me address the first part -- well, let me address almost the entirety of the question. Inside Q4, the majority of the dilution to the margin on adjusted EBITDA was attributable to higher variable compensation for both management bonus and sales incentives following a great close to the year. We beat top line, we beat bottom line, and we beat our balance sheet targets for the full year. So this higher variable compensation, I would say, diluted margins in the queue by approximately 130 basis points. That won't necessarily repeat as we step into the year. Targets are reset and therefore, variable compensation is reset. Also in the quarter, we recorded costs associated with the settlement of certain litigation. And then as you mentioned, we have continued to invest in our research development and engineering and our sales team infrastructure, and we do expect to leverage that cost base in 2026. I would say in terms of the guidance, we have matured here as an organization. We do believe the adjusted diluted EPS metric is a more complete and accountable measure for us. But I do want to be clear. We've guided adjusted diluted EPS up 6% to 12% at the midpoint, 9% growth. It is squarely driven on operational performance. We're not assuming any material changes in the capital structure. It's about execution, efficiency and margin delivery inside the income statement. And the aggregation of depreciation, interest expense and tax in absolute dollars is fairly comparable year-over-year with 2025. Depreciation is higher given we're investing in our facilities. Interest expense is lower given the accretion of cash onto the balance sheet and the interest earnings on that and our tax charge on the business in dollar-wise will be higher, but the effective tax rate will be lower. Operator: Moving on to Saree Boroditsky with Jefferies. Unknown Analyst: This is James on for Saree. I got dropped during the call, so sorry if this has been already asked. But can you kind of update us on what you're hearing from dealers out there? Like how much backlog do they hold? And what do they tell you about kind of Early Buy season for 2027 since one of your competitors kind of talked about like no recovery into 2027 as well. So kind of just wanted to hear your thoughts on it. Kevin Holleran: We -- in the first quarter, we do have a lot of interactions with dealers, regional trade shows, the big one in Atlantic City. There are several dealer buying group shows, some of the distributors have retail summits, et cetera. I would say that there's cautious optimism I'm not in a position to aggregate overall what kind of an order file or backlog they're carrying into 2026. But I would say, in general, those that I spoke to, I really felt there was -- we weren't assuming any step level change from year ending '25 into 2026. But in terms of leads, it was prompting some general cautious optimism heading into 2026. I wasn't quite clear on the question around 2027 or... Unknown Analyst: Yes. It was more so like what does like your discussion with like dealers tell you about potential like 2027 Early Buy season, but I think you kind of answered it. Kevin Holleran: Yes. I'm not sure that I would have good insight into 2027 at this point with so much of 2026 yet to play out. Unknown Analyst: Right, right. And I guess on the pool mix here, can you kind of provide what higher end versus lower end pool mix is currently looking like versus like historical average? And if lower-end pool comes back in 2026 or 2027, should we expect some pressure on margins? Or would volume incremental like offset that? Kevin Holleran: I would say, in general, in terms of new construction, the whole industry is pretty aligned with the fact that, call it the 60,000, I'm rounding up from what the current estimates are in terms of U.S. in-ground construction that the makeup of that build count last year was largely kind of mid- to higher end, and that's been the case for a few years as we see with the ticket value of those builds. We would like to think that with some economic macro improvement that more of that entry-level pool would become a part of the mix. I would say content from our perspective might be a bit less. But in terms of margin, I would say the equipment that goes on that entry-level pool has a similar margin profile to the higher end. So I wouldn't assume that, that would throw off margin pressure when that segment of the new build market rebounds. Eifion Jones: Yes, I'll just add to that. I mean most of our products have similar structural gross margins. And then with the additional volume, if and when this business does return, we'd expect to get leverage across the fixed cost base within the business, but within the factories and across the installed SG&A base. Operator: We'll take our next question from Rob Wertheimer with Melius. Robert Wertheimer: So question is just a little bit on technology connected pools, benefits and so on. So was there anything in technology development and competitive front and your own data that made this a good moment to invest a little bit more in OmniX in specific? And then more generally, could you just talk, obviously, as a consumer, the benefits to having automated pools are great. But maybe just recap the differences between a fully wired, fully connected automated pool and what maybe OmniX could do and what benefits that has for you? Kevin Holleran: Yes, sure. I mean we're very proud of the ratings that our omni system receives online. And I think that's really reinforced from voice of customer that we get back. We do believe, I think as an industry in total, we have identified this upgrading and automating of the installed base as an opportunity that's available. And we really felt it's time for us to give the marketplace more tangible opportunities, more affordable opportunities to do that and really doing it one piece at a time as natural break fix occurs through the natural course of enjoying your pool. I think that's a great entry point to get in and bring automation. Frankly, having -- up until very recently, we had a single variable speed pump, which is now the funnel has broadened, Rob with all variable speed pumps now having the OmniX capability and that Universal comms, which I spoke about, which allows you to drop in onto a competitive pad that -- and it can talk across the equipment that is on that pad. So there was a second part of your question, which I if you could remind me the second part of the question. Robert Wertheimer: I think you touched on it. Was there anything that made this the right moment for investment? And then just in general, what the benefits to you are because consumers see huge benefits, you get maybe more pull-through, more share, more dealer engagement. I'm just looking for a general overview of how you benefit from that technology. Kevin Holleran: Yes. I really do think this is an opportunity to upgrade that aftermarket. And I think the way that we've positioned the universal comms capability in our variable speed pump really broaden the funnel that it doesn't just have to be a Hayward pad that could take on that variable speed pump in the future that it's a more wide open aftermarket opportunity for us. And we're going to continue talking in future earnings calls about additional products that will be bringing the OmniX capability that you can, again, build piece at a time, build out the network or the ecosystem to have full-fledged automation in a pool that may be 10 years old or older. Operator: And moving on to Jeff Hammond with KeyBanc Capital Markets. Jeffrey Hammond: I noticed in your investments internal and external, you mentioned kind of industrial flow, which is a small piece of your business. And just it's not a business you talk about much, but just wondering how you're leaning in on that? And should we expect some external growth focus there? Kevin Holleran: It's a great question, and I'm glad you picked up on it because it's a business that we're spending a lot more time understanding what it can become. We spent a lot of time in 2025, understanding how that could grow. When we look at it broadly, Jeff, we see ourselves as experts in water management, whether it's filtration, whether it's filtering, treating, et cetera. And for our first 100 years, we've really focused that capability around residential and commercial pools. And we are trying to determine how that could be leveraged potentially into some other end markets. Nothing really to debut at this point but it is getting more of more of the leadership team's time. And we're seeing if this, call it, roughly $50 million business that's extremely profitable, by the way, can become something bigger and more important. Obviously, broader flow control, fluid management operates in much larger TAMs than the pool industry. So those are the things that have grabbed our attention and that we're spending time determining can it be a bigger platform inside of our business. Jeffrey Hammond: Great. Great. And then just back on the 4-horsepower pump and the pressure cleaner. Can you just talk about the TAM for those markets and what you think entitlement is in terms of kind of market share once you mature in those spaces? Kevin Holleran: Yes. I mean we have -- I'll keep our ambitions maybe to myself, but I will identify what we believe the -- those TAMs to be, not necessarily in dollars, but in the 4-horsepower range. We believe somewhere around 1/4 of all pumps are 3.5 horsepower or larger. And so it's a meaningful segment of the pump market. And frankly, up until now, we were unable to participate in because our largest pump was about 2.7 horsepower before this 4 horsepower. So it's an enormous opportunity in an established market. We're really proud of the performance that we have with this new introduction, and we're spending a lot of time educating the marketplace on this new product. As for pressure cleaners, I'll use a round number of -- in U.S., it's roughly 100,000 units per year. That's about a $50 million. I'm using round numbers here, Jeff, but it's an opportunity that we don't have in either of these 2 product categories, any real volume in our current financials. So that's what has me so excited for us. We brought great performing product to the marketplace. And now it's our job to get it promoted and educate the marketplace on some of the features and benefits of these new products that we've introduced. Operator: And moving next to Andrew Carter with Stifel. Andrew Carter: I wanted to ask, first off, just to confirm, your adjusted EPS guidance for the year does not include any share repurchase. And also, our math suggests your leverage will drop into the low 1s in 2026. Is that correct? So I guess could you refresh -- could you remind us of kind of your cash flow priorities beyond organic investment? Eifion Jones: Yes. Andrew, yes, absolutely. Our adjusted diluted EPS guidance of 6 to 12 does not contemplate any material change in the capital structure of the business. This is about execution of operating performance of the business, top line growth of 4%, modest gross margin expansion, further SG&A leverage, good operating profitability growth in the business. In terms of the second part of your question, the -- yes, look, the signaling that we're putting out here with $200 million worth of cash flow in the year [Audio Gap] will the balance sheet right now. Kevin has been mentioning throughout the call, opportunities that exist inside M&A. Nothing imminent there. We'll continue to update you as we go through the year. We've got a little bit higher CapEx. But yes, we're delevering the balance sheet into a really healthy position absent any other deployment. And then the very last part of the question, Andrew? Andrew Carter: I know what it was. It was about the priorities for cash flow beyond organic investment. Eifion Jones: Yes. So look, I mean, capital allocation remains, as we previously communicated, we're always going to put first dollar back into the business in terms of upgrading our facilities through CapEx and making sure that they're well maintained. Second dollar will go to M&A opportunities. And with the balance sheet in the position it is right now, we feel good. We have a lot of optionality. And as Kevin mentioned, we've done really good here with the commercial business. We'll continue to look at tack-on opportunities in pool, and we're beginning to look a little bit into the flow control space, where we see very credible large TAMs that align with our core competencies. So a lot of great optionality when it comes to M&A. And then we remain opportunistic around share repurchases. We instituted a $450 million share repurchase program toward the end of last year. We've executed a little bit of that in Q4 in terms of anti-dilutive share repurchases. And again, we remain opportunistic there. But first dollar will be back into the business, second dollar to M&A. And while I'm on this topic, I just want to come back and reaffirm to Tyler, look, adjusted EBITDA is an important metric for us, and we will continue to report adjusted EBITDA as we step through the year, but we're anchoring on adjusted diluted EPS as our guidance metric. We believe that holds us to a higher standard as an organization, but we will continue to report adjusted EBITDA inside our earnings materials as we step through the year. Andrew Carter: Second question, for your 10-K, there's a pretty notable shipment difference between your top 2 customers. Some of that being market share. But I guess I would ask in terms of inventory levels, is there a big difference in approach? And I guess, could you also kind of comment overall where channel inventory levels are today? Kevin Holleran: I would say we don't see any major difference in terms of inventory approach between the two large partners that you're referring to. And if I'm -- the second part of the question, broadening it to more distribution and channel partners that we get data from, we would say that we feel that our inventory exiting 2025 is in a very healthy spot to be able to serve the upcoming season, Andrew. I did just want to circle back because a colleague here pointed out to me when I was answering Jeff Hammond's question around the 4-horsepower. I think I said all pumps installed. What I meant to say was all variable speed pumps because there's still a number of single-speed pumps out there that I wanted to make sure I clarified on. So thanks for that. Operator: And this now concludes our question-and-answer session. I would like to turn the floor back over to Kevin Holleran for closing comments. Kevin Holleran: Thanks, Carrie. I want to thank all our employees and partners around the world. Your dedication and hard work have been essential, not just in closing out a strong year, but in helping us conclude Hayward's first 100 years with real momentum. We're excited for what's ahead as we begin our next century. If you have any follow-up questions, please reach out to our team. We appreciate your continued interest in Hayward and look forward to speaking with you again on our next earnings call. Carrie, you may now end the call. Operator: Thank you. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.
Operator: Welcome to the HSBC Holdings plc Investor and Analyst Presentation for the 2025 annual results. We will begin in 2 minutes. [Operator Instructions] Please note that it will not be possible to ask a question if you are joining via the webcast link on the HSBC website. Ladies and gentlemen, welcome to HSBC Holdings plc's 2025 annual results webinar for investors and analysts. For your information, today's webinar is being recorded. At this time, I will hand the call over to Georges Elhedery, Group CEO. Georges Elhedery: Welcome, everyone. Thank you for joining us. As we celebrate the year of the horse, [Foreign Language]. Our 2025 full year performance was strong. It was a year in which we performed, transformed, invested for growth. I will discuss our strong strategic progress today. First, the strong momentum in our 2025 performance. Second, the execution of our 3 strategic priorities where we are progressing at pace and with discipline. And third, the new growth and return targets we are setting out today for 2026, '27 and '28. So first, the full year earnings. My comments will exclude notable items and the comparisons will be year-on-year on a constant currency basis. In 2025, there were $6.7 billion of notable items. You are already aware of these from prior quarters. They are set out on appendix Slide 36. So first, we delivered strong earnings. Group revenues grew 5%. Profit before tax rose 7%, reaching a record $36.6 billion. Return on tangible equity was 17.2%. And we delivered 3% cost growth on a target basis in 2025, in line with our cost target. Second, we delivered strong growth. Our deposit balances grew 5% with deposit growth in each of our 4 businesses. Our deposit base is a core strength. It contributes the lion's share of our banking NII. We also grew fee and outcome. In Transaction Banking, it grew by 4%. Elevated market activity demonstrating the power of our deep international network, which gives access to 86% of world trade flows, alongside our product and service expertise. In Wealth, it grew by 24%, reflecting our leadership position in the world's fastest-growing wealth markets and continued investment in our products and proposition. And we are investing for strategic long-term growth. We completed the $13.7 billion privatization of Hang Seng Bank. This brings together to 255 years of history and heritage, combining global reach and local depth. It reflects our confidence and conviction in Hong Kong's future growth. And third, we delivered strong returns to our shareholders. We announced a full year ordinary dividend per share of $0.75, up 14% on 2024. Let's turn straight to the progress we are making on strategy execution. In October 2024, I set out a clear agenda to unlock HSBC's full potential. To do so, we now run the bank on 4 core complementary businesses, 2 home market businesses, U.K. and Hong Kong, and 2 international network businesses, Corporate and Institutional Banking and International Wealth and Premier Banking. Each business is growing. Each is generating above mid-teens return on tangible equity and each is building on a strong foundation for future growth. We are focused on 3 clear priorities, and we are moving at pace with each one, be simple and agile; two, drive customer centricity and three, deliver focused sustainable growth. Now let's look at each priority in turn and our progress. First, simple and agile. The first step in unlocking HSBC's full potential is reengineering to reduce complexity and cost. Structure and strategy are now aligned. Accountability is sharpened and roles deduplicated. In 2025, we reduced net managing director positions by circa 15%. We are taking $1.5 billion of annualized simplification saves straight to the bottom line with immaterial revenue impact. We expect to have taken action to deliver these saves by the first half of 2026, 6 months ahead of plan. We are also making positive progress with the reallocation of circa $1.5 billion from nonstrategic or low-returning businesses. The medium-term intent being to reallocate these costs to areas of competitive strength and generate accretive returns. In 2025, we announced 11 business or market exits. Completed and announced exits account for $0.7 billion in annualized cost savings with around $1 billion of associated revenue $0.6 billion remains an active execution, including those under strategic review. Then following the privatization of Hang Seng Bank, we are increasing reallocation costs to $1.8 billion, reflecting an additional $0.3 billion of reported basis cost synergies across HSBC and Hang Seng Bank. We will direct this $0.3 billion to growth opportunities in Hong Kong. We are also streamlining and upgrading our operating model by simplifying the bank at scale and retiring nonstrategic applications. And we are reengineering whilst focusing on resilience and risk management. Next, priority number two, drive customer centricity. Our 4 businesses are built on customer trust. Our investments to improve customer proposition and experience are yielding results. Net Promoter Scores have improved or remained top ranked in our home markets. In Hong Kong, we added 1.1 million new to bank customers. Taking the total number of customers to more than 7 million. Our U.K. business lending -- our U.K. business banking lending grew 13% year-on-year, excluding COVID loan runoff. In CIB, corporate surveys have positioned us as a market leader in trade, in payments and in foreign exchange. In IWPB, we attracted net new invested assets of $80 billion. Next, priority #3, investing to deliver focused, sustainable growth. Our Hong Kong home market is a dynamic economy, a top 3 global financial center and a thriving trade gateway. It is the super connector between Mainland China and the world. And it is set to become the world's leading cross-border wealth hub by 2029. The privatization of Hang Seng Bank enables us to scale capabilities and drive growth across both banks for all customers. We have the ambition, and we have comprehensive plans to deliver $0.9 billion of benefits through reported synergies and unlock of opportunities by 2028. It is an investment for growth. And if we move beyond Hong Kong and look at HSBC's other core strength, we are in Asia, Middle East powerhouse. Asia and the Middle East are increasingly central to global trade and capital flows. Global trade is being rewarded. Asia's growth is increasingly powered by intra-Asia demand. Asia is buying Asia. The Middle East is scaling as a global capital trade and investment hub. Its integration with Asia is accelerating. The Asia-Middle East corridor is becoming a defining access of global growth. Wealth creation across Asia and the Middle East is also structurally strong. That is why we are investing to consolidate our powerhouse position and capture these growth opportunities. We are also investing to connect the world, scaling our capabilities, building new capabilities and supporting customers secure commercial advantage from real-time services. Our customers are making real-time 24/7 payments across 35 markets. They're also using frictionless tokenized deposits and payments in 4 markets, including the U.K. with more to follow. And we are pioneering the future of finance. Last month, the U.K. Treasury selected HSBC's distributed ledger technology as its preferred platform for its U.K. Digital Gilt pilot. Next, our people and technology. We see innovation and culture that's core to our competitiveness, and we are investing in both. We are scaling AI adoption first, to empower our colleagues second for end-to-end process engineering and third, to enhance customer experience. Our customer relationships are built on trust. AI strengthens how we act on that trust, personalizing service at scale. The strong culture turns a clear strategy into results, and we are investing to nurture a high-performance culture. All our senior leaders and the broader managing director cohort have attended our new group-wide leadership training. Finally, let's turn to our new targets for 2026, '27 and '28. 2025 has been a year in which we have performed, transformed and invested for growth. This gives us the confidence to set out new growth targets. We will target revenues growing year-on-year every year, rising to 5% in 2028, excluding notable items. We will target return on tangible equity of 17% or better in each year from 2026 to 2028, excluding notable items and a dividend payout ratio of 50% for each year, excluding material notable items. To conclude, we are creating a simple, agile, growing bank built to generate high returns. We are executing our strategy with discipline and precision. We are delivering growth, we are investing for growth and we are confident we can navigate uncertainty from a position of strength. That is why we are confident in setting these new targets and in our ability to continue delivering for our shareholders. Let me now hand over to Pam. Thank you. Manveen Kaur: Thank you, Georges. Thank you, everyone, for joining. We have had another strong quarter, which reflects the positive progress we are making towards creating a simple, more agile growing HSBC. We are investing for growth. Throughout this presentation, I will exclude notable items and focus on the fourth quarter numbers compared to the same period last year on a constant currency basis. Let's turn straight to the highlights. In the fourth quarter, revenues grew 6% and to $17.7 billion. This was driven by broad-based growth in banking NII and fee and other income. Profit before tax was $8.6 billion, up 17%. Our customer deposit balances stand at $1.8 trillion, an increase of $78 billion when we include held-for-sale balances. Full year return on tangible equity was 17.2%, achieving our mid-teens or better target. In 2025, we maintained tight cost discipline, managing target basis cost growth to 3%, in line with our cost growth target. Turning to capital and distributions. Our CET1 capital ratio was 14.9%, up 40 basis points in the quarter, reflecting our organic capitalization and expectation not to initiate any further buybacks for up to 3 quarters following October's announcement of our intention to privatize Hang Seng Bank. As Georges said, this strong performance allows us to announce ordinary dividends for the year of $0.75 per share, an increase of $0.04 on the prior year. Turning to our business segment performance. We grew full year revenue by 5% to $71 billion. Each of our 4 businesses grew revenues. Each grew deposits, deepening customer relationships. Each returned a mid-teens or better return on tangible equity, excluding notable items. We are pleased to be making such positive progress firm-wide. Moving next to our privatization of Hang Seng Bank. On 9th October, we announced our intention to privatize Hang Seng Bank. We are pleased to have completed on 26th January, sooner than our initial expectation of the first half of 2026. This slide explains the financial rationale. Let's walk through it, starting with a $13.7 billion purchase price. The removal of the $3.8 billion minority capital inefficiency takes you to the $9.9 billion of common equity Tier 1 consumption. The removal of the capital inefficiency is around 1/4 of the purchase price. The $9.9 billion CET1 consumption is equivalent to buying back 4% of group shares at the point of announcement. Next, we show the $0.8 billion minority interest in the P&L and the $0.5 billion of pretax synergies from the privatization. Together, the minority interest and the synergies contribute more than 4% to our profit, beating the buyback threshold. On top of this, we see potential, further revenue and cost upside of $0.4 billion enabled by the privatization. Then on the right of the slide, we see good growth in Hong Kong in the years ahead. Having 2 fully owned banks positions us well to capture this growth. As we said in October, we are acquiring a business with structurally high pre-impairment margins. And while we are not calling the credit cycle, we believe it is a cycle. Let's now turn to banking NII. Our full year banking NII was $44.1 billion. In the fourth quarter, banking NII of $11.7 billion grew $0.7 billion. $0.4 billion of this growth was in Hong Kong, including the recovery of HIBOR during the quarter. Banking NII in the fourth quarter included a positive benefit of around $100 million for items that we do not expect to repeat. We expect full year 2026 banking NII of at least $45 billion with the impact of expected lower rates more than offset by deposit growth and the tailwind from our structural hedge. Next, to wholesale transaction banking. This year has really validated the strength of our franchise in a range of economic market and tariff situations. We have deepened customer relationships, and our global network has helped our customers navigate volatility and uncertainty. In the quarter, security services grew fee and other income 6%, reflecting higher market valuations and new mandates. Payments grew 3%, driven by new mandates and payment volumes. In particular, international payments. Foreign exchange increased by 1%, reflecting strong client flows and higher levels of volatility. This was a good performance given the strong prior year comparison. Trade was down 5% in the quarter, but it was stable over the full year. I would note the first half was particularly strong, given advanced ordering as we supported clients to navigate a fast-changing landscape. We continue to see growth in volumes, and strong client engagement. Let's now turn to Wealth, including the new disclosures we are setting out today. We are very pleased with the 20% year-on-year fee and other income growth to $2.1 billion. And we are very encouraged that this was driven by all 4 income areas, which shows the sharpening of our strategy is working. Asset Management grew 14% and Private Banking grew 8%. Investment Distribution also performed well, up 14%, reflecting strength in our customer franchise in Hong Kong. Our Insurance CSM balance was $14.6 billion, up 21% versus the prior year. We continue to attract net new invested assets with $7 billion in the fourth quarter. Today, we are giving you new disclosures, which you will see through on this slide. These better show the strength of our relationship with our customers, including both their deposits and invested assets. We are focused on capturing the full wealth opportunity, and we will now report Wealth balances and net new money. I appreciate that the Wealth balance figure is similar to the invested assets. But I would highlight two changes to note. You will see these set out on Appendix Slides 31, 32 and 33. We have added $608 billion of Premier and Private Bank deposits to the invested assets. That is offset by taking out $580 billion of asset management, third-party distribution assets. This is a good business, but it does not reflect our wealth customers. Adjusting our disclosure in this way also means our Wealth business is more easily comparable to the broader peer group. These new disclosures will replace the existing ones from the first quarter of 2026. We saw net new money in the quarter of $26 billion, of which $19 billion was in Asia. And Wealth is not just a Hong Kong story. It runs across our Asia and Middle East franchise with double-digit invested asset growth in Singapore, Mainland China, India and the UAE. Next to credit. Our ECL charge this quarter was $0.9 billion. There was no material impact from Hong Kong commercial real estate in the quarter. On Slide 29, you will see we have updated the commercial real estate disclosures. Movements in the fourth quarter were in line with our expectations. of a full year 2026 ECL guidance is around 40 basis points. This is at the higher end of our typical range, reflecting the economic outlook and remaining pressures in parts of retail and office commercial real estate in Hong Kong. Let's now turn to costs. We delivered 3% target basis cost growth in the full year, hitting our cost goals while making the space to invest in the bank was a key theme of 2025. It will be again in 2026. We have taken actions to realize $1.2 billion of annualized simplification savings with immaterial revenue impact. This is ahead of our original time line of $1 billion by the year-end 2025. On a realized basis, we have taken $0.6 billion of the simplication saves into the full year 2025 P&L. Together with ongoing discipline, this allows us to guide for 1% cost growth on a target basis for 2026 while reinvesting in the business. Next, to customer deposits and loans. We had another strong quarter with deposit growth of $50 billion. We saw good growth in each of our 4 businesses. Loans increased by $5 billion. The U.K. was again the standout with another quarter of growth in mortgages and commercial lending. Our U.K. business is well positioned to support growth in the U.K. economy. We are particularly pleased with the momentum in our commercial loan book where we see significant potential, particularly in infrastructure, innovation, social housing and mid-market direct lending. Now turning to capital. Our CET1 ratio is up strongly to 14.9%, primarily reflecting good organic capital generation. Although after the balance sheet date, I draw your attention to the impact of the Hang Seng Bank privatization which is 110 basis points in addition to the 10 basis points already incurred in the fourth quarter. We have set this out in the appendix Slide 27. As a reminder, we said when announcing the offer on 9th October that we expected to suspend buybacks for up to the next 3 quarters. That is, of course, dependent on underlying capital generation. With strong profitability and current modest loan growth we remain highly capital generative. A decision on future share buybacks will be taken quarterly, subject to a non-buyback considerations. Let's next turn to the full year defaults. Excluding notable items, and at constant currency, revenues grew 5% to $71 billion. Profit before tax was $36.6 billion, up 7% year-on-year to a record high. Return on tangible equity was 17.2%, achieving our mid-teens or better target. Our strong performance allows us to announce ordinary dividends for the year of $0.75 per share or $12.9 billion. Let's briefly return to the new targets Georges set out earlier before I close on guidance. We made clear and positive progress in 2025. That is why we are now raising our ambition to target 17% return on tangible equity or better, excluding notable items in each year from 2026 to 2028. We will also target year-on-year revenue growth in each year over the period, rising to 5% in 2028 compared to 2027, excluding notable items. And as you would expect, we maintain our discipline of a 50% dividend payout ratio, excluding material notable items and related impacts. Finally, to guidance. This slide gives you our guidance mainly for 2026. We saw revenue momentum continue in January, including in Wealth. On the slide, you see banking NII of at least $45 billion. Our revenue ambitions for our Wealth business are contained within our revenue target. We have, therefore, removed grow fee and other income at a double-digit percentage CAGR from our guidance. We see an ECL charge of around 40 basis points, broadly stable on 2025. We expect to constrain cost growth to 1% on a target basis. This benefits from our organizational simplification and allows us to continue to invest in the business. There is no change to our CET1 target range of 14% to 14.5%. In 2026, we will deliver the $1.5 billion of savings from the reorganization. We are well on track with the $1.5 billion of reallocation costs which will be redirected towards priority growth areas. We are now adding the expected $0.3 billion of Hang Seng Bank cost synergies to the original $1.5 billion of reallocation costs, taking this to circa $1.8 billion. On Hang Seng Bank specifically, we see $0.5 billion of revenue and cost synergies to be achieved by year-end 2028 as well as an additional $0.4 billion of potential further upside enabled by the privatization. To achieve this $0.9 billion, we will incur a restructuring charge of $0.6 billion from the Hang Seng privatization which will be a material notable item. To close, as I said to you last year, I am fully focused on discipline, performance and delivery. Discipline means prioritizing with precision, maintaining strong cost control and ensuring investment rigor for growth. Performance means gearing our financial strategy towards achieving our new returns target. Delivery means ensuring we remain agile and resilient, enhance operating leverage and are always well positioned to support our customers. This is exactly how we will continue to run the bank. With that, we are happy to take your questions. Alastair? Alastair Ryan: Thank you, Georges. We'll take any questions from the room here in Hong Kong first. If I can ask you to introduce you to your company, and there's been the hard part, constrain yourself to two questions each, please. That goes for people on Zoom as well as people in the room. Anyone would like to ask a first question here? Yes, we'll take a question from Nick. Nicholas Lord: It's Nick Lord from Morgan Stanley. I'll put it in one question in two parts, if that's okay. I'm just interested in your revenue target by 2028 of achieving 5% revenue growth. And I just wonder if you could talk about some of the components of how you would get there. Presumably, Wealth is part of that. And so maybe you could talk about the Wealth trajectory and how sustainable that is. Presumably, at some stage, we're going to see sort of a kick in of sort of the development of markets in Asia, and that market's business can grow more. So I wonder if you could talk a little bit about how you want to grow that markets business in Asia. Georges Elhedery: Thank you, Nick, for the question. I'm going to share some high-level comments as we are looking at the growth opportunities, and Pam can take you through the various components. The first thing is we have delivered growth in 2025. And we have delivered growth, as we mentioned, across all our businesses and all our key metrics, including deposits, loans, including fee income and Transaction Banking and Wealth and this is reflected in our revenues growing at 5%, 2025. The second item to call out is if you look at our footprint. We're actually basically aligned to the strong structural growth opportunities. Hong Kong, we've called it out, and we are basically consolidating our leadership position to capture these growth opportunities with the privatization of Hang Seng among other. Asia and Middle East, structural growth opportunities in Wealth, but also Asia and Middle East hitting record volumes and shipments for trade, Asia is buying Asia and we are -- our footprint allows us to capture these growth opportunities. The U.K., we've seen the strongest loan growth in 2025, and we have indicators to believe that there is a possibility for this trend to carry on. This is the strongest loan growth we've seen in the U.K. for many years, but it's also the strongest store growth we've seen across all our businesses that we have seen in the U.K. And then the last thing I would put, we are investing for all these growth opportunities. We're putting now investment from within our cost base. We're putting investment from the additional costs we are taking in 2026. And we will be putting even further investments from the reallocation of the $1.8 billion as we free up these costs back into those core areas where we can grow. And this is what's giving us this confidence to give you the growth targets of revenue growing year-on-year every year rising to 5% in 2028. Pam? Manveen Kaur: Thanks, Georges. So firstly, in 2026, we expect broad-based growth in revenue across all our businesses, but just unbundling a little. In banking NII, as we have said, we expect a low single-digit growth fundamentally driven through deposits. Yes, there are pockets of growth in loans, but so far, we've just seen in the U.K. market. Overall, we expect that growth in Wealth and Transaction Banking and our fee-generating businesses will continue to be very positive. As we go beyond '26, we do expect balance sheet growth should again in Asia and other markets, not just in the U.K. Of course, we are seeing growth in the U.S. already, but we are not a big player in the U.S. market, domestic growth. And we are continuing to invest in our fee businesses and our investment plans are multiyear plans. So it's not just for growth for 1 year. It's a very strong building block for growth through the period we have called out and beyond. Particularly in markets like Hong Kong, in the U.K. and other key markets for us in Asia and the Middle East. Alastair Ryan: Thank you, Nick. Thank you. Any further questions in Hong Kong. We'll go straight to Zoom. The first question on the Zoom then, please, is with Joe Dickerson at Jefferies. Actually I've announced yourself, Joe. Joseph Dickerson: Good set of results, guys. Just a quick question on the costs. If you look at the 2026 number that you've given the kind of 1% growth. I know you've got your recycling how do you think about when you peel that back and what's the metabolic rate of growth in costs, particularly coming from investments because you clearly have some global peers who have accelerated their investments around AI. So I was just curious how you think about that. And then secondly, a nitpicky question, but what rate of HIBOR have you assumed in the banking NII guide of greater than $45 billion? Georges Elhedery: Okay. Thank you very much, Joe, for your questions. On let me make some high-level considerations how we look at costs, and I'll ask Pam to comment then on cost and then on hypo rates. And I shared a bit earlier, but I want to emphasize, first, within our workspace, there's a proportion set aside for investments for change the bank, investments, digital capabilities, additional people, hires, relationship managers, wealth advisory, et cetera, of course, generative AI efficiencies. That's within our cost base. Second, the fact that we're adding costs adjusted for these savings, half of that additional cost will go towards payroll inflation, but the other half will go towards additional investments. And then third, the recycling of those $1.8 billion, which is commensurate to about 5%, 6% of our cost base will go back into those areas of investment for growth. So we believe we have ample capacity to invest and deliver the growth that we are setting ourselves, setting targets to deliver against. Then the next thing I would say about cost is that it's important, Joe, to -- we are committed to cost discipline, we are confident in our ability to deliver cost discipline. And as you've seen for our 2025 results, we have met our cost target. So I think that's an important guide also as you look at our cost guidance for 2026. Pam? Manveen Kaur: Thank you, Georges. So firstly, I would note that we are ahead on our simplification saves because the plan and the actions we have taken have come through sooner than what we had originally outlined. This gives us incremental saves of $700 million in full year '26. So that has been a consideration in the overall 1% cost growth envelope. And as Georges said, as we have divestments happening, we are continuously redeploying those -- reallocating those costs to our priority growth areas. What's really important for us is that our investment rigor is focused on our strategic priorities. That's what we've done in 2025. That's what we will do going forward. And these are committed plans, which are multiyear plans. They don't go back and forth every year. So that's all part of the overall cost envelope guidance we have given for this year. And again, we're only giving guidance for this year only, but we expect to maintain a cost rigor on a continuous basis. In terms of assumptions, we have used the end January forward rate curve for our banking NII guidance for all major currencies. So in terms of HIBOR just to note a couple of points. Our HIBOR volatility that we saw in Q2 and Q3 when HIBOR is at 1% has an impact of about $100 million on banking NII. The moment HIBOR sort of stabilizes as it did in Q4 and indeed this year, although it has fluctuated a little bit around the 2.5% mark, that is captured in our guidance. And we look at a few plausible downside scenarios as well before we give a full guidance. Alastair Ryan: Thank you. Our next question on the Zoom is from Ben Toms at RBC. Benjamin Toms: Firstly, on your RoTE guidance of greater than 17%. I'm just looking for some commentary about how sustainable you feel that guidance is beyond the announced planning horizon. So how much do you feel this guidance isn't all weather guidance post all the investments that you've been making into the business? And then secondly, on the Hang Seng synergies on Slide 13, can you mind just talking a little bit around why you've adopted 2 buckets that you've labeled synergies and upside. Is the upside bucket basically where there's a lower degree of certainty over the synergies? So what type of synergies fall into each bucket would be useful. And presumably, there's no incremental restructuring costs associated with the upside bucket on top of the $0.6 billion. Georges Elhedery: Thank you very much, Ben. On the Hang Seng guidance, what I will share is we do have the management ambition, and we do have comprehensive sets of plans to achieve the full $0.9 billion upside with the restructuring costs that we've called out. I'll let Pam give you the details. On the RoTE guidance, we are not guiding beyond our horizon, but you should always assume that we are ambitious. Pam? Manveen Kaur: Thank you, Georges. And just to say on our RoTE guidance, we continue to see a positive momentum in our businesses. And as we said earlier, we are investing for growth. But of course, the targets are only for 3 years. So in terms of the Hang Seng synergies, you're quite right, the $500 million is what I would call the reported synergies following accounting rules. The $400 million synergies are depending to some extent of markets and customer behavior. So there is some degree of uncertainty, and they don't strictly fall between what is considered to be accounting reported synergies. So that's the reason why they're too separate. Both these synergies, the plan to get that $900 million benefit is by the end of '28. And the restructuring cost of $600 million covers the benefits across both buckets. And now beyond that, we actually believe, as it says on the slide that at some stage, the credit cycle will be normalized. So there will be some benefit coming from there. There will be more growth in lending as well as overall Hong Kong growth, which we will continue to be very well positioned for because of the redeployment of the cost allocation that we have, there will be a fair chunk that obviously goes into Hong Kong, which is a core market on our strategy. Alastair Ryan: Yes, we have a question in the room next, Melissa. Sorry, you're allowed to introduce yourself fully. Melissa Kuang: I'm Melissa from Goldman Sachs. Just two questions. In terms of the strategy that you have, the rising to 5% revenue growth. Just wanted to see if you can give about CAGR growth instead. So we can understand the pathway there. In terms of that, I suppose, will it be coming largely from the nonbanking NII portion? Or will it be from the banking and NII? So that's my first question. On the second question, perhaps on the restructuring cost at HSP of $0.6 billion. Can you just give a little flavor about what is it that we are doing in terms of the restructuring that we need such a cost focusing on in terms of delivery and then how we will see the revenue synergies. And in terms of the revenue synergies can it be as quick as next year? Or will it be more heavy into 2028 as per your 3-year guidance rising to 5%? Georges Elhedery: Thank you very much, Melissa, and Pam can address both questions. Manveen Kaur: Thank you, Georges. So firstly, we've said that revenue growth is positive each year, but it's also progressive and reaching out to 5% by '27 to '28. In terms of the underlying building blocks we said to you that in 2026, where we have given the guidance on banking NII, it's a low single digit. So therefore, similar to the prior year, we will see more positive growth momentum on the fee-generating businesses. And beyond 2026, Banking NII, of course, we look and see where the guidance is, where it is, where the rates are and what's the timing of the rate cuts as we go into '26, but we are continuing to invest in our fee-generating businesses so we see that momentum in those businesses, including Wealth, which really underpins this revenue growth and wholesale transaction banking to continue. And I'm hoping that at some stage, we'll see a little bit more of growth on the balance sheet in terms of lending beyond U.K. that we have already seen. Now in terms of the restructuring costs. There are a couple of elements that drive it. One is there's some organizational alignment. So there will be some roles, which will evolve and teams that will be realigned, but a large chunk of this is really in terms of technology. So the investment in technology so that we can better harmonize our technology and better get results from the technology investment we have across both the Green and the Red brand. And this is really quite critical for us in order to achieve the overall ambition of the $900 million because it's the $900 million ambition just to reiterate, it's not just a cost story. It's a revenue and a cost story, and this is an investment for growth, and that's how we look at it. And we plan to spend restructuring costs of $600 million across the 3 years. And of course, this will be spread through these 3 years, we are not saying any more. In terms of revenue synergies, we strongly believe that by the privatization of Hang Seng Bank, our ability to be able to provide a broader product proposition into the Green band is highly enhanced. So we'll have better Wealth products for our retail customers. We have capital markets and broader wholesale transaction banking products for the wholesale customers, but more importantly, we will be able to have access for the same international network that we have for the Red brand also within the Green brand. And last but not least, we will have more balance sheet flexibility in terms of how we leverage our treasury capabilities, but also in terms of upstreaming and downstream capital, and this will all be done over the next 3 years. Alastair Ryan: Thank you. We'll go back to the Zoom. The next question will be from Aman Rakkar at Barclays. Aman Rakkar: I had two questions, please. So one is around capital. It looks like a decent chance that you'll be within your target CET1 range in Q1 based on historical and perhaps projected capital generation kind of estimates. Obviously, it raises the prospect as to whether you might be able to reintroduce buyback earlier than planned. I don't know if you're able to kind of comment on whether that's a realistic or plausible scenario. But I guess more specifically, just interested in the capital allocation thought process from here? Clearly, your stock is trading at a level now where the return on investment around buyback might be beaten by alternative uses of uses of capital. Obviously, you did it with Hang Seng, but should we be thinking about inorganic growth as well as the compelling organic growth within your footprint? And then I just wanted to ask around banking NII, please. Clearly, that kind of Q4 jumping off point is flattered by $100 million. I don't know if there's anything else that you direct us to kind of strip out of that number in terms of deposit catch-up or the impact of HIBOR. And I was particularly interested in what your deposit growth assumption is that sits behind the guidance you've given '26, please, because I think that could be a sensitivity around the ultimate outturn of banking NII in '26. Georges Elhedery: Thank you, Aman. Pam is best placed to answer both, but I want to share a few thoughts about our philosophy on capital. First, we remain capital-generative as you've seen from our targets, but also as we've experienced over the first 1.5 months in the year in 2026. So we're very pleased to see that our capital generation is strong. But our first priority is now restoring the CET1 ratio following the privatization of Hang Seng, which we estimated to take us 3 quarters. But of course, we do that assessment quarter-by-quarter. But I don't want to point out to the increased dividend we are paying this year, $0.75, $0.45 on the fourth quarter, which is on a full year basis, 14% higher than last year. So we are distributing through dividends. What I wanted to share about the discipline how we use capital, we've shared it in February 2025 Aman, we've set ourselves 4 key criteria. They are a high bar, and we strictly adhere to them in the way we look at inorganic opportunities. In so far, that these 4 criteria are met like in the case of Hang Seng privatization, then we will consider inorganic. But if one of these criteria is defeated, then our preference will be to utilize or return any excess capital back to our shareholders in the form of share buyback. Pam? Manveen Kaur: Thank you, Georges, and thank you, Aman, for your questions. So firstly, as Georges said, we continue to remain highly capital generative. We've had a good start to the year, as I called out earlier in my remarks. But as you know, we look at our share buyback decisions on a quarterly basis, and that will be a quarterly process. The starting point is clearly our target operating range, which we are working hard so that we can replenish capital that has been deployed in the Hang Seng Bank privatization. That's the first priority, as Georges said, and that CET1 operating range remains 14% to 14.5%. That's the one which underpins all the targets and guidance we have given today. Just to clarify, in terms of our priorities from there on, of course, the priorities are 50% is the dividend payout ratio, which we have again reaffirmed. We would like to see balance sheet growth, and we want to invest for growth. That's if we can have growth at the right return levels. Our distribution priorities hence have not changed, and share buyback remains for us a useful tool to deploy surplus capital irrespective of where the share price is. So I think that's an important consideration for us going forward. Next question. On banking NII, you're right, there was a $100 million non-repeat items. So if you take that out for modeling purposes, you come to $11.6 billion. There are no other one-offs. There was a higher HIBOR quarter-on-quarter, and HIBOR also stabilized. And that's why, as you remember, third quarter when we gave a more cautious outlook because we don't know where HIBOR would be. But having seen HIBOR stabilize, it gave us the upbeat on our banking NII results. We also saw low betas on saving accounts in Hong Kong. And very importantly, we saw strong deposit growth, and we do expect this strong deposit growth to continue to be a key driver in 2026 along with the tailwinds of the structural hedge similar to last year and redeployment at higher rates. The only thing to bear in mind is that for this year, clearly, in Q1, given that there will be 2 days less there will be a headwind of $300 million in Q1. We have assumed, obviously, the rate changes, both that we've seen to date as well as projected for the year. But a lot depends on, as you can imagine, the timing of those rate changes, particularly in the U.S. dollar and sterling. Alastair Ryan: So we'll take the next question back on Zoom, Amit Goel at Mediobanca. Amit Goel: So two for me. The first one, just coming back on the upgraded RoTE targets. the 17% plus. I just want to check in terms of how you're thinking about that on a kind of year-on-year-on-year basis for '27 and '28. I mean are you thinking that RoTE kind of continues to improve? Or are you thinking more 17% is kind of a very acceptable and a good level and so any additional upside you would look to reinvest? And within that, I kind of note that on the LTIP, you've kind of brought up the lower end of the kind of the boundary performance to, I think, to 16.5% from 14%, but the 18% of the top end hasn't changed. So I appreciate that's done by the compensation committee. But I'm just kind of curious how you're thinking about what appropriate or sustainable level of return is. And then secondly, again, just coming back, maybe more clarification on the Hang Seng Bank kind of benefit and restructuring charge. So I mean, I guess, I was curious, really, for a bit more detail on the $0.4 billion of additional benefit, I guess, from an accounting standpoint, can't be treated as a synergy what exactly that is? And within the restructuring charge, I think previously you said that there's actually going to be more of a less staff, natural -- there will be more natural attrition and redeployment. So there'd be very limited kind of day kind of costs. So I'm just curious what you're spending that money on? Georges Elhedery: Perfect. Thank you, Amit, very much for your two questions. Pam can address them, but just to talk about LTIP briefly. This is indeed the remuneration committee consideration. It reflects the performance that we will achieve in '26, '27, '28, which aligns to the guidance we're giving you. So there isn't more we can say at this stage. Apart from that, it is more ambitious and reflects our ambition to the business. Manveen Kaur: Thank you, Jordan. Thank you for your question. So firstly, yes, we have ambitions and our target is 17% plus each year. We are not giving a trajectory, whether it's the same or progressive but of course, we continue to grow our business and invest in it diligently, but the target is just 17% plus each year. In terms of our -- the Hang Seng, firstly to call out, these are both benefits we are getting from a cost perspective but also a revenue perspective. So classically, what you would see in terms of cost synergies and all the restructuring is actually severance costs, that is not the case here. Because there is so much focus on revenue as well, a lot of the restructuring will be in terms of investment from a technology perspective. The cost synergies themselves, of course, there will be some realignment and evolution of roles and individual areas. It's not something which is going to lead to severance or staff reductions. There could be some rule changes, clearly. There will be some scale in product manufacturing and there'll be some technology harmonization. Now when we think in terms of the 2 bits with the $500 million, the $400 million and why it so, clearly, from a cost synergies perspective, it's easier to call out. Revenue synergies, there are greater haircuts, but we do have very detailed comprehensive plans on how we are going to drive these revenue synergies. And those plans underpin the $400 million even though they were a haircut in the $500 million and just in total, to reiterate because there are lots of numbers going around. I appreciate that. Think of it as a $900 million benefit in those 2 buckets with different degrees of accounting rules and different probability of expectations and then an overall restructuring cost of $600 million to achieve that total. Georges Elhedery: And Amit, we are a net investor in people in Hong Kong. We are also investing in technology in Hong Kong to capture all these growth opportunities we have been talking about. Therefore, we do not expect, anticipate or plan any program of redundancies. We do, though, expect that some roles may need to evolve, and we are basically committing to training, reskilling to make sure that our own colleagues have these growth opportunities, career opportunities to be able to capture these roles in which we will be investing over the duration of our program of 3 years. Manveen Kaur: That's a meaningful number that we have already included in that $600 million restructuring costs for training and reskilling of our colleagues as their roles change and evolve. Alastair Ryan: Thank you. Will stay on the Zoom with Kian Abouhossein from JPMorgan. Kian? Kian Abouhossein: First of all, Georges, congratulations. I have to say you really driving the bank to a better process and discipline. We haven't seen in HSBC before, if I may say so. To the questions, tech stack, can you go a little bit more into detail? You gave a number in 2022 that you're spending about 20% on IT as a percentage of expenses. Wondering if we should think about similar ballpark. Within that, can you go a little bit under the hood and discuss where are you on cloud transmission are you done? Where are we on platforms? Are you done? Or what platforms still have to be produced new or integrated data management? So I really want to understand a little bit what you're doing on the tech side. And then CRE, this is still an area where I'm a little bit uncomfortable. Stage 3, CRE China 18% coverage, 16% on Hong Kong -- 14% sorry, on Hong Kong, stage 3. Can you talk a little bit where you want to drive that to? And clearly, I heard Pam's remarks about provisions and CRE was mentioned. Georges Elhedery: Perfect. Thank you, Kian, for your two questions and for your feedback. I'm going to take your tech question. Pam will cover the Hong Kong CRE. And I think it's a very important question. Thank you for asking it. We're indeed driving both performance and transformation with discipline, with precision, and we are doing it at pace. And we're very glad to see that the results of both performing, growing and transforming is delivering at pace, as you've seen in our 2024 numbers. So in terms of tech, you could broadly assume that 20% is the cost that we are spending on technology. But the way we're talking technology now is, number one, we are thinking about all those legacy or nonstrategic applications, which are consumers of run-the-bank costs, consumers of maintenance costs, patching costs, license fees that we are going to very proactively demise at scale. And we're very pleased to be able to say that we've demised more than 1,100 applications this year -- well, in 2025, this is more than 1/3 of the about 3,000 applications that we have deemed nonstrategic and looking to demise. Just to give you a perspective, we run about 10,000 applications, 9,000 actually, of which 3,000 are flagged to demise over the horizon between now and 2028, and we're moving at pace for that. Now that demise will allow us to free up investment capacity to put it in new technology and new capabilities in tech space. Cloud transformation, I think we are quite mature on cloud. I think we've moved from a cloud-first strategy where we moved many of our applications to cloud to now a more mature and therefore, more sophisticated approach to cloud by looking at optimization of hosting of applications. And therefore, we would look at any new applications or our existing stack, where it is better at. If it is on cloud where the majority is, then it will be on cloud, and then we will look at portability capabilities and resilience capabilities. And if it is on-premise, then or in the private cloud, then we will look at that. So I think we have matured our cloud approach, and we're already in a place where we want to be, but of course, we'll continuously evolve it. If you ask me where is the biggest investment going into the new technology today, it is definitely going into generative AI. I want to just take a minute to explain how we're thinking about generative AI because that's quite important. We're looking at generative AI in 3 work streams. They're on the Slide 8 of the pack. The first work stream is we're making generative AI available to all our colleagues in time, 85% mostly now enabled to make sure that we are helping our colleagues upgrade themselves and become future-ready. The first thinking is how can we bring our whole colleague population with us in becoming future-ready, generative AI enabled. They will have generative AI tools that they can use. They will have coding assistance or vibe coding assistance for those among our engineers, 31,000 already enabled, and we are seeing immediate productivity gains. We're seeing 60% speeding up in our unit testing. We're seeing 5x faster patching of code, patching of vulnerabilities and code, thanks to all these capabilities. This is our first mission. All our colleagues to benefit, to be trained, to be upskilled, to become future-ready, better version of themselves, more productive, better outcome for our customers. The second work stream in generative AI is fundamental reengineering of our processes end-to-end. 50 of those processes are already under review. Some of them have already delivered and finished, such as onboarding and KYC, but all sorts of processes, including fraud detection and prevention, credit applications, capital allocations and what have you data -- visas and what have you to allow generative AI to help us redesign the process in a much simpler way and also allow gen AI to be integrated in the process to process data in a much more efficient way. The result of which is a more productive bank, more efficient bank and a safer bank with stronger controls, and more importantly, a very simple bank that will be able to ultimately deliver to our customers closer to near real time or real time at the highest possible standard that's available for us. And that is an ongoing journey. The third work stream we're taking in generative AI is how we enhance customer experience at the customer touch points. So this is our relationship managers, wealth advisers, contact center operators. As they engage with customers, generative AI tools already rolled out, as you can see on the slide, will allow them to personalize at scale, to tailor-make, to customize at scale at the highest possible standards for our customers close to real time in a way that can allow us to deliver our capabilities to customers in a much more seamless, faster, better way. Customer experience will be materially enhanced. Now today, we will have operators using this generative AI at the service of our customers, but you can envisage that in a few years' time, we could possibly put these generative AI tools straight for utilization by our customers. Those are the 3 work streams. What I want to say though is that we're doing this with safety and security at the forefront. We're doing this in a way that we can review, monitor and audit everything we're doing in the space as a critical standard, and we're doing this in a way to keep control, resilience and human accountability always there because we are a regulated industry and our customers' trust is the most important asset, and we will do everything to make sure customers trust is always protected and nurtured. Thank you for that question. I'll hand over to Pam on Hong Kong. Manveen Kaur: Thank you, Kian. So just looking overall in our guidance, around 40 basis points guidance for 2026 considers all our portfolios. And of course, Hong Kong commercial real estate as well as the very small residual amount of China commercial real estate, and we look at a range of plausible downside scenarios before we give you this guidance. So just unbundling a bit. The China commercial real estate portfolio has really come down. It's now less than $1.5 billion, and our ECLs this year for this was below $200 million. So in that context, the names that have left that portfolio that's left, we feel much better about it compared to where the other portfolio was when we first started with it. Now when you think in terms of Hong Kong commercial real estate, firstly, I'm going to give you a bit of an update on the 3 segments within this Hong Kong commercial real estate portfolio and then how we look at the names, particularly the credit impaired names. Now the first one, we've been calling it for a year, and now I'm very pleased to say that the residential component of Hong Kong commercial real estate is near normalized. And I say that because whether I look at in terms of price increases, HPI has been up 5% year-on-year in 2025. But more importantly, we've seen a 10% growth and also sales volume. Rentals have already stabilized both in terms of the rental demand as well as the rental pricing. Now when we look at retail and the office space, of course, there are pockets of distress in it. But just as a broader context, we saw retail sales also in Hong Kong in May turn into positive. And they are now up year-on-year at 6.6%. But of course, this alone is not going to solve the problems of the retail sector because peoples retail shopping patterns have changed. They don't necessarily need to go to shops on malls, et cetera. Having said that, as there is more consumption in Hong Kong, we are seeing this shift from shopping places being changed into more food and beverage and so on, but there will be pockets of stress in it, and that will be coming from mainly oversupply at this point of time. Now office is the sector we are watching very carefully, because recently, we have seen both in terms of rental demand and in transactions for the best properties with the best spec in central in the best areas, there are some green shoots. But the downside is, at this point of time, vacancy rates starts are still around 17%. So that's what we will be managing through and following up very, very carefully. Having said that, in Hong Kong, we are not a distressed seller. It's a market we are deeply embedded in. We really understand well. But we are very resilient in terms of how we do our valuations. So we go and look at valuations, including distressed valuations. And we look at with our collateral position, and we stay well collateralized. And we've been following through this very closely over the last couple of years. The one metric, which I personally follow, though my job has changed now, is what happens to credit impaired names. And the exposure that you need to focus on is credit impaired names, which have an LTV over 70%. Now this number has grown and it now stands at $1.9 billion. But the ECLs against it have also grown, and they have grown to around $900 million. And if you go back quarter-on-quarter, that differential between the ECL number and the exposure sits around $1 billion number. So that's where you think your risk is. And of course, you have to see if some of the substandard names don't fall down and so on. So overall, I would say, given what we are seeing and particularly to notice that in this quarter, we had a stage 3 against one name, but the macro environment in Hong Kong was positive. And as a consequence, through IFRS 9 calculation, those 2 almost offset each other. So in that broader picture, we feel very comfortable with the 40 basis point guidance. Alastair Ryan: We will take Rob Noble at Deutsche Numis next. Robert Noble: Just on net -- sorry, noninterest income in 2026, what are the negatives in noninterest income for next year? So if you were to grow the same level, which was, I think, the low teens in 2025, you would blow through 5% revenue growth in '26, let alone in 2028. So why aren't you -- why are we much more positive on revenues than you're kind of sat now? And then secondly, just on Hang Seng, what's the difference in the local capital requirements in Hong Kong and the U.K.? Does the transaction change anything in terms of minimum group regulatory requirements and how we manage capital through the group? Georges Elhedery: Okay. Rob, thank you very much. Let me address your first question, and Pam may add to it and address definitely the Hang Seng capital question. So the 90% or more of our noninterest income, and therefore, our fee or other income is driven by transaction banking and Wealth. So looking at the dynamic in these 2 will give you a good perspective of how our non-NII is evolving. Transaction banking, we've reported full year growth of 4% year-on-year. We are seeing continued momentum in this space. We are a leader in practically all the aspects of transaction banking that we prosecute with our clients. We've been voted by 30,000 of businesses as the leader in payments, both in products, services and technology. We've been 9 years consecutively a leader in trade. We've been voted by corporates using foreign exchange as the leader in servicing them with foreign exchange. We continue investing in this space. We continue expecting resilience in this space, in particular in trade. And I can talk more to trade if desired. As you look at Wealth, Wealth remain unequivocally one of the strongest growth opportunities, in particular, one, given our footprint, where we are focusing on Asia and the Middle East and the underlying growth in Asia and the Middle East of Wealth is very strong and our ability to capture more market share is very strong. We're already a leader in Wealth in Asia, if you look at Wealth balances. And that's an area where we can benefit from this underlying structural growth opportunity. And second, Wealth because we are also accelerating our investments in this space. You've seen we've launched 26 or 27 wealth centers in 2025, taking the total to 64. We're hiring relationship managers, wealth advisers. We're empowering ourselves with generative AI wealth capabilities. We're building technology. We're creating a comprehensive set of products, and we continue investing in this space. So we do believe they remain -- Wealth remains a very strong growth opportunity, albeit we have dropped the guidance on that. And the idea is to give you an overall revenue guidance, which is better encompassing the overall opportunities and probably more relevant for your forecasting. Pam? Manveen Kaur: Thank you, Georges. So firstly, the only comment I'll make on Wealth is, as Georges said, we are very comfortable in our broad-based product proposition. But the only thing we need to remember is that this year, with how the markets have performed, therefore, on some of the Wealth that is generated through transactional kind of activity, we just have to see how that progresses in next year. We're not going to make a call out on how volatile or otherwise markets are going to be in 2026. So if there's anything that's what would have been a good consideration because we have to look at plausible downsides clearly in giving our guidance as opposed to just a base case or an optimistic case. So that's all I would say on that. Now from a Hang Seng capital perspective, we have already got the $3.8 billion benefit, which comes from the disallowed minority capital, which we don't need to have an impact on our CET1 anywhere. So that's a positive straight on. But generally, in a broader picture, across all our subsidiaries, which are 100% owned, we do have more flexibility in terms of how we move our capital, whether it's upstreaming or downstreaming, obviously, subject to what we consider the mark-to-market outlook is, where our portfolio is and subject to sort of regulatory discussions. So all in all, it does give us a better ability to move capital around the group and be more efficient in the deployment of capital. Alastair Ryan: The next question we will take again from the Zoom is [ Chen Li ] at China Securities. Unknown Analyst: I have a question about preservation of Hang Seng Bank. Could you provide further information about the growth opportunities? I want to know that in which aspects of the Wealth Management business will have more -- stronger synergies with Hang Seng Bank? And what are other outlooks for the Wealth balances and the Wealth Management margins? Georges Elhedery: Okay. Chen, thank you very much. I'll hand over to Pam, but remember what we said at the announcement on the 9th of October of our intent to privatize Hang Seng is these are commitments we are holding. Hang Seng Bank will retain its own authorized institution and governance. It will retain its own brand in Hong Kong, of course, as a major community bank and the largest local bank. It will retain an independent customer proposition that will compete in the market for all customers. It will retain its branch network. And that proposition will remain intact with a distinctive cultural strength and customer proposition, customer experience strength that Hang Seng has been known for, for practically a century in Hong Kong. What we are driving through these privatizations is better efficiencies in cross-selling or better efficiencies in aligning back office or manufacturing capabilities that are not related to the customer proposition. Pam? Manveen Kaur: Thank you, Georges. So firstly, as Georges has said, that the positioning of Hang Seng Bank as an iconic community bank in Hong Kong stays. What we will endeavor to do is that post the privatization, we don't have that arm's length relationship restriction that prevents us to do more in terms of product proposition offerings and cross referral to our customers and also in terms of the investment dollars that we spend, we can't spend them if it's on the same product, on the same customer journeys seamlessly across both the Red brand and the Green brand. So that gives us a very good position that as these 2 stand-alone brands, our ability to lean into the growth in Hong Kong and the macro opportunities, including cross-border will be available to the broadest customer base while maintaining that community element of service for those customers. So that's how we are looking at it. And we will look at, obviously, Wealth products as well as pricing margins so that we can really make them more easily available for our customers. Georges Elhedery: Chen, we are the market. We are the market leader in Hong Kong, undisputed. We are consolidating and cementing this leadership. Hang Seng Bank privatization will allow us to consolidate that leadership even further in all sorts of a broad range of products and services. And we have a leadership position in capturing these growth opportunities that Pam was talking about in Hong Kong as a super connector between the Mainland and the world, as poised to become the leading cross-border wealth hub on the planet before the end of the decade. And it's really a privilege to be in the position we are in to be able to capture this with the full HSBC and Hang Seng propositions. Thank you, Chen. Alastair Ryan: So I will take the next question from Ed Firth at KBW. Edward Hugo Firth: I just had two questions. One, just talking about the HIBOR benefit in Q4 for your net interest income. I think one of your peers talked about it as a temporary benefit. And I guess I'm not close enough to the franchises and how you price, et cetera, domestically. But I guess, do you know -- is there anything peculiar about you or some of the peers about the way you repriced CASA accounts or something in Q4, which would mean that yours should be sustained, but somebody else's might be temporary. So I guess that's the first question. And then the second question is, I guess, it's slightly an extension of Rob's question. I'm not quite sure what is so specific about 2028 that means you can get 5% revenue growth there, but I assume you don't feel you can before then. And I know that at the moment, in '26, we've got some headwinds from interest rates, but you've also got a very strong tailwinds around things like Wealth Management, Pam highlighted that. And '27, I guess, should be a reasonably normal year. So I'm just wondering, is there something that I need to think about that you can see that is happening from '28 and beyond that will make your revenue growth better that we're not seeing today? Georges Elhedery: Okay. Thank you very much, Ed, for your two questions. Pam, do you want to address that? Manveen Kaur: Yes. So let me just unbundle the situation with regard to HIBOR. So in the fourth quarter, HIBOR stabilized. And we had called out in the prior quarters that in 20 -- and I'll come to Q1 in a second. That in Q2 and Q3, HIBOR was very volatile. And we were looking at the comparison for a HIBOR close to a 1% where it has an impact of about $100 million in terms of banking NII on a monthly basis and then stabilizing to something which is in the 2% mark. We look at HIBOR on a 1-month HIBOR basis. We feel very comfortable as long as HIBOR is around 2.25%, 2.5% and so on. I fully recognize that in -- and I don't know what other peers would say, like what tenor of HIBOR rate is most relevant for them. I'm just telling you from our perspective. Now in Q1, HIBOR has fallen, but we have to see the context. There's been a range of IPOs that normally happens. When there's that demand for HIBOR fluctuation, but it has fluctuated within a narrow range. So the impact isn't there. Also, last year, in Q4, there was a benefit of lower betas. So when HIBOR went up, the same impact wasn't there on the savings rates. Of course, we'll have to look at betas, how they evolve. And then we have a very strong deposit franchise. And I think that's a differentiator in terms of the CASA level that we have, in terms of our accounts. And therefore, we have a good positioning where that deposit base helps us on the banking NII more than most of our peers. Obviously, in terms of both banking NII this year and also our ambition, it's the rate headwinds. And as I said earlier, it's the timing of the rate headwinds. If they're delayed, of course, it becomes less of a headwind. If they are earlier, then there is more sensitivity to it. So I would say from a Wealth business, as I also alluded to earlier, yes, the growth is very strong whether its asset management, Wealth products, insurance, it's broad-based growth. But last year, there was a great advantage or a tailwind coming from markets, which gave us a lot of uplift on the transactional-based fee income. We can't assume that for this year. Of course, if markets stay well and that happens, then that's a positive tailwind. So that's how I would look at it. Georges Elhedery: Yes. And I would look at '28, not specifically as the year '28, but as what would we believe our long-term structural opportunity to grow. It's our guidance for '28, but we've delivered 5% revenue growth in '25. We've delivered 4% in '24. So it's just the footprint we are in and the capabilities for us to capture the growth is there. Manveen Kaur: And we like to be cautious to we have to consider downside scenarios as well. We don't always take the best case. That's all I would add. Alastair Ryan: Many thanks. We have probably time for a couple more questions. We'll take Alastair Warr at Autonomous next. Alastair Warr: Two questions. Back to Hang Seng Bank, I'm afraid. You touched on potential upside from asset quality improving. I just wondered if that's something you're thinking about in terms of maybe more active steps? Or is this just about being patient with the property cycle? And then just on the Wealth side for a second question. It looks like there's a bit of a slowdown in the new account opening in the fourth quarter if you've got 1.1 million for the year and you were running at about 300,000 a quarter. Is that just seasonal or anything changing there that we should be aware of? Georges Elhedery: Thank you, Alastair. Pam, you can. Manveen Kaur: So just in terms of the asset quality, the comment I made was that if you look at Hang Seng's pre-impairment margins, they've been very strong. If you look at what Hang Seng's ECL charges have been prior to '22 versus in '24, '25 and even the run rate for the first half of the year and then what's consolidated for the full year, that's what I meant by the overall improvement, and that would be both for Hang Seng Bank as it would be for HSBC Red brand, and that's the only way to look at it. In terms of our own policies or processes and how we manage exposures, both for the Red brand and Green brand, they are highly aligned, how the rigor we follow through them, I don't expect any of that to give us either a tailwind or a headwind. So in terms of the new-to-bank customers, yes, it was 1.1 million, just to clarify for the Red brand. And the fourth quarter also had a good number. We believe that this new-to-bank customers is a huge growth opportunity for us. However, we are trying to be now a little bit more selective on the acquisition because we have now had a 3-year trend on how the acquisition has happened in between the lower end of the customer base and the more premier. We have added a fee for the new-to-bank customers who have a balance less than HKD 10,000. And because of that, we expect that there would be slightly slower acquisition in 2026. But the focus on our affluent customers is going to continue. The focus of the improvement in our overall income, whether it's through deposits, Wealth products, insurance is very healthy coming from these new-to-bank customers. So we don't see any change. We just don't want people to say that every month is going to be like 100,000 number because it's like almost like a ticker number because that's what the trend was. There will be fluctuations and changes month-to-month and quarter-to-quarter, but nothing material to call out as such. Alastair Ryan: We'll take Kendra Yan at CICC. Jiahui Yan: My question is kind of related to micro side. As the newly nominated U.S. Federal Reserve Chair has proposed interest rate cuts and balance sheet reduction. Could you please share your macro assumption behind the future 3 years guidance? And are there any risks that we need to pay attention to? Georges Elhedery: Yes. Thank you, Kendra. We can do that, Pam? Manveen Kaur: Yes. So just as I said earlier, Kendra, when we look at our guidance, we look at plausible downside scenarios. That include interest rate cuts, both quantum as well as duration. This time around, as we said, the starting point for the guidance for this year was the January year-end cuts, but we also stress test our portfolios on a regular basis for a range of scenarios. And we consider those and the impact on ECLs also on a weighted average basis when we look at our overall portfolios. We have looked at the -- some of the macro I would say, recent news, whether it's to do with private credit or otherwise because as I said earlier, we look at second and third order risks that may come from some sort of a macro event or issue, even though our own underwriting practices are very stringent and very rigorous in this respect. What I will say is that despite the evolving scenarios that you are facing on tariffs and trade, our business has been really quite resilient. And that has -- overall, it is up 2% year-on-year in 2025. In a complex market as this landscape evolves, our relationships and engagement with clients gets even stronger. We have taken market share in corridors through -- in Hong Kong, U.K., Asia overall as supply chains are moving and corridors are shifting. So I would say, overall, if I think in a macro sense, there are headwinds and tailwinds as well as for the world at large, but also for HSBC. We look at specific idiosyncratic factors that could impact us, any risk concentrations we may have in our home markets, and that's all part of our guidance. And that's why I said to you earlier or to the earlier question that when we give our guidance and our targets, we like to be rightfully conservative. But the most important thing is through this period, we have made an assumption that we will continue to invest for growth. We have the right strategy. We have the right priorities. We have the focus to retain and win market share and we will continue to do that with the basic underlying principle that Georges called out earlier, we are here to serve our customers, and it's the strength of our relationship with our customers that gives us the confidence for our guidance and targets. Alastair Ryan: Yes. Thank you, Georges. So we'll just take a final question today from Katherine Lei at JPMorgan. Katherine Lei: Okay. My question is still on revenue side, right? I think the 5% revenue growth in 2028 and then the above 17% RoTE guidance, I think there's 2 key drivers. One will be on NII and then the other will be on Wealth. But my question is that on NII, what is -- like what gives HSBC the confidence that on the sustainability of the deposit growth? Because one trend we noted is that, say, for example, in China, with RMB appreciation and also China start to taxing its citizen globally, will that actually slow down, say, for example, Chinese nationals coming to Hong Kong to open new accounts and then the money flow movement? So can we be more a bit specific on what are the key drivers and then the key path on the deposit growth? This is number one. Number two, I think is still on -- number two is on Wealth and on that trend, right? So what do you think that will have an impact on our Wealth as well? Georges Elhedery: Okay. Thank you very much, Katherine. Let me address them in reverse order. I'll speak a little bit about Wealth, and I'll share some thoughts about deposits and Pam can give you additional granularity to address your question. Wealth remains structurally a very important growth opportunity for HSBC, as we said specifically that we are aligning our Wealth footprint, Asia and Middle East to where the Wealth is growing fastest in the world in Asia and the Middle East. Also our ability to capture wealth all the way from the premier customer base, which is the affluent middle class all the way to the high net worth means we have a better catchment of all these opportunities. We're also present in a number of onshore markets such as China onshore. We are the leading international wealth manager in China, Mainland China onshore, which is not dependent to flows outside China, for instance. We're investing in India. We, of course, have big wealth hubs in places such as Hong Kong, of course, Singapore, the UAE and a number of other markets. The challenges possibly to anticipate is there is a turnaround or a change in the overall outlook of investment because inevitably, wealth will depend on the underlying performance of the invested markets. And if there is -- today, there is a strong resilience in these markets, which is what we -- our customers are also looking at. But that is, of course, always a risk that we need to be watchful of. We're also investing to gain share. We're investing to diversify the product offering and to diversify the wrapper offering all the way from insurance to asset management to other forms of brokerage, et cetera. So that we are able to meet the varying wealth customers' needs in how they look at their investment requirements. Finally, we're also investing in generational wealth, specifically supporting transfer to the youth or the next generation or transfer between wealth centers in a way our footprint allows us to do that is competitively very strong compared to a number of our peers who are offering wealth from very, very few number of hubs, okay? That's the wealth. Now with regards to deposits, Pam will give you a better answer in the details you're asking for, but let me tell you one thing about deposit. It is the foundational product on which our customers' trust is expressed with HSBC, and this is how we look at it. Customers trust us with their deposits. That's the starting point of any possible service and proposition in transaction banking, payment, financing and otherwise. So we cherish this asset class. We have always cherished it, through thick and through thin, in good rates and bad rates, and we will always focus on what it takes to make sure our customers trust us, the financial strength, the level of service so that we earn their trust with their deposits. When you look at our deposit base, it has grown in every business. It has grown, and we are highly surplus liquidity in every currency, every major currency, in every major geography. So there is a deep rooted across our 4 businesses and across all the geographies where we operate. a deep-rooted trust, which we nurture to support customers giving us their deposits and using us as their deposit bank by preference or by excellence that can support, if you want, our outlook on our deposit growth. Pam? Manveen Kaur: Thank you, Georges. And Katherine, a really good question to close on. We have seen deposit growth, as you've seen in our new disclosures on Wealth across the spectrum of our customer base, premier, private bank, retail in every market, in every jurisdiction, even when there isn't a home market, and that really underpins the growth that we are seeing in our banking NII. We have taken very conservative trajectory on loan growth. I'm hopeful at some stage, loan growth will also pick up, which will then also support the banking NII if from an interest rate perspective, the timing of the interest rate becomes a headwind in one of those plausible downside scenarios. We have a structural hedge, which is continuing to be a tailwind given all the work we did a few years ago. We will also continue to build on the structural hedge, even though the largest increases we have done are -- have been behind us now. So if I look at all of these things in the round, and I look at the momentum of the business that we have seen in the first sort of 7 weeks of this year, that gives us confidence for our banking NII guidance for 2026. If you underpin that just based on the fourth quarter, obviously, it will give you a number of [ $46 billion ]. But we are not calling that out because we are very cognizant of the headwinds on interest rates. And you're right, the interest rates in the U.S. is down 50 basis points, U.K., 25 basis points just year-to-date with further 2 to 3 rate cuts to happen. So with that, I think in the round, we feel very confident that the banking NII, which is, again, the trust of our customers and what we are doing everything to preserve that trust and to build on those relationships, because I'll just end with one thing. We are fundamentally a relationship bank. We have a full-service suite of products we offer to our customers. So for our guidance, for our targets, we look at that full range. We are not a product proposition-based bank, in which case, some of the comments you made will obviously be a bigger headwind. Georges Elhedery: Perfect. Thank you, Pam, and thank you, Katherine, for your last question. Thank you, everyone, for joining us. We are pleased to report strong revenues, strong profit, strong returns and strong distribution to our shareholders. We are confident we can navigate the challenges ahead of us from a position of strength, and this has allowed us to put ambitious targets about our revenue growing every year for '26, '27, '28 rising to 5% in '28 as well as our return on tangible equity delivering 17% or better every year over that period with a 50% dividend payout ratio, all excluding notable item. Thank you very much for joining us this morning or this afternoon, and I hope you have a good day. Manveen Kaur: Thank you. Operator: Thank you, ladies and gentlemen, for joining today's webinar. You may now disconnect.
Operator: Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Adecco Group Q4 and Full Year 2025 Results. [Operator Instructions] I would now like to turn the call over to Benita Barretto, Head of Investor Relations. Please go ahead. Benita Barretto: Good morning. Thank you for joining our conference call today. I'm Benita Barretto, the group's Head of Investor Relations. And with me are the Adecco Group's CEO, Denis Machuel; and CFO, Valentina Ficaio. Before we begin, please take note of the disclaimer on Slide 2. Today's presentation will reference both GAAP and non-GAAP financial results and operating metrics. This conference call will include forward-looking statements, which are based on current assumptions and, as always, present opportunities as well as risks and uncertainties. With that, I will now hand over to Denis. Denis Machuel: Thank you, Benita, and a warm welcome to all of you who joined the call today. And let me open with the full year highlights on Slide 4. The group has consistently delivered on its ambitions and targets in 2025. In terms of market share, the group gained 245 basis points relative to key competitors with ongoing positive momentum. On a full year basis, the group's revenues were up 1.3% year-on-year, gross profit was stable, and the group delivered an industry-leading 19.2% gross margin, evidence of the benefits of its diversification strategy. The group has managed costs and capacity with discipline. G&A overheads were further reduced by EUR 23 million, bringing our total net savings to nearly EUR 200 million when compared to 2022's baseline. And productivity increased 3% year-on-year. In turn, the group generated EUR 693 million of EBITA and stayed within the EBITA margin corridor on a full year basis at 3%. Cash generation was strong with 102% cash conversion ratio, operating cash flow of EUR 613 million and free cash flow of EUR 483 million. Importantly, the group improved its leverage ratio, ending the year at 2.4x net debt-to-EBITDA, down 0.2x year-on-year and down 0.6x sequentially. Let's turn now to Slide 5. And on the left side, we highlight our consistent outperformance relative to key competitors across the past 3 years. And the chart on the right side shows volumes steadily improved throughout the year with flexible placement and outsourcing volumes in the Adecco GBU rebounding from decline to growth. Management's focus on customer satisfaction, digital innovation and recruiter productivity, integral to our strategy, is driving strong top line and volume momentum ahead of market trends. Let's move to Slide 6, where we set out the progress we are making with the run-and-change agenda, strengthening execution muscle across operations day by day, while investing in digital solutions and new services to drive future growth. There are many points on this slide, so let me highlight only a few. Beginning with the Strengthen Run priorities. The group has made significant progress in 2025. The Adecco North American turnaround gained traction. Full year revenues were up 12% and the EBITA margin expanded 230 basis points year-on-year. In line with the group's digital strategy, Adecco further expanded its Talent Supply Chain approach to 144 large clients, adding 42 in Q4 alone. By centralizing, automating and digitizing processes effectively, the Talent Supply Chain delivered a meaningful 550 basis points year-on-year improvement in fill rates. In Akkodis, restructuring in Germany has locked in EUR 58 million run rate savings. And LHH's Career Transition business continued to successfully expand in the SME segment, increasing the number of companies served by 17%. The group's Change agenda also progressed. Adecco now has 6 recruiter agents live within the Talent Supply Chain structure in the U.K. and in France. The U.K. agents have achieved approximately 15% time savings in recruiting processes, and this is an encouraging start. And we will roll out agents across key markets in 2026 to scale these benefits. And while there is further work to be done in Akkodis Consulting, France's value creation plan improved performance with the unit growing ahead of market and achieved a 7% margin run rate, up 160 basis points year-on-year. And in LHH, targeted investments in Ezra digital coaching platform drove 42% revenue growth and a record pipeline at year-end. Moving to Slide 7. On this slide, we detail the firm progress made in the turnaround of Akkodis Germany. Management took decisive restructuring action in 2025, achieving EUR 58 million in annual cost savings on a run rate basis by year-end. This included reducing the cost of sales by EUR 43 million and SG&A expenses by EUR 15 million, with EUR 8 million saved through real estate consolidation across 26 locations. Last wave of rightsizing effort is in flight, lowering headcount by approximately 600 in total. In addition, select noncore assets were exited, eliminating approximately EUR 3 million of negative EBITA. The program incurred onetime charges of EUR 46 million in 2025 but has already delivered around EUR 15 million of in-year P&L benefit. As a result, Akkodis Germany achieved a healthy 5.4% EBITA margin run rate at year-end. The group expects incremental savings to crystallize in the P&L during 2026, in particular during H1. With the organization being rightsized, management's focus in 2026 will shift to rebuilding the top line, supported by encouraging new client wins across sectors such as aerospace, defense and life sciences. In short, the group has made strong progress in stabilizing Akkodis Germany, positioning it for sustainable profitable growth going forward. Slide 8 sets out the Board of Directors' dividend proposal. We are retaining our attractive shareholder remuneration with a dividend of CHF 1 per share for fiscal year 2025. This represents a 46% payout ratio, in line with our established dividend policy of paying out 40% to 50% of adjusted earnings per share. Shareholders will have the option to receive the dividend either in cash or in newly issued shares. With this proposal, the group provides attractive returns to shareholders, including the option for qualifying shareholders to participate in the group's future growth in a tax-efficient way. The optional scrip dividend aligns with and supports the group's capital allocation priorities, which remain unchanged. It allows shareholders to increase their investment in the Adecco Group while enabling the company to retain cash for growth and prioritize deleveraging. Now let me hand over to Valentina for the Q4 results. Valentina Ficaio: Thank you, Denis, and a warm welcome from my side. Let's begin with Slide 10 and an overview of the group's strong Q4 results. The group delivered further significant market share gains, leading key competitors by 395 basis points. Revenues reached EUR 6 billion, rising 3.9%, our best quarterly performance this year. Gross profit grew 4% to EUR 1.1 billion with a healthy 19.1% margin, stable on an organic basis. Our disciplined execution drove good operating leverage. We were pleased to see a strong productivity improvement of 11% and to deliver a strong drop down ratio of over 80%. In turn, the group's EBITA was EUR 225 million, up 20%, with a 3.8% margin, up 60 basis points. Let's now discuss the GBU developments, beginning with Adecco on Slide 11. Adecco delivered a strong performance with revenues at EUR 4.8 billion, up 4.9% and improved sequentially. Flexible placement revenues increased by 4%. Outsourcing was very strong, up 14%, and MSP was up 6%. Permanent placement, however, was 6% lower. Adecco's healthy gross margin was driven by firm pricing, client mix and lower permanent placement volumes, and productivity improved 6%. The EBITA margin improved 40 basis points to 4%, mainly reflecting higher volumes and strong operating leverage, supported by G&A savings and agile capacity management. Adecco's drop down ratio this quarter was robust at over 50%. Let's now move to Adecco at the segment level on Slide 12. In Adecco France, revenues were 2% lower, stable sequentially and ahead of the market. Logistics continued to weigh, while autos and manufacturing were strong. The EBITA margin of 4.4%, up 10 basis points, mainly reflects client mix and benefit from SG&A savings plans. Revenues in Adecco EMEA, excluding France, were up 4% and sequentially improved. Most territories achieved good growth and outperformed competitors. Looking at the larger markets. Revenues were up 3% in Italy with solid activity in logistics, financial services and consumer goods. Revenues in Iberia were up 7%. Food and beverage, autos and financial services were strong. In the U.K. and Ireland, revenues declined 1%, a good result in a challenging market. The result was weighed by lower logistics and public sector demand despite strength in IT tech and financial services. Revenues in Germany and Austria were up 2%, well ahead of competitors, with strength in autos, consumer goods and defense. The segment's EBITA margin of 3.9% was 50 basis points higher, mainly reflecting strong operating leverage and good cost mitigation. Turning now to Slide 13. Adecco Americas delivered 21% revenue growth. North America revenues increased 23%, well ahead of the market, mainly due to strong activity from large clients. In sector terms, consumer goods, food and beverage and autos were notably strong. Latin America revenues were up 19%, led by Colombia, Peru and Brazil. By sector, logistics, financial and professional services and retail were strong. The Americas EBITA margin of 3.3% expanded 150 basis points, reflecting client mix and strong operating leverage from higher volumes. Adecco APAC remained strong with revenues up 7%. Revenues rose 6% in Japan, 14% in Asia and 7% in India. Australia and New Zealand returned to growth with revenues up 2%. APAC's EBITA margin of 4.3% mainly reflects the timing of income from FESCO. Let's now focus on Slide 14 and Akkodis' strengthened performance. Akkodis' revenue were 1% lower and sequentially improved. Consulting & Solutions revenue were up 2%, marking a return to growth for this service line. In EMEA, revenues were flat. Germany was 7% lower, driven by autos headwinds. However, revenues in France were up 3% and ahead of the market in aerospace and defense and autos. And the U.K. and Italy performed notably well. North American revenues were up 3%, ahead of market, supported by further modest improvement in tech staffing demand. And Consulting & Solutions grew 46%. Revenues in APAC were 4% lower. Japan's result was heavily influenced by trading day differences. On an adjusted basis, revenues were up 5%. Revenues in Australia were 10% lower in a tough market. Akkodis' EBITA margin of 7% was 90 basis points higher, mainly reflecting benefit from the turnaround in Germany. Let's move to Slide 15. LHH has executed well and delivered highly profitable growth. LHH's revenues were up 2%. In Professional Recruitment Solutions, revenues were 3% lower, taking share in a subdued market. Recruitment Solutions gross profit was flat with the U.S. 3% lower and Rest of World up 4%. Permanent Placement was up 4% and productivity was 8% higher. Career Transition was robust with revenues up 1%. U.S. revenues were 2% lower on a high comparison, while the U.K. and Switzerland were strong, and the pipeline remains healthy. Revenues in Coaching & Skilling rose 27%. Ezra's revenues were very strong, rising 68% while General Assembly's B2B business grew 31%. LHH's EBITA margin was 9.7%, up 510 basis points. The year-on-year development is flatted by the absence of charges recorded in Q4 '24 related to the wind down of General Assembly's B2C activities. On an underlying basis, the margin expanded 230 basis points, reflecting positive mix and volumes and strong operating leverage with productivity up 12%. Let's now turn to Slide 16. Gross margin was healthy at 19.1%, stable year-on-year on an organic basis. The group's gross margin was driven by negative FX impact of 10 basis points; 20 basis points negative impact coming from flexible placement, mainly reflecting client and country mix; 10 basis points negative impact from permanent placement, reflecting lower activity in Adecco; and a 30 basis points positive impact in Outsourcing, Consulting & Other Services, mainly driven by Akkodis Germany. Let's now look at Slide 17 and the group's EBITA bridge. At 3.8%, the EBITA margin excluding one-offs was strong, rising 60 basis points year-on-year. The result was driven by a 10 basis points negative impact from FX, a 30 basis points favorable impact from Akkodis Germany and, furthermore, excluding Akkodis Germany, a stable gross profit contribution at healthy levels, an encouraging 50 basis points positive impact from operating leverage, including G&A savings as well as strong productivity improvement, and a 10 basis points negative impact from the timing of FESCO income. Among key metrics, SG&A expenses excluding one-offs as a percentage of revenues was 15.4%, down 70 basis points, while G&A costs were just 3% of revenues. Productivity, measured as direct contribution per selling FTE, rose 11%. Moving to Slide 18 and the group's cash flow and financing structure. The last 12-month cash conversion ratio was strong at 102%. Full year operating free cash flow was EUR 613 million. Free cash flow was EUR 483 million. Both outcomes are strong given the group's continuous improvement in revenues. In Q4, operating cash flow was EUR 476 million, a modest EUR 15 million decrease from the prior year period. This outcome reflects strong collections and favorable timing of payables, partly mitigated by working capital absorption for growth. We have maintained discipline regarding payment terms and are very pleased to report that the group's DSO improved 0.4 days to 51.8 days, remaining best-in-class. Capital expenditure was EUR 50 million, and free cash flow was EUR 426 million, a modest EUR 20 million decrease from the prior year period. The group also strengthened its balance sheet. Gross debts were reduced by EUR 280 million in 2025, supported by the repayment of CHF 225 million senior bond in Q4. At the end of Q4, net debt was EUR 2.29 billion, EUR 186 million lower. Leverage ratio improved to 2.4x, down 0.2x year-on-year and down 0.6x sequentially. The group is firmly committed to bringing the net debt-to-EBITDA ratio to 1.5x or below by the end of 2027, absent any major macroeconomic or geopolitical disruption. On Slide 19, we provide our near-term outlook. The group has seen continued positive momentum in volumes this quarter to date. For Q1, the group expects gross margin and SG&A expenses, excluding one-offs, to be broadly stable sequentially. As a reminder, the prior year period benefited from the timing of FESCO income. We are rigorously executing the group's strategy and run-and-change priorities, focusing on market share gains while managing costs and capacity with discipline to drive profitable growth. And with that, I hand back to Denis. Denis Machuel: Thank you, Valentina. And let me conclude with Slide 20 and key takeaways. We launched the agility advantage value creation path and run-and-change agenda at our November Capital Markets Day. We are successfully executing against group strategy and driving momentum. During 2025, the group delivered on its full year margin commitment, captured market share and return to revenue growth. And we are encouraged to see continued positive momentum in volumes to date this quarter. Moreover, as we successfully advanced our strategic priorities, the group's financials are improving, underpinning an improvement in the year-end net debt-to-EBITDA ratio, which was down 0.2x year-on-year and 0.6x sequentially. We remain firmly committed to achieving a net debt-to-EBITDA ratio at or below 1.5x by year-end 2027. With this said, thank you for your attention, and let's open the lines for Q&A. Operator: [Operator Instructions] Our first question comes from the line of Andy Grobler with BNP Paribas. Andrew Grobler: Just a couple from me, if I may. Firstly, just on free cash. It was very strong in Q4 led by payables. Could you just talk through what you did to drive that and whether any of that is going to reverse into early 2026? And then secondly, just a slightly broader one around client behavior. Are you seeing any change in client behavior in terms of their desire for flexibility, in terms of the interactions they're having with you? Or do they remain broadly pretty cautious in those end markets? Denis Machuel: Thank you, Andy. And Valentina is going to answer the first part, and I'm going to answer your second question. Valentina Ficaio: Andy, on free cash flow, it was a very strong performance. You've seen that we landed on EUR 483 million and the conversion ratio was very strong, above 100%. And it's particularly strong, this performance, if we consider that we've done it on the back of a year and, most importantly, a Q4 where we were growing. And you know that our business absorbs working capital when we grow at this level. If I try to unpack a bit what are the most important components, fundamentally, it all goes down to very strong working capital management. We've been very diligent on collections. And you've seen how our DSO continues to be very strong. We are down year-on-year. It's not easy to keep going down on year-on-year in this market. So we're very pleased with that. And in terms of AP, yes, we did have some favorable timing on payments, but we've also done quite a lot of job in terms of carving out overbalancing, negotiating payment terms. And you really start to see how the impact of that comes through also in our AP management. So overall, we are very pleased and we continue to be laser-focused on working capital. When you think about 2026, I would -- I really think about free cash flow generation this year to -- the behavior to be similar. Just as a reminder, seasonally, our H1 is an outflow versus an H2 that is an inflow. So that's the way that I would model it. But again, laser focused on working capital because that's the key of our strong free cash flow performance this quarter. Denis Machuel: And as far as what our clients are telling us, we see pretty good momentum, particularly on flex. I must say, Adecco is firing on almost all cylinders. We have soft results in France and the U.K., but apart from that -- even though in France, we are ahead of the market. But apart from that, we're really, really strong. And we see momentum, we see demand for flexible workers across the board, across geographies. It's says something also a little bit about, of course, the uncertainty that we live in. But the economy is pretty good. So there's demand. There's work to be done. And we are surfing on that. We're surfing on that through, of course, our sales dynamism we serve because we have very strong delivery engine. And that makes me very confident. There's one sign, which is interesting, is we see a little bit of a pickup in permanent recruitment in LHH. It's 4%. It's not big yet and we start from your volumes, but it's a little bit positive. But overall, I'm very, very optimistic on the momentum that we have. We have a great momentum as well in outsourcing, you've seen double-digit growth. I think the market is there to support our development. Andrew Grobler: Can I just ask one quick follow-up? Just on LHH and in RS in particular. You noted that perm was growing, but gross profit was down in that segment. So that suggests that your kind of gross margin in your contract temp businesses is lower. Could you just talk through what's going on in that segment, please? Denis Machuel: Well, actually, you've got to look at LHH as in 2 dimensions. There is perm and flex on one side and there is the U.S. and outside of the U.S. In the U.S., we are minus 3%. In the rest of the world, we are plus 4% overall. So that says something about the geographic differences. But overall, I mean, let's be clear. We are -- the whole industry is operating at pretty low historical level. But we are -- what we do is we are outperforming the market, which matters to me. Valentina Ficaio: And I would also add that as you look overall at the performance, you see also how LHH has really worked on productivity to offset also some of these elements. And LHH productivity was up 12% in Q4 and their sales FTE was down 4%. So you see how they are acting also on what Denis just mentioned. Operator: Your next question comes from the line of James Rowland Clark with Barclays. James Clark: My first is just on the answer you just gave about good momentum. Just to be clear, I understand you've taken a lot of market share in the last few quarters. Is that momentum comment about you specifically taking share? Or do you think that's more market-based? If you could help sort of parse those two elements, that would be great. Secondly, on EBIT margins in 2026, I think consensus has got 30 to 40 bps of margin growth. Are you comfortable with that? And could you help us bridge that improvement across organic gross margin, which looks to be under pressure going into this year but also then offset by SG&A? So I'd love just to get your sense on the moving parts to achieve that margin, if you're comfortable with it. And then finally, on leverage, you're guiding to down to 2.5x by the end of '27. So you've got to lose 0.5x a year between now and then. Do you see that as a linear progression or faster in '26 and '27 or vice versa? And if so, why? Denis Machuel: Thank you, James. And I'm sure Valentina will be super happy to take the EBITA and leverage questions, and I'm going to talk about the momentum. Two things here. As much as I believe that the way we operate, the way we've put in place a very strong sales dynamic, which is -- which we adjust as per market conditions, as per the industry we are facing, et cetera, as per the geographies, and we have also put a very strong delivery engine that helps us gain share from our own merits and that makes me very confident for the future, I also believe that it's overall the market conditions that are also improving. And we have been through some difficult quarters in, I would say, end of 2024 and beginning of 2025. And we see an overall better traction on the markets. And on that, we are well positioned because we've done all the hard work to strengthen the muscle in sales, strengthen the muscle in delivery. So it's -- I would say it's a bit of both that help us grow as we do. Vale, now on EBITA? Valentina Ficaio: And I'll build on the comments that Denis just mentioned about momentum just to give you some more flavor on guidance for Q1 EBITA. So I think that what you mentioned, James, is reasonable. And the way that I think about our Q1 EBITA is the continued positive volumes behavior gives us confidence in terms of revenue outlook. And gross margin is broadly stable sequentially. If you think also about the comparison year-on-year is we have a 20 basis point headwind coming from FX. You may remember that last year in Q1 '25, this represented a tailwind. So that gives you a flavor why also year-on-year Q1 gross margin is actually broadly stable. And in terms of SG&A, our normal seasonality from Q4 to Q1 usually see SG&A going up by EUR 10 million, EUR 15 million. So the fact that we're guiding for broadly stable tells you about the cost discipline that we continue to enforce. And you saw that we've mentioned the FESCO income because we assume FESCO to continue to contribute positively on a full year basis. But the timing last year, it can vary. And last year, it happened in Q1. On a full year EBITA, we don't guide overall, but I think this gives you a bit the moving pieces that you need to model in terms of getting there, and the assumption that you mentioned are quite reasonable. Moving to leverage. I think it's -- the free cash flow generation, the performance that we had -- the trajectory of the performance that we had throughout 2025 delivered good delevering, 0.2 year-on-year and sequentially, 0.6. The path to 1.5 is clear. We don't guide specifically on '26 and '27. But clearly, the levers that we have in our hands, and we are already pulling are modest growth. You've seen how growth has dropped through in operating leverage over the past quarters. We expect that to continue throughout the next quarters. And then we have additional benefits coming from Akkodis Germany, but also other elements like the turnaround in North America, like the improvement in France that will continue to help us get there, as we've shown you in the last -- in recent quarters. Operator: Your next question comes from Suhasini Varanasi with Goldman Sachs. Suhasini Varanasi: Just one question for me, please. I just wanted to clarify the exit rate and momentum that you saw year-to-date because I think your slide on -- Slide 5 seems to suggest at least on the GBU, Adecco GBU front, the momentum is continuing to improve in year-to-date. Just at that GBU level and at the group level, can you please clarify how the exit rate has looked compared to the 3.94% growth that you reported last quarter? Valentina Ficaio: Suhasini, I'll take this one. Just to give you a sense, the exit rate was very much aligned with the quarter leverage, so at group level. So I hope that's helpful to give you a sense. Operator: Your next question comes from the line of Simon LeChipre with Jefferies. Simon LeChipre: First question. Looking at your Q4 results and if we exclude Akkodis, so gross margin was down 30 bps on an organic basis and SG&A was probably flat organically. And in prior quarters, it seems you were able to offset the gross margin pressure through cost savings. So does that mean it is no longer the case? And I mean, how should we think about the future quarters in terms of the relation between margin performance and SG&A? Secondly, in terms of your Q1 gross margin guidance, so stable sequentially. So I would assume the seasonal effect from Q4 to Q1 is negative. It seems you're also talking about like FX negative impact being a bit stronger. So how would you offset these 2 factors to get to a stable gross margin sequentially? And last thing on AI. We see more and more evidences of how AI can make the business more efficient. So I would assume this suggests some deflationary effect on top line. So how do you think about the net bottom line impact in the future? Like do you think your SG&A would continue to reduce? And would that be enough to offset this potential deflationary trend on the top line? Denis Machuel: I'll take the AI piece and Valentina will be very happy to take the gross margin question and the FX. Valentina Ficaio: So starting with your 2 questions on gross margin, Simon. I think when you think about the performance that we had in Q4 at 19.1%, it's a very healthy level. It's industry-leading. And it reflects a number of components. It's not just Akkodis, right? There's firm pricing and client mix, and there's GBUs mix that contribute positively to the gross margin buildup. Yes, Akkodis Germany is a component of it, but it's not the only one. And then there's clear added value in the gross margin that comes from the service lines that have higher gross margin profile, like outsourcing, like Ezra. You've heard us mentioning a number of service lines that have grown double digit in Q4, and will continue to do that. So there are a number of levers that we can continue to work on, Akkodis Germany is one of them, to work on our gross margin and keep it at this stable levels. When you look at -- and by the way, permanent placement continues to be subdued clearly. When permanent placement picks up, it is a further lever that we can capture because we will capture permanent placement growth when it comes, and that's another further lever we can pull. When you think about Q1, let me just take a moment to walk you through the elements. You've called out FX. It's correct. As I was mentioning before, actually it was a tailwind in Q1 last year. So you do have a 20 basis points gap when you look at it from a Q-on-Q perspective. And then we again have several pieces because there's modest impact coming from perm and flex, but there's also a modest positive impact coming from the other service lines. So that is why we continue to say it's really broadly stable even on a year-on-year basis. Because if you take out the FX, we are continuing to see how the benefits of the other service lines of Akkodis that we are implementing is affecting the modest client mix that we have in flex and perm. Simon LeChipre: Sorry, may I have just a quick follow-up on GM and also on SG&A. So it was minus 1% organically year-on-year in Q4, so I think mainly driven by Akkodis. So does that mean like the Adecco GBU, as you know, is now trending kind of flattish year-on-year? Valentina Ficaio: No. We continue to see the same performance. We call out Akkodis when we mentioned that because we want to call out the nice progress that we've done in the restructuring and the fact that most of it, it is coming through SG&A but it's broad-based. And you've seen it also in our productivity numbers. They're up in all of the GBUs, not just in Akkodis. And in our G&A over sales, that is just 3%, and that is not just Akkodis. It's broad-based. Denis Machuel: Let me take now the AI impact. And I think there is a top line impact, positive impact and also an impact in productivity that's going to help our profitability overall. On the top line, I believe that AI is really an opportunity for us. Remind you, we are in a fragmented market. So the more optimized we are in how we deliver our service through AI, the better we can gain share. And I'll give you two examples. We've embedded generative AI into our Career Studio in LHH. And when people use Career Studio with AI powered, they find a job 32 days earlier than the ones who don't. This is creating value for our clients. This has helped us penetrate bigger, faster our clients. So this has a positive impact on the top line. If I look at the way we deliver with our AI agents in the U.K. on our recruitment, we have fill rates that have improved 550 basis points, okay? So this is an impact. We have improved our time to submit by 24% quarter-on-quarter. This helps us be more efficient, deliver more. So -- but a positive impact on the top line. In doing so, we have operating leverage, as Valentina was saying. And in terms of how we optimize our cost, of course, we will progressively embed AI into our processes. We embed AI in our middle and back office, and this is going to create also efficiencies. So I believe that AI will have a positive impact both on the way we capture market share and in the way we improve our profitability. Operator: Your next question comes from the line of Remi Grenu with Morgan Stanley. Remi Grenu: Denis, Valentina, just one question remaining on my side. Focusing a little bit on North America and the very high growth there. I mean, the acceleration came in Q1 and Q2 last year, if I remember correctly. So can you help us unpack a little bit the performance there, if it's been driven by a few contracts and if we then should expect some kind of annualization of these benefits in Q1 and Q2 this year? Just trying to understand a little bit from the 20% organic growth you're currently growing out in that country, what we should expect in terms of potential normalization over the next few quarters? Denis Machuel: Yes. Thank you, Remi. Yes, if I go back to history, Q1, we were minus 1% year-on-year. Q2, we are plus 10%. Q3, we are plus 21%. And Q4, we are plus 23%. So of course, this is -- we're very pleased. This shows that all the efforts that we've put in the turnaround plan in the U.S. is delivering. We have productivity improve by 10% and we have a very strong dynamic on the large accounts. We also are positive in the SMEs, but that's the point where we need to focus our efforts because the growth in our large accounts is a bit higher than the growth on small and medium companies. So to your point, yes, I mean, we -- let's be clear, we started from a low base, okay? So we are -- I mean, this double-digit growth rates are encouraging. But as we anniversary some of the wins of the large clients, we will go more towards more market trends to sort of a bit of a normalization. Still our focus and our efforts will be to gain share, to be ahead of the market. And I'm quite positive that we can achieve that, but probably not to the extent that we've had this year. We have good traction in customer goods, in retail, in autos, in food and beverages. So I mean, there's traction in the market. The economy in the U.S. is still pretty good. So we will serve on that. We are much stronger than we were 2 years ago. And yes, you can expect growth, probably not with such a differential with the market. Remi Grenu: Understood. And just maybe building up a little bit on the question from Simon on the operating cost guidance for Q1. I mean, I'm a little bit surprised by the comment on stability. So can you help us a little bit quantify the building blocks to get there? I mean, discussing with some of your competitors, it feels like that they are forecasting some wage inflation around 2% or a little bit more than that. The higher volume of activity, the 4% organic growth and positive momentum probably would mean under a normal cycle that you need to invest a little bit more in resources. So yes, so can you help us a little bit on that stability of operating costs? And I'm just trying to understand as well if to what extent you think that stability comments and these cost efficiencies are already driven by AI initiatives, or if it's just about Adecco removing some of the inefficiencies in the cost base that you had there and had to address? Denis Machuel: Let me start by a little bit of how we strategize that growth. And you heard me say in the past that what we try is to be very, very granular in the way we inject the resources that are linked to the dynamic of the market. And if I talk markets, it's by country. It's even by region in a country. It's by industry in a particular region, a particular country. So really adjust with the -- through this empowerment that we've put in place years ago, that's what we -- we let people adjust very precisely to the market conditions. Yes, we will need to invest in some places, but we are also cautious in some others. And that's how we operate. And definitely, we will -- we have improved our cost inefficiencies. We've really readjusted our SPs. We have adjusted our G&A. So I think we are continuously optimizing the resources, and I think AI will nicely help us on that. Now on the building blocks for Q1. Valentina Ficaio: And just to give additional color, Remi. On the operating cost sequentially stable. It's all about cost discipline, right? The continuous focus on productivity and G&A gets us there. If you look for a second at Q4, I think it's also very helpful to see how we have performed. Productivity was up broad-based, plus 11 at group level. But if you look at each GBU, Adecco was plus 6, LHH was up 12 and Akkodis, even with Germany soft, capped 90% utilization rate approximately. So -- but if you look at our employee -- group employees, they are actually slightly down. So that tells you how we are combining very well growth with good cost discipline and good productivity. And that gives you a sense of why we guide for this to continue to be stable as we continue building on these 2 clear levers that has been key to the operating leverage that you've seen in our results. Denis Machuel: And just to complement on AI. Yes, we see a 30 bps improvement when we serve the clients by -- through AI initiatives. But it's not at the scale that I want to see. We said that we would cover 60% of our revenues by agentic AI over time by the end of 2026. I mean, it's progressing. We yet have to fully scale. So more to come. We'll keep you updated on the progress. I remain prudent in the impact of AI because there is no magic in AI. It's hard work. You need to scale it. I think we have all the levers and the foundations, but let's see how it goes. But the trend is positive. Remi Grenu: Okay. And the last question is on the SME, which you referred to, Denis, I think, in one of your previous answers, saying that you need to address this segment better. Is the issue market related? Is just the momentum between the 2 markets, if you see separate them between SME and large enterprise, is still very, I mean, diverging a lot in terms of volume of activity? Or is there any initiative at Adecco's level which you need to implement to be better at serving this cohort of client? Because it has implication, obviously, for gross margin and profitability, I guess. Denis Machuel: Yes. Well, actually, we've really doubled down in the past couple of years in how we serve the large clients and enhance Talent Supply Chain and enhance all that. We still have a pretty good dynamic in SMEs. But this is a place where we accelerate our efforts because we know, to your point, that it's very accretive to our margin. So I think we are in a good place in how we roll out all our technology into our Talent Supply Chain, and we are also rolling out progressively the technology through our branches. I believe that the strength of branch network is that proximity, that deep understanding of the local ecosystems. And that's one of the top priorities for 2026 is to inject as much energy and technology into the SME segment as we have done in the large accounts. Operator: Your next question comes from the line of Simon Van Oppen with Kepler Cheuvreux. Simon Van Oppen: I have a question on margins. We see margins in all divisions strengthening in Q4, most significantly in Akkodis and LHH, especially on an underlying basis. Can you unpack a little bit the main drivers for the strengthening of your margins by division? And what do you expect in terms of margin for each division in 2026? And in extension to that, should we expect more one-offs in 2026? And if so, roughly by how much by division? Denis Machuel: Valentina? Valentina Ficaio: Thank you, Simon. So let me explain a bit around each GBU and how they evolved in terms of margin, and then we can also quickly touch on formal one-offs guidance. I think what is the common denominator among the 3 GBUs improvement is volumes up, operating leverage drop through. That is clearly -- and if I take for a moment Akkodis out, it's a clear denominator, right? And then if I take one GBU apart, you have Adecco that grew materially, right? You've seen how in Q4, it's up almost 5% with pockets that are even double digits. And clearly, the Adecco story is a story around strong operating leverage but also diversification with service lines like outsourcing that grew double digits, to give you a sense. And it always comes on the back of good cost discipline, healthy operating leverage and the improvement in margins. In LHH, you've seen us mention that there's an element of the improvement year-on-year that is because we had headwinds last year. So it is a 500 basis point improvement, but in fact, underlying is half of it, 250, which is still a very significant improvement. And it's mainly coming from CT continuing to performing very well, but also the contribution of other lines like Ezra and like the B2B business in GA that have grown double digits, and they come with very healthy high gross margins. And then finally in Akkodis, clearly, the main driver of the improvement in performance is Akkodis Germany and the fact that we are progressing well in the turnaround. In terms of one-off costs, the guidance that we're giving you is down from EUR 60 million this year to EUR 40 million next year. The EUR 60 million clearly this year is mainly coming from the Akkodis Germany turnaround. And so we're basically guiding next year to be lower in one-offs, mainly because Akkodis Germany is basically completed. Operator: Your next question comes from the line of Gian-Marco Werro with ZKB. Gian Werro: Two questions from my side. The first one is on the gross profit margin in flexible placement. I would appreciate if you can dive there a little bit deeper into this development of 20 basis point decline year-over-year. Can you maybe elaborate, please, on the gross margin dynamics in the temporary staffing, especially in your key markets like France, Germany and also the U.S., please, just to grab a little bit there the dynamics, how is it evolving, still increasing, stable or declining? And then second question is on AI also. Denis, I appreciate your optimistic tone about the opportunities lying here. But very frankly speaking, don't you also see also, of course, some headwinds here of jobs that become redundant, like many operations of warehouses, IT, white collar back-office work that, in my view, is certainly also affecting your top line negatively. I would appreciate if you can just talk briefly about the dynamics that you observe in the industry. Denis Machuel: So I'm going to start by answering your questions on AI, Gian-Marco, and then Valentina will talk about the gross margin. Fundamentally, we don't see any impact of AI at this stage. We know that as all technology evolutions that are happening, some jobs are going to be impacted, some destroyed, but so many are going to be created. That's what history tells us, okay? And for the moment, if you look at the numbers coming from Career Transition, okay, which is the world leader in outplacement, 1.4% of the people are telling us that they've been laid off due to AI. That's it, okay? And 12% say, yes, there was a bit of AI coming in. So to date, there's no massive impact, no impact of AI. And let's be clear, and I'm not the only one to say that, a lot of companies are doing layoff plans pretending that is coming from AI because it makes them look good, okay? But fundamentally, this is not the case, okay? So now nobody knows within 3 or 5 years what's the relationship between the jobs destroyed and the jobs created, okay? If you look back 10 years ago, nobody was talking about cloud architects, nobody was talking about content moderation. And these jobs have been created because of the digital world, et cetera. So this is going to come as well with AI, okay? So I believe that because of this, I'd say, massive reshuffling of the labor market, this is a massive opportunity for us to upskill, reskill, move people around, accompanying people in their agility. That's what we are here for. And AI is not new. It has been now around for more than a couple of years. And look at our numbers, okay? So we are trending nicely in this world of AI. We are reshaping the future of work in this AI era, And we are well placed to accompany our clients on their agility that is necessary with AI. So that makes me very confident. Now on the gross margin. Valentina Ficaio: So the year-on-year development you were asking about, Gian-Marco on flex. First of all, it's a modest impact. Overall, the flex gross margin remains quite healthy. We are happy with pricing. It stays firm. We have a positive spread bill-to-pay rate. And so the modest impact that you see is fundamentally client and country mix. And just to build on the question that you were asking about, what about countries, France, U.S.? It is really all about how do we grow, right? So sometimes in some countries, but also in some industry, we may see one client segment growing faster than the other. It's the case right now, as Denis was mentioning, in France and North America. But what is really important is that, as that happens, we also operate on cost base, right? Because these are also clients that come with a lower cost to serve. So the most important thing when we think about margin, yes, it's the gross margin, but it's also the mix that we have between SMEs and large and the drop-through on the overall margin. Gian Werro: Okay. But no specific comments you want to make here on the 3 countries I mentioned, about the development of the gross margin? If it's stable or you mentioned that most probably... Denis Machuel: The trends in these 3 countries are aligned with the overall trend of the GBUs, yes. Operator: Your next question comes from the line of Karine Elias with Barclays. Karine Elias: I just had a quick one on the hybrid. I believe on your third quarter conference call, you mentioned your intention to refinance at the time the hybrid. Just wondering whether that's still the case. Valentina Ficaio: Thank you, Karine. Yes, so the refinancing, you're correct. We are refinancing the hybrid. We are in progress of doing that. We are constantly in the market to understand when is the right moment to execute. But you should expect that to be happening. Operator: Your next question comes from the line of Andy Grobler with BNP Paribas. Andrew Grobler: Just one follow-up, if I may. Just on the dividend. You moved to the option of the scrip. What drove that decision? And to what extent is that part of the plan for getting to 1.5x leverage by the end of next year? Denis Machuel: Thanks, Andy. So let me put the overall perspective. The group has a very clear framework on capital allocation and a clear dividend policy. Every year, of course, depending upon the results, the annual performance, the Board evaluates all options within that framework and within dividend policy to provide what the Board believes as the best outcome for shareholders. And this year, the decision has been made to propose the choice between the payment in shares or payment in cash, which we believe is the right balance between our deleveraging priority on one side and also retaining cash for growth. So we also felt that this is an optionality that is financially attractive for our shareholders, for qualifying shareholders on the tax side. So I think it's a pretty good decision for shareholders. Now on the... Valentina Ficaio: On the leverage. Denis Machuel: The leverage, yes. Valentina Ficaio: As Denis mentioned, the scrip is an option, completely independent from the path that we've discussed to reach our 1.5. That path is based on performance, growth, operating leverage, the turnarounds that we're doing. The scrip is an option and it's independent from that. Operator: I will now turn the call back over to Denis Machuel, CEO, for closing remarks. Denis Machuel: Thank you very much, everyone. We really appreciate your presence today. So just to wrap up, I think our 2025 results make me very confident for the future. I must tell you that our teams are energized and they are focused on delivering performance. So yes, we still have a lot to do. But the momentum that we've created and which continues at the beginning of 2026, as we said, puts us in a very good place, in a very good place to deliver profitable growth moving forward and to delever. With that, thanks a lot for having been with us today, and speak to you next time. Have a great day. Thank you. Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
Operator: Good morning, good afternoon all, and thank you for joining us today for Aena Full year '25 Results Presentation. My name is Sami and I'll be coordinating your call today. [Operator Instructions] I'll now hand over to your host, Carlos to begin. Please go ahead, Carlos. Carlos Gallego: Good afternoon, and welcome to our 2025 results presentation. This is Carlos Gallego, Head of Investor Relations. It's a pleasure to be with you again following our conference call last week regarding the regulatory proposal. Today, we are presenting our 2025 results, our Chairman and CEO, Maurici Lucena, will be hosting this session, together with our CFO, Ignacio Castejon and myself, who will review the main highlights of the results presentation, which you can already find both on our website and on the CNMV website. After that, we will open the floor to your questions. [Operator Instructions] Without further delay, I will now hand the call over to Maurici Lucena. Thank you. Maurici Betriu: Thank you very much, Carlos. Good afternoon, everybody. Thank you for joining us for the presentation of our annual 2025 financial results. It is a very important satisfaction for the top management to present these results because as you have seen in the communication to the market, they are record financial results. And it's our 3 year in a row that we achieved this record. And as Carlos said, this presentation follows the presentation we did last week regarding the DORA III Aena's proposal. So as usual, I will start with traffic. 2025 was also in terms of volume, the third year in a row with the highest traffic ever in Spain. We are very proud of this achievement and not only because of the volume, but also because we know it's very difficult to manage with a high quality of airport services such record volume, and we achieved both, the record of volume and I would say, a high-quality service -- airport services, excuse me. So in total, Aena Group traffic reached almost 385 million passengers. And in Spain, in the Spanish airports that belong to Aena, the figure was more than 321.5 million passengers. And as you also know, our traffic estimate for the present year for 2026 in Spain is an increase of 1.3% and to us, this is a natural estimate because we think that we have overcome the, let's say, overshooting phase of the traffic evolution after the pandemic. And now we enter into, let's say, more normal phase of traffic -- of airport traffic. And it's a combination of -- the way we see the economy, the way we see not only the Spanish economy, but very -- especially the economies of our principal foreign markets. I'm referring to the U.K., Germany, France and so on. And also that in 2026 and especially in DORA III, we will, in certain days in certain aspects, face constraints because the infrastructure -- because Aena's airports are approaching its -- or many Aena's airports are approaching its technical limits, and this is the strong reason why we propose within DORA III to enter into a very strong new phase of investment. I don't want to be dramatic in the sense that I think that these constraints on the side of our airports. I mean, they will exist, but they will not be very important. They just introduce subtleties in the way we are calculating our estimates for the future. If I now move to Brazil and to the U.K., you know that in 2025, our traffic in Luton was 17.6 million passengers. In Brazil, in one concession, almost 29 million passengers, in the other concession, almost 17 million passengers. And in terms of financial performance, I will just -- I would like just to highlight that our total revenue in 2025 was almost or reached almost EUR 6.4 billion. Our EBITDA was close to EUR 3.8 billion. And all in all, the net profit exceeds or exceeded in 2025, EUR 2.1 billion, which is a record. And as consequently, you know that the Board of Directors it was yesterday, proposed the payment of a gross dividend of EUR 1.09 per share. And on the commercial side, we experienced a very robust growth last year. I would like to stress that in the duty-free business line, for example, 3 lots, Canary Islands, the North of Spain and Andalusia-Mediterranean. These 3 lots ended 2025 above the contractual MAGs, and this is a very important achievement because this makes feel both very comfortable Aena and the duty-free companies. And as you know, we have just started the complete renovation of the food and beverage activity in Barcelona, in the Barcelona Airport. And on the real estate side, total revenue grew by 20 -- by 10.5% in 2025. And in the international arena, I think that we are -- we are satisfied because we are -- we would like to, if possible, to increase a little bit more the contribution of the international activity in the total EBITDA. But so far, we have achieved an EBITDA that in the consolidated figure was close to EUR 400 million. And I think that this is a significant EBITDA, and this is a satisfaction but because you know that we would like in the long-term to have a better balance between Spain and the rest of our international markets. And also concerning the international activity, I would like to highlight that by the end of last year, Aena obtained the most financing in the Brazilian airport sector. This will allow us to finance the CapEx of the new concession, the BOAB concession. And also internationally, you know that in December 2025, we acquired a significant participation in the U.K. in the -- respectively, in Leeds and Newcastle Airports. This is an achievement because we naturally feel very comfortable both expanding our activity in Brazil and in the U.K. because if we expand our activity, we set in motion our, let's say, extraordinary efficiency because of the functioning in the network. Okay. Now I move to financial issues. Last month, in January 2026, we launched a second bond valued at EUR 500 million with a maturity of 10 years. We are very satisfied with the financial conditions because I think that they demonstrate that in the bond markets where Aena was relatively virgin, we have very rapidly achieved the confidence of the market. And I think that the conditions of this second bond reflect the -- well, I would say that the financial assets of Aena. In terms of ESG, I would like only to mention that in 2025, Aena achieved a reduction of almost 75% of emissions of Scope 1 and 2 compared to 2019. And finally, I would like to just refresh the main messages associated to our DORA III proposal that we communicated last week. You know that the government of Spain through the Council of Ministers, they have a deadline in September 2026 to approve the definitive DORA III. And you know that our aim has been to translate into volume of investment, distribution among airports, the evolution of tariffs, OpEx, WACC and so on. We have translated, I was saying, our new cycle of investment in terms of the regulatory scheme. And this is -- this will be a complete different phase for Aena. It will be the first time in the last 20, 25 years that we enter into a very strong investment cycle. I would like to remind that in pure financial terms, this is good news because we will significantly increase our WACC, our regulated assets base in more than EUR 5.5 billion. And this is -- this should be the increase in the enterprise value. Of course, taking into account that the WACC, the OpEx, the risks and so on, they all are, let's say, reasonable. In other words, if the figures of the final DORA III approval by the government, along with the real Aena performance during DORA III, if all this makes sense, we will significantly increase the enterprise value. And this is good news, knowing that we face some risks, but we are very confident that the experience and our past performance demonstrate that we are a reliable company that will develop and materialize DORA III successfully. And you know that the key projects in DORA III, they cover the airports of Madrid, Barcelona, Malaga, Alicante, Tenerife Sur, Valencia, Ibiza, Lanzarote, Bilbao, Tenerife Norte, Menorca and Melilla. And in terms of the OpEx that I know very well that worries you, in my opinion, too much. But this regulated OpEx it is -- is just a consequence of how the economy is moving and the new phase in which Aena will -- into which Aena will enter. What do I mean by this statement? Well, I'm referring that the new OpEx is -- reflects the inflation, experience but experienced by the Spanish economy and by the way, by the world economy, the increase in the minimum wage and very specifically, the new resources we require to address the investment challenge, the increased traffic. The increased traffic also implies a little bit more OpEx, more regulatory requirements in terms of safety, maintenance and quality of airport services. This also costs money. And finally, you know that many of our airports are aging. They are aging well, but they are aging, and this means more open -- more OpEx to maintain them. And again, we have said this many times, but we are convinced that when you enter into a phase with important investment and important expansions of many airports, we have to compatibilize the new traffic, new record volumes of traffic in the future with the investment. So to compatibilize successfully these both very important ingredients, this future record traffic with the CapEx, the expansion of the infrastructures, we need a little bit more of OpEx. And for Aena, it's been, let's say, a lesson what has happened in recent years in Palma de Mallorca. The renovation, the whole renovation of the airport has been a success, but we have learned that will be -- that all the rest of things being equal, we need to spend a little bit more money to ensure that the passenger experience is better than it has been in Palma de Mallorca. In Palma de Mallorca, we will finish the renovation before expected. It will cost a little bit less than expected, but one lesson learned has been that for the future expansions of airports, we will need a little bit more money, just a little bit more to increase the passenger experience. And finally, you know that our WACC is simply a consequence of the turn of the monetary policy across the world. And finally, our average increase proposed all in all, is just EUR 0.43 every year. This regardless of the -- this boring and I don't know how to describe is noise that made by the airlines. When you compare the increase we propose with the increase in the prices of flight tickets, well, I think that this is perfectly eloquent of the difference. And regardless of this very modest increase we propose in terms of airport charges to cover this complete transformation of Spanish airports that will endure 3 decades, these new airports. I think that they will be used in the coming 3 decades. Regardless of this increase, the charges of Aena's airports in Spain will remain highly competitive. And particularly, they will remain the most competitive aeronautical charges in Europe. And this is very good news, and this is a commitment that we will accomplish. And thank you very much, and we will join you back in the Q&A session. Ignacio Hernandez: Thank you very much, Maurici. Hi, everyone. This is Ignacio Castejon speaking. Let me go through some of the information that we have included in the presentation shared with all of you earlier today. Let's go to Slide 8 on traffic, on the Spanish platform, I would like to share with all of you that the traffic is mainly explained -- traffic growth, sorry, is mainly explained by the growth rates of the international markets. International markets grow at circa 6%, while the domestic market decreased by 0.3%. There might be many reasons related to supply and demand considerations impacting the domestic market, but that decrease is what has happened this year. With respect to the 6% growth in the international market, I would like to share that, as you know, long-haul market is still a much smaller segment than European or Spanish markets. However, Asia, Africa, Middle East and South America, LatAm have delivered growths of 41%, 19.5%, 13% and 7.4%, respectively. So very impressive growth rates in the long-haul market arena. If we look at Europe, our largest market, excluding Spain, our main 4 markets grow as follows: the U.K. at 4%; Germany, 1.8%; Italy at 9.2%; and France at 3.1%. Let's go to slide -- let's keep sorry on Slide 8, but let's have a look at the financial performance of the company in the following minutes. As mentioned by the Chairman, total revenue rise to -- by 9.5% up to EUR 6.4 billion Compared to 2024, thanks to the positive evolution of passenger traffic as discussed earlier, the continued improvement in the commercial activity, especially the revenue per pax growing to EUR 6.43 per pax and also the contribution coming from the international activity, especially one related to the construction services on the IFRIC 12, that is neutral of [indiscernible] standpoint. Excluding these IFRIC 12 accounting adjustment, revenue for the group would have grown at 7%. Let's move to Slide 9 on the cost. As we have been informing all of you through the year, total operating expenses have been going up, growing at a higher rate than traffic or even traffic plus inflation. Total operating expenses at group level grew by 11.1%, up to EUR 2,650 million with personnel expenses increasing by 8.8% and other operating expenses going up by 13.1%. If we exclude the impact of IFRIC 12 in Brazil, the increase would be materially different, would be 4.9% for the whole group. If we look at the Spanish network, total OpEx, total operating expenses grew by 6%, reaching EUR 2052.4 million. The increase, as in the case for the group, was driven by the increase in staff costs and also in other operating expenses. In the following slides, I will devote more time to other operating expenses for the Spanish network. But let me go to Slide 10 before in order to speak about EBITDA. EBITDA level reached EUR 3,785 million, sorry, representing an increase of 7.8% compared to 2024. This resulted in an EBITDA margin of 59.3%, 90 basis points lower than in 2024. The margin has been impacted because of the IFRIC 12 accounting rules. So excluding this impact, the EBITDA margin for the whole group -- for the consolidated group would have improved by 50 basis points to 61.4%. All in all, the net profit of the group rose to EUR 2,136 million. That's an increase higher than 10% compared to 2024, reflecting, sorry, the strong operating performance, the EBITDA growth, but also the impact coming from the new estimate and a change, therefore, in the useful lives of some of the fixed assets in Spain that has resulted into a more reduced or a lower amortization -- and depreciation and amortization expenditure of around EUR 68.5 million. Net cash generated from operating activities increased by 1.5%. However, this comparison is affected by the positive tax effect that we had in 2024 related to the offsetting of the losses from a tax standpoint, of course, coming from the COVID. The consolidated net debt to EBITDA ratio of the group stood at 1.46 well below the 1.57 recorded in 2024. In this sense, please let me recall that back in September, Moody's Rating Agency upgraded Aena long-term issuer rating and senior unsecured rating to A2 from A3. And 7 weeks ago, Fitch Ratings affirm Aena rating at single A. Let's move to Slide 11. If we look at the performance of the group by the different business lines, and let's start with the total aero revenue. This total aero revenue increased by circa 5% to EUR 3,346 million. The dilution, you know the revenue that we are not able to get basically comparing the rate that we are able to charge in 2025 has been EUR 100.4 million, so lower than the 1 in 2024. This dilution will be recovered in a couple of years, as you know, further our regulation. On the commercial activities contribution, please let me share with you a good first -- a good set of news because this is the first year in which we were able to exceed -- sorry, the EUR 2 billion figure in revenues for the commercial and the real estate revenues. On the international front, the contribution in terms of EBITDA coming from the international activities was EUR 383 million. Let's go to -- let's analyze in more detail the commercial performance. So let's move to Slide 16 and 17, if that's okay for all of you. So the Chairman and CEO have already highlighted the significant growth in sales that the company has had. Let me have a look at the ordinary revenue figures that have had an increase of circa 10%, 9.9%, with commercial revenue going up by 9.6% in the real estate business by 14.3%. As I was saying earlier, this increase is explained by traffic, but also by the unit revenue coming from the commercial and real estate activities, that has gone up from EUR 6.1 to EUR 6.4 per pax. There are several reasons why we think we are delivering this performance. Basically, the growth has been driven mainly by the material progress in the remodeling works and the additional commercial surface that we have added to our activities, especially in duty-free, where most of the works in Madrid and Barcelona are done. Also the introduction of new business concepts, the arrival of new brands that fit with our passenger profile, the more lucrative conditions of the latest contract that we have awarded, we'll cover that point later. The strong performance of the mobility-related services, car rental and parking, as you know, the continued increase in demand for VIP lounges and also the development of many real estate initiatives, especially in cargo and hangars. Let's discuss in more detail some of these business lines on the commercial front. If we look at duty-free, sales in this business line raised by 15 -- sorry, 0.3% with the total revenue for this business line, reaching EUR 535 million. Variable rents plus MAGs increased by 7.7% to EUR 433 million. As the Chairman was explaining earlier, we are very satisfied with the performance because we have 3 lots that have already exceeded the minimum annual guarantee rents. And we were short by around 10% in another lot. So hopefully, in 2026, once most of the commercial activities in the Palma Airport are finished, as explained by our Chairman earlier, we should be able to get closer to that MAG in that specific lot of the [ Valaris ]. If we look at the F&B activity, sales increased by 6.1% and unit sales by 2.1%. Total revenue grew by 8.5% to EUR 352 million, thanks to higher penetration rates, average and higher average ticket prices and also with having more commercial service available to our passengers. If we have a look at the mobility activity, car park total business grow -- revenue grew by 8.7% to EUR 221 million. And this is a very interesting piece of information because as we were saying earlier, domestic traffic have been going down. So all this performance is mainly related to the company making available more parking spaces and also how we are managing the ticket prices in this business activity. If we look at the car rental activity, sales increased by 6.7% and total business revenue by 23.9%, up to EUR 256 million. This fantastic performance is driven by the new contract that, as you now enter in operation in November 2024. If you look at the commercial performance in the last quarter of the year, I have read some of your opinions this morning, we are already taking into account the last weeks of 2024 with the new car rental activity, and that would explain why the car rental activity in the last quarter, mainly the last weeks of the year, the performance 2025 versus 2024 has shown a lower growth rate. And the main reason is because in those weeks, months of 2024, we were already -- the new contract were already binding and was already being taken into account in the -- in our accounts. VIP services, an amazing trend has continued through the whole year with total business revenue rising by 31.5%, reaching to EUR 104 million. The income per passenger has gone up by 26.6%. VIP lounges that account for 82% of the total revenue of the business line basically managed to deliver an increase in the number of our clients by 16% and the average ticket growth by 13%. Real estate, as I was saying earlier, an increase of about 41%, mainly driven by cargo hangars, but also the new contract terms and conditions related to our FBOs activity. Let's go to Slide 18, where we show the minimum annual guaranteed rents that the company has secured by contract. Please, let me remind all of you that we are not taking into account any renewal of contracts in this information. That's why you see a decrease in trend once we sign -- once that contract expires, all the MAGs related to that contract are removed from this information, but not the new contracts that might replace those future contracts. You can also see in this slide, information related to all the new awards that took place in 2025 related to Specialty shops and F&B, where you can read the material increases proposed and signed by our operators and concessionaires in those activities. Material increases are therefore expected in -- because of those units in 2026 according to the information coming from these tenders. Let's go to Slide 19 and 20. There, you can see some further information on the other operating expenses related to the Spanish network. As the Chairman was explaining earlier and as we explained last week, the trend related to other operating expenses in Spain is a trend in which those expenditures are going up, especially related to maintenance, security and PRM services. You will see that in the last quarter of this year, there have been some increases a bit higher in some of these categories than the one that you have seen in the first part of the year -- in the first 9 months of the year. And for example, in the case of PRM, they are related to contractual arrangements related to the whole year, not only to this specific quarter. If we move on to financial consideration, Slide 21, you will see some further information on the net debt and gross debt position and cash position of Aena, the mother company, but also the consolidated position. On the consolidated position, gross debt, gross financial debt have moved up. The reason behind that is basically the financial -- the financing that we have raised in Brazil, mentioned by the Chairman earlier, BRL 5.7 billion. And with respect to the ratio that I have also seen some of your notes earlier this morning, that you can see the net debt to EBITDA in the mother company has gone down materially from 1.59 to 13.1. That ratio in the consolidated group has gone down, has gone down to 1.46. And some of you were saying that, that was a reduction lower than the one that you were expecting. Please let me share with all of you that there is a significant amount of cash that has been invested in very short-term deposits in Brazil. So all that financing that we have raised. And according to accounting rules, we -- that -- and how we calculate this ratio, that cash is not part of this ratio. It's a short-term financial asset that because we are not planning to use in the next 90 days, from an accounting standpoint is not part of the item cash and cash equivalents. If we were taking into account all that cash, short-term financial assets, sorry, as part of our cash position, the ratio of 1.46 would be around 1.35, 1.36. I hope that now is more clear with respect to that item. Let me move on to the financial -- sorry, to the international platform. So I'm moving to Luton and Brazil, Slide 20 -- 22 for Luton. Luton Airport traffic grew by circa 5%. So 17.6 million passengers went through our facilities in the U.K. EBITDA stood at EUR 186.8 million, an increase of 20.3%. If we were removing the impact coming from a compensation related to the reconstruction of the parking structure, EBITDA would have grown by 11.1% at our Luton facility, still a double-digit increase in our London airport. Let's go to Slide 23 and 24 to talk about ANB and BO or BOAB. Passenger traffic in ANB increased by 5.7%, circa to 16.8 million passengers. EBITDA at that airport increased by 19%, high -- a very material increase with the margin also going up from 43.2% to 57.4%. This margin takes into account the IFRIC 12 accounting adjustment. If we were removing that adjustment, the EBITDA margin for 2025 would be 61%, a very high margin for our ANB activities in. If we go to Slide 24, passenger growth was 5.1%, reaching circa 29 million passengers in our concession in Brazil, in our BOAB concession in Brazil, with EBITDA growing by 13.1% to BRL 678 million. EBITDA margins are materially impacted because of the IFRIC 12 accounting rules. If we were removing that impact, EBITDA margin could be at 63.4%. You know that we keep executing our mandatory CapEx in that concession, especially in the Congonhas Airport, and we are planning to deliver all those construction works in June 2028 for that airport further to our obligations in our concession agreement. And please let me remind all of you that we managed to attract circa EUR 400 million from our international activities from BOAB and also from Luton coming from repayment of shareholder loans, but also coming from dividends and fees. And that would be at the end of my presentation. So I think we are ready to start the Q&A session of the conference call. Thank you very much. Operator: [Operator Instructions] Our first question comes from Tobias [ Froom ] from Bernstein. Unknown Analyst: Beyond what you've just said, could you remind us which other commercial contracts will be open for tender in the short to medium term, just to gauge the upside for commercial? Maurici Betriu: Thank you very much, Tobias, for your question. On the commercial front, as you know, we launched the advertising tender some weeks ago. The tender is moving on. The financial impact of the new contracts that would be signed following that tender would really happen in 2028 because as the advertising existing or the current advertising contracts for most of the -- our airports are expiring that year, except for the Palma Airport that is expiring, terminating this year. That's why we are launching this advertising lot altogether in this year. With respect to other commercial activities that we are planning to launch in the following weeks, there are some airports such as Malaga and Gran Canaria in which we are planning to renovate the commercial offer, and that will be happening through the year. Let me finish just stating or making the Chairman refer to the Barcelona F&B activity. That's a process that is -- has been awarded recently. And the financial impact of that process will be seen in 2026 because of all the MAGs that have been contracted for that activity. On the real estate activity, we are very active, as mentioned by the Chairman and also in my summary in cargo, in hangars, also other real estate actions that the company is launching. So there might be some financial improvement coming from that activity as well. And I think that would be a fair summary of what you might expect on the commercial front in the following months, Tobias. Operator: Our next question comes from Luis Prieto from Kepler. Luis Prieto: My question is the following. There is now full visibility on the CapEx plans for the next 5 years domestically. But could you please give us an overview of what this CapEx should amount to over the same period of time internationally, given the relevance of BOABs works and potentially Luton's expansion? Ignacio Hernandez: Luis, this is Ignacio speaking. With respect to Luton Airport, well, at this moment in time, the contractual committed CapEx that is mandatory to Aena Group through that subsidiary is mainly maintenance CapEx because the -- as you know, we are the concession holder in that airport, and our concession is expiring in 2032. So limited CapEx on that front. Having said that, Luis, as all of you know, there is a DCO that has been granted to the Luton Borough through the company called Luton Rising that DCO grants the possibility to expand that airport and the expansion could be material, taking into account the maximum level of capacity that has been granted according to that DCO. But that CapEx, as a result of that DCO is CapEx that wouldn't be mandatory or committed CapEx for that subsidiary of Aena Group. So at that moment in time, that is not CapEx that is part of our forecast. With respect to our willingness to participate in that expansion, as we have always seen -- said, sorry, getting involved in the expansion of Luton for Aena is something attractive, but always subject to the attractive terms and conditions. We are hopeful that, that will be the case because it would be a win-win situation for Luton, for Luton shareholders and for the Luton Borough. But that's still something that is ongoing and it has not been resolved yet. We are always available to discuss and try to reach a positive agreement with the grantor in that respect. But so far, that has not happened yet. With respect to our Brazilian assets, as we have been disclosing on ANB, most of the CapEx -- most of the material CapEx has been delivered, has been constructed by our subsidiary. That's why you can see in the presentation a material decrease in the slide, I think it's 23, CapEx figures for that subsidiary are very limited because most of the construction activity that was mandatory according to the concession sign has been done. However, in the case of Congonhas, as you were highlighting in your question, there has been an increase in CapEx, EUR 250 million in 2025. Total CapEx figure for that portfolio for all the construction activity, if I remember, well the figure, was a bit north of BRL 4 billion -- BRL 4.4 billion, around 50% was related to Congonhas and the other 50% related to the other portfolio of airports that are part of that subsidiary. Mandatory CapEx milestones, we have to deliver most of the activity of the construction activity, sorry, excluding Congonhas through 2026 and the one related to Congonhas, the milestone according to our concession agreement is by 2028. Sorry for my long answer, but that should provide all of you a good picture on the CapEx for the whole group. Operator: Our next question comes from Cristian Nedelcu from UBS. Cristian Nedelcu: My question is on the DORA III traffic forecast. Having in mind that some of the investor community out there has concerns regarding the risk of AI disruption leading to potential increases in unemployment rates on white collar. It seems to me that it's harder than usual to forecast the next 5 years of traffic. So having this in mind, could you tell us a bit how you are thinking about this risk in your traffic forecast? And is this a topic of discussion with CNMC or DGAC? Does this come up at all when talking about the traffic forecast? Maurici Betriu: Cristian, thank you very much for the question. That's an interesting topic that and we could be talking for hours on the different types of impacts that AI may have in airports, in the economy and in governments. So it's difficult for me when you are seeing those movements in the equity and debt capital markets impacting technology companies, software companies and many other industries to be specific about how that might impact traffic at Aena. And we have some impacts, some of them will be positive, other negatives. But at this moment in time, it is something that as a company, we are following as a senior management, management in the IT teams and of course, that we will take into account. Depends on the week and depends on the day of the week, you can see that one specific industry is impacted in one way or the other. These days, it seems that companies like Aena are being positively impacted because we are considered a hard asset company, transport company, but that might change next week because of how the sentiment evolves in the market these days. With respect to our conversations on this topic with the regulators, all the discussions with the regulators, as you know, are confidential because our consultation process with the regulators and the airlines is confidential. So apart from the information that we have disclosed about the CAGR on traffic and our general views on that evolution explained by the team last week -- by the senior team last week, we cannot disclose further details discussed with the regulators. Operator: Our next question comes from Elodie Rall from JPMorgan. Elodie Rall: So my question would be on OpEx. So clearly, you're guiding for OpEx to rise in particular in DORA III, but also in '26. It'd be helpful to have a magnitude or an idea of the magnitude of the increase in OpEx. Maybe you can start with a bit of a split in the different OpEx group like staff, supplies or the OpEx, that would be helpful to understand the moving parts. Ignacio Hernandez: Hi, Elodie. This is Ignacio. Thank you for your question. And of course, we can devote some time to the performance of OpEx for 2025, and we can also share some views and -- our views, sorry, on the future further to the information disclosed to the market last week on the DORA. If we look at 2025, and I'm referring to, for example, the evolution, the performance of staff costs or HR cost that we have delivered a growth of around 9%, if I am not wrong. Basically, what is behind that growth is what we have been trying to share with all of you. The company is adding more people. So the number of FTEs is going up, has been going up this year. And given the new cycle that the company is about to start in the following months, sorry, we will keep adding more FTEs to the company in many different fronts, operational, headquarters so that we can ensure that the delivery of our DORA III plans and our future strategic plan is -- happens in a positive manner for everyone. We are not only adding FTEs, but also the cost from a pure monetary standpoint is going up. Payrolls are going up. And the main reason is basically agreements affecting all of the staff of Aena. That's public information. That has gone up by around 2%. But also the company has signed a new collective agreement with the unions, and there are a number of initiatives that have been agreed by the company with the agreement of the unions, and that is also impacting our staff cost line at Aena level. And that's mainly what is behind the increase of that 10%. There are other elements that we don't control, such as the increase in the social security cost that this country and therefore, Spain has approved and because of all the increases in salary FTEs and the removing -- removal, sorry, of the caps on the social security front that are also impacting our line in this specific cost item. So this trend is something that has happened in 2025 that you have seen through all the quarters, and we don't expect a different change in this trend in the following months, Elodie. If we look at the other operating expenses that is the other big cost item and we look at 2025, you have information in the Slide 26 that we are projecting, but you also have the information on other operating expenses for quarter -- for the last quarter and for the first 9 months of 2025. And as we said some months ago, some cost items such as maintenance, security, PRM services, all these cost items because of growth in traffic, because of implementation of new regulatory requirements, because of increasing costs that we are seeing and that will be higher in the future in order to maintain the quality levels that we want to maintain and that are mandatory to us because of our regulation and that will be mandatory to us because of the DORA III, because of the congested infrastructure that we are managing in some cases, and that will be even more difficult in the future. Because of trends that we are seeing in the context of our industry, PRM, penetration rates of PRM, passengers per plane, per flight are going up. So the number of people that are requiring these services are materially going up, and therefore, that's impacting that activity. And finally, VIP lounges, we are -- as we were discussing through my remarks -- my earlier remarks, this business line has been one of the main reasons of the growth in the commercial revenues, but we are very serious about maintaining the quality standards that our passengers demand. And therefore, we are improving the service there. That's why you are seeing the increase in that cost item for the whole year about 32%. In this specific quarter, 38%. Why? Because of a new contract that has been awarded, if I remember well, in Madrid -- in our Madrid facilities. There have been a couple of positive movements in the last quarter -- one in this quarter and one in the third quarter of the year. That's why you can see there a decrease of EUR 28 million. If we were removing that trend, the increasing of our other operating expenses this year would have been a bit higher. So the trend is there. This trend, sorry, is there. I want to be very frank and transparent. The company is doing its best to be the most efficient company in the industry, and that is confirmed by the OpEx per pax levels that we disclosed last week and that we -- and that they are available if you want to have a chat with us. If you compare our OpEx per pax levels with any other airport operator that is comparable to us, we are the lowest by far. EBITDA margins are still on the very high side of the industry. So the commitment of the management is there. But we cannot neglect as a management team that the trends in the industry are changing, legislation is more demanding. The company is going to manage and is starting to manage big construction projects, and that's impacting and will be impacting the cost items, the OpEx cost items of the company has impacted and will be impacted in the near future. Operator: Our next question comes from Harishankar from Deutsche Bank. Harishankar Ramamoorthy: Just one on the change in the policy on useful lives, if I may. When I look at the tables that you've provided in the reports, I think the one visible change is on other installations and housing, but that's probably not the key driving factor here. Maybe is it that you've moved the needle within the broader range of useful lives in each category, and that's what is prompting the EUR 6 million to EUR 9 million of reduced amortization. Maybe if you could give us some color there on what prompted this and how material is this in the context of different categories of assets? And also, how much of this EUR 6 million to EUR 9 million goes towards the regulated segment? Ignacio Hernandez: Thank you, Hari. This is Ignacio speaking. Happy to clarify your question on -- related to the assets. The company manages and monitors all the asset lives. Basically, our infra team is monitoring those asset lives. And when we identify potential deviations between the accounting tax lives of the assets versus reality, we launched a specific report with the support normally of third parties in order to confirm that what we are seeing in reality is an industry -- is also happening in the industry. So that has been the case this year. We have seen that in some of our assets, useful lives were longer than the ones that we are using for accounting and tax reasons. With respect to the assets, sorry, that have had the largest contribution in terms of reduction of the depreciation expenditure has been the one related to surface access and also the ones related to aprons and the pavements in the air side. Those have been the ones that have moved the needle. So I will check the annual accounts, but I think that was clear. Sorry, it was not clear from your reading, Hari. With respect to the asset regulated base, basically, asset regulated base follows -- generally speaking, follows accounting rules. So this potential reduction in the depreciation expenditure this specific year, this might be resulting into a higher asset regulated base at the end of the year than the one that we were expecting before this adjustment. Taking into account that this adjustment this year is getting -- has been -- has accounted for EUR 68 million, next year will be a bit lower. So it will not be an adjustment that -- will not be a recurring adjustment as material as the one that we have seen this year because it will get lower and lower in the following years. Thank you for your question, Hari. Operator: Our next question comes from Andrew Lobbenberg from Barclays. Andrew Lobbenberg: This one, I suspect, is for the bus and not meaning to excite you. But if we can look back to the episode at the end of last year where there was the effort by the PP to put through this legal case through the Senate that was going to stop your tariffs increasing, but then it was cut off and it didn't get passed through the Congress, which makes complete sense to me. I mean, watching that whole episode, I was bewildered. How did it happen? Why did it happen? Why were you being treated as a political football, at least that's what it looked like to me. And I mean, why did it happen? And how much confidence can you have that you're not going to have some random regulatory or political intervention in the coming year as we work through the DORA process? Sorry if it's a bit vague, but I think you get the question, I hope. Maurici Betriu: Thank you for the question. This is Maurici Lucena. Well, probably this is a very good question. I just think that the general sentiment in Spain is that airports work very well. And regardless of the noise, especially the noise that comes from the airlines, I think that the politicians agree with this good functioning of the airports. You know that in Spain, the air -- well, the airports and the air activity is even more important than in other countries because of its very high weight in terms of the economy because we are a very touristic country. And as a single sector, tourism is the most important sector within the Spanish economy. So -- and everybody knows that for the tourism to function well, they need planes and they need airports. So I think that this ultimately protects the airport model. The PP -- the Popular Party initiative was very weird and bewildering as you've said, because the Popular Party is the father of the regulatory framework. So this is what really surprised me. And we have -- and I personally, we have publicly acknowledged the -- well, let's say, the good decision that this new framework signified back in 2014. So I think that now that it is clear that Aena is entering a very important CapEx cycle with the renovation expansion of many, many airports I think that everybody is, let's say, more aware that the model needs to be robust because Aena, and I personally, we have said that we need this model to be robust, solid, protected because otherwise, we could not enter into this new investment phase. I think that we have had strong reminders by our private shareholders, especially TCI. We publicly answered the concern of TCI. We were crystal clear. So all in all, answering directly your question, I'm very confident that this won't happen again because I think that saying it, in other words, too much is at risk. And I think that this risk is now more clear than it was when the Popular Party surprisingly launched this political initiative. So -- and the government, the Ministry of Transport, the President, the government, they are all very aware that the model functions well, that Aena is a very good company and that it means we need trust, we need stability because what we will do in the coming 10 years is very important, both for Aena, but especially for Spain. Thanks. Operator: Our next question comes from Dario Maglione from BNP Paribas. Dario Maglione: Just a quick one, a follow-up. So it's a bit technical. On the D&A, you mentioned the EUR 69.6 million lower D&A. Most of it is in the Aviation segment. So D&A for the Aviation segment for the full year was EUR 557 million for 2025. What shall we expect in 2026? Ignacio Hernandez: Dario, this is Ignacio speaking. I think we are -- if you are referring to the savings on the depreciation expenditure in 2026, that's a number that we have estimated. That's a number that we know is lower than the EUR 68 million, significantly lower. And that's how I would answer your question, Dario. Dario Maglione: Okay. So it should be a lower depreciation compared to 2025? Ignacio Hernandez: You are referring to the total amount of amortization, Dario? Sorry, based on your follow-up, I just want to confirm. You are referring to the total amount of the expenditure or the impact that we had this year, just to clarify Dario and avoid confusion. Dario Maglione: The total amount in 2026 for D&A. What should we expect? Ignacio Hernandez: Okay. Sorry, my answer was related to the specific impact that I was explaining in my previous question. Dario, I would assume a very similar level of depreciation and amortization for 2026 to the one that we have had in the 2025. Operator: Our next question comes from Marcin Wojtal from Bank of America. Marcin Wojtal: Yes. My question is again on DORA III, if you allow me, what are the next steps, if you could remind us? And should we specifically expect any feedback from a CNMC or DGAC on your DORA III submission before the summer, perhaps like a draft determination or some commentary that would be released publicly? Or we are essentially waiting for the final publication in September, and there is essentially one publication and nothing comes before that. Ignacio Hernandez: Marcin, this is Ignacio speaking. Sorry, I was on mute. Well, the company has been working in a very diligent manner in order to speed up the process as much as possible with a very long consultation process that started right after the summer of last year. So it has been a long consultation process, but our goal has been putting all the information about our proposal available to the different stakeholders and regulators as early as possible. There is a deadline for the cabinet that is the end of September. That's a formal deadline included in the regulation and that's the date that is there. With respect to other reactions coming from supervisors or regulators, in the previous DORA process, in the previous DORA II process, there was a non-binding report, if I remember well, published by the CNMC discussing a number of items related to the proposal that became publicly available. I understand that, that is going to be the process this time as well. With respect to specific days, publication dates of that report, let's -- I cannot be definitive in that matter. Let's wait. Let's be hopeful that given that we have shared that information a bit earlier than the previous year, we can have those report -- those non-binding reports becoming available a bit earlier than in the previous process. You were also asking about next steps or next milestones. As explained by the Chairman in his opening remarks, there will be a process now of setting information with the different regional coordination committees or discussion about the specific projects that will impact and will benefit the regions. Thank you, Marcin. Operator: Our next question comes from Jose Arroyas from Santander. José Arroyas: I wanted to ask you about the commercial revenue per pax trends in connection with the information you provide on Slide 32. In the presentation or throughout your presentation, you explained that the reason for the slowdown in Q4 was largely due to car rental, and that was very clear. But I wanted to ask you specifically about the slowdown in the revenue per pax trends in duty-free and in specialty shops, any trend you can highlight to us? Maurici Betriu: Thank you, Jose Manuel. And thank you for the question. With respect to specialty shops, I think that's a business line within the retail arena that is the one that has been, I would say, the most impacted because of disruption of e-commerce, et cetera. And also because within that business line, we have some activities that are, for example, exchange -- currency exchange, sorry, I was thinking in Spanish, apologies for that. And that is being impacted a lot as well. So the trend is there. What we are trying to do is also providing a hybrid concept. So mixing the retail concept of duty-free F&B and specialty shops to avoid or to try to maximize the return coming from the 2 business lines that we are seeing the most exciting or the most promising ones such as F&B and duty-free in that front. With respect to duty-free activities, it's true that this quarter, the performance has been a bit lower than in other quarters. There might be some accounting adjustment because this is the month, the end of the year when we take advantage in order to adjust the 12-month minimum annual guaranteed rent for the whole year, and there are some adjustment there. Also, the months of the year -- this quarter of the year is not the summer part of the year. So the trend is also a bit more negative. Having said all that, if I look at the sales in the duty-free activity still at double digit. If I remember well, Jose Manuel, was around 13% of sales increase that compared to traffic or compared to other activity levels of the company has been very, very high. Let's see how 2026 evolves. We are confident that a duty-free line for 2026 should reflect the new openings in Palma. This news -- this summer season for Palma for duty-free now that all the duty-free units will be opening that airport will be positively contributing to this business line. And that has not been the case in 2025, regardless of the very last weeks of the year that are very low season for Palma. Thank you for your question, Jose Manuel. Operator: We currently have no further questions. So I'd like to hand back to Carlos for some closing remarks. Carlos Gallego: Thank you, Sami. As there are no further questions, we would like to conclude today's call. The Investor Relations team remains at your disposal for any additional information or clarification you may require. Thank you very much to all of you, and have a great afternoon. Thank you. Operator: This concludes today's call. We thank everyone for joining. You may now disconnect your lines.
Operator: Good morning, everyone, and welcome to the United Therapeutics Corporation Fourth Quarter 2025 Corporate Update Conference Call. My name is Jamie, and I will be your conference operator today. [Operator Instructions] Please also note today's event is being recorded. At this time, I'd like to turn the webcast over to Harry Silvers, Investor Relations Manager at United Therapeutics. Harrison Silvers: Thank you, Jamie. Good morning. It is my pleasure to welcome you to the United Therapeutics Corporation Fourth Quarter 2025 Corporate Update Webcast. Remarks today will include forward-looking statements representing our expectations or beliefs regarding future events. These statements involve risks and uncertainties that may cause actual results to differ materially. Our latest SEC filings, including Forms 10-K and 10-Q, contain additional information on these risks and uncertainties. We assume no obligation to update forward-looking statements. Today's remarks may discuss the progress and results of clinical trials or other developments with respect to our products. These remarks are intended solely to educate investors and are not intended to serve as the basis for medical decision-making or to suggest that any products are safe and effective for any unapproved or investigational uses. Full prescribing information for the products is available on our website. Accompanying me on today's call are Dr. Martine Rothblatt, our Chairperson and Chief Executive Officer; Michael Benkowitz, our President and Chief Operating Officer; James Edgemond, our Chief Financial Officer and Treasurer; Dr. Leigh Peterson, our Executive Vice President of Product Development and Xenotransplantation; and Pat Poisson, our Executive Vice President of Strategic Development. Note that Michael Benkowitz, James Edgemond and I will participate in a fireside chat and one-on-one meetings at the TD Cowen 46th Annual Healthcare Conference in Boston on March 2. Additionally, Martine Rothblatt, James and I will be at the Leerink Global Healthcare Conference in Miami on March 9 for a fireside chat and one-on-one meetings. Finally, James and I will also participate in one-on-one meetings at the UBS Biotech Summit in Miami on March 10. Our scientific, commercial and medical affairs teams will be present at the 21st Annual John Vane Memorial Symposia in London, March 13 and 14, and at the International Society for Heart & Lung Transplantation in Toronto, April 22 to 25. Now I will turn the webcast over to Martine for an overview of our development pipeline and business activities. Martine? Martine Rothblatt: Thank you, Harry. Good morning, everyone. Today, I'm going to share with you news that transforms the fields of pulmonary hypertension and IPF. This news is our unsheathing of a category killer product called [ Tresmi. ] This product is a revolutionary proprietary drug device formulation of treprostinil into a soft mist inhaler. It will reduce the #1 side effect of dry powder inhalers, which is coughing by up to 90% based on the human studies we've done so far. And we intend to file for its approval in PAH and ILD this year and commercially launch it next year. The days of people discontinuing their PAH or ILD therapy due to cough will be over. Anyone would rather have soft mist than dry powder. Also transformative for our markets will be the unblinding of our outcome study next week. We are optimistic that this unblinding will usher in a new era of once-a-day treatments for pulmonary hypertension. The reason we can promise once-a-day treatment is because the new medicine is a super prostacyclin. It is a super prostacyclin because it lasts much longer and binds molecules much more efficiently than all other approved forms of prostacyclin. Hence, between our super prostacyclin once-daily pill and our cough less soft mist inhaler, or SMI, we have solved the two biggest problems in our diseases, cough and dose frequency. Also very exciting is our unblinding next month of our second pivotal trial of Tyvaso for IPF. You'll recall from last quarter that our first pivotal trial showed Tyvaso to be much better than any other IPF drug the FDA has ever approved. With confirmation of those results next month, we'll quickly file for approval and commercially launch into IPF not later than June of 2027. In summary, for 2027, we should have three disease transformative paradigm-shattering commercial launches: one, a once-daily super prostacyclin for PAH; two, a category crushing [ Tresmi ] coughless inhaler for ILD; and three, a better than everything new treatment for IPF. Hell, yes, we are pumped. Now let me review some of the other major management areas that I track as CEO. We are religious about revenue growth at UT. And Mike Benkowitz... Michael Benkowitz: Good morning, everyone. 2025 marked another year of record-breaking revenue, driven by double-digit percent revenue growth from Tyvaso and Orenitram, leading to [ 11% ] total revenue growth over full year 2024 and surpassing $3 billion in total revenue for the first time in our history. For the fourth quarter, we recorded $790 million in total revenue, representing 7% growth from the fourth quarter of 2024. We have pointed out in the past and continue to remind investors of our historical seasonal revenue trends where the first quarter and fourth quarter tend to be lighter ordering quarters, while the second quarter and third quarter tend to be heavier ordering quarters. As such, sales in the short term can vary depending on the timing and magnitude of orders from our specialty pharmaceutical distributors and may not precisely reflect patient demand or changes in patient census. Turning to Tyvaso. Total revenue for the fourth quarter was $464 million, a 12% increase over the previous year, underpinned by robust 24% year-over-year growth in Tyvaso DPI. This impressive trajectory reflects our strategic positioning in a large and growing addressable but uncaptured market in PAH and PH-ILD, where we are steadily increasing our share of voice and expect to continue delivering double-digit growth. Through mid-February of this year, our rate of referrals for total Tyvaso was at its highest level in two years. Notably, the referral rate in 3 of the last 4 months was at or above where we were heading into a competitive launch early summer of last year. This continued strength in the underlying fundamentals reflects the disciplined execution of our teams who continue to reinforce our message. And we expect this momentum to continue throughout the year as the many attributes of Tyvaso DPI position the device for sustainable long-term growth. We are constantly striving to enhance our Tyvaso DPI platform, which we believe will help us solidify and grow our position as the preferred inhaled prostacyclin therapy. We recently introduced 80-microgram cartridges, which enable delivery of the equivalent of 15 nebulized treprostinil breaths in a single DPI breath as well as 96 and 112-microgram combination kits. This advancement strengthens Tyvaso DPI's differentiation in the pulmonary hypertension market by improving convenience and expanding dosing flexibility, which we believe can support broader adoption and longer-term growth while streamlining access and affordability for patients with more advanced dosing needs. Moreover, we believe the consistency of flow rate and delivery with our DPI device and its low inspiratory flow requirements further differentiates our platform. Turning to Orenitram and Remodulin. Last month at the Pulmonary Vascular Research Institute Annual Congress in Dublin, our medical affairs teams presented data from the ongoing [ ARTISAN ] study, examining the effect of early and rapid treprostinil therapy on mean pulmonary arterial pressure, or mPAP, and the reduction to improve right ventricular function in PAH. Preliminary data suggests that early initiation of high-dose treprostinil therapy represents a feasible strategy for reducing mPAP and improving right ventricular structure and function. These data further reinforce the significant benefits that can be achieved from Orenitram and Remodulin, which remain backbones to treprostinil-based therapy in treating pulmonary hypertension and are strong foundational pieces to our commercial business. To close, we are proud of the exceptional drive and relentless focus of our teams who remain deeply committed to making a real difference for the patients we serve. Building on the strength of this past year, we expect this foundation will continue to support durable double-digit growth and ongoing success over the long term. With that, I'll turn things back to Martine to run the Q&A. Martine Rothblatt: Michael, thanks so much for that great review of our religious dedication to strong revenue growth... Harrison Silvers: Operator, maybe we could go to the first question in the queue. Operator: [Operator Instructions] Our first question today comes from Ash Verma from UBS. Ashwani Verma: So just on TETON 1 data coming up, I wanted to understand your level of confidence here in a positive study for IPF. I know you're very confident ahead of the TETON 2 study, but just in terms of how you're thinking about for this second study, I would love to get your thoughts. And then secondly, it seems like this question keeps coming up, just the impact from Yutrepia. I know previously, you talked about that this is -- there was a give it a try dynamic. But just what are you seeing latest in terms of the patient adds for DPI or nebulizer and if there is any impact from the competitor? Leigh Peterson: Yes. I'll go ahead. This is Leigh Peterson, and I will go ahead and answer the first question about expectations for TETON 1 and yes, just to reinforce that we are extremely encouraged by the TETON 2 results. And we're really optimistic that we can show a treatment effect in the TETON 1 study as well, particularly since we did see such a robust effect in TETON 2 and that the TETON 1 and TETON 2 study population are relatively similar with regards to the baseline characteristics. So we're confident that the TETON 2 results will translate to a second successful study. Harrison Silvers: Operator, it seems like we lost Martine and Michael. Operator: We have Martine rejoining. Martine, this is the conference operator. You joined into the live conference. Your line just dropped here recently. We rejoined you back in. Your line is live. Martine Rothblatt: Okay. I'm sorry, everybody, the conference operator messed up the conference call. And I think, Mike, were you able to get your entire presentation through before you got dropped? Michael Benkowitz: I think so. I'm not sure if anybody heard me. Martine Rothblatt: Okay. Well, why don't we start back up? We'll go over 9:30. And why don't we start back up around the time I think that was dropped. And then Mike, if you don't mind redoing your presentation after I continue. Is that okay? Michael Benkowitz: Yes, Martine, I think I just -- we just confirmed that everybody heard my presentation. Martine Rothblatt: Okay. Good. Well, I'll pick up from when I was dropped then. So everyone has just heard Mike's presentation. And I think it confirms what we've been saying to everybody is our commitment to double-digit revenue growth. I'm going to continue from the point that I got dropped by the call to say, in addition to all of the fantastic success that Mike and his team have delivered in terms of revenues that we at UT are also fanatical about new product development because we never like to rest on laurels. And Dr. Peterson, who is also on this call, is doing a superb job of product development, including the amazing new super prostacyclin and IPF medicines that I mentioned at the start. Before I dive into these new products, let me just take a moment due to the conference call error earlier, just to double check with Harry and Michael that my remarks are coming through. Are they coming through? Harrison Silvers: Yes, we got you, Martine. Martine Rothblatt: Okay. Sorry for the interruption, but like trust but verify kind of thing. All right. So other areas that I focus on in addition to new product development are Investor Relations and business development. With regard to business development, we are now in fruitful discussions with three great pharmaceutical companies. And this is really driven by their keen interest in the proven predictive power of our AI-enabled digital lung model. Our model can run hundreds of accurate in silico Phase III trials in way less time than it takes for a single in vivo trial. No one else has this advanced and lung-specific computational biology technology. It is great to know that the outcome of a pulmonary trial can be known before spending hundreds of millions of dollars to run it, not to mention the many years saved or gained. Transplantation is another major management focus for me, and it too is firing on all thrusters. I'm just going to -- before I go into transplantation, just let me take a moment to check again with Harry and Mike and make sure the line remains active. Harrison Silvers: Yes, we have you. Martine Rothblatt: Okay. Great. The first thruster is Xeno, which has now two patients transplanted and doing well in our FDA-approved phase less clinical trial. We are on schedule to fully enroll the full 6-patient cohort by this summer. Then we'll enroll the full balance of the trial needed for registration as decided by the FDA in 2027. At this rate, we should have a commercial Xeno product on the market in 2030. The second transplant thruster is Miromatrix. We've now fully enrolled and successfully completed the first manufactured liver clinical trial ever. We expect FDA guidance on how to take this liver failure recovery product and also our mirokidney implanted product to regulatory approval during the course of this year. Instead of me going through all of our multiple other transplant thrusters such as, for example, 3D bioprinting of kidneys and lungs, let me simply say that I felt honored to be chosen by Forbes team of experts and AIs as the eighth most innovative person in America. I feel an obligation to live up to that, and there is no company in the world manufacturing as many transplantable organs in as many different ways with as many or for that matter, any in human clinical trials as my teams at United Therapeutics. This is life-saving innovation with very, very large. A final area of major management focus for me is our strategic clinical development group, also known as our Skunkworks or Stealth division. It is in this group that the revolutionary new [ Tresmi ] product was birthed as described at the start of the call. This is the product that will totally transform our markets by all but eliminating treprostinil's #1 reason for patient discontinuation, harsh coughing. We are unsheathing this product today because it will be filed this year for commercial launch next year. The immense power of this product is summarized in its name. Few will want to continue inhaling a dry powder when instead they can breathe a soft mist. Other products that you'll soon see emerging from our Skunkworks division include: one, a once-daily inhaler two, PRN inhalers; three, even better pills than the once-daily ralinepag; and four, more IPF and PAH products than I can really discuss in a mass call like this because they are deeper in stealth mode. But all of these products have long IP. In summary, UT is committed to using relentless innovation and our AI-enabled digital lung model to keep producing the best, most convenient, most effective and safest products in the PAH and IPF space. Operator, you can now open up the line for additional questions. Operator: Our first question once again will be from Ash Verma from UBS. Ashwani Verma: Great. Sorry about what happened earlier. Just on like the TETON 1 data coming up, I wanted to get an understanding of the level of confidence you have in the IPF study outcome versus how you're feeling about TETON 2. And secondly, just wanted to get the latest on impact from Yutrepia if you're starting to see any type of patient add or competitive dynamic on the DPI or the nebulizer. Martine Rothblatt: Okay. Thank you, Ash. Thanks for the question. So the first part of your question about TETON 1, we will have answered by Dr. Leigh Peterson. She is in charge of product development and in charge of the team that's running the TETON trials. And then after she finishes answering your question, then the second part of your question will be answered by Mike Benkowitz relating to marketplace dynamics between us and Yutrepia. Dr. Peterson, could you please start? Leigh Peterson: Yes, sure. So I don't know if you all heard me the first time I said this, but I'll add a little bit more detail this time. So just to reiterate, we're extremely enthusiastic about the TETON 2 results. And we have great confidence that these results are going to be translated to a second successful study, in particular, TETON 1. The baseline characteristics of both studies are similar, relatively similar. So the possibility of the translation is really high. And again, the robust results that we saw in TETON 2 also give us confidence. I mean, we not only saw a very good, very positive statistically significant basically primary endpoint with regard to FVC, we saw the -- as everyone know, we saw an improvement in absolute forced vital capacity of 95.6 milliliters. And we also saw significant improvements in our secondary endpoints. And so again, given these really good results, we expect similar results from TETON-1. Martine Rothblatt: Perfect, Dr. Peterson. Thank you so much. Mike, I'm not sure how much they heard of the earlier discussion. So if you could just respond to Ash's question as you think. Michael Benkowitz: Yes. So Ash, I think you were asking about just kind of the competitive dynamics between us and Liquidia. So what I'd say is Tyvaso remains the well-entrenched market leader for inhaled therapy in pulmonary hypertension. The health care providers consistently affirm UT's leadership position in this space. As we said, there was initial curiosity to evaluate a new market entrant, but the doctors are recognizing that the advantages of Tyvaso DPI is easy and importantly, consistent delivery in just one breath is important. Our primary market research insights and underlying demand trends support this. What we're hearing and seeing is that the belief in Liquidia's unsubstantiated claims of higher dosing, less cough, better lung deposition, lower effort is definitely weighing. Our referrals have been at pre-Liquidia launch level -- at pre-Liquidia launch levels in 3 of the last 4 months. Our prescriber breadth and depth and patient retention is at or better to where it was before Liquidia launched. Now what we have seen is the patient starts have lagged these trends a little bit. I think that's primarily due to the typical Q4 seasonality we see as well as just kind of the cross-country severe weather we experienced in January; however, that log jam really seems to have broken in February based on what we've seen in the last 3 to 4 weeks. And I would say if these trends continue, you'd expect to see us return to sequential revenue growth no later than Q2. Operator: Our next question comes from Roanna Ruiz from Leerink Partners. Roanna Clarissa Ruiz: So I thought it was a really interesting update on the soft mist inhaler product. And I was curious if you could talk a bit more about the human-based studies you've done so far and what additional features you've been optimizing for this product? And how you think physicians will react in terms of prescribing it if it's fully available and commercialized? Martine Rothblatt: Yes. Thanks for your question. I think physicians will be super happy about it. It is -- as it says right in the name, it's soft mist versus dry powder. So I think physicians will be happy about it because patients will be happy about it. I think it will be equivalently effective. So why not have something that works just as good, but is easier for the patient to tolerate. We have just brought this out of stealth mode today on this call. So this is totally really exciting news. And so many of the details we are not going to share openly. But I did want everybody to know that it was going to be filed for approval this year and then launch next year. So given the proximity of all of that, it was important to -- for us to unsheathe the product, but the -- all of the various competitive advantages of this product will remain undisclosed until we end up seeing the FDA approval. Operator: Our next question comes from Roger Song from Jefferies. Jiale Song: Great. Congrats for the progress and exciting to see those three launches. Maybe the team, so I think you confirmed the double-digit growth this year. I think, Martine, you mentioned the $4 billion run rate by 2027 -- the end of 2027. Can you also comment on that kind of soft guidance? And also given those three new product launches next year, so how much contribution from those launches will contribute to the long-term growth, including the $4 billion run rate? Martine Rothblatt: Yes, it's a really insightful question. So first of all, we can clearly double down on our commitment to hit that $4 billion revenue run rate next year. So it will be in the back half of the year. But if you just take our double-digit revenue growth and you roll it forward from the levels that we are at right now, you'll see that we would be hitting that $1 billion a quarter by the tail end of next year. So we're doubling down on that. It does not require the contribution of these three new product launches. So all of that is, you could say, gravy, whip cream, whatever is your favorite metaphor. But definitely, these three product launches are going to bend the curve upwards in terms of our revenue levels beyond the $4 billion annualized rate because we were growing double digit with the great products that we currently have, the Tyvaso DPI, Orenitram, Remodulin, all of these -- Unituxin, all of these products. So above and beyond that, we've now got three more products, and these aren't just like me-too products. These are [ truly ] category crusher products. I mean the first one that can like slash way down the cough, a cough less inhaler, that's amazing. A once-a-day super prostacyclin, that's amazing. And an IPF treatment that's better than anything the FDA has ever approved for IPF since the beginning of IPF. It does not get better than that. So like I said, we're super pumped. And I think the $4 billion revenue run rate, it's just to be the point at which the revenue curve bends even more sharply upwards. Operator: Our next question comes from Joseph Thome from TD Cowen and Company. Joseph Thome: Congrats on the progress. Maybe given your excitement for ralinepag, what are the most important outcomes that we should be looking at when we see those data? Is it on PVR, 6-minute walk, time to worsening event? Kind of what do you think will resonate most with physicians in addition to the dosing benefit to drive adoption there? Martine Rothblatt: Yes. That's -- we love these kind of scientific questions. Dr. Peterson, the Head of Product Development, she has lived this trial for 7 years because this trial like started before COVID and persevered through COVID. So I don't think anybody knows the whole panorama of positive therapeutic benefits from this super prostacyclin than she does. So Leigh, if you could give kind of your stream of consciousness of what we can expect from this super prostacyclin and what do you think physicians will appreciate? Leigh Peterson: Yes. Sure. Happy to. So obviously, what Martine said is the most important with regard to this being a very, very potent drug. It binds the receptors, the IP receptor very tightly and has a really long half-life. And so this translates to the once-a-day dosing and potentially more tolerability. So that's definitely a bonus. But also, we're looking to -- I mean, we're looking to see the statistically significant and clinical meaningful benefit on top of that in clinical worsening versus placebo. And as you all know from our other studies as well as this one, clinical worsening is defined with specific parameters and seeing a benefit in the number of hospitalizations as well as mortality would be a super effect to see in this product. So as Martine says, we are unblinding next week, and we are really, really looking forward to that and happy to put those results out there. Martine Rothblatt: Thank you so much, Leigh. Really appreciate it. Operator, I'm getting inputs that other people are being dropped on the call, so we can close the call at this time. Operator: Ladies and gentlemen, at this time, we will close today's conference call. We thank you for participating in today's United Therapeutics Corporation earnings webcast. A rebroadcast of this webcast will be available for replay for one week by visiting the Events and Presentations section of the United Therapeutics Investor Relations website at ir.unither.com. We thank you for joining. You may now disconnect your lines.
Operator: Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin and I will be your conference operator today. At this time, I would like to welcome everyone to the Circle Internet Group's Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] Thank you. I would now like to turn the call over to John Andrews, Vice President of Capital Markets and Investor Relations. Please go ahead. John Andrews: Thank you, operator, and good morning. I'd like to welcome you to Circle's Fourth Quarter and Full Year 2025 Earnings Conference Call. I'm joined by Jeremy Allaire, our Co-Founder, Chief Executive Officer and Chairman; and Jeremy Fox-Geen, our Chief Financial Officer. Earlier this morning, we posted our earnings press release and earnings presentation on the Circle Investor Relations website, investor.circle.com. A transcript of this call will be posted on that website once available. I do need to remind everyone that our earnings press release presentation and this call contain statements that are forward looking. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Information concerning risks, uncertainties and other factors that could cause these results to differ is included in our SEC filings. We will also disclose non-GAAP financial measures on this call today. Definitions of those non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures can be found in the earnings release and earnings presentation, which are posted on Circle's Investor Relations website at investor.circle.com. Non-GAAP financial measures should be considered in addition to, not as a substitute for GAAP measures. Now I'd like to turn the call over to Jeremy Allaire. Jeremy? Jeremy Allaire: Thank you, John, and good morning, everyone. I want to start this morning talking a little bit about what I'm seeing in terms of this extraordinary transformation that's underway. I'm speaking not just about the changes we're seeing from blockchains and stablecoins, but the broader backdrop of technology acceleration, software-powered technology acceleration and artificial intelligence. I believe we are in the earliest stages of a very deep and very fundamental transformation of the way the global economic system functions and works. Not only will our global economic system become more internet native, but it's also going to become dramatically more automated. We are entering a world where, in my view, likely tens or hundreds of billions of AI agents will interact and perform economic functions over the Internet. If we look at the past decades, we've seen this progression and this progression has been accelerating. This progression has been one where we build more and more software native infrastructure, more and more data and transactions on the Internet. The progression from the Internet of information into an Internet of software distribution, interactive media and commerce, all made possible to the adoption of web, cloud and mobile platforms has created extraordinary value over time. Beginning around 2013, we began to see another transition this time into the value era of the Internet where early blockchain platforms emerged. Later, through the innovation of fiat backed stablecoins, we saw the birth of a transformative Internet-native money layer. Now as we've achieved regulatory clarity, and as the technology has matured, we're now seeing these developments directly colliding with another major platform shift, which is the adoption of AI platforms. This value era, this combination of economic operating systems and an Internet native money layer with artificial intelligence, agentic economic activity and automation, seems likely to drive the greatest acceleration of economic activity we've ever seen in human history, and we're really just at the beginning. Our aim at Circle has always been to build a new Internet financial system to build the software infrastructure that powers it, and we're more excited than ever to have that opportunity today. Let's talk about our key highlights in Q4. Our stablecoin network continued to grow. We saw USDC end the year around $75 billion in circulation, up 72% year-on-year despite some of the declines that we saw in Q4 due to the crypto market correction. We also saw tremendous ongoing growth in the amount of transactions happening on our network with onchain USDC volume hitting nearly $12 trillion, representing 247% year-on-year growth. This continues to reflect the growing velocity and utility of digital dollars on the Internet. Q4 delivered very strong financial results. We realized $770 million in total revenue and reserve income in the quarter, up 77% year-on-year. Adjusted EBITDA for the quarter was $167 million, up 412% year-on-year, with an adjusted EBITDA margin of 54%. Overall, for the quarter, we had very strong yearly growth across the board. Importantly, our platform continues to expand. We launched the Testnet of Arc, our Layer 1 blockchain network, and we're on track to launch Mainnet this year. Circle Payments Network continues to see very strong volume growth and participant expansion as we continue to see traction in real-world payments and cross-border settlements. We're also adding new products. We introduced StableFX in beta, our new onchain FX app and xReserve, which supports continued expansion of USDC across a wide range of blockchain ecosystems. And we now support USDC on over 30 different blockchain networks with interoperability being a key piece of Circle's platform strategy. Mainstream adoption continues to deepen across a broad range of leading enterprises and institutions. Intuit and Circle are partnering for Intuit to bring low-cost programmable money through Circle's technology to its millions of consumers and businesses. Visa continues to expand its integration of Circle stablecoins, announcing the launch of USDC settlement that permits U.S. Visa card issuers and acquirers to settle outside of normal banking hours using USDC. And earlier this month, Circle and Polymarket, the largest prediction market in the world, announced a formal partnership where Polymarket will continue to advance its use of USDC as the core collateral and settlement asset for their markets, demonstrating our very strong position as the leading regulated stablecoin network. Now these are just the tip of the iceberg. Major enterprises and financial institutions continue to integrate and support USDC in their businesses. We saw firms as diverse as Cash App, Gusto, Deal, interactive brokers, JPMorgan and Mastercard launched products and offerings that took advantage of USDC. Right now, we are seeing more activity from start-ups, enterprises and financial firms than we've ever seen in our history. The stablecoin market continues to grow strongly, and our position in that market continues to strengthen as well. CFX stablecoins grew $85 billion in the year, with 46% year-on-year growth. Within that market, our competitive position remains strong, and we continue to maintain a significant share. Importantly, it's a market that, despite the efforts of many other firms to enter and compete is really a market of 2 major issuers. And this reflects the very durable network effects that we maintain that are significant barriers to entry and adoption. Looking at growth in actual transaction volumes, Circle's share of transaction volume grew from 39% in the third quarter to nearly 50% in the fourth quarter. This is based on Visa's published analysis, which works to eliminate internal transactions, exchange wallet rebalancing and bots to really capture the volume that better reflects real economic activity. You can also note that while there have been a number of other stablecoins entering the market over the past year, their usage in real transactions is effectively 0. As noted in my introductory comments, Circle's network grew strongly with 3.5x year-on-year growth in onchain transaction volume and notably, CCTP, a critical infrastructure for interoperable usage of USDC, grew 3.7x year-over-year to over $41 billion of volume in the fourth quarter. I know that competition is a major topic for many. So I want to talk again about the durable network effects that Circle maintains. Foundationally, Circle's competitive position has been built on trust, as an audited public company with a deep commitment to compliance, as a firm regulated across jurisdictions around the world and with the highest levels of transparency possible. We enjoy the trust of major financial institutions, payments companies, enterprises, developers and end users around the world. And that trust shows up in our fundamental liquidity with $75 billion of USDC in circulation an unmatched liquidity infrastructure that in Q4 supported $163 billion of minting and redemption volume. That minting and redemption, that promise to create and redeem a digital dollar one for one at scale and through banking systems around the world is completely unmatched by any other player in the market. In Q4 '25, we saw distribution and network usage grow as noted, to nearly $12 trillion of onchain transaction volume, continued growth in meaningful wallets using USDC and our product platform continuing to expand. The breadth of infrastructure we provide, the breadth of liquidity services that we provide and with new applications like CPN and StableFX, our whole product platform is not something others in our market are able to replicate. And crucially, acting as a market-neutral infrastructure, not competing with our customers and our partners and building widely accessible and usable technology across as many platforms as possible have been keys to our competitive success as well. Moving on to our platform expansion. Circle's platform has really evolved from being a stable coin network to being a comprehensive platform and infrastructure partner for on chain finance, spanning our 3 platform pillars. Arc and our developer infrastructure, which includes the tools, the operating systems and the onchain protocols and infrastructure to enable the Internet financial system to flourish. Our digital assets and services which includes USDC and EURC, the world's leading regulated digital dollar and digital euro, tokenized funds such as USYC and liquidity services such as Circle Mint and xReserve that ensure liquid and available stablecoins around the world. And our apps. CPN is a rapidly growing application service from Circle for payments. And in beta now, StableFX, an application service for FX. We continue to invest in our platform and our infrastructure to expand what we can provide to companies around the world. With Arc and our developer infrastructure, we're seeing very strong progress. Our Testnet launched in Q4 with over 100 companies in banking, capital markets, digital assets, technology, commerce and payments. All leading brands actively testing, evaluating and working with us to bring this into commercial production. We've had near 100% uptime since the launch of our Testnet with an average of 0.5 second for transaction settlement finality, over 166 million total transactions and we're now averaging around 2.3 million daily transactions in our testing environment. We're on track to launch Mainnet in 2026, and we're thrilled with the progress we're making. More exciting things to come in terms of technology, partnerships and our ultimate Mainnet launch. I also want to touch a little bit more on CCTP. Obviously, we have had very strong year-on-year growth, very strong growth in the number of transactions that are happening over this network. But I want to call your attention to the market share for CCTP. You can see here that for USDC, CCTP is nearly all of the traffic that flows from moving USDC across blockchains, but we also reached more than 50% of all bridge volume. Not just of USDC, but of all assets across chains that we track. And in fact, in January, that volume reached 62%. And CCTP is becoming a critical infrastructure for how value moves on the Internet, and we're excited with our advancements in CCTP and the advancements in our interoperability infrastructure through our acquisition of Interop Labs. Through these advancements, we're building new capabilities that are really aimed at helping asset issuers of all types, whether you're issuing tokenized stocks, tokenized funds, tokenized bank deposits and new stablecoins to be able to take advantage of this tremendous interoperability infrastructure, to enable your assets to travel on these highways that Circle has built to move value on the Internet more seamlessly. We view interoperability infrastructure as a huge opportunity for us. And we also saw a strong growth in Circle other digital assets. In the fourth quarter, EURC reached EUR 310 million, representing 3.8x year-on-year growth and has already grown 25% since quarter end to EUR 389 million as of February 20. This reflects the growing demand for regulated euro-denominated stable coins and EURC remains the largest euro stablecoin. USYC, our tokenized Money Market Fund has also grown strongly since Q3. We acquired USYC in January of last year. We integrated it into Circle and we developed a new product and distribution strategy around it, focused on tokenized collateral on digital asset exchanges. With the relaunch of USYC, we've seen accelerating growth driven by demand for USYC as collateral on leading exchanges like finance and others. USYC assets ended the year at approximately $1.5 billion and have continued to grow to now over $1.7 billion in assets since quarter end. In our apps pillar, Circle Payments Network continues to scale. We have 55 financial institutions enrolled, that's up from 29 in the third quarter. We have 74 financial institutions that are currently in eligibility reviews, and we continue to maintain a strong pipeline with interest from hundreds of banks, payment firms and others all around the world. We've continued to expand the markets where CPN is available with live flows now in 14 markets across the Americas, EMEA and APAC. And importantly, CPN volumes continue to ramp, with annualized volume based on a trailing 30-day period as of February 20, reaching $5.7 billion. That's growing approximately 68% from our third quarter earnings update. We are aggressively investing in product development for CPN and have a strong pipeline of upcoming country launches and anticipate adding 11 new markets in the coming months. We also launched StableFX in production beta. This extends our application layer by combining institutional-grade FX execution with onchain atomic settlement, enabling 24/7 cattle efficient currency conversion and simplified risk management. We have stablecoin issuers for many jurisdictions participating in this, and we are excited to bring this application online alongside Arc, which will benefit the entire digital asset ecosystem and provide key infrastructure as we continue to scale CPN as well. I want to talk specifically about AI at Circle. We are seeing an explosion of developer activity around AI and it's becoming an important driver for Circle's platform, and we believe an important and potentially significant driver for USDC adoption. We have a number of initiatives here. As many of you may have seen, when OpenClaw, the new open-source autonomous agent system came out. We quickly responded and ran an agent-only hackathon, where agents competed with each other to build innovative applications with USDC, and agents themselves voted on the winners, and we saw incredible engagement on this. We're also building systems to better support Agentic payments. In fact, we just went into Testnet release of a new capability with Circle Gateway that allows for agents to autonomously and programmatically automate cross chain USDC transactions with a transaction cost of [ $0.00001 ]. This is live on our test net, and we're thrilled with what this is going to enable in terms of genic payments and monetization models on the Internet. We believe that no other payment system in the world can do this. We're also investing in helping developers who are building AI agents and are using AI for their own development to build faster and smarter with Circle products. We're bringing our capabilities as an infrastructure provider in skills libraries and providing servers that allow developer tools and AI agents to directly use Circle products, and we're seeing great uptake on this. Now inside Circle, AI is also becoming foundational infrastructure across all of our functions. We began our work with AI like many companies over the last 2 years, and our investments there are accelerating. We are making core AI infrastructure and automation a critical component that's embedded into all of our operations, agenetic infrastructure, specialized tooling and specific AI playbooks. We're building the governance that will allow all of our employees to self-serve, develop, deploy and use AI agents across their functions. And we're deepening AI integration across every aspect of our product development, design, engineering and deployment life cycle and seeing very strong results. Our product velocity is accelerating and I anticipate that to continue alongside the exponential improvements we're seeing from AI coding agents. Now my own belief is that AI platforms, AI agents and blockchain-based economic operating systems will support trustworthy, automated, transparent and hyper-efficient infrastructures that are going to be the underpinnings of the future of the global economic system. And I believe that this is going to be one of the most accelerated periods of technology transformation in the history of the world, and it really is just thrilling to be here building core infrastructure that can help to underpin this new economic system. I've never been more excited about Circle's market position, platform stack and our growth opportunities. With that, let me turn it over to Jeremy Fox-Geen, our CFO, to take you through the financial results. Jeremy Fox-Geen: Thank you, Jeremy, and good morning, everyone. I'm pleased to report we delivered strong financial results in the fourth quarter and full fiscal year, closing out an exceptional year of growth and momentum for Circle. I'll start by reviewing the quarter and then provide our forward guidance. USDC in circulation was $75.3 billion at year-end, up 72% year-on-year and notably grew faster than the overall CFX stablecoin market. USDC held within Circle's platform infrastructure or on-platform USDC, grew 5.6x year-on-year to $12.5 billion at year-end, representing 17% of total circulation. The reserve return rate was 3.81% for the fourth quarter, down 68 basis points year-on-year, reflecting the decline in SOFR during this period. Total revenue and reserve income increased 77% year-on-year to $770 million for the quarter as growth in average USDC in circulation and other revenue was partially offset by the lower reserve return rate. Total distribution transaction and other costs increased 52% year-on-year to $461 million. I do want to remind you that distribution costs in the fourth quarter of 2024 included the previously disclosed onetime payments of $60 million to a large distribution partner. Revenue less distribution cost margin was 40.1% in the fourth quarter with a modest quarter-on-quarter increase of 0.6 percentage points, primarily reflecting the impact from growth in other revenue. Other revenue increased to $37 million in the fourth quarter. Subscription and services revenue was $24.7 million in the fourth quarter, primarily from revenue associated with our blockchain network partnerships. Transaction revenue was $12.2 million, primarily from blockchain rewards revenue, where our revenues from running a super valid data on the Canton Network increased substantially as Canton Coin began trading during the quarter. Total revenue and reserve income less distribution transaction and other costs grew 136% year-over-year to $309 million in the fourth quarter. Adjusted operating expenses grew 32% year-on-year to $144 million for the quarter as we continue to invest in growing our platform and distribution at this pivotal time for our industry. Adjusted operating expenses include payroll taxes, including payroll taxes related to stock-based compensation, which were $8.4 million in the fourth quarter while we had no such expense in the prior year period. Beginning in the first quarter of 2026, we have amended the definition of adjusted operating expenses. First, to exclude stock-based compensation, payroll tax expense, we aligned with our treatment of stock-based compensation expense. And second, to exclude certain onetime legal expenses, acquisition-related costs and were relevant restructuring expenses all of which totaled $2.9 million in the fourth quarter as they reflect the same adjustments as in our adjusted EBITDA measure. Based on this amended definition, adjusted operating expenses would have been $133 million in the fourth quarter and would have grown 28% year-on-year on a comparable basis. Adjusted EBITDA grew 412% year-on-year to $167 million, reflecting the operating leverage inherent in our model. The prior year adjusted EBITDA included the onetime distribution payment that I previously mentioned. Adjusted EBITDA margin was 54% in the fourth quarter. I want to take a moment to briefly recap our FY '25 guidance and results. First, our guidance philosophy. We are building our business for long-term success. And moreover, several of our most impactful performance drivers are visible to the market in real time. As such, we do not give detailed quarterly or full financial guidance, we guide only on certain metrics to help our investors better understand our expected performance trajectory. We will update this guidance when we expect our performance to materially deviate from guidance. USDC in circulation at year-end grew 72% year-on-year. FY '25 other revenue of $110 million exceeded our guidance of $90 million to $100 million. Fourth quarter results came in better than expected, largely driven by a $7 million benefit as Canton Coin began trading. FY '25 RLDC margin of 39.4% exceeded our guidance of approximately 38%. Fourth quarter margin came in better than expected, driven by the combination of other revenue outperformance as well as a sustained reserve margin. FY '25 adjusted operating expenses of $508 million was in line with guidance. Let me conclude with comments on our guidance for FY 2026. We do not give guidance on USDC circulation or growth. We are at the beginning of meaningful shifts in the global markets for money, and we expect both long-term growth and quarter-on-quarter variability. As previously noted, we would anticipate USDC to grow at a 40% CAGR over a multiyear through cycle. We anticipate FY '26 of the revenue to be between $150 million and $170 million. We anticipate the FY '26 RLDC margin to be between 38% and 40%. We anticipate the FY '26 adjusted operating expenses to be between $570 million and $585 million, reflecting growing investments in building our platform capabilities and global partnerships. As noted before, beginning in the first quarter of 2026, adjusted operating expenses will exclude payroll tax expense related to stock-based compensation, which totaled $20.6 million in FY '25, as well as certain onetime legal expenses, acquisition-related costs and where relevant restructuring expenses, all of which totaled $10 million in FY '25. Our 2026 guided range reflects this definitional change as does the FY '25 comparable figure on this slide of $478 million. Overall, we have delivered a strong close to a critical year for Circle with meaningful growth and strong profitability. We are only just beginning to attack the opportunity before us, and we remain excited about our future. I want to thank the team here at Circle for your continued hard work to thank our investors and analysts for your support and engagement. With that, operator, we can now start the Q&A portion of the call. Operator: [Operator Instructions] Your first question comes from the line of Devin Ryan of Citizens Bank. Devin Ryan: I want to start on kind of this agentic evolution. I think it's a compelling case. And just want to get a sense of how you think from a timing perspective this plays out? And does it start with trading liquidity and then progressing to payments and borrowing and lending or how do you see that? And then how do you make sure that USDC is in the middle of that? And can Arc perform relative to other Layer 1s technically to support this? Jeremy Allaire: Thank you. It's a great question, and it's something that we are spending a lot of time on. When we designed Arc and announced and rolled out the Testnet. We talked specifically about this agentic economic activity as a fundamental design center for how we saw autonomous software autonomous agents and others conducting economic activity on the Internet. And it kind of speaks to the bigger backdrop of the early vision of the company, which is programmable money and what that allows and machine intermediated money and what that allows. And we're really seeing this convergence happen as we speak. And so we started our journey, not just in the design of Arc, but with USDC, by making sure that we're participating in all of the key standards for agenetic payments and value movement helping contribute to what's called the x402 standard, the Agentic payment standard from Google. We're part of the AI agent consortium. So we've been engaged and involved. But something happened really a month ago, which is these -- this turning point with Claude, ClaudeCode, what's now called OpenClaw. And we really saw this kind of incredible leap in the ability for the average person, but also sophisticated developers to spin up agents to do an incredibly wide array of tests. And obviously, we're all seeing that out in the market. And what's been interesting to see is that there's been this direct and immediate pickup where AI agents are realizing and the developers of those AI agents are realizing that agent to agent transactions need a reliable, low-cost trusted medium of exchange. And so virtually all of the AI payments infrastructure that we're seeing, the agent type activity is happening with blockchains. It's happening with USDC. So that's been very, very encouraging, and we're doubling down on that in a pretty significant way. Now I think to other parts of your question, what's the ramp on this? I mean I think this is one of the great known unknowns or however you might want to put it, which is -- what is the -- are we having a kind of take off moment? The Collison Brothers yesterday talked about, Q1 '26 might be the takeoff moment for the singularity, we may look back at that. And I think the technology shifts that we've been experiencing are indicative of a kind of takeoff. And that leads to the uses, which is AI agents consuming work from other AI agents, the kind of collaboration amongst AI agents, AI agents distributing out work to humans, humans consuming from AI agents. All of these are happening. We've seen AI agent marketplaces launched just in the past weeks where AI agents can employ human workers to conduct tasks and be compensated in USDC, as the medium of exchange. We're seeing AI job boards where AIs can hire each other and use USDC as the way to make those payments. So this is happening very organically. And I think from our perspective, as businesses and start-ups build products around agentic economic activity, the natural place that they're going to do that is with stablecoins and on blockchains, which leads to part of your other question, which is really around Arc. Arc is purpose built for this moment. Arc is built with a validation and consensus model that can support scale. ARC is built with an economic model where we can drive the cost of transactions in high-performance kind of channels down to [ $0.00001 ]. And in fact, we just went in Testnet last week with a feature that is designed for autonomous agents called Circle Gateway, which is a feature that would allow autonomous agents to hold a balance and spend not just on Arc, but on other networks and have a transaction cost of [ $0.00001 ] and get that value moved in less than a second to all these other apps and services that are out on these networks. So we're building the primitives, we're building it at the operating system level, the infrastructure level, we're building the tooling. And we're really engaged in actually marketing to agents that are autonomously out there and want to build. So a lot more to come from us here, and we're really pleased. And I think we -- again, -- we talk about money velocity and how effectively networks and infrastructure like what we've built will lead to higher and higher amounts of money velocity. And my own view, which is in my opening comments as well is in a world of tens or even hundreds of billions of AI agents, the velocity of money is just going to be multiple orders of magnitude higher than it is today in the existing economic system. And so we're building a new economic infrastructure. We're building a new Internet financial system. And I think we're very optimistic that Circle can play a really key role in this convergence between AI and stablecoins and blockchains. Devin Ryan: Yes. Jeremy. A great response, and we'll be fascinating to follow this evolution. Maybe just a faster follow-up, but on just Arc token, any update on kind of the considerations there, how that's evolving? And then any sense of timing of when you might make a decision on whether you would launch a token for Arc? Jeremy Allaire: Yes. A couple of things I can say. I think we're continuing to explore the Arc token. It's, I think, a very good exploration. We're getting a very good understanding of how a token can play a key role in providing stakeholder incentives, governance, security, utility and other things on the Arc network. And so that exploration continues. We aren't communicating about any specific time line or other because we're still in that exploration. But as noted, we're making tremendous progress with Arc and we're making very strong progress towards Arc Mainnet, and we're very excited that come into play, and we expect to see some amazing companies participating in running the Arc infrastructure, deploying apps on the infrastructure and also providing foundational infrastructure to asset issuers and AI agents, a wide array of use cases on it. So we're pleased with the progress. And of course, as we have more to say about that, we'll share that publicly. Operator: Your next question comes from the line of Joseph Vafi of Canaccord Genuity. Joseph Vafi: Great progress. Just -- maybe we'll just regulatory backdrop a little bit, Jeremy and Jeremy. GENIUS has been in place now for a couple of quarters. Just wondering what kind of tangible signs of progress you've seen directly from GENIUS? And then the follow-up would be on CLARITY, where we sit now, your views on it. Clearly, the stablecoins are kind of in the middle of the compromise and discussion there. So your comments and thoughts there. Jeremy Allaire: Sure. So first on GENIUS, GENIUS has absolutely continued to be a tailwind for our business. And I think the sector as a whole. It has created this legal foundation for major institutions to come into this market. We've seen follow-on guidance from the likes of the SEC and the CFTC as they're clarifying how effectively what would be GENIUS compliant stablecoins can be used as collateral on CFTC markets, the recent SEC guidance in terms of the kind of haircut treatment on stablecoins for broker-dealers, which is a big breakthrough in terms of how stablecoins can be used in capital markets. And I would just say, broadly, banks, payments companies, tech firms, large enterprises around the world are leaning in and wanting to weave stablecoins into the product strategies. And so it's also spilling over into international markets where international regulators are also saying, okay, well, we now need to kind of acknowledge genius compliant stable coins as the sort of good, stablecoins that could be allowed in their markets, and that's really strong from our perspective. So we think it's been very positive and will continue to be positive as it goes effective and as some of these OCC licenses start to come through as well, which will impact large issuers like Circle. On CLARITY, I mean CLARITY is very close to the finish line right now. I know we're very close to the issues. There's a lot that's been reported. I think the most recent reporting seems accurate, which is that the crypto industry and the banking industry are working day over day, week over week at a staff level and with the White House to come up with some compromise language around the different kinds of rewards that people can get for holding stablecoins or using stablecoins and how they use them. And my sense is that everybody wants to figure this out. There's a lot in this for banks, capital markets, asset managers, the crypto industry as well. And so right now, I'm cautiously optimistic about it, but obviously, DC is DC and all the dynamics of the spring and everything else. It's not my job to handicap, there are probably analysts at some of your firms that can do that better. But we're cautiously optimistic, and we do think that with CLARITY Act, if it does come to pass on a bipartisan basis, is another significant unlock for building in this space. And we'll certainly talk about that in the future, but we think it's a very, very significant unlock for the development of this market and the use of blockchains in a far broader range of applications as well. Operator: Your next question comes from the line of John Todaro of Needham. John Todaro: I guess just going back to Arc and then maybe CCTP in there as well. It seems like the evolution of these could long term become kind of asset agnostic or could be just a broad asset tokenization platform for issuance of equity, some of these other assets. I guess just, Jeremy, what are your thoughts on kind of that evolution in the long term, if we could just grow a little bit more into the long-term vision park? Jeremy Allaire: Yes, absolutely. So the conceptual model for Arc for us is this is an economic operating system. It is a distributed economic operating system. That distributed economic operating system is going to be operated by a collection of known leading financial infrastructure companies, including Circle that will run the infrastructure to support the compute, the transactions, and the like and the data on these networks. And it's designed for prudentially sound financial activity and economic activity. We think that's necessary to build the real world economy on the Internet. Within that, though, we want to make sure that as a safe and sound and secure foundation that it has several things that are important to financial system actors. We want to make sure that it has the single best, most capital efficient liquidity for digital dollars in the world. And so marrying what we do with USDC to what we're able to do with the technology and arc, we believe we can create the most capital efficient and fast digital dollar kind of liquidity model in the world. The second, which is related to another part of it is we really think about Arc as a liquidity and distribution hub for other asset issuers. And so we're building technology and this technology builds on the incredible distribution we've already created with CCTP. We're building technology that would allow an asset issuer, whether it's a tokenized equity, a tokenized fund, a tokenized bank deposit, other stablecoin issuers and any kind of asset that can be imagined that can be tokenized to be able to be issued on Arc and then be able to turn on liquidity and distribution on other blockchain networks. So if I'm issuing a tokenized stock, and I want that tokenized stock to be able to run on Robinhood's L2 and on coin basis, onchain exchange and on some other tokenized environment that supports these assets. The people who are issuing assets really need to know that they can do it in a safe way, in a liquid way and have that kind of distribution and -- so we've built the highways. CCTP in January was over 60% of all traffic moving across these different networks. And with the new technologies that we're bringing into Arc around this, we believe that we can light up those highways for any asset issuer. And so again, back to the vision side, big picture, this is a general-purpose OS for economic activity on the Internet. As we come into the market in this environment where we have demands from people who want to build very, very cost-efficient, capital-efficient AI transactions, we have demand from people who want to build tokenization applications and get liquidity and distribution for those. We think Arc and our interoperability infrastructure will be very, very well suited for that environment. John Todaro: That's great. That's very helpful. And then I guess just as a follow-up, going back to the Agentic AI comments, I would agree with you. Just with the ways of the crypto equities have been trading and then just the crypto token market in general, is agenetic AI and payments and all that within those ecosystems? Do you see the excitement kind of extending beyond stablecoins in Arc? Could this be a general tailwind for the sector? Jeremy Allaire: I mean I think this is one of the most exciting -- obviously, I'm biased, but I think this is one of the most exciting kind of points of convergence out there. If I'm a developer building AI agents, and I want to build AI agents that can enter into contracts with other agents that can enter into contracts with humans that might have disputes that need proof of data or things that happen that need to execute those contracts and move money if I'm thinking about building an organization that is mostly consists of some humans and some AI agents, and I want to build the underlying governance mechanisms or how that's going to work, blockchain infrastructure is going to be how that happens. We need cryptographic proof. It's the only thing that will allow us to trust the activity and the data and the transactions of these agents. And so we're seeing that in our developer activity. We're seeing that in the Arc developer engagement where start-up founders who are coming in from the AI space are realizing like this is kind of a back plane that is really, really helpful. And if you go back and think about other big platform shift, there was sort of -- sometimes there's the sort of 2 sides of the coin and you had the rise of mobile, which was obviously the surface area for creating applications and that corresponded to the rise in cloud platforms, which could actually be the back end and scale the back end for mobile. And so they work kind of hand-in-hand. And so I very much believe starting now, really starting now in 2026 that AI platforms and these blockchain operating system platforms will be kind of hand in glove for people who want to build for this new AI-driven economic system. John Todaro: Congrats on a strong quarter, guys. Operator: Your next question comes from the line of Pete Christiansen of Citi. Peter Christiansen: Impressive and rapid progress on a number of fronts here. And the competitive mode looks stronger than ever. Jeremy, I was wondering if you could provide some underlying color on CPN onboarding and flows, perhaps initial use cases and some stickiness, growth per FI partner that sort of thing? And then as a follow-up regarding the conversation on [ Jeto ] commerce, which looks incredibly compelling, how should investors think about this opportunity transforming Circle's operating/financial model? Jeremy Allaire: Sure. So on CPN, as you saw from the results, we are seeing very steady and very strong growth in the kind of key things that we're focused on now, which is when we launch this last June, it was at sort of state 0 with no financial institutions or just a couple and the technology is just getting off the ground. We have been progressing through product iterations and then commercial iterations, as noted, we now have 55 financial institutions on the network. That's up sequentially considerably the number of financial institutions wanting to add to the network continues to grow and be robust. And then the flows, which I can characterize a little bit more about. The flows have grown as well. So from a standing start to an annualized TPV of about $5.7 billion as of last Friday, up I think, 68% since the last time we talked to you guys, we're very pleased with what we're seeing there. We are -- a couple of things I'd say is there are more and more larger types of firms that are -- can support larger flows that we're very focused on coming on to the network, and that's a key goal. From a product perspective, we want to increase the velocity of everything that happens, the velocity of how these members can join and implement and operationalize for a lot of financial institutions, they've never dealt with blockchains. They've never dealt with stablecoins. And so kind of streamlining how they can do that. and then making sure that the highest demand corridors have good redundancies, have good players in those. But what we're seeing in terms of use cases is this is very much B2B cross-border merchant settlement as major drivers. And we're seeing that in the markets that you would not be surprised to see businesses that are exporters out of Asia and importers in both other emerging markets and developed markets, we're seeing some application flows that are very clearly -- can be south to south and north to south remittance applications. So we're seeing the use cases we want to see. There's certainly a lot more to come there. And we're, again, very pleased with the success. I made the comment on the earnings call that we've got a lot of product investments here. We have ambitious goals here in terms of what this can scale to be. And ultimately, obviously, as this starts to get to more meaningful scale, we can start to monetize this, and our partners are already starting to monetize this. So that's a bit on CPN. And then on Agentic and kind of the impact for us. We think about this in a few ways. I think one is just as a major new demand driver for the utility of our stablecoin network. So AI agents as consumers of this as essentially end customers in a sense that are driving stablecoin transaction volume, driving balances of stablecoins, driving stablecoins out into more use cases and businesses that are not crypto-native but are kind of interacting with this new agentic economy. I think it's a way for us to kind of accelerate into other types of software-based institutions that see that they need to have their products be consumable by AI agents and maybe with different pricing and economics and where, again, the standards that we're building around Agentic payments could play a role. But also this can drive fundamentally traffic on Arc and growth on Arc. And over time, as we've noted, we believe that Arc can create new kind of transaction-based revenue streams. And so the velocity of that, the scale of that is, again, early, but we think could be very significant over time. And those are a few of the things. And I think we'll have more to say about this, obviously, as it progresses. But what we've seen literally just over the last 3 to 4 weeks has been really eye-opening, and we've been happy that we've had product and technology ready to go for -- and we have been working on some of the standards in this space now for some time and are ready to go for this kind of lift off moment that seems to be happening. Operator: Your next question comes from the line of Dan Dolev with Mizuho. Dan Dolev: Team Circle, Jeremy, great results here. Really nice to see that. Congrats. I wanted to ask you about the opportunity specifically in prediction markets and your partnership with Polymarket? Just in general, like why is USDC so critical to this very fast-growing segment? And what should we expect in the coming quarters and years from that very interesting partnership? Jeremy Allaire: It's a great question, Dan. I mean I think when we think about the adoption of our stablecoin network and our broader infrastructure, we're always kind of asked like, well, what are the killer apps and we have lots of different killer apps that are emerging. We see cross-border payments is one of those. Obviously, historically, crypto trading, we're seeing Agentic emerging, tokenization and so on. But prediction markets is absolutely one of those. We've been very fortunate that we made a big bet in the kind of on chain ecosystem early on. And so USDC is sort of systemic and critical to a lot of onchain applications that were built over the past 3, 4, 5 years, and Polymarket is one of those. And so with Poly market, we've been able to work closely with them to kind of advance how they use our technology to improve the experience for their customers, improve what they can offer to their users, make it a more seamless experience. But what something like USDC does and our infrastructure does for a prediction market like Polymarket is people want to be able to move quickly. The sort of essence of markets in general, but prediction markets, in particular, these are information markets and people want to be able to move quickly. And so stablecoins give end users and people who want to participate in these markets, the ability to basically provide collateral and settlement at the speed of the Internet and do that from lots of different wallets, from lots of different markets all around the world. So it opens up global access in a more seamless way and it gives a firm like Polymarket, a good infrastructure to kind of store that and surface that to users. Now USDC is now offered as a way to fund your [ cashy ] accounts. USDC underpins coin-based prediction markets. You can use USDC to get funds on [ crack ] and Robinhood. And obviously, they're offering prediction market. So there's more to see here. And we want to work with the leading players and make sure that the best digital dollars, whether for settlement or for collateral, are used in all the places and having the world's leading player kind of adopt this and build on this with us, we think, is a very positive win. And obviously, everyone has been tracking the growth and success of Polymarket, which has been pretty astounding and obviously, still early days in these markets. very impressive. Operator: Your next question comes from the line of Ken Worthington of JPMorgan. Kenneth Worthington: USDC on Circle platform rose to 17% in 4Q. As we think about 2026 and the new initiatives you have underway, what is a reasonable range of outcomes in terms of where that mix can go for Circle and what relationships or initiatives are likely to be the biggest drivers of incremental on-platform USDC, say, over the next 12 to 24 months? Jeremy Allaire: Thanks, Ken. We're very pleased with the 5x growth year-over-year in that a couple of things. I think the first is we are continuing to build infrastructure products that are valuable for kind of holding and using USDC, and we're doing that across our wallets products. We're doing that across products like Circle Gateway. We're doing that in Circle Mint and in many places that we interface with customers, developers and people building on us. And the fundamental premise here is that more and more major institutions, whether those are financial institutions or others are going to want to build on our infrastructure. And Arc, for example, is a driver because Arc is our infrastructure, and it will be wired really well into mint and wallets and gateway and these other infrastructures. And so these can all work together to drive more applications, more money flow and more money stock to use Circle technologies and that contributes to what can be on top from USDC. And so in many respects, it's just continuing to build these institutional partnerships with this wide diversity of companies that will continue to help us grow that. I would say that's sort of the high level on that. We're not guiding, obviously, anything on that. But I think you've seen the direction of travel. We continue to focus on building great infrastructure people want to build on. And one other note is we have received conditional approval for Circles National Trust Bank, First National Digital Currency Bank. That is obviously something that is important to USDC and USDC reserves and ultimately, how we work at the OCC under the GENIUS Act. It's also something that can strengthen the custody infrastructure that we provide to market participants. And so you can expect us to pursue that. And I think as we build that as a kind of fiduciary and security and operational apparatus that has some of the protections that come with the trust bank that we think that is additive to our on-platform capabilities as we go out into future quarters. Jeremy Fox-Geen: Yes. And I'd just add on to that, Jeremy talked about the expansion of our platform infrastructure and the products that we have that make it more attractive for all leading enterprises to build upon Circle's platform and technology. But I'd also add all of the rest of the infrastructure that we built that underpins what we do is part of that our broad-based global banking and liquidity infrastructure is unmatched in the stablecoin space. The broad network of users and developers and other enterprises building on USDC only makes it more attractive to any one additional major enterprise to choose to use USDC. And of course, we're positioned as new core market infrastructure. We're not competing with any of the enterprises and the developers who build on our infrastructure for their customers. Operator: Your next question comes from the line of Jeff Cantwell of Seaport Research. Jeffrey Cantwell: I'll ask both the [indiscernible] and upfront. I was wondering, first, if you can give us the building blocks for your other revenue guidance of $150 million to $170 million for this year. What is causing the step up? You mind just breaking that out for us versus 2025. And then again on Arc, just to kind of get a little more comfortable with the strategy and the rollout as you're getting closer to the Mainnet launch. Do you mind giving us maybe at a high level what the rollout plan is post go into Mainnet? And I guess I'm just curious, do you foresee a world where elements of Arc and elements of CPN mesh together to deliver more value for clients and your customers? Jeremy Allaire: Yes. Thank you. Maybe I'll take the second question and then Jeremy Fox-Geen can take the first question. So on Arc Mainnet, a few things. The first is we're making great progress. And as noted, the technology infrastructure through Testnet has been strong. The usage has been strong. The growth in transactions and activity and developer activity, we're very pleased with. When we think about that transition from Testnet to Mainnet, there's a couple of key things that we're looking at. So one is there are technologies that we still want to make sure are available to all of the users of Arc network before we go to Mainnet, and I alluded to some exciting technologies. So these relate to things that are valuable to institutions doing tokenization and are valuable to AI agents doing activity on these networks. So we've got some technology delivery. But importantly, we've said publicly that the first phase of Arc Mainnet is going to be what's called a proof of authority validation. And that's really bringing on that first wave of strategic partners that are going to be working with us to run the Arc network infrastructure. And we want to make sure that we have world-class financial infrastructure companies who are running the infrastructure with us. And so if you're a developer or you're an institution or you're an end user, you will understand that Arc network is run by some of the leading financial infrastructure companies of the world, which can -- which is really, really key to not just trust and reliability, but ultimately to governance and how we think about this going forward. So that's a key piece. The second is we are working closely with the entire digital asset ecosystem across enterprise tools, custody, wallets, exchanges, everything that's out there to make sure that everyone is ready for that day 1. And so we want to give everyone time to get all of their infrastructure ready. And that includes deep integration across Circle's existing product stack, so that, for example, on day 1, when we go Mainnet, USDC liquidity, for example, is the best in the world is the most capital efficient in the world and becomes an attractive way for value flowing on the Internet to kind of come through Arc. So there's work there. There's work with mainstream companies who are in that Testnet group that we announced who are looking to commit to launch products on Arc and making sure we have the right mix of use cases across capital markets, payments, FX, agentic and the like. And so that's a key thing in getting those already. And then to your last part of your question, Arc is going to be a key infrastructure for CPN. Arc will provide a very strong infrastructure for speed, reliability, prudential safety and soundness, efficiency. It simplifies flows because people only need to hold a stablecoin in order to use it, but it also has all the interoperability features built in. So Arc has best-in-class interoperability. And so if an endpoint on CPN needs to interact with a wallet that is on a different network, Arc actually gives those members on CPN, the ability to really easily get conversion into those other networks. And so Arc becomes a back plan for CPN and relatedly, StableFX, which is a key application that runs natively on Arc will also become the FX back plan to support Arc transactions. So a transaction between euro and a dollar or euro and a peso or dirham and a peso, you pick what it is, we're bringing other stable coins onto Arc, and we're bringing other stable coins and market makers onto StableFX, and that's going to allow us to provide real-time atomically swapped liquidity across currencies would shift speeds that conversion and settlement and settle them an assurances reduces the amount of capital people have to tie up and the like. And so ARC, StableFX, CPN and Circle Mint kind of working together are going to support, I think, key things as we go into Arc Mainnet. Jeremy Fox-Geen: And Jeff, I'll take the second -- the first part of that question. So the other revenue, that was $36.8 million in the quarter, and that was roughly $25 million from subscription and services revenue and $12 million from transaction revenue. Within those categories, within subscription and services revenue, the largest part of the revenue we own within that is revenues from our blockchain network partnerships, which have both upfront and recurring elements. We've talked about how the upfront depending upon the number of integrations and the number of partnerships we strike can be a little bit lumpy quarter-on-quarter and how the underlying recurring are building up over time as we bring more and more of those online and we execute against that pipeline, which is strong. Also within that our asset management fees on the USYC tokenized money market fund, which is relatively small today, but obviously have potential going forward. Within transaction revenues, there's -- as I think we said before, there's a number of different pieces in that. There's fees from value-added products like fast redemption for USDC for CCTP fast transfer. That's where you'll see fees over time from the Circle payments network. In addition, we also run validate our infrastructure, and we mentioned that in my opening remarks is that this quarter, in particular, because of the trading -- the listing of Canton Coin and the share price movement, we recognized unusually high revenue in this quarter, particularly for that. Now we're not guiding on those building blocks. All of these monetizing products and services only started in the monetizable form in really the fourth quarter of 2024 and the first quarter of 2025 and onwards. So it's very, very early days for these products. But given that, collectively, this revenue line is only 8 year old, we're very pleased with where we ended up with $110 million for the year. Operator: Your next question comes from the line of Ken Suchoski of Autonomous Research. Kenneth Suchoski: Circle has seen some nice leverage on distribution costs. I wanted to focus there. I mean the coin agreement is what it is, but wanted to get your latest thinking on what's happening outside of coin base in terms of distribution costs and how those conversations are going? Because those non coin-based distribution costs have been pretty stable like the last couple of quarters. So just any update there would be great. Jeremy Allaire: Yes. I can take part of that, and if Jeremy wants to add anything, he can as well. I think we are in a really strong position because USDC has the strength of its network effects, which is that if you're building a product or service, and you want to have a compliant liquid available, interoperable digital dollar, USDC is the top choice. And so what we see is just many, many products being built and launched that use USDC and connect to our stablecoin network and drive demand and drive liquidity and that's valuable for those products. Those products are tapping into essentially this globally available, nearly free dollar payment system. And so as that happens organically, that's kind of the organic developer-driven, institutionally-driven flywheels. That drives growth in USDC, and in those institutions, we don't need to go and do incentive deals or other things with. And so we're -- I think as we've said, we're disciplined about where we think it makes sense to have an incentive relationship where it makes sense, where we can see that the partner can actually drive growth and can drive meaningful growth. So we look at those as factors like where is the growth? Where is the meaningful growth? And I think that contributes to the kind of strength of the fundamental kind of unit economics that we've been able to maintain here. And that's sort of the big picture. Jeremy may have other comments to add? Jeremy Fox-Geen: Yes. I'd add a couple of things to that important strategic narrative, which is -- and we've said this, I think, before on these calls, which is growth in USDC distribution partners, some of which is incentivized. Also leads to a growth in the strength of the underlying network effects around USDC, which I spoke about the elements of that earlier in this call, right? And that makes it more attractive for other market participants to independently build and use USDC and provide USDC-based products and services to their customers. The underlying point of that, which is any distribution relationship we have also strengthens USDC that is not subject to any distribution relationship or indeed any incentive partnership. And that's a fundamental networks have network effects, strength to RLDC margin and our underlying economics. Operator: Your next question comes from the line of James Faucette of Morgan Stanley. James Faucette: I want to go back to the comments you made about the AI hackathon and the like. How do you think about the to-do-list for Circle to become integral to a lot of those evolving payment networks and that kind of thing, especially when obviously, there are other players or solutions like either Crypton more generally, just wondering kind of what the pluses and minuses are and how you establish a position in agentic world? Jeremy Allaire: Sure. Thank you for the question. I think a couple of things I'd note. The first is that Circle has invested heavily over the past 4 to 5 years to make sure that our stablecoin network and essentially, the pipes that support the distribution, liquidity and settlement of USDC are available on as many blockchain network platforms as possible. We're on over 30 blockchain networks. And that's key because developers who are building applications are going to build applications where their agents might anchor on Ethereum. As you know, they might anchor on Solana. They might anchor on Arc, they might anchor on a new chain that hasn't even come out. There's exciting new blockchains that are coming out. And I think we all believe that if you think about blockchain networks, these economic operating systems, like we're in the early innings of these scaling out and scaling out to the kind of velocity of transactions that AI is going to demand. And so one is we run across these networks today. And in fact, we've co-authored and participated in almost all of the key agentic payment standards. And the agentic payment standards like x402 and [ EURC 80004 ], it's a little jargon for those that aren't aware, but basically, these are sort of agent-related standards are almost all -- I think I saw a statistic and I may be wrong about this, but essentially 99% of Agentic payments that have been measured over this recent period have been in USDC. So we have a first-mover advantage by being on all of these networks by being involved in the standards by being deployed in these ways. We also make sure that all of our own APIs, all of our own protocols are surfaced directly as skills libraries to the agentic coding systems. And as MCP servers so that AI developer tools can like seamlessly integrate to this. And so those are all things that we started making investments in some time ago that are paying off now as we get to this kind of lift off moment. So we feel good about those pieces. And I think now -- I think a lot of companies are really realizing like, let's say, you're a SaaS company, and you realize, well, maybe we're not going to sell end user seats, but we're going to sell access to our capabilities as an API to AI agents, a lot of companies are trying to figure out, well, how do you market to swarms of AIs running around and are there marketplaces where AI can find things they can use. And so the sort of distribution in the AI agent world is like a new thing. And we chose, as you noted, right, right after [indiscernible] launched, we saw an opportunity to allow AI agents to compete in a hackathon amongst themselves to vote on things, and that was the first of its kind. And I think was a powerful marketing activity where that collection of AI agents are now well educated about USDC. And so there's more things like that, that you'll expect to see us do over time. And -- but at a technology level, just kind of coming back is we believe that Arc has an infrastructure, both because of the USDC centric capability, the capital efficiency, the interoperability and the kind of cost efficiency of transactions is going to be a very attractive high throughput infrastructure, and we're going to be leaning into that. Operator: There are no further questions at this time. And with that, I will now turn the call over to John Andrews for closing comments. Please go ahead. John Andrews: Yes. Great. Kelvin, thank you so much. And for those who couldn't get through on the Q&A line, we'll happily follow up with you over the course of the day. Again, we'd like to thank you for your attention and participation this morning and look forward to connecting you soon. Jeremy Allaire: Thanks, everyone. Jeremy Fox-Geen: Thank you. Operator: Ladies and gentlemen, this concludes today's call. We thank you for participating. You may now disconnect your lines.
Operator: Hello, and thank you for standing by. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome everyone to the American Integrity Insurance Group, Inc. Fourth Quarter and Full Year 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. As a reminder, this call is being recorded. Before we begin, please note that today's remarks may contain forward-looking statements, including comments about the company's outlook, strategy, plans, and expected performance. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially. A full discussion of the risk factors can be found in the company's SEC filings under its most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Management undertakes no obligation to update any forward-looking statements. Furthermore, today's remarks may contain non-GAAP financial measures. A reconciliation of non-GAAP financial measures to their most comparable GAAP measures is included in the company's quarterly press release and can be found on its website at www.aii.com. Reference to American Integrity or the company refers to American Integrity Insurance Group, Inc. With that, I will turn the call over to American Integrity Insurance Group, Inc.'s founder and Chief Executive Officer, Robert Ritchie. Please go ahead. Robert Ritchie: Thank you, and good morning, everyone. This is an extraordinary moment in American Integrity Insurance Group, Inc.'s journey, and I am honored to share it with you today. This past year has been a defining chapter in our company's history. In May, we completed our very successful initial public offering, raising gross proceeds of $100 million. This was a milestone that not only strengthened our balance sheet, but it also affirmed a message that American Integrity Insurance Group, Inc. is a company built for scale, resilience, and durable value creation. Importantly, our IPO was not a destination; it was a catalyst. It was a launching point, and today, we are operating from the stronger foundation it created as we diversify our products, as we expand into new markets, and as we serve even more communities. Our robust quarterly and full-year results are a testament to the strength of our underwriting discipline, the depth of our agent relationships, the trust of our policyholders, the confidence of our employees, and the improving health of the Florida marketplace. I would like to highlight several key achievements from 2025. First, we grew gross premiums earned by nearly 30% year-over-year to $885 million. We delivered adjusted net income available to common shareholders of $103 million, or $5.97 per diluted share, compared to $37.9 million, or $2.94 per diluted share, in the prior year. We achieved a combined ratio record of 63.7%. This is a more than 17-point improvement from 80.9% that we achieved in 2024. We recorded a 42.1% adjusted return on equity, and this is up from 26.8% in 2024, and we increased our customer count 19% from 356,000 to nearly 422,000 customers. Like many other leading carriers in Florida, our financial results benefited from well-underwritten, profitable takeouts from Citizens in late 2024 and early 2025. As expected, the phase of large, profitable Citizens takeouts is complete. Importantly, our growth engine today is organic and voluntary, supported by deep agent relationships and disciplined underwriting. Our results are underpinned by strong organic voluntary growth. Our voluntary customer count increased 16% to 327,000 policies during 2025, based upon a total production of 104,000 new voluntary policies written during the year. In our home state of Florida, which represents 97% of our current in-force premium, we ended the year as the sixth-largest writer based upon policy count, having written the third-most policies after excluding national carriers and Citizens. This voluntary growth positions us among the fastest-growing competitors in our entire peer group. Our ongoing policy growth is a direct result of our deep relationships with our agent partners that have been cultivated for over two decades, and we believe it positions us for sustained success as we execute our growth initiatives, including our recent reentry into the Tri-County region of Florida, our expansion into the middle-aged home market, our newly launched commercial residential product, and our recent entry into North Carolina. We believe we are positioned for diversified, profitable growth for years to come, which will create substantial value for our stockholders. Importantly, we remain disciplined, and we pursue responsible growth as we strive to maintain a strong balance sheet purposefully built to weather cycles and support our insureds, our distribution partners, our employees, and our shareholders. With that exciting news, I am pleased to announce that our board of directors has declared a special cash dividend to our stockholders of $1.02 per share, which aggregates to $20 million. American Integrity Insurance Group, Inc. has a long history of returning capital to stockholders following periods of exceptional performance while retaining sufficient capital to pursue our growth opportunities. With that, I will turn the call over to Jon Ritchie to discuss operational execution and, more deeply, our growth initiatives. Jon? Jon Ritchie: Bob, I will focus on how we believe our disciplined execution this quarter positions us for sustainable growth into 2026. Starting with our results, we continue to grow in our core Florida market. In the fourth quarter, we wrote 26,025 new policies in the voluntary market, bringing our full-year total to over 104,000, representing a 17% increase over full-year 2024. Combined with improving retention levels reaching 82.7% this quarter, our voluntary policies in force have increased 16% over the past year to 332,780 policies. We also assumed almost 8,000 Citizens residential takeout policies in the fourth quarter, representing $24.2 million of assumed unearned premium, as compared to approximately 68,200 policies in 2024. Our Citizens takeouts decreased as fewer policies met our underwriting and target profitability standards. Importantly, we expected this, and our voluntary policy growth remains the driver of our policy growth given the many strategic initiatives we have implemented over the last year. Starting with the Tri-County region of Florida, we reentered this market in 2025 and have been building momentum through the fourth quarter and into the new year. At year-end 2025, we had 29,226 policies in force in the Tri-County region, representing 7% of our book, which we believe is well below our potential market share for an area representing about 28% of Florida's households. While most of this business in the Tri-County region has come from the Citizens takeouts over the last year, we are pleased with the early results we are seeing in our voluntary policy writing in this area. We believe our growth in the Tri-County region will continue through 2026 and represents a multiyear opportunity. Another growth avenue is our renewed focus on middle-aged homes, which represents another large market opportunity. In fact, middle-aged homes represented 76% of our HO-3 policies in force as of 2016, prior to the litigation crisis that gripped Florida the last decade, and which declined to 26% of our policies in force as of 2025 as we managed the risk profile of our business. Given the legislative reforms that were passed in 2022, this market has become attractive once again, and we have reoriented our sales and production efforts to ramp up our writings. Importantly, we have completed our extensive underwriting efforts to refine and price our go-to-market and are pleased with the early acceleration we are seeing in our production numbers. We launched our commercial residential product in October 2025, which is designed to deliver comprehensive and reliable protection for Florida's condominium, townhouse, and residential homeowners associations. In 2025, we assumed 149 commercial residential policies from Citizens, representing $5.9 million of assumed unearned premium, and began writing commercial residential policies in the voluntary market. Likewise, we are pleased with the early results, which are consistent with our desire to leverage early insights to refine the product and scale responsibly. We also continue to have success growing our writings in Georgia and South Carolina, largely through our Florida homebuilder agent relationships, and have begun writing policies in North Carolina, though Florida will remain our core market for years to come. At year-end 2025, our out-of-state policies had more than doubled to 26,732 policies in force. Finally, from a growth perspective, I am pleased to report that we reduced our non-cat quota share from a 40% cession rate to 25% and renewed the treaty with significantly improved pricing. We expect that this will drive additional revenue and reduce the cost of our quota share by approximately 50% during 2026. In 2025, we ceded $248 million of earned premium and generated $276 million of revenue. With the newly lowered cession rate, we would have ceded $155 million of earned premium and generated revenue of $369 million. We believe these changes will have a positive impact on net income in 2026. The underlying, or non-cat, loss environment and our results continue to be favorable. For every dollar of gross premiums we earn, we paid out $0.17 in non-cat losses in 2025, consistent with 2024, a strong ratio representative of our underwriting focus and higher market share of newer homes. We introduced this metric in our earnings release and Annual Report on Form 10-K to reduce the noise that is inherent in the net loss ratio due to large changes in the quota share and excess-of-loss cat expenses, which we believe helps investors better understand our trends. We would expect this number to increase modestly as we increase the proportion of policies in our book in Tri-County and for homes with middle-aged roofs. Benjamin Lurie: This has also been a favorable year for catastrophe losses, given that we did not experience catastrophe loss for the first time in many years. That is certainly welcome news for Florida, our policyholders, and our stockholders. Importantly, the combination of the catastrophe loss-free year in Florida and increased capital availability in the global reinsurance market means expectations for favorable pricing for our reinsurance renewal are high. Many market commentators estimate that, depending on region, risk-adjusted rate decreases will range from 10% to 20% for 2026 renewals. With that, let me turn the call over to Benjamin Lurie to walk through the financials. Thanks, Jon. Now that we have covered the annual results fairly comprehensively, I will walk us through the fourth quarter of 2025, where our results continue to demonstrate the strength of our distribution network driving organic growth, prudent underwriting, a favorable loss environment, and an increasingly attractive reinsurance pricing environment, which resulted in net income available to common shareholders for the fourth quarter of $20.9 million, or $1.07 per diluted share, and adjusted net income was $21.8 million, or $1.11 per diluted share. Our return on equity was 25.6% compared to 21.2% for the fourth quarter of 2024. Adjusted return on equity was 26.7% compared to 21.2% in the fourth quarter of 2024. During the quarter, we wrote 87,000 new and renewal policies in the voluntary market, an increase of 17% compared to the fourth quarter of 2024. As Jon indicated, we are pleased with the early results from our various growth initiatives. Gross premiums written in the fourth quarter of 2025 decreased by $31.2 million to $206.4 million from $237.6 million in the fourth quarter of 2024. The decrease in gross premiums written was primarily due to our assumption of more policies from Citizens during 2024 as compared to 2025. Gross premiums written from the voluntary market in the fourth quarter of 2025 increased by $15.5 million to $137.9 million from $122.4 million in the fourth quarter of 2024. Gross premiums earned in the fourth quarter of 2025 increased by $29.3 million to $229.1 million from $199.8 million in the fourth quarter of 2024. The increase in gross premiums earned was driven primarily by new and renewal policies written through the voluntary market and from our strategic participation in the Citizens takeout program. Ceded premiums earned in the fourth quarter of 2025 increased by $31.7 million to $169.8 million compared to $138.1 million in the fourth quarter of 2024 due to the increase in gross premiums earned and the placement of our 2025–2026 catastrophe excess-of-loss reinsurance program effective 06/01/2025. The company purchased more reinsurance coverage compared to prior years, reflecting an increased in-force premium and total insured value. Net premiums earned in the fourth quarter of 2025 decreased by $2.4 million to $59.4 million from $61.8 million in the fourth quarter of 2024. The decrease in net premiums earned was driven primarily by the 2024 quarter, which created temporary catastrophe reinsurance windfall savings that bolstered net premiums earned in that quarter. Net investment income in the fourth quarter of 2025 increased $2.1 million to $5.9 million compared to $3.8 million in the fourth quarter of 2024, which was primarily driven by an increase in invested assets resulting from increased premiums in force and the proceeds from our IPO. Turning to underwriting performance, losses and loss adjustment expenses for the fourth quarter of 2025 decreased $6.5 million to $26.3 million compared to $32.8 million for the fourth quarter of 2024, primarily driven by the lack of catastrophe losses from current-year events during the period. The loss ratio was 42.6% for the fourth quarter of 2025 compared to 51.6% for the fourth quarter of 2024. Again, we believe the gross underlying non-cat loss and LAE ratio to also be useful to investors, as it shows our underwriting performance before the impact of reinsurance. This number remains consistent, increasing from 16.5% in fourth quarter 2024 to 17.1% in fourth quarter 2025. Favorable development of $3 million for the quarter resulted in favorable development for the year of $1.8 million. Policy acquisition expenses for the fourth quarter of 2025 decreased 51% to $5.8 million compared to $11.8 million for the fourth quarter of 2024, and general and administrative costs for the fourth quarter of 2025 decreased 43.2% to $6.7 million compared to $11.7 million in the fourth quarter of 2024, both driven by an increase in non-catastrophe ceding commissions. As a result, the expense ratio was 20.2% for the fourth quarter of 2025 compared to 37.1% for the fourth quarter of 2024. The combined ratio was 62.8% for the fourth quarter of 2025 compared to 88.7% in the fourth quarter of 2024. Income tax expense was $8.4 million and $2.3 million for the fourth quarter of 2025 and fourth quarter of 2024, respectively. The increase from the fourth quarter of this year versus last year is primarily due to a change in tax status of American Integrity Insurance Group, Inc., coinciding with our IPO. Shareholders' equity increased to $337 million at year end, reflecting strong earnings generation and the capital raised in our IPO. Our balance sheet remains well positioned to support continued profitable growth. Benjamin Lurie: Overall, 2025 was an exciting year of execution and transformation for American Integrity Insurance Group, Inc. We strengthened the balance sheet through our IPO, continued to grow our voluntary network, and delivered outstanding earnings. With that, I will turn the call back over to the operator to open the line for questions. Operator: Thank you. If you would like to ask a question, please press 1 on your telephone keypad. If you would like to withdraw your question, simply press 1 again. Please ensure that your phone is not on mute when called on. Thank you. Your first question comes from Charles Peters with Raymond James. Your line is open. Charles Peters: Well, good morning, everyone. First off, great. I think I am going to start with just the competitive environment as we think about 2026. A couple of your peers have reported already, and the common theme seems to be emerging that the market is—there is a lot more competition for both new business and renewal business than there was maybe a year or two ago. So maybe you could update us on how you see competition across the different cohorts, the new homes, the slightly older homes, and then the commercial space, please. Robert Ritchie: Good morning, Charles, Bob. Good hearing your voice. So when you see that and hear and read that there are 17 new competitors, that is not entirely the story. There are only about seven new capital groups, others that form reciprocals, sister companies, etcetera. Of the seven, there is only one very large one. The other six or so are very responsible and responsive niche players, and they have continued to take out some takeout business and are beginning to write voluntary. Here is where I do not agree with certain statements that might be made by others, and I do not say it to be brash. It took 20 years, but we are in a leadership position in various distribution channels. Let us start with the IA Florida preferred agents, and it took us 20 years to get there. Preferred agents are giving us top-door business and are awarding us opportunities. Now we have to earn these every day, but I can tell you over the series of time here—and we cannot really talk about this quarter—but I want to let you know that we are approaching record numbers of new business days on a continual basis, on our terms, in our pricing. This is a position where it allows us to, as an example, write in South Florida now, middle-aged homes. We continue to dominate the new builder segment. We continue to write three out of every 10 new homes being built in Florida. This is a combination, Charles, of, of course, the independent agents, but it is especially the builder agents like Westwood and others. Furthermore, we are doing business with virtually every national carrier except for State Farm on our terms. That is providing us opportunities. Finally, we have relationships with mortgage companies, other finance companies, online approaches. You put all that together, it is a very, very strong loaf of bread called new business. That is why we are competing and writing record new business on our terms. I welcome every competitor. We need more, not less. There are 8 million homes in Florida and 130,000 new homes being built each year. I am bullish about our growth opportunities at American Integrity Insurance Group, Inc. Charles Peters: Excellent. Thanks for that color. Thank you. The other question I have is just—and it is coming from some of the investors—is with the change in the quota share for 2026, maybe you could spend a second and walk us through how the expense ratio, both the general and admin and the policy acquisition lines, might change because of the change in the quota share. That would be helpful. Thank you. Benjamin Lurie: Absolutely. Thank you, Charles. So because of the quota share program, we get ceding commissions that do net against those two expense line items. So even though our underlying expenses will stay pretty much constant, you will see a net increase in those two line items. However, that increase is going to be more than offset by a decrease in ceded premiums we are paying to our quota share partners. The net result of that is going to be slightly higher expenses versus 2025 on a net basis, but also significantly higher net revenues and revenues. That is what we expect will drive even additional profitability going into this year. Charles Peters: Got it. Thanks for the answers. Operator: Your next question comes from Jon Paul Newsome with Piper Sandler. Your line is open. Jon Paul Newsome: Hi. I was hoping you could give us a little bit more thoughts on capital management and how you prioritize where you are going to put the capital in light of this cession, too. Usually, when we see special dividends, that means that there is some sort of signaling that there is not a place to put that capital. Anyway, prioritization as well as your thoughts on—that is the signal we should be thinking about in terms of special dividends. Benjamin Lurie: Jon Paul, thank you so much for that question. It is a great question and one that we are eager to answer. So when we did the IPO in May, it was in anticipation of having significant growth opportunities across all the areas that you have heard about on this call—Tri-County, middle-aged homes, commercial product—and we are more excited than ever about those growth avenues. That said, during our initial conversations, we have always said that to the extent we have windfall earnings, for example in this year because of no cat storms, that we would always be looking for opportunities to return excess capital to investors. So the fact that we had no cats this year gave us the surplus, and we have a 20-year history of returning money to the investors whenever we can. That said, the remaining IPO proceeds are still to fund all these growth initiatives that we are so excited about in 2026. Jon Paul Newsome: How do you look at the trade-off versus special dividend versus buybacks? Benjamin Lurie: Another great question and something that we have thought a lot about and a question we have taken very seriously. We did a secondary in the last quarter, and the reason we did that was the same reason we did the IPO. We wanted to get our stock in the hands of new public shareholders that understand our business, that are excited the way we are about our future growth prospects, and provide the float and the daily volumes necessary to create liquidity and make our stock attractive to investors. So because that was a decision point, we did not want to take float out of the market today. We are trying to get the stock in the hands of as many new investors that will hear our story that we are excited to tell. That continues to be our plan going forward, and we believe as we continue to execute on our business plan and deliver positive returns that folks will increasingly be excited about becoming investors in our stock. Jon Paul Newsome: Thank you. Appreciate the help, as always. Operator: The next question comes from Thomas Mcjoynt-Griffith with KBW. Your line is open. Thomas Mcjoynt-Griffith: Hey, good morning, guys. My first question is asking about the trajectory of the average sort of premium per policy going forward. There is obviously a confluence of inputs from what is happening with primary pricing in homeowners versus your business mix changing by adding Tri-County and middle-aged homes, and then there are also the commercial policies, which are much higher premiums. So as you take all of those together, where do you see your average premium per policy going? Jon Ritchie: Hey, Thomas, it is Jon. Certainly, the mix of business that we are writing—and you hit the nail on the head—middle-aged homes and Tri-County in particular will elevate the average premium of the overall portfolio as we continue to write a large number of new policies in that space, and we are expecting that there is upward trajectory of the average premium of the total portfolio, especially for the voluntary book. In conjunction with that, certainly, there is pressure downward on the primary pricing due to the trends that we have seen in the non-cat losses, particularly over the last several years. As we have mentioned in, I believe, the last call, the current average rate decrease for the portfolio for the 2025 annual rate filings is roughly 5%. We will continue to monitor that and file accordingly. Lastly, you hit on commercial policies we are starting to write. That will take time to grow. We are being very prudent and thoughtful as we enter that space, but we are seeing some early success. So, long answer to your question, but overall, we are seeing the trend of average premium going up over the next 12 months. Thomas Mcjoynt-Griffith: Got it. And to follow up on that 5% figure that you just referenced for the average rate decrease, is that referring to your portfolio specifically? As you look out across Florida homeowners, across competitors, do you have a view on what competitors are doing with that number? Jon Ritchie: Yes, so that was for American Integrity Insurance Group, Inc.'s portfolio, that 5% reference, and we do monitor rate filings both through the OIR and then also what we hear in the field from our sales department. Certainly, that range of rate decrease is pretty consistent with what we are seeing in the marketplace. Certainly, we do know that we have an incredibly responsible regulator with Mike Jaworski at the Office of Insurance Regulation, and that certainly is beneficial, and he is being prudent as rate filings are coming through. We are not seeing anyone out there buying market share at this point in the cycle. It is also worth noting, Thomas, with that rate decrease, we still have our inflation factor that is on the renewal book that partially offsets that rate decrease. Certainly, that in conjunction with everything else that I mentioned previously gives us the conviction knowing that the average premium is heading upward at this point. Thomas Mcjoynt-Griffith: Thanks. Then switching over to the reinsurance side, it seems like it is an advantageous time to be a buyer of reinsurance. You have options coming up at the 6/1 renewal to either take savings, to buy more reinsurance up in the tower, press lower attachment points. How do you weigh the pros and cons of those different decisions as you approach this upcoming reinsurance renewal? Jon Ritchie: Yes. Certainly, the reinsurance market is advantageous for buyers this cycle. Capacity is abundant. Pricing is going down on a risk-adjusted basis. We have seen early signs of this as we are in the ILS market, issuing our cat bonds that are closing this week. In the traditional market, early conversations that we have had with our trading partners in Bermuda and London are very favorable. In terms of our buying habits, they will be consistent with prior year, certainly from a vertical perspective of limit, but also horizontal. We will have third and fourth event cover to cover the 2026 storm season on both a frequency and severity basis. It is our intent, as we continue to place our reinsurance cover for the 2026 renewal cycle, that retentions will be consistent with the prior treaty year. Thomas Mcjoynt-Griffith: Thank you. Operator: Your next question is a follow-up from Charles Peters with Raymond James. Your line is open. Charles Peters: Hey. Thanks for letting me come back with a couple of follow-up questions. First of all, it sounded like poor Jon Paul was about choking on something, so I hope he is okay. I wanted to get back to this reinsurance comment. One of the things that we have to be mindful of is that the third and fourth quarter is hurricane season, and you said in your comments about the changing reinsurance conditions that the retentions, the third and fourth events—I am just trying to map out what you think the retention might be for your first event and second event this year. Obviously, knowing that there is still some uncertainty about your placements, but how are you thinking about that? Jon Ritchie: Yes. So we are finalizing structure as we go to market to place our cover for this year. On a first-event basis, the retention will be consistent with the 2025–2026 treaty year. We are looking at options on second event, and then certainly on a third and fourth event basis, we have been able to get additional cover for those events, and particularly some cascading features in the ILS market have returned. We are able to attach lower for those tranches of cover that we are placing. We are finalizing our thoughts on third and fourth event, but retention is something that is incredibly important to us to keep that as low as possible. Robert Ritchie: Especially post-first event. So we are being thoughtful, creative, and these cat bonds and their flexibility and pricing are creating, I think, some really good opportunities this year for us. So stay tuned. I think you will, as a group of analysts and shareholders, like the outcome. Charles Peters: Yeah, and I think you mentioned in your answer that the 2004 season hurricane season is sort of a benchmark of trying to structure your reinsurance. Is that correct? Jon Ritchie: It is. It has always been my mantra, and I am very grateful except for a year or two during the worst of this crisis. 2004—four majors hitting a single state in a single year—had not happened for a century before 2004. So it has always been our testament and our risk management approach to be protected in the event of a multiplicity of major hurricanes again. Charles Peters: Excellent. That is good color. The other comment that was made during the comments was you talked about the non-cat loss ratio of $0.17, I think, of gross. I do not—it is non-cat or AOP—I am not sure what the right acronym is. But 17% seems low, and maybe that is just a reflection that your business was skewed towards new homes. I would think that the market is maybe twice that, but maybe you could give us some perspective on the comment that you said that you expect that to go up. Jon Ritchie: Yes, certainly. We are very proud of that 17% gross loss ratio for the book, and that is consistent with the prior year. It is a combination of the mix of business, the quality of re-underwriting of the portfolio that we have done in recent years, and then certainly the legislative reform benefiting us and the entire marketplace. However, it is our belief that the 17% gross loss ratio certainly will begin to increase modestly a point or two as we continue to write in Tri-County and we write middle-aged homes. However, the premium we are collecting for that type of business is appropriate and offsets that, and we are happy with the direction where the loss ratio is going. Robert Ritchie: Then also, Charles, as you know, the loss ratio is an important number both for comparison and for analysis of the company's performance. It is all about frequency and severity. So as the top line with modest rate decreases happens, then it is mathematics, and of course that ratio becomes a point or two higher. I am pleased to tell you—very pleased to tell you—a couple of things. Number one, the frequency has normalized to a market performing more normally post-reform. That is remarkable. For us, our frequency is a bit lower, we feel, than competitors because of the robust new business, new construction. On the severity side, inflation is not zero, so we will see some uptick occasionally on the severity side. Net-net, it is about pure premium divided into the gross premium, and you had a comment. Benjamin Lurie: Charles, just real quick on the math side of it, just to make sure that we are being clear and consistent. We are introducing the gross underlying ratio to take away the effects of reinsurance—both quota share and cat reinsurance. Typically, when you talk about net underlying loss ratio, you are talking about after your cat reinsurance load, which can be 40% to 50% of every dollar. That would bring you to underlying ratios along the lines of what you are talking about. We just think it is important to show our losses without the effect of reinsurance because, as we have talked about, changing our quota share arrangements will have impacts on these numbers. We want to be very transparent with our investors and the community as far as what our actual loss experiences are. Charles Peters: Thank you. I guess the one final question I will have—and just to give you an opportunity to remind everyone, myself included—is you know, you have grown the book substantially over the last year, and I am just curious about your process about managing risk aggregation and concentration as you expand into these other areas of the market, and how you think about those types of concerns considering what your objectives are on a long-term basis. Jon Ritchie: Yes, that is a great question. Charles, thank you for that. Certainly, the growth initiatives in Florida where we are targeting in Tri-County and then also middle-aged homes complement the portfolio geographically and take some pressure off some peak zones for the company within the state, particularly Southwest Florida, which we are very happy with our market share there. But writing in Tri-County and middle-aged homes coming disproportionately from Central Florida is a region where we had to non-renew a healthy amount of business during the litigation crisis that we faced over the last 10 years. So the strategy that we are deploying offsets the concern that you are raising in terms of disproportionate concentration of risk, and we are really pleased with our new business writings where they are coming geographically within Florida. Charles Peters: Thanks. Thanks for letting me ask additional questions. Robert Ritchie: Thanks. Operator: This concludes the question-and-answer session. I will turn the call to Robert Ritchie for closing remarks. Robert Ritchie: Thank you, and thanks for joining us on our call this morning. I am very proud of our results. I am incredibly proud of our employees because, over this past year, we have created remarkable success and the new chapter ahead of us is even more exciting. I want to thank everyone for their hard work and for all that everybody does each and every day to make us more successful. As we look at the year ahead, I have three things to close with. Number one, we are operating from a position of strength. We surpassed our objectives for 2025 and continue to responsibly return excess capital to our investors, and so, fueled by our IPO proceeds, as Benjamin mentioned, we have the capital to grow organically, sustainably, and in the right markets. Number two, momentum is on our side. You heard me talk about record growth—responsible, profitable record growth. Momentum is our friend, and we are seeing early successes in exploiting various growth opportunities. Finally, number three, we have the people. Some of them are listening today. I am grateful for every one of you. In excess of 310 dedicated employees and a leadership team that has been with us for at least five years and running—some 10, 12, 15 years. We are aligned, and we are pulling in the same direction. We built a strong culture, and I am very proud of it, that has positioned us for success through market cycles. So in conclusion, we remain focused on the drivers we control—underwriting quality, expense discipline, and thoughtful yet aggressive growth. Now is our time to grow. We believe our performance remains durable and repeatable. We are not just growing; we are building something enduring. I want to thank you for your time today. Operator: This concludes today's conference call. Thank you for joining. You may now disconnect.