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Operator: [Audio Gap] [Foreign Language] Brunello Cucinelli, President; Luca Lisandroni, CEO; Ricardo Stefanelli, CEO; Dario Pipitone, CFO; Moreno Ciarapica, Co-CFO Senior; and Pietro Arnaboldi, Investor Relations and Corporate Planning Director. [Foreign Language] Brunello Cucinelli: [Foreign Language] So the most important thing is that next week, we have the Milanese Fashion Week, perhaps the most important appointment for our industry. And we have the international as well as the Italian press coming to the appointment. And we can definitely talk freely, speak freely with them because we have already disclosed our results. This is -- the same happens when we go to Pitti the early January. Then the second item, having clarified and completed our entire relationship with the new course of Saks Global following its restructuring, now this allows us to share everything with you. And we are very satisfied with this new relationship, both in terms of sales and brand image. So these new timings -- so for this call, we would like to also keep the schedule also for the years to come. As always, all 10 of us are here today. This is how we would like to proceed. I will present the key figures. Dario, our CFO, will go through the details. I will explain everything regarding Saks Global. Then I will go through a detailed growth plan for 2026, a couple of words on 2027. Luca will touch upon the international markets and then 5 minutes for the strengths of our business model in which we strongly believe and where we see great opportunities for the years ahead. Now -- so excellent revenues with a turnover of EUR 1.408 billion, representing growth of 11.5% at constant exchange rates and 10.1% at current exchange rates. Normalized EBIT of EUR 235.9 million, representing an increase of 11.4%, margins of 16.8%, up from 16.6% the previous year. Net profit of EUR 142 million, an increase of 10.5% with an impact on sales of 10.1%, in line with the previous year. So the completion of the '24, '25 and '26, 3-year project for Made in Italy artisanal production has been brought forward by 6 months with extraordinary investment, and this will enable us to operate to function with confidence over the next 10 to 15 years. So in 2025, investment amounted to EUR 146.2 million, accounting for 10.4% of turnover. Net debt for the core business amounted to EUR 198.4 million, reflecting the significant investments made and the distribution of EUR 68.8 million in dividends. The Board of Directors will propose to the shareholders' meeting called for 23rd of April 2026. So the proposal will be the distribution of a dividend of EUR 1.04 per share payout of 51%. Then the strong start to sales in the boutiques is also another important item together with a solid order intake for the upcoming fall/winter men's and women's collections. And this enables us to confirm for 2026 an expected revenue increase of around 10% at constant exchange rate, reflecting our long-term sustainable growth project. A gradual improvement in the financial position is expected, favored by the return to ordinary investment levels from 2026, having completed ahead of schedule the significant investment plan for the Made in Italy artisanal production. On 21st of January this year, the new AI-based e-commerce website was unveiled. It was developed on the proprietary Callimachus platform with the aim of offering personalized tailor-made experiences and placing uniqueness, exploration, discovery right at the core. We believe that this new pageless website can generate benefits, both in terms of brand image and revenue. And I'll give you more color later on. On April 14, in New York at the Lincoln Center, we will host the first of the world premiere of the documentary film Brunello: The Gracious Visionary, following the warm reception given to its absolute premiere on December 4 in Rome, Cinecitta. The premiere will continue in the major world capitals, and it will end in December in the Middle East. And this will entail a lot of travel. So a year has ended that we are pleased to describe as solid, balanced and beautiful, marked by excellent results in terms of revenue, profits and also international recognition. These achievements should allow us to look ahead with confidence to a future of outstanding prospects, growth in the years to come, positive forecast and enduring prosperity. Markets across all geographies appear to be expanding in a healthy and harmonious manner where each fashion brand expresses its own heritage, identity and positioning. We are receiving extremely positive feedback regarding the Callimachus platform developed by our Solomeo AI, our new e-commerce conceived to offer visitors an AI-driven digital experience through which they may discover the brand's collections in a manner that is consistent with the values that have always inspired us. At the core of Callimachus lies a new concept of website without pages and endowed with its own intelligence. It is a system that is capable of understanding and following each user's preferences, delivering a personalized, dynamic and pleasant and engaging experience in real time. Visitors are spending more time on the new e-commerce platform than in the past because the experience seems to be both stimulating and enjoyable. To conclude, in this first part of the year, sales continue to perform extremely well across all markets and then Luca will give you more color on this. The excellent order intake currently underway for the Fall/Winter '26 collections, together with the positive feedback from buyers, the international press and our teams in our boutiques, well, this leads us to envisage with confidence for this year too, a balanced and solid revenue growth of around 10%, accompanied by the achievement of a healthy profit. And now Dario, you know that you have been translated, so do not speed up too much. Dario Pipitone: Yes. Thank you, Brunello, and good evening, everyone. I will begin with an analysis of -- and please use the presentation to follow the slides from Slide 24 onwards of the presentation. The final revenue figures confirm the preliminary data released last January 12 with revenue growth of 10.1% at current exchange rates and 10 -- 11.5% at constant exchange rates. With regard to the other income statement items, Slide 26 shows that as at 31st December 2025, we report a balanced margin and cost structure with the reported EBIT and net profit increasing by 7.6% and 10.5%, respectively, compared to December 31 last year. Normalizing margins for the extraordinary provision of EUR 8.1 million recorded during the year following the Chapter 11 filing of our client Saks Global. So normalized EBIT amounts to EUR 235.9 million or 16.8% of revenues compared to 16.6% in 2024, a growth of 11.4% reported there. First margin equal to 75.2% of revenues increased by 11.1% compared to last year, mainly ascribable to the sales mix by distribution channel, product mix and geography. Operating costs increased by 10.5%, reflecting the expansion of our fashion house. Now moving to Slide 28 for a detailed analysis of the main cost items, namely personnel costs, rents and communication investments. So we can highlight that personnel costs as at 31st December 2025 amounted to EUR 255.4 million, and it's with -- increasing by 9.4%, slightly less than proportional to revenue growth with an impact of 18.1% as at 31st December -- sorry, it was 18.3% last year. As of 31st December 2025, total headcount stands at 3,327 FTEs with an increase of 226 FTEs compared to last year. And this is down to the targeted expansion of our retail network and also the strengthening of our artisanal production workforce as part of the project launched last year to expand in-house handcrafted production. Now moving on to rent costs. So net of IFRS 16 effects, this cost amounted to EUR 218.9 million or 15.6% of revenues, up 19.5% compared to EUR 183.2 million or 14.3% of revenues as last year. This increase is mainly down to 3 different items: new and selected openings and enlargements carried out throughout the year, certain important lease renewals and partially costs that we began recognizing in 2025 relating to openings and enlargements expected in the coming months. As to the communication investments, they went up by 5% or EUR 4.6 million, amounting to EUR 96.9 million with an impact of 6.9% vis-a-vis EUR 92.3 million or 7.2% last year. So the above reflects our ongoing and increasingly strong focus on consolidating the brand's positioning within the absolute luxury segment as well as organizing family -- organizing small events that enhance the brand allure without affecting its exclusivity. As we said last August, major events were concentrated in the second half of the year mainly with communication investments accounting for 7.2% of revenues compared to 6.5% in the first 6 months. So before moving on to the main KPIs below EBITDA, it is appropriate to briefly comment on transport and duties, which amounts to EUR 62.4 million as at 31st December '25 or 4.4% of revenues compared to EUR 55.2 million the previous year, 4.3% of revenues. This item went up by 10.4%, in line with revenue growth. So to conclude on Slide 26, as at 31st December 2025, depreciation and amortization amounted to EUR 180.6 million compared to EUR 153 million in 2024, up 18% or EUR 27.6 million, mainly ascribable to new lease contracts signed during the period. Consistently with our earlier comments on rents, excluding IFRS 16 effects, depreciation and amortization amount to EUR 55.6 million compared to EUR 49 million in 2024, with a slight increase in the impact on revenues from 3.8% to 4% for this year. Following the EBIT growth, as previously mentioned, and after financial management reporting net financial expenses of EUR 29.1 million and a tax rate of 28.5%, net profit as at the 31st of December '25 amounts to EUR 142 million with an impact of 10.1%, up 10.5% compared to last year. Before concluding the income statement analysis, I would briefly come back to financial management with reference to Slide 29, sorry, where we provide the usual breakdown, highlighting so-called recurring component on which to project expectations for the year. Then we have a component which is linked to exchange rate fluctuations, and there is a component reflecting the effects of equity investments. The increase in the ordinary and recurring component is equal to EUR 15.7 million and is mainly attributable to -- well, for EUR 6.8 million, financial expenses and lease liabilities amounting to EUR 27 million as at 31st December '25 compared to EUR 20.2 million of last year, following new lease contracts signed during the period. And for the remaining part, EUR 6.4 million relating to the increase in net financial expenses associated with characteristic with net financial debt to the core business, which we will comment on shortly. The exchange rate component shows an income increase of EUR 18.6 million, mainly reflecting unrealized net gains from currency fluctuations and therefore, subject to variation from period to period. Now let's turn to Slide 30 and following. I'd like to share a few brief comments on the balance sheet items such as net working capital, investments and net financial debt. The net working capital, including other net current assets and liabilities, amounts to EUR 313.2 million with an impact on revenues as at the 31st of December 2025 of 22.2% versus 19.3% at the 31st of December 2024. In detail, well, the items were developed as follows: trade receivables at the 31st of December '24 amounted to EUR 82.1 million at 30 June 2025, EUR 103.6 million and EUR 101.2 million at the 31st of December '25, corresponding to 7.2% of revenues versus 6.4% last year. These dynamics reflect strong revenue performance, particularly in the wholesale channel and the net balance due from the Saks Global Group, which we expect to recover upon completion of the Chapter 11 procedure, against which we recorded an extraordinary provision of EUR 8.1 million, bringing our bad debt reserve net of utilizations to EUR 13.7 million at the 31st of December '25. Excluding the extraordinary event relating to Saks Global, we therefore consider our receivables position extremely sound with losses recorded during the year equal to 0.09% of revenues, which is, virtually nil, consistent with our track record. Payment terms to suppliers, collaborators and third-party consultants remain unchanged with trade payables amounting to EUR 177.1 million versus EUR 169.2 million at the 31st of December '24, up 4.7% due to the business growth. Inventory impact on revenues stands at 28.3%, which is substantially in line with both the 30th of June and the 31st of December 2024 reported results, and this is a level that we consider as healthy and ordinary for our company. Other net current assets and liabilities show a negative balance at the 31st of December '25, equal to EUR 9.7 million versus EUR 36.5 million in 2024, with changes that are almost entirely attributable to the fair value measurement of derivatives, hedging currency risks. Moving on to investments. I'm on Slide 32. You see that as at the 31st of December 2025, investments amount to EUR 146.2 million, 10.4% of revenues versus 8.6% last year. And they relate to -- well, for EUR 84 million, significant commercial investments supporting the image of our fashion house and the contemporaneity of spaces, both in showrooms and in our boutiques. For EUR 46.1 million, they are referred to likewise important investments aimed at consolidating our strongly artisanal production capacity within the 10-year project that Brunello mentioned and for about EUR 16.1 million, well, these are almost entirely referred to significant technology investments. Finally, the net financial debt for the core business on Slide 33 amounts to EUR 198.4 million or 14% of revenues at the 31st of December '25, in line with what we discussed in our August call versus EUR 103.6 million at the 31st of December '24. The 2025 net financial position for the core business reflects the positive operating results for the period, the significant investment plan, both in sales and real estate and changes in the net working capital as described above as well as dividend payments totaling EUR 68.8 million. Thank you all for your attention. Well, Brunello, well, I concluded my remarks. I would like to hand the floor back to you. Brunello Cucinelli: All right. So before summarizing the 2025 and talking about the 2026 and '27 projects, I'd like to go into the detail of the Saks Global issue. We have had a great -- more than 30 years of relationship with Neiman Marcus, Saks and Bergdorf Goodman, which were brought together last year under Saks Global, but we continue to regard them as 3 distinct department stores in the world of fashion that are extremely important and among the finest in the world. We have grown consistently in both revenue and brand image. And in over 30 years, we've never lost a single donor. So we're not commenting on the financial merger. But for us, they remain separate brands, as I said. Only a very small amount of end customers overlap between Neiman Marcus and Saks. And this means that in the eyes of the final client, the strong and distinct value of the brands, Neiman Marcus, Saks and Bergdorf Goodman clearly remains. The spaces we have with them are very nice. They're beautiful, significant, located in equally important locations. Broadly speaking, our relationship with them is about, well, half concession and half traditional wholesale, representing approximately 6% to 7% of our total company revenues. For us, business in 2025 has performed very, very well with all 3, Saks, Neiman and Bergdorf, both menswear and womenswear and the image, the visual presentation and lifestyle positioning have remained at a very high level. Since January, there has been a new team in place. We think they are highly capable. We know them very well because the team is led by Geoffroy van Raemdonck and Lana. They are outstanding product experts, and this is something we've always appreciated. They're going -- they're coming to Milan next week. And so first and foremost, the discussion is about product, then about brand contemporaneity, visual identity and lifestyle and only afterwards about other topics. The entire team performed very well at Neiman Marcus. We met them in New York, and they clearly explained the group's new strategy, which is very clear, is based on concentration and elevation. This means closing nonprofitable stores, which incidentally do not concern us and carefully selecting brands in order to remain firmly positioned in the true luxury while including contemporary brands. So we are closing this 2025 cycle with them by booking a provision of EUR 8 million to cover any potential losses, as we said, which allows us to feel very comfortable for the future. These would represent the only potential losses in more than 30 years of track record with them. Since the end of January, we've begun this new phase. We've resumed deliveries. We are already receiving payments on time, and they are preparing orders with extreme care for the autumn/winter 2026 men's and women's collections. The feedback on the collections has been so far truly exceptional. They said, you have created the 2 most beautiful collections in our history. Hopefully, that's true. Well, these assessments align perfectly with those of our other clients, the teams in our boutiques as well. Well, the best objectives that they've used are rich and unique. We like them very much. They've told us that sales of our brand have been performing well at the beginning of this year, too. And this is a very important moment. So please note and remember that we always consider the 3 brands together, but separate. So we expect a year of solid growth, not only in terms of revenue, but also in terms of image by -- from Goodman, we will have 2 new spaces. So final conclusions for the year 2025, which is for us the second -- the end of the second year of our 5-year plan '24 to '28. 2028 will mark the 50th anniversary of the company. We have defined this year as record-breaking in terms of growth, profits, investments and also for the recognition. Revenues increased by 11.5% at current exchange rates and by 10.1% at constant exchange rates. Throughout our history, our 30 years as a listed company, we have achieved an average revenue growth of 13.7%. Well, in 2021, '22, we recorded a 30% growth, which was rather unusual, but 13.7% at current exchange rates and 13.4% at constant exchange rates. EBIT showed a slight improvement, 16.8% normalized because of the Saks-related topic. Net profit, 10.1%. Inventory remains healthy, high quality, well balanced as has always been the case for our company. Please note that we work in the apparel world, and this has been our average value since we became public. If inventory were a bit older, the image in the boutiques would be old styled as well and not contemporary any longer, and this would have an impact on sales. Investments, well, we reached a peak in 2025 with 10.4%. However, now that we have completed all our factories and the expansion of our headquarters, well, we feel well positioned for the next 10 to 15 years at net debt maximum level, but we consider that a healthy level over the next 3 years. It will decrease as investments will normalize at around 6% mainly related to commercial activities. But do not think we have reduced investments. They should be viewed in combination with the last 3-year period during which they accounted for approximately 9% on average dividends and change to 50% of the net profit. So how do we envisage 2026 in quite a tangible way? Sales in the first part of the year have been excellent across all geographies. And Luca will go into details shortly. We expect healthy growth of around 10%, EBIT growing more than proportionally, investments at around 6% and communication investments between 6% and 6.5%, what was 6.9% last year because in the past 3 years accounted for about 0.5%, but there was the film project, which ended, then inventory stable as a percentage at around 28%. Net debt improving, also thanks to lower investments in artisanal production. Dividends, as usual. So it seems to us that at this moment, the brand image is very clear, and it has a very well-rooted identity in menswear and womenswear, style identity in absolute luxury and identity rooted in exclusivity, craftsmanship and quality, the identity of the thoroughly Italian company, including its idea of sustainability. All of this supported by the recognition and accolades received in 2025. And the film was released in 2025. And in 2026, the movie will tour the world starting in April in the United States. How we see 2027, but only in general terms, just to give you some visibility. So no changes in strategy, healthy and balanced growth of around 10%, slight improvement in EBIT. And overall, we expect a similar -- a performance similar to 2026. And if that happens, we would be very pleased. Luca, now it's up to you. Thank you. Luca Lisandroni: So let's now step into 2026 based on -- building up from 2025. The first part of the year brings us 2 very positive pieces of new excellent retail sales and a very, very positive Fall/Winter 2026 sales campaign. Let us begin with retail and starting from the product. So the first month of the year is always a pretty sensitive period because there is the overlap of 2 collections, winter and spring/summer. Winter sales continued to perform pretty well. But it was the first deliveries of the spring/summer collection that truly provided a boost to our sales. This means that we worked effectively on the season launch in terms of timing, proportions and weight and visual merchandising. But even more importantly, this means that the creativity of the new Spring/Summer '26 collection currently being sold in stores has been highly appreciated by end customers. And this represents a very strong guarantee for the rest of the season. So this becomes even more meaningful when you understand that this is consistent across all geographies and even balanced between men and women. So we can now confidently say that we can rely on a very beautiful and very fine spring/summer collection. Now from regional standpoint, still within retail. North America, excellent sales and even with a slight acceleration compared to the fourth quarter of 2025. Europe, very good, thanks to the crucial role of local clientele. And particularly positive and immediate has been the contribution from the flagship expansions in London and Paris, along with the widespread growth across the rest of the European network. As you know, we are very closely linked with a very high -- we look up at Hermes, and we greatly appreciated Axel Dumas' remark talking about expansion, saying that it is the customers who push the walls of the stores. It is a great expression. So we therefore want to thank our customers in London and Paris who have enabled us to make these stores even more welcoming and vibrant besides them being bigger. In Europe, we had no new openings throughout 2025 nor in this first part of the year. Therefore, the result is definitely on a largely comparable basis. Asia, excellent sales there with China growing significantly and consistently week after week from the very first days of the year, regardless of the different timing of the Chinese New Year. And when we take a look at our results in the past 12 months, we can say that store by store, we have achieved a new and higher level of performance. Now taking a look at our retail channel as a whole overall, we can say that it continues to benefit on the one hand from growth in the number of customers period after period between 5% and 10%, thanks to the onboarding of new clients and on the other hand, an increased average spending by existing customers. These figures highlight both the attractiveness of the brand and also our ability to create long-term value in customer relationships. And they seem to outline a very solid and reassuring evolution of our customer portfolio. The growth in average retail selling price is higher than the increase in average list price due to a sales mix that basically favors more special products. Well, whenever this occurs, we view it as a very healthy element for our sales and a strong representation -- and also for our positioning and a strong representation of the steady elevation of demand at the high end of the market. So based on this, we expect a very strong retail quarter in which the exchange rate effect, the ForEx effect will be noticeable, but then we believe that it will normalize over the course of the year, especially from April, where there was high volatility last year. But even at current exchange rates, however, we expect a very positive performance. Let us now turn to wholesale. We have completed the men's sales campaign, and we are approximately halfway through the women's campaign for the Fall/Winter '26 collections, but we can already say that we have received very flattering feedback on both collections. And we consider our order collection management to be excellent. So during the meetings we had in our showrooms, we have basically restated the message from our Christmas letter to send to our 400 multi-brand clients, probably the best of the finest in the world. In that letter, we asked them to -- even in the online activities, to basically try and achieve the very same nobility that the brands are recognized for in the physical brick-and-mortar world. We're very pleased that our clients have embraced this message, and we are highly confident that the wholesale channel will increasingly contribute positively to strengthening the modern and exclusive perception of our brand. The strength of the collection has allowed us to minimize the impact of this request on orders. So we expect to close yet another quarter with slight growth in the wholesale channel, but more important than the performance in the single quarter, however, is the assurance that multi-brand clients worldwide have closed a strong winter season with us and opened the summer season with sell-out levels that are even better than last year. In conclusion, the results and indications from this start to 2026 reinforce our conviction that we can experience yet another year of growth around 10%. We expect growth to be more concentrated in the retail channel and well distributed across regions, always moving towards an increasing geographic balance. Now 8, 9 minutes devoted to the main topics and then, of course, discussion and take your time for that. So we have a fashion house that accounts for 75% and lifestyle accounts for 25%. And we are mainly a ready-to-wear brand and only 25% in apparel and 15% accessories. This is how we want to grow. And this is how we believe we were recognized last year in London with the Fashion Oscar we received last December, a clear identity in Italian men's and women's style of true luxury, great craftsmanship, quality and exclusivity. So therefore, we must remain exclusive and also strict in our communication, especially online as we have always tried to do. So we account -- retail accounts for 68% and wholesale 32%, expect to drop to 30% in 2026. We have 136 directly operated stores, a few openings each year, just 3 or 4 expansions of existing stores and occasional relocations and between 470,000 and 500,000 customers annually with about 5%, 10% new customers added to the equation every year. And then we organize these events, these small-scale events worldwide, gathering about 100, 150 clients per evening. And we find this format to be very important because you can speak to anybody attending. According to recent measurements, customers spend about 30, 31 minutes in our boutiques. A year ago, it was 16 minutes, 50% men, 50% women. Casa Cucinelli are very important. We currently have 9 worldwide. We will open the 10th in Shanghai in early September, and we will organize events there. Then revenues per country. So today, 37% North America, 35% Europe, 28% Asia, of which 13% China. Perhaps in 3, 5 years, we expect the split to be as follows: 33% U.S.A., 33% Europe, 33% Asia, with China possibly reaching 18%, 20%. We started late in this country, but we see great opportunities in the years ahead. Then production and sustainability. We collaborate with approximately 400 SMEs, 800, 500 people, 80% of whom are located in Umbria, Tuscany and Marche. Sustainability. So Ricardo was included by Time in the Time 100 Climate 2025 list as one of the most influential international leaders in climate action. We have always believed in sustainability: in environmental sustainability, avoid waste, recover everything possible; human sustainability, meaning how much you earn; spiritual sustainability, how you treat others; technology-related sustainability, how long do I have to be online for business reasons; and moral sustainability because we are a company based in Italy that works in Italy, produces in Italy, manufactures in Italy and striving to work for the future of our nation, and we also pay our dues here. A very important topic. In 2025, we had around 3,400 employees with approximately 250 new hires per year. Employee turnover is extremely low across the company. However, please note that we never implemented and never will implement working from home or remote working for 3 main reasons. Because that way, if you do remote working, there is no distinction between private and work life. This jeopardizes collective creativity and especially young people learn almost nothing. And they basically come up with the idea that they will always work 3 days per week only. This is the reason why we decided to ban it. We have always wanted to work 8 hours a day, very focused with 1.5 hours in the company restaurants. So if we were to remove this no remote working rule, turnover in the company would be almost 0. This does not mean that we do not consider or hold human flexibility extremely high, which has always been a tenet of our company. So we all start at 8, but if you need to -- if you have a medical appointment, you can definitely take it. And the vibes in the company are pretty pleasant. So about prices. The pure price increase in 2026 is around 3%. Part of this depends, even though a negligible one, depends on the new clothing industry labor contract in Italy, which was renewed in 2025 after 6 years of unchanged numbers, EUR 60 a month after 6 years, I'm not so sure that it will be easy to recruit new labor. But we have 20,000 job applications per year. We only need 300, but you should consider that out of the 20,000, 4,000 are willing to perform labor work, of course, high-quality artisanal work. Then there are about 100 people in the design team, 20 of whom are top level, plus myself as a coordinator. That's why you can definitely be sure that even if I was to pass away, the company would not be stuck. My time at the company is 80% devoted to product, including visual, stylists and lifestyle. We have the academy in Solomeo for the arts and crafts, and we have a lot of confidence, thanks to that, that the value of the hamlet, Solomeo, that's very important. Every year, we welcome about 13,000 to 14,000 visitors, including customers, friends, journalists, celebrity, politicians, and I have a problem. The only person having a problem is me because I have to dine with someone every single night. So we believe that the village of Solomeo gives us -- this hamlet gives us a strongly rooted identity and uniqueness. And honestly, we work daily to preserve it. A couple of minutes on Callimachus. Callimachus is based on a new concept of a website. It was launched in January. Well, an important thing, well, usually, people tend to stay 4 minutes on our website, and now they stay 9 minutes, and they usually visit 3x more products, and this is very important. Just let me share a couple of feedbacks. Well, companies that are leading in the world, so leading in all industries. They said, for example, a truly exciting turning point for digital storytelling in luxury; or another feedback, a clear break from the traditional rules of e-commerce, a radically innovative experience, truly brilliant or congratulations on this fantastic project. Congratulations on the wonderful work you've done, we would love to meet you. Groq, for example, I can disclose this name, the one that NVIDIA bought for $20 billion. Well, Groq said that's their feedback, Callimachus reinvents websites and e-commerce. Solomeo AI has launched an online platform based entirely on artificial intelligence, transforming Brunello Cucinelli's e-commerce into a personalized shopping experience that reflects the attention and care typical of a luxury boutique. Another very important company says a true innovation that pushes the boundaries, highly inspiring. And then another one says beautiful website that truly represents your manual work and craftsmanship. This is the feedback of 10 leading brands in the world, which wrote to us, and we like this very much. Where we started this project as a sort of a hobby. This is not our core business, but we reached a great success. Conclusions, we think we have great opportunities in the years ahead, provided we continue to develop contemporary collections. So first and foremost, we have to focus on products. The Fall/Winter 2026 men's and women's collection are the most beautiful ever as reported. But having strong collections in stores gives us a bit more peace of mind between July and December now regardless of what happens than worldwide. So we are experiencing a very positive moment for the brand image and a brand which is Italian, artisanal, contemporary and exclusive in terms of luxury. So thank you very much for your attention. We can open up the discussion now. Operator: [Operator Instructions] The first question from Andrea Randone, Intermonte. Andrea Randone: I have a first question, which may be a bit trivial, a bit banal, but this is to better understand the guidance at constant exchange rates. You are talking about a quite heavy exchange rate with a quite heavy impact on the first part of the year. Can you give us more flavor? Are you talking about 2%? Is this going to be the impact on the full year? Is it a reasonable value? And then I have a second question. Can you summarize again the elements that lead to an improvement in cash generation? You talked about normalization of investments, stable working capital. So these seem to be the main elements for an improvement in cash generation. But this is certainly -- well, the normalization of cash generation is certainly important for the market. So if you can please recap these elements? And the third question concerning business. I'm curious to know whether you were happy with the take-up of Harrods in London or well satisfied or happy with similar initiatives. Do you think they are effective? Brunello Cucinelli: Andrea, I will answer the second question. As far as exchange rates are concerned, we estimate 1.2%, 1.5% to 2% for the full year. And the first -- in the first quarter, we may have 4%, 5%. But then from April onwards, well, we think it will be 1.5% for the full year. Then as far as the take-up of Harrods is concerned, this was a beautiful success, honestly speaking. Now this year, I think, they will celebrate the 130th anniversary or something like that. So Luca will take the other answers. Luca Lisandroni: Well, first of all, we want to go back to an ordinary level of investments in the past 3 years. As Brunello said, we had a very high concentration of investments. For next year, we envisage to continue with commercial investments that are absolutely ordinary. The extraordinary part of investments dedicated to factories will no longer be there. So please, Andrea, do not think we've dropped our investments. That's very important. Investments remain the same. Operator: Next question, Oriana Cardani, Intesa Sanpaolo. Oriana Cardani: I have 2 questions. First question about the first margin. Do you expect a result for 2026 in line with the 2025 result? Or do you see any potential for an increase as a percentage of revenues? And the second question is on fragrances and glasses, eyeglasses. Can you comment from a qualitative and quantitative viewpoint, the performance of these 2 categories last year? And for eyewear, are you expecting to extend the partnership with EssilorLuxottica on the smart glasses part? Brunello Cucinelli: Luca will take the question on eyewear. And then as far as revenues are concerned, we expect to be in line with what we said. And well, if we can increase that by the end of the year even further, would be even better, but that's it. As for fragrances and eyewear, well, they have been performing very well, especially from an image viewpoint because we have positioned them the right way, as EssilorLuxottica said. So we are very important for them like Chanel. Well, with Chanel, they make huge numbers, but it's in terms of research and positioning. Fragrances are very high end and the response rate is very high. Do you want to add anything on eyewear? Luca Lisandroni: Yes. This was the very target when we launched both categories. In these new categories, we wanted to achieve the very same positioning as the one we had in apparel. And I think we've managed to do so. And then as far as extension to smart glasses is concerned, for the time being, this is not in our plans, in our pipeline. However, we have a small high-end eyewear collection in the pipeline with gold frame. So we really want to focus on that. And these are glasses with a price ranging from EUR 5,000 to EUR 9,000. Well, going back to the previous question on first margin. Well, the question was on the first margin and not on revenues, but nothing changes. The final number for 2025 is a very good reference for the results that we are planning for 2026. Well, this doesn't mean that we do not -- we're not happy if we increase by 10 or 20 basis points, but the outlook that we have can be confirmed. Operator: Next question from the conference in English, Chris Huang, UBS. Chris Huang: I have 3, if I may. First one, just a follow-up on the first margin. You said that 2025 is a very good reference for 2026. But I'm just curious about the actual drivers of this first margin expansion in 2025. I think in the press release, you mentioned channel mix being one of the key drivers, but actually channel mix wasn't that big of a difference when it comes to year-over-year performance. So just wondering why gross margin has been so strong in 2025, the drivers behind? Secondly, on the start of the year, I think, Luca, you provided a lot of very helpful comments on the retail channel by different regions [Audio Gap] . Unknown Executive: Have new colors on the geographies. So I would start from this question. So as we said multiple times, we do not believe that our business is mature. And the reason being that we have new customers across all different geographies. Then as to the conversion to -- concession to Neiman Marcus, you should consider 3 brands. [indiscernible], I am not talking about the Saks Global gathering together all the 3 brands. We see them as separate distinct brands. We have a very balanced relationship and then we can move on with these 5 doors per year. Then stores. So the openings are confirmed to Mexico City, Abu Dhabi. And in the first part of the year, we strengthened our network in Florida with 2 smaller stores and then in Wuhan, China. Then you see expansions will play a fundamental role in 2026. In Geneva, we will expand the store in the summer, then we will expand the store in Toronto and also Plaza 66 and Shanghai and also the opening of the Casa Cucinelli Shanghai. [ Paula ], I think we can close at around 140 stores. And we like this. We like the stores to be prime quality, the right size and also the number. We believe in exclusivity. Operator: [Operator Instructions] The next question, a follow-up question from Andrea Randone, Intermonte. Andrea Randone: I have a short follow-up question. You mentioned progressive results throughout all geographies. I know that tourism doesn't play a very important role for you. But what about Japan, considering that there are no longer Chinese tourists going to Japan? Is this having an impact on your sales? Brunello Cucinelli: Yes, that's true, but this is not new. Last year, Japan benefited much less versus 2024 from tourism. 2024 was an extraordinary year in terms of tourism. However, sales are -- Chris, I have -- well, for you, please call Pietro at the end of the call. So don't worry, you will get all the answers you need. So please call Pietro at the end of this call. Thank you very much. Thank you. Let me just point out one final thing. Please remember that we always focus on absolute luxury on these markets. So please consider where we are in the market because we always say we work in the very high end of the market in the top luxury market. That's very important. All right. So thank you very much. Thank you. Chris, please call Pietro. Thank you very much. Well, for the people living in Milan. So remember, next week, we have the Fashion Week. And on Wednesday, we will also get feedback from the press on the women's collection. So thank you very much for this because now that everything has been disclosed, we can speak freely about everything. And so we have a lot of confidence and peace of mind. Thank you very much. Thank you. Bye-bye. [Statements in English on this transcript were spoken by an interpreter present on the live call.]
Richard Stewart: Good morning, ladies and gentlemen. Welcome. I think it's a real pleasure to have you with us today as we present our operating and financial results for 2025. So thank you very much for joining us today. I think just in terms of the agenda that we've got, I will start off with a few high-level of salient points. Then we'll move into the Performance Excellence, which will be presented by a number of the team. We'll then move into growth and just touch briefly on the resources, the mineral resources and reserves that we've recently published. Charl will take us through the financial performance and Ken to touch on how we're interpreting these very volatile markets we're seeing and a little bit of the outlook in that regard before I wrap up with the way forward. I think there are several forward-looking statements in the document. So would urge you please to just take note of the safe harbor statement. Thank you. I think when we reflect on December 1, 2025, I think certainly during the latter half of the year, it was at a time of significant change at Sibanye, we, of course, have the leadership transition. And with that, we also undertook a refresh of our strategy. This was something that we presented to the market at the end of January. But for anybody who was not able to make that, if I could try and summarize our strategic refresh in one word, it would be simplification. Specifically, what we're really focusing on in the short term is around maximizing and driving our operating margins. We're doing that through a keen focus on operational excellence and simplifying the operating model that we have and then further simplification through our portfolio such that we're focusing on the highest return assets, of course, cash generative assets and ensuring an appropriate management focus in that regard. This is all coupled with a very disciplined capital allocation framework which we shared as being roughly 1/3 towards shareholder returns, 1/3 towards reducing our gross debt and 1/3 towards growth. And again, Charl will unpack that in a little bit more detail. And in terms of growth, we certainly see the best value at the moment for us in terms of returns as being internal in terms of the resource value that we have. We have a significant resource base, particularly in South Africa, our PGM operations and organic growth will be our immediate focus. But we did also share a value creation framework that we have put together that will help us assess any external growth opportunities moving forward. In addition to the strategic refresh, I think there were some quite key decisions that we needed to make towards the end of last year, especially amongst several of our operations. One of the big ones was the start-up of the Keliber lithium project in Finland. That is a greenfield project that we have built and given the volatility in the lithium market, we had to make a decision how best to proceed with that project. And I think very pleasingly, towards the end of last year, together with our partners, Finnish Minerals Group came to a way forward, which really considers a staged ramp-up of the Keliber project. And we'll share a bit more of those details with you in the presentation, but it really is an approach that mitigates some of the risk of the market while allowing us a lot of strategic optionality around the project. And we will unpack that for you in the coming slides. The second big decision we had to make was around Kloof. We did share with the market that early on in the year, due to increased risk of seismicity have what we deem to be an unacceptable safety risk, we ceased mining of quite a few of the deeper level areas at Kloof. And this had a material impact not only on the output from the Kloof operations but also the future of that operation. Towards the end of last year, we did make a decision that Kloof would continue to operate on a year-by-year basis, assessing the profitability each year as we proceed. So very dependent on sustained higher gold prices. And then there were several priority projects that we have been evaluating during the year, and we're making -- we'll be making financial investment decisions on -- during the course of this year. There was also some overhangs from previous or legacy issues. We had to address the Appian court case. We came to a settlement there in November, ultimately a settlement payment of $215 million. And then we also had the South African gold wage negotiations that had been continuing from about the middle of the year I think credit to the team, we successfully settled that also towards the end of the year. And again, credit to all stakeholders, I think a very good outcome considering the environment we're currently operating in. But I share this because I guess it was a rather busy, a transformational and actually quite a noisy second half of the year with lots of decisions being made in terms of how we will continue going forward. And that has also reflected in our finances, which are complex. And again, I do say, a lot of noise. But hopefully, certainly the way I feel, and hopefully, you can see that what this has done is simplified our operations going forward. It's already simplified where our focus needs to be and I think it's set up a solid operational base, which we have launched into 2026. And then I look forward to that simplification also starting to feature in the financial numbers but as you ultimately simplify the total portfolio. I think looking at our operational output, safety and I'll unpack safety in a bit more detail in the coming slide, but very pleased with the continuous improvements that we've seen in many of our indicators both lagging and leading indicators. We have seen some of our best numbers ever, which is pleasing in terms of the progress that we've made over the years, but our focus on eliminating fatals remains our absolute priority as a company. I think I have to give full credit to many of our operational teams. As I said, this was a busy period it was a very volatile period in the markets. And yet our operational teams delivered solidly across most of our business. All of our operations came in largely within guidance, recognizing we did have to revise guidance at the gold operations because of the Kloof decision I mentioned earlier. But coming within guidance or better than guidance across the board was very pleasing and full credit to our teams in that regard. We also made some great strides on our sustainability strategy across many aspects, including water, including the social investments in South Africa. But one that really is a bit of a standout is our positioning with regards to our renewable energy where I think we really are now positioned as a leader in renewable energy in South African mining. And certainly, that is not only going to have a material impact on our carbon footprint going forward and our ability to provide responsible metals but also significant commercial benefit. Just during the year-to-date on a small portion of the projects we've commissioned, we've already achieved close to ZAR 100 million worth of savings and avoided over 300,000 tonnes of carbon dioxide. And we see that going up to close to ZAR 1 billion worth of savings over the coming years. Like I mentioned, I think with much of the decisions and complexity we had in the business over the second half of the year, that does reflect in our numbers. But looking through those numbers, I guess, sort of really through to the core financials I think what we really see is stability, a real turnaround. And I think a solid base of which to build into 2026. We achieved the highest EBITDA that we have in 3 years at just under ZAR 38 billion or just over $2 billion and to see a headline earnings per share up by just under 300%. I think is very pleasing, particularly given that most of that just came during the second half of the year. Our balance sheet remains strong. Our total net debt to adjusted EBITDA has declined to below 0.6x, so very comfortably within covenant limits. But as we shared during our strategy renewed focus on gross debt to ensure stability through a cycle is where our focus will be going forward. But overall, with a good operational output, with the strong financial stability and underpinned. I think as a company and the Board, the Board is very comfortable to declare a dividend of ZAR 131 cents per share. That equates to roughly a 2% dividend yield. And again, I think, reflecting largely just the earnings over the second half of the year. And that dividend declaration is at the top end of our dividend policy. So very glad to be back into dividend-paying territory. I think as we look at performance excellence, we did share at the end of January during our strategic update that our strategy is based on 4 pillars. Simplification, I've mentioned already, simplification of our -- of how we operate, driving accountability, simplification of our portfolio, getting our focus on capital allocation in the right place. And the second pillar was performance excellence. Performance excellence is really -- covers a holistic improvement. And within there, we have safe production. We have the operational excellence, which I think will be well understood by many. Resource optimization, how best we can extract our resources, maximizing long-term economic value and of course, embedding sustainability in the way we operate. And for us, sustainability is really about people, the planet and prosperity for both. I will specifically touch today on safe production and then hand over to the 2 COOs, Richard and Charles to look at operational excellence and Melanie in sustainability. So I think touching on on-site production. As I mentioned earlier, it's been extremely pleasing to see the trend that we have seen since 2021, in particular, in our raised 2021 because that's the time when we started our fatal elimination strategy. Since then, we've seen over 40% reduction in serious injuries. And the reason we look at serious injuries that is very often associated with high energy incidents. So high energy incidents that could result in either fatal incidents or certainly life-changing incidents. I think we've also seen a very similar pleasing decline in terms of the high potential incidents that we measure. Some of those are associated with injury somewhat. But it certainly gives us a good data point to understand whether or not we are decreasing risk within our operations. And whether we look at our own history, whether we benchmark ourselves against peers who have similar underground neuro tabular labor-intensive operations generally, across the board, I think we've seen a significant reduction in risk in our operations and that is a trend we'd like to see continue. And we continue to benchmark ourselves against ICMM and peers, many of whom, of course, operate in very different environments. I think what's always tough talking about the safety trends is as pleasing as it is to look in the rearview mirror and I understand that we're doing the right things to reduce risk. As a management team, we also recognize that, that is unfortunately very cold comfort to family and friends of colleagues who we have lost on our operations. And tragedy, during 2025, we did experience 6 fatal incidents across our operations. And in this regard, I would really like to extend our heartfelt condolences on behalf of the management team and the Board to the family and the friends of [ Alberto ] Xavier, [ Onkazi ] Jozana, [ Fonso ] Matsolo, [ Brian ] Hanson, [ Asituey ] Ramaila and Klaas [Onkosana. ] Eliminating fatal incidents is absolutely our #1 priority as a Board, as a management team and as a company. Our focus moving forward into 2026 remains on how we can more effectively embed our fatal elimination strategy. The strategy fundamentally hangs on 3 pillars of critical controls, what we call critical management routines or effectively management practices, and then life-saving behaviors. So those are the 3 key pillars that will mitigate risk within our operations. The focus for 2026 is how we can enhance compliance in this regard but most importantly, enhancing it through a transformation of culture, which will also drive behavior. I think what we have seen historically within the mining industry is that compliance has driven through force, through instruction and we recognize the opportunity to change that culture and to drive compliance through a culture of accountability and a culture of care. And through that, we truly believe we will eliminate fatal incidents from our operations. Thank you very much. And with that, I will hand over to Richard Cox to take us through the South African operations. Over to you, Richard. Thank you. Richard Cox: Thanks, Rich. Hello, everyone. As Chief Operating Officer of our South African operations, my focus is on delivering performance excellence through safe production, operational efficiency and holistic improvement, our strategy insures, we consistently improve delivery across our portfolio. So let's take a look into our 2025 results for the South African business. Turning to our SA PGM operations. we've maintained consistent delivery, meeting or exceeding guidance each year since 2017. More specifically, for 2025, total 4E PGM production reached 1.8 million ounces including attributable production from Mimosa at 117,000 ounces and third-party purchase of concentrate at 73,000 ounces and all aggregated aligning with our 1.75 billion to 1.85 million ounce guidance and stable year-on-year. Since the Lonmin acquisition in 2019, production has remained steady between 1.73 million and 1.83 million ounces annually, reflecting our operational resilience and ongoing progress towards the second quartile of the industry cost curve. Breaking it down, underground production increased 2% to over 1.6 million ounces supported by improvements at Rustenburg's mechanized Bathopele shaft and more stable output compared to 2024s disruptions at Siphumelele and Kroondal operations. In Marikana, output was affected by safety-related stoppages at the high-performing safety shaft, but this was partially offset by K4's ramp-up where production rose 41% to almost 100,000 ounces, contributing to Marikana's improved cost position. Surface production was lower by 29% at 108,000 ounces influenced by higher first quarter rainfall and the commencement to transition feed resources, such as Rustenburg's Waterval West TSF and Marikana's ETD1 to ETD2 tailings facilities. We are evaluating long-term service opportunities at Rustenburg to support the sustainability of the surface business. Purchase of concentrate volumes were reduced by 24%, in line with contractual terms. We remain focused on cost discipline Operating costs increased by just 7.3% in absolute terms. All-in sustaining costs rose 10% to just over ZAR 24,000 per 40 ounce and that was within our ZAR 23,500 to ZAR 24,500 an ounce targets hosted by byproduct credits of ZAR 11.1 billion. Now these credits were enhanced by stronger ruthenium and iridium contributions, helping offset the 261% increase in royalties to ZAR 765 million from higher prices and a 12% rise in sustaining capital to ZAR 2.9 billion for key mining equipment and precious metal refinery infrastructure. Project capital was lower by 16% at ZAR 675 million, which was below guidance due to completed Rustenburg initiatives and deferred Marikana expenditures. Total CapEx came in at ZAR 5.9 billion, under our ZAR 6.5 billion estimate. So this foundation we are creating enables us to capitalize on stronger PGM prices. The 2025 average 4E basket price increased 28% to over ZAR 31,000 per ounce, driving adjusted EBITDA up 125% to ZAR 16.7 billion. Early 2026 prices have risen 43% to over 44,000 per ounce as shown in the chart, following an even higher and brief January adjustment. With supported fundamentals, we anticipate potential for additional earnings and cash flow improvements in 2026. We continue investing through the cycle in low risk, low capital intensive projects with quick paybacks, all supporting stable, high-performing operations with optionality to extend our portfolio. Overall, our SA PGM operations are very well positioned to benefit long term and also from the current market upside. This slide illustrates our advancement on the PGM cost curve and based upon end December 2025 data and highlights our positioning relative to peers. Starting on the right, Marikana's total cost, including CapEx has been influenced by K4's project buildup phase. But as K4 approaches steady state, we're seeing a shift towards lower costs. This combined Rustenburg and Kroondal position has moved slightly higher due to the Kroondal transition to toll treatment which does introduce processing costs, however, enhances profitability through improved revenue and margins. While we are actually below the 50th percentile now, and our low capital intensity brownfields projects are poised to further strengthen competitiveness against peers spots 4E and 6E, which includes base metal basket prices are positioned well above our costs, underscoring our leverage in the prevailing market. And so our progression from the fourth to the second quarter reflects the value of our strategic investments in building long-term sustainable advantage in this business. Now to our gold operations. These mature assets are highly geared to gold prices and continue to generate strong cash flows in the current supportive price environment. Total production, including DRDGOLD was lower by 10% at 19.7 tonnes. Underground production reduced by 8%, primarily due to operational challenges at our Kloof operations, including seismicity and infrastructure constraints, while surface production was down 16% influenced by lower yields as we transitioned from higher grade to lower-grade tailings and low-grade third-party sources. A 39% increase in the gold price received helped mitigate this impact. The all-in sustaining cost increased 15% to ZAR 1.4 million per kilogram, with 14% lower gold sold. At our Kloof operations, persistent challenges, including a shaft incident at our [ Manana 7 ] shaft in May of '25 infrastructure age showing in ventilation pass and ore pass systems, logistics constraints and seismic risk in high-grade isolated blocks of ground or IBGs, resulted in production lower by 31% year-on-year at 3,374 kilograms. This prompted the rebasing of the plan and a life of mine adjustments to 1 year. Safety remains our #1 priority. We did relocate a number of Kloof teams from higher-risk IBGs to Driefontein operations. And subsequently, post a comprehensive review process, removed those areas of Kloof operations from a long-term plan to align with our risk tolerance. As said, the sustained rise in the rand gold price over the period boosted adjusted EBITDA of 115% to ZAR 12.5 billion, representing 33% of group EBITDA and surpassing 2020's record. Excluding DRDGOLD, EBITDA increased 111% to ZAR 6.1 billion on average price of ZAR 1.8 million per kilogram. For the whole gold business, we are pleased to have concluded a 3-year wage agreement with labor, and that provides a degree of cost certainty moving forward. There is a lot of work underway in reporting our strategic transitioning of the SA gold business, and this effort is to ensure long-term sustainability. Our investment in the DRDGOLD is a prime example, providing long-life, high-margin surface gold exposure that is cash generative. We are also focusing on our higher-margin shallow gold mining business with Burnstone's feasibility study underway and final investment decision being targeted for the first half of 2026. As you see in image, the Burnstone project exemplifies this strategic shift. We are also focusing on high-margin shallow gold mining, where we have added over 1 million ounces in reserves at Cooke surface, Burnstone, attributable DRD and Beatrix operations. Turning to the charts. The gearing and all-in sustaining cost margin chart illustrates how price rising prices are opening up expanding margins. The average gold price received planning steadily against controlled all-in sustaining costs. The adjusted free cash flow bar chart highlights the magnitude and rapid cash flow turnaround moving from negative in 2024 to positive and significant in 2025. Looking forward, our core operations will continue to drive performance excellence and we're excited about the prospects in our current portfolio. For 2026, the outlook is positive. Spot prices are up 9% year-to-date to over ZAR 2.5 million per kilogram and 20% above second half 2025 levels. all boding well for another successful year with potential earnings and cash flow growth. I'll now hand over to Charles. Charles Carter: Thank you, Richard. The U.S. PGM operations have had a solid year with production of 284,000 3E ounces and an all-in sustaining cost of $1,203 an ounce beating our guidance, combined with a strongly improving safety performance into year-end. The significant downsizing in late 2024, while turning around the cash bleed at the time in the context of depressed prices also sow the seeds of improved mining productivities and cost efficiencies that we have built on through the year under review. Certainly, with improved PGM prices later in the year, we returned to profitability. And when you overlay Section 45x benefits, you have a competent outcome. During this period of getting our operating performance right, albeit at lower volumes, the team led by Kevin Robertson has also done a significant amount of work on setting up the Montana operations for long-term success. You have seen in the earlier global cost curve that we are now sitting in the middle of the pack and have been for 2 consecutive quarters. But our drive towards $1,000 an ounce is aimed at being a lowest quartile PGM producer on a sustainable basis through price cycles. In the Montana operations, we have a legacy of semi-mechanized mining with narrow headings and small stopes using a range of small equipment such as 2-yard LHDs and CMAC bolting, which ultimately constrains you with lower tonnes per cycle and a higher cost per ounce, notwithstanding the fact that our miners are incredibly good at what they do and bring significant skills and experience to the process. Through last year, we trialed mechanized bolting with success, and we are not right now rolling out a significant transformation program, which will see amongst many changes the stepwise introduction of mechanized equipment, a progressive increase in heading size in advance with associated workforce and supervisory upskilling and a shift from legacy captive stoping to task mining. The benefits of these changes really start bearing fruit in 2027 because we have a phased introduction of new equipment and changes to where practices running in parallel with our established approach. Where this takes us in the next 18 months is a fully mechanized and scaled operation with higher productivities and lower costs, improved safety and wellness benefits and a business that we believe will be resilient through price cycles. We are starting these change interventions at Stillwater East and then moving to East Boulder. And once we know that we can deliver around $1,000 an ounce, we will consider bringing back toward a west, although this will require infrastructure upgrades and a range of capital spend, which means that we have that decision point further down the road and it will neatly based on an extensive feasibility study. If I turn to the U.S.-based recycling business, 2025 has also been a busy year for us. We bedded down and integrated the Reldan acquisition and late year added the Metallix acquisition. Together with our Columbus AutoCAD recycling business, we believe that we have a compelling PGM and precious metals recycling platform that has low capital intensity and which can provide stable margins through price cycles. The team led by Grant Stuart is moving very quickly to integrate the management teams and optimize which feeds go to which site while leveraging a single sourcing and sales platform that now has very wide reach both in the Americas, but also into Asia and elsewhere. As investors and analysts will appreciate there is significant change underway in global metals recycling where we are seeing consolidation, vertical integration and indeed, some companies in various parts of the value chain going to the wall. Within the significant shifts underway, I think we are well positioned. We know what our value proposition is, the niches that we play in and which differentiates us against some of our very large competitors. And we now have the ability to organically grow an integrated recycling platform without needing to necessarily chase new acquisitions. Our Century zinc retreatment business in Australia has also had a very good year from a stellar safety performance through to increased production of 101 kilotonnes of payable metal and a 17% decrease in all-in sustaining costs to $1,920 a tonne, which exceeded guidance. This team is very ably led by Barry Harris, and I want to thank Robert Van Niekerk who was the executive lead through the last couple of years for a seamless handover. As you will be aware, the team has been working on 2 feasibility studies, [ FOS 1 ] and Mount Lyell. The Mount Lyell feasibility study is currently under assurance review and evaluation. We expect to have a close-out review in early May. The [ FOS 1 ] study is expected to be completed end of March with Assurance targeted to be completed at the end of May. Final decisions will be made within our disciplined capital allocation framework that Richard has spoken to. Given the remaining short life at Century, a pathway to new opportunities in Australia is important. And I'm looking forward to spending time with the team on the ground next week and working through the opportunity set. With that, let me hand over to Robert. Robert van Niekerk: Thank you, Charles, and hello, everybody. Sibanye Stillwater has a substantial life of mine and solid project base, focusing only on the precious metals. We've got 356 million ounces in the resource category, of which about 16% 58.2 million ounces has been converted into the mineral reserve category. SA PGM operations contributed about 50% of the resource base, 177 million ounces. And again, about 16% of that has been converted into reserves, 29.4 million ounces. If you look on the right-hand side of the slide, you can see that these reserves serve very, very significant operations. Some of the Rustenburg operations have in excess of 32 years life. The Marikana K4 project, for example, has a 45-year life of mine and the Marikana East 4 project has a 34-year life of mine. As Richard said earlier on our gold operations are mature. They are bid to the gold price, but I would likely -- they are very insignificant. We have a 43 million-ounce resource and a 9.4 million ounce reserve. The Beatrix operation in the free state is a solid operation. The Driefontein operation is a very solid operation. And our DRD operation is our world-class tailings retreatment operation. And we also have the Bernstein project, which is there still to become a very efficient, shallow, low-cost, 25-year life of mine operation. The second biggest category of our resource base is our U.S. operations. Here, we have 80.9 million ounces in resource, of which only 19.4 million ounces have been converted into reserves. Again, these assets are highly leveraged, they are high grade, they our quality assets. And again, if you look at the right-hand side of the slide, the Stillwater mine has a 26-year life of mine and the East Boulder mine has in excess of 30 years, actually 35 years life of mine. We'd also like to add that this year, we have included a maiden reserve for the Marikana East project in the SA PGM region. We have also included a maiden reserve for the Cooke TSF and I made a reserve for the Mount Lyell copper project in Tasmania, Australia. In closing, I'd like to leave everybody on the call with a message that next year, '26 and 2027, Sibanye Stillwater will be focusing on converting a large percentage of the abundant resources into reserves. With that, I'm going to hand over to Melanie. Thank you very much. Melanie Naidoo-Vermaak: Thank you, Robert. Good morning, good afternoon and good evening to all attendees. Our renewable energy program remains central to our journey towards carbon neutrality. Having set ourselves a target to reduce our emissions by 40% come 2030. And now with the conclusion of the new agreements with Etana and NOA, our renewable pipeline has expanded to 765 megawatts, delivering nearly the same capacity as a single Kusile unit and thus strengthening our energy security and accelerating progress towards carbon neutrality. Naturally, this positions us as the largest contracted private renewable energy offtake in South African mining. And with this portfolio and come 2028, it will supply more than half of our South African energy needs -- it will generate over ZAR 1 billion in annual savings and avoid 2.6 million tonnes of CO2 each year, a 41% reduction from our 2024 levels. At the same time, our operations, high water demand and presence in water stream catchments make strong water stewardship critical. Through disciplined management practices, and our investment in advanced water treatment plants, we've significantly reduced portable water reliance and increased resilience and also contributed to margins. 4 of our operations are now fully independent of municipal portable water with our gold assets at 94% independence. Importantly, though, the water liberated through these efforts is equivalent to the needs of a midsized city and an essential social contribution in a water scarce country that's currently grappling with water challenges. Our commitment to communities remains equally strong. And through the Marikana renewal process, we prioritized addressing the needs of affected families and rebuilding trust. And a key focus was closing the housing gap for families, not supported by the AMCU Trust. I'm pleased to share that we delivered the final 2 of 17 houses, honoring our commitments to the widows. As a business, we remain committed to shared value with all stakeholders as we earn trust where we operate. Thank you, and handing over to you, Charles. Charles Carter: Thanks, Melanie. At Keliber, we are looking forward to hosting a Market Day in a couple of months and then a deep dive on the operation. When you get there, you will see a really impressive build and the team on the ground led by Hannu Hautala has done an incredible job in completing the build program on schedule. and where changes to spend were related to revised permit requirements late in the process. This is Sibanye's first greenfields project build and it has been incredibly well executed. The financial investment decision for the refinery was made in November 2022. In October 2023, the scope change for the effluent treatment plant was approved along with authorization to begin construction of the concentrator. Mechanical completion has been achieved for all components of both the concentrator and refinery with the exception of the rotary kiln at the refinery. As you may be aware, mining activities were delayed due to postponing contract signing until the completion of the deep dive analysis in the second half of last year. Commissioning of the concentrator crusher, conveyance system, sorting plant and laboratory is scheduled to be completed ahead of plan. The phased approach is a direct outcome of the deep dive work conducted by the corporate technical team. The guidance is that we will produce at least 15,000 kilotonnes to 20,000 kilotonnes of spodumene this year either for direct sale or as a feed into the refinery, if approved late year and subject to market conditions. Let me unpack the stage approach in a little more detail. Stage 1, EUR 783 million is the initial capital and excludes any other preproduction SIB costs. 237 kilotonnes of stockpile is required by year-end and counter the limitation put in the Syvajarvi mining permit being kept at 540 kilotonnes. Stage 2, spodumene grade of greater than 5.1% is targeted to ensure a sellable product, which will not incur penalties or rejection from commercial counterparties. Stage 3 refinery startup decision is conventional in the market assessment at the time. If it's a pause, we will continue with spodumene in sales. Stage 4 focus on technical grade will allow the team to sort up processing issues before quality issues. The team will continue to incorporate lessons learned from other facilities. Stage 5 decision to proceed with ramp-up to produce battery grade lithium. It must be noted that the qualification process for battery grade may take 6 to 9 months, which means battery grade could be commercially available, likely at the earliest in 2028. On the operational overview, it's important to note that the feasibility profiles had a number of satellite ore bodies in as well. As far back as 2023, we have kicked off mining optimization studies, which resulted in extended life only out of the Syvajarvi and Rapasaari pits. We intend to kick off further work on the other pits as well as this year work on the [indiscernible], which is a new pit, which will lie close to Rapasaari. When you're on site, you'll see that we have a strong land position with further exploration options ahead of us at the right time. And given all the exploration juniors that have paid claims outside of our lease boundary, I have no doubt that the lithium story has legs in Northern Western Finland for a very long time to come. The spiking SIB in 2008 in the graph on the lower left is mainly driven by the waste stripping for the Rapasaari pit. The cost overview will be updated as we get new insights from our cost optimization and debottling studies. And certainly, the team is focused on improving this picture. Here, the further optimization work is focused primarily on the following work streams. Mining study work to optimize pick design pushbacks and stockpiling. We're targeting here a potential EUR 10 million to EUR 15 million savings and the mine to deliver a stockpile of 50 kilotonnes oil by 30th June, about 1 month of inventory. As I noted, 237-kilotonnes to be on stockpile to ensure stable production in 2027. The concentrator study is targeted in spodumene grade about 5.1% to optimize spodumene concentrate sales and boost refinery capacity. Metallurgical work on grade versus recovery is in progress. First grade recovery curves issued for mining production planning were also taking place. Cost reduction and efficiency optimization targeting the potential unit cost decrease of $1,000 per tonne of lithium hydroxide has a number of components. We're reviewing the procurement for more cost savings, developing a full digital twin of the value chain to further optimize, we're studying the personnel and staffing optimization opportunities, and we're reassessing the maintenance strategy and costs post ramped up. So there's a lot of further optimization work on the go, and I'm confident that we'll start to see gains from there in the next few months. Refinery debottlenecking study is targeting higher throughput potential and overall yield improvement also on the go. This is about increasing refining capacity by adding a magnetic separator and resolving process bottlenecks. We're looking to boost the yield 2% to 3% recovery in lithium from the effluent treatment stream, reducing ETP costs by reviewing current initiatives and working with other third parties to support refinery commissioning and ramp-up phases. With that, thank you, and let me hand over to Charl. Charl Keyter: Thank you, Charles. Good morning to all participants. It gives me great pleasure to share the financial results for the year ended 2025. If we start with the key highlights. Headline earnings per share for 2025 increased 281% to ZAR 244 cents per share. During the same period, adjusted EBITDA increased almost threefold from ZAR 13 billion to just under ZAR 38 billion, 189% increase. As a reminder, we have set a target of reducing gross debt by 50% from the current ZAR 2.2 billion level over the next 2 to 3 years. But through the cycle, net gearing target of below 1x net debt to EBITDA remains consistent with our financial policy and has served us well during periods of constrained commodity prices. If we look at our net debt to adjusted EBITDA at the end of 2025, it is down 1.77x at the end of 2024 to 0.59x at the end of 2025. As a reminder, the dividend declared for 2025, as you would have heard, is ZAR 131 cents per share or 2% yield. Turning to the income statement. The revenue increased by 16% and costs were down 8% However, as highlighted on the previous slide, this translated to an increase of almost 200% in adjusted EBITDA. Noteworthy items for 2025 include the following: the loss on financial instruments of ZAR 3.8 billion was mainly due to the impact of the protective gold hedges that amounted to ZAR 1.7 billion as well as a revaluation of the Burnstone debt. With the sharp increase in the long-term price of gold, the Burnstone debt is now expected to be fully repaid, and that meant that we had to increase this liability by ZAR 1.7 billion. Another big item that impacted this period. Impairments for the year at the U.S. PGM operations Keliber and Kloof amounted to ZAR 15.8 billion. The impairment at Kloof was due to the reduction in the life of mine due to the removal of isolated blocks of ground for safety reasons. The impairment at the U.S. PGM operations and Keliber were the result of changes in economic parameters such as long-term prices. This was partially offset by the reversal of impairments at Beatrix, Driefontein and Burnstone due to the increase in the long-term price of gold. The transaction cost includes the $215 million or ZAR 3.6 billion settlement of the Appian claim. If we look at the net other costs, that benefited from credits in 2024 that were once off and did not repeat in 2025. It is important to note that taxes and royalties of ZAR 4.3 billion increased in proportion to our profitability. As already mentioned, a full year dividend of ZAR 3.7 billion or at the top end of the range, 35% of normalized earnings will be paid compared to the last dividend that we paid in 2023. This represents an increase of 146% on an absolute basis. In 2025, we had significant nonroutine cash impacts that affected our financial results. These included the Appian payment and the gold hedges that was put in place in December 2024 to ensure the ongoing sustainability of our gold operations. The question that a lot of people will ask is what would your financial results have looked like in the absence of these nonroutine items? The short answer is that the money available for the 3 areas of distribution would have increased by ZAR 5.2 billion to approximately ZAR 14.6 billion, and each bucket would have been allocated ZAR 4.9 billion. However, in 2025 on a look-back basis, we did allocate more to growth as one. The revised allocation model was not in place. And two, we were finalizing the Keliber project. Importantly for 2026, our growth capital plan, excluding DRD is ZAR 3.7 billion compared to the ZAR 9.4 billion that we spent in 2025. The growth capital excludes Burnstone and other projects in study phase. And as we generate all cash and earn the right to allocate more to each bucket, these will be considered. Our debt maturities remain manageable due to a well constructed maturity profile. Gross debt was ZAR 39 billion and less the cash on hand of ZAR 17 billion equated to net debt of ZAR 22 billion. Liquidity headroom is strong at ZAR 40 billion or roughly 5.5 months of OpEx plus CapEx. The next priority on our debt profile will be the upcoming renewal and downsizing of our 2026 $675 million bond, and the target date for completion is before the end of half 1, 2026, and this will be subject to supportive markets. Thank you, ladies and gentlemen. I will now pass the baton to Kleantha that will discuss market performance. Thank you, Kleantha. Kleantha Pillay: Thanks, Charles, and good morning, everyone. Markets were characterized by tariff uncertainty and geopolitical tensions throughout 2025 and into 2026. And this has driven the precious metals rally. Gold spot prices brought the $4,500 mark during December, up 73% since the beginning of the year and driven again by geopolitics, wars and a weak U.S. dollar. Gold ETFs were up 25% year-on-year to 4,000 tonnes and Central Bank buying continued. The platinum price rally has been driven largely by tariff uncertainty and was exacerbated by primary supply disruptions during the first half of the year. 3E recycling volumes were up 9% year-on-year. However, this is still below the pre-COVID levels despite better prices attracting hoarded stock. The tariff uncertainty has resulted in significant platinum flows into both the U.S. and China. Over 600,000 ounces of platinum was imported into the U.S. in July compared with normal levels of around 200,000 ounces. Between July and October, 1 million ounces of above normal levels moved into the U.S. And overall, platinum imports were up over 50% year-on-year. NYMEX stocks quickly reached a peak of about 650,000 ounces in April and then dropped back to 280,000 ounces in July. This as reciprocal tariffs were delayed and then PGMs were on the list of goods not subject to tariffs. Stocks then jumped back to around 700,000 ounces in October. As the outcome of the Section 232 investigation was delayed due to the government shutdown. Since then, the outcome has been announced as negotiations not tariffs. So uncertainty still lingers. Imports of platinum into China also increased steadily during the first half of the year and then fell back in the second half as prices became too high. Investors and jewelry manufacturers switched into platinum as gold just became too expensive. Overall, platinum imports into China were up 7% year-on-year to 4.5 million ounces, supported by the launch of the platinum futures trading on the Guangzhou Futures Exchange in November. Large daily trading volumes north of 6 million ounces per day in December resulted in the GFEX having to implement restrictions on trading. Platinum demand and along with the palladium during 2025 was largely driven by investments and speculation rather than by fundamental industrial requirements. Over the near term, we continue to forecast deficits for both platinum and palladium while the rhodium market balance will remain first to balance. The recent rally in prices has set us a new higher base and the heightened focus on securing critical minerals will continue to drive regional supply chains and with it price differentiation. And now moving on to lithium. The appreciation in lithium prices due in quarter 4 was driven by China's anti-evolution drive and the camp down on primary supply in that country. As well as from better-than-anticipated demand from battery energy storage systems. China changed the feed-in tariff model for renewable energy mid-2025, unlocking demand for energy storage systems. Prices moved from a low $7,000 per tonne levels up to just over $16,000 per ton currently. Inventory levels remain low as [ Cattle's ] lepidolite mine has yet to start producing again, and winter supply from brine production is reduced. Looking out to 2029, battery energy storage system demand is expected to grow at a 23% CAGR while demand from battery electric vehicles will grow at a 9% CAGR. The market is expected to remain in surplus over the medium term and will start tightening from 2028 to 2029. New supply will need to be incentivized by higher prices. Looking forward to the rest of this year, we remain bullish on gold. We believe that PGM prices have reset at a higher base, but will continue to be volatile. And similarly, we believe that lithium prices will continue to be influenced by Chinese decision-making. We will, therefore, continue to focus on what is in our control, performance and delivery at our operations. I'll now hand back to Richard to conclude. Richard Stewart: Thanks very much, Kleantha. And then I guess, just heading into the last section to wrap up with. So I think just starting off with our guidance for 2026 and the outlook. Starting off with our South African PGM operations, I think a very slight decline in terms of our production guidance in line with the overall life of mine profile that many of you will be familiar with, but no significant changes across the South African PGM operations. guidance of the South African gold operations is slightly lower than what we achieved this year or during 2025 and that is driven largely by the reduction of output at the Kloof operations, as Richard touched on earlier. I think in terms of the U.S. PGMs, we do see a slight increase in terms of output at the underground operations that is coupled with the ongoing work towards reducing the overall unit costs down towards $1,000 per ounce and associated with that, we do see an increase in some of the capital as we start making those investments. On the recycling, we have quoted our production guidance as a gold equivalent to ounces. So you'll see 400,000 to 420,000 ounces there. Please note that is gold equivalent, we produce a range of metals. But I think when looking at it on this basis, it does just demonstrate the significance of this business, almost 0.5 million equivalent gold ounces that we have built over the time of a, as we mentioned, low capital intensity, very low capital base. On Keliber, the guidance we are providing is we are anticipating producing spodumene concentrate as we ramp up the concentrate at this stage, whether or not that goes into refinery, of course, will be dependent on the decision that is made on the commissioning of the refinery. And in terms of total costs, we are guiding towards a total expenditure of about EUR 180 million to EUR 190 million. Just to unpack that briefly, approximately half of that, about EUR 90 million is the remaining project capital that was due to get spent predominantly in the first quarter and a little bit in quarter 2. So that is in line with the original project capital of EUR 780 million that we've shared with the market. And the balance is really the cost of the -- as we ramp up the overall operation. At Century zinc, this is likely to be the last full year of production on a Century zinc and again, largely in line with what was achieved during 2025. So just moving on to the strategy. I think as we outlined in my earlier slides, I think we've set a very solid base moving forward into 2026. The 4 key pillars that we have with regards to our strategy, being simplification, simplification of our operating model and our portfolio. Performance excellence, which I think you heard us touching on today and unpacking around safe production, operational excellence, optimizing our resources to maximize value and embedding sustainability in the way that we operate. Growth, which is initially focused on the value creation. We believe we can drive from our existing resources and therefore, unlocking organic value. And finally, a disciplined capital allocation model by bringing these 4 pillars together with the base that we've set in 2025, we are certainly confident that we can unlock significant value as we move forward into 2026, irrespective of the environment that we find ourselves operating in. I think just wrapping up with the overall strategy that we shared with the market at the end of January towards creating a future-focused metals business. In the short term, our strategy is very much focused on strengthening our business fundamentals. And this will be achieved through increasing our operating margins through our operational excellence simplifying our operating model and ultimately, simplifying our portfolio towards highest return assets and cash-generative assets. I think we're successful in this regard. We would be generating free cash through a disciplined capital allocation framework that looks at returning capital to shareholders, reducing our total gross debt and investing in the growth and sustainability of the business, particularly unlocking our inherent resource value. We certainly see that as ultimately continuing to build our business, building our production profile and continuing to build on our resource stewardship model across primary mining, secondary mining and recycling. So ladies and gentlemen, I think in conclusion, once again, thank you for joining us today. To try and sum up in 3 quick points. I think where we are sitting today as a business. I think we've had a solid operational output in 2025. And I think we're well positioned moving into 2026 to unlock the significant value that we have within our portfolio. I think we have seen a noisy set of financials. But looking through that, there is some real financial stability in the company. We've reduced our gearing significantly and certainly, at the current commodity prices that we are experiencing and the operational output that we are achieving, we look forward to some significant cash flow as we move forward. And then I think we finally have a resilience and a disciplined strategy. This is a strategy that is independent of the external environment and positions us for long-term themes which we see underpinning growth within the commodities market. So just in terms of way forward, as we did share with you at the end of January, we launched our strategy on the 29th of January. Today, we have shared our results. But as we move forward at the end of April, we will be looking to have a 2-day Capital Markets Day focused specifically on our international operations. That will be a webcast as well as an in-person visit in Finland to our Keliber operations, but we'll also cover both U.S. and recycling and Australian operations. And then towards the end of June, another 2-day Capital Markets Day in South Africa, specifically focused on our goals in PGM operations. So we look forward to engaging with you and getting those invitations out and thank you once again for joining us today. And of course, we're happy to take any questions you may have. Thank you very much, and over to you, James. James Wellsted: Thanks, Richard. Thanks, gentlemen. I've got a couple of questions here. I think we'll start with the Kloof questions. I'd say Keliber questions, sorry, missing my Ks up here. At Keliber, you note that initial value realization depends on producing and selling spodumene concentrate. It's a specified grade during the concentrator start-up. How do you assess the risk of achieving specification grade the early stages of ramp up? Can you give us some comfort around achieving these initial targets that's from Arnold Van Graan. Richard Stewart: I'll ask Ralph to come in and join me on some of the details. But just on a high level, let me make just unpack the sort of what we've spoken about the stage ramp-up and life mitigate risk. I think a lot of the work -- initially, the feasibility study for Keliber was, of course, based on mining all the way through to a final battery product. A lot of the work that we did in the second half of last year was around looking at these independent steps. So both the costs associated with them, the commercial liability associated with them and almost if you were to optimize, for example, just up to a spodumene concentrate what would that mean? What's come out of that work is essentially we are confident that we can look at this in different stages, that we can have an initial stage that in its own right is commercially viable. And of course, that gives us the option to remain at that point. But we are also aware of a lot of the work that's currently going on in the EU as well as Western economies generally things like Project Bolt, but also EU looking at sustainability and supply of critical minerals. And we think that this will have an impact on what the ultimate sort of pricing layout looks like in time to come. And that, of course, is a key aspect of how we look at the refinery and when and how we turn that on. So I'll let Ralph answer some of your more detailed questions. But I think just on a high level to note that, that was a lot of the work we have done and out of that, very confident that we can look at the project in different stages, each being commercially viable in their own rights. But Ralph, please feel free to add anything there. Ralph Lombard: [indiscernible] So just to give you confidence, we always visit the spodumene grade even during the feasibility. And we're quite confident we can push a grade in the high limits of more than 5% based on those test work. Also, the concentrator is very traditional technologies. So obviously, we test the recovery versus spodumene grade. So we're quite confident, and we're also confident in Syvajarvi, which is our first pit. It's quite high grade with the lithium oxide percentage of close to 1.1% and even more at certain stages which will also assist us in getting that higher grade. So from a Keliber perspective, we don't see any new risks because we are pushing a higher spodumene grade initially. Thanks. I hope that answers your question. James Wellsted: Thanks, Ralph. Second question is on impairment due to the longer-term lithium price forecast, stage start-up to preserve flexibility. Question is what long-term lithium price assumption underpins the revised recoverable amounts at Keliber and at what price level does the project fail to meet our hurdle rate? Richard Stewart: Let me maybe pick up on the hurdle rate question. And Charl, if I could ask you then to pick up just on the prices that we used for our impairments. So I think in terms of hurdle rates, let's put it this way. I think what you see in terms of the total project as we've shared with you, we currently have an all-in sustaining cost of about $12,000 odd per tonne. That is if we go all the way through to a battery grade. So we've always said we would obviously like to see prices I guess, well in excess of that in order to meet our internal hurdle rates. So looking at a region of 14,000 to 15,000 is where we'd want to see it sustainably at least going forward on that basis. I think importantly, of course, what we are assessing as part of this is also the opportunity on the earlier stage concentrate. And of course, that then is driven by volume in concentrate prices. I think critically, the long-term opportunity of this project is about supplying battery grade into the European ecosystems. We never built this ready just to us what you mean concentrate into more broader Chinese supply chains. So I think that's the opportunity that we've really got to this particular project. But Charl, would you like to pick up on the long-term price for the payment models? Charl Keyter: Thank you, Richard. So the average price that we've used over the life of the mine but obviously, I appreciate that the price falls up over the duration of the life of mine. The average price was just under USD 17,500 per tonne and that equates roughly to a long-term price of about USD 20,000 per tonne. James Wellsted: In a further question on what the remaining book value for Keliber is? Charl Keyter: Yes. So the remaining book value is ZAR 9 billion or just under EUR 460 million. James Wellsted: And Richard, for you, what are the next steps in the battery metal strategy? Richard Stewart: Thanks very much. I think as we shared at our Strategy Day, I think our long-term strategy as a company still remains to be able to supply metals that ultimately will support decarbonization and an energy transition. So that remains the long-term strategy. I think it's broader than perhaps just battery metals. But in the short term, our strategy is very much around optimizing the current portfolio. So as it stands today, we have our core operations of our South African gold, our South African PGMs, our U.S. PGMs, recycling and Keliber and that is where our focus will be and certainly our investment into our organic projects there. I think we will continue to assess the various projects, and that is where I did share with the market the growth framework that we've developed, which talks about the different metals we will look at in the jurisdictions we will consider. That will ultimately drive how we think about it. But as I say, our sort of immediate focus, our short-term strategy is very much on delivering from our core operations. James Wellsted: Thank you, Richard. Thank you for this wonderful presentation, well done IR team. Thank you. Can one expect this level of financial performance going forward, should the commodity prices hold? Richard, you can take that or Charl. Richard Stewart: Yes, happy to just take that more generally. I mean, I think as we mentioned on a high level, of course, I think the benefit of the prices that we saw coming through, gold, of course, we saw coming through throughout most of the year but the really big -- all of these prices ramped up towards the end of the year. PGMs really only started recovering in H2 with a significant ramp up in December. So of course, I think the type of financials that you've seen were based more on a back-ended portion of the year that delivered most of the value. But I think what we would look forward to prices remaining exactly the same. I think as I mentioned, we've had a noisy set of numbers and quite a few one-offs that we've had to deal with. So if anything under this environment, everything else the same, I would expect to see slightly improved financials with that noise out the window. But as Kleantha mentioned, the approach that we're adopting for the year ahead, I think we've got great tailwinds with the commodity prices. I think we see new bases being set, I think this market is being grown by a world that's scrambling to secure critical metal. So that's likely to remain. But it will be volatile. And certainly, that's the way we're positioning it and looking at our business for the year ahead. James Wellsted: Given the record gold prices, to what extent are the reserve reductions at Kloof, structural geotechnical constraints versus price-sensitive. Would a sustained higher gold price justify re-extending the mine life? Richard Stewart: James, let me take the first crack at that, and Rich, if you'd like to add anything. I mean I think critically, so of course, as has been noted, I think we do have slightly conservative prices that we use for reserves and the reason for that is we look to do our long-term mine planning and capital allocation based on what we still see as through cycle prices, ultimately, making capital decisions for really long durations. I do ever think Kloof is important to say that I don't think gold price was not a factor at all in terms of the decisions that we made. The decision to reduce Kloof was a safety decision, first and foremost. We did have some shafts that were coming to the end of their life. Anyway, that was part of the plan during the course of last year Kloof 7 shaft in particular, was planned to close. But then we lost volume due to safety and that decision, I think when we make a decision to stop mining areas because the safety, price is not a factor that gets considered in those decisions at all. So what we are looking at is Kloof for safety on operation that today is producing a lot less than it was obviously designed to. That means it's got a very high fixed cost base. And fundamentally, that means your unit cost goes up. According to the reserve price we use, i.e., through the cycle, we do not have long life reserves at Kloof, but we fully recognize that at these prices, Kloof remains profitable, and we can continue to mine it as long as the prices remain where they are. So we have put a year-to-year plan in place and we will continue to assess Kloof at those prices. And I think that brings significant benefits, as Rich mentioned, not only commercial and cash flow for the company but of course, also is a large employer. So we will keep Kloof going for as long as it is profitable and makes sense, but we won't be declaring or changing significantly the life of mine and reassessing capital at these numbers. James Wellsted: I guess a related question, but can you give us a sense of your gold operations, excluding DRDGOLD environmental liabilities? And how much of this is funded through environmental trust that, so I guess that's rehab. I'm trying to get a sense of the longer-term cash flow impact, should there be further closures or rationalization? Richard Stewart: Charl can I perhaps ask you to pick that up or Rich? Richard Cox: Happy to pick that up. Thanks for the question. So we do have a liability over the gold operations of ZAR 5.4 billion and of the ZAR 5.4 billion, ZAR 4.7 billion is funded and the balance then is with guarantees. Richard Stewart: Charl, anything you'd like to add to that or... Charl Keyter: No, Rich full cover. Thank you. James Wellsted: Thank you. Well, I've got a question for you, Charl, actually. So I'm going back onto you. How should we model the benefits of Section 45 ex credits in '26 and '27 in particular, and how this relates to cash flows. And then related to that is when are we expecting to receive the credits from 2023 and 2024's cash. And is the higher CapEx -- okay, that's a separate question. It's just a Section 45 ex. Charl Keyter: Yes. So in terms of 45 ex, the '23 and '24 payment should -- sorry, the '23 and '24 credits, we are expecting that in 2026. And then thereafter, we expect it to flow in the year following the claim. So the '25 claim to flow at the back end of '26 and some early '26 towards the back end of '27, give or take a few months. James Wellsted: Just on when do we expect in '23 and '24? Charl Keyter: Yes. So '23 and '24 claims we expect in 2026 due to the large amounts, and this being fairly new. And those amounts are subject to examination as it's referred to in the U.S. or as we refer to an audit. But again, we are working closely with our tax advisers, and we are continuously following up. James Wellsted: A question on the higher CapEx at SA PGMs in 2026. Due to some deferral spend in 2025, is it because of that? Or what other factors? Richard Stewart: Thanks, James. So I'll ask Rich to pick that up. I don't think it's so much a deferral in 2025, but we do have an increase in SIB around some specific projects. But Rich, perhaps I can hand over to you, please to pick that up. Richard Cox: Thanks, Rich. So there is a little bit of extra venture within our precious metal refinery as well as some trackless mining machinery. But largely year-on-year, it's the same except for those extra pickups in trackless mobile machinery and in the precious metal refinery. James Wellsted: So the related question to that. I'm not sure if it is relevant. But is capital spent on ore reserve development what type of development is funded from this CapEx and what type of development have funded from working operating costs? And in terms of the Kopaneng deeps project, Will it be a similar layout in arrangement to Siphumelele mechanized section and which words shaft would be used to transport mainland materials? Richard Stewart: Perhaps we'll ask Rich just to pick up on Kopaneng and Charl on the capital. Charl Keyter: Okay. So in terms of ore reserve development, it is effectively underground development work that's undertaken to open up access and prepare the cave mineral reserves for mining in the future production periods. But I have to specify here that the amount that gets capitalized is specifically in the off-rig development to open up those ore blocks. The reef plane or on-reef development is expensed in the period that it's incurred. I hope that answers it. James Wellsted: Position on the Kopaneng deeps layouts, et cetera. Richard Cox: I'll take that, James. So Kopaneng is a concept study at the moment. It's a very attractive downdip extension. So the strike is over 5 kilometers. And that has been the challenge of how to gain access, so a very good question. So initially, we will gain access on one of the flanks through a down-dip extension of the Bambanani asset. And then Khomanani offers a very attractive into the ore body. However, Khomanani 2 shaft doesn't have a rock pass. So we have to look at other down dip extensions and then possibly even a down dip development of a decline from Khomanani as well. So man and material probably through Khomanani and Bambanani in initial phases. But I think in the long term, there are other more attractive options for bigger volumes. We will be doing a pre-feasibility study in 2026 to sharpen up those carryforward options. James Wellsted: Question for Kleantha. How will the GFEX impact prices this year? Should there be physical delivery for May and June? Kleantha Pillay: Thanks for that question. Look, I think essentially, we're going to see heightened metal flows into China at least up until settlement date. So we've got a good price underpin their for platinum. And I think we're also going to see East rates moving up a little bit as we get closer to that date. Once that settlement date is reached essentially, you're going to have a very nice cleverly made platinum stockpile in China. And I think post that, you will get some price correction. But yes, that is the nature of investment demand, unfortunately. So I think we will see some underpin, and then we'll see a bit of correction post that settlement date. James Wellsted: Turning to the U.S. now. In the U.S. PGM operations, repositioning now for optimize, for currently -- sorry -- basically, the question is are we repositioning for current 2E PGM prices? Or is there further downside risk if prices soften? Richard Stewart: Thanks, James. So I'll pick that up initially. I think as we have shared and as trials unpacked, our objective in the U.S. is ultimately to get our cost base down closer to $1,000 per ounce. And again, the reason for that target is that because that's where we see sort of through cycle I guess, being a low point, and therefore, that operation being able to wash its own face sustainably for significant option to the optionality to the upside in terms of palladium prices. So we -- I think in terms of have we positioned it for the current palladium prices, I think right now, our objective, we restructured that operation 2 or 3 years ago to position it for the downturn that we saw. And our focus right now is on achieving those cost levels. Once we've achieved those then we will be able to assess the operations going forward and understand what a new base could look like. As Charles mentioned, we do have the opportunity to relook at Stillwater West in time. But today, that's not currently part of the focus. The focus will be on East Boulder and Stillwater West, so largely in line with the current production levels. James Wellsted: Thanks, Richard. Questions on streams and hedging. Could you give us an update on the streaming deals? I guess that the details of streaming deals and then unpack your hedging book for us, ounces per year and at what price. Richard Stewart: Thanks, James. So let me maybe take the streaming question. And Charl, if you could then follow on with some of the hedge questions. So I think in terms of the stream, we fundamentally have 2 streams within the company at the moment. One is at the Stillwater operations. That stream largely considers a palladium stream of about 4.5% and most of the gold that comes out of that operation. So that -- and that is a sort of evergreen stream. I think it does step down at some point to 2.5%, but that's still quite a bit out. So that's the one stream that we've got in place. The second stream that we have in place is on the South African PGM operations. That stream again considers all of the gold that is produced from those operations, which is about 1% of the total metal. And then if I recall, it's about 2.5% on platinum, which also steps down and that is there for the life of the current mine that does not include any extensions beyond that. So the platinum is limited to the current life of mine. Charl Keyter: Thanks, Rich. If we look at the gold hedges, so in December 2023, we entered into some hedging arrangements for our South African gold operations. These hedges were put in place to protect the downside, specifically around our legacy assets. They have -- all of the hedges have now been concluded at the end of December 2025. So there are no further gold hedges in place at the current moment. James Wellsted: Thanks, Charl. Charl, probably one for you again. What are the plans with the convertible bond due 2028, given that it is now in the money from Lorenzo Parisi... Charl Keyter: Yes. So we'll keep an eye on the convertible bond. It's got a 2028 maturity, but it's got a call option. So we can call it towards the end of the year. And we'll just monitor it carefully to see what we do in terms of the convertible bond. Based on current prices, it is in the conversion territory. But for now, the focus is on refinancing the 2026 $675 million bond, and we'll just carefully monitor the convertible bond going forward. James Wellsted: The value of that convertible bond on the balance sheet... Charl Keyter: That's $500 million. James Wellsted: In terms of simplification, Richard, might we think about the Finnish and possibly the Australian assets being potentially available for sale? Richard Stewart: Thanks very much. I think we've been sort of quite clear at the moment that the Keliber lithium project certainly forms part of our strategic priority assets. I think we see that as a very valuable asset. So I think the short answer to that is no. I think when we look at the Australian assets today, the new Century Zinc operations have been very successful. We remain very committed to those operations until the closure of those and then the completion of that particular project. In Australia, we have a couple of projects that are being assessed. We have the Mt Lyell project. I think as we mentioned, certainly, copper is a metal that we would be interested in if we could see value accretion in those opportunities. So Mt Lyell will currently be assessed, as Charl said, and understand whether or not that meets our hurdle rates and our overall capital investment criteria. And then we do have opportunities as well with the Phos 1 project to extend the New Century or to utilize the New Century infrastructure post mining of zinc. I think it would be a wonderful opportunity to see that infrastructure continue being used. Phosphate likely does not fit in with our sort of strategic focus going forward. So our priority would be to look at how we could maximize value, try and ensure the sustainability of that project going forward, but how we could get value from that unlikely to be a core investment thesis on the phosphate side from our side. James Wellsted: Thanks, Richard. Just some questions on renewable energy. Can you remind us what is feeding into the operations currently, volume, solar versus wind? Listen, I don't think we can give that breakdown right now, but we'll be able to get it. we got it. Okay. And what's in the pipeline? And when will it start feeding in? And then secondly, Sibanye Stillwater is advancing well on the clean energy front. What is the overall renewables ambition and what are the targeted deadlines? Richard Stewart: Thank you very much. Perhaps, Rob, if I could maybe ask you to pick up on some of those. Robert van Niekerk: Yes, Richard. I can talk to the renewable energy. At the moment, we've got Castle wind farm as well as the solar project, the Springbok Solar project, providing electricity into our operations. The Castle wind farm was commissioned in March. The Springbok Solar project was commissioned in September. And to date, they've generated 293 gigawatt hours. In 2026, we're going to have another 2 plants coming into play. They are both wind farms. It is Umsinde wind farm and the Witberg farm. And then by the end of '26, we'll be receiving more than 400 megawatts on an annual basis. This will exceed 700 megawatts in '27 and '28. So [ Les ], I hope that answers your question on the renewable energy. James Wellsted: Thanks, Rob. That's pretty comprehensive. Did you give the overall target. Sorry, I wasn't clear on that. Robert van Niekerk: Overall target is slightly about 700 megawatts, James. By the end of '28. James Wellsted: That's as big as the Castle unit. I think Melanie mentioned that. Pretty interesting. Let's get on to some of the SA PGM questions. What are the key drivers of the lower SA PGM volumes and the much higher costs? Richard Stewart: Thank you very much. Let me take that one. So I think the slight reduction in volume, our underground operations are, in fact, largely stable year-on-year. So we aren't seeing significant change there. Much of that downgrade of about 100,000 ounces comes from a combination of surface as well as some lower third-party assumptions on lower third-party [ pop Kloof ] processing material. So that's a predominant driver down. I think in terms of the costs, the operating cost base, I think, is actually pretty stable. We're seeing that coming in, in line with or, in fact, below inflation. The big increase is largely around, I think, as we mentioned a bit earlier, the sustaining capital, in particular, which is being driven by the new projects in our refinery, specifically our OPMs or other precious metals plants in our precious metals refinery as well as some upgrades to mechanized equipment. That's a really big driver on the cost side. James Wellsted: A question from Nkateko about production guidance being lower and then also a reduction. Is it the reduction related to third-party volume of own metal. I think Richard just answered that there's quite a big decline in the surface. And then we have got lower third-party metal. So I think that's pretty much been covered. A question on the Appian settlement, how it's been accounted for in the cash flow statement, Charl? Charl Keyter: Yes. Thank you. So the Appian settlement is in the cash flow from operating activities. So the number has been effectively paid or deducted in that number. So if you want to normalize cash flow from operating activities, excluding Appian, you have to add that back for the year 2025. James Wellsted: The cash flow table that we've got in the book, that would be under corporate audit. Charl Keyter: Correct. James Wellsted: Okay. Thank you. Question on uranium assets. When will there be a value unlock, Richard? Richard Stewart: Yes. Thanks very much. I mean I think we've got the 2 uranium sort of assets at the moment. The one is the old Beatrix 4 shaft or Beisa as it's known. That is an asset where we are still in the process of a transaction with a junior company, Neo Metals, who is looking to develop that asset, and we retain an equity exposure to it. That transaction is still in process. Unfortunately, still tied up with regulatory conditions and licensing that we're looking at there. But once that is closed, I think then we'll start seeing the opportunity to develop and get exposure to that project. The second big one is the Cooke Tailings project. That is the Cooke Tailings dam that is both a co-product gold and uranium opportunity. We have recently or in the process now of completing the feasibility study on that. It's going through assurance that will also be reviewed in the second quarter of this year towards a financial decision or looking at various ways that could potentially be taken forward. So that would be the second one. And again, during the next quarter, we would come up with a decision on how to move forward on that. So those are our 2 current exposures to uranium. James Wellsted: Thank you. I guess sticking on the growth theme, what accretive investment opportunities do we see in South Africa amid the strong gold and platinum group metal price environment and with Burnstone update. And then some questions on collaboration or other with DRDGOLD. Richard Stewart: Yes. Thanks very much. I think as mentioned, right now, our focus in terms of opportunities on our current resources. That's where we see best returns. I think any M&A in the gold space at this point in time is probably, I would suggest high risk depending on how you're looking at doing that, but given where the commodity cycle is, so that's not one we're looking at immediately. And again, on the PGM side, I think we've said we're very happy with our portfolio as we look forward to the commodity markets of PGMs and how we see that playing out. And we think we've got some of the best brownfield opportunities to develop. So that's where we see our best value coming through. In terms of further collaboration with DRDGOLD, been quite open in that regard. I think it's been an excellent collaboration. I think we've seen real value created for both companies. And certainly, as we look forward to the future, we are building -- continue to build a significant secondary mining business. We are doing a lot of surface mining and projects on our PGM side. We still have some gold opportunities in South Africa, and we'd like to see that business growing. So moving forward, I think we'd certainly be keen on more collaboration with DRDGOLD and see that as a long-term partnership and future with the company. James Wellsted: Yes. Just another angle on the DRDGOLD side. I guess from a gold bull or a gold bear's perspective, it's obviously worth about ZAR 25 billion now of 50% -- are we looking to dispose of the stake in time and what would trigger a sale? Or are we looking to buy -- increase our position in DRDGOLD in juice? Richard Stewart: We're definitely not looking for a sale, as I mentioned. I think that's -- we see a long-term opportunity to continue to grow with DRD and add a lot more value between our resources, their skills and the ability to grow together. So no, we're not looking to sell. I think in the long term, we would love to increase our stake in DRDGOLD but again, clearly now is not the time for that. I think we have different opportunities to invest capital now. But down the road, if that opportunity is right and we can do it in a value-accretive manner, certainly something we would consider. James Wellsted: And then I guess -- yes, another growth question, I guess, on copper for Sibanye, more copper exposure or not? Richard Stewart: Yes. I think as we shared in our framework that we'll use to assess external growth opportunities, copper was definitely a metal that I think we would like exposure to. But I think the critical question is less around what we want exposure to or not. The real question when we look at any form of growth is going to be, is it value accretive? So yes, copper is a metal we would look at. But if we're going to do it, it would have to be done in a value-accretive manner. And I dare say, where could we -- where do we see our strengths and opportunities? I think there are some niche opportunities, where we could really create value from copper, and we will continue to look at those. But that will be the underlying driver is it value accretive and where do we think we can unlock value. James Wellsted: Thanks, Richard. And then a question on our chrome strategy, I guess, production and revenues. Does chrome now play a negligible role given the rise in PGM prices? Not. And I guess maybe just touch on the deal with Glencore. Richard Stewart: Thanks very much. No, Chrome is definitely not negligible to us. I think it's clearly a byproduct in that regard, but it's a very important byproduct for us, one we've given a lot of attention to over the last 5 years and continue to look at going forward. So of course, in different commodity cycles, the relative impact of chrome is important. I think we've seen over the years how chrome has gone from being about 2% of our revenue basket almost as high as 15% during downtimes. At the moment, it's probably sitting around 10% to 12%. So it's still a very material number. And of course, even though it's relative to PGMs, that number in our earnings and bottom line is material. So we will continue to focus on all value opportunities and chrome is certainly a very important one. I think critically, the transaction that we did with Glencore, what that really looked around, I guess, was 3 big opportunities. The first one was at our Marikana operations. Historically, that chrome was sold to Glencore under, I guess, onerous terms for us. And that prohibited the potential expansion of some of those resources. And I think in recognition with Glencore by opening up those resources, we can all benefit. And that was the first opportunity from that transaction. So that really unlocked some of the value from the new projects that we have announced as part of our strategy. I think the second benefit was by looking at our chrome operations across the board at Rustenburg and Marikana. We think there's some real synergies that can be derived there. And then we have substantial chrome in surface tailings, which, again, I think with our combined skills, we've got an opportunity to unlock that. So no, not at all. I think we will be -- we are already, I think, if I'm not mistaken, the third biggest chrome producer. And I think with this going forward, we'll be a substantial chrome producer. So that's absolutely part of the strategy going forward. James Wellsted: And just first estimate for gold from Burnstone. Richard Stewart: I think perhaps before then, I need to say our first step is really to get an investment decision from our Board. So that we would be going to in quarter 2 or towards the end of the first half. So let me just make that clear. We do still need to go through that process. I think first gold from Burnstone would come relatively quickly. But I think the thing with Burnstone is it is a long ramp-up period. So while you access the ore body quite quickly and can get first gold quite quickly, it's about a 4- to 5-year period before you reach steady state of about 120,000 to 130,000 ounces. So that's sort of what that profile looks like. But again, we'll unpack that in more detail at our Capital Markets Day sharing those profiles with you. James Wellsted: Thanks, Richard. There are a couple here that I'll just answer myself, I think, before we go to the call. Any further payments due for this Appian settlement? No. they're done. A question on surface sources and projected life for Rustenburg PGM surface tailings. Again, that's been subject to a study, and we'll come to the market with all of the detail later this year when we have our Capital Markets Day. So if you can hold on for that, we'll be able to give you all that sort of detail. And then a question from Steve Shepherd about development assay results are no longer included in the disclosure. One wonders how analysts are able to forecast future head grades and yields without this crucial information. We'll speak about that offline, Steve, I have my opinions. Can we go to the call, please? Operator: We have a question from Chris Nicholson of RMB Morgan Stanley. Christopher Nicholson: I've got a number of different questions, believe it or not, after all the ones you've been on the webcast. I'll just limit it to a couple. Just the first one, just on Burnstone, are you in a position where you could guide on what CapEx for that project should be? It looks like your group CapEx this year is ZAR 17 billion roughly. So I'm just kind of adding what we should add on top of that to get the 120,000 ounces. Otherwise, we can't really credit you with those yet. Second question is just on costs. I think you've done a good -- I think to understand what's happening in the gold and SA PGMs. But just in U.S. PGMs, I see CapEx is up. But even if you strip that out, it does look like the underlying unit cost is up. Is this just a case of a bit of catch-up in forward development? What's driving that? Clearly, you still want to move down towards $1,000 long-term target, but it's going up in the short term. And then final one, I think you've lost over it a bit, but just on Keliber, that extra EUR 100 million over and above the project CapEx this year, that just seems strange given the project is now finished. What actually is that? Is this a working capital build? Or is there a working capital build in addition to that? And if it is, can you actually capitalize all those ore stockpiles? Richard Stewart: Chris, thanks very much. Good to hear from you. Let me -- I'll take the Burnstone and the Keliber question and then ask Charl, if he can pick up on the U.S. cost in particular. So Chris, just on Burnstone, we haven't actually released a full capital number. So as soon as we've got that feasibility done, we'll do that. But what I can share with you is that the large project capital at Burnstone has already been spent. So when we turn that project off, the underground infrastructure is developed, most of the surface infrastructure is developed. The plant is largely done. So the capital that will really be required on Burnstone is essentially opening up that ore body. So it's development capital predominantly. So what we're really looking at is the cost from going from start-up to steady state. For those who are familiar, it's a Kimberly ore body, which means there's a lot of development required if you really want to set that mine up for the long term, and that's our intention. So it's not a big slug of capital that will come through. It's essentially opening up and development capital. So if you were going to think of a mine ramping up its ORD style capital that will be capitalized preproduction. So it's not big project CapEx, Chris, but we'll certainly look to give you the profiles on that as those studies are completed and made public. I think on Keliber, so let me just unpack that and so we can be absolutely clear on those numbers. So we always said -- or the project CapEx for Keliber was EUR 763 million. That number has not changed. The last portion of that number, i.e., the EUR 90 million that I quoted gets spent in 2026. So -- and that gets spent during the first quarter of -- first quarter and a little bit into the second quarter. So the total project capital remains at $763 million. It hasn't changed, and the last $90 million is being spent in Q1 and Q2 of this year. The balance to get us to the $180 million, so the balance, let's call it, of $90 million, that is effectively preproduction costs as we start up. A large amount of that will likely be capitalized as preproduction, but it's preproduction and sustaining capital type costs, Chris. So the project capital remains as is. We're just spending the last $90 million now, but it is part of that original $763 million and then the other $90 million preproduction. I hope that clarified it for you, Chris. Charl, do you want to pick up on the U.S.? Charl Keyter: I does, I does. Richard Stewart: Super thanks, Chris. Charl Keyter: Chris, on development, we do have quite an expanded development set of activities, particularly at East Boulder. We also have some incremental capital. So we're replacing the bridge at Stillwater East that runs between the East mine and the concentrator and mill. And that was capital we deferred in the last couple of years. We're now getting into it. And then we do have some mechanized bolters starting to come in. So there is that capital. And then we also have the initial spend on rock dump and tailings expansion at East Boulder as well. So all in, you've got -- you do have a sustaining cost number that is higher than you're probably expecting. But I think the underlying run rates that you're getting from the operators is what you can see going forward. And as I outlined in the presentation, you do have a mixed year of activity here. We've got steady-state performance and then we've got a big shift into the transformative work where you really start to see the benefits on a cost basis and a productivity basis probably at the tail end of the year and into next year. So those will start to be daylighted at Stillwater East late in the year, but they will only get into East Boulder next year. James Wellsted: Is there another question on the line... Christopher Nicholson: Can I just ask is $130 million a good stay in business CapEx level then for kind of 300,000 ounces at Stillwater. Is that what we should assume going forward? Richard Stewart: Chris, is that -- you're talking on the U.S. operations? Christopher Nicholson: On the U.S. operations, yes. Richard Stewart: Yes. That's correct, Chris, broadly in line with the guidance that we put out. That's right, yes. James Wellsted: We like you. We'll give you another go. Operator, is there another question? Operator: Yes, we have a question from Adrian Hammond of SBG Securities. Adrian Hammond: Just a question on your recycling guidance. I know you've now consolidated the ops. But if on my calculations, then Columbus volumes have materially decreased. Could you just unpack that for me? And then for another one on Kloof for Charl perhaps, just the closure liabilities, do they cover the pumping costs that you foresee there? I'm just thinking about the aquifers that Kloof sits on. I know you incur about ZAR 1 billion a year for Cooke pumping. Does the liability you've mentioned cover the pumping that's envisaged for Kloof? Richard Stewart: Adrian, good to hear from you. Listen, I'm going to ask Grant, I think he is on the line, just to pick up your question on the recycling breakdown. I don't believe there's been a significant drop-off at the Columbus facility, but let me ask Grant just to unpack that. Just in terms of Kloof, I'll ask Charl if he does want to come in with any numbers. But just high level, Adrian, I think where Kloof is very different to the Cooke operations. So that's ZAR 1 billion you just quoted now, which is the pumping across Cooke 1 to 4. That's very interconnected with other operations. So on the northern side, we have the Harmony shaft. And on the southern side, we obviously got South Deep. And that is why a lot of that pumping has had to remain while we develop stable systems to be able to ensure seal from the surrounding operations as part of a connected basin. Both Kloof and Beatrix are stand-alone operations in that regard. So when Kloof ultimately comes to closure, it's not interconnected to any other operating mines. So essentially, that can be flooded in line with our environmental permits. So the pumping issues and liabilities that we have previously experienced at the Cooke shaft are not applicable to either Kloof or Beatrix. It would, in time, become applicable to Driefontein. And I think that's where there's obviously an important conversation around extending life of mines around Driefontein and what that future liability may look like. So that is one where that's got to be looked at down the line in the future. Driefontein still got 10 years ahead of it. But for Kloof and Beatrix, that's not a problem on the liability. Charl, I don't know, if you want to just add any numbers to that, and then we can -- I don't... Charl Keyter: No. Yes, we would not provide for pumping or any liabilities because as you've explained, it's -- we have the ability to flood and it's not similar to the Cooke scenario. So no, well covered. Thank you. Richard Stewart: And then Grant, if you are online, do you just want to pick up on the recycling question of Adrian? Grant Stuart: Yes, sure, Richard. online. Adrian, good to chat. Yes, there hasn't actually been much of a decline on the ounces profile delivered by Columbus. If you look on '24 and '25, it was a 2%, I think, decline. I think there is a significant shift though in the market. So there is going to be a lot of different industry play coming out and strategic moves and shifts that will have to take place. And I guess we'll unpack that for you during the April '20 discussion, where we outlined some of our broader recycling strategy. James Wellsted: Thank you. Operator, are there any calls on the line still? -- delay. Thanks a lot. I think that's it really. only one more question. There's always one from Arnold Van Graan about share buybacks mixed. Richard, how do you feel about that? Richard Stewart: Arnold, that's a great way to end this, and thank you very much. Good to hear from you this morning. No, listen, I think as we shared in our Strategy Day, the capital allocation model we're looking at, at the moment is very focused on the 3 pillars. So we've got our dividend policy that largely talks to about 1/3 of distributable free cash flow going to shareholders, 1/3 going to paying down our gross debt, which I dare say should reflect in our overall share price as we get that down. And therefore, hopefully, we would see shareholders benefiting from that capital uplift and then towards growth. I think until such time as we've got our debt in line, for now, we will be sticking to that dividend policy, and we wouldn't be considering any extra. Of course, if commodity prices stay where they are, and we've achieved those objectives on the gross debt side, then we'd have to look at where that policy or the capital allocation strategy lies. But for now, we'll be sticking to our dividend policy, Arnold. Thank you very much. I guess, is that the last question then? If that's the last question, then perhaps just from my side, thank you very much, everybody, for joining us again. As mentioned, this is just one in a series of engagements we're looking to have with the market. I think we can tell that there are still a lot of questions and a lot of details we need to share around some of the projects in particular that we've got, and we certainly look forward to unpacking that with you during April and June of this year. So thank you very much for joining us again. Please have a good and a safe day. Thank you.
Operator: Thank you for standing by. Welcome to the Danone 2025 Annual Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. Our speakers today will be Antoine de Saint-Affrique CEO; and Juergen Esser, CFO. I would now like to hand the conference over to your speaker today, Mathilde Rodie, Head of Investor Relations. Please go ahead. Mathilde Rodie: Thank you. Good morning, everyone. Mathilde Rodie speaking, Head of Investor Relations. Thank you for being with us this morning for Danone's Full Year 2025 Results Call. I'm here with our CEO, Antoine de Saint-Affrique; and our CFO, Juergen Esser, who will go through some prepared remarks before taking your questions. And before we start, I draw your attention to the disclaimer on Slide 44 of the presentation related to forward-looking statements and the definition of financial indicators that we'll refer to during the presentation. And with that, let me hand it over to Antoine. Antoine de Saint-Affrique: Thank you, Mathilde. Good morning, everyone, and a warm welcome to you all. Thanks for joining Juergen and me today for our full year results '25. Moving to Slide 3. Before we focus on what is a very good set of results, I thought it was important to talk about the recent development regarding Infant Milk Formula. It is obviously top of mind for everyone and to start with and most importantly, for all the families that rely on us daily. I know how much the current events are disturbing and worrying for them. This is the last thing you want to live through when you are feeding the most precious person in your life. We obviously take this extremely seriously. And there, let me be clear, food safety and quality are -- have been and will always remain our top priority at Danone. We are confident in the safety and quality of our products, which are supported by extensive scientific evidence and rigorous testing. In the light of recent events, we went back to review the level of consumer complaints over the period in question, and we didn't find any cause for concern. However, in the context of the ongoing evolution of authorities' requirements, we are working closely with those national food safety authorities and are taking action to comply with their new requirements. We have been recalling from relevant markets, essentially in Europe and now in the Middle East, batches of Infant Formula products. While doing this, our focus is on supporting parents and health care professionals, providing clear information and helping to restore trust as their trust makes all the difference. Let me now get into the results on Slide 4. We are pleased to share with you another set of strong and good quality results. The numbers you see on this chart are more than figures on the page. They reflect the hard work, the commitment, the passion of the Danoners. And I really want to thank each and every one of them for that. '25 marked the first year of Chapter 2, our Renew strategy, and we delivered a strong plus 4.5% like-for-like sales growth. Importantly, this performance was consistently underpinned by positive volume mix throughout the year, contributing plus 2.7% in '25. This quality growth, combined with disciplined execution and continued productivity gains, resulted in a plus 44 basis point improvement in our recurring operating margin, reaching 13.4%, all while continuing to invest behind our capabilities, our brands, our science and our innovation. Our solid operational performance and strong financial discipline also translated into recurring earnings per share growing plus 4.6% in '25, reaching EUR 3.80, close to all-time high and a robust financial position with EUR 2.8 billion in free cash flow generation. Last but certainly not least, and fully aligned with ambition to create sustainable value, we further improved our ROIC in '25. It is now firmly anchored into double-digit territory with a 62 basis point increase versus last year. And what is important as well, we achieved all of this while driving sustainability in a way that is focused and impactful because we firmly believe it is essential to the long-term resilience of our business. This year, we were again recognized on the CDP Triple A list, reflecting our leadership in transparency and performance on climate, water stewardship and forest preservation. We also achieved worldwide B Corp certification. These milestones marks the culmination of a decade-long journey and highlights our long-standing commitment to combining strong business performance with positive social and environmental impact. Taken together, the '25 performance you can see on this chart reflects the strength and the resilience of our unique health-focused portfolio. And this performance is deeply connected to the structural trends that are reshaping the food industry. Moving now to Slide 5. As I've shared with you before, I believe that the food industry is at a tipping point. Around the world, people are increasingly aware that what they eat and their health are more intertwined than ever. With every new insight into the power of nutrition, consumers are raising their expectations, and they are seeking better choices for themselves and for their families. Health through foods has never been more relevant. This is exactly where Danone is uniquely positioned to lead. Our health-focused approach, supported by science and a strong focus on delivering high-quality offerings position us uniquely to provide nutritional solutions that support people at every stage of life. It is not just what we do. It is what consistently guides our strategy and execution, and we see the results. Our categories continue to outperform the broader food and beverage industry, fueled by powerful and converging trends, all pointing in the same direction. Consumers everywhere are choosing with health in mind. Protein, for instance, are essential for good health at every stage of life and demand continues to rise, particularly among people using GLP-1 who are actively seeking ways to preserve strength. But consumers today are looking for more than just higher protein. They increasingly see nutrient dense, high-quality protein supported by the right dietary complements. This is where fibers play a critical role. Most population worldwide consume 20% to 30% less fiber than recommended despite very strong evidence linking low fiber intake to a high risk of major noncommunicable disease. Fibers are also fundamental to gut, immune and metabolic health, and they help body to absorb and use protein more effectively. Protein and fibers represent a major long-term growth opportunity, and we are strengthening our leadership accordingly, building on our capabilities in the field of biotics. Finally, Medical Nutrition continues to demonstrate its positive impact on the life of patients. As we highlighted at our CME in June '24, the right medical nutrition helps patients stay on their treatment over time, recover more effectively, especially after surgery and return home sooner. Faster recovery not only improves patients' life, it also delivers clear health economic benefits for the health care system. Taken together, these trends point to a clear reality. People everywhere now expect their food to actively support their health, and this is where Danone is uniquely positioned to lead. With close to 90% of our portfolio scoring 3.5 stars or more under the Health Star Rating system, we deliver every day nutrition that is high in protein, rich in fiber and grounded in biotics alongside medical nutrition that makes a meaningful difference in people's lives. And it's nutrition that tastes good. These long-lasting trends underpinning our performance, as we can see on Slide 6. Our 4.5% like-for-like sales growth in '25 has been powered by our fast-growing platforms, notably high protein, gut health, infant formula and medical nutrition. Starting with high protein. Our rapidly expanding range built on the strong product superiority and differentiated functional benefit continues to drive penetration across geographies, supported by the ongoing rollouts of innovations. In the U.S., Oikos PRO exceeded EUR 1 billion revenue in '25, a clear demonstration of the scale and relevance of this platform. The broader shift towards value-added dairy is also supporting the growth of our Danone brands with a strengthened portfolio, including [indiscernible] the brand also surpassed EUR 1 billion revenue mark in '25, delivering high single-digit growth for the year. Gut health and fiber are also strong growth drivers, particularly for Activia, where we have started to reclaim our leadership territory in gut health. With innovations in kefir and fiber enriched products, Activia returned to growth in Europe in '25. Also in Europe, Alpro is another key growth engine. As the leading plant-based brand and EUR 1 billion platform, we are driving category momentum through innovation. We continue to evolve Alpro beyond an ingredient-led dairy alternative into a benefit-led plant-powered nutritional complement to dairy, something that you can see in our latest packaging. And we are expanding our product range, especially in yogurts to meet this growing demand for flexitarian diets. In Infant Milk Formula, our premiumization strategy around Aptamil continued to deliver strong results in '25. Aptamil achieved double-digit growth, enabled by the renovation of our core range and the rollout of superior innovation, addressing specific nutritional needs, supporting the healthy growth and development of children. We also continue to expand our reach across markets, building on our strong momentum in China and delivering remarkable performance in India and across Southeast Asia, where, for instance, the Aptamil business doubled in Vietnam in just 1 year. In Medical Nutrition, we are seeing strong growth across both adult oral nutrition and tube feeding. Our flagship brands, Fortimel and Nutrition together now represent a rapidly growing EUR 1 billion platform. We continue to expand our portfolio, including hybrid protein solution designed to improve tolerance and adherence, helping more patients access the nutrition support they need. So as you see, our growth engines are firing and the momentum is clear. But delivering today is only part of the story. Moving to Slide 7. At our last CME, we set out the ambition for Renew Chapter 2, doubling down on the fundamentals while further transforming the business. This is what we started doing in '25, launching science-based innovation, staying true to our health-focused approach while pivoting the way we look at our categories to unlock significant new opportunities. As I mentioned earlier, fibers play a crucial role in health. And at the end of last year, we launched Oikos Fusion, a high-protein product enriched with prebiotic fibers to support digestive health. It is particularly well suited to consumers looking to manage their weight, including those using GLP-1 medication. In the same spirit, Alpro recently launched its new Meal To Go drinks, nutritionally balanced plant-based meal replacement designed for busy lifestyle offering 20 grams of protein and 26 essential vitamin and minerals. We are making the healthy choice, the easy choice. We're also reclaiming our leadership where it matters most, beginning with gut health. We are reestablishing Activia as the global reference in gut health. In markets such as Japan and Australia, where we are winning, we leverage the fact that our Activia products contain probiotics up to 100x stronger than regular yogurt, supported by scientific evidence and studies, and this is only the beginning. Finally, we're committed to further broaden our channel footprint to further reinforce the resilience of our model, and this is happening. In '25, channels outside mass retail grew significantly faster than mass retail. Our specialized channel, be it pharmacies, hospital, home care delivered double-digit growth. We are reaching more people in more places at all stages of their lives. Let's move to Slide 8. We keep focusing on execution and competitiveness, strengthening some of our key capabilities. In operations, we have made significant progress over the past years. We are operating with greater agility and speed, and we are proud now to rank 10th in the Gartner Top 25 Supply Chains, the highest ranking for an FMCG company. In '25, we continue to deliver strong productivity gains, supported by the growing digitization of our operations from the shop floor to the shelf. We are accelerating our transformation. Through our Industry 5.0 approach, we are equipping our teams and factories with advanced digital and AI-enabled capabilities from automated quality system to predictive maintenance and real-time performance visualization. Our Industry 5.0 Academy is upskilling 20,000 employees globally, while a network of 10 pioneering factories is piloting our digital factory of the future. Beyond manufacturing, we're also strengthening digital execution across our end-to-end value chain. AI-enabled planning hubs, increasingly automated shared service centers and new in-store visualization tools are improving accuracy, speed and efficiency with which we serve our customers and our shoppers. While we are making progress on a number of fronts, not everything is working as it should, and there is still much more work to do to address underperforming areas. It is clear that in the U.S., our performance in '25 didn't meet our expectations. We are not where we should be, and we know we need to step up our game. Winning in this market means going further than protein or specialized nutrition. It means elevating the rest of our portfolio from creamers to nonprotein yogurts to plant-based and showing up there is -- there with the same strength and relevance that we do today in High Protein or SN. As you certainly have noted, we appointed a new Americas zone President, [ Henri Bruxelles ] and made broader organizational changes to rebuild a culture of winning, one anchored in execution excellence and the right operational intensity. We've made significant leadership change, and we are starting deploying [ at space ] innovation proven in other geographies and align with consumer shifts. Alongside addressing underperformance, we are also broadening our reach by investing to capture new growth goals. We are expanding capacity where it matters most in High Protein, Skyr, Kefir, Alpro and Medical Nutrition across Europe, China, the U.S. and Japan. These investments will progressively allow us to capture growth opportunities to their full extent, support very strong demand in High Protein and enable us to better serve emerging trends across the rest of the categories. Moving to Slide 9. Through sustained long-term performance and build durable competitive advantage, we are strengthening the capabilities that truly differentiate Danone. We believe the future of dairy lies in empowering farmers to build more resilient and sustainable supply chains. That is why we launched the Danone Milk Academy, the first of its kind, multi-year global platform, bringing together academia, technical partners and Danone expertise to provide farmers with practical knowledge, science and digital tools. With an approach tailored to different regions and to farm size. The Milk Academy will strengthen the dairy supply chain and accelerate the long-term transformation of dairy farming. The same spirit underpins our Partner for Growth initiative. More than a program, it is a catalyst for share value, moving us from transactional relationship to deep partnership with our suppliers. Since its launch over 2 years ago, it has allowed us to boost efficiency, unlock capacity and advance our sustainability goals. We are deliberately building a resilient multi-sourced supplier ecosystem, combining the right diversity and the right quality and partnering with suppliers who share a long-term collaborative mindset. Importantly, this approach also strengthened our innovation capabilities and enhances the robustness of our supply chain. Speaking of innovation, we keep investing in cutting-edge research to build lasting differentiation. We recently inaugurated our OneBiome Laboratory in Saclay, accelerating research in the gut microbiome by leveraging proprietary scientific data, clinical studies and deep consumer understanding. We also acquired, as you know, The Akkermansia Company, bringing a clinical proven biotics strain with the potential to reinforce the gut barrier, a capability that will increasingly drive further differentiation across our products. Finally, we continue to invest in skills and leadership. Through initiatives such as DanSkills, we are equipping our teams with the critical capabilities of tomorrow, driving for continuous functional and leadership upgrade. We also pursued a cultural transformation initiated 4 years ago, one made of focus on execution, passion for consumer and one we are performing and transforming go together. Let's move to Slide 10. As part of Renew Chapter 2, we also made it clear we will move to the front foot on acquisition. In '25, we started executing on that ambition with a strong focus on strategic fit and disciplined governance. Following the acquisition of Kate Farm, we now have a $500 million Medical Nutrition platform in the U.S., making it the first time we have achieved meaningful scale and reach into the health care system and hospital infrastructure in the country. Importantly, this platform is built on a product portfolio that is truly differentiated, addressing patient needs for more complete and healthier nutrition. The integration with our existing Medical Nutrition business is progressing extremely well with Kate Farm delivering strong growth. Our ambition is clear: to build a powerful growth engine in North America. In doing so, further rebalance our category mix in the U.S. We're also pleased to have acquired last week an additional 1% stake in our Australian dairy joint venture with Saputo following the exercise of our call option. Concretely, this brings our ownership to 51%, resulting in the financial consolidation of the business. We operate in dairy across Australia and New Zealand through 3 strong brands: YoPro, Activia and Ultimate, which together generate over [ EUR 100 ] million in revenue in '25. We hold a leading position in both High Protein and Gut Health. And interestingly, this is where our High Protein journey began as early as 2016 with the initial launch of YoPro. So taken together, this move illustrates how we are actively shaping our portfolio to support sustainable long-term growth. And with this, let me hand it over to Juergen. Juergen , over to you. Juergen Esser: Thank you, Antoine, and good morning to all of you. Let me start our financial review with our sales performance on Slide #12. As you have seen from the press release, we closed year 2025 on a strong note with like-for-like sales growth of plus 4.7% in Q4, closing a year of consistent delivery. Importantly, growth was again driven by volume mix at plus 2.5%, while price added plus 2.1% in Q4. As we deploy Chapter 2 of our Renew Danone strategy, we leverage our well-diversified portfolio, delivering quarter-after-quarter sustainable growth across regions and categories. This becomes even clearer when turning to Slide #13. For the full year, like-for-like sales grew plus 4.5% with all regions and all categories contributing. We will dive into regional details shortly, but let me mention here the standouts. First, Europe, which has delivered a very solid year with now 9 consecutive quarters of positive volume mix and continued progress in the dynamics of its EDP portfolio. And the undeniable highlight of the year 2025, CNAO, which delivered exceptional performance across all subregions from China to Japan to Oceania. This should not distract from the performance in North America, which did not live up to our expectations, as Antoine mentioned, especially in the second half of last year, a key priority for improvement in year 2026. And finally, our more emerging markets in Latin America and Africa, Middle East. We do not talk much about them, however, worth stating that they delivered a very sound year 2025 and finished on a high note in the last quarter. Those regional dynamics are also reflected in the growth reported by category. In our EDP business that delivered a very solid year with plus 3.5%, benefiting from a very dynamic market environment all over the world. In our Specialized Nutrition business that posted like-for-like sales of plus 7.4%, reflecting strong demand for both our Infant Milk Formula as well as our Medical Nutrition products. And lastly, in our Waters business that grew by plus 1.9% in 2025, the solid result considering the very uneven weather patterns across the region. Before turning to the regional review, let me comment on our sales bridge for the year on Slide #14. Our plus 4.5% like-for-like sales growth was driven by a plus 2.7% contribution from volume/mix and a plus 1.8% contribution from price. Outside of like-for-like, we saw a negative 4.4% currency impact due to the appreciation of the euro against most currencies. Scope was slightly negative at minus 0.4%, reflecting the deconsolidation of Horizon Organic in early 2024, partly offset by the acquisition of Kate Farms from the third quarter onwards. Altogether, reported sales ended broadly stable at EUR 27.3 billion. Let's now take a closer look at the performance of each region, starting with Europe on Slide #15. Europe confirmed its positive momentum in Q4 with plus 2.5% like-for-like sales growth and continued positive volume mix at plus 1%, while price contributed plus 1.5%. As you can see from the chart below, performance was steady throughout the year as the team continued to progress in the transformation of the EDP portfolio. Also in this last quarter of the year, high protein, kefir and Skyr all grew at double-digit rates. Our work on Activia, refocusing on gut health and Fibers is in parallel starting to pay off as the brand delivered positive growth in Q4 across the region, including in key countries such as France, U.K. or Spain. Too early to declare victory, but the trajectory is promising. Next to Dairy, the Plant-based portfolio continued to perform strongly with Alpro again posting very solid competitive growth. The growth in Specialized Nutrition was driven by especially the solid momentum in Adult Medical Nutrition with strong performance from brands like Fortimel and Nutrison. And our Waters category delivered a very strong finish to the year, notably driven by Volvic with its innovations in flavored and functional water as well as by the Evian brand. For the full year, Europe grew plus 2.3% like-for-like with 1.9% contribution from volume mix and solid recurring operating margin increased to 12%. This reflects the combination of solid gross margin improvement, thanks to operating leverage and significant reinvestments behind innovation and product superiority to fuel the growth momentum for the years to come. Let's now move to North America on Slide #16. The last quarter of the year in North America was soft with plus 0.7% like-for-like sales growth driven by plus 1.3% price. We continue to see strong demand for our High Protein platform that keeps growing at double-digit levels, supported by consumer shift towards healthier choices. The Oikos brand is going from strength to strength, further expanding its market shares in the category. The growth of Oikos is unfortunately, to a large extent, offset by the unsatisfactory performance of our Plant-based and Coffee Creamers business. In Coffee Creamers, we have seen our market share is increasing progressively. We are, however, clear that we need to double down on our efforts to bring International Delight back to where it belongs. To address the fast emerging clean label segment, we launched under the 2 good brand, a new coffee creamers range offering low sugar levels with no artificial sweeteners. Year 2026 shall mark for our Coffee Creamers business a year of recovery and return to growth, specifically from the second quarter onwards when base of comps will ease. Next to EDP, our Medical Nutrition business had a strong quarter. The legacy Nutricia business is growing well, led by the Neocate brand, while Kate Farms, as Antoine mentioned, continues to scale rapidly as we progress on the integration. This will be more visible from the third quarter of 2026 onwards, but we will reflect Kate Farms in like-for-like. For the full year, North America grew plus 2% with plus 0.6% contribution from volume mix and plus 1.4% from price. Recurring operating margin stood at 11%, down by 39 bps, reflecting the need for investments to rebuild top line momentum. Let's now go to China, North Asia and Oceania on Slide #17. The CNAO zone delivered an exceptional year, closing Q4 with like-for-like sales growth of plus 10.4%, driven entirely by volume mix. We continue to win in Specialized Nutrition, where we achieved double-digit growth with a similar performance in Infant Milk Formula and Medical Nutrition. In IMF, Essensis continued to drive market share gains. In a normalizing category context after the Dragon year boost, we remain focused on our competitive performance. Thanks to the great job of the team around Bruno, we are very confident in our ability to keep growing through premiumization, further consolidating a still fragmented market. Next to IMF, we saw the demand for our Medical Nutrition brands, notably Fortimel Neocate remaining very strong also in the last quarter of the year. In EDP, Japan delivered again a remarkable performance in Q4, thanks to its 2 functional brands, Oikos and Activia. As Antoine mentioned, we are pleased to consolidate in the future the dairy joint venture we have in Australia. Australia is like Japan, a very functional market where High Protein and Gut Health platforms are thriving, which bodes well for the future performance of our EDP category in this part of the world. Finally, in Waters, Mizone completed a strong year with stable performance in Q4 in what is traditionally a very small quarter for the category. We have intentionally managed stocks down to minimum levels as we are, as we speak, launching with the Chinese New Year, several renovations gearing up for the 2026 season. For the full year, CNAO sales grew plus 11.7%, entirely driven by volume mix of plus 12%. Recurring operating margin was slightly lower at 29.2%, reflecting increased investments to support further market share gains, notably in Specialized Nutrition and in Waters. Let's now look at Latin America on Slide 18. The region delivered a strong Q4 with like-for-like sales growth of plus 8.3%, predominantly price-led. EDP delivered competitive growth across the region, and let me here highlight particularly the Danone brands as well as the high protein platforms with the Oikos and YoPro brands. Specialized Nutrition continued its strong momentum, driven by Aptamil and Medical Nutrition across both pediatrics and adult ranges. And finally, Waters that returned to growth in Q4 after a difficult season. For the year, Latin America grew plus 6% like-for-like. We are making good progress in addressing the margins in the region and recurring operating margin increased significantly to 6.4%, nearly 3 points higher than a year ago. This was driven by underlying margin improvement as well as IAS 29 effects turning positive. Finally, let's have a look at our AMEA region on Slide #19. The region closed year 2025 strongly with like-for-like sales growth of plus 8.3% in Q4, driven by plus 5.5% from volume mix. In EDP, Dairy Africa continued to post strong volume mix-led growth. Specialized Nutrition grew at double-digit levels with strong performance across all subregions. The Aptamil brand kept gaining market shares, and we believe we have plenty of headroom to further expand in the region. For the full year, AMEA delivered plus 5.6% like-for-like with volume mix of plus 1 point -- 2.1% and price of 3.5%. Recurring operating margin was steady at 10.4%. I suggest we concluded the performance review of our regions. And so let's move on to the margin bridge for the full year 2025 on Slide #20. Our recurring operating margin increased by plus 44 bps in 2025, reaching a level of 13.4%. The main driver was once again the expansion of our margin from operations at plus 77 bps. This is reflecting our focus on volume-led growth as well as continued productivity gains across our cost of goods sold. Staying true to our business model, we continue to reinvest behind our brands and products to fuel future growth avenues and drive category leadership. These reinvestments have, as predicted, moderated in year 2025 compared to previous years. Lastly, the contribution from other effects that mainly represents the positive impact from the application of IAS 29. The solid margin increase of year 2025, combined with our strong like-for-like sales growth has been the key driver of our recurring EPS performance. Let's move to the next slide, Slide 21, to get into the details. Our recurring EPS grew at plus 4.6% in hard currency last year, reaching EUR 3.80. Strong operational performance, which we just went through, was the key driver with plus 5.9%. Higher refinancing costs and the final impact of 2024 disposals weighed slightly on EPS, but these were partially offset by tax associates and minorities. The negative currency impact was largely offset by IAS 29. We are delighted to report that we are delivering on our value creation commitment across all key financial parameters. And so I suggest we move to the next slide, Slide 22, to provide you with some more details. We delivered last year EUR 2.8 billion of free cash flow, reflecting strong operational performance and strict financial discipline. Importantly, we achieved a strong cash flow while stepping up our investments into the business, never compromising on what will always be our #1 capital allocation priority. In 2025, we increased as predicted our CapEx spending with a focus on capacity creation for medical nutrition and functional dairy. Our strong cash generation enabled us to pursue targeted M&A, including for the acquisition of the Kate Farms company, while at the same moment, slightly reducing our leverage. We're also very pleased that we have further increased our return on invested capital to 10.7%. As you know, expanding the ROIC and keeping it structurally at double-digit levels is key in our value creation journey. And finally, let me mention that we will propose a dividend of EUR 2.25 per share, up around 5% versus last year, in line with the EPS growth. These solid results make us confident in our ability to deliver on our future value creation ambition, which leads me very naturally to my last slide, Slide #23, our financial guidance. In line with our midterm guidance, our ambition for year 2026 is to achieve net sales growth of plus 3% to plus 5% like-for-like with recurring operating income to grow faster than sales. And with that, let me hand it back to Antoine for the conclusion. Antoine de Saint-Affrique: Thank you, Juergen. And as we close this call and before opening the floor to questions, I would like to leave you with a few final thoughts, and I suggest we jump straight to Slide 25. Our priority remains to perform consistently while continuing to transform the company. We pursue this through innovation and disciplined acquisition, positioning the business for the future and selectively capturing opportunities in what is a fast-changing environment. Our focus remains on the high-growth value-added segments, where science and health-related benefits are a clear differentiator. We are committed to delivering quality results through disciplined execution, fixing what needs to be fixed, scaling what works well and maintaining a mindset of constructive dissatisfaction in an increasingly complex environment. As you know, our ambition is to act as a true value compounder, building long-term sustainable value while remaining resilient amid ongoing volatility. As we look ahead to '26 and while the external environment remains uncertain, our approach remains unchanged. We stay disciplined, we stay focused on execution and aligned with the midterm ambition we have set out. And with that, let me hand back to Mathilde to start the Q&A session. Mathilde, over to you. Mathilde Rodie: Thank you very much. So we are ready now to open the Q&A. And the first question is from Guillaume Delmas, UBS. Guillaume Gerard Delmas: I've got two questions. The first one is on your operating margin in EDP. Because if I remember well, since the reset of 2022, when you first introduced Renew Danone, EDP margins have not materially improved, and they remain quite below the 10% mark. So my question here is compared to your initial expectations back in 2022, is EDP profitability running a little bit behind schedule? And why are you not seeing the strong volume/mix development and the productivity savings boosting the division's margins a bit more? And I guess looking ahead, what do you think is the medium-term margin profile for this business? Is it around 10%? Could it go even higher? So any color on that would be very helpful. And then my second question is probably won't surprise you on the IMF recall. I mean, I appreciate this morning, it's too early to quantify the impact, but maybe, can you talk about what empirically you've seen so far. So any shortages or issues with on-shelf availability? Any consumer hesitancy towards your brands. And zooming in on Mainland China, where I don't think you had any product recalls, did you actually benefit from competitors' recalls in the first weeks of 2026? Antoine de Saint-Affrique: Thank you. So listen, we'll do as usual and do it with Juergen, and let me start with your last question. The first thing is those kind of events is not overall good news for the category in general. When it comes to China, none of the products we sell in official direct channels in China have been impacted. And we obviously work in full transparency with the Chinese authorities. When it comes to Europe, we expect to see, and we see supply disruption. We see obviously lots and lots of activity on our consumer care lines. We see also a sentiment that is balanced, actually. Obviously, lots of emotions are with the first recall. As I said, by the way, before the recall, we looked at all our consumer complaints, and we didn't notice anything. So the entire focus of the organization is fundamentally about two things, making sure that the products are back on shelf, and making sure that we do reassure the consumers and the health care professionals were extremely active both on the Internet and in our Care Line. As to the impact in terms of -- the lasting impact in terms of consumer sentiment, in Europe, it's too early to say, but we didn't notice things that are just -- I mean, extraordinary. You may have seen there was a publication yesterday of ESTAR, which I would refer you to on actually the -- I mean, then assessing the impact of exposure as low to moderate for infants. So this will also help reassure the consumers. Juergen Esser: Yes. Juergen speaking. When it comes to the financial impacts, 2 or 3 important elements. First, given the fact that most batches which are currently being recalled were sold already in the course of year 2025. We have to date not experienced a significant return of stock. And therefore, while the recalls are underway, the current financial impact on year 2025 do not seem material to us. Having said that, and to your point, the recall of several industry players at the same time has created, especially in European retailers, some disruption on the shelf because some retailers were first taking off all the product before sorting and replenishing the shelf. And we expect that supply disruption to have a one-off impact on our Q1 performance. We estimate this one-off impact to be between 0.5% to 1% of net sales in the first quarter. Moving forward, as Antoine said, our ambition is to win back trust and credibility because it is extremely important in that category. And it's obviously very early days. We need to monitor the situation very closely, but the few data points that we have on market shares are rather reassuring. On EDP margins, you are absolutely right that the key focus on us. And you may remember that when we were together launching the Chapter 2 of Renew Danone. We were very clear on what we are expecting from EDP in terms of contribution on growth, and I think we are delivering on a very nice way on it with plus 3.5% in the year 2025, as much as on margins, because we declared very clearly that EDP margin target is to go into double-digit territory. You do not see that yet reflected in the EBIT numbers of the category because we are heavily investing for that growth. Gross margins are going up, and you see gross margins of the company increasing supported big time by EDP gross margin increases. But at the same time, we are fueling the growth. We are fueling the growth in Europe. As Antoine mentioned, with all the elements we are doing on Activia, on High Protein, on Skyr and Kefir as much as refueling the growth in North America, very importantly, on the full EDP portfolio. Antoine de Saint-Affrique: I think that and we said that all along, we will keep reinvesting to drive our category growth. And in the cases where we have lost competitiveness, to reinstate our strength and competitiveness of our brands. I mean, what you see on Activia, I mentioned Activia is progressively getting back to growth. With good innovation, with, I mean, bringing back the gut challenge, so we see the things moving in the right direction. We will keep investing behind that to make sure that we reclaim and we regain our leadership in that field because we are convinced it's the field of the future. Mathilde Rodie: So the next question is from Celine Pannuti, JPMorgan. Celine Pannuti: So my first question, I would like to come back to what you said on the Infant Milk Formula to clarify the commentary. You mentioned the 50 to 100 basis point impact on Q1. Is this at the group level for Europe? And then in terms of your market share performance, can we -- I mean, what have you seen? I know it's early days, but in Europe or in China, how things are trending for you? And then maybe, I think, Antoine, you mentioned it's not great news for the category. From a midterm perspective, how do you think this may play out from higher regulation or maybe more consolidation? Would be interested to hear your perspective there. Then my second question is on North America, where volume turned negative in the fourth quarter. You mentioned that capacity is underway and as well creamer are getting more positively, more competitive. How do we think about volume reacceleration throughout 2026, please? Antoine de Saint-Affrique: Celine, we'll do duet again. Let me start with IMF, where we'll do a duet, and then we'll come back to the U.S. I mean, shares we didn't see. It's too early to say. We didn't see any significant share movement, one way or the other. I mean, what I was saying, it's not good for the categories. You don't win on events. You win on science. You win on your competitiveness. You win on being the best at execution. So short-term shares gain or loss on an event is not -- I mean, it's not good news. It's not something that is structural. We don't see anything major, but it's very, very early. IMF is very, very regulated category. I mean, I think, in our factories, we have over 300 checkpoints when it comes to quality. There are rules in every countries that are extremely, extremely strict. So do we expect a further strengthening of the regulation? Not in any major and significant way. I mean, there has been a change in the rules and regulation when it comes to, I mean, salaries, and that has been an ongoing move for the last couple of weeks. But by and large, we don't expect the rules of the categories to change. Where we are very confident, to be honest, is we are confident in the quality of our product. We are very, very close to both the consumers and the health care professionals and we have innovation that is really differentiating. So too early to say. We don't see any significant impact. We will have to work because indeed, noise around the category is never a good news, but I don't see it as something structural. Juergen Esser: Yes. Juergen speaking, when it comes to the financial impact, I confirm the 50 to 100 bps on Q1 at group level. But as you say, in the end, it's coming through the region of Europe and Middle East because this is where the recalls are happening. We expect the situation to normalize in the months of -- during -- in the course of the month of March. Antoine de Saint-Affrique: So on the U.S., I was very clear. I'm not happy with the performance. There are things we are super happy with. Protein keeps driving very well. Everything around medical nutrition is just flying. Kate Farm is going from strength to strength. Our Nutricia business is going from strength to strength. So it's very -- I mean, that I found very exciting. We have a couple of good things that are coming on stream. We see some early green shoots in creamers. We've launched Two Good in Natural, but to be honest, I think we'll only see progress as of, I mean, later in the year, so quarter 2 onwards. We are relaunching Danimals, but there is still more work to do. I'm not happy for one with Silk. I think, I mean, we've made because we didn't have enough capacity choices in the rest of yogurt capacity is coming on stream, so we should get better, but we could have done better. There has been a really deep change in leadership in the U.S., obviously, with Henri, who comes with deep knowledge and huge track record, but beyond Henri, we went very deep in leadership change in the U.S. The lady that has been running the turnaround of Alpro in Europe is now in charge of the category and of the creamers in the U.S. I expect the end of not inventory and rapid movements in the U.S. Juergen Esser: Yes. And maybe just one element to add, which is that we have one more quarter to go where we are running against a high base of comps for Coffee Creamers from Q2 onwards. This will ease and will have also the recovery of that region. Mathilde Rodie: Next questions from Jon Cox, Kepler. Jon Cox: Yes. Sorry, just to come back to this 50 to 100 basis points. You're saying on a group basis, so this is not just specialist nutrition on a group-wide basis, 50 to 100 basis points in Q1, which at 100 basis points level would be 25 basis points on the year. That seems relatively material. I know maybe by the time you get down to EPS level or not, but it seems quite material. And that's just on the recalls themselves rather than any, say, brand damage done in Europe as a result of the recalls. Just to add to that, elsewhere, you're talking about the Middle East recalls. Are there any signs that any of the governments elsewhere in the world are going to introduce the European standards and what would the impact be in terms of potential recalls in Asia and elsewhere? Second question, just on the gross margin gain, I can see it's 90 basis points. It sort of leads into the question earlier about EDP margin, just not moving. And I think most of us thought that would be the driver for overall group margin improvement. Is that gross margin gain really coming through EDP, and you're just actually reinvesting all of those savings into driving top line growth. And I'm just wondering about the sort of the return profile of that, if you're just investing so much into the EDP business to drive growth. But on the other hand, the profitability isn't moving. And the risk is once you stop investing, actually, that volume will go back to where it has been historically in dairy in Europe and elsewhere. Juergen Esser: First, on the first point. Look, we have this morning been issuing our guidance for the full year with a lot of confidence. And we have been issuing the guidance for the full year with a lot of confidence because we have now been consistently over the past 4 years, delivering on our commitment. We left year 2025 with very strong dynamics. And yes, the IMF situation will create a one-off, as I described it for Q1. Having said that, the last year stepped up the resilience of our portfolio, leveraging a larger range of growth engines and not only IMF, and are, therefore, expressing the confidence. We today -- the guidance today with confidence. That confidence is supported by many things, including the belief that the IMF situation will progressively normalize, but it will also be supported by what I said before, sequential acceleration, for example, of the U.S., and here specifically from the Q2 onwards, when we run on an easier set of comps for Coffee Creamers. On gross margin and EDP, I confirm what I said before, we see very promising dynamics in EDP. Let's not forget that we only started to transform the portfolio, some 2 or 3 years ago. So we were very clear that this is not a quick turnaround, but it takes some time to make it happen, and we are very happy with what we have seen in the year 2025. We are transforming in a very significant way the portfolio in Europe. All the innovations, we have been putting in the shelves, are working, and we have learned something very important from the past, putting innovation and only supporting it for 1, 2 or 3 quarters, you're going to lose the innovation. You're going to lose the renovation. This is why we are so much committed to support the innovations at the core to make sure we get sustainable success, and this will also be reflected in the profit margin at some point. Mathilde Rodie: So next question is from Warren Ackerman, Barclays. Warren Ackerman: First question is on Medical Nutrition. Could you quantify the Medical Nutrition growth globally in Q4? Maybe if you're able to break out China, Europe and North America? I'm interested in your outlook, specifically on Kate Farms, how big is Kate Farms? What was the growth in the year or the quarter? And just trying to understand how big could Kate Farms get as you kind of expand? I know you've got some ambitious plans for the brand. And then secondly, can you talk about some of the other growth engines like EDP Japan, you're saying it's a standout performance. Can you maybe put some numbers on that? And I guess the other sort of topic as well, just to try and understand a little bit is the out-of-home growth, particularly EDP Europe? If you're able to put some numbers on that as well, it would be great. Antoine de Saint-Affrique: So we'll do a bit of a duet on that. Maybe starting with EDP and EDP in Japan. What is really interesting in Japan, is we have been constantly over the course of the, I think, the last couple of years, going between high single and low double digits in Japan. On the base of Japan is an EDP -- Japan is an EDP business essentially, on the base of a strong differentiation, on the base of science, on the base of strong claims. And this is really an inspiration for -- I mean, this is really an inspiration for Activia. I mean, delivering claims that are proving the uniqueness of Activia versus other yogurts are differentiating ourselves and justifying a premium. So that is the model. By the way, we have the same, it's a smaller business, and it was under our Saputo, but we have the same with Activia in Australia. It's a good model on what we want to do around EDP. On out-of-home and EDP. Out-of-home and EDP takes 2 different forms. It is what you can do in all the hotels, restaurants, I mean, around, I mean, fresh dairy, obviously. But I think the biggest and most important access of developments there is into our drinkables. And it's true for dairy. And you see that with what we do around Oikos, which you find also in gems, which you start finding in many different places, all you see that with what we just launched, I think, it's in Germany with Alpro meal replacer. And if you haven't tried it, we'll send some to you, which is made basically to capture those people that are working at lunchtime at the exit of the office in proximity stores. The -- I mean, our out-of-home channels are growing much faster than mass retail. Juergen? Juergen Esser: Yes. On Medical Nutrition, the dynamics are actually pretty good and especially as we leave year 2025, growing double digit in North America, growing double digit in China and North Asia, Oceania are growing double digit in many emerging markets. Actually, we're quite balanced between what we see in Milk Nutrition for infants and Milk Nutrition for adults. But on both, we see very, very strong traction. It's getting now to a scale, which starts to impact also company results. You talk about Kate Farms. Antoine mentioned it in the prepared remarks, it's now a $500 million business. Antoine de Saint-Affrique: It's farm nutrition. Juergen Esser: Exactly, which I think is something, which you will see reflected in the like-for-like performance of North America from Q3 onwards when we have both Kate Farms, Nutricia, the whole Medical Nutrition platform impacting the results. Kate Farms is actually growing strong double digits as we speak. And so we see coming to life the expected synergies of our existing and legacy platform we had in the U.S. and the, let's say, network access, we are getting to hospitals and the health infrastructure in that part of the region. Antoine de Saint-Affrique: Maybe to complete on the combination Kate Farm and Nutricia. So I said it in the prepared remarks. The combination of the two is $0.5 billion. We've -- as you know, we folded in some ways, Nutricia into our Kate Farms business. The complementarity of the product line, the complementarity of our customer access, the complementarity of the scale is just fantastic. So the business has real momentum. And I think it will have -- I mean, be a game changer in the U.S. Juergen Esser: And on Japan, as you mentioned, Japan, EUR 400 million business as we leave year 2025, growing at strong double digit, and we have more capacity coming online very soon in order to support this fantastic dynamic on a portfolio, which is extremely focused on high protein and gut health. So that's very exciting. It's one of the largest dairy markets of the world, and this is why we are very focused on success there. Mathilde Rodie: We have the next question from David Roux, Morgan Stanley. David Roux: Can you hear me? Antoine de Saint-Affrique: Yes. David Roux: My first question is just on the North America yogurt capacity, which you mentioned. Could you just give us an update as to where you are now with this rollout. How much headroom to overall capacity in the U.S. will this help with once completed. And how we should think about the CapEx evolution for the group from this going forward? Then my second question is on working capital. You've called out working capital at record low levels relative to sales in the release. I think you mentioned some destocking of Mizone, but perhaps can you give us a bit of color around what has been driving this and how we should think about that working cap to sales ratio going forward. And then my last question briefly on FX. I understand you don't usually give color on this, but given that FX was a meaningful factor this past year, can you give us some expectation for the FX impact on revenue and EPS at current levels for the forthcoming year? Antoine de Saint-Affrique: So I think -- I mean, the bulk of the question will go to Juergen. On Noram, literally, the capacity is coming on stream step by step by step. So we are adding line after line to basically respond to a demand that keeps being absolutely buoyant and to be able to reenlarge our offering. Obviously, what we invest into CapEx is not only behind EDP or behind yogurt, but we invest into CapEx in medical nutrition, as you've heard last year with what we are doing in France in Stanford, behind infant nutrition. So we invest where we see value-adding growth for the company. Juergen Esser: Yes. And maybe when you look at overall CapEx, and this is what we shared at the CME for Chapter 2 when renew Danone, CapEx for the company is going to slightly increase. We were the last year traveling just shy of 4%. We said it may go up to 4.5% in order to support capacity investments into high protein, which is true for areas like North America, which is true for areas like Europe and which is true for areas like Japan, which I just mentioned, but also for Medical Nutrition, where we are obviously progressively investing for the future growth. For working capital, very happy with how we finished the year 2025 at minus 10%. I think we are now getting into best-in-class when it comes to working capital management. Actually, the benefit of working capital in year 2025, not so much coming from stocks. It's more about a much more efficient way we manage the balance between receivables and payables, and we are benefiting here from something Antoine said in the prepared remarks, which is the digitalization of our process flows in our global business services. This is really giving us a fantastic platform to -- for the ambition to say sustainably at a good level of working capital as we have it today. For the currency, look, I would wish I could predict how currencies will move in year 2026. You saw the impact we had on sales at minus 4%. In the full year, it was minus 6% in Q4. Really here, I don't want to -- please understand that I don't want to give a number because any number I will give will be a wrong number. Mathilde Rodie: And next question from David Hayes, Jefferies. David Hayes: So I don't want to be the annoying person and labor the guidance context, but I'm going to be that annoying person. So just to come back to that quickly, just trying to gauge in your kind of that confidence word you used. I mean, you saw one of your peers yesterday impacted by this recall talking about with their best guess on the brand equity impact through the years that they might be at the lower end of the range. Was that something that you considered including, or to your confidence point, you don't feel there's need to caveat that based on the current trends and brand impacts that you're seeing at least early on in the -- in this process. And then the second question, just on the Rest of World. Was there some benefit from Ramadan? Again, we heard a competitor yesterday talk about that was sort of a help in the period of Indonesia. Obviously, a big market in that region. So was there Ramadan timing that we should take account of? And that gives back a little bit in the first quarter this year. Antoine de Saint-Affrique: Thanks, David. We'll do again a bit of a gut. I mean, we don't see at this stage any major brand or brand equity impact on IMF. There is obviously a disturbance on the shelves. There is obviously, for a period of time, I mean, a sales force that is focused on talking to the customers replenishing the shelf. So as they do that, they don't do -- I mean, they don't do other things. But from a pure brand and category standpoint, we haven't seen anything major at this stage, too early to say. We obviously look at it very, very carefully, but I wouldn't be definitive one way or the other. On Ramadan, I mean, to be honest, we are -- we don't comment on the move from Ramadan from one week to the other. Juergen, I don't know if you want to... Juergen Esser: On the Ramadan, nothing to add, I would say. On the guidance, 3% to 5%, we are, in a way, growingly consistent is what we are now saying since 4 years. We feel good about the 3% to 5% guidance we have launched that was in year 2022, and you saw us delivering in that corridor is a very consistent manner. And so there's nothing to add to what I said before on the guidance. So we feel good about it. Mathilde Rodie: And the next and last question is from Tom Sykes, Deutsche Bank. Tom Sykes: Just firstly, on the gross margin. It looks like that was sequentially down a little in H2, which is the first time in a little while. Could you maybe say what the reasons for that are? Is that FX? Or could you say something about COGS productivity and just whether you'll be able to price under your COGS inflation like you have been doing, please? And then just on the growth of high protein, either North America or globally. Could you give a view as to the run rate of growth now versus perhaps where you were in the first half of the year, please? Antoine de Saint-Affrique: So let me start, maybe with the growth of high protein. We still see the growth in the protein world being very, very down -- being very dynamic. If you look at the overall category growth of the yogurt category, it's very dynamic. I mean, I think at global level, it's high single digits, and it's being driven by protein. Protein by the way, takes different forms. I mean, it's high protein, like the likes of Oikos or YoPRO. It is also things like Stevia. And I mean, Stevia at Danone is doing extremely well, I mean, you see it reflected also, and I mentioned it in the remarks in the numbers of the Danone brands. So there is, I mean, there is a deep, deep trend around protein in different forms. And we believe that our trend is here to stay. It is becoming, as I said in my prepared remarks, also it is becoming more sophisticated. So it's not protein for the sake of protein, the protein that are doing something or protein that are complemented with something. The protein that are doing something are you seeing that we've launched under Oikos protein and digestive benefits, what we've launched in Europe under HiPro, which is muscle recovery or what we launched behind Stevia, which is a different positioning, but one that is also very relevant when it comes to protein that feed you in your daily activity as you need for something that is high in protein and low in the rest. So it's a trend we believe to be long-lasting trend. We see progressively the market shifting to different kinds of protein, and we're obviously not only suffering the way, but leading the way in more ways than one. Juergen Esser: Tom, on the gross margin, you're absolutely right. H2 expanded a little bit less than H1. It's not about productivity, which really was very strong across the year. It's more about the phasing of material inflation, especially coming through from dairy ingredients, things like whey or things like lactose, which were quite high where prices were quite high in year 2026, where we were better protected through hedging in the first semester than in the second semester. That's why we had a bit more impact in the second semester coming from it. Good news is that those prices have started to come down. So nothing particular to say for year 2026. Mathilde Rodie: So with that, we are ending the Q&A. Thank you, Tom, for the last question. Antoine de Saint-Affrique: Thank you, guys, and we'll see you, or most of you, soon in the coming weeks. Good day, everyone, and good weekend.
Operator: Thank you for standing by. Welcome to the Danone 2025 Annual Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. Our speakers today will be Antoine de Saint-Affrique CEO; and Juergen Esser, CFO. I would now like to hand the conference over to your speaker today, Mathilde Rodie, Head of Investor Relations. Please go ahead. Mathilde Rodie: Thank you. Good morning, everyone. Mathilde Rodie speaking, Head of Investor Relations. Thank you for being with us this morning for Danone's Full Year 2025 Results Call. I'm here with our CEO, Antoine de Saint-Affrique; and our CFO, Juergen Esser, who will go through some prepared remarks before taking your questions. And before we start, I draw your attention to the disclaimer on Slide 44 of the presentation related to forward-looking statements and the definition of financial indicators that we'll refer to during the presentation. And with that, let me hand it over to Antoine. Antoine de Saint-Affrique: Thank you, Mathilde. Good morning, everyone, and a warm welcome to you all. Thanks for joining Juergen and me today for our full year results '25. Moving to Slide 3. Before we focus on what is a very good set of results, I thought it was important to talk about the recent development regarding Infant Milk Formula. It is obviously top of mind for everyone and to start with and most importantly, for all the families that rely on us daily. I know how much the current events are disturbing and worrying for them. This is the last thing you want to live through when you are feeding the most precious person in your life. We obviously take this extremely seriously. And there, let me be clear, food safety and quality are -- have been and will always remain our top priority at Danone. We are confident in the safety and quality of our products, which are supported by extensive scientific evidence and rigorous testing. In the light of recent events, we went back to review the level of consumer complaints over the period in question, and we didn't find any cause for concern. However, in the context of the ongoing evolution of authorities' requirements, we are working closely with those national food safety authorities and are taking action to comply with their new requirements. We have been recalling from relevant markets, essentially in Europe and now in the Middle East, batches of Infant Formula products. While doing this, our focus is on supporting parents and health care professionals, providing clear information and helping to restore trust as their trust makes all the difference. Let me now get into the results on Slide 4. We are pleased to share with you another set of strong and good quality results. The numbers you see on this chart are more than figures on the page. They reflect the hard work, the commitment, the passion of the Danoners. And I really want to thank each and every one of them for that. '25 marked the first year of Chapter 2, our Renew strategy, and we delivered a strong plus 4.5% like-for-like sales growth. Importantly, this performance was consistently underpinned by positive volume mix throughout the year, contributing plus 2.7% in '25. This quality growth, combined with disciplined execution and continued productivity gains, resulted in a plus 44 basis point improvement in our recurring operating margin, reaching 13.4%, all while continuing to invest behind our capabilities, our brands, our science and our innovation. Our solid operational performance and strong financial discipline also translated into recurring earnings per share growing plus 4.6% in '25, reaching EUR 3.80, close to all-time high and a robust financial position with EUR 2.8 billion in free cash flow generation. Last but certainly not least, and fully aligned with ambition to create sustainable value, we further improved our ROIC in '25. It is now firmly anchored into double-digit territory with a 62 basis point increase versus last year. And what is important as well, we achieved all of this while driving sustainability in a way that is focused and impactful because we firmly believe it is essential to the long-term resilience of our business. This year, we were again recognized on the CDP Triple A list, reflecting our leadership in transparency and performance on climate, water stewardship and forest preservation. We also achieved worldwide B Corp certification. These milestones marks the culmination of a decade-long journey and highlights our long-standing commitment to combining strong business performance with positive social and environmental impact. Taken together, the '25 performance you can see on this chart reflects the strength and the resilience of our unique health-focused portfolio. And this performance is deeply connected to the structural trends that are reshaping the food industry. Moving now to Slide 5. As I've shared with you before, I believe that the food industry is at a tipping point. Around the world, people are increasingly aware that what they eat and their health are more intertwined than ever. With every new insight into the power of nutrition, consumers are raising their expectations, and they are seeking better choices for themselves and for their families. Health through foods has never been more relevant. This is exactly where Danone is uniquely positioned to lead. Our health-focused approach, supported by science and a strong focus on delivering high-quality offerings position us uniquely to provide nutritional solutions that support people at every stage of life. It is not just what we do. It is what consistently guides our strategy and execution, and we see the results. Our categories continue to outperform the broader food and beverage industry, fueled by powerful and converging trends, all pointing in the same direction. Consumers everywhere are choosing with health in mind. Protein, for instance, are essential for good health at every stage of life and demand continues to rise, particularly among people using GLP-1 who are actively seeking ways to preserve strength. But consumers today are looking for more than just higher protein. They increasingly see nutrient dense, high-quality protein supported by the right dietary complements. This is where fibers play a critical role. Most population worldwide consume 20% to 30% less fiber than recommended despite very strong evidence linking low fiber intake to a high risk of major noncommunicable disease. Fibers are also fundamental to gut, immune and metabolic health, and they help body to absorb and use protein more effectively. Protein and fibers represent a major long-term growth opportunity, and we are strengthening our leadership accordingly, building on our capabilities in the field of biotics. Finally, Medical Nutrition continues to demonstrate its positive impact on the life of patients. As we highlighted at our CME in June '24, the right medical nutrition helps patients stay on their treatment over time, recover more effectively, especially after surgery and return home sooner. Faster recovery not only improves patients' life, it also delivers clear health economic benefits for the health care system. Taken together, these trends point to a clear reality. People everywhere now expect their food to actively support their health, and this is where Danone is uniquely positioned to lead. With close to 90% of our portfolio scoring 3.5 stars or more under the Health Star Rating system, we deliver every day nutrition that is high in protein, rich in fiber and grounded in biotics alongside medical nutrition that makes a meaningful difference in people's lives. And it's nutrition that tastes good. These long-lasting trends underpinning our performance, as we can see on Slide 6. Our 4.5% like-for-like sales growth in '25 has been powered by our fast-growing platforms, notably high protein, gut health, infant formula and medical nutrition. Starting with high protein. Our rapidly expanding range built on the strong product superiority and differentiated functional benefit continues to drive penetration across geographies, supported by the ongoing rollouts of innovations. In the U.S., Oikos PRO exceeded EUR 1 billion revenue in '25, a clear demonstration of the scale and relevance of this platform. The broader shift towards value-added dairy is also supporting the growth of our Danone brands with a strengthened portfolio, including [indiscernible] the brand also surpassed EUR 1 billion revenue mark in '25, delivering high single-digit growth for the year. Gut health and fiber are also strong growth drivers, particularly for Activia, where we have started to reclaim our leadership territory in gut health. With innovations in kefir and fiber enriched products, Activia returned to growth in Europe in '25. Also in Europe, Alpro is another key growth engine. As the leading plant-based brand and EUR 1 billion platform, we are driving category momentum through innovation. We continue to evolve Alpro beyond an ingredient-led dairy alternative into a benefit-led plant-powered nutritional complement to dairy, something that you can see in our latest packaging. And we are expanding our product range, especially in yogurts to meet this growing demand for flexitarian diets. In Infant Milk Formula, our premiumization strategy around Aptamil continued to deliver strong results in '25. Aptamil achieved double-digit growth, enabled by the renovation of our core range and the rollout of superior innovation, addressing specific nutritional needs, supporting the healthy growth and development of children. We also continue to expand our reach across markets, building on our strong momentum in China and delivering remarkable performance in India and across Southeast Asia, where, for instance, the Aptamil business doubled in Vietnam in just 1 year. In Medical Nutrition, we are seeing strong growth across both adult oral nutrition and tube feeding. Our flagship brands, Fortimel and Nutrition together now represent a rapidly growing EUR 1 billion platform. We continue to expand our portfolio, including hybrid protein solution designed to improve tolerance and adherence, helping more patients access the nutrition support they need. So as you see, our growth engines are firing and the momentum is clear. But delivering today is only part of the story. Moving to Slide 7. At our last CME, we set out the ambition for Renew Chapter 2, doubling down on the fundamentals while further transforming the business. This is what we started doing in '25, launching science-based innovation, staying true to our health-focused approach while pivoting the way we look at our categories to unlock significant new opportunities. As I mentioned earlier, fibers play a crucial role in health. And at the end of last year, we launched Oikos Fusion, a high-protein product enriched with prebiotic fibers to support digestive health. It is particularly well suited to consumers looking to manage their weight, including those using GLP-1 medication. In the same spirit, Alpro recently launched its new Meal To Go drinks, nutritionally balanced plant-based meal replacement designed for busy lifestyle offering 20 grams of protein and 26 essential vitamin and minerals. We are making the healthy choice, the easy choice. We're also reclaiming our leadership where it matters most, beginning with gut health. We are reestablishing Activia as the global reference in gut health. In markets such as Japan and Australia, where we are winning, we leverage the fact that our Activia products contain probiotics up to 100x stronger than regular yogurt, supported by scientific evidence and studies, and this is only the beginning. Finally, we're committed to further broaden our channel footprint to further reinforce the resilience of our model, and this is happening. In '25, channels outside mass retail grew significantly faster than mass retail. Our specialized channel, be it pharmacies, hospital, home care delivered double-digit growth. We are reaching more people in more places at all stages of their lives. Let's move to Slide 8. We keep focusing on execution and competitiveness, strengthening some of our key capabilities. In operations, we have made significant progress over the past years. We are operating with greater agility and speed, and we are proud now to rank 10th in the Gartner Top 25 Supply Chains, the highest ranking for an FMCG company. In '25, we continue to deliver strong productivity gains, supported by the growing digitization of our operations from the shop floor to the shelf. We are accelerating our transformation. Through our Industry 5.0 approach, we are equipping our teams and factories with advanced digital and AI-enabled capabilities from automated quality system to predictive maintenance and real-time performance visualization. Our Industry 5.0 Academy is upskilling 20,000 employees globally, while a network of 10 pioneering factories is piloting our digital factory of the future. Beyond manufacturing, we're also strengthening digital execution across our end-to-end value chain. AI-enabled planning hubs, increasingly automated shared service centers and new in-store visualization tools are improving accuracy, speed and efficiency with which we serve our customers and our shoppers. While we are making progress on a number of fronts, not everything is working as it should, and there is still much more work to do to address underperforming areas. It is clear that in the U.S., our performance in '25 didn't meet our expectations. We are not where we should be, and we know we need to step up our game. Winning in this market means going further than protein or specialized nutrition. It means elevating the rest of our portfolio from creamers to nonprotein yogurts to plant-based and showing up there is -- there with the same strength and relevance that we do today in High Protein or SN. As you certainly have noted, we appointed a new Americas zone President, [ Henri Bruxelles ] and made broader organizational changes to rebuild a culture of winning, one anchored in execution excellence and the right operational intensity. We've made significant leadership change, and we are starting deploying [ at space ] innovation proven in other geographies and align with consumer shifts. Alongside addressing underperformance, we are also broadening our reach by investing to capture new growth goals. We are expanding capacity where it matters most in High Protein, Skyr, Kefir, Alpro and Medical Nutrition across Europe, China, the U.S. and Japan. These investments will progressively allow us to capture growth opportunities to their full extent, support very strong demand in High Protein and enable us to better serve emerging trends across the rest of the categories. Moving to Slide 9. Through sustained long-term performance and build durable competitive advantage, we are strengthening the capabilities that truly differentiate Danone. We believe the future of dairy lies in empowering farmers to build more resilient and sustainable supply chains. That is why we launched the Danone Milk Academy, the first of its kind, multi-year global platform, bringing together academia, technical partners and Danone expertise to provide farmers with practical knowledge, science and digital tools. With an approach tailored to different regions and to farm size. The Milk Academy will strengthen the dairy supply chain and accelerate the long-term transformation of dairy farming. The same spirit underpins our Partner for Growth initiative. More than a program, it is a catalyst for share value, moving us from transactional relationship to deep partnership with our suppliers. Since its launch over 2 years ago, it has allowed us to boost efficiency, unlock capacity and advance our sustainability goals. We are deliberately building a resilient multi-sourced supplier ecosystem, combining the right diversity and the right quality and partnering with suppliers who share a long-term collaborative mindset. Importantly, this approach also strengthened our innovation capabilities and enhances the robustness of our supply chain. Speaking of innovation, we keep investing in cutting-edge research to build lasting differentiation. We recently inaugurated our OneBiome Laboratory in Saclay, accelerating research in the gut microbiome by leveraging proprietary scientific data, clinical studies and deep consumer understanding. We also acquired, as you know, The Akkermansia Company, bringing a clinical proven biotics strain with the potential to reinforce the gut barrier, a capability that will increasingly drive further differentiation across our products. Finally, we continue to invest in skills and leadership. Through initiatives such as DanSkills, we are equipping our teams with the critical capabilities of tomorrow, driving for continuous functional and leadership upgrade. We also pursued a cultural transformation initiated 4 years ago, one made of focus on execution, passion for consumer and one we are performing and transforming go together. Let's move to Slide 10. As part of Renew Chapter 2, we also made it clear we will move to the front foot on acquisition. In '25, we started executing on that ambition with a strong focus on strategic fit and disciplined governance. Following the acquisition of Kate Farm, we now have a $500 million Medical Nutrition platform in the U.S., making it the first time we have achieved meaningful scale and reach into the health care system and hospital infrastructure in the country. Importantly, this platform is built on a product portfolio that is truly differentiated, addressing patient needs for more complete and healthier nutrition. The integration with our existing Medical Nutrition business is progressing extremely well with Kate Farm delivering strong growth. Our ambition is clear: to build a powerful growth engine in North America. In doing so, further rebalance our category mix in the U.S. We're also pleased to have acquired last week an additional 1% stake in our Australian dairy joint venture with Saputo following the exercise of our call option. Concretely, this brings our ownership to 51%, resulting in the financial consolidation of the business. We operate in dairy across Australia and New Zealand through 3 strong brands: YoPro, Activia and Ultimate, which together generate over [ EUR 100 ] million in revenue in '25. We hold a leading position in both High Protein and Gut Health. And interestingly, this is where our High Protein journey began as early as 2016 with the initial launch of YoPro. So taken together, this move illustrates how we are actively shaping our portfolio to support sustainable long-term growth. And with this, let me hand it over to Juergen. Juergen , over to you. Juergen Esser: Thank you, Antoine, and good morning to all of you. Let me start our financial review with our sales performance on Slide #12. As you have seen from the press release, we closed year 2025 on a strong note with like-for-like sales growth of plus 4.7% in Q4, closing a year of consistent delivery. Importantly, growth was again driven by volume mix at plus 2.5%, while price added plus 2.1% in Q4. As we deploy Chapter 2 of our Renew Danone strategy, we leverage our well-diversified portfolio, delivering quarter-after-quarter sustainable growth across regions and categories. This becomes even clearer when turning to Slide #13. For the full year, like-for-like sales grew plus 4.5% with all regions and all categories contributing. We will dive into regional details shortly, but let me mention here the standouts. First, Europe, which has delivered a very solid year with now 9 consecutive quarters of positive volume mix and continued progress in the dynamics of its EDP portfolio. And the undeniable highlight of the year 2025, CNAO, which delivered exceptional performance across all subregions from China to Japan to Oceania. This should not distract from the performance in North America, which did not live up to our expectations, as Antoine mentioned, especially in the second half of last year, a key priority for improvement in year 2026. And finally, our more emerging markets in Latin America and Africa, Middle East. We do not talk much about them, however, worth stating that they delivered a very sound year 2025 and finished on a high note in the last quarter. Those regional dynamics are also reflected in the growth reported by category. In our EDP business that delivered a very solid year with plus 3.5%, benefiting from a very dynamic market environment all over the world. In our Specialized Nutrition business that posted like-for-like sales of plus 7.4%, reflecting strong demand for both our Infant Milk Formula as well as our Medical Nutrition products. And lastly, in our Waters business that grew by plus 1.9% in 2025, the solid result considering the very uneven weather patterns across the region. Before turning to the regional review, let me comment on our sales bridge for the year on Slide #14. Our plus 4.5% like-for-like sales growth was driven by a plus 2.7% contribution from volume/mix and a plus 1.8% contribution from price. Outside of like-for-like, we saw a negative 4.4% currency impact due to the appreciation of the euro against most currencies. Scope was slightly negative at minus 0.4%, reflecting the deconsolidation of Horizon Organic in early 2024, partly offset by the acquisition of Kate Farms from the third quarter onwards. Altogether, reported sales ended broadly stable at EUR 27.3 billion. Let's now take a closer look at the performance of each region, starting with Europe on Slide #15. Europe confirmed its positive momentum in Q4 with plus 2.5% like-for-like sales growth and continued positive volume mix at plus 1%, while price contributed plus 1.5%. As you can see from the chart below, performance was steady throughout the year as the team continued to progress in the transformation of the EDP portfolio. Also in this last quarter of the year, high protein, kefir and Skyr all grew at double-digit rates. Our work on Activia, refocusing on gut health and Fibers is in parallel starting to pay off as the brand delivered positive growth in Q4 across the region, including in key countries such as France, U.K. or Spain. Too early to declare victory, but the trajectory is promising. Next to Dairy, the Plant-based portfolio continued to perform strongly with Alpro again posting very solid competitive growth. The growth in Specialized Nutrition was driven by especially the solid momentum in Adult Medical Nutrition with strong performance from brands like Fortimel and Nutrison. And our Waters category delivered a very strong finish to the year, notably driven by Volvic with its innovations in flavored and functional water as well as by the Evian brand. For the full year, Europe grew plus 2.3% like-for-like with 1.9% contribution from volume mix and solid recurring operating margin increased to 12%. This reflects the combination of solid gross margin improvement, thanks to operating leverage and significant reinvestments behind innovation and product superiority to fuel the growth momentum for the years to come. Let's now move to North America on Slide #16. The last quarter of the year in North America was soft with plus 0.7% like-for-like sales growth driven by plus 1.3% price. We continue to see strong demand for our High Protein platform that keeps growing at double-digit levels, supported by consumer shift towards healthier choices. The Oikos brand is going from strength to strength, further expanding its market shares in the category. The growth of Oikos is unfortunately, to a large extent, offset by the unsatisfactory performance of our Plant-based and Coffee Creamers business. In Coffee Creamers, we have seen our market share is increasing progressively. We are, however, clear that we need to double down on our efforts to bring International Delight back to where it belongs. To address the fast emerging clean label segment, we launched under the 2 good brand, a new coffee creamers range offering low sugar levels with no artificial sweeteners. Year 2026 shall mark for our Coffee Creamers business a year of recovery and return to growth, specifically from the second quarter onwards when base of comps will ease. Next to EDP, our Medical Nutrition business had a strong quarter. The legacy Nutricia business is growing well, led by the Neocate brand, while Kate Farms, as Antoine mentioned, continues to scale rapidly as we progress on the integration. This will be more visible from the third quarter of 2026 onwards, but we will reflect Kate Farms in like-for-like. For the full year, North America grew plus 2% with plus 0.6% contribution from volume mix and plus 1.4% from price. Recurring operating margin stood at 11%, down by 39 bps, reflecting the need for investments to rebuild top line momentum. Let's now go to China, North Asia and Oceania on Slide #17. The CNAO zone delivered an exceptional year, closing Q4 with like-for-like sales growth of plus 10.4%, driven entirely by volume mix. We continue to win in Specialized Nutrition, where we achieved double-digit growth with a similar performance in Infant Milk Formula and Medical Nutrition. In IMF, Essensis continued to drive market share gains. In a normalizing category context after the Dragon year boost, we remain focused on our competitive performance. Thanks to the great job of the team around Bruno, we are very confident in our ability to keep growing through premiumization, further consolidating a still fragmented market. Next to IMF, we saw the demand for our Medical Nutrition brands, notably Fortimel Neocate remaining very strong also in the last quarter of the year. In EDP, Japan delivered again a remarkable performance in Q4, thanks to its 2 functional brands, Oikos and Activia. As Antoine mentioned, we are pleased to consolidate in the future the dairy joint venture we have in Australia. Australia is like Japan, a very functional market where High Protein and Gut Health platforms are thriving, which bodes well for the future performance of our EDP category in this part of the world. Finally, in Waters, Mizone completed a strong year with stable performance in Q4 in what is traditionally a very small quarter for the category. We have intentionally managed stocks down to minimum levels as we are, as we speak, launching with the Chinese New Year, several renovations gearing up for the 2026 season. For the full year, CNAO sales grew plus 11.7%, entirely driven by volume mix of plus 12%. Recurring operating margin was slightly lower at 29.2%, reflecting increased investments to support further market share gains, notably in Specialized Nutrition and in Waters. Let's now look at Latin America on Slide 18. The region delivered a strong Q4 with like-for-like sales growth of plus 8.3%, predominantly price-led. EDP delivered competitive growth across the region, and let me here highlight particularly the Danone brands as well as the high protein platforms with the Oikos and YoPro brands. Specialized Nutrition continued its strong momentum, driven by Aptamil and Medical Nutrition across both pediatrics and adult ranges. And finally, Waters that returned to growth in Q4 after a difficult season. For the year, Latin America grew plus 6% like-for-like. We are making good progress in addressing the margins in the region and recurring operating margin increased significantly to 6.4%, nearly 3 points higher than a year ago. This was driven by underlying margin improvement as well as IAS 29 effects turning positive. Finally, let's have a look at our AMEA region on Slide #19. The region closed year 2025 strongly with like-for-like sales growth of plus 8.3% in Q4, driven by plus 5.5% from volume mix. In EDP, Dairy Africa continued to post strong volume mix-led growth. Specialized Nutrition grew at double-digit levels with strong performance across all subregions. The Aptamil brand kept gaining market shares, and we believe we have plenty of headroom to further expand in the region. For the full year, AMEA delivered plus 5.6% like-for-like with volume mix of plus 1 point -- 2.1% and price of 3.5%. Recurring operating margin was steady at 10.4%. I suggest we concluded the performance review of our regions. And so let's move on to the margin bridge for the full year 2025 on Slide #20. Our recurring operating margin increased by plus 44 bps in 2025, reaching a level of 13.4%. The main driver was once again the expansion of our margin from operations at plus 77 bps. This is reflecting our focus on volume-led growth as well as continued productivity gains across our cost of goods sold. Staying true to our business model, we continue to reinvest behind our brands and products to fuel future growth avenues and drive category leadership. These reinvestments have, as predicted, moderated in year 2025 compared to previous years. Lastly, the contribution from other effects that mainly represents the positive impact from the application of IAS 29. The solid margin increase of year 2025, combined with our strong like-for-like sales growth has been the key driver of our recurring EPS performance. Let's move to the next slide, Slide 21, to get into the details. Our recurring EPS grew at plus 4.6% in hard currency last year, reaching EUR 3.80. Strong operational performance, which we just went through, was the key driver with plus 5.9%. Higher refinancing costs and the final impact of 2024 disposals weighed slightly on EPS, but these were partially offset by tax associates and minorities. The negative currency impact was largely offset by IAS 29. We are delighted to report that we are delivering on our value creation commitment across all key financial parameters. And so I suggest we move to the next slide, Slide 22, to provide you with some more details. We delivered last year EUR 2.8 billion of free cash flow, reflecting strong operational performance and strict financial discipline. Importantly, we achieved a strong cash flow while stepping up our investments into the business, never compromising on what will always be our #1 capital allocation priority. In 2025, we increased as predicted our CapEx spending with a focus on capacity creation for medical nutrition and functional dairy. Our strong cash generation enabled us to pursue targeted M&A, including for the acquisition of the Kate Farms company, while at the same moment, slightly reducing our leverage. We're also very pleased that we have further increased our return on invested capital to 10.7%. As you know, expanding the ROIC and keeping it structurally at double-digit levels is key in our value creation journey. And finally, let me mention that we will propose a dividend of EUR 2.25 per share, up around 5% versus last year, in line with the EPS growth. These solid results make us confident in our ability to deliver on our future value creation ambition, which leads me very naturally to my last slide, Slide #23, our financial guidance. In line with our midterm guidance, our ambition for year 2026 is to achieve net sales growth of plus 3% to plus 5% like-for-like with recurring operating income to grow faster than sales. And with that, let me hand it back to Antoine for the conclusion. Antoine de Saint-Affrique: Thank you, Juergen. And as we close this call and before opening the floor to questions, I would like to leave you with a few final thoughts, and I suggest we jump straight to Slide 25. Our priority remains to perform consistently while continuing to transform the company. We pursue this through innovation and disciplined acquisition, positioning the business for the future and selectively capturing opportunities in what is a fast-changing environment. Our focus remains on the high-growth value-added segments, where science and health-related benefits are a clear differentiator. We are committed to delivering quality results through disciplined execution, fixing what needs to be fixed, scaling what works well and maintaining a mindset of constructive dissatisfaction in an increasingly complex environment. As you know, our ambition is to act as a true value compounder, building long-term sustainable value while remaining resilient amid ongoing volatility. As we look ahead to '26 and while the external environment remains uncertain, our approach remains unchanged. We stay disciplined, we stay focused on execution and aligned with the midterm ambition we have set out. And with that, let me hand back to Mathilde to start the Q&A session. Mathilde, over to you. Mathilde Rodie: Thank you very much. So we are ready now to open the Q&A. And the first question is from Guillaume Delmas, UBS. Guillaume Gerard Delmas: I've got two questions. The first one is on your operating margin in EDP. Because if I remember well, since the reset of 2022, when you first introduced Renew Danone, EDP margins have not materially improved, and they remain quite below the 10% mark. So my question here is compared to your initial expectations back in 2022, is EDP profitability running a little bit behind schedule? And why are you not seeing the strong volume/mix development and the productivity savings boosting the division's margins a bit more? And I guess looking ahead, what do you think is the medium-term margin profile for this business? Is it around 10%? Could it go even higher? So any color on that would be very helpful. And then my second question is probably won't surprise you on the IMF recall. I mean, I appreciate this morning, it's too early to quantify the impact, but maybe, can you talk about what empirically you've seen so far. So any shortages or issues with on-shelf availability? Any consumer hesitancy towards your brands. And zooming in on Mainland China, where I don't think you had any product recalls, did you actually benefit from competitors' recalls in the first weeks of 2026? Antoine de Saint-Affrique: Thank you. So listen, we'll do as usual and do it with Juergen, and let me start with your last question. The first thing is those kind of events is not overall good news for the category in general. When it comes to China, none of the products we sell in official direct channels in China have been impacted. And we obviously work in full transparency with the Chinese authorities. When it comes to Europe, we expect to see, and we see supply disruption. We see obviously lots and lots of activity on our consumer care lines. We see also a sentiment that is balanced, actually. Obviously, lots of emotions are with the first recall. As I said, by the way, before the recall, we looked at all our consumer complaints, and we didn't notice anything. So the entire focus of the organization is fundamentally about two things, making sure that the products are back on shelf, and making sure that we do reassure the consumers and the health care professionals were extremely active both on the Internet and in our Care Line. As to the impact in terms of -- the lasting impact in terms of consumer sentiment, in Europe, it's too early to say, but we didn't notice things that are just -- I mean, extraordinary. You may have seen there was a publication yesterday of ESTAR, which I would refer you to on actually the -- I mean, then assessing the impact of exposure as low to moderate for infants. So this will also help reassure the consumers. Juergen Esser: Yes. Juergen speaking. When it comes to the financial impacts, 2 or 3 important elements. First, given the fact that most batches which are currently being recalled were sold already in the course of year 2025. We have to date not experienced a significant return of stock. And therefore, while the recalls are underway, the current financial impact on year 2025 do not seem material to us. Having said that, and to your point, the recall of several industry players at the same time has created, especially in European retailers, some disruption on the shelf because some retailers were first taking off all the product before sorting and replenishing the shelf. And we expect that supply disruption to have a one-off impact on our Q1 performance. We estimate this one-off impact to be between 0.5% to 1% of net sales in the first quarter. Moving forward, as Antoine said, our ambition is to win back trust and credibility because it is extremely important in that category. And it's obviously very early days. We need to monitor the situation very closely, but the few data points that we have on market shares are rather reassuring. On EDP margins, you are absolutely right that the key focus on us. And you may remember that when we were together launching the Chapter 2 of Renew Danone. We were very clear on what we are expecting from EDP in terms of contribution on growth, and I think we are delivering on a very nice way on it with plus 3.5% in the year 2025, as much as on margins, because we declared very clearly that EDP margin target is to go into double-digit territory. You do not see that yet reflected in the EBIT numbers of the category because we are heavily investing for that growth. Gross margins are going up, and you see gross margins of the company increasing supported big time by EDP gross margin increases. But at the same time, we are fueling the growth. We are fueling the growth in Europe. As Antoine mentioned, with all the elements we are doing on Activia, on High Protein, on Skyr and Kefir as much as refueling the growth in North America, very importantly, on the full EDP portfolio. Antoine de Saint-Affrique: I think that and we said that all along, we will keep reinvesting to drive our category growth. And in the cases where we have lost competitiveness, to reinstate our strength and competitiveness of our brands. I mean, what you see on Activia, I mentioned Activia is progressively getting back to growth. With good innovation, with, I mean, bringing back the gut challenge, so we see the things moving in the right direction. We will keep investing behind that to make sure that we reclaim and we regain our leadership in that field because we are convinced it's the field of the future. Mathilde Rodie: So the next question is from Celine Pannuti, JPMorgan. Celine Pannuti: So my first question, I would like to come back to what you said on the Infant Milk Formula to clarify the commentary. You mentioned the 50 to 100 basis point impact on Q1. Is this at the group level for Europe? And then in terms of your market share performance, can we -- I mean, what have you seen? I know it's early days, but in Europe or in China, how things are trending for you? And then maybe, I think, Antoine, you mentioned it's not great news for the category. From a midterm perspective, how do you think this may play out from higher regulation or maybe more consolidation? Would be interested to hear your perspective there. Then my second question is on North America, where volume turned negative in the fourth quarter. You mentioned that capacity is underway and as well creamer are getting more positively, more competitive. How do we think about volume reacceleration throughout 2026, please? Antoine de Saint-Affrique: Celine, we'll do duet again. Let me start with IMF, where we'll do a duet, and then we'll come back to the U.S. I mean, shares we didn't see. It's too early to say. We didn't see any significant share movement, one way or the other. I mean, what I was saying, it's not good for the categories. You don't win on events. You win on science. You win on your competitiveness. You win on being the best at execution. So short-term shares gain or loss on an event is not -- I mean, it's not good news. It's not something that is structural. We don't see anything major, but it's very, very early. IMF is very, very regulated category. I mean, I think, in our factories, we have over 300 checkpoints when it comes to quality. There are rules in every countries that are extremely, extremely strict. So do we expect a further strengthening of the regulation? Not in any major and significant way. I mean, there has been a change in the rules and regulation when it comes to, I mean, salaries, and that has been an ongoing move for the last couple of weeks. But by and large, we don't expect the rules of the categories to change. Where we are very confident, to be honest, is we are confident in the quality of our product. We are very, very close to both the consumers and the health care professionals and we have innovation that is really differentiating. So too early to say. We don't see any significant impact. We will have to work because indeed, noise around the category is never a good news, but I don't see it as something structural. Juergen Esser: Yes. Juergen speaking, when it comes to the financial impact, I confirm the 50 to 100 bps on Q1 at group level. But as you say, in the end, it's coming through the region of Europe and Middle East because this is where the recalls are happening. We expect the situation to normalize in the months of -- during -- in the course of the month of March. Antoine de Saint-Affrique: So on the U.S., I was very clear. I'm not happy with the performance. There are things we are super happy with. Protein keeps driving very well. Everything around medical nutrition is just flying. Kate Farm is going from strength to strength. Our Nutricia business is going from strength to strength. So it's very -- I mean, that I found very exciting. We have a couple of good things that are coming on stream. We see some early green shoots in creamers. We've launched Two Good in Natural, but to be honest, I think we'll only see progress as of, I mean, later in the year, so quarter 2 onwards. We are relaunching Danimals, but there is still more work to do. I'm not happy for one with Silk. I think, I mean, we've made because we didn't have enough capacity choices in the rest of yogurt capacity is coming on stream, so we should get better, but we could have done better. There has been a really deep change in leadership in the U.S., obviously, with Henri, who comes with deep knowledge and huge track record, but beyond Henri, we went very deep in leadership change in the U.S. The lady that has been running the turnaround of Alpro in Europe is now in charge of the category and of the creamers in the U.S. I expect the end of not inventory and rapid movements in the U.S. Juergen Esser: Yes. And maybe just one element to add, which is that we have one more quarter to go where we are running against a high base of comps for Coffee Creamers from Q2 onwards. This will ease and will have also the recovery of that region. Mathilde Rodie: Next questions from Jon Cox, Kepler. Jon Cox: Yes. Sorry, just to come back to this 50 to 100 basis points. You're saying on a group basis, so this is not just specialist nutrition on a group-wide basis, 50 to 100 basis points in Q1, which at 100 basis points level would be 25 basis points on the year. That seems relatively material. I know maybe by the time you get down to EPS level or not, but it seems quite material. And that's just on the recalls themselves rather than any, say, brand damage done in Europe as a result of the recalls. Just to add to that, elsewhere, you're talking about the Middle East recalls. Are there any signs that any of the governments elsewhere in the world are going to introduce the European standards and what would the impact be in terms of potential recalls in Asia and elsewhere? Second question, just on the gross margin gain, I can see it's 90 basis points. It sort of leads into the question earlier about EDP margin, just not moving. And I think most of us thought that would be the driver for overall group margin improvement. Is that gross margin gain really coming through EDP, and you're just actually reinvesting all of those savings into driving top line growth. And I'm just wondering about the sort of the return profile of that, if you're just investing so much into the EDP business to drive growth. But on the other hand, the profitability isn't moving. And the risk is once you stop investing, actually, that volume will go back to where it has been historically in dairy in Europe and elsewhere. Juergen Esser: First, on the first point. Look, we have this morning been issuing our guidance for the full year with a lot of confidence. And we have been issuing the guidance for the full year with a lot of confidence because we have now been consistently over the past 4 years, delivering on our commitment. We left year 2025 with very strong dynamics. And yes, the IMF situation will create a one-off, as I described it for Q1. Having said that, the last year stepped up the resilience of our portfolio, leveraging a larger range of growth engines and not only IMF, and are, therefore, expressing the confidence. We today -- the guidance today with confidence. That confidence is supported by many things, including the belief that the IMF situation will progressively normalize, but it will also be supported by what I said before, sequential acceleration, for example, of the U.S., and here specifically from the Q2 onwards, when we run on an easier set of comps for Coffee Creamers. On gross margin and EDP, I confirm what I said before, we see very promising dynamics in EDP. Let's not forget that we only started to transform the portfolio, some 2 or 3 years ago. So we were very clear that this is not a quick turnaround, but it takes some time to make it happen, and we are very happy with what we have seen in the year 2025. We are transforming in a very significant way the portfolio in Europe. All the innovations, we have been putting in the shelves, are working, and we have learned something very important from the past, putting innovation and only supporting it for 1, 2 or 3 quarters, you're going to lose the innovation. You're going to lose the renovation. This is why we are so much committed to support the innovations at the core to make sure we get sustainable success, and this will also be reflected in the profit margin at some point. Mathilde Rodie: So next question is from Warren Ackerman, Barclays. Warren Ackerman: First question is on Medical Nutrition. Could you quantify the Medical Nutrition growth globally in Q4? Maybe if you're able to break out China, Europe and North America? I'm interested in your outlook, specifically on Kate Farms, how big is Kate Farms? What was the growth in the year or the quarter? And just trying to understand how big could Kate Farms get as you kind of expand? I know you've got some ambitious plans for the brand. And then secondly, can you talk about some of the other growth engines like EDP Japan, you're saying it's a standout performance. Can you maybe put some numbers on that? And I guess the other sort of topic as well, just to try and understand a little bit is the out-of-home growth, particularly EDP Europe? If you're able to put some numbers on that as well, it would be great. Antoine de Saint-Affrique: So we'll do a bit of a duet on that. Maybe starting with EDP and EDP in Japan. What is really interesting in Japan, is we have been constantly over the course of the, I think, the last couple of years, going between high single and low double digits in Japan. On the base of Japan is an EDP -- Japan is an EDP business essentially, on the base of a strong differentiation, on the base of science, on the base of strong claims. And this is really an inspiration for -- I mean, this is really an inspiration for Activia. I mean, delivering claims that are proving the uniqueness of Activia versus other yogurts are differentiating ourselves and justifying a premium. So that is the model. By the way, we have the same, it's a smaller business, and it was under our Saputo, but we have the same with Activia in Australia. It's a good model on what we want to do around EDP. On out-of-home and EDP. Out-of-home and EDP takes 2 different forms. It is what you can do in all the hotels, restaurants, I mean, around, I mean, fresh dairy, obviously. But I think the biggest and most important access of developments there is into our drinkables. And it's true for dairy. And you see that with what we do around Oikos, which you find also in gems, which you start finding in many different places, all you see that with what we just launched, I think, it's in Germany with Alpro meal replacer. And if you haven't tried it, we'll send some to you, which is made basically to capture those people that are working at lunchtime at the exit of the office in proximity stores. The -- I mean, our out-of-home channels are growing much faster than mass retail. Juergen? Juergen Esser: Yes. On Medical Nutrition, the dynamics are actually pretty good and especially as we leave year 2025, growing double digit in North America, growing double digit in China and North Asia, Oceania are growing double digit in many emerging markets. Actually, we're quite balanced between what we see in Milk Nutrition for infants and Milk Nutrition for adults. But on both, we see very, very strong traction. It's getting now to a scale, which starts to impact also company results. You talk about Kate Farms. Antoine mentioned it in the prepared remarks, it's now a $500 million business. Antoine de Saint-Affrique: It's farm nutrition. Juergen Esser: Exactly, which I think is something, which you will see reflected in the like-for-like performance of North America from Q3 onwards when we have both Kate Farms, Nutricia, the whole Medical Nutrition platform impacting the results. Kate Farms is actually growing strong double digits as we speak. And so we see coming to life the expected synergies of our existing and legacy platform we had in the U.S. and the, let's say, network access, we are getting to hospitals and the health infrastructure in that part of the region. Antoine de Saint-Affrique: Maybe to complete on the combination Kate Farm and Nutricia. So I said it in the prepared remarks. The combination of the two is $0.5 billion. We've -- as you know, we folded in some ways, Nutricia into our Kate Farms business. The complementarity of the product line, the complementarity of our customer access, the complementarity of the scale is just fantastic. So the business has real momentum. And I think it will have -- I mean, be a game changer in the U.S. Juergen Esser: And on Japan, as you mentioned, Japan, EUR 400 million business as we leave year 2025, growing at strong double digit, and we have more capacity coming online very soon in order to support this fantastic dynamic on a portfolio, which is extremely focused on high protein and gut health. So that's very exciting. It's one of the largest dairy markets of the world, and this is why we are very focused on success there. Mathilde Rodie: We have the next question from David Roux, Morgan Stanley. David Roux: Can you hear me? Antoine de Saint-Affrique: Yes. David Roux: My first question is just on the North America yogurt capacity, which you mentioned. Could you just give us an update as to where you are now with this rollout. How much headroom to overall capacity in the U.S. will this help with once completed. And how we should think about the CapEx evolution for the group from this going forward? Then my second question is on working capital. You've called out working capital at record low levels relative to sales in the release. I think you mentioned some destocking of Mizone, but perhaps can you give us a bit of color around what has been driving this and how we should think about that working cap to sales ratio going forward. And then my last question briefly on FX. I understand you don't usually give color on this, but given that FX was a meaningful factor this past year, can you give us some expectation for the FX impact on revenue and EPS at current levels for the forthcoming year? Antoine de Saint-Affrique: So I think -- I mean, the bulk of the question will go to Juergen. On Noram, literally, the capacity is coming on stream step by step by step. So we are adding line after line to basically respond to a demand that keeps being absolutely buoyant and to be able to reenlarge our offering. Obviously, what we invest into CapEx is not only behind EDP or behind yogurt, but we invest into CapEx in medical nutrition, as you've heard last year with what we are doing in France in Stanford, behind infant nutrition. So we invest where we see value-adding growth for the company. Juergen Esser: Yes. And maybe when you look at overall CapEx, and this is what we shared at the CME for Chapter 2 when renew Danone, CapEx for the company is going to slightly increase. We were the last year traveling just shy of 4%. We said it may go up to 4.5% in order to support capacity investments into high protein, which is true for areas like North America, which is true for areas like Europe and which is true for areas like Japan, which I just mentioned, but also for Medical Nutrition, where we are obviously progressively investing for the future growth. For working capital, very happy with how we finished the year 2025 at minus 10%. I think we are now getting into best-in-class when it comes to working capital management. Actually, the benefit of working capital in year 2025, not so much coming from stocks. It's more about a much more efficient way we manage the balance between receivables and payables, and we are benefiting here from something Antoine said in the prepared remarks, which is the digitalization of our process flows in our global business services. This is really giving us a fantastic platform to -- for the ambition to say sustainably at a good level of working capital as we have it today. For the currency, look, I would wish I could predict how currencies will move in year 2026. You saw the impact we had on sales at minus 4%. In the full year, it was minus 6% in Q4. Really here, I don't want to -- please understand that I don't want to give a number because any number I will give will be a wrong number. Mathilde Rodie: And next question from David Hayes, Jefferies. David Hayes: So I don't want to be the annoying person and labor the guidance context, but I'm going to be that annoying person. So just to come back to that quickly, just trying to gauge in your kind of that confidence word you used. I mean, you saw one of your peers yesterday impacted by this recall talking about with their best guess on the brand equity impact through the years that they might be at the lower end of the range. Was that something that you considered including, or to your confidence point, you don't feel there's need to caveat that based on the current trends and brand impacts that you're seeing at least early on in the -- in this process. And then the second question, just on the Rest of World. Was there some benefit from Ramadan? Again, we heard a competitor yesterday talk about that was sort of a help in the period of Indonesia. Obviously, a big market in that region. So was there Ramadan timing that we should take account of? And that gives back a little bit in the first quarter this year. Antoine de Saint-Affrique: Thanks, David. We'll do again a bit of a gut. I mean, we don't see at this stage any major brand or brand equity impact on IMF. There is obviously a disturbance on the shelves. There is obviously, for a period of time, I mean, a sales force that is focused on talking to the customers replenishing the shelf. So as they do that, they don't do -- I mean, they don't do other things. But from a pure brand and category standpoint, we haven't seen anything major at this stage, too early to say. We obviously look at it very, very carefully, but I wouldn't be definitive one way or the other. On Ramadan, I mean, to be honest, we are -- we don't comment on the move from Ramadan from one week to the other. Juergen, I don't know if you want to... Juergen Esser: On the Ramadan, nothing to add, I would say. On the guidance, 3% to 5%, we are, in a way, growingly consistent is what we are now saying since 4 years. We feel good about the 3% to 5% guidance we have launched that was in year 2022, and you saw us delivering in that corridor is a very consistent manner. And so there's nothing to add to what I said before on the guidance. So we feel good about it. Mathilde Rodie: And the next and last question is from Tom Sykes, Deutsche Bank. Tom Sykes: Just firstly, on the gross margin. It looks like that was sequentially down a little in H2, which is the first time in a little while. Could you maybe say what the reasons for that are? Is that FX? Or could you say something about COGS productivity and just whether you'll be able to price under your COGS inflation like you have been doing, please? And then just on the growth of high protein, either North America or globally. Could you give a view as to the run rate of growth now versus perhaps where you were in the first half of the year, please? Antoine de Saint-Affrique: So let me start, maybe with the growth of high protein. We still see the growth in the protein world being very, very down -- being very dynamic. If you look at the overall category growth of the yogurt category, it's very dynamic. I mean, I think at global level, it's high single digits, and it's being driven by protein. Protein by the way, takes different forms. I mean, it's high protein, like the likes of Oikos or YoPRO. It is also things like Stevia. And I mean, Stevia at Danone is doing extremely well, I mean, you see it reflected also, and I mentioned it in the remarks in the numbers of the Danone brands. So there is, I mean, there is a deep, deep trend around protein in different forms. And we believe that our trend is here to stay. It is becoming, as I said in my prepared remarks, also it is becoming more sophisticated. So it's not protein for the sake of protein, the protein that are doing something or protein that are complemented with something. The protein that are doing something are you seeing that we've launched under Oikos protein and digestive benefits, what we've launched in Europe under HiPro, which is muscle recovery or what we launched behind Stevia, which is a different positioning, but one that is also very relevant when it comes to protein that feed you in your daily activity as you need for something that is high in protein and low in the rest. So it's a trend we believe to be long-lasting trend. We see progressively the market shifting to different kinds of protein, and we're obviously not only suffering the way, but leading the way in more ways than one. Juergen Esser: Tom, on the gross margin, you're absolutely right. H2 expanded a little bit less than H1. It's not about productivity, which really was very strong across the year. It's more about the phasing of material inflation, especially coming through from dairy ingredients, things like whey or things like lactose, which were quite high where prices were quite high in year 2026, where we were better protected through hedging in the first semester than in the second semester. That's why we had a bit more impact in the second semester coming from it. Good news is that those prices have started to come down. So nothing particular to say for year 2026. Mathilde Rodie: So with that, we are ending the Q&A. Thank you, Tom, for the last question. Antoine de Saint-Affrique: Thank you, guys, and we'll see you, or most of you, soon in the coming weeks. Good day, everyone, and good weekend.
Operator: [Audio Gap] [Foreign Language] Brunello Cucinelli, President; Luca Lisandroni, CEO; Ricardo Stefanelli, CEO; Dario Pipitone, CFO; Moreno Ciarapica, Co-CFO Senior; and Pietro Arnaboldi, Investor Relations and Corporate Planning Director. [Foreign Language] Brunello Cucinelli: [Foreign Language] So the most important thing is that next week, we have the Milanese Fashion Week, perhaps the most important appointment for our industry. And we have the international as well as the Italian press coming to the appointment. And we can definitely talk freely, speak freely with them because we have already disclosed our results. This is -- the same happens when we go to Pitti the early January. Then the second item, having clarified and completed our entire relationship with the new course of Saks Global following its restructuring, now this allows us to share everything with you. And we are very satisfied with this new relationship, both in terms of sales and brand image. So these new timings -- so for this call, we would like to also keep the schedule also for the years to come. As always, all 10 of us are here today. This is how we would like to proceed. I will present the key figures. Dario, our CFO, will go through the details. I will explain everything regarding Saks Global. Then I will go through a detailed growth plan for 2026, a couple of words on 2027. Luca will touch upon the international markets and then 5 minutes for the strengths of our business model in which we strongly believe and where we see great opportunities for the years ahead. Now -- so excellent revenues with a turnover of EUR 1.408 billion, representing growth of 11.5% at constant exchange rates and 10.1% at current exchange rates. Normalized EBIT of EUR 235.9 million, representing an increase of 11.4%, margins of 16.8%, up from 16.6% the previous year. Net profit of EUR 142 million, an increase of 10.5% with an impact on sales of 10.1%, in line with the previous year. So the completion of the '24, '25 and '26, 3-year project for Made in Italy artisanal production has been brought forward by 6 months with extraordinary investment, and this will enable us to operate to function with confidence over the next 10 to 15 years. So in 2025, investment amounted to EUR 146.2 million, accounting for 10.4% of turnover. Net debt for the core business amounted to EUR 198.4 million, reflecting the significant investments made and the distribution of EUR 68.8 million in dividends. The Board of Directors will propose to the shareholders' meeting called for 23rd of April 2026. So the proposal will be the distribution of a dividend of EUR 1.04 per share payout of 51%. Then the strong start to sales in the boutiques is also another important item together with a solid order intake for the upcoming fall/winter men's and women's collections. And this enables us to confirm for 2026 an expected revenue increase of around 10% at constant exchange rate, reflecting our long-term sustainable growth project. A gradual improvement in the financial position is expected, favored by the return to ordinary investment levels from 2026, having completed ahead of schedule the significant investment plan for the Made in Italy artisanal production. On 21st of January this year, the new AI-based e-commerce website was unveiled. It was developed on the proprietary Callimachus platform with the aim of offering personalized tailor-made experiences and placing uniqueness, exploration, discovery right at the core. We believe that this new pageless website can generate benefits, both in terms of brand image and revenue. And I'll give you more color later on. On April 14, in New York at the Lincoln Center, we will host the first of the world premiere of the documentary film Brunello: The Gracious Visionary, following the warm reception given to its absolute premiere on December 4 in Rome, Cinecitta. The premiere will continue in the major world capitals, and it will end in December in the Middle East. And this will entail a lot of travel. So a year has ended that we are pleased to describe as solid, balanced and beautiful, marked by excellent results in terms of revenue, profits and also international recognition. These achievements should allow us to look ahead with confidence to a future of outstanding prospects, growth in the years to come, positive forecast and enduring prosperity. Markets across all geographies appear to be expanding in a healthy and harmonious manner where each fashion brand expresses its own heritage, identity and positioning. We are receiving extremely positive feedback regarding the Callimachus platform developed by our Solomeo AI, our new e-commerce conceived to offer visitors an AI-driven digital experience through which they may discover the brand's collections in a manner that is consistent with the values that have always inspired us. At the core of Callimachus lies a new concept of website without pages and endowed with its own intelligence. It is a system that is capable of understanding and following each user's preferences, delivering a personalized, dynamic and pleasant and engaging experience in real time. Visitors are spending more time on the new e-commerce platform than in the past because the experience seems to be both stimulating and enjoyable. To conclude, in this first part of the year, sales continue to perform extremely well across all markets and then Luca will give you more color on this. The excellent order intake currently underway for the Fall/Winter '26 collections, together with the positive feedback from buyers, the international press and our teams in our boutiques, well, this leads us to envisage with confidence for this year too, a balanced and solid revenue growth of around 10%, accompanied by the achievement of a healthy profit. And now Dario, you know that you have been translated, so do not speed up too much. Dario Pipitone: Yes. Thank you, Brunello, and good evening, everyone. I will begin with an analysis of -- and please use the presentation to follow the slides from Slide 24 onwards of the presentation. The final revenue figures confirm the preliminary data released last January 12 with revenue growth of 10.1% at current exchange rates and 10 -- 11.5% at constant exchange rates. With regard to the other income statement items, Slide 26 shows that as at 31st December 2025, we report a balanced margin and cost structure with the reported EBIT and net profit increasing by 7.6% and 10.5%, respectively, compared to December 31 last year. Normalizing margins for the extraordinary provision of EUR 8.1 million recorded during the year following the Chapter 11 filing of our client Saks Global. So normalized EBIT amounts to EUR 235.9 million or 16.8% of revenues compared to 16.6% in 2024, a growth of 11.4% reported there. First margin equal to 75.2% of revenues increased by 11.1% compared to last year, mainly ascribable to the sales mix by distribution channel, product mix and geography. Operating costs increased by 10.5%, reflecting the expansion of our fashion house. Now moving to Slide 28 for a detailed analysis of the main cost items, namely personnel costs, rents and communication investments. So we can highlight that personnel costs as at 31st December 2025 amounted to EUR 255.4 million, and it's with -- increasing by 9.4%, slightly less than proportional to revenue growth with an impact of 18.1% as at 31st December -- sorry, it was 18.3% last year. As of 31st December 2025, total headcount stands at 3,327 FTEs with an increase of 226 FTEs compared to last year. And this is down to the targeted expansion of our retail network and also the strengthening of our artisanal production workforce as part of the project launched last year to expand in-house handcrafted production. Now moving on to rent costs. So net of IFRS 16 effects, this cost amounted to EUR 218.9 million or 15.6% of revenues, up 19.5% compared to EUR 183.2 million or 14.3% of revenues as last year. This increase is mainly down to 3 different items: new and selected openings and enlargements carried out throughout the year, certain important lease renewals and partially costs that we began recognizing in 2025 relating to openings and enlargements expected in the coming months. As to the communication investments, they went up by 5% or EUR 4.6 million, amounting to EUR 96.9 million with an impact of 6.9% vis-a-vis EUR 92.3 million or 7.2% last year. So the above reflects our ongoing and increasingly strong focus on consolidating the brand's positioning within the absolute luxury segment as well as organizing family -- organizing small events that enhance the brand allure without affecting its exclusivity. As we said last August, major events were concentrated in the second half of the year mainly with communication investments accounting for 7.2% of revenues compared to 6.5% in the first 6 months. So before moving on to the main KPIs below EBITDA, it is appropriate to briefly comment on transport and duties, which amounts to EUR 62.4 million as at 31st December '25 or 4.4% of revenues compared to EUR 55.2 million the previous year, 4.3% of revenues. This item went up by 10.4%, in line with revenue growth. So to conclude on Slide 26, as at 31st December 2025, depreciation and amortization amounted to EUR 180.6 million compared to EUR 153 million in 2024, up 18% or EUR 27.6 million, mainly ascribable to new lease contracts signed during the period. Consistently with our earlier comments on rents, excluding IFRS 16 effects, depreciation and amortization amount to EUR 55.6 million compared to EUR 49 million in 2024, with a slight increase in the impact on revenues from 3.8% to 4% for this year. Following the EBIT growth, as previously mentioned, and after financial management reporting net financial expenses of EUR 29.1 million and a tax rate of 28.5%, net profit as at the 31st of December '25 amounts to EUR 142 million with an impact of 10.1%, up 10.5% compared to last year. Before concluding the income statement analysis, I would briefly come back to financial management with reference to Slide 29, sorry, where we provide the usual breakdown, highlighting so-called recurring component on which to project expectations for the year. Then we have a component which is linked to exchange rate fluctuations, and there is a component reflecting the effects of equity investments. The increase in the ordinary and recurring component is equal to EUR 15.7 million and is mainly attributable to -- well, for EUR 6.8 million, financial expenses and lease liabilities amounting to EUR 27 million as at 31st December '25 compared to EUR 20.2 million of last year, following new lease contracts signed during the period. And for the remaining part, EUR 6.4 million relating to the increase in net financial expenses associated with characteristic with net financial debt to the core business, which we will comment on shortly. The exchange rate component shows an income increase of EUR 18.6 million, mainly reflecting unrealized net gains from currency fluctuations and therefore, subject to variation from period to period. Now let's turn to Slide 30 and following. I'd like to share a few brief comments on the balance sheet items such as net working capital, investments and net financial debt. The net working capital, including other net current assets and liabilities, amounts to EUR 313.2 million with an impact on revenues as at the 31st of December 2025 of 22.2% versus 19.3% at the 31st of December 2024. In detail, well, the items were developed as follows: trade receivables at the 31st of December '24 amounted to EUR 82.1 million at 30 June 2025, EUR 103.6 million and EUR 101.2 million at the 31st of December '25, corresponding to 7.2% of revenues versus 6.4% last year. These dynamics reflect strong revenue performance, particularly in the wholesale channel and the net balance due from the Saks Global Group, which we expect to recover upon completion of the Chapter 11 procedure, against which we recorded an extraordinary provision of EUR 8.1 million, bringing our bad debt reserve net of utilizations to EUR 13.7 million at the 31st of December '25. Excluding the extraordinary event relating to Saks Global, we therefore consider our receivables position extremely sound with losses recorded during the year equal to 0.09% of revenues, which is, virtually nil, consistent with our track record. Payment terms to suppliers, collaborators and third-party consultants remain unchanged with trade payables amounting to EUR 177.1 million versus EUR 169.2 million at the 31st of December '24, up 4.7% due to the business growth. Inventory impact on revenues stands at 28.3%, which is substantially in line with both the 30th of June and the 31st of December 2024 reported results, and this is a level that we consider as healthy and ordinary for our company. Other net current assets and liabilities show a negative balance at the 31st of December '25, equal to EUR 9.7 million versus EUR 36.5 million in 2024, with changes that are almost entirely attributable to the fair value measurement of derivatives, hedging currency risks. Moving on to investments. I'm on Slide 32. You see that as at the 31st of December 2025, investments amount to EUR 146.2 million, 10.4% of revenues versus 8.6% last year. And they relate to -- well, for EUR 84 million, significant commercial investments supporting the image of our fashion house and the contemporaneity of spaces, both in showrooms and in our boutiques. For EUR 46.1 million, they are referred to likewise important investments aimed at consolidating our strongly artisanal production capacity within the 10-year project that Brunello mentioned and for about EUR 16.1 million, well, these are almost entirely referred to significant technology investments. Finally, the net financial debt for the core business on Slide 33 amounts to EUR 198.4 million or 14% of revenues at the 31st of December '25, in line with what we discussed in our August call versus EUR 103.6 million at the 31st of December '24. The 2025 net financial position for the core business reflects the positive operating results for the period, the significant investment plan, both in sales and real estate and changes in the net working capital as described above as well as dividend payments totaling EUR 68.8 million. Thank you all for your attention. Well, Brunello, well, I concluded my remarks. I would like to hand the floor back to you. Brunello Cucinelli: All right. So before summarizing the 2025 and talking about the 2026 and '27 projects, I'd like to go into the detail of the Saks Global issue. We have had a great -- more than 30 years of relationship with Neiman Marcus, Saks and Bergdorf Goodman, which were brought together last year under Saks Global, but we continue to regard them as 3 distinct department stores in the world of fashion that are extremely important and among the finest in the world. We have grown consistently in both revenue and brand image. And in over 30 years, we've never lost a single donor. So we're not commenting on the financial merger. But for us, they remain separate brands, as I said. Only a very small amount of end customers overlap between Neiman Marcus and Saks. And this means that in the eyes of the final client, the strong and distinct value of the brands, Neiman Marcus, Saks and Bergdorf Goodman clearly remains. The spaces we have with them are very nice. They're beautiful, significant, located in equally important locations. Broadly speaking, our relationship with them is about, well, half concession and half traditional wholesale, representing approximately 6% to 7% of our total company revenues. For us, business in 2025 has performed very, very well with all 3, Saks, Neiman and Bergdorf, both menswear and womenswear and the image, the visual presentation and lifestyle positioning have remained at a very high level. Since January, there has been a new team in place. We think they are highly capable. We know them very well because the team is led by Geoffroy van Raemdonck and Lana. They are outstanding product experts, and this is something we've always appreciated. They're going -- they're coming to Milan next week. And so first and foremost, the discussion is about product, then about brand contemporaneity, visual identity and lifestyle and only afterwards about other topics. The entire team performed very well at Neiman Marcus. We met them in New York, and they clearly explained the group's new strategy, which is very clear, is based on concentration and elevation. This means closing nonprofitable stores, which incidentally do not concern us and carefully selecting brands in order to remain firmly positioned in the true luxury while including contemporary brands. So we are closing this 2025 cycle with them by booking a provision of EUR 8 million to cover any potential losses, as we said, which allows us to feel very comfortable for the future. These would represent the only potential losses in more than 30 years of track record with them. Since the end of January, we've begun this new phase. We've resumed deliveries. We are already receiving payments on time, and they are preparing orders with extreme care for the autumn/winter 2026 men's and women's collections. The feedback on the collections has been so far truly exceptional. They said, you have created the 2 most beautiful collections in our history. Hopefully, that's true. Well, these assessments align perfectly with those of our other clients, the teams in our boutiques as well. Well, the best objectives that they've used are rich and unique. We like them very much. They've told us that sales of our brand have been performing well at the beginning of this year, too. And this is a very important moment. So please note and remember that we always consider the 3 brands together, but separate. So we expect a year of solid growth, not only in terms of revenue, but also in terms of image by -- from Goodman, we will have 2 new spaces. So final conclusions for the year 2025, which is for us the second -- the end of the second year of our 5-year plan '24 to '28. 2028 will mark the 50th anniversary of the company. We have defined this year as record-breaking in terms of growth, profits, investments and also for the recognition. Revenues increased by 11.5% at current exchange rates and by 10.1% at constant exchange rates. Throughout our history, our 30 years as a listed company, we have achieved an average revenue growth of 13.7%. Well, in 2021, '22, we recorded a 30% growth, which was rather unusual, but 13.7% at current exchange rates and 13.4% at constant exchange rates. EBIT showed a slight improvement, 16.8% normalized because of the Saks-related topic. Net profit, 10.1%. Inventory remains healthy, high quality, well balanced as has always been the case for our company. Please note that we work in the apparel world, and this has been our average value since we became public. If inventory were a bit older, the image in the boutiques would be old styled as well and not contemporary any longer, and this would have an impact on sales. Investments, well, we reached a peak in 2025 with 10.4%. However, now that we have completed all our factories and the expansion of our headquarters, well, we feel well positioned for the next 10 to 15 years at net debt maximum level, but we consider that a healthy level over the next 3 years. It will decrease as investments will normalize at around 6% mainly related to commercial activities. But do not think we have reduced investments. They should be viewed in combination with the last 3-year period during which they accounted for approximately 9% on average dividends and change to 50% of the net profit. So how do we envisage 2026 in quite a tangible way? Sales in the first part of the year have been excellent across all geographies. And Luca will go into details shortly. We expect healthy growth of around 10%, EBIT growing more than proportionally, investments at around 6% and communication investments between 6% and 6.5%, what was 6.9% last year because in the past 3 years accounted for about 0.5%, but there was the film project, which ended, then inventory stable as a percentage at around 28%. Net debt improving, also thanks to lower investments in artisanal production. Dividends, as usual. So it seems to us that at this moment, the brand image is very clear, and it has a very well-rooted identity in menswear and womenswear, style identity in absolute luxury and identity rooted in exclusivity, craftsmanship and quality, the identity of the thoroughly Italian company, including its idea of sustainability. All of this supported by the recognition and accolades received in 2025. And the film was released in 2025. And in 2026, the movie will tour the world starting in April in the United States. How we see 2027, but only in general terms, just to give you some visibility. So no changes in strategy, healthy and balanced growth of around 10%, slight improvement in EBIT. And overall, we expect a similar -- a performance similar to 2026. And if that happens, we would be very pleased. Luca, now it's up to you. Thank you. Luca Lisandroni: So let's now step into 2026 based on -- building up from 2025. The first part of the year brings us 2 very positive pieces of new excellent retail sales and a very, very positive Fall/Winter 2026 sales campaign. Let us begin with retail and starting from the product. So the first month of the year is always a pretty sensitive period because there is the overlap of 2 collections, winter and spring/summer. Winter sales continued to perform pretty well. But it was the first deliveries of the spring/summer collection that truly provided a boost to our sales. This means that we worked effectively on the season launch in terms of timing, proportions and weight and visual merchandising. But even more importantly, this means that the creativity of the new Spring/Summer '26 collection currently being sold in stores has been highly appreciated by end customers. And this represents a very strong guarantee for the rest of the season. So this becomes even more meaningful when you understand that this is consistent across all geographies and even balanced between men and women. So we can now confidently say that we can rely on a very beautiful and very fine spring/summer collection. Now from regional standpoint, still within retail. North America, excellent sales and even with a slight acceleration compared to the fourth quarter of 2025. Europe, very good, thanks to the crucial role of local clientele. And particularly positive and immediate has been the contribution from the flagship expansions in London and Paris, along with the widespread growth across the rest of the European network. As you know, we are very closely linked with a very high -- we look up at Hermes, and we greatly appreciated Axel Dumas' remark talking about expansion, saying that it is the customers who push the walls of the stores. It is a great expression. So we therefore want to thank our customers in London and Paris who have enabled us to make these stores even more welcoming and vibrant besides them being bigger. In Europe, we had no new openings throughout 2025 nor in this first part of the year. Therefore, the result is definitely on a largely comparable basis. Asia, excellent sales there with China growing significantly and consistently week after week from the very first days of the year, regardless of the different timing of the Chinese New Year. And when we take a look at our results in the past 12 months, we can say that store by store, we have achieved a new and higher level of performance. Now taking a look at our retail channel as a whole overall, we can say that it continues to benefit on the one hand from growth in the number of customers period after period between 5% and 10%, thanks to the onboarding of new clients and on the other hand, an increased average spending by existing customers. These figures highlight both the attractiveness of the brand and also our ability to create long-term value in customer relationships. And they seem to outline a very solid and reassuring evolution of our customer portfolio. The growth in average retail selling price is higher than the increase in average list price due to a sales mix that basically favors more special products. Well, whenever this occurs, we view it as a very healthy element for our sales and a strong representation -- and also for our positioning and a strong representation of the steady elevation of demand at the high end of the market. So based on this, we expect a very strong retail quarter in which the exchange rate effect, the ForEx effect will be noticeable, but then we believe that it will normalize over the course of the year, especially from April, where there was high volatility last year. But even at current exchange rates, however, we expect a very positive performance. Let us now turn to wholesale. We have completed the men's sales campaign, and we are approximately halfway through the women's campaign for the Fall/Winter '26 collections, but we can already say that we have received very flattering feedback on both collections. And we consider our order collection management to be excellent. So during the meetings we had in our showrooms, we have basically restated the message from our Christmas letter to send to our 400 multi-brand clients, probably the best of the finest in the world. In that letter, we asked them to -- even in the online activities, to basically try and achieve the very same nobility that the brands are recognized for in the physical brick-and-mortar world. We're very pleased that our clients have embraced this message, and we are highly confident that the wholesale channel will increasingly contribute positively to strengthening the modern and exclusive perception of our brand. The strength of the collection has allowed us to minimize the impact of this request on orders. So we expect to close yet another quarter with slight growth in the wholesale channel, but more important than the performance in the single quarter, however, is the assurance that multi-brand clients worldwide have closed a strong winter season with us and opened the summer season with sell-out levels that are even better than last year. In conclusion, the results and indications from this start to 2026 reinforce our conviction that we can experience yet another year of growth around 10%. We expect growth to be more concentrated in the retail channel and well distributed across regions, always moving towards an increasing geographic balance. Now 8, 9 minutes devoted to the main topics and then, of course, discussion and take your time for that. So we have a fashion house that accounts for 75% and lifestyle accounts for 25%. And we are mainly a ready-to-wear brand and only 25% in apparel and 15% accessories. This is how we want to grow. And this is how we believe we were recognized last year in London with the Fashion Oscar we received last December, a clear identity in Italian men's and women's style of true luxury, great craftsmanship, quality and exclusivity. So therefore, we must remain exclusive and also strict in our communication, especially online as we have always tried to do. So we account -- retail accounts for 68% and wholesale 32%, expect to drop to 30% in 2026. We have 136 directly operated stores, a few openings each year, just 3 or 4 expansions of existing stores and occasional relocations and between 470,000 and 500,000 customers annually with about 5%, 10% new customers added to the equation every year. And then we organize these events, these small-scale events worldwide, gathering about 100, 150 clients per evening. And we find this format to be very important because you can speak to anybody attending. According to recent measurements, customers spend about 30, 31 minutes in our boutiques. A year ago, it was 16 minutes, 50% men, 50% women. Casa Cucinelli are very important. We currently have 9 worldwide. We will open the 10th in Shanghai in early September, and we will organize events there. Then revenues per country. So today, 37% North America, 35% Europe, 28% Asia, of which 13% China. Perhaps in 3, 5 years, we expect the split to be as follows: 33% U.S.A., 33% Europe, 33% Asia, with China possibly reaching 18%, 20%. We started late in this country, but we see great opportunities in the years ahead. Then production and sustainability. We collaborate with approximately 400 SMEs, 800, 500 people, 80% of whom are located in Umbria, Tuscany and Marche. Sustainability. So Ricardo was included by Time in the Time 100 Climate 2025 list as one of the most influential international leaders in climate action. We have always believed in sustainability: in environmental sustainability, avoid waste, recover everything possible; human sustainability, meaning how much you earn; spiritual sustainability, how you treat others; technology-related sustainability, how long do I have to be online for business reasons; and moral sustainability because we are a company based in Italy that works in Italy, produces in Italy, manufactures in Italy and striving to work for the future of our nation, and we also pay our dues here. A very important topic. In 2025, we had around 3,400 employees with approximately 250 new hires per year. Employee turnover is extremely low across the company. However, please note that we never implemented and never will implement working from home or remote working for 3 main reasons. Because that way, if you do remote working, there is no distinction between private and work life. This jeopardizes collective creativity and especially young people learn almost nothing. And they basically come up with the idea that they will always work 3 days per week only. This is the reason why we decided to ban it. We have always wanted to work 8 hours a day, very focused with 1.5 hours in the company restaurants. So if we were to remove this no remote working rule, turnover in the company would be almost 0. This does not mean that we do not consider or hold human flexibility extremely high, which has always been a tenet of our company. So we all start at 8, but if you need to -- if you have a medical appointment, you can definitely take it. And the vibes in the company are pretty pleasant. So about prices. The pure price increase in 2026 is around 3%. Part of this depends, even though a negligible one, depends on the new clothing industry labor contract in Italy, which was renewed in 2025 after 6 years of unchanged numbers, EUR 60 a month after 6 years, I'm not so sure that it will be easy to recruit new labor. But we have 20,000 job applications per year. We only need 300, but you should consider that out of the 20,000, 4,000 are willing to perform labor work, of course, high-quality artisanal work. Then there are about 100 people in the design team, 20 of whom are top level, plus myself as a coordinator. That's why you can definitely be sure that even if I was to pass away, the company would not be stuck. My time at the company is 80% devoted to product, including visual, stylists and lifestyle. We have the academy in Solomeo for the arts and crafts, and we have a lot of confidence, thanks to that, that the value of the hamlet, Solomeo, that's very important. Every year, we welcome about 13,000 to 14,000 visitors, including customers, friends, journalists, celebrity, politicians, and I have a problem. The only person having a problem is me because I have to dine with someone every single night. So we believe that the village of Solomeo gives us -- this hamlet gives us a strongly rooted identity and uniqueness. And honestly, we work daily to preserve it. A couple of minutes on Callimachus. Callimachus is based on a new concept of a website. It was launched in January. Well, an important thing, well, usually, people tend to stay 4 minutes on our website, and now they stay 9 minutes, and they usually visit 3x more products, and this is very important. Just let me share a couple of feedbacks. Well, companies that are leading in the world, so leading in all industries. They said, for example, a truly exciting turning point for digital storytelling in luxury; or another feedback, a clear break from the traditional rules of e-commerce, a radically innovative experience, truly brilliant or congratulations on this fantastic project. Congratulations on the wonderful work you've done, we would love to meet you. Groq, for example, I can disclose this name, the one that NVIDIA bought for $20 billion. Well, Groq said that's their feedback, Callimachus reinvents websites and e-commerce. Solomeo AI has launched an online platform based entirely on artificial intelligence, transforming Brunello Cucinelli's e-commerce into a personalized shopping experience that reflects the attention and care typical of a luxury boutique. Another very important company says a true innovation that pushes the boundaries, highly inspiring. And then another one says beautiful website that truly represents your manual work and craftsmanship. This is the feedback of 10 leading brands in the world, which wrote to us, and we like this very much. Where we started this project as a sort of a hobby. This is not our core business, but we reached a great success. Conclusions, we think we have great opportunities in the years ahead, provided we continue to develop contemporary collections. So first and foremost, we have to focus on products. The Fall/Winter 2026 men's and women's collection are the most beautiful ever as reported. But having strong collections in stores gives us a bit more peace of mind between July and December now regardless of what happens than worldwide. So we are experiencing a very positive moment for the brand image and a brand which is Italian, artisanal, contemporary and exclusive in terms of luxury. So thank you very much for your attention. We can open up the discussion now. Operator: [Operator Instructions] The first question from Andrea Randone, Intermonte. Andrea Randone: I have a first question, which may be a bit trivial, a bit banal, but this is to better understand the guidance at constant exchange rates. You are talking about a quite heavy exchange rate with a quite heavy impact on the first part of the year. Can you give us more flavor? Are you talking about 2%? Is this going to be the impact on the full year? Is it a reasonable value? And then I have a second question. Can you summarize again the elements that lead to an improvement in cash generation? You talked about normalization of investments, stable working capital. So these seem to be the main elements for an improvement in cash generation. But this is certainly -- well, the normalization of cash generation is certainly important for the market. So if you can please recap these elements? And the third question concerning business. I'm curious to know whether you were happy with the take-up of Harrods in London or well satisfied or happy with similar initiatives. Do you think they are effective? Brunello Cucinelli: Andrea, I will answer the second question. As far as exchange rates are concerned, we estimate 1.2%, 1.5% to 2% for the full year. And the first -- in the first quarter, we may have 4%, 5%. But then from April onwards, well, we think it will be 1.5% for the full year. Then as far as the take-up of Harrods is concerned, this was a beautiful success, honestly speaking. Now this year, I think, they will celebrate the 130th anniversary or something like that. So Luca will take the other answers. Luca Lisandroni: Well, first of all, we want to go back to an ordinary level of investments in the past 3 years. As Brunello said, we had a very high concentration of investments. For next year, we envisage to continue with commercial investments that are absolutely ordinary. The extraordinary part of investments dedicated to factories will no longer be there. So please, Andrea, do not think we've dropped our investments. That's very important. Investments remain the same. Operator: Next question, Oriana Cardani, Intesa Sanpaolo. Oriana Cardani: I have 2 questions. First question about the first margin. Do you expect a result for 2026 in line with the 2025 result? Or do you see any potential for an increase as a percentage of revenues? And the second question is on fragrances and glasses, eyeglasses. Can you comment from a qualitative and quantitative viewpoint, the performance of these 2 categories last year? And for eyewear, are you expecting to extend the partnership with EssilorLuxottica on the smart glasses part? Brunello Cucinelli: Luca will take the question on eyewear. And then as far as revenues are concerned, we expect to be in line with what we said. And well, if we can increase that by the end of the year even further, would be even better, but that's it. As for fragrances and eyewear, well, they have been performing very well, especially from an image viewpoint because we have positioned them the right way, as EssilorLuxottica said. So we are very important for them like Chanel. Well, with Chanel, they make huge numbers, but it's in terms of research and positioning. Fragrances are very high end and the response rate is very high. Do you want to add anything on eyewear? Luca Lisandroni: Yes. This was the very target when we launched both categories. In these new categories, we wanted to achieve the very same positioning as the one we had in apparel. And I think we've managed to do so. And then as far as extension to smart glasses is concerned, for the time being, this is not in our plans, in our pipeline. However, we have a small high-end eyewear collection in the pipeline with gold frame. So we really want to focus on that. And these are glasses with a price ranging from EUR 5,000 to EUR 9,000. Well, going back to the previous question on first margin. Well, the question was on the first margin and not on revenues, but nothing changes. The final number for 2025 is a very good reference for the results that we are planning for 2026. Well, this doesn't mean that we do not -- we're not happy if we increase by 10 or 20 basis points, but the outlook that we have can be confirmed. Operator: Next question from the conference in English, Chris Huang, UBS. Chris Huang: I have 3, if I may. First one, just a follow-up on the first margin. You said that 2025 is a very good reference for 2026. But I'm just curious about the actual drivers of this first margin expansion in 2025. I think in the press release, you mentioned channel mix being one of the key drivers, but actually channel mix wasn't that big of a difference when it comes to year-over-year performance. So just wondering why gross margin has been so strong in 2025, the drivers behind? Secondly, on the start of the year, I think, Luca, you provided a lot of very helpful comments on the retail channel by different regions [Audio Gap] . Unknown Executive: Have new colors on the geographies. So I would start from this question. So as we said multiple times, we do not believe that our business is mature. And the reason being that we have new customers across all different geographies. Then as to the conversion to -- concession to Neiman Marcus, you should consider 3 brands. [indiscernible], I am not talking about the Saks Global gathering together all the 3 brands. We see them as separate distinct brands. We have a very balanced relationship and then we can move on with these 5 doors per year. Then stores. So the openings are confirmed to Mexico City, Abu Dhabi. And in the first part of the year, we strengthened our network in Florida with 2 smaller stores and then in Wuhan, China. Then you see expansions will play a fundamental role in 2026. In Geneva, we will expand the store in the summer, then we will expand the store in Toronto and also Plaza 66 and Shanghai and also the opening of the Casa Cucinelli Shanghai. [ Paula ], I think we can close at around 140 stores. And we like this. We like the stores to be prime quality, the right size and also the number. We believe in exclusivity. Operator: [Operator Instructions] The next question, a follow-up question from Andrea Randone, Intermonte. Andrea Randone: I have a short follow-up question. You mentioned progressive results throughout all geographies. I know that tourism doesn't play a very important role for you. But what about Japan, considering that there are no longer Chinese tourists going to Japan? Is this having an impact on your sales? Brunello Cucinelli: Yes, that's true, but this is not new. Last year, Japan benefited much less versus 2024 from tourism. 2024 was an extraordinary year in terms of tourism. However, sales are -- Chris, I have -- well, for you, please call Pietro at the end of the call. So don't worry, you will get all the answers you need. So please call Pietro at the end of this call. Thank you very much. Thank you. Let me just point out one final thing. Please remember that we always focus on absolute luxury on these markets. So please consider where we are in the market because we always say we work in the very high end of the market in the top luxury market. That's very important. All right. So thank you very much. Thank you. Chris, please call Pietro. Thank you very much. Well, for the people living in Milan. So remember, next week, we have the Fashion Week. And on Wednesday, we will also get feedback from the press on the women's collection. So thank you very much for this because now that everything has been disclosed, we can speak freely about everything. And so we have a lot of confidence and peace of mind. Thank you very much. Thank you. Bye-bye. [Statements in English on this transcript were spoken by an interpreter present on the live call.]
Operator: Welcome to the Cofinimmo Full Year 2025 Results Conference Call. [Operator Instructions]. I will now hand the conference over to your host Jean-Pierre Hanin, CEO of Cofinimmo. Please, sir, go ahead. Jean-Pierre Hanin: Thank you, Marja, and good morning to everybody. Thank you for joining us for the presentation of Cofinimmo's results for the full year 2025. I'm joined by some of my colleagues, Jean Kotarakos, CFO; Sebastien Berden, COO; and Sophie Grulois, General Counsel and Secretary General. As usual, we'll keep the presentation focused, and we look forward to your questions at the end. I will start with a brief update on the contemplated combination with Aedifica through a public exchange offer that we addressed in our several press release available on our website and published between the 1st of May '25 and the 29th of January 2026. On the 3rd of June 2025, Aedifica and Cofinimmo reached an agreement to unite and create Europe's leading healthcare REIT. The combination of both companies will be realized through a voluntary and conditional exchange offer for all Cofinimmo shares launched by Aedifica. After approval of the Aedifica shareholders in July 2025, the Dutch and German competition authorities also granted their approval. On the 21st of January '26, we were informed that the Belgian Competition Authority granted clearance for the proposed combination, subject to the commitment offered by Aedifica to dispose of healthcare assets located in Belgium over several years with a total value of EUR 300 million. On the 29th of January, the offer prospectus of Aedifica and the response memorandum of Cofinimmo were approved by the FSMA. Subsequently, the initial exchange offer for acceptance by the public was launched on the 30th of January 2026. This offer is currently ongoing, as you all know, and will be closed on the 2nd of March of this year with the announcement of the results in the following days. Beyond this brief update, you will understand that today's discussion will focus on Cofinimmo's stand-alone performance and outlook. Let's begin with the key highlights from the year on Slide 3. Despite a volatile macro environment, 2025 has been a year of strong operational and financial performance for Cofinimmo, which leads to results higher than the outlook. Those good results arise from an excellent operational performance, a gross rental income of EUR 355 million, up nearly 3% like-for-like, a high occupancy rate of 98.4% and long residential length of 13 years on average. The solid financial foundation on which Cofinimmo was built also explained those good results. For example, a very low average cost of debt of 1.5%, one of the lowest level for REITs in Europe and a low debt-to-asset ratio of 42.8%, reflecting disciplined portfolio management. Sustainability has remained a core focus through the year. I'll come back on that later. The net result from core activities, EPRA earnings, rose by 0.7% to EUR 246 million, above guidance. The net result -- group share reached EUR 213 million, up EUR 150 million year-on-year. Healthcare real estate market, up 77% of our EUR 6.1 billion portfolio. The Office segment has largely been recentered on the best area of the Brussels Central Business District. I will comment on our investment and divestment 2025 and on the outlook '26 later in the presentation. All those elements allowed the Board to confirm a gross dividend of EUR 5.20 per share for 2025, payable in 2026. Our company profile and strategy are already well known by all of you, so I suggest to go directly to Slide #8, which also reflects something you know quite well, which is the evolution of over time of a different segment until 2025. Let's move on Slide 10. So last year, we achieved gross investment of EUR 111 million, essentially linked to the execution of development projects in healthcare. We also continued on the right bar chart, our asset rotation mainly in healthcare, ending 2025 with EUR 82 million of divestment. Divestments were all made in line with the latest fair value. Those of distribution network assets were even done above fair value. Slide 11 summarizes for you the active portfolio rotation. Since 2019, we have transformed what was still dominantly a Belgian office player into a leading European healthcare REIT. Over 20 years, the group completed EUR 4.6 billion net investment in healthcare with a clear acceleration since 2018 and a slowdown since 2022. Over the same period, we managed to realize net divestment amounting to almost EUR 1 billion in offices. Slide 12 illustrates the solid portfolio growth since 2018. You can witness our investment pace and the expansion path in healthcare real estate despite change in market conditions. This results in a portfolio growth of 7% on average per year. Over the same period, thanks to our proactive management, we kept our debt-to-asset ratio at an adequate level as shown on the right-hand chart. The outlook for the end of 2025 was around 43%, and we managed to close the year in the lower end of this outlook at 42.8%. On Slide 13, I'd like to comment on the Cofinimmo's share performance on the stock market. Since our last call in July, we gained approximately EUR 700 million in market cap, which associate now between EUR 3.5 billion and EUR 3.6 billion. After several difficult years, European healthcare real estate, in general, performed well on the stock market during the 2025 financial year, and this was even more true for Cofinimmo in particular. Three distinct periods can be identified. Firstly, the adjustment to the 2025 dividend outlook payable in '26 announced in February '25, and that was well received by the market. The share price rose 8% between the close of the trading on the 20th of February and that on the 2nd of April '25 in the context of a boost M&A activity in the U.K. Secondly, the share price also performed well after President Trump announced Liberation Day, climbing 30% between the close of trading on the 2nd of April and the 29th of April '25. It was due to the fact that healthcare real estate is not directly affected by tariffs. Thirdly, the share price accelerated from 30th of April onward, stabilizing at a level reflecting the proposed combination with Aedifica through a public exchange offer. After a new acceleration in the last weeks of the year, the share price reached EUR 79.2 on the last day of 2025, up 18% since the end of April. The total gross returns for shareholders just amount to 45% cumulatively over 2025 and even more than 82% until the 18th of February of this year. Going to sustainability, I'm on Slide 15 to 19, you see that, as usual, sustainability is at the core of our strategy and embedded in all operations. Let me give you some recent examples. Cofinimmo improved its ranking in the Europe's Climate Leaders list issued by the Financial Times, now at the fourth place among 39 European real estate companies. In 2025, we achieved 10 new BREEAM certifications across healthcare and office assets. Two days ago, another good news, we were included in the S&P Global Sustainability Yearbook 2025. We renewed our Great Place to Work certification in Belgium and Germany and the scope of our ISO 14001 certification was extended to Spain, and we received the EPRA Sustainability Gold Award for the 12th consecutive year. I'm on Slide 17 now. As a reminder, our Thirty to the Cube project designed in agreement with science-based targets foresees a 30% reduction in energy intensity of our portfolio by 2030. At the end of 2025, the energy intensity has already been reduced by 26% since 2017. You have, as usual, on Slide 18 and 19, the list of sustainability benchmarks and awards show that our efforts have positioned us as a very credible player in the industry. Now let's turn to the property portfolio. I'm on Slide 21 where you see that our property portfolio maintains a very high occupancy rate of 90.4% at the end of 2025. On the same slide, you see the top 10 list of our tenants. Our tenant base is diversified with the top 10 tenants accounting for 62% of contractual rents. Moving to Slide 22. The overall weighted average residual terms remain quite long at 13 years and even at 14 years for healthcare. Lease maturities are well spread over segments and geographies. On the next slide, we see that over 2025, gross rental yield at 100% occupancy stands at 5.9%, with net yield at 5.6%. Overall, our average net yields are closer to 6% than to 5%. Also, yields are stable across segment, reflecting disciplined asset management and resilient demand. Sebastien Berden, CEO, will now provide insight into our segment. Sébastien Berden: Thank you, Jean-Pierre, and good morning to all of you. Since 2018, we consolidated our position within the healthcare sector in Europe. And I'm sure you remember, we achieved this through geographic expansion, but also by diversifying in the different types of healthcare buildings. As illustrated on this slide, our portfolio spans 9 countries and includes 8 different types of healthcare assets. Next to nursing home, which still form the majority of our assets. We own acute care and rehab clinics as well as primary care and facilities for disabled people to mention only a few. Moving to Slide 26. This is an overview of our portfolio. The fair value amounts to EUR 4.7 billion and represents 77% of Cofinimmo's overall portfolio. After some selective divestments, we own now 304 assets, representing more than 30,000 beds and supplying 1.9 million square meters to many clients. On Slide 27, we present a little update of the statistics on underlying occupancy that soon became a habit in the market. And the trend in the evolution of underlying occupancy is good. You'll recall that in '23 and '24, we saw a continued improvement in occupancy rates in most countries, while now the same trend continued as the average occupancy in our portfolio stands at 93% in December '25, up 1% from last year. I'm sure you also remember that we compiled the statistics from our observations during visits, and we will reconfirm this figure within a couple of months when we also receive the reports from all our tenants for all our assets, likely somewhere in June or July. On Slide 28, we also like to remind you of the many projects and buildings under construction we managed in '25. And although the list is long, we actually reduced it with 5 projects that were completed in 2025. These were projects in Spain, Belgium and the Netherlands we had in our rolling pipeline in months and are very happy to have now been delivered. And maybe I'd like to draw your attention this time also on a series of investments we did in nursing homes and care facilities for disabled people in Finland. We are very happy with this as we strongly believe in the Finnish market and could agree on a gross rental initial yield of approximately 7%. And as you know, when Cofinimmo invests, Cofinimmo also divests, and this is a summary on our divestments in Slide 29. These were primarily all the nursing homes in France and a series of smaller assets and medical office buildings in the Netherlands. We disposed them in the context of our asset rotation program that we set up since a couple of months now. Let's now move to the Pubstone portfolio and move to Slide 32. This slide is a quick reminder of the portfolio that represents 800 pubs and restaurants for a fair value of EUR 500 million. Slide 33 reports on the activity of the Pubstone team. Well, the activity was one of active divestment in 2025 with a disposed volume of approximately EUR 9 million at excellent conditions since all disposals were sold at prices above fair value. Worth mentioning also is a disposal in our PPP portfolio for a police office near Antwerp. Finally, I'm also asked to provide you with a short update on our office portfolio and propose we move to Slide 35. This portfolio represents a fair value of EUR 925 million with 25 properties supplying 250,000 square meters to many clients. Slide 36 reports on the activity of the Office team and their excellent work and performance again in '25. The team worked further on the optimalization of this portfolio, keeping almost 3/4 of the square meters within the European district of the CBD. This segment where we can observe the highest average rents and where the prime rent was observed. And then finally, on Slide 37, we report on one of our milestones in '25 in this portfolio. It is a reminder of the renovation of an office building in Mechelen City between Brussels and Antwerp, offering 15,000 square meter lease and leased to the Flemish community for 18 years. I will now pass the floor to Jean Kotarakos, our CFO, who will delve within the financial specifics of our company. Jean Kotarakos: Thank you, Sebastien. Good morning to all. We can go to Slide 39. Here, we observed that our overall portfolio has experienced a like-for-like rental increase of almost 3%, primarily fueled by indexation and new leases. Besides this, the minus 1.1% year-on-year change you can see in gross rental income is mainly due to changes in the scope. We can move to Slide 40, where we see a 0.7% growth of the EPRA earnings compared to 2024 at EUR 246 million, which is higher than the outlook. Please note that this figure excludes nonrecurring effects arising from the proposed combination with Aedifica over the year and the divestment of a finance lease receivable in Q3, which partially offset each other and represent a net expense of EUR 1.4 million recorded as a result of the portfolio below EPRA earnings. The EPRA EPS reached EUR 6.45, which again is higher than the outlook. On Slide 41, we present the IFRS -- net result, sorry, which stands at EUR 213 million at the end of '25 or EUR 6.61 per share. The increase of EUR 150 million compared to '24 is due to the increase in the net result from core activities of EUR 2 million, combined with the net effect of the changes in the fair value of hedging instruments and investment properties, which are both mainly noncash items between the end of '24 and the end of '25. The net result group share per share at the end of December '25 takes into account the issuance of shares in '24 as illustrated by the increased denominator, which increased from 37.5 million to more than 38 million rounded. Drilling down into the portfolio result, we see a figure of minus EUR 23 million compared to minus EUR 152 million at the end of '24. This encompasses the following key elements. The gain or losses on disposal of investment properties and other nonfinancial assets amount to plus EUR 4 million, so it's a gain at the end of '25 compared to minus EUR 16 million at the end of '24. The item changes in the fair value of investment properties is positive at the end of December '25, plus EUR 2 million compared to minus EUR 123 million at the end of '24. Without the initial effect from the changes in the scope, the changes in the fair value of investment properties during the first quarter of '25 were positive, putting an end to 9 consecutive quarters of decrease, and they remain stable in the second, third and fourth quarters. In total, this change was plus 0.1% for the '25 financial year and is mainly due to, firstly, a change of plus 0.1% in the real estate which arises firstly from a negative change in France, mainly due to the increase in registration fees following the Finance Act implemented on the 1st of April by certain local authorities as well as downward revision to inflation forecast in that country. And secondly, a positive change in the Netherlands derives from the combined effect of indexations and the increase in estimated rental value reflecting, sorry, an increase in operators' public financing. All this is combined with a minus 0.8% change in the Office segment, representing only 15% of the consolidated portfolio and partially offset by a change of plus 1.8% in the property of distribution networks. Turning to Slide 42 and looking at the balance sheet. We observed that our total assets are valued at approximately EUR 6.4 billion. Investment properties at fair value represent nearly 95% of this figure. Those assets are financed by roughly EUR 3.5 billion in equity and less than EUR 3 billion in liabilities. The Slide 43 offers an analysis of the evolution of the debt-to-asset ratio from 42.6% at the end of '24 to 42.8% at the end of '25. This stability can be attributed to several factors. First, the dividend '24 paid to our shareholders last May has led to an increase of 3.7%, which was offset by the cash flow produced during the full year '25, generating a decrease of 3.8%, while the net investment of '25 had a global effect of a mere 0.2% positive. On Slide 44, you can see that the EPRA NAV -- sorry, that the NAV is somewhere between EUR 92 and EUR 101 per share, depending on the concept you like most. I will comment on the evolution of the IFRS NAV between '24, where it stood at EUR 92.84 per share versus EUR 92.2 per share at the end of December '25. This very limited decrease of EUR 0.6 per share has 2 drivers. The payment of the dividend '24 in May '25, which still amounted to EUR 6.20 per share, partially offset by the net result for '25 being EUR 5.61 per share as seen on the previous slide. Let's now move to the financial resources at our disposal. In '25, there was no equity raise as there was no optional dividend. I'm on Slide 47. Our S&P credit rating to BBB with a stable outlook was confirmed in March '25 with the report being published in April. It's also worth mentioning that S&P improved its outlook early June '25 following the press release related to the proposed combination with Aedifica and reiterated this outlook early November '25. This means that the combined entity rating could improve by 1 notch after completion of the combination. Cofinimmo continued to proactively manage its financial maturities, as you can see on Slide 48. In this context, Cofinimmo signed new long-term credit lines for EUR 185 million and extended a cumulative amount of EUR 494 million for 1 year. Slide 49 reminds you that Cofinimmo holds EUR 2.6 billion in sustainable financing, comprising various instruments, including a sustainable commercial paper program. We can go to the next slide. And on this slide, Slide 50, we show further the breakdown of the long-term committed financing instruments split between bonds and similar instruments which represent almost 1/3 of the total and bank facilities representing more than 2/3 of the total. This includes a headroom of more than EUR 1 billion of available credit lines after the deduction of the backup of the commercial paper program. The second chart shows the breakdown of the drawn financial debt. Going now on to Slide 51. Due to the passage of time and the weight of the 2 benchmark bonds of EUR 500 million each in our maturity table, the average debt maturity after it remains stable at 4 years in '23 and '24 stands now at 3 years at end of '25. The average cost of debt is still very low at 1.5%, which is one of the lowest across the European REIT landscape and in line with the outlook. On the medium term, we anticipate a gradual increase year-on-year to reach around 2.3% in '28 when the first benchmark bond will mature. Looking at the maturity table on Slide 52, we can see that the operations recently carried out provided that the long-term financial commitments for 2026 are now reduced to EUR 267 million versus EUR 781 million at the beginning of '25 and EUR 695 million at the end of the third quarter '25. Most of the credit lines maturing in '26, representing EUR 207 million out of the mentioned EUR 267 million will not be refinanced earlier since they have been concluded at attractive conditions. And finally, Slide 53 reminds us the high hedging ratio foreseen for the coming years. I will now hand over to Jean-Pierre, who will give you an update on the '26 outlook. Jean-Pierre Hanin: Thank you, Jean. Thank you for this financial overview. On Slide 55, you will find the breakdown of net investment estimate for 2026. Turning first to the investment column on the left on the slide. We are considering at this stage gross investment for a total of EUR 310 million for 2026 splitted between committed development project, files under DD or being contemplated, other healthcare investment and limited CapEx for offices and distribution networks. Secondly, on the divestment aspect on the right side of the slide, we foresee a total of EUR 110 million, the lion's share of it, 5 already done under due dil and EUR 6 million of other potential divestment file. With this projection, net investment would reach around EUR 200 million at the end of 2026. I will end this presentation with an update on the outlook for this year on a stand-alone basis. Cofinimmo expects, barring major unforeseen event, to achieve a net result from core activities group share per share, which is equivalent to EPRA EPS of EUR 6.35 per share for the 2026 financial year, leaving aside the nonrecurring effect arising from the proposed combination with Aedifica. The debt-to-asset ratio as at the end of '26 would then amount to around 44% compared to 42.8% at the end of last year. We appreciate your attention. We all know that the mindset are more in the direction of the future deal with Aedifica, for which all the team of Cofinimmo are very supportive and already working on it. But of course, we are, as usual, at your disposal for any questions you might have. Thank you. Operator: [Operator Instructions] Our first question comes from the line of Charles Boissier at UBS. Charles Boissier: Two questions from my side. So first on healthcare tenants and second on Offices. On healthcare tenants, I think back in 2024, the write-downs amounted to EUR 0.5 million. And now you have mentioned some write-down on receivables, termination payments in the order of EUR 6 million offsetting each other. So it's 12x more than 2024. So I just wanted to know about the context behind these write-downs and how much annualized rent does it correspond to? And to what extent this is also in the 2026 guidance as well? Jean-Pierre Hanin: Thank you, Charles. First, on the numbers, Jean? Jean Kotarakos: Yes, Charles, I would like just to precise 2 things. The amount offset each other, in fact, so we have a write-down indeed of EUR 6 million on receivable and then indemnities of EUR 6 million, which is a positive amount. Jean-Pierre Hanin: So it's not an add-on. It's minus -- so -- but anyway, it's -- your second question about the context. So as you know, the global context for operators is seriously improving with some variation regarding the speed depending on the size of the operator on the geography, as also known and reflected in the press, including in the last quarter of '25 and the beginning of this year. Some of them are still finalizing the restructuring of their balance sheet. And I would say, for some of these operators linked to activities that have nothing to do with healthcare, which means that healthcare assets are very sound, and this is still the view that we have for all assets. And basically, this write-downs have been indeed taken, but they might lead to credits in future periods. And that's basically the position we have preferred to take, especially in view of the coming deal for the future. So this is basically the end of, for some of the operators, some difficult periods. Some of them tackle problem at the beginning. Those who had problem outside of the healthcare started to restructure their balance sheet a bit later. But basically, nothing very worrying. As far as Armonia is concerned, you are also reading the press. We have an agreement with them in agreed form, not yet signed, but it's -- as we speak, it could be in the [indiscernible] could be received as we speak. So basically, this is the situation. As far as Offices is concerned, I guess that your question is about the evolution of the occupancy ratio. Again, the Office portfolio with much more tenants is leaving, you have sometimes up, sometimes down, depending at the time where you take the picture. So we have also some divestment again, is it just the portfolio leaving. It's not reflecting a structural deterioration or anything else, but just the portfolio going through its normal life, I would say. And you know that we have seriously upgraded the quality. So now for buyers to buy everything, I think -- not only the upgrade of the quality, but also the refocus on the CBD all assets that make it even as a whole, an attractive portfolio. Charles Boissier: And so if I hear you, then based on your leasing conversation, you wouldn't necessarily expect 2026 occupancy in offices to significantly deteriorate from here? Jean-Pierre Hanin: From what I know today, no. And the CBD remains the best area in Brussels. So -- especially, we are in the best part in the Leopold District, as you know. And today, there is no sign that this would deteriorate. I'm telling you this because we all have in mind what happened a few weeks ago with -- there has been some headwinds some years ago with the -- basically working from home. And then since 2 months, some people saying, with AI, the occupancy will go down. But in all markets, the Brussels market has always been qualified by some international investors as a bit more boring because more resilient, but resilience is also very positive, and we don't see anything related to that coming as we speak. Operator: Our next question comes from the line of Vivien Maquet at Degroof Petercam. Vivien Maquet: A couple of questions on my end. If I may start with the first one on the divestment target. Could you maybe share how much of this EUR 110 million relates to offices because I think that most of it is now under due diligence or has been completed. So I think that you have a good, I would say, idea on the share of Offices. Could you share it? Jean-Pierre Hanin: Yes. Well, as we are only in February, as every year, the allocation between Healthcare and Offices that we have in mind in February might be quite different when we land at the end of the year, especially, as you know, that as far as Offices is concerned, everything is for sale. So to tell you that in EUR 110 million, there is 50% of Offices and DPN, which is more or less what we have in mind. Of course, the Offices divestment could be much more significant. So the guidance about allocation has to be taken with a bit of caution, especially when we are in February. I think around September, then the allocation becomes a bit more relevant. Vivien Maquet: I understand. But if it's on due diligence, I mean, you have -- how much is Offices under due diligence there? Jean-Pierre Hanin: Under due dil, let me give you... Jean Kotarakos: Yes. You have Offices in due dil. Jean-Pierre Hanin: I prefer not to give you the amount because we are talking of, I would say, not small assets. And if I give you an amount where we are still negotiating, we still don't want to basically leak information about how much we have in our accounts compared to the discussion we had. Vivien Maquet: Understand. Then maybe another question on the first disposal you have completed to this date. Was there the nursing home in Brussels. I understand you cannot disclose information on the price, but just wanted to understand a bit the rationale behind it because last year, you mostly sold none in Belgium and here you are selling in Brussels. Was that... Jean-Pierre Hanin: No. We have completed an asset rotation plan based on several criteria, real estate criteria, commercial criteria and then climate and energy intensity. And asset rotation is part of any core business as all business. And we also like to have asset rotation within the healthcare portfolio. And if you look at our track record in the past, it's consistent. So it's nothing more than executed a sound and well studied asset rotation plan. You should not see anything more than that. Vivien Maquet: Okay. And then one last question on Europe, the others. Could you share your view on where we stand for the healthcare in Germany? How do you see the market? Do you see it as bottoming out? And do you see increasing opportunity for you, thanks to increased profitability of the tenants to commit to new projects there? Do you believe it's the right time to look at that market? Jean-Pierre Hanin: Yes, I think you have to make a distinction between standing assets and development project. For development project, given the position of certain developer and so on, operators are thinking again about it and are studying it, but it might still take some months before you see a large portfolio of new assets being constructed. But again, depending on the geographies, we all know that South of Europe is quite dynamic. The U.K. is quite dynamic as well. So I think the overall climate is positive. Certain operators are looking again at growing, not necessarily by owning their real estate, but by looking at consolidation. So clearly, the atmosphere is more positive and more dynamic, especially with the, I would say, sharp need for infrastructure that has been highlighted during the COVID period. So we all know that there is a structural lack of infrastructure, which may differ from one country to the other, which made it a necessity in many of the geographies in Europe. Operator: Our next question comes from the line of Veronique Meertens at Kempen. Veronique Meertens: For me, some questions around the guidance. Maybe as a follow-up on Charles' question. So do I understand correctly that for '26, you do not expect further issues on delayed rental payments from some of these operators? And secondly, on the guidance, could you give some additional color on you being a net investor? Obviously, there's still some CapEx for the pipeline, but what is included in your guidance in terms of the other investments that you pencil in and how big of a share do they have in the rental growth for '26? Jean-Pierre Hanin: Thank you, Veronique. First, on the guidance, remember, last year, the guidance was EUR 620 million, and we ended up with EUR 645 million. And you know us that's basically the way we usually approach things. So the EUR 645 million includes already many of the expectations we have regarding certain operators. So for those situations that are known to us, that's already included in the budget '26 based on the discussion we continue to have. About the investment, well, I think it will depend also about the future combination and how it will be played. You know that basically, we are confined to financing our investment with debt only. And we also want to have our LTV under control. And of course, the coordination with Aedifica is and will be even more important. So there are opportunities on the market. I think that also has been highlighted by Stephan in many occasions. But of course, '26 is a bit of a special year for Cofinimmo in terms of ability to basically harvest as long as the 2 companies have not been completely unified. Veronique Meertens: Of course. No, I understand. But maybe then on those discussions with some of these operators that are struggling, can you elaborate on -- are those discussions around rent levels? Are those discussions around maybe changing to a different operator? Or what are you actually discussing with them? Jean-Pierre Hanin: It's basically not about changing operators. It's understanding to what extent problems outside of healthcare are impacting the healthcare operation. Why? And what are they planned since the healthcare operations are sound, what are they planned to basically solve this issue. It's not related to healthcare. So it's not about ourself finding new operators because the operators or certain houses are in distress. So we are a responsible partner, but there must be a responsible also group. And it's more finding a win-win than any dramatic move (to be continued). Veronique Meertens: Okay. So indeed, so it's not per se worries about the actual rent cover ratios of those specific assets? Jean-Pierre Hanin: No, no, because we -- there has been a discussion, as you know, with [indiscernible] and all landlords in Belgium showed a certain we'd say -- I would say, flexibility to basically ensure the future. And this spirit try to be maintained when they are, I would say, a discussion with operators. Operator: Our next question comes from the line of Steven Boumans at ABN AMRO ODDO BHF. Steven Boumans: So first one is on the -- what is the EUR 12 million loss share in the result of associated companies and joint ventures. Could you give a quick background and especially tell us what we can expect for this line item for '26, please. Jean Kotarakos: Steven, the loss in the associate is mainly strike in the press release. comes from some amount that we had to take regarding the development project in Germany. So it's -- we have published the loss of EUR 8 million in the press release. Steven Boumans: Yes. And is that issue fully gone? So nothing to expect in this line item for '26. Jean Kotarakos: It's a one-off for this year. And normally, we are on the safe side for [indiscernible]. Steven Boumans: Okay, clear. And then maybe on the healthcare investment markets for the potential investments that you see. Could you provide some background on the yields you are seeing? And do you expect to transact those investments and how that compares to, let's say, 6 months or 12 months ago? Jean-Pierre Hanin: Well, I would say 6 and 12 months ago, you had not many transactions. So the few transactions that has been done at that time in terms of yield you could dispute whether they were representative because there has been some, I would say, a very attractive portfolio that has been sold some more. So it's very challenging to say, okay, yields have evolved compared to 12 months ago. I think that what is well appreciated is that the time where money was free with very low interest rate is over. This has been basically translated into the valuation of the various players. So which means that today, you start to see yields that basically reflect this new interest environment, which we believe is there to stay and not to go back to "good old days." We know that there are certain owners that are still dreaming that this come back. The liquidity is coming progressively because you don't have a lot of [indiscernible] seller. If you look at, I think, the larger seller of healthcare assets during the last 2 years has been [indiscernible] and you see the very impressive amount of divestments they have done with them as operators, which in the mind of certain people raise still a question mark, and they have done it at still a good yield. So for me, it's not necessarily that much a big evolution of yield. It's just that basically the dreamer of going back to the 0 interest rate environments are basically almost disappearing. And today, you see here that make more sense concurring this environment that we have today. And corresponding liquidity, more liquidity compared to, I would say, the last 2 years. Steven Boumans: Okay. Clear. And to be [indiscernible] expect from what you see today that the yields on your book value reflect what of the deals that you expect to happen in '26, too. Jean-Pierre Hanin: Yes, I think regarding the valuation, we are comfortable with what is happening today, yes. Operator: [Operator Instructions] Our next question comes from the line of Frederic Renard at Kepler. Frederic Renard: Just a follow-up on the office Polo. I just wanted to know a bit what is the percentage of leasing coming for renegotiation this year? How much have you been able to achieve and at which level of rent? Jean-Pierre Hanin: We need to follow up on that because I don't have the information front of me, there is not a wall of refinancing. And usually, we secure the big chunk, but it should be very marginal. But we will follow up on that with [indiscernible] Frederic to give you more headline on this. Frederic Renard: All right. And then maybe follow-up -- all right. Understood. Maybe just a follow up on the [indiscernible] discussion you mentioned that you were referring to. Just you mentioned that you had a good discussion, but do I understand that actually, you had a discussion already on your facilities and that you actually considered some rent relief. Should I understand that. Jean-Pierre Hanin: Well, basically, there has been -- [indiscernible] has done bilateral discussion with all the vast majority, I would say, of the land lot in Belgium. And the basically focus was to have equal treatment for all of the Belgian landlord. So that was basically the rule of thumb for all this discussion. And to the extent that they were valid argument, the various Belgian landlords have shown temporary flexibility given the global relationship, but also based on recovery plan and measure to be taken by the operators themselves. So basically, the discussion were quite similar in order to ensure equal treatment. Frederic Renard: Okay. And on [indiscernible], remind me, you have also some exposure in Spain, right? Jean-Pierre Hanin: The exposure is very minimal in Spain, but I'm even not. It's -- let me -- now it's in France that we have 2 assets with [indiscernible]. And 2 in Italy, not in Spain. So you are going to a granulometry so I need to verify my note given the asset rotation, but 2 assets in Italy and 2 assets in France. Frederic Renard: And there, the discussion... Jean-Pierre Hanin: The discussion was [indiscernible] period, not [indiscernible]. Operator: Our last question comes from the line of Lynn Hautekeete at KBC. Lynn Hautekeete: I have a follow-up on the healthcare campus in North [indiscernible]. So I'm trying to reconcile the movement on your balance sheet and the cash flows. So on Page 11 in your footnotes. You say that you had EUR 40 million investments in the fourth quarter of EUR 125 million, and that is the net result or a net amount of EUR 56 million and EUR 70 million coming from changes in participations. I'm just wondering that EUR 17 million, what exactly is that figure? Is it CapEx that was supposed to be spent and then did not go out because you sold the participation? Jean Kotarakos: Lynn, I think it's a very detailed question. I can discuss that after the call, if you want. You can reconcile [indiscernible]. Jean-Pierre Hanin: We will give you a full reconciliation, yes, nothing to hide. Because it's -- technically, there are various steps. So it's -- we will give you detail on that. Lynn Hautekeete: Yes, perfect. It's not an easy one. And then maybe second question is on the CapEx of the offices. I was just wondering, is that yielding CapEx? Or is it just part of refurbishments? Jean-Pierre Hanin: Refurbishments, yes. Mostly refurbishments. Lynn Hautekeete: Okay. And then maybe a third one, a quick 1 is on the headroom that you have on your facilities. So that's around EUR 1 billion, and you're not going to replace EUR 270 million of it. Is it possible that, that headroom goes down even further in the future because right now, it's quite expensive to keep the EUR 1 billion. Jean-Pierre Hanin: The future is the combination with Aedifica. So I think we are all waiting that it becomes really to benefit from the combined combination. And you know that the combination will have a positive impact on the cost of capital, including on the abilities basically of our financing and what S&P also has said. So we don't do reasoning on a stand-alone basis for the future, but more on the combined and the news will be good in this respect. Operator: There are no further questions at this time, so I turn the conference back to the speakers for any closing remarks. Jean-Pierre Hanin: Thank you. Well, as usual, I will tell you that we are at your disposal. I think we are all looking at March 2 in our agenda. But in the meantime, if any questions regarding the past, don't hesitate. We have well noticed 2 follow-up that we will do regarding the question that we have raised to date. And of course, we will follow up on that. But if anybody has any other questions, always pleased to answer them. And you know us, you know how to contact and we will follow up. Thank you for your attention, and thank you also for those years of dialogue. This is not the end of the story. There is an exciting operation insight and for sure, the future leader of Europe in healthcare, they will be interesting times. Thank you, and we'll be in touch.
Operator: Hello, everyone, and thank you for joining the Megaport First Half FY '26 Results Webinar and Investor Briefing. We will begin with a presentation by Michael Reid, Chief Executive Officer; and Leticia Dorman, Chief Financial Officer, followed by a short Q&A session. [Operator Instructions] We have 60 minutes for today's call, so please keep questions short and to the point. Now I will hand over to the Megaport Chief Executive Officer, Michael Reid. Michael Reid: Well, thank you so much for the introduction, and welcome team. We've got an action-packed half year results for you. We've done a lot. So we're going to charge through it. This is the FY '26 half year results for Megaport. Now we're just going to open, we have not run this before, but we've got a bit of a slide key here. Obviously, in the half, we made 2 acquisitions. And as we present through the slide deck, what you'll see is each one of these will represent at the top right, you look at the top right of the screen, and you'll see if that's Megaport Network only, Latitude only, obviously, Megaport plus plus, et cetera, and this is the total group. So just remind all folks, look at the top right, think of this, and hopefully, it's pretty self-explanatory. So we'll be going through company highlights. financial results. Leticia is sitting next to me. We've got an acquisition and strategic update. We've combined the 2 of those, and we're actually going to spend a bit more time than what you normally would expect for a half year, given the 2 acquisitions that we've made. And we're also going to walk through how that aligns to the strategic view of the business moving forward and why we made those acquisitions. We're also going to spend a bit of time on guidance. Guidance has been a little bit trickier. Obviously, we've had movements in FX, but we've also got 2 other companies coming into the business. So we're going to give you a comparison of what we had with -- assuming there was no acquisition, and then we're going to break it down and finish the year with the acquisitions included for full transparency. If we look at the top right, what you'll see, just I won't keep drawing on about this, but in the top right you'll see that key. So this represents Megaport Latitude and Extreme, the 2 acquisitions inside the business. This is the Megaport Group annual recurring revenue. So we are a $338 million business, $263 million from Megaport, $68 million from Latitude and roughly $7 million in AUD ARR inside the business. We've broken 2 highlight pages, one being the Megaport Group highlights and the next will be the Megaport stand-alone, so we're giving you full transparency of the underlying business, and we have had an incredible run in that first half. Let's start with the group business. We said before, $338 million in annual recurring revenue. That's up 49%, $112 million year-on-year. And we closed, as you know, 2 acquisitions. We acquired -- we announced and closed in the half as we came to market in November, did the raise and actually announced both acquisitions. Latitude.sh, which is the $68 million of ARR, 22 locations, GPU, CPU-as-a-Service business and actually adding more and more innovation that I'm going to show you through a demo soon. We actually announced the acquisition of 40 -- a company in India that we didn't share the name, which was 40 data centers in India. That was for regulatory purposes. We acquired Extreme IX, which is the largest Internet exchange platform in India, something that we do in many, many countries. That gave us 40 different data centers with network, and we're going to talk through that further on, comes with $7 million in ARR and 400 customers. If we look at guidance, so let's -- there's a lot of -- we've spent a lot on 2 guidance slides, and we've also got a detailed guidance in the appendix, specifically covering FX and also the breakdown of each of the companies in there and how it's made up so that I think all analysts and investors can get their head around it. So Megaport Network original revenue guidance has been revised upwards. So the guidance that we gave at the start of the year, assuming no acquisition, we have revised the bottom end and tightened that range based on the success that we've seen through the business, and we're going to walk through that. And the Latitude.sh revenue guidance that we gave in November, we are reaffirming. So let's look at the highlights from a Megaport Network perspective. So this is, as you see, top right, the Megaport logo sitting there, $263.4 million in ARR. That's up 19% on a constant currency basis, $36.8 million year-on-year. There has been an FX headwind as the move between $0.65 to $0.70, which is why it showcases at 16%. The importance is that the underlying business has grown at 19% in constant currency, an incredible result from the team. And how about this? Net revenue retention by logo, 111%, up 3 percentage points year-on-year. Our net retention continues to grow. I'm going to talk about why we've seen that growth inside the business as we get through the deck. And also, let's talk about this customer lifetime. As we've changed the product mix and the types of services we offer customers, what we're seeing is customers taking longer-term commitments. And instead of just buying cloud connectivity, long-haul data center interconnect, complicated global WAN structures and you name it, and they're actually bringing all these new products, including Internet together. And our lifetime for the customer, this is a big deal. And this is -- for those who aren't aware, it's basically one divided by churn, has increased by 3 years. In effect, the churn is lower, and so our customer lifetime has increased. It's 13 years, which is outstanding. Now when you flow that number forward and you look at your lifetime value, your total lifetime value, which is a mixture of the lifetime and the average spend per customer and your margin wrapped into that, we're up 57%. That's a $2.5 billion total lifetime value, and we've got a slide to sort of share that, and we'll talk more about it. You can see our annual recurring revenue breakdown. Again, this is Megaport's stand-alone business or the Network business, excluding acquisitions. You can see we continue to grow that annual recurring revenue fast. You can see the breakdown of Americas, Asia Pacific and EMEA as always. Let me state this, the Americas and specifically the United States really is on fire. They're growing at 24% inside that business, and that's where we've been investing for a lot of growth. We're seeing an incredible opportunity for us there, and it's continuing to grow, and we're not even scratching the surface. And if you look here on the right, what we've shared is the net or the incremental ARR additions. And you can see this is the largest ever year-on-year ARR increase. This is astounding. You can see this just pushing up and up and up and to the right. So we are incredibly happy with how the team has performed, and we're going to go through more of those details. It's not just about expanding the existing base, and that it's super critical that you do that. But if you're not adding net new logos, you've fallen out of product market fit. And this is where we've seen that in sort of the full year, you saw that massive jump in new logos. We have actually had a 100% increase in new logo growth compared to the prior comparative period. That's important because seasonality rolls throughout the year, and this is a representation of the fact that this wasn't some lucky sort of H2. We're actually growing and continuing and year-on-year, we're up 100%. That is an incredible result from the go-to-market team, but it's a mixture of 2 things, products that actually resonate with the market and the go-to-market team that we've invested to take that out to market. And that crosses all areas, channel, frontline sales, STRs, customer success, you name it. So congratulations to the Megaport team there. This is a slide we've shared in the full year deck, and it's actually just continues to astound. It's actually, I think, what we've been hoping to see, but it highlights the fact that the investment in engineering talent and all of those products that you've heard us sort of constantly refer to bringing out in that period of time sort of FY '24 period, all of that has come to fruition and 30% of our ARR growth is now attributed to what is new products. The underlying business is still growing fast. But on top of that, you get this growth from new products, which just highlights the importance of continuing to invest in new products to add to the space. And I've got a slide in the strategy section that will sort of drum this one home, but you can see what a dramatic increase that has had in H1. So outstanding result from the engineering and product team and great job again from the sales team for taking that out. Total lifetime value, we shared that prior, and we highlighted the fact that customer lifetime has gone from 10 to 13 years. You can see that, that is a marketed shift upward. That is -- if you look at it, we made quite significant changes in the business in terms of how we offer contracted services, the types of services we take to market. We did some significant investments in the network and sort of -- I'll show you on the next slide, but we've sort of been going on about the investments that we've made in 400-gig backbones, 400-gig networks, so we can offer 100 gig just about everywhere on the planet as well as rolling out massive, massive speed in Internet. All of these things bring through significantly longer contracted business and also much higher ARR lands. And so that's why you've seen our ARR per customer of the 3,000 customers inside the Megaport business, this is excluding the acquisitions, is up 6% year-on-year. You couple that with that lifetime increasing and then you actually have this $2.5 billion increase. So again, testament to the health of the business in every metric you can think of going incredibly well. This is a bit of an eye chart. It's always astounding to sort of think that this isn't a full year. This is only 6 months of execution, but worth pointing out that we continue to execute against the strategy, which we will talk through further, but we break that down into build, innovate and invest. These provide the pillars to increase TAM and go-to-market. If you look at build, 51 data centers added. We're now -- we crossed in this half, actually, we forget because we celebrated in August, but we crossed 1,000 data centers globally. We're now at 1,034. We added 5 new IX locations. We've actually on-ramped in effect, 11 direct connects into Latitude to the compute platform that we now have. We've got 11 new cloud on-ramps to 344. It really is cooking with gas there. We added 2 Internet markets, Italy and Sweden. That's all the regulatory components coming off. We've got pretty much the majority now. We lifted Internet to 100 gig in 16 metros. In fact, when we first rolled out Internet, we weren't sure how successful it would be. It's been so successful, and we thought it would only ever be at sort of 10 gig levels. But for the last year or so, we've been rolling out big 400-gig machines. And so you can get 100 gig in 16 metros. And it's astounding to see how many enterprise customers are taking that up. So we're not stopping. We're continuing to build that out globally. 100 gig connectivity. So this is -- when I first joined Megaport, the fastest we could deliver was 10 gig anywhere. And then we had -- now if you look at it from 802 data centers, we can deliver 100 gig in 60 seconds, quite astounding. There really is nothing else like it. Let's talk about Innovate. Cam and the team have been working incredibly hard to deliver some pretty impressive enterprise-grade security features. We rolled out IPSec, which is encrypted tunnels on the MCR. Packet Filtering, which is like control list on that platform. We're going to continue to expand our investments into security, and you'll see that in the second half. We added console access for MVE. We added probably one of the most requested MVE images, which is Meraki. We've got Juniper and Anapaya, 36 countries, 7 languages. We added 400-gig ports, which is really interesting. If you remember, when we launched, we were always 10 gig and 1 gig. We added 400 gig ports and actually had immediate customer adoption. So the amount of utilization out there is quite astounding, and we'll talk through that even when we look at sort of what AI is providing from a tailwind, but just quite astounding now. What's important is that we continue to build to support that. Acquired 2 companies, we're going to go through that. we continue to invest in go-to-market. We're actually doing some pretty cool stuff with DWDM, which is like if you get your propeller and want to hear that spinning, we're looking at rolling out DWM for the first metro and then doing that across many. Cam tells me this is a really big deal. And then we've upgraded the backbone capacity to 400 gig to 8 countries. Now what does that mean? We're getting subsea connectivity at 100 gig. And this is where we get massive ARR for single VXCs, and that's really, really -- it's exciting. And the last thing, and I'll point this out just more broadly is people, I think, carry on that AI is changing all their business, and it's hard to know what I think some businesses is real and what is not. In our case, we're not someone that sort of just [ spruce ] this out there. We are seeing tremendous assistance like most companies for AI in the development space. So when you look at adding [ Claude ] into this, the efficiency of the development teams is phenomenal. But also what we're seeing, and this is more for everyone's kids out there, if you want to study something, I'd call it prompt engineering, AI prompt engineering. Folks that don't even know really what they're doing, but they know how to prompt the AI, we're seeing these folks come in and just do some incredible speed and change so many things inside the business very, very rapidly, particularly on the engineering front. All right. I'm going to pass it over to Tish, our fearless CFO, she's going to slide in here, and we'll go through the financial results. Leticia Dorman: Thank you, Michael. So financial results for the half. So I said it happening. We had 2 acquisitions as well as the underlying business of Megaport. So what we've highlighted here within the EBITDA is largely Megaport and the Latitude acquisition. Now Latitude, we acquired -- we announced, did a capital raise early November. On the 26th of November, we closed it. So you will see 1 month of results in here as well. So I did want to highlight that. Revenue, I know Michael has talked about that. However, it does come through in the numbers clearly. You've got the strong expansion with NRR with the continuing investment within the existing customer base. We've got the growth in new logo acquisitions, and those 2 combined results in strong revenue plus the inclusion of the compute revenue from Latitude. Partner commissions continues to stay relatively consistent at 11%. Direct network costs, now we've got IFRS 16 in there, which I know some of those on the call do enjoy talking to me about, so I'm always happy to talk about accounting standards with anyone. However, what we look at is across kind of a net-net basis of that regardless of accounting treatment because the focus of the business over the last 18 months has been that global backbone rollout to 400 gig, which has been led by North America in particular. So if you exclude IFRS 16 from both this half and last half, it's consistent. Employee costs, we've been -- I think we've hired quite a few folks. And so you will see in here that is continuing to be planned. You can see that rolling through in the numbers. And that is to support the accelerated revenue growth and then the related spend associated with those new folks coming on board. In terms of other operating expenses, you've got your sales and marketing event activities, which you can clearly see in there as well as travel and some IT costs associated. Now EBITDA is one thing to notice, great Tish, you've got an EBITDA margin of 26%. That does include the Latitude 1 month. And I just wanted to highlight that the exit margin for Megaport Network business of 21% is in line with guidance and really reflects that timing of our planned investment, which we'll talk about further in the guidance slide and happy to take any questions. However, I did want to highlight that as well. Now the cash flow, a lot of things happening in here. So I've tried to break it down clearly within the text, but I'll just go through it quickly. The operating cash inflows have increased. That is purely due to the higher customer revenues during the period and the 1 month of the compute or Latitude.sh results. The investing activities, you've got some acquisition payments and you've got also the CapEx payments, which are related to the planned delivery of equipment. Within the appendix, we've provided the breakdown for CapEx for the group. So you can clearly see what that has been on, and you will see that it is to do with the supporting the expansion plans and including the planned delivery. Financing activity inflows, you can clearly see that, that's largely driven by the capital raise that we provided earlier in the year -- late last year. One thing to highlight is the net cash flow was an outflow if you ignore all of the capital raising and acquisition activities, was an outflow of $10 million or under $10 million. Now that reflects the planned expansion, hiring of the go-to-market as well as the CapEx spend and the investment in the front ending of the ordering of equipment. So that is one thing I do want to highlight to the group. We've talked around headcount previously, particularly at the last year-end time that we came to talk to you. We've got here the sales and marketing continues to be a clear activity that we invest in, and that's moving upwards, continues to. Product and engineering is a big focus area, particularly with Cam hiring across the world, hiring the right talent. And G&A continues to stay steady as a percentage of revenue. So this is how we look at the investment of the business for headcount. And this is just Megaport stand-alone at this point. I'm going to hand back to Michael. I've done a quick snapshot of financials, but over to you. Michael Reid: Beautiful. Good job. Thank you, Tish. All right. So we're going to go through the acquisition and strategic update. So this is where we're going to look at some of the strategy around the business and also talk through a bit more detail on the acquisition. We're going to run a bit longer than normal just because there's a lot to go through. The first slide is something that I probably didn't expect to be adding to the deck, but this is a lot of inbound questions. These 2 questions have been coming certainly with the way markets have moved and sort of everyone is trying to wrap their head around, I think, are you a company that benefits from AI and are you a company that can be disrupted rapidly by AI. I just want to sort of draw this for all shareholders and anyone that's either new to Megaport or even knows us well. First question, I'm going to sort of just point this out, is AI benefiting Megaport? The answer is yes. And that is why you've seen such outstanding results in that first half, particularly driven in the United States. AI is very, very strong there and the rest of the world is sort of starting to catch up. But really in the U.S., it's cooking with gas. It is providing what is a very strong tailwind for us. So AI is driving significant movement of data. So if you think about it, there's huge amounts of data movements as you start to either send your data to AI, to models, whatever it may be. And the other piece is it requires large amounts of processing by compute and GPU. So the 2 parts of our business, both network and the compute and GPU businesses benefit strongly from AI. I think that's obvious, but it's just worthwhile sharing it. The other piece I want to share is that Megaport is a software-defined physical network and compute. We use software to automate physical things that live inside data centers all around the planet. The last one on this is you don't have to pick a winner. Megaport is never looking to pick the winner, and there's lots and lots of changes that we see all the time in terms of deals. We are the picks and shovels for AI. As often people would say, you're like the overnight success, but 13 years in the making. And so we've been building this platform for the past 13 years to land literally in the exact right place with the right platform at the right time, there's almost no one else in the planet that can do what we do and certainly no one that offers what we do on a global scale. So we are absolutely a beneficiary of that space. We built the cloud component and the AI piece, is actually playing out in a very similar way. So the second question, which is, well, hang on, can AI disrupt Megaport like these software-only providers. Now for a few years now, I've always said it would be always tough being a software-only CEO with all the disruption happening in AI. And it's why I'm a huge believer in Megaport's business because it is the beautiful mix of both software and hardware distributed at scale. So the answer is no, we won't be disrupted by AI because of one important fact, and that is we are physical. It's a bit of a sort of a lot of physical words here, but just to sort of drum that message home, we move data via networks and we process data via CPU and GPU. Both of those are physical. And to put that in perspective, we have a software layer that runs across this physical IT infrastructure, which can't be replaced by AI. AI is not so good with atoms, not yet anyway. And so if you look at it, we've got 320,000-plus routes of physical fiber, 320,000 physical routes. We have 3,000-plus physical network devices. They live in 1,000-plus different data centers. We now have 7,700-plus and growing fast physical compute servers and GPUs, and we deploy them in 30 physical countries, not just deployed by some SaaS platform that lives on AWS, but actually in the country. And then on top of that, we have all the telco regulations and licenses, which is not easy. All right, I think I've drawn that message home. I've shared this slide a lot. I won't labor it too much, but we -- I want to keep this -- keep reminding folks -- we make all strategic initiatives based upon these guiding principles. That includes innovation and product and acquisitions. We obviously made 2 acquisitions, but I'll just remind folks, this is the secret sauce that makes Megaport strong and so too with Latitude and any other business or product that we want to look at. And the answer is, let's start with automation. Automation is the key, and it's not easy to do. And that's the software automating physical infrastructure. You can automate it, you can make it instantaneous. If you can put it at a global scale, you can actually deliver a global service to customers. If you make it the most resilient and then on top of that, make it flexible. You can buy it monthly, hourly, whatever it may be, 60 months, you name it. If you then can make it self-service, but with a really cool GUI and make it really easy and then you provide the best support, the pricing is disruptive, and somehow you do all of that, you make it profitable, you have got an incredible company. And that is what Megaport is, and it's also exactly what Latitude is from an acquisition standpoint. The strategy from Megaport's perspective remains the same, and we constantly share these, I guess, the rings of total addressable market. So for those who have not seen this slide before, on the left, if you look at these rings, each ring represents a product set and a total addressable market that we can go after. And we started with cloud connectivity. We added Virtual Edge, then we added Global WAN, Data Center Interconnect, [ DC Ethernet ], NAT Gateway, security. That slide I showed you before about the growth in new products. These are the new products that are driving that. We just added 2 new rings. This unlocks significant TAM for all Compute-as-a-Service and GPU-as-a-Service, and we're going to continue to add rings in the second half as we announce new products and new innovations that we're going to bring. On the right, if you look at the pillars for growth, we talk about build, innovate and invest. Building is expanding a ring. It doesn't necessarily mean that we're adding a ring. So a great example is new data centers. Every time we add a new data center, we increase the TAM of all of those products. Every time we add a new market like India, it's the same component or when we added Brazil. And then we've got expand capacity by going, as I said before, from 10 to 100 gig to 400 gig and now we offer those services. That expands the TAM inside those rings. And then we're going to continue to expand compute and GPU offerings, so different types of SKUs and obviously, significantly more and distributed in all those different locations. Then we look at Innovate. We are going to constantly build and you saw the hiring that Tish shared around the innovation team inside both network. And I've shared also security being a big play for us. Those 2 sort of become hand-in-hand. And then if you look at the CPU and GPU innovation, in the demo coming up, I'm going to show you some of the really cool stuff that's already coming out, particularly in the AI innovation space. And then we look at Invest. We are expanding product and engineering. As I mentioned, we're investing in that space. We will continue to expand go-to-market, particularly as we service and take these products to market, which is why you're seeing so much great results in that side of the business. And we'll always explore strategic acquisitions. But always, those strategic acquisitions will line back up to what we shared on the previous slide, which is the strategy that we look at around the investments. So we're going to quickly go into the Latitude.sh acquisition. We shared this in November, but it was a quick session when we did the capital raise, very successful capital raise, and thank you for all your contributions. I think we had 30 minutes from memory to sort of bounce through this. So Latitude.sh is a Compute-as-a-Service business. It provides high-performance CPU and GPU in key markets worldwide. It's very simple to use. It's very API-driven, just like Megaport, incredibly predictable billing unlike what you would have in the cloud and flexibility to deploy workloads literally on demand, super important. Massive global scale, totally automated, rapidly growing and then have actually been very strong from a product-led perspective. All of this lands inside those -- the strategy that we had from a business perspective. If you look at the ARR, well, what does it look like? Where were they based and how does that play out? 10 countries and 20 locations when we acquired, I think they're at 22 today. We'll continue to grow. The U.S. represents the vast majority at 50%, Europe at 20%, Asia Pac at 17%, LatAm at 13%. It's at $45 million ARR as at 31st December '25. Okay, who does it service and what do these customer use cases look like? There's 2 parts of the business today. And actually, I'm going to show you how that will change in the future as well. But there's compute and then there's GPU. If you think of compute, what you need for a bare metal platform such as what Latitude has produced, high-performance compute is not something you get delivered inside a cloud, and it's hard to run and build yourself. So in the middle, we have these incredibly high-performance compute and very large network stacks, which deliver blockchain Web3 as an example. These are financial service rails as an example, using blockchain to transmit via Solana as an example, say foreign exchange for enterprises. And they use up huge amounts of compute and network, and it needs to be distributed globally. Enterprise applications that are not optimized for cloud cost a fortune in the cloud or don't perform how you need them to perform. And so what you have is an ability to run incredibly high-performative applications that don't sting you with all of the API calls and so forth in the cloud. And so then you've got SaaS applications that need high performance at the edge. If anyone has a kid who loves Fortnite or gaming, you'll know what latency is and the importance of having edge compute that process fast with very low latency for gaming. We've got some incredibly interesting gaming companies that actually spin up actual compute platforms for the gamer themselves, really interesting. And ad tech is, if you thought gaming required speed, ad tech is even faster. It needs to show the ad as fast as Michael Reid is looking at this website, he's interested in a new surfboard or whatever it may be. I'm not that good surfing to be clear, but let's just say a really long surfboard because he's not that good at surfing and they need to show that as quickly as possible. That's ad tech. And then we go into the streaming element as well. So that is some of the use cases that are really, really big in the CPU-as-a-Service. GPU is a big market. And so if we look at inference being how we access the AI, and that is like ChatGPT. When you access it, that is inference. When you train ChatGPT, that is the giant data centers that you're seeing build out to sort of the hyperscale and then you've got this fine-tuning element where you take a model and you fine-tune it for enterprise. I'm going to show you in the demo something really interesting. Let's jump into that because it's like, well, Latitude's had this history of product-led growth. And I shared that not only is the platform incredible, but you've got to be able to access it and make it simple. So we're going to play to the demo guides and so forth and just see if I can switch this machine over. And I'll see if I can -- all right. Steve is telling me to keep the demo short because he just -- he knows that I love it. Can this be seen? All right. First thing, you're welcome to the Megaport portal. You're used to this. You can see all these different locations in the U.S. Everyone represents a data center that we're in. This is cool. So we've now landed in India with that acquisition, so 40 different data centers live and you can start ordering there. Now if you jump out of that piece and you look at the top left of our portal, we can click on this particular piece. And now you can see the option between network and then compute. So Latitude.sh, we can click that component. And now we're in the Latitude.sh platform. And here is one I have prepared earlier. We look at projects. This is the portal that we look at. Here's a live demo to shareholders. So we'll go and click on to that project. And just like Megaport, it says quick click to create a server, and we've got some really interesting things down here. So we can create a server. Now when we acquired the business, there was bare metal, bare metal GPU and GPU VMs. But very recently, and I don't know if you've noticed, but we now have CPU VMs. This is virtual machines running across the infrastructure, a super important innovation inside the product. So you can actually click on the CPU VMs and bring down -- we only have a few locations today, and we'll roll these out to more. But you can choose a very tiny virtual machine at $0.07 per hour, which spins up a virtual machine with Ubuntu, run it for hourly at $0.07 and you can click deploy. And that is as hard as it is to run a virtual machine is staying to schedule there. I'll move back to the bare metal component and make it quick because Steve's on me. And this is my fun bit. So we'll go to the bare metal component. If we look at North America, South America, Europe and Asia Pac, these are all the different locations. We'll choose Ashburn where the clouds live. We have physically installed compute infrastructure that sits in all of these locations. They are available to deploy. There are different levels. There are entry-level core optimized, memory optimized, storage optimized, you name it. Let's choose a big guy. Roll down. What's amazing is the platform is constantly looking at what infrastructure is there and what is the likelihood of using a certain operating system. Remember, this is bare metal. So it is actually your entire server, and it will preload an operating system into the ones that are available or some, and then you can choose to deploy that. So we'll choose $3.52 per hour, no RAID, pick a name, blah, blah, blah. You click deploy, and it will roll up on the top right here, and you can start to see that being deployed. So that one is getting deployed. Now if we go back down here, you can see that's now on. So that's your 5 seconds of deployment. Last thing I want to show you. So what we've done is we've deployed a bare metal machine physical. We've deployed a virtual machine, which is now running over there. And we're going to go to this thing, which is so new that no one even knows it exists, and this is AI inference, but I did want to show the team what this thing looks like. So this is where we're actually deploying model as a service. And so if we click through to the different playgrounds and API -- create an API key in here. So what we want to do is create an API key. We then grab a model, an AI model, our own open source model, and we deploy it in our own physical infrastructure, so you've got total control over that. So you can go and create a key, we call it a test, grab that key. Which one was that? Okay. Now I've got a copy of this. It doesn't matter if you copy it from a security perspective, I'll be deleting it after for those worried. We go under the playground. And now what you can see is at the top left here, you choose the AI model you would like to run, your own private model that you control the data that's going into it and the compute that it runs on, so it cannot be taken. So let's choose [ LAMA ], for those of you familiar with that. We paste the API key in the top right. And you are all familiar with this. This is where we now write our question, write a launch e-mail for our new inference endpoint. You click enter and it will start generating. So what it's doing is it's asking this question to a LAMA agent that is -- so think of an -- look, it's already done. It's amazing. Think of an enterprise that wants to control the use of all your data and you want to upload that into a private instance that's sovereign that you have total control over and actually no one can steal that data. All right. Steve is telling me that's enough. There you go. I think that's really cool. I just want to show you one last piece. Ignore that. I'm going to delete these servers because this is the important part. We're deleting the server, you copy and paste is back in here. And what has it done? It goes through a process of wiping that server and making it available back in the pool for someone else to use, 100% autonomous, totally delivered via code and delivered via a portal like that. Very cool. All right. You can see we're excited about it. Now I'm going to get back to the presentation. And we're back. All right. So people are saying, why did this make sense? This is the next logical step for Megaport. We shared this in the presentation. The reality is -- can somebody fix my laser pointer. We were the kings of network and are the kings of network. What -- if you look at IT infrastructure, they're made up of 3 pieces of the puzzle. In fact, every application you have ever used, excluding ChatGPT or AI lives on network, storage and compute. The compute element comes with Latitude.sh. And you can see that we're missing a piece of this puzzle, and you can probably imagine that, that's something we're working hard to go and release as well to finish the trifecta of both -- of all the IT infrastructure. I won't go through the pieces on the right. We shared the 100-day plan. We're a few months into the acquisition as we are today, progressing as expected, and we're really, really thrilled to have the team come on. It's actually probably progressing better given what I've just shown you from an innovation standpoint, 2 major innovation releases between when we acquired and when we landed. So a big shout out to Gui and Eduardo and the entire Latitude team for bringing that. I won't go through this. We'll talk through it if you need on the call. The last piece was we made an acquisition into India, which is the Extreme acquisition. Why? Well, it's the fifth largest economy. It's the most populous country in the world. The real reason is we had massive demand from all of our global enterprise customers, 3,000 different customers asking for us to get into India. It's not easy to land regulatory purposes and actually run the network is difficult which is why we've acquired to land. It comes with $7 million in ARR. It's accretive to the business, 400 active customers, 40 data centers. Now we're rolling out infrastructure to retrofit all those sites with Megaport-grade infrastructure, and then we will offer all those services as soon as possible. We've shared this slide. The strategy has not changed. I won't go into too much detail, but you can see where we've landed. We're in the transform and reset phase. We've been rebuilding go-to-market at the full year, we announced that. We've done incredibly well against that. We're landing within what we've told the market from where Tish shared. You've seen the product. The net revenue retention hasn't stabilized. It actually increased. So we're doing well there. Revenue is up. We'll land at the end of FY '26 and into this accelerate revenue phase where we'll capitalize on that prior investment, continue to expand the TAM. We're going to grow the market share. We're going to continue to invest in revenue with revenue growing faster than costs that remains inside the business, and we're going to accelerate revenue through investment constantly. And then as we get to the future, it's going to be a fairly large. I mean we'll be at significant scale in FY '30 and beyond. We'll be a global leader in infrastructure as a service powered by software with 20% sustainable growth, highly profitable, converting scale into sustained profitability and free cash flow. All right. Guidance. Let's do it as quickly as we possibly can, even though there's -- it's a little bit complicated. What we've given you is 2 slides. This is the first one. As you see at the top right, Megaport Network only. This is the Megaport network updated guidance versus the original. Remember, there's an FX component, and we've also had 2 acquisitions. We've excluded the 2 acquisitions, and we've kept constant currency, so you can see how the underlying business is performing as we predicted. It's at $0.65. We originally had revenue at $260 million to $270 million. We've raised the lower end of revenue by $4 million based upon the success we're seeing inside the business. We've held EBITDA margin unchanged. We've held CapEx unchanged. And so why would we up the bottom end? Well, we've seen outstanding performance in ARR, up 24% in North America. We're seeing net retention up 3 percentage points, and we've got sustained growth when we look at new logos. It's pretty obvious, but that's why we've tightened the bottom end of the range, and we're confident there. As we said, there's 2 material changes being the AUD to USD and the 2 acquisitions. So then you're thinking, well, Michael, what does that mean for us? Great news. We've answered that test, too. And so we've gone, all right, let's give the combined group updated FY '26 guidance. We've got it at $0.70 AUD:USD. We're not saying that that's what it will be for the entire half. We don't know what it will be, but we're certainly telling you what it looks like as we see it right now. And we've also given sensitivities on FX. We've also given great detail, if you want to break down because we've added 2 companies and the 3 companies coming together in the appendix. So $302 million to $317 million in revenue, 21% to 24% of EBITDA -- of revenue -- EBITDA of revenue, $90 million to $100 million of CapEx. That includes the tightening of the raise of the bottom end of Megaport unchanged for compute for Latitude from what we shared in November, so no surprises there. We've added in about $3 million to $4 million for the Internet Exchange business we acquired in India. We've also included the CapEx to go and roll out that hardware. Worth highlighting that the maintenance CapEx on the combined group is actually less than 2%. And so if you look at it, pretty much all the CapEx we're deploying into these is growth CapEx. And lastly, just to point this out, the sensitivities, just to give you perspective, there is detail further on, is we're at $0.70. If you look at a $0.05 movement, that is a $9 million -- so when the U.S. dollar weakens, that is a $9 million reduction in revenue for the business. All right. We made it up to questions. Let's do it. Operator: [Operator Instructions] Our first question comes from Nick Harris. Nick Harris: Congrats. Great to see the core business, in particular, flying. I'm pretty excited to see that NRR continuing to lift. Just trying to unpack that. Could you help us maybe understand what's happening behind the hood or under the hood there. Specifically, are you lapping a really poor quarter 12 months ago? So it's just the mathematical average getting better? Or is the front of the -- like the Q2 FY '26 pulling the average up -- as in -- Michael Reid: Average in what? Nick Harris: It's a trailing 12-month NRR, right? So... Michael Reid: NRR, sorry, I missed that. Nick Harris: Got the keyword, NRR. Michael Reid: Yes, no, I was thinking which metric. It's good. Maybe you said it and I missed it. Okay. So NRR -- so back -- I think we've shared it a few times, but the net retention inside the business is lifting for a number of reasons. One, the U.S. really is on fire. So we've seen massive expansion inside the United States, in particular customers. Globally, we're strong, but the U.S. really is quite impressive. I'd say, again, back to that AI tailwind. We're selling services that are very different. So if you remember the journey we've been on, we used to be this tell story of like we're just a cloud connectivity company. And if you think of selling a connection to a cloud, that could be a $100 connection. We've seen million dollar single VXC connections. Think about that. You can either sell a single connection to a cloud at one connection for $100 or you can sell a single connection, subsea, long-haul Global WAN across the subsea, basically long haul at 100 gig, and you're looking at $1 million in ARR. I'm just giving you a perspective that by changing and adding these products, you will get your net retention expanding because you're selling much higher value services into the existing customer base. And the other piece is there's a tailwind around what companies are doing. So everyone is trying to innovate their businesses and move forward. And so people are making moves to spend things, but they're doing it at such massive scale. And that's why we've said like data center Internet is a really good example, such a simple product, but so important and actually helping us drive that. So what I would say is 2 things. It's the fact that we've now got a serious go-to-market team deployed and mature globally. We went to a -- I mean, we had an off-site in North America for the sales kickoff, there's 150 people that turned up. When I first came, there was 4 people and one customer success person. It's a really big change. And so when you've got that customer success team and new products and a market that makes sense, you get massive expansion. Europe is doing well for us as well. Asia Pac, I think, has been a little slower just because I think they're trying to figure out what's going on with AI, but we've still got growth in those areas. So if you sort of throw that through your lens, then you get the outcome. The U.S. for us will always be the largest growth and the largest opportunity, to be clear, which is why we're investing strong there. Operator: Our next question comes from Eric Choi. Eric Choi: Would it be possible to ask 2 number questions that are kind of related to Tish. Sorry, Michael. Just one on FY '26 and FY '27. Just on FY '26, just trying to unpick what's changed in EBITDA guidance. So can I just confirm if you took your comments in November and if you added 7 months of Latitude, we should have been getting about $73 million of EBITDA. And today, you're guiding to about $70 million. So it's really only a $3 million difference. And then of that, I think you can work out about $2 million is FX, and then there's another $1 million, which is just extra Latitude investment, but Latitude revenues are in line. That's the first one. The next one, Tish, or... Leticia Dorman: Yes. Eric, that's a good question. So we kind of -- we highlighted when we acquired Latitude around the 50% EBITDA margin. Now again, in terms of -- they didn't have a particularly large go-to-market team. And so part of that is investing across both to make sure that we are able and set up ready to sell the compute. That's really critical. So we've built in that. But don't -- the target is to -- particularly into FY '27 is to try to get to that back to -- well, we will get back to that margin. But in the meantime, we've got to invest to be able to grow. So similar story to Megaport. Eric Choi: Good stuff, Tish. Just on '27. Very helpful. Just if we extrapolate current trends for the core business, $111 million NRR, you're doing about 8% land. And then if you take the earnouts that you've got for Latitude, I just want to confirm that kind of suggests a $450 million revenue number, which would be above consensus. And then like in that scenario where you're getting earn-outs, should we assume you keep reinvesting, therefore, we shouldn't assume much margin expansion for each of the divisions into '27 besides Latitude. Leticia Dorman: I think just make sure you're not just taking the top end there, to make sure you're taking a midpoint. We want to. We will continue to drive forward to earn those -- to ensure that the Latitude founders earn out that because we earn that revenue. But just in terms of modeling, I never like to go too -- don't get too ahead of yourself just yet. Operator: Our next question comes from Andrew Gillies. Andrew Gillies: Really solid result. Great job. Just a quick one on Latitude, probably for you, Michael. Like that transaction has been presented ex synergies, but presumably, all of your network customers buy compute, particularly in North America, where you've had a really strong underlying revenue growth or ARR growth number. You've got those existing relationships with the telco service distributors. Like I appreciate you're not disclosing a number, but are there some low friction sales opportunities there that could help expand NRR? And then can you maybe touch on sort of Equinix Metal. I've noticed you've got a new section on the Latitude.sh website. There could be a direct opportunity there as well. Michael Reid: Yes. Great questions. We didn't model the business with synergies. I spent 6 years at Cisco acquiring a bunch of companies and synergies is a dangerous thing to just add into this. Sort of like you solve the equation with miraculous synergies. The way the acquisition with Latitude went down was actually they weren't looking for an acquisition. They were just looking for some investment into the company so that they could actually get some CapEx expenditure. And so they had a business plan that was related to them not being acquired and just running as a stand-alone company. And that business plan is what we've basically acquired them against, without any synergies built in, without -- and giving them a stretch ability if they go and succeed beyond a certain point to earn additional components beyond what their original planning was and then allowing them to get to that component. That is excluding synergies. So the point was, well, you need to build that business as it is today and continue to expand. The reality is it's up to us to go and take those synergies ideally and then leverage that across the business. So it should, in theory, be cream on top, if you think of it from that perspective. But what's important to call out is it takes time. So I'll give you an -- and we've been on this journey. We always say it's an 18 months. You start hiring enterprise sellers today. You start building the platform to deliver more enterprise style services. And then you start selling that, it's a 6- to 8-month -- I don't know, could be a 9-month ramp in terms of compute. We'll be finding that out. And then you end up revenue in it. So if you think about it, it's revenue that's in their targets, not ARR. And so it can be a delayed approach. That said, we've already hired, I think it's 5 or 6 frontline sellers. And if you look at -- if you sort of follow us on LinkedIn, you'll see that these are high-end Equinix bare metal sellers in North America and in Asia Pacific, including solution architects, customer success managers and frontline sellers. We landed those folks in December, which is astounding. So the team's worked incredibly fast. When we announced the platform, the acquisition, we actually had a huge amount of inbound. It turns out that bare metal and compute sellers are passionate about this space. A lot of them reached out and said, well, actually, to the Equinix bare metal when they've turned that off, they love the platform and could see how valuable it was and could see that Megaport was serious about it. And so we've actually got these folks coming in. So that said, they become an overlay sales force to the existing sellers at Megaport. And your point is totally true. The conversation is that Megaport connects folks that are connecting compute between data centers and the cloud. That's what we do today. So the next obvious question is, hey, did you know we had a compute platform, would you like to explore opportunities to either save money or get better performance or whatever it is. That becomes a sales motion, you push that through the machine. So that is the synergies that we would expect. But hard to model that in the short term. We need to build that out, and we're already building. I mean we move fast, if you haven't figured that out. So we -- I'm bullish on that space. Yes, the Equinix Metal piece, I think they've sunset that platform, but it's proving to be a great opportunity for us. So it's a good outcome, particularly with hiring and with customer opportunities. Operator: Our next question comes from Siraj Ahmed. Siraj Ahmed: Just maybe actually a follow-up to Andrew's question right now. Just the Latitude momentum, right? The ARR as of December looks like they only added $2 million in the quarter, so a bit slow, but you are guiding to revenue of $25 million to $30 million for the half. Just keen to hear what gives you confidence? Was it a bit delayed, right? Maybe it's the Equinix piece, et cetera, would love to think of the drivers for the Latitude. Michael Reid: The most important driver for Latitude is having access to compute that is available for customers to consume. That is the key. And Latitude is was -- if you looked at them, very much a start-up style business, capital constrained, went to market in, I think, I want to say, March, looking for capital. Obviously, we went through a transaction, and it takes a long time to get that through. So I would say it delayed their ability to procure infrastructure throughout that time. So it wasn't available during that quarter. So if you don't have product availability, you can't sell anything. So that is a pretty sort of an obvious but critical statement there. And since that, we've been ordering infrastructure to build out across all the sites, and we'll continue to expand sites. So that was easily to see and to understand why purely because of a compute -- hadn't deployed compute in that time. Hopefully that makes sense. Siraj Ahmed: So that's super helpful, Mike. But I think they got about 1,000 servers last month, right? So maybe you're already starting to see that come through. Is that fair? And should we be thinking maybe this half it's more towards the lower end and then it ramps into next year? Michael Reid: Yes. So there's a few factors, and we've shared this. There's a ramping period of time from when the servers are received, installed and then the software layer is added. So they're actually published into the platform. And so just because you've ordered something, it doesn't mean it's available for a customer to use. And just because it's available for a customer to use doesn't mean it's revenue and you need to obviously ramp that. And so that's why I think we shared there's a ramping profile from when infrastructure lands to when it gets deployed when it comes in for a customer to utilize it. And the tricky part is lining up -- when infrastructure is going to land is always tricky. Well, it's become more tricky at the moment just because of supply chain. So there is -- it's not clear to get exact date. So to predict an exact date when you're going to get something and then predict the exact ramp of utilization is tricky. So what we have is a range around that depending upon those factors. Some of those factors are out of -- obviously out of our control. The one thing we can control is what we order and order as soon as possible to get that built out, particularly given supply chain. Hopefully, this just gives you a perspective on it, which is why we have a range. Operator: Our next question comes from Tim Plumbe. Tim Plumbe: My question is just around the go-to-market hiring process. Mike, can you give us a bit of a sense in terms of how far through it you are? And then once those guys are up and running and at a mature level, is there a way for us to think about average ARR contribution per salesperson? Michael Reid: Can you say the first data market -- sorry. Leticia Dorman: Go-to market. Michael Reid: Go-to market. Tim Plumbe: The go-to market, like how are you... Michael Reid: Got it. No, got it. You said the data market, I was thinking what that is. Okay. So we're -- as I mentioned just before, if you follow us on LinkedIn, you'll see that we've just hired, I think, 5 frontline sales or maybe more, pretty strong, very experienced sellers, I think most of them from Equinix Metal. So very, very strong in this space. Understand the products, understand the market and so forth. And we've also got solution architects who are incredibly strong in that space. Now what's different about building a stand-alone business is you would need significantly more folks to take a business like that to market if you didn't have the existing frontline sellers inside Megaport. So what is unique is you have like a -- what you've created is an overlay sales force. So think about it, our existing sellers will be paid on anything that gets sold as compute, but they're going to only know so much about it. And they only need to know enough to be dangerous. And the conversation with the customer is literally, hey, have you considered, did you know we had this product? And they'll say, oh, I don't look after that or maybe it's this person. You said, do you mind introducing me to that person? And then they send in the specialist. So what's so different about those specialists is they're not out there punching the pavement sort of outbound hunting. We have a machine to do that for them, and they become the specialist in that space. So they will probably, over time, have a much higher dollar figure that they would bring per head because they have a machine beneath them, if that makes sense. So I wouldn't compare them to a traditional frontline seller. They are more of an overlay sales function. They have paid totally on compute, just to be clear. So it's not like some free kick, but it's going to be a lot easier to get into the 3,000 enterprise customers that we have versus cold calling. So you would -- we haven't landed on the exact productivity per head expectation from them. Remember, the tricky part here is that a vast majority of the existing business came from product-led growth. And as I said, we aren't disrupting that. And so this is really the cream on top to help build and scale the business. And as I said, there's probably an 18-month journey before that machine is actually working or at least showing through the revenues. We will see it work much sooner just like with Megaport, but in terms of the revenue contribution, it comes later. So it's going to be the core business against the business plan that we acquired them against. And they've got great opportunity to go and be successful on that. And it's a low risk in that. If it's not successful, it's not paid. If it is successful, it's paid. If they're really successful, we pay more. And every which way, it's good for shareholders. Does that make sense? Leticia Dorman: Tim, I think it's fundamentally applying the same principles as Megaport to the compute and then overlaying that with the India acquisition as a collective group. So that's kind of how we're starting to think about it into FY '27. Tim Plumbe: Yes. I mean sorry, Mike. My question was more around the core part of the business. Like you guys have flagged a material uplift in reinvestment back into the business. So how far through are you in terms of finding the headcount that you need for the core part of the business? Michael Reid: Should have stopped me. Tim Plumbe: I'm just a PR guy. Michael Reid: I was carrying on about Latitude. You're allowed to interrupt. Leticia Dorman: Sure, you can, Tim. Michael Reid: All right. Very simply, we hired all of those, I think, before we -- I think we were -- as we were coming at the start of the year, I think we'd shared that most of that sales force was in place, which is why you've seen like our expenditure where it is. Continue to add that the vast majority were added at the start of the year. You're also seeing probably the impacts of those already come through with significant new logo and all the net retention, all the expansion. And I think you're seeing the success of that already, frankly. Leticia Dorman: We'll continue hiring into the second half, though, Tim, kind of in a more steady cadence. But you'll see that that's kind of why we provided guidance on the stand-alone. Michael Reid: Yes. If you think about it, you've got to move fast for a year. The faster you move -- because obviously, if you hire in the last half, you only -- you're not actually making a much impact. So there's no impact almost because by the time you get them ramped, they're making no impact to the business. So we're very, very fast there as we've been incredibly fast with the Latitude folks as well. That's what we do. We hire wicked talent. And it's actually there's a lot of people that love to be at Megaport, and it's not hard to hire because we've got such a big machine of folks that recommend wicked talent to us. It's very rare. By the way, every single go-to-market hire in the end, and pretty much everyone that's coming through is coming from a recommendation from someone inside the business, makes it so much easier. Operator: Our next question comes from Bob Chen. Bob Chen: Just a question, a follow-up to your comment earlier around the biggest constraint being compute for the Latitude business. I mean there's been a lot of noise around shortages as well as price increases for DRAM and servers. Like how easy is it to pass on the price increases to your customers? And then what are you guys doing on the supply chain side to try and mitigate the shortages? Michael Reid: Yes. The good news is we've got choice in terms of the SKUs that we can procure and the vendors we can procure from. There's definitely been -- I mean, for those who don't know, there is a pretty significant memory challenge globally at the moment. I think memory price is up 300 or 400% in the last few months alone. I think it was OpenAI, I think, took out a big line. I think Western Digital has even said that they're not even taking orders. So there's definitely -- that's flowing through the entire industry. I think the scale at which hyperscalers are procuring this style of infrastructure is pretty large. Even though, I guess, it's a sizable CapEx for Megaport, it's still a very small component on the global scheme of things. And so there's plenty of different providers that we can leverage. I think there's 5 or 6 different parts we can procure. And we've been changing depending upon pricing and opportunity and who's willing to work with us and so forth. We also, you have to spend time escalating, unfortunately, when you end up in a position where everyone -- what happens is everyone tries to jump the queue and kind of the noisy wheel gets the oil, so to speak. And we've had that with some of our vendors where we've jumped in. They've sort of pushed out and delayed delivery and then we've jumped back in and they've actually pushed us back forward. So at the moment, we're in a very good position. A lot of ordering and infrastructure was prior to price rise as well, which is helpful. We will see how the pricing plays out in the market, but it's likely that ultimately, someone -- prices will typically get passed on to the consumers over time. You can't withhold those prices, and that will happen across the board. We don't need to do that for the short period where we're at, but at some point we will and all of that will get washed through the business. So it's a very -- you're constantly monitoring pricing in that game and making sure that you're competitive, it's returning a great margin and so forth. So what's probable is that you'll probably see -- it could -- these are the funny things. They're hard and sometimes they play in your favor because the rest of the world can't get access to something that you've got access to. And so you could see things change. But let's just see how it plays over the next 6 months. This space changes almost daily. Bob Chen: Great. And I guess it doesn't change the underlying business case on Latitude at this point in time, at least. Michael Reid: No. And if you think about it, when we went through this, it's kind of discretionary growth. If you grew too fast and you started to burn too much CapEx, you just slow down the CapEx you deploy if you ever got to that position. So it's kind of a discretionary business where you can control the inputs in terms of the CapEx that you're deploying and then you can monitor it with pricing in terms of -- to manage the utilization play. So you've got levers, if that makes sense. So it doesn't run away from you unless you choose for it to do that. Operator: Our next question comes from Roger Samuel. Roger Samuel: Just a quick one on your EBITDA margin. So you mentioned that the exit run rate was 21% for the half. Now given that you reported 26%, is there any possibility that you might go below the 21% to 24% range in the second half? Yes, or is that 21% is the floor for the second half? Leticia Dorman: Roger, I guess for us, it's more highlighting that that's 26%. You've got 1 month of Latitude in there, which is a higher-margin business, heavier CapEx, higher-margin business. The reason I've highlighted that from a Megaport underlying EBITDA exit margin is because we will continue to add costs in the second half. It will be a mix of recurring and nonrecurring spend. And so yes, that's why we provided guidance to the 18% to 20% mark for the... Roger Samuel: Right. Yes, I was just wondering if you may go below the 21% figure in the second half, given that you give a range of 21% to 24%. Leticia Dorman: No. You mean on the group? Yes, no. That's why we've given the range on collective. Yes. Sorry, just ensuring I understand the question. Roger Samuel: Even for the second half as well? Operator: Our next question comes from Siraj Ahmed. Siraj Ahmed: I think it's a good follow-up to Roger's question actually. So, Tish, one for you probably. I mean you did add, what, $10 million costs half-on-half in the core business, right? And the guidance, especially given exit rate is only it's 21%, but to get to 18% to 20%, actually has to go dip to sort of 15% in the second half, right? That's a big step-up in cost in the second half. But Michael just said that you did most of the hiring at the beginning of the half. So just confused... Leticia Dorman: So, don't forget, don't forget they don't start on 1 July. And so you add those costs throughout. So it's kind of -- it's exactly the same thing that we talked about last year, I think almost this time last year. And so it is that collective ramp. And again, that's why I kind of highlight that there is recurring and nonrecurring spend within the business. And that is part of -- you think about Megaport stand-alone, you've added 2 acquisitions. We do need to make sure that we've got collective marketing and activities built into the second half. And so that's why I really want to focus from an EBITDA standpoint on the collective group margin because it is the sum of components. So that's kind of why we've tried to provide some guidance on that at the collective group because I think that's really important. Siraj Ahmed: Okay. That's super helpful. And so just to clarify again, given your comment on recurring and nonrecurring, so maybe we shouldn't be using the second half margins as the -- for full year '27 because that's what I'm getting a lot of questions on because that sort of implies run rate in next year is much lower, right? But you're saying there's nonrecurring spend as well. So all of that doesn't carry into FY '27. Leticia Dorman: It's a mix. It's a mix. And so yes, I think you've got 2 very different margin businesses coming together, so -- and the India expansion. So there's just a sum of all the components. So we'll provide guidance for FY '27 at the full year. So -- but yes, you're kind of on the right track at least. Siraj Ahmed: Yes. And can I just follow up on one thing? The synergies question, which Michael was revenue. But on the cost side, I think what Latitude is now going to use your backbone or your network, right? So does that mean there's a bit of cost synergies for the business as well? I know it's not material, but at least Latitude benefits from that. Michael Reid: There is lots of benefits on that. So there's -- we talked about synergies in terms of just like go-to-market. There's synergies in terms of the platforms as well. Like if you think about it, we're in all these data centers. We've got these relationships in space, much easier to expand and scale. We can actually do some really cool stuff where we land smaller sites with leveraging the Megaport network so that there's a significant reduction -- not material, but enough to be a reduction in cost to land faster in more locations. So you'll probably see us expand the number of locations a lot easier because we can land a lot simpler and then we can scale from there. That's because of the Megaport backbone. A lot of the Megaport components cross in because you've got an ability to say, well, we could put 100-gig VXC, for example, straight into the Latitude business, and we have a choice as to how we can charge that to a customer or not or offer a differentiated service. So a lot of it comes through. There's a lot of differentiation that comes out of it. There's a lot of innovation that we're going to bring from an enterprise perspective. Think VPC, which is basically enterprise networking components into the compute stack, very similar to what you'd see with a cloud provider. We'll build that and integrate that into the platform and offer it. So the 2 businesses are pretty tightly aligned in many ways and benefit each other on both sides. Leticia Dorman: We got one more question. Operator: Our last question comes from Paul Mason. Paul Mason: I just wanted to ask a bit about the NRR and services numbers, like the services numbers have shot the lights out, right, a much bigger set of additions than previous halves. Just wondering if you could give any color on the contribution from the second half '25 cohort to that? Like is what's driving this big step-up like the relatively new customers that you had a big surge last half? Or is like the upselling more coming from just like a broad base at this point? And I suppose where that's leading is because you had a second half in a row of really good customer adds. Is this then going to reaccelerate those numbers like even more significantly because it's all coming from a much bigger set of new customers. Michael Reid: We've been on this journey for a while explaining the impact and drivers around net retention and also the impact for what's important for the company. The answer is both, of course, and that's why we keep sharing that, a, net retention. So we're selling more stuff to the existing customer base. And that's why they're taking up more services. They're much bigger services. There's more revenue associated to them. But also when you have more products, you land more logos because you can meet them at a different sales cycle for each component that you have. So this mission that we've been on, I don't know what it was, 2 years ago, and we said, hey, these are all the levers to fix the net retention. It wasn't just fixing net retention, but it was like adding new products will help you expand more, earn the right to sell more. But what's really interesting, and we kept sharing that is there was a period of time before sort of -- I can't remember what year it was, like '22 to '23, where new logos had declined. And new logos on the back of no sales force and lots of things. We won't go back down that path. But when you have really, really high lands of new logos, you typically follow -- that gives a positive tailwind to net retention as well because they expand faster than an old logo. So when you have -- it's like the perfect storm. We've got all those elements working at the moment. And then you've got a great market in the United States specifically demanding all of these services, and we have the platform that delivers it. So it's not really anyone else that can do what we do. So we're in that really, really great position, which is why you're seeing that come through in all the metrics. Like this is an outstanding performance from the underlying Megaport business. And on top of that, we've acquired some really cool acquisitions. One in particular, is going to take us to a really different company in the future. So yes, I'm glad you noticed it. Paul Mason: If it's all right, if I can sneak in one other quick one. I was just wondering, one of the things that you introduced when you joined as CEO was like the sort of solution selling and Global WAN was like something we hadn't heard out of Megaport before you arrived. Have you got any ideas on like something like that, that would bridge Megaport and Latitude, like actually a cross-platform solution sort of that could be a new go-to-market motion for you guys yet or anything like that? Michael Reid: Yes, yes, absolutely. Whilst they are different technologies, they serve the same function. Like if you think about it, if you ever -- I mean, you know this, but for folks on the call, if you look at IT infrastructure, there are only 3 things. It's network, compute and storage. They either live in a data center, they live in a cloud or they live on someone's on-premise literally. And so by stitching these 3 things together, so I say 3 because we will look to build out a storage business as well. When you stitch those 3 together, you solve the customer problem. The outcome is you want to run an application. And the application wants to be served up in a very high performative, low-cost, predictable manner. And that is what this solution delivers. And then you want to be able to make that resilient across multiple locations, time zones, countries, you name it in the network and all these things stick together. So it really is a beautiful combination of what will be these 3 businesses moving forward, at least the compute now and the network, and then we'll add the storage element to it. That is, couldn't be more like a solution selling discussion. But the cool part is you can always land a customer at any point. You could just land on a GPU that the customer wants to use and then you have the right to cross-sell into the network element, add compute, potentially add storage. We've got this 3,000 enterprise customers on the network side. They've got sort of close to 2,000 on the compute side, and we have this ability to sort of take both to both sides. So it's really exciting. It will take time to build that, but that is what the opportunity is ahead of us. It's really cool. All right. Operator: That brings our Q&A session to a close. I will now hand back to Michael for closing remarks. Michael Reid: I think we're done. That was a little longer. Thanks for those who hung in with us. It was longer because of the 2 acquisitions. This time next year, we'll keep it a lot tighter. We wanted to make sure everyone had an opportunity to understand the businesses, understand the changes around the guidance components, the strategy of why we acquired, what it looks like from a product perspective, give you some insight into some really cool innovation that we're already launching inside both businesses. And thank you for your support. It's an incredible opportunity for us, and we're just going after it. So yes, look forward to catching up on the roadshow. Leticia Dorman: Thank you.
Operator: Welcome to the Fourth Quarter and Full Year 2025 Harmonic Earnings Conference Call. My name is Michelle, and I'll 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 David Hanover, Investor Relations. David, you may begin. David Hanover: Thank you, operator. Hello, everyone, and thank you for joining us today for Harmonic's Fourth Quarter and Full Year 2025 Financial Results Conference Call. With me today are Nimrod Ben-Natan, President and CEO; and Walter Jankovic, Chief Financial Officer. Before we begin, I'd like to point out that in addition to the audio portion of the webcast, we've also provided slides for this webcast, which you may view by going to our webcast on our Investor Relations website. Now turning to Slide 2. During this call, we will provide projections and other forward-looking statements regarding future events or future financial performance of the company. Such statements are only current expectations and actual events or results may differ materially. We refer you to documents Harmonic files with the SEC, including our most recent 10-Q and 10-K reports in the forward-looking statements section of today's preliminary results press release. These documents identify important risk factors, which can cause actual results to differ materially from those contained in our projections or forward-looking statements. And please note that unless otherwise indicated, the financial metrics we provide you on this call are determined on a non-GAAP basis. These metrics, together with corresponding GAAP numbers and a reconciliation to GAAP are contained in today's press release, which we have posted on our website and filed with the SEC on Form 8-K. We will also discuss historical financial and other statistical information regarding our business and operation, and some of this information is included in the press release. The remainder of the information will be available on a recorded version of this call or on our website. And now I'll turn the call over to our CEO, Nimrod Ben-Natan. Nimrod? Nimrod Ben-Natan: Thanks, David, and welcome, everyone, to our fourth quarter and full year 2025 earnings call. We delivered a strong fourth quarter, reflecting accelerating momentum across our broadband business. This is our first earnings call following the announcement of the pending sale of our Video business to MediaKind. This is a decisive step that will push our growth strategy forward and transform us into what I call the new Harmonic, a pure-play broadband leader. This transaction will simplify our operating model and align all of our resources to unlock growth opportunities in the expanding broadband infrastructure market. With the Video sale expected to close in the second quarter of 2026, all financial and operating results I discuss today reflect our continuing operations, meaning our core broadband business. Turning to Slide 4. Broadband revenue for the quarter was $98.2 million, representing 9% sequential growth and coming in above the high end of guidance. In addition, we delivered record quarterly bookings of $346.9 million, driving a 3.5 book-to-bill ratio. These bookings were fueled by several multiyear contracts, reinforcing both revenue resiliency and long-term customer commitment to our platform, alongside record diversified rest-of-world bookings that will support growth in 2026 and beyond. All of this drove backlog and deferred revenue to $573.8 million at year-end, up 73% year-over-year. The current portion of this alone was $307 million, more than double last year's level, giving us strong visibility and confidence as we enter 2026. In addition to our core Broadband business, our Video business, now classified as discontinued operations, exceeded our expectations in the fourth quarter, both in terms of revenue and profitability. The planned sale of this business to MediaKind for approximately $145 million in cash remains on track. In addition to the strategic benefits, this transaction further enhances our balance sheet and supports a disciplined capital allocation framework focused on investing in growth, maintaining financial flexibility and building long-term shareholder value. A defining theme of 2025 and one that accelerated meaningfully in the fourth quarter is the diversification and expansion of our customer base beyond our 2 largest North American accounts. Rest-of-World revenue, which excludes revenue from these 2 large customers grew 33% year-over-year in the fourth quarter. This now represents 41% of total broadband revenue, a meaningful shift in our revenue mix, underscoring the continuing momentum of our diversification initiatives. We delivered record Rest-of-World bookings in the fourth quarter, reflecting growing adoption of our platform globally and increasing confidence from operators investing in multiyear network modernization. For example, together with Norman Engineering, our longest-standing partner in Europe, we recently marked 20 successful DOCSIS and fiber deployments across the region, including with operators in Austria and Germany. We also announced that Telia, the second largest telecom operator in Norway, is modernizing its broadband network using our virtualized cOS platform in a distributed access architecture. What is very important here is that we are not just seeing one-off wins. Rather, these recent deployments are the result of expanding platform relationships. Customers typically start with an initial deployment such as DOCSIS. And as they standardize on our platform and services, they grow their footprint and expand across our portfolio, adding fiber and our intelligence-driven cloud capabilities. Our fiber business continues to scale rapidly and is an increasingly important growth driver with strong revenue growth in the fourth quarter and for the full year. We are seeing growing fiber wins with both telco and cable operators in North America and internationally. A major highlight is our expanding collaboration with izzi, the largest MSO in Mexico. izzi has selected our COS platform and remote OLT solutions to power a strategic fiber broadband expansion across its network. This multiyear deployment leverages our open ONT strategy, lowering izzi's total cost of ownership while accelerating their fiber rollouts. It is a strong example of how our platform simplifies large-scale fiber transitions. Enabling our fiber market momentum are several new fiber product innovations. We recently introduced a new pluggable combo OLT option, which is particularly attractive for operators executing surgical footprint expansions and serving rural markets in a highly cost-effective way. What is particularly compelling and a key differentiator for Harmonic is how fiber and DOCSIS converge within our cloud-native architecture, allowing operators to efficiently manage both technologies through a unified platform, simplifying operations and lowering total cost of ownership across their entire access networks. Our Unified DOCSIS 4.0 strategy continues to gain traction as the ecosystem matures and operators' confidence builds. Major operators are advancing DOCSIS 4.0 road maps and reporting tangible operating benefits from network upgrades, including fewer service calls and faster repair times. We successfully completed a DOCSIS 4.0 field validation with Vodafone Germany, further reinforcing the maturity of the technology and our leadership in this space. Unified DOCSIS 4.0 node shipments are now ramping with initial deliveries this quarter. We are transitioning from field trials and early deployments to scale commercial deployments, marking an important inflection point for this cycle. Looking ahead, operators are increasingly seeking platforms that help them anticipate issues, optimize performance and reduce operational friction, ultimately lowering operating expenses and improving competitiveness. This creates an extraordinary opportunity for Harmonic to leverage the unique data available through our virtualized cloud platform and provide innovative new intelligence-driven operational solutions. Following the successful introduction of Beacon and Pathfinder, which help customers maximize the speed performance of their networks while minimizing truck rolls, we have introduced new subscriber experience detection capabilities that can identify and mitigate network issues before they generate support calls, directly helping operators reduce churn and lower operating costs. Over time, we expect continued development of this intelligence layer to increase recurring revenue, deepen customer integration, improve margins and expand our addressable market into AI-enabled operations beyond access infrastructure. Turning to Slide 5. Network investment is no longer just about speed. It is about measurable business outcomes. A large North American operator recently highlighted significant reductions in service costs and faster mean time to repair in areas where next-generation DOCSIS 4.0 technology has been deployed. These improvements translate directly into lower operating costs and higher subscriber satisfaction. When operators invest in network quality, the returns show up in reduced churn, stronger loyalty and improved competitive position. Our own commitment to customer success is reflected in our world-class Net Promoter Score of 82 as measured at the end of 2025, underscoring the trust operators place in our platform and our team. Customer success is the foundation of our growth model. Moving to Slide 6. Harmonic wins because we enable operators to scale bandwidth faster, more cost effectively and with improved subscriber satisfaction. Our differentiation is built on technology leadership, speed of execution, improving customer network reliability and solutions that drive lower total cost of ownership. We now have 146 COS deployments in production, serving more than 41 million cable modems and ONUs worldwide. At this scale, the gap between Harmonic and the rest of the market is no longer incremental. It is structural. Our platform brings a decade of production maturity, proven operational consistency and unmatched scale in virtualized broadband and a wealth of real-time network data that is now beginning to be exploited. This is why leading cable and now telco operators are standardizing on Harmonic as they modernize their networks and why we believe there are so many compelling growth opportunities still in front of us. Moving to Slide 7. The broadband market opportunity ahead of us is substantial. According to Dell'Oro, the cable serviceable addressable market is expected to grow from approximately $510 million in 2025 to over $1.1 billion by 2030. What's driving this is that across the industry, broadband operators are accelerating network modernization as data consumption continues to rise at a rapid pace. AI-powered applications, immersive content experiences and multi-gigabit services are driving sustained bandwidth growth and placing increasing performance demands on broadband networks. This investment cycle is not driven by speed alone. Operators are increasingly focused on quality of experience, churn reduction and operating efficiency. Network capability has become a direct driver of customer satisfaction, application adoption and long-term competitiveness. Our share positions remain strong in virtual CMTS, RPDs and remote OLTs with meaningful room to expand. In fiber, the addressable market exceeds $2.6 billion and represents a significant opportunity where our share is growing. Importantly, these market figures exclude the AI operation and tools market, which represents an additional growth vector we have begun to actively target. Turning to Slide 8. Our long-term strategy centers on 4 priorities: first, expanding our market leadership in DOCSIS through continued innovation in COS, remote devices, outdoor nodes and recurring services while accelerating our fiber position with both cable and telco operators globally. Our objective is not simply participation, but category leadership across access architectures, driven by continued investment in innovation and differentiated capabilities. Second, increasing customer diversification. We are targeting sustained Rest-of-World growth of 30% or more annually, expanding beyond our largest North American customers and building a broader, more balanced global revenue base. Third, driving software and cloud differentiation. Our cloud-native architecture and intelligent automation capabilities create opportunities to expand recurring revenue, deepen platform integration and build long-term customer relationships. And fourth, maintaining operational and cost discipline. As a pure-play broadband company, we are simplifying our cost structure and positioning the business to generate meaningful operating leverage as revenue scales. Together, these priorities are designed to expand our addressable market, increase revenue durability and improve our long-term margin profile. Moving to Slide 9. As we enter 2026, Harmonic is well positioned as a focused pure-play broadband innovator, providing market-leading DOCSIS and fiber-to-the-home solutions augmented by an intelligence-driven software layer for automation and subscriber experience to operators worldwide. With the sale of our Video business, we are transitioning to a company fully dedicated to the growing broadband market. This sharpens our strategic focus, simplifies our operating model to a single go-to-market motion and product road map and improves our ability to generate long-term operating leverage as we scale. The transaction also provides us with a significant capital infusion with a stronger balance sheet and incremental cash. We are positioned to invest in organic innovation, expand into adjacent broadband opportunities and pursue disciplined inorganic expansion where it accelerates diversification and market leadership. We believe this combination, leadership in DOCSIS, expanding presence in fiber and a growing intelligence-driven software capability positions Harmonic for accelerated growth and improved long-term operating margins. With that, I will turn the call over to Walter to walk through our financials in more detail. Walter Jankovic: Thanks, Nimrod, and thank you all for joining us today. Before I discuss our quarterly results and outlook, I'd like to remind everyone that financial results I'll be referring to on this call are provided on a non-GAAP basis. As David mentioned earlier, our Q4 press release and earnings presentation include reconciliations of our non-GAAP to GAAP financial measures. Both of these are available on our website. As previously announced, we are in the process of selling our Video business to MediaKind. As a result, this segment is classified as held for sale and reported as discontinued operations. Unless otherwise noted, all results discussed today relate to continuing operations. We've also provided historical information for continuing operations to support your financial modeling and prior period comparisons. The transaction remains on track to close in the second quarter of this year, subject to customary conditions, including the completion of the required consultation with the French Employee Works Council. We closed the year with exceptionally strong quarterly broadband bookings, driving a 3.5 book-to-bill ratio for the quarter and a significant year-over-year increase in backlog. This robust backlog enhances our visibility for 2026 and combined with Unified DOCSIS 4.0 ramps, large customer deployment plans and accelerating rest of world adoption will help drive strong broadband revenue growth throughout the course of this year. On Slide 11, you'll find some of the financial highlights for the quarter. For total company results, including Video discontinued operations, revenue was $157.3 million, EPS was $0.14 and adjusted EBITDA was $23.8 million, all well above our Q4 guidance. For continuing operations, fourth quarter broadband revenue was $98.2 million, above our $85 million to $95 million guidance range with adjusted EBITDA of $12.1 million and EPS of $0.06. These results include $3 million in stranded costs related to the pending Video business sale. The revenue upside reflected strong bookings and service deployments in the quarter. For the fourth quarter, we had one customer representing greater than 10% of total revenue, which accounted for 53% of total revenue. To remind everyone, this metric is now based on continuing operations, which is only our Broadband business. Our Q4 Rest-of-World revenue showed strong year-over-year growth of 33%, representing 41% of total revenue, underscoring our customer diversification progress. As a reminder, Rest-of-World revenue describes all revenue that is not from our largest 2 customers as measured by subscriber count. Starting with next quarter's results, we will refer to Rest-of-World as Rest-of-Market as this name more accurately reflects the grouping of these customers, which can be in any region, including the U.S. Recurring revenue reflected in the services and SaaS revenue line item made up 16% of our total continuing operations or broadband revenue. Moving on to Slide 12. You'll find our fiscal year 2025 actual results. For the total company, net revenue was $570.8 million with a gross margin of 55.8%, adjusted EBITDA of $83.8 million and EPS of $0.47. Continuing operations generated $360.5 million in revenue, a 48.7% gross margin, adjusted EBITDA of $47.3 million and EPS of $0.23. These results include a $2.3 million tariff impact and approximately $9 million of stranded costs related to the pending Video sale. Turning to Slide 13. You can see our balance sheet and cash flow highlights for continuing operations. Our balance sheet remains strong with $124.1 million of cash and cash equivalents at year-end. The sequential change in cash was mainly attributed to positive free cash flow in the quarter, offset by share repurchases. Free cash flow during the fourth quarter was $9.6 million. For the full year, we increased cash by $22.6 million while also repurchasing $79 million in stock during the year. We generated $97 million in free cash flow, which was an increase of $44 million from the prior year, demonstrating strong profitability and cash generation even amid a broadband industry transition to DOCSIS 4.0. Furthermore, given our expectations for progressive and significant full year broadband revenue growth in 2026, we are confident in our ability to expand profit margins and generate free cash flow considering the high operating leverage we have already shown in broadband. DSO at the end of Q4 was 79 compared to 61 in Q3 '25 and 76 in Q4 '24. The sequential increase was due to a large number of shipments that took place earlier in the third quarter. We expect DSO to trend in the high 70s going forward based on our customer mix. Inventory decreased $1 million in the quarter, and our days inventory on hand fell to 83 days from 91 days last quarter. Q4 bookings reached a record $346.9 million, nearly matching all of total broadband revenue for full year 2025, resulting in a 3.5 book-to-bill ratio. At the end of Q4, total backlog and deferred revenue was $573.8 million, up 73% year-over-year. Of that, $307 million or 53.5% is expected to convert to revenue within the next 12 months, an increase of 110% year-over-year. This provides us excellent visibility for 2026 growth. As shown on Slide 14, we believe we have ample liquidity to support our capital allocation priorities with $124 million in cash and $82 million undrawn credit facility and expected net proceeds from the planned Video sale. Additionally, we continue to anticipate a meaningful reduction in our cash income taxes in 2026 due to the passage of the One Big Beautiful Bill Act as well as the impact of Section 174 R&D adjustments. All of this should substantially enhance our capital allocation flexibility. Even as we transform to a pure-play broadband company, our capital priorities remain unchanged: investing in organic growth and diversification, returning capital to our shareholders and pursuing strategic M&A to further enhance growth and diversification in our broadband business. Aligned with our first key priority, we expect to increase our inventory over the next several quarters to support our anticipated growth, including advancing memory purchases to secure supply. We also expect to invest in additional organic broadband opportunities in both our services business and fiber portfolio. Under our expanded $200 million share repurchase program, to date, we have already repurchased $101 million of our common shares, including $13.3 million in Q4 2025 and an additional $21.8 million post year-end. As we stated previously, we expect to fund ongoing repurchases through the strong free cash flow generation over the next several years. In addition, we expect to realize a substantial cash infusion from the sale of Video. This will also position us well to explore additional opportunities, including inorganic options to further diversify and grow our broadband business. Now I would like to briefly discuss stranded costs on Slide 15. These are shared corporate and infrastructure expenses previously allocated across both Broadband and Video that will now reside in continuing operations. We anticipate approximately $10 million in stranded costs for 2026, including $3 million in public company costs. We believe roughly 30% of these are temporary costs and will be removed within 1 year following the closing of the Video sale. Turning to guidance on Slide 16. We lay out our continuing operations non-GAAP financial guidance for Q1 2026 and full year 2026, and we have included an FY 2026 EPS bridge to assist in comparing our continuing operations results to the previous combined Broadband and Video results. Please note, beginning this period, the company will provide guidance on adjusted operating profit before tax basis rather than on an adjusted EBITDA basis. This change reflects our view that operating profit is the more commonly used profitability measure in this industry and provides a more complete and transparent view of our underlying operating performance. Given the company's limited capital expenditures and low depreciation and amortization, the difference between the 2 metrics is minimal. With our 2026 guidance, we're taking a prudent and measured approach on both revenue and margins, considering factors such as the current memory chip pricing and supply dynamics. Built into our full year margin guidance is the current market pricing expected for memory. Now let me walk you through the guidance. For Q1 2026, we expect broadband to deliver revenue between $100 million to $105 million, gross margins between 54% to 55% due to favorable product mix, operating profit between $18 million to $20 million and EPS of $0.11 to $0.12. As our guidance shows, we expect modest sequential broadband revenue growth in Q1 2026 versus Q4 2025, with momentum building considerably as we move throughout 2026. Our Broadband gross margin guidance includes an estimated tariff impact of less than $1 million based on the currently announced tariff rates and exemptions. Operating profit includes stranded costs of approximately $2 million. For the full year 2026, we expect broadband to generate revenue between $440 million to $480 million, gross margins between 51% to 53%, declining from the Q1 levels due to product mix and surging memory costs as they flow into shipments after the Q1 time frame, operating profit between $74 million to $99 million and EPS of $0.46 to $0.63. This full year Broadband gross margin guidance includes an estimated tariff impact of approximately $4 million, while operating profit includes stranded costs of approximately $10 million. Our non-GAAP tax rate in Q1 and full year 2026 is now 24.5% and reflects the higher expected U.S. mix of business in our continuing operations. Regarding the previously mentioned EPS bridge, Video, which, as a reminder, is now classified as discontinued operations, contributed $0.24 in EPS in 2025. Also, in 2026, continuing operations includes $10 million of stranded costs and EPS impact of $0.07. These items provide a bridge to prior total company EPS results and expectations. On Slide 17, we provide some historical context to our continuing operations and our full year 2026 guidance. Revenues are forecasted to grow quite strongly in 2026 between 22% and 33% due to the extremely strong bookings we saw in Q4, combined with Unified DOCSIS 4.0 ramps, large customer deployment plans and Rest-of-Market adoption. 2026 gross margin is projected to increase several hundred basis points due to cOS mix, offset partially by expected higher memory costs. Operating expenses increased primarily due to expanded portfolio investments and the impact of foreign exchange. Again, you can see here our record backlog and deferred revenue level as compared to prior years, which positions us well for growth in 2026 and beyond. We ended the year with strong performance in Broadband and Video, exceeding our expectations. Record Broadband bookings provide excellent visibility for the coming year and revenue resiliency over the long term. As we finish 2025, we are now seeing DOCSIS 4.0 transitions evolve from headwinds to tailwinds, positioning us for accelerated growth as deployments ramp. The Video sale will streamline our operations, strengthen our balance sheet and allow us to focus entirely on our fast-growing broadband business. This will position us well for accelerating our growth and diversification across broadband, both in DOCSIS and fiber-to-the-home to take full advantage of the growing available market. With broadband, with robust demand, strong cash generation and expanding operating leverage, we are confident in our ability to deliver sustained revenue growth, margin expansion and continued strong free cash flow in 2026 and beyond. Thank you for your attention. And now I'll turn it back to Nimrod for closing remarks before we open up the call for questions. Nimrod Ben-Natan: Thanks, Walter. To summarize, our broadband business delivered a strong finish to 2025. Record bookings and substantial backlog growth provide clear visibility into 2026 and beyond. With the pending sale of our Video business, we are well placed to capitalize on this industry's growth as a pure-play leader in the broadband deployment space. Our converged DOCSIS and fiber architecture is proven at scale, enabling operators to deliver multi-gigabit services with higher quality of experience and lower cost of ownership. Fiber continues to accelerate as a major growth engine and Unified DOCSIS 4.0 is transitioning from trials to commercial scale. At the same time, our intelligence-driven software capabilities are expanding our differentiation and extending our addressable market. Supported by strong rest of world momentum and a more diversified customer base, Harmonic will lead the next phase of broadband networks modernization. These dynamics give us confidence in our long-term growth trajectory as DOCSIS 4.0 and fiber deployment scale through 2026 and beyond. That concludes our prepared remarks. Walter and I are now happy to take your questions. Operator: [Operator Instructions] And our first question comes from Simon Leopold with Raymond James. Simon Leopold: I want to start out with how you're thinking about the customer mix for the full year 2026 in that I assume there are a number of moving parts, and it's intriguing to see the rest of world customers getting as big as they did this quarter. So it's a positive, but I imagine we should not make the assumption that they remain at 40% of revenue for the full year. So I'd love to get your thoughts on how 2026 assumptions might be broken down by major customers versus rest-of-world. Walter Jankovic: Simon, it's Walter. Maybe I'll address that here first. So with regards to 2026, the comments we made today around Rest-of-World and the expected continued growth at 30% plus is one of the factors in looking at the absolute growth of that contingent of customers. Obviously, from quarter-to-quarter, depending on what the largest customers spend, the percent will vary. However, over the long term, with the expectation around this year's growth and continued growth in rest of market customers, we expect that metric to continue moving north. However, as you look at quarter-to-quarter, you will see it move up and down based on what the other customers are doing in terms of the larger customers. Simon Leopold: Okay. And you've given us quarterly guidance, full year guidance on gross margin. I just want to sort of do a sanity check on my arithmetic in that it sounds like you're expecting some COGS hit from memory to basically start contributing in the second quarter. My rough estimate is something like 300 basis points, which sounds similar to what we've heard from others. But is that kind of the right magnitude of how to think about it? Walter Jankovic: Here's what we've assumed based on the very dynamic situation around memory pricing today. We've built in around a net $6 million impact as a result of the pricing that we see today. We have committed orders out there for the supply that we need in 2026. And the pricing on that is generally fixed to some degree, it could move. So we've built in a certain factor there in terms of the margin impact solely from the price element of memory. And as I mentioned, we have already have committed all of the supply we need for 2026. Now one of the factors beyond margin that I would like to highlight and mention, and it kind of reflects back to the comments I made with regards to the full year guidance and being prudent about it is that there's always risk that some of those deliveries that are committed get delayed, which could impact your timing of your revenue or there could be impacts to our customers' ecosystem from other products out there that could have a knock-on or indirect effect on delivery schedules later in the year. So that's why we've taken a more prudent view of our guidance for the full year. But specifically with regards to the pricing of memory, we've got a pretty good handle of where it is right now, and we've built that in based on looking at the net impact. And when I say net on the $6 million, it's net of what we expect from customer recoveries in terms of additional price adders. Simon Leopold: Maybe one last value that maybe you've given us and I haven't found it yet. But I'm just trying to figure out in 2025, what would be the sort of other customers, Rest-of-World customers' Broadband purchases. So we know total company. I'm trying to figure out what they did in the Broadband segment. Walter Jankovic: For -- yes... Nimrod Ben-Natan: I think you can -- $130 million and a change. Walter Jankovic: $130 million. Yes, that's right. Nimrod Ben-Natan: $138 million. Walter Jankovic: $138 million as compared to 2024 at just under $95 million. Operator: Our next question comes from Ryan Koontz with Needham & Company. Ryan Koontz: Nice quarter and outlook, guys. With regards to the big bookings step-up you saw here in Q4, maybe can you discuss customer behaviors there that drove kind of change in behavior and a little bit about the composition there as it relates to maybe the difference between your larger customers and some of your rest of market customers within that backlog? Walter Jankovic: Ryan, it's Walter. Yes. Maybe I'll kick it off and Nimrod can add some more color to it. But just in terms of the bookings there in Q4, the way I would categorize it, it was very strong in rest of world. So the dynamics of both larger customers as well as the rest of world were strong. We had some bookings that are multiyear bookings included in there, but you have the current metric there as well in terms of how much of that backlog is going to be -- expected to be turned into revenue over the next 12 months. And certainly, customers are putting their orders in sooner. We're getting more visibility, and we're pushing our teams to get that level of visibility so that way we can ensure that we're ordering appropriately in terms of getting our supply chain ready for the growth. Ryan Koontz: Great. And maybe a follow-up, if I could, on the margin outlook within Broadband. What do you -- what's your perspective there on kind of increasing mix of software? Is that one of the tailwinds you're seeing as it relates to the step-up in gross margins for '26? Walter Jankovic: Yes, Ryan, absolutely, it is the step-up of the cOS mix for 2026, which is helping to drive that. Obviously, we're scaling up and also scaling broader customer set. So those are all things that are tailwinds. One of the headwinds, as explained on the prior question with regards to memory, that's a headwind for us in terms -- and has been factored into the overall margin guide. Nimrod Ben-Natan: And maybe one more comment on the licenses. Historically, we had quarters in which we delivered more hardware versus software. And one of the indicators you see now is increase in our connected modems and ONU. When customers are connecting subscribers, this is typically when there is more cOS licenses being recognized. Ryan Koontz: And is that a factor of -- what's driving that higher connectivity rate? Is it just customer rollout? Or is there some changing behavior? Nimrod Ben-Natan: Yes. It's a ramp-up of production. Sometimes it takes longer to go through integration phase. We announced quite a few new customers over the course of '25. So as we get into end of '25 and '26, you see more of them starting to connect subscribers. Operator: Our next question comes from George Notter with Wolfe Research. Taran Katta: This is Taran on for George. I just want to confirm, you said $6 million in cost net of pricing actions, correct? And if so, what sort of pricing actions do you guys plan on taking with your customers? Walter Jankovic: Well, it's -- Taran, it's Walter here. Specifically, the net is, as you -- just to confirm the number, it's $6 million net that we've built in there. And the pricing actions have to do with certain products that obviously have higher memory content in it and rolling out those actions. I won't get specific about the nature of those, but obviously, this is a significant impact across the industries, and it's impacting a lot of different vendors out there. So I'm sure you've heard very similar from them as well. Operator: And our next question comes from Steven Frankel with Rosenblatt Securities. Steven Frankel: I wonder if you might characterize the bookings in the quarter. How significant was that ROW contribution to the total? Or did you also have significant bookings from your 2 key customers in Q4? Walter Jankovic: Steve, it's Walter. It was a mix of both, to be honest, well spread out between larger customers as well as Rest-of-World. And you saw today in our commentary in terms of the expectations of Rest-of-World growth at 30% plus. So that's helping us have the level of visibility and confidence around that continued growth trajectory. Steven Frankel: Okay. And then on memory, maybe in these products that are more memory intense, typically, what percent of the BOM does memory represent? Walter Jankovic: As compared to other products in the industry outside of what we specifically do, I think we'd fall in the category of the lower end of the spectrum as compared to high memory count. Like, for example, if you look at CPE type of equipment, customer prem equipment, modems, that would have a much higher memory content BOM in the product versus the products we do. But nonetheless, it does have an impact, and that's why we made the comments we did. Steven Frankel: Okay. And one more quick one. In the revenue breakdown of SaaS and service, if you look at that $58 million in '25, could you give us a rough idea of what maintenance was of the $58 million? Walter Jankovic: It was the large majority in terms of SLA contracts, but included in there under the SaaS umbrella are the features and functionality that we're also selling out to customers and very much a focused area of growth. And Nimrod mentioned it earlier in his opening remarks in regards to investments we're making around tools and the intelligence on the network. So maybe, Nimrod, you'd like to comment further on that. Nimrod Ben-Natan: So that's a component of that. It's a growing component, and we expect that to grow into '26 and beyond. And that's also an area of an investment, whether organic or inorganic. We see that as, number one, very critical for our customers. Number two, very beneficial for our business given the recurring nature of that. Steven Frankel: And were any of the multiyear agreements you talked about in the quarter kind of more software focused on these new value-added offerings? Or are these new customers that are securing a multiyear view into nodes and associated software? Nimrod Ben-Natan: There was a mix in the booking. There was a mix of hardware and software as well as our tools. When we publicly talk about tools and more recently, intelligence, these are kind of the categories that we talked about. There was a mix of all of the above. Operator: I'm showing no further questions at this time. I'd like to turn the call back over to Nimrod for any further remarks. Nimrod Ben-Natan: Thank you. We appreciate your continued interest in Harmonic and look forward to updating you on our progress in the future. Thank you all for joining the call. Have a good day. Operator: Thank you for your participation. You may now disconnect. Good day.
Operator: Welcome to Onex Fourth Quarter and Full Year 2025 Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. And now I'd like to turn the call over to Jill Homenuk, Managing Director, Shareholder Relations and Communications at Onex. Please go ahead. Jill Homenuk: Thank you. Good morning, everyone, and thanks for joining us. We're broadcasting this call on our website. Hosting the call today are Bobby Le Blanc, Onex's Chief Executive Officer; and Chris Govan, our Chief Financial Officer. Earlier this morning, we issued our fourth quarter and full year 2025 press release, MD&A and consolidated financial statements, which are available on the Shareholders section of our website and have also been filed on SEDAR. A supplemental information package is also available on our website. As a reminder, all references to dollar amounts on this call are in U.S. unless otherwise stated. I must also point everyone to our webcast presentation for our usual disclaimer and cautionary factors relating to any forward-looking statements contained in today's presentation and remarks. With that, I'll now turn the call over to Bobby. Robert LeBlanc: Good morning, everyone. In 2025, Onex delivered strong results and made meaningful progress on our business and capital allocation objectives to set the stage for accelerated value creation and earnings growth going forward. Most notably, our recently completed acquisition of Convex and our new strategic relationship with AIG has significantly enhanced our growth prospects and earnings outlook. Across Onex, we are entering 2026 with momentum and confidence. We're able to do almost 7 years of due diligence on Convex given it was an Onex Partners V portfolio company. This is exactly the type of informational advantage that we look for as investors. Convex is expected to be Onex's largest contributor to value creation going forward. And the accelerated closing reflected a strong commitment and alignment across Convex, AIG and Onex to complete the transaction on an expedited basis. As a reminder, the transaction valued Convex at $7 billion with Onex and AIG owning approximately 63% and 35%, respectively. In addition, the Convex management team demonstrated their alignment and conviction by rolling approximately $500 million of equity and accrued incentives, which is a major vote of confidence in our partnership and go-forward strategy. This morning, we released our year-end financial information for Convex. In 2025, the team delivered another outstanding year, continuing to demonstrate their ability to deliver industry-leading growth and profitability. You'll find more information in our Q4 supplemental information package, but here are some of the highlights. For the year, Convex delivered $711 million in net income and an overall return on equity of 20%. Net income increased 25% versus the $566 million Q3 latest 12 months figure we announced at the time of the acquisition and grew 40% from the $506 million delivered in 2024. This 2025 net income figure equates to $423 million for Onex based upon our 63% ownership position and is updated for Convex's pro forma interest cost on the $600 million of debt raised as part of the transaction. The team achieved $5.9 billion of gross premium written in 2025, growing 14% year-over-year. Convex's ability to scale to this level of gross premium written in less than 7 years demonstrates the impressive business the Convex team has built and the value they provide to their customers. Despite the significant growth, Convex has still only captured about 2% of its addressable market, which highlights the significant opportunity we and management continue to see for the business. Convex also delivered consistent and strong underwriting performance in 2025 with an 89% combined ratio, the third consecutive year of combined ratios under 90%. Management expects to continue growing earnings through cycle by utilizing several structural levers, including: one, capturing further operating leverage as Convex continues to scale into its expense base; two, growth in asset leverage; three, growth in net underwriting profitability; and lastly, yield improvement on Convex's growing investment portfolio. This strong financial performance increased Convex's tangible book value to $3.8 billion at year-end, resulting in a reduction of Onex's effective acquisition multiple to 1.8x tangible book value and 10x 2025 net income. In our supplemental information package, we outlined more information, including Convex's structural competitive advantages, how management plans to continue to grow through cycle and how Convex should deliver significant value to Onex shareholders. When we announced the transaction, one of our commitments to shareholders was to ensure you receive transparency on our investment in Convex so you can value it appropriately. Next month, in follow-up to today's earnings update, we plan to publish complete financial information for Convex, similar to the tables we provided at the time of our Q3 announcement. The addition of Convex as a core Onex platform alongside private equity and credit will play a pivotal role in our ongoing transition where we continue to prioritize consistently growing net income and free cash flow to help drive overall enterprise value. Our future capital allocation initiatives will align with this strategy, focusing on direct investments with strong risk-adjusted returns, low leverage and longer hold periods in sectors where we have a right to win. While we continue to support our private equity and credit strategies to ensure continued alignment with our LPs and co-investors by participating in each fund up to a maximum of 10%, this capital-lighter model will enable a higher proportion of third-party capital in our funds. This, in turn, will contribute to ongoing growth in fee-generating AUM, fee-related earnings and carried interest. Early in 2025, both of our private equity platforms, Onex Partners and ONCAP completed successful fundraises. And throughout the year, both made progress in continuing to return capital to their limited partners and co-investors, a total of $8 billion in realizations and securing new investment opportunities with high conviction value creation plans. Onex Partners had an active and successful year and has extended the momentum into 2026. OP announced $7.7 billion in total distributions in 2025, including $4.3 billion to its co-investors. Since 2024, OP has returned $10 billion of capital across 8 realizations and completed 6 new investments totaling $2 billion. Recently, OP entered into an agreement to create a $1.5 billion multi-asset continuation vehicle with leading global secondary funds and sovereign investors. The transaction is expected to close this quarter and delivered proceeds of approximately $310 million to Onex. Importantly, we will also bring DPI for Onex Partners V to 0.8x, positioning it very favorably relative to other funds of this vintage. As you all know, there has recently been a lot of news around software and AI disruption. Looking at the percentage of our investing capital in technology-enabled businesses, we feel comfortable with our relative exposure and the embedded protections of our company's business models and competitive environments. Only 4% of Onex's total investing capital is tied directly to pure vertical software businesses. Looking at it from the broadest perspective, only 14% of Onex's total investing capital is invested in tech-enabled firms. All these businesses have proprietary data and significant competitive moats sustained by regulatory barriers and B2B workflows occurring inside their systems. Across our operating companies, we are not seeing any meaningful evidence of disruption, but rather they're continuously improving their product value proposition through the adoption of AI and other data analytic tools. Turning to ONCAP. The team returned $270 million to investors, including Onex in 2025, which was primarily driven by the partial sale of Precision Concepts. ONCAP also recently completed its leadership succession process, which resulted in 2 of its most proven leaders, Adam Shantz and Steve Marshall becoming co-heads of the platform. Michael Lay has transitioned into the role of ONCAP Executive Chair. Congratulations to each of them on this milestone, which ensures long-term leadership continuity for ONCAP. Our credit team had another outstanding year. Within structured credit, where we are recognized as a global leader, we priced 28 CLOs across the U.S. and Europe, raising more than $6 billion of new fee-generating AUM and extending another $6 billion. Chris will get into more detail on fee-related earnings, but it's worth noting that the team's ability to increase fee-generating AUM has enabled them to exceed our Investor Day run rate FRE expectations. We have a reputation for delivering strong performance within our CLOs relative to peer firms through a proactive and diligent approach to portfolio management. By heavily investing in our underwriting processes and implementing state-of-the-art risk management tools and processes, we were able to navigate the spread challenged credit landscape and avoid involvement in some of the high-profile casualties like First Brands and Saks Global that impacted the broader credit market last year. The credit team to its credit is also underweight software and AI risk credits across its portfolio. Across Onex, our success wouldn't be possible without the commitment and dedication of the people who make up the organization. I want to thank them for all they do and also for making Onex a great place to come to work every day. We have strong conviction in Onex's intrinsic value and are intensifying our efforts to have that value reflected in our stock price. In the supplemental information package, we've included how management views Onex's intrinsic value. At this stage of our capital allocation transition, we believe it is appropriate to utilize a sum of the parts framework. There are currently 3 distinct value drivers for shareholders: Convex, our asset management business and our remaining balance sheet investments. The slide on the screen is a really important one to focus on. As you can see, when utilizing -- first, the acquisition for Convex, which we believe is conservative given the strong recent performance and then applying a 15x multiple to pro forma 2026 year-end run rate fee-related earnings, and then finally, looking at the value of our remaining investing capital at the Q4 valuation, we believe intrinsic value is $174. Importantly, our current estimate does not include the value we expect to generate for shareholders over time from reorienting realized proceeds from our private equity investments into 1 or 2 direct balance sheet investments similar to Convex that ideally have a good strategic fit with Convex and our asset management business. These investments will use lower leverage and have attractive risk-adjusted return profiles to drive growth in enterprise value for Onex shareholders. We will also provide significant transparency and financial KPIs, similar to Convex on each investment to support our shareholders in measuring our performance. Having our intrinsic value properly reflected in our share price is a top priority, and we are committed to delivering the earnings growth, disciplined execution and transparency to make this happen. I want to thank our shareholders for their ongoing support over the past year and for their confidence as we move forward. The pieces are in place for a solid year, and our team is laser-focused on driving enterprise and shareholder value. I'll now turn the call over to Chris. Christopher Govan: Thanks, Bobby, and good morning, everyone. While most of my remarks will focus on our results for the quarter, I will also take some time to provide an update following the completion of the Convex acquisition. So let's start with our investing segment. Onex ended the year with investing capital per share of $124.70, a return of 3% in the quarter and 10% for the year. The 5-year CAGR on investing capital per share is now 11%. Investing gains in the quarter were driven by strong returns from Onex Partners V and Onex Partners Opportunities of 4% and 7%, respectively, and a 6% return across the ONCAP portfolio. Our credit investments were essentially flat in Q4, driven by spread compression on the CLO's underlying portfolio of loans. With spreads on the CLO's debt fixed in the short term, spread compression in the portfolio results in a reduction in the mark-to-market value of our CLO equity. However, it's important to note that our CLO investments continue to offer an attractive go-forward return and cash distribution profile. Moreover, we expect any mismatch in spreads to be eliminated by refinancing the CLO liabilities as they come out of their no-call period, which is typically 1 or 2 years. As Bobby discussed, 2025 was a strong year of private equity realizations for us with the $8 billion of realizations across the platforms, delivering over $800 million to Onex Corporation. Realizations in the fourth quarter included Onex Partners V sales of 54% of OneDigital and 25% of WestJet. In addition, Onex Corp. completed its final realization of Ryan Specialty, netting just over $200 million. In total, the Ryan Specialty investment generated aggregate proceeds of $1.2 billion for Onex Corp. over almost 8 years, a multiple of capital of 3.8x and a 49% IRR. On the new investment front, activity in the fourth quarter included the acquisition of Integrated Specialty Coverages by Onex Partners Opportunities and ONCAP V investment in CSN Collision. Onex Partners Opportunities also agreed to invest in its fourth portfolio company, a transaction that is expected to close later this quarter. On the asset management side of the business, Onex ended the quarter with nearly $44 billion of fee-generating AUM, an increase of 24% during the year. The increase primarily reflects the issuance of new CLOs, commitments made to ONCAP V and Onex Partners Opportunities and net write-ups in the PE portfolio. The Asset Management segment generated earnings of $49 million in Q4, of which $2 million was fee-related earnings from our PE and credit platforms. After factoring in the costs associated with managing Onex Corporation's capital and maintaining the public company, firm-wide FRE was a loss of $4 million for the quarter and $3 million for the year. Looking forward, credit continues its strong FRE trajectory, ending 2025 with run rate FRE of $60 million. As Bobby noted, this is ahead of our 2023 Investor Day target. And consistent with the Q3 earnings call commentary, we ended the year with firm-wide run rate FRE of $17 million, which includes the benefit of the multi-asset continuation vehicle or MACV that Bobby mentioned. At the time of the Q3 call, we expected the MACV to be signed up for the year-end, so its impact was included in the $17 million forecast. I should also note that since management fees on the MACV won't start accruing until the transaction closes later this quarter, we don't expect our quarterly FRE to reflect the $17 million annual run rate until Q2. With that in mind, we're projecting firm-wide FRE for 2026 in the low to mid-$20 million range. And more importantly, we expect to exit 2026 with firm-wide run rate FRE that is more than twice the $17 million from the start of the year. And I think it's important to note, our assumptions around new fee-generating AUM in 2026 include only about 1/3 of AIG's $2 billion of expected commitments and no additional allocations from Convex. As an aside for those of you wondering about the MACV economics, from an invested capital perspective, Onex's expected proceeds from the sale represent pricing that is about 98% of where we had those investments marked at Q4. However, the MACV has a couple of other benefits. It converts Onex's capital into fee and carry-generating AUM and it extends the life of management fees and carry on third-party capital. So when we add the present value of these benefits to the sales proceeds, we think of the value to Onex being well above the Q4 marks. Now as alluded to at the outset, I think it would be helpful for me to add some color around the final funding of the Convex transaction as well as Onex's go-forward liquidity position. At closing, Onex grew $700 million under a NAV loan facility, $300 million less than originally contemplated in a $1 billion draw. The reduced draw was possible due to incremental realizations and distributions from our private equity platforms. Following the close of the transaction, Onex retained approximately $400 million of cash and near cash and maintained access to $500 million of undrawn funds on the revolving portion of NAV loan, providing total liquidity of approximately $900 million. As a reminder, Onex has almost $5 billion of PE investments relative to $735 million of unfunded commitments, of which only $330 million are to funds in their commitment period. So we're quite comfortable that this liquidity is sufficient to fund our capital needs, and we expect significant net PE realizations over the next few years. With this being my final earnings call as CFO, I want to close by thanking all of my colleagues at Onex who have supported me over the last 11 years, including, of course, Bobby. And most importantly, thank you, Gerry, for building this wonderful company and giving me the opportunity to serve as its CFO. Finally, a warm welcome to Meg McClellan, Onex's next CFO. I look forward to supporting her during the transition. That concludes the prepared remarks. We'll now be happy to take any questions. Operator: [Operator Instructions] Our first question comes from the line of Graham Ryding from TD Securities. Graham Ryding: There's -- I appreciate the disclosure you provided on Convex. And I think you flagged some areas in the presentation, Slide 14, where you think could potentially offset what looks like it might be a softening or is a softening pricing environment. What areas do you think, in particular, are going to have the most impact here? And are you expecting Convex to continue to generate earnings growth in what might be sort of a later stage in the cycle? Robert LeBlanc: Graham, it's Bobby. Like we're viewing 2026 as a sort of minus 4-ish percent rate environment for property and casualty. But just given where Convex is in its evolution, we believe those levers that we have to pull would more than offset that type of rate pressure. Those things include continuing to gain market share. Importantly, we are nowhere near growing into our expense base. So that operating leverage is going to continue as we continue to grow the top line. And on the left side of the balance sheet, we've really never done anything to sort of optimize yield enhancement, if you will. I think there's a very good opportunity there without taking much incremental risk, by the way, including using some of Onex's products for a small portion of their balance sheet. And finally, the way it works in insurance, as you grow in scale, you also grow into your asset leverage. And our asset leverage has meaningful upside from this point forward. So I feel quite good, absent very strange catastrophic events that you're going to continue to see earnings growth in 2026 from Convex. Graham Ryding: Okay. Great. And on the FRE outlook, Chris, that you provided, I appreciate the sort of ladder that you provided to sort of get you to $35 million as a run rate. Is that -- should we interpret that as sort of Q4, you hit that $35 million by Q4 '26? And did you say that 1/3 of the $2 billion from AIG is part of that sort of exit run rate? Christopher Govan: Yes. So I'll take the second part first. That's correct. Our budget, I'll call it, has about 1/3 of that capital being allocated this year. And so it would be fully in the year-end run rate, but obviously doesn't fully impact in-year revenues and profitability. In terms of when we expect to hit that $35 million, yes, we're going to hit it at year-end. But that, again, given it's a run rate, and so you have capital being raised constantly throughout the year, you sort of -- we take the benefit of that all at year-end on an annualized basis, but some of that revenue won't be fully impacting Q4. So you really don't expect -- we don't expect to hit our run rate in terms of in-quarter earnings until the following quarter. So you'd expect something close to 1/4 of that in Q1 '27. Robert LeBlanc: And one other thing, Graham, that those numbers only include 1/3 of AIG, but they also include no dollars coming in from Convex, which I think is a very conservative assumption. Operator: And our next question comes from the line of Bart Dziarski from RBC Capital Markets. Bart Dziarski: I wanted to ask around the software tech exposure. So thanks for giving that to us, Bobby, 4% invested capital. Just to confirm, is that also 4% of AUM? And could you split that between the exposure within private equity and private credit? Robert LeBlanc: Yes. So that is our overall NAV exposure to software is 4% and things that are on our balance sheet, okay? So for that, it is mostly private equity, in particular, 2 software companies that we have, PowerSchool and Unanet. So we are very underweight on the private equity side software. On the credit side to their -- and I said credit twice when I did the script, and I'll say it again, like they are meaningfully underweight software by more than 200 basis points against their comp sets, which is great. And I'd be remiss just not to give that team a lot of credit, not only for being underweight software and AI risk type loans, but they're meaningfully underweight in direct lending. And I'm sure you're watching and hearing all of the news around direct lending, particularly in the retail front right now. And they were not in any of the major credits of Tricolor, First Brands and Saks. Like that team has done a very good job of -- we overinvested in analysts, right? And we heavily invested in state-of-the-art risk management tools. But I also give credit just to the judgment and seeing where the puck was going, so to speak, and are really proud of all of our investment teams in terms of where we sit on a relative basis and on an absolute basis with exposure to software. Christopher Govan: Yes. And Bart, just Chris, for a second. Just on your total AUM question and the 4%. I don't have an exact number, but I know that the total private equity AUM, the exposure will be less than that 4%. We're a little overweight just in terms of allocations and commitments to funds compared to the platform as a whole. Bart Dziarski: Okay. Great. That's very helpful. And then just on the FRE guide, so thanks for unpacking that for us, Chris. And wondering, could you give us kind of the latest on fundraising, OP VI. I think that fund has now been launched in Q1, if I'm not mistaken. But maybe just your latest thoughts sizing, timing of that fund. Robert LeBlanc: Yes. I wouldn't call it officially launched, but we're certainly in the process of gearing up for fundraising like real time. We're not going to get into today's size and timing, but certainly, we'd be looking to have a first close at some point in 2026. But there's really not much more we can say on that point. Ronnie is in the market still with his OSCO fund. We expect that to close sometime in the next quarter or 2. I don't see ONCAP in market in 2026, just given they're about halfway through their investment period in their current fund. And then as for the rest of our credit products, we're always in market vis-a-vis trying to sell every day because those are not traditional fund structured products or are things that our LPs and other people can invest in every day. Bart Dziarski: Okay. Great. And then just one more, if I may. You made an interesting point around Convex Capital coming into Onex. And so maybe just help us understand that like the duration of Convex's liabilities, what assets would they lend themselves to, to be managed by Onex? Like how would that matching work? Robert LeBlanc: Yes. So like -- unlike life insurance, property casualty insurance has less asset leverage, if you will, which is why you see so many people going after these annuity blocks, which we looked at, by the way, and never really could get comfortable with the pricing. And we knew this asset so much better. It's just an easier place for us to be in. But it depends on the person investing the dollars into the funds. People -- insurance companies, which are people -- are firms, obviously, that we're trying to do business with outside of even AIG and Convex. For those that are overcapitalized that can afford risk-based capital charges, they may be more evenly split between PE and credit. But the riskier the asset, the higher the capital charge for an insurance company when they invest in alternative asset management. So most focus on credit, but a lot also focus on PE and the percent of PE relative to credit or infrastructure, real estate or whatever asset class you want to talk about, depending on the risk profile and their capital base, they may be more aggressive or less aggressive. But they tend to lean more towards credit than PE. But for what we're looking at with AIG and Convex in the near term, I think it could be more balanced than you would expect from a PE and credit perspective. But we're working on that right now with AIG and Convex. But you should also think about Convex in terms of how much of their asset base would be in sort of noninvestment grade, high quality, like the current portfolio at Convex is like literally a AA+ portfolio. You shouldn't be ever thinking that more than 10% goes into those type of assets. 90% of what Convex does will always be sort of AA+ pristine type assets that are assets matched up against liabilities. Operator: This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Bobby Le Blanc for any further remarks. Robert LeBlanc: Thank you very much, and thanks for participating on the call. Chris and I are musing, we're going to try to get this to not be on a Friday going forward. I think that will be good for everybody. But before we close the call, I just once again, I want to thank you, Chris, for your partnership and all that you've done for Onex over your career here. You're not going anywhere, so I'm going to start with that. But as your role changes, I just want to make sure we thank you for all you've done to date. And as for our new CFO, Meg McClellan, we look forward to her joining us, and she'll be on the next earnings call. And I look forward to introducing again. And until then, have a great day and a great weekend. Thanks again. Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.
Peter Stierli: Good afternoon. Nice to see you all again here in Zurich. A warm welcome also to the participants in the webcast. My name is Peter Stierli, I'm the Head of Communications and IR. And with me is, as always, Marcel Imwinkelried, our CEO; and Reto Suter, our CFO. Marcel will first give us a summary of our numbers, then Reto will talk about the financials a little more detail. And then Marcel will elaborate more on what's ahead next for us in the coming months this year. At the end, we will have a Q&A session. And for those who dialed in through the webcast, you can ask your questions through the audio or video call. With that, Marcel, I'd like to hand over to you. Marcel Imwinkelried: Thank you very much, Peter. I'm really happy. You know why? It's for me the first time that I'm presenting the full year results of Siegfried under my full responsibility for the full year. I'm really proud what we have accomplished as a team, and I'm standing as the CEO in front of the entire team of Siegfried, and I'm telling you why. Most of you, I met 18 months ago in Barcelona, and I was introducing the new strategy, EVOLVE+. Great news. We are making progress. In most of the dimensions, we are ahead of the game, ahead of the plan. I will tell you more in the upcoming minutes. Now I think, let's first look back what's the result of the full year 2025. Not functioning. Maybe somebody can help me to -- Yes. Thanks a lot. I would like to highlight, first of all, the profitable growth. For us, a big opportunity, and Reto will give you more insights, but when I joined Siegfried, 5 years ago, we were at 17-ish percentage of EBITDA. We're coming up step-by-step, year-over-year. And this is really important that we are coming up to the high 20s. I'm confident to do so, because operational excellence, which we have introduced in the last 2 years is the trigger that we are achieving such a high number at the core EBITDA margin. I think 23.5% is a very good result. Of course, we need to consider a one-timer of CHF 7.5 billion. Despite this one-timer, we are still above the 23 percentage with 23.05%, which is good. We have a strong plan in place also to keep this momentum and further improve our margin. Secondly, we kept and we met our guidance with a growth of 4.3% in local currency versus last year. And last but not least, what's really important, not yet reflected also in the outlook in this presentation is the new acquisition of Noramco and Extractas, which will contribute significantly in top line and bottom line already this year, but also the next year. But this year, it depends when the closing will happen. Outlook. I think here, really important also to show that Drug Product, we have created the momentum. We have an outlook for 2026 of high single-digit growth. This is also much more compared to 2025. So we have created the momentum there. In Drug Substance, low single-digit growth. This is reflecting a prudent uncertainty or assumption regarding one large product for one company. Now also to clarify that a little bit, this doesn't mean that this product is -- will be gone or is still in. It's one-timer because our customer doesn't know yet how the demand will evolve further because it's an in-market product. So this will continue. And also in the future, this will be also an important product for us as well. In a nutshell, then low single-digit growth for the group and of course, the core EBITDA margin, we are confident to be above the 23%. Of course, this is excluding the acquisition. It depends. This can happen end of March, so starting off the second quarter or at the third quarter this year. As soon as we have the clarity when the closing will happen, we will give the new guidance will, of course, increase significantly than the guidance at the top line. And also you can expect something at the bottom line as well because as already outlined, during the acquisition presentation, there is no dilution coming through due to this acquisition. As already also shared with you, we have a momentum created due to commercial excellence. We have adapted our organization, and we have also defined and implemented the new go-to-market strategy. Good news. And that's also the reason why I really confident that we can keep and that I can confirm the positive midterm outlook for the next years. Due to the fact, I've already shared with many of you also during the conferences that we were able to win additional RFPs inflows by 30%, but really good news, we won in 2025, 30% more projects, new customers in both clusters in Drug Substance as well as Drug Product versus 2024. Now I would like to give you a flavor about operational highlights, 2025. As you know, safety is really close to our heart. And we are making progress also year-over-year in this dimension as well. We have reduced the lost time frequency -- injury frequency rate by 25% and further implemented the Class A project, which is the prerequisite to make sure that we are becoming a really top-notch supplier for our customers. We have 6 out of 13 sites already certified. So the last 7 sites, and then, of course, the newcomers will also be part of this. Quality. Quality is the permit to operate in our industry. And especially also, you need to know that the FDA, the U.S. health authorities are raising the bar. One of the other competitors of us are struggling. But we have not only a great track record, we passed also successfully four FDA audits in the last year, which is prerequisite to win and to get new customers and products. Sustainability highlights, 2025 further progressed. Compared to 2020, we have reduced close to 50% our carbon ambition. The same also for reduction of energy. This was also highlights over the last years. We're continuing to make progress on this as well. To come back to EVOLVE+ strategy. We are investing quite heavily to be prepared for our near-term and midterm growth. We are making progress. As you know, in El Masnou, we are working and in a niche with the ophtha production and good news since 2 years, the ophthalmic growth is high single digit. If you are comparing that to the last decade, it was at the low single digit, and we are one of the market leaders for the ophtha business. That's the reason and the good news that we can and that we are doing, investing and expanding in our site in El Masnou for sterile ointments and also for droptainers. Also to capture the new trend in the steriles, which are prefilled syringe and cartridges, we are installing as we speak. Two new lines. One is already installed. The operation is starting the qualification. The second one will come operationally by end of this year. Minden. Minden, the transfers are underway. I told you we will get the first revenues in 2025. This happened. Now the ramp-up is coming through, and we will do the integration mid of the year as quite a lot of trades are already in operation at this time. DINAMIQS, another highlight. Here, we did the integration last September with -- in Sweden close here to Zurich for the final vectors. Good news, we could not include that this in this presentation. 36 hours ago, we successfully passed the Swissmedic inspection to get the permit, the certificate that we can start with the GMP production, which is a great achievement. Now I would like to hand over to Reto, he will give you more insights about the financial numbers. Reto Suter: Thank you very much, Marcel. Good afternoon, everybody, [Foreign Language] and thank you for joining us today. 2025 was another year of continued growth, structural margin expansion and strong cash generation for Siegfried. We delivered a really record profitability. And at the same time, we continued to invest and deploy capital in a meaningful way into capacity expansion into new technologies and obviously also into new capabilities. The results that we achieved confirmed three very important elements of our business strategy. First, strength from a diversified portfolio across customers as well as products. Secondly, a significant impact from operational efficiency measures and portfolio optimization. And third, a contribution from diligent financial management, and also a diligent deployment of fresh capital to new opportunities. So despite significant currency headwinds and also, let's say, a challenging macroeconomic environment, we in 2025, delivered the best set of financial numbers in the history of Siegfried. Now having said all this, and as we look now into 2026, we apply a very careful approach to guiding due to this outstanding confirmation of one single customer for one single product. This diligence and this prudence reflect honesty and also transparency. It's by no means a change in the structural growth trajectory of Siegfried as a company. Now let's dive into the numbers, starting with sales. We grew by 4.3% in local currencies for the group to CHF 1.33 billion. That growth was equally spread along the two business lines, 4.3% in Drug Substances and then 4.3% as well in Drug Products. We saw the more pronounced seasonality that we announced a year ago, 53% of revenue was captured in H2. And of course -- not a surprise, a very heavy ForEx headwind as well, especially in the dollar and, of course, also in the euro. The currency split, as you see, it's more or less unchanged to the last year. This is transactional analysis. So really contract-by-contract underlying currency, 50% of what we do is in the euro, 13% in the dollar, the remainder is in Swiss francs. Good news here, as in the past, we had no impact on the margin and the bottom line through these volatile currency environment. Then the tariff exposure, as mentioned also throughout all of last year, minimal, we saw less than CHF 5 million of sales being affected by import duties, tariffs, et cetera. So optimally set up as well now to go into 2026. Let me spend just a few words here on the reconciliation between the reported numbers under our accounting framework, Swiss GAAP versus the core EBITDA. These are the numbers that we and the team use to manage and stay our business. You will see that in 2025, core numbers are below the reported numbers as it may be the case from time-to-time. Due to one fact, we have this pension liability in Germany mainly, which became smaller during 2025 as interest rates increased. And this CHF 10 million gain, we basically took out. And then we did what we always do, CHF 2.9 million of running current net interest, we basically transferred down to financial expenses. And then we adjusted for CHF 0.8 million of transaction cost. This is cost for a transaction where we had a serious look at, but did not ultimately consume it. So -- and that's that. Now I would like to basically bring the 2025 results a bit into a broader context. Driven by organic growth and smart acquisitions, we have expanded the business and grew it profitably quite a bit. So sales grew from 2020 to 2025 from CHF 145 million to CHF 1.33 billion in this year. This is in Swiss francs. That's a CAGR of 9.5%. Would we do it in local currencies? So basically adding the currency headwinds, the absolute currency headwinds to the 2025 numbers, we are at 11.7%. In total, over this period, we have lost CHF 140 million for currencies. That's around the effect of the acquisition that we had in Spain. So it's significant. From a margin point of view, this didn't impact us. We grew the margin from 17.7% to 23.5%. And this wasn't an easy environment to operate in. So this growth in sales, but also specifically in the margin, we managed despite the few disruption elements. So we have COVID, which was, of course, also an opportunity for us. We saw inflation. We saw destocking. We saw disruptions in supply chains. We saw currency wall and obviously also some elements of geopolitics. It's a resilient growth that we have been able to demonstrate and that we are going to demonstrate also going forward. Specifically, we have proven the ability to as well replace substantially large components of our revenue streams. I'm referring here to the COVID vaccines, which we had, and then obviously, which went away luckily. The margin expansion was structural, and it was driven by basically three things. The one was portfolio optimization, which we started in 2021 on the Drug Substances side, which we have now expanded to Drug Products, but where you see the effects in Drug Products not yet. Then operational excellence, which added efficiency in a quite a significant scale year-on-year. Also, this will continue. And then, of course, effects of scale, where we brought onstream idle capacities, which then developed into basically revenues and also profits. The growth was balanced. You know that. Mostly organic, and then the acquisition effect of the acquisition in Spain. And that's the plan also going forward. If you go to the margins now comparing '24 numbers to '25 numbers, you see that at each margin level, we reached new record highs. So we translated the growth in Swiss francs of 2.6% to substantially larger expansions across the margin aggregates. So core gross profit was driven mainly by cost discipline portfolio optimization. Operational excellence increased to CHF 354 million plus 7.6%. Core EBITDA, which includes, of course, the drivers for the gross profit margin plus the operating expenses, which we kept in check, 9.3% higher at 312.3%. And on it goes. Obviously, if you have a look at core net profit and core EBIT, this reflects the fact that we have invested into capacities, which are, as the case maybe not yet fully ramped up. So that will correct over time. Diversification. It's a crucial key element in our business strategy and our business setup. We are well diversified relating to customers as well as to products. So we have no dominant customer dominating our revenue base. And the same is true for the products. This is largely the same numbers that I have presented to you a year ago. Customer one, this is Novartis, 13% to 17%, largely diversified portfolio of products, and customer 2 at 10%, customer 3 to 10 at 31%. With the products, the top product at 6%, product 2 to 10 at 26%. We continue to generate the vast majority of our revenues in the commercial phase, 96%. So we're not exposed to early phase financing risks, important to understand. This gives us the stability in order to continue to grow in a structured way. On profitability, just a few additions to things which I have already mentioned. Operating expenses remain disciplined at now 11.4% of sales. Despite some changes in the perimeter, we have added the acceleration hub and of course, also invested into capabilities, digitalization, et cetera. The other operating income, as mentioned by Marcel, includes a one-off payment, which we don't expect to reoccur next year, CHF 7.5 million, which related to a 2021 incident of fraudulent payments. That's good news. We have all the money back. So we just follow through on these type of things. Core financial expenses remained under control. We had, throughout the year, a bit higher level of debt but we kept the financial expenses in check. Effective tax rate still below 20%. We significantly improved the cash flow, the operating cash flow, 35% up year-on-year, driven by higher profitability and disciplined working on the net working capital. We continued to focus on net working capital. We saw some timing effects of revenue recognition. So by year-end, we had the vast majority of the invoices in December. And of course, that goes against net working capital freeing up. I will say one word about this when I come to net debt-to-EBITDA ratio. Strategic investments at CHF 231 million, that's tangible plus intangibles or brick-and-motor plus IT systems, which will support the future growth that we will see also going forward. On the financing side, we have placed successfully a CHF 300 million bond and we have introduced the factoring solution, a non-recourse factoring solution, which we used in an amount for CHF 40 million over year-end. Now why did I do that? Factoring allows me to flatten net working capital consumption throughout the year. And I can do that if I compare the cost of this solution to other financing instruments at very attractive conditions. So I absolutely needed to do that. The balance sheet now prior to the acquisition is solid at year-end at 1.5x net debt to core EBITDA which allows me to maintain financial flexibility also for the future. As of yesterday, a few days after the close, net debt-to-EBITDA is at 1.0x, which means that around CHF 150 million of accounts receivable have by now been converted into cash. It gives you a bit of an idea on how net working capital consumption fluctuates throughout the year. This means that even after the funding of the announced acquisition, I will be able to continue to basically have a balance sheet to continue to invest. Now based on this very strong financial numbers and the commitment of our Board of Directors to shareholder returns, we have decided to increase the distribution to shareholders. The proposal to the AGM, which will take place on April 16 this year will include the proposal of a par value repayment of CHF 0.4 per share. Now let me summarize 2025. We saw continued growth for both businesses. We saw a structural expansion of the margin. We saw a record profitability, strong cash generation and a strong -- now even more flexible balance sheet. All of the factors which contribute to our structural growth trajectory remain in place. One, the diversification; two, the contribution from operational excellence and optimization of the portfolio, which we now expand also into Drug Products; and three, the strong balance sheet and the careful application of new capital to new opportunities. So Siegfried is well positioned to capture all the opportunities which lie ahead of us and will continue to be the steady compounder that we have been in the past. And with that, thank you very much for the attention. And I hand back to Marcel. Marcel Imwinkelried: Thank you very much, Reto. Now let's talk about our future. And here, I'm really excited. I will give you some insights why I'm doing so. EVOLVE+ strategy, I think already highlighted, it's now really coming through, and it's resulting also in the results, which we have presented just now with operational excellence, which is the key contributor at the end for the EBITDA margin uplift. And secondly, really, what we see is the inflow and also the wins or the wins for new products and also projects and customers. Now I would like to come to another topic and which I was asked several times in the past about M&A. It was always repeating M&A is always on, but really, you need to have the patience to find the right tool and to get it for an affordable price. That's something which is the secret of success of Siegfried, what we did, and we will continue. We found such a tool. It took quite some time to make that happen. And it was obviously also according to our EVOLVE's strategy to further grow on the existing core with Drug Substance, small molecules and then, of course, due to the current recent situation, which will not disappear in the near future for the U.S. supply points. I'm constantly in touch with our customers, and they are telling me since 12 months. Marcel, I need to have a second supply point out of U.S. for U.S. It's not predictable for us anymore what will happen. It's independent of the administration in U.S. what will happen. All pharmaceutical companies are preparing this future setup, not only U.S. ones, also the European ones, they're asking for it. They are looking really to expand it. But what happened over the last 30 years. In U.S., the pharmaceutical companies and also CDMO, they were investing in large molecules, Drug Substance, followed by sterile fill and finish locations, supply points in U.S. and also in new modalities like cell and gene. But over the last 3 decades, Drug Substance small molecules was transferred out of U.S. to China, to India and also to Europe and of course, we are participating accordingly. However, the game is changing now. They are looking for it, and it's not a surprise, read the news, and you will find out the big pharmaceutical companies they are investing or were looking also for acquisitions in U.S. to get a hub, a location to produce Drug Substance small molecules. We did the same. But at the end, you need to find something which is really unique what you can offer compared to the community or also the competitors. And what we found at the end, we found such a tool. First, you need to know there are less than 15 large-scale CDMO locations available in U.S. We did a lot of due diligence. I was several times in U.S. was watching and look how these sites were recapitalized, but very often very poor outed facilities and, of course, also missing capabilities. When I was the first time in the U.S., I found a strong location in Delaware and the second one in Georgia, excuse me. And of course, I think the unique opportunity, but why we got it is so affordable at the end, Siegfried was the only company which is able to keep the production supply of this essential controlled substance also in the future. Now if we are looking at the case, we have with this acquisition, a very stable market and also portfolio which we are taking over. Strong contribution also at EBITDA, protect market also for the future, because you're not allowed to import from somewhere else to this -- to U.S. for such controlled substances, a moderate growth. But for us, what's really on top of it is really the opportunity to gain exclusive business with this setup. Wilmington, this would be the new site from Noramco together with the existing Pennsville site, which is just 20 minutes away by car. They are really, really close to each other, but even more important, also the product portfolio is overlapping. We are talking here about controlled substance. We know the products. We know the processes from each other because Noramco was also a customer of us and vice versa. Some of the people we even know already also from the past and vice versa. And there is -- will be very soon one approach for both sides. And what we can do is really to optimize this controlled substance portfolio in the Pennsville site. And then we will free up Facility #5, where 80 cubic meters are installed there to go for exclusive business. Athens and Grafton. As you know, 1.5 years ago, we have acquired Grafton as an acceleration hub to start with early development activities for Drug Substance small molecules. With Athens also, by the way, like Wilmington, a previous J&J facility. So it was not a surprise to find two sites at the end with strong people, capable people, very well regarding process, which are in place, very well maintained and also high automation what we found there. There are also an add-on with Athens compared to Grafton because Grafton is really strong in Phase I and Phase II. Athens is even stronger in early phase activities. So it's for us at the end, an add-on. We have a sweet spot and a big opportunity, and that's why I'm really truly excited about this deal. One is from closing of the day when we have the deal, we have a strong contribution, top line and bottom line immediately. However, the exciting case is really then to fill this capacity, which we are freeing up in the next 2 years. And of course, to bring in new customers, new business, it will also take 2 years. So we will do that in parallel. So after 2028, on top of the base case, which we have also shared with you, we are looking forward to further increase the top line and also the bottom line. As you can imagine, also the pricing is very interesting because supply constraints to push demand, it's a different position which you have. So we will do the ramp-up after 2028. And I'm really excited, but I'm not alone. I'm not alone. Many of our colleagues in our organization who are waiting for it. And I would like also now to give some quotes and voices also of my colleagues. [Presentation] Marcel Imwinkelried: We are really excited. Now we are ready. We have the plan in place to make that happen independent when the closing will happen. If we are looking out at the entire network of Siegfried for Drug Substance, small molecules, we are complete now. This doesn't mean that we're not further looking also to expand. However, if you are looking from early phase preclinical up to commercial, we are very well positioned. We have all capabilities for all development phases in place. And if you're looking backwards, especially then from Phase III commercial and then out of patent, you see that we have seven sites in all three continents: China, Europe and also U.S. to make that happen. Whatever the demand is from the different customers and the demand is there. So the dual supply points are given for the future, and this is a great achievement for us. Now I would like to share with you something else about an exciting new molecule mechanism platform. It's called protein degraders. It's a new mechanism, which is coming through. Of course, the research we were working since 2 decades on that. But now in the upcoming months, you will see the first approval for big products coming through. Why is this so exciting for Siegfried? We are perfectly set up exactly for this kind of products. They need Drug Substance small molecules where we have the entire network in place, which I have just shared with you. But secondly, they need and will end up then in tablets or in capsules. So that means for Malta, but especially for Barbera, that's the place to be. So we can really offer for big pharmaceutical companies, but especially also for the small and mid-caps, the entire service what they need. Just recently, over the last 5 weeks, we won three new products and three new customers directly linked with the same mechanism, what I'm sharing here with you. One -- by the way, is not the same molecule when I'm talking about these three, we are talking about three different molecules. We're talking about three different customers. One is in Phase III, very interesting. So this will become quite soon, it will get approval. The other ones are a little bit earlier, but this will be a changer for the entire industry, a game changer and also a game changer for the company of Siegfried. And we will -- we are really full in there. Happy to share with you more. And I'm sure in 3 years, we will talk more about this protein degraders. Now capital allocation. I think, we are really disciplined on that. So if we are able to do an M&A acquisition and very often in the past, and we did it again to do acquisition and to buy new assets for half of the price, which is always then helping us at the mid- and long term to fill then the sites and also to gain the revenues really profitable. This is still on because I was also asked what does this mean with this acquisition now of Noramco and also Extractas. And also outlined by Reto, we still have firepower ready to use if we find one another tool what I was sharing with you. So this is ongoing, but you need to be patient. And it's not predictable at the end. We will see how this will evolve, but it's still on. Now we are really set up to outpace the market growth, just also what I was sharing with you, inflow is great, 3%. This will come through also then midterm-wise as well. And for 2026, it depends because what I'm guiding you now will change definitely. It's just a question by when. Will it be in the second quarter or will it be in the third quarter? Because with the new acquisition after closing, we will significantly improve our guidance for 2026. So far for Drug Products, high single-digit growth. So compared to last year, much better, much higher, doubled. Secondly, Drug Substance low single digit due to the missing, pending confirmation for a product which is in-market product. So it's just fluctuation, but it will also support us in the midterm as well. That's for sure. And for the group, also reflected then in a low single-digit growth. We are confident. And this is really important because the bottom line is absolutely key for me. Not just to growth, I want to over proportionally grow in the bottom line. And that's what we have shown up you as well, which is proven, and we will continue on that. And you can expect also then a core EBITDA margin above 23%. We have a strong plan in place, and we will make it happen. Thanks a lot for your attention, and now happy to go for question and answers. Peter Stierli: Thank you, Marcel. We'll now start with the Q&A session. Of course, many questions from the room here, but those who are joining us through the webcast, who would like to ask a question, please do that through the audio or video call, and you will be directed to the operator. Laura Pfeifer-Rossi: I'm Laura Pfeifer from Octavian. Maybe first on Drug Products. Here, you're guiding for an acceleration to high single digit. So to what extent is this growth driven by the large originator contract you have previously announced? I think it was 1 year ago or so. And also, could you provide more detail on the size and ramp-up time line for this contract? And maybe also what are the key terms? Is this a multiyear arrangement? And then, I think the second one is more on Slide 21. You highlighted the protein degraders, but you also show obesity metabolic as a complex small molecule area. So can you provide us just an idea on your current overall exposure to metabolic GLP-1 programs across your overall business. So both -- all clusters, all service offerings and also what share of revenue this could represent over the next couple of years? Thank you. Peter Stierli: Marcel? Marcel Imwinkelried: Yes. Sure. Thanks a lot. Let's first start with the project, which we have announced 1 year ago. This is one part. But to be honest, we are growing in most of the -- really of the different dosage forms in Drug Product. So we are moving also upwards in Hameln especially in El Masnou. That's also the reason why I was sharing with you the expansion. This is significantly also coming up now. Also the new lines which we are investing in there are already more or less fully utilized by the new contracts, which is helping as well. Also the other portfolio in line is developing very nicely. It's in line with what I was highlighting with the ophtha growth and also in Barbera and in Malta, we are also coming up nice step-by-step. And I think it's a contribution broadly across all different dosage forms and all different sites, which is great. That's -- it's ending up then in this high single digit, more to come because, as I already outlined, with the additional wins of 30% to 2024, you can assume that further growth will come in the upcoming years. Then ramp up. With this -- what I was highlighting with the three new products, which we won over the last 4 weeks, it's -- this is really coming through then in 2027. The first one is Phase III. The other two ones, which are early, they are coming through them in 2028 and afterwards, but this will help us. And that's why I'm so confident for the midterm outlook independent from the acquisition that we have really the momentum and the inflow in the pipeline that you will take off. Yes. Protein degrader, this is something exactly in line with what I was just sharing with these products, more is coming if you are looking and always -- and this gives you also a little bit of flavor. We are not the followers and waiting is like a CMO that somebody is coming to us and are you ready to send us no offer. We are doing that really proactively. What kind of technologies? What are the next future or the next trend in the industry to capture that and to read it also to proactively to approach them and tell them, listen, we can provide the full service what you need. And that's a different approach compared to the past, and this is helping us now. Now to the GLP-1 exposure, I think this goes -- I think, of course, we were explaining that the GLP-1 exposure products -- molecules, they are really complex. But the same protein degraders, which I'm highlighting are also so complex like this. And I'm really happy that the third part of the true story that we have invested and decided to invest in the spray drying because the common approach for all of these different molecules, they need to have this spray drying, bridging technology in place. And here, we are unique that we can offer end-to-end or I'm preferring to use the word from beginning to the end. Laura Pfeifer-Rossi: Just, sorry, to clarify, so I'm now a bit confused. So the three new products that you have won over the last 5 weeks, these were all protein degraders or these were all... Marcel Imwinkelried: Yes. Protein degraders. Yes. Laura Pfeifer-Rossi: Okay. And then, but then you did not really answer my question then on the obesity exposure. So do you already have established contracts for whatever Drug Product, Drug Substance? Marcel Imwinkelried: We are not talking about obesity exposure. You know that Laura, because if I would share something related to that, and it's clear then I would highlight a product or also a company. That's what we are not doing. Peter Stierli: Sibylle. Sibylle Bischofberger Frick: Sibylle Bischofberger from Vontobel. I have two questions. First, about the past. Sales from Wisconsin and the DINAMIQS should have increased in 2025, and they should more and more support sales growth also in 2026. If you could say something about these two parts of your business? And then secondly, 2026, the outlook about the phasing between first half and second half. And if you could say something about the currency effects, how much they would affect sales on the top line if currencies would stay as they are at the moment? Marcel Imwinkelried: Yes, I will take the first one, and Reto will take the second one. DINAMIQS here, of course, we were really successful. I think, I shared that also in the conferences as well. So we won 10 additional customers over the last -- in the last year, one in Australia, four in U.S. and the rest in Europe. However, here, we are talking about development activities. The growth rate is quite significant with 30% what we can plus/minus. However, 30% of a very low amount is still not a game changer or will change dramatically. That's the reason. But the prerequisite was exactly what I was highlighting during the presentation. First of all, we need to get the permit, the certificate from the Swissmedic Health Authority to operate and to start then with the GMP production. And as also outlined in the order presentation during the financial part, the money is really in there as soon as we can start with the GMP commercial production. So it's coming. But this setup is coming through then next year, mainly what you see then step-by-step coming up then. For this year, it will be not significant growth for us as a company. Wisconsin also here, I think that's stable. Of course, this is not a game changer related to the top line or bottom line. So here, we are looking to develop 10, 15 projects on a yearly basis, but this is the funnel for the pipeline. So we are getting, of course, for the service we get paid and also the margin. But this is not a contributor at the end for our growth top line and bottom line. This is just filling then from now in 3 to 5 years to get one of these products, commercial, which ends up then really also visible in the P&L. Peter Stierli: Thanks, Marcel. Reto, seasonality and FX impact. Reto Suter: No, absolutely. I think we had this question quite a few times. So let's clarify. Obviously, we do have, again, in 2026, we expect a negative impact on the top line by currencies. Looking at the first 7 weeks of the year, comparing that to last year, I see a currency headwind of a bit more than 2% for the year. Now obviously, for the first half, this effect is stronger as degrading of the dollar only started after Liberation Day, sometimes at the beginning of April. So for the first half, it's actually closer to 3%. So I'm at 2.8% for the group. On seasonality, while we are still working on that. The indications are that this is very similar to what we have been observing in 2025. So more like 47% to 53% instead of 48% to 52%. Peter Stierli: The next question is from Charles Weston. Charles, can you hear us? Charles Weston: Two topics, if I can. First of all, on the product that has meant the sort of lower Drug Substance guidance. It's quite unusual to see such a sort of a change and volatility like this in a large on-market product. So is there any further color you can provide on this? Is your customer destocking? How confident are you that, that customer will come back? And then because it's so late, ordinarily contracts would be -- would include some sort of compensation payments or take-or-pay payments. So perhaps you can just touch on that for 2026. And then the second question, please, is on the non-recourse debt. Is that off balance sheet? And you talked about CHF 40 million. Is it still CHF 40 million? Or is it going to be increasing going forward? Marcel Imwinkelried: Okay. I will take the first one, and Reto will take the second one. For the first one, we are pending for the order confirmation. So he has also -- he is not sure how the demand, what he needs also short to midterm. That's the reason why we are waiting to get the final agreement on that. I think it's -- by the way, it's a customer which we are working together since 30 years. So it's not a question if the customer will come back. We have really strong relationship together since 30 years. And I think he has quite currently some volatility in the market regarding this product and he needs to figure out what does this mean. So that's also what I was highlighting. This market will remain in this very big more product also in the future as well. Now if this not what come through, that the demand will be at lower than expected. Of course, you need to know that's a good question, Charles, that contractually, we are protected from the margin point of view. So maybe we would get a smaller hit than at the top line, but the bottom line is fully protected. Reto Suter: Yes. If I may, the second question, basically, the factoring solution. Basically, you sell accounts receivable, you receive cash, this affected the cash position in a positive way about CHF 40 million at year-end. This facility has a total size of CHF 50 million. So yes, I could go higher CHF 10 million. And as mentioned, this is not used for window dressing. It's really used to flatten out net working capital consumption throughout the year, which will then automatically mean that I can size the funding contracts accordingly lower. And as this facility comes in a better condition than usual funding contract, it's a net gain from the cost of debt point of view. Charles Weston: Okay. So we should just assume a similar rate going forward for that, should we? Reto Suter: Yes. Not more than CHF 50 million, yes. Peter Stierli: Next question, Tanya? Tanya Hansalik: Just to follow-up on this outstanding product confirmation. So I was surprised by the size of the magnitude of the product volumes that are missing or need to be confirmed. What are the implications if the demand stays lower in 2027? Do you also get a compensation or then it takes a while to ramp up the new product? Would there be a gap there in 2027? And then my second question is on free cash flow. If you could provide some sort of guidance on that with your Project FALCON and then the non-recourse factoring, you mentioned, yes, when we can basically expect free cash flows to be positive? Marcel Imwinkelried: As usual, I take the first one, and let Reto take the second one. First one, so I think for 2027, I think this will come back because it's a onetime. They have to look at the stock level and how the latest forecast for there looks like. However, we have always a little bit some fluctuations. Some products are going through the roof, then you need to be flexible and to capture that, some of them are coming a little bit down. It depends, of course, we have also frozen horizon. That's the reason why we are protected also for this product from a margin point of view. But as I just outlined ,with the win of this very important protein degrader for Barbera, where we are doing then the filling of the capsules. Then next year, this can already help to the potentially to fill if something like this, this would happen. So I think in a nutshell, this will not change our outlook for 2027. It's small fluctuation. It's, of course, a bigger product. It's not a very small one. But at the outlook also for '27 and afterwards, this will not change our view. Reto Suter: Yes. On the second question relating to free cash flow, that's obviously the result of two distinct topics. The one is how much operating cash flow do you achieve? And then secondly, what do you spend for investments? Now I address these one by one, and then the combination is the answer. The operating cash flow in 2025 was, of course, masked and impacted by a very low revenue recognition. And this has obviously destroyed a lot of the good work that we had done when we speak about Project FALCON. I was sharing that as of yesterday, net debt-to-EBITDA is at 1.0, which means that CHF 150 million of accounts receivable have by now converted into cash. So, ceteris paribus, if I will close the books now, my operating cash flow would be about around CHF 120 million higher than the one that I showed to you. So that's really dependent on when you close the book. The second is, of course, we now had two very heavy years of investments, mid-teens. This year, it was actually 16% more like. This will now return and come back to low teens. As mentioned by Marcel, this is our guidance for 2026 and also for the years to come. So you see both parameters somewhat go into the right direction. I'm not worried around cash conversion, around cash generation, around the quality of the balance sheet and the flexibility that we have to fund further investments, not at all. Tanya Hansalik: I just wanted to follow up on the replacing with the protein degrader. So you mean the API part of the contract or because you said you had the drug oral dosage form and also the API, maybe on the time lines of these two when they... Marcel Imwinkelried: Yes, we're working on. I want to have everything from beginning to end. But we are very successful in both in Drug Product. Here, you can maybe imagine that if a big pharmaceutic company has developed such a product, where they are producing Drug Substance by themselves and then they are looking for somebody like Siegfried, who is then providing the service for the finished drug product. That's in this case. But in the other cases, here is really Drug Substance, but we are also in discussion to go then for the Drug Product as well. And that's exactly in line with the end -- beginning to end strategy that we can provide that. Peter Stierli: Next question is from Fynn from Deutsche Bank. Fynn Scherzler: I also have a follow-up question on the product that's awaiting the confirmation. So, you said it's an in-market product. Can you help us maybe with the size of the order that you are awaiting? So essentially asking what would growth look like with the product coming through? And could you clarify, is this an all-or-nothing situation? So did you either get the full amount? Or do you maybe want to get it partially? And then -- sorry, more on that, do you have any indication on timing of that? So when do you expect to hear back from the customer? And do you have any idea for the odds of this actually coming through? Marcel Imwinkelried: Yes. Happy to answer this question, sure. I think the magnitude -- of course, it's somehow a little bit impacting or impacting us. Otherwise, I stand in front of many strong analysts here, and they have their models. Of course, we would guide different or give a different guidance mid-single digit for Drug Substance. That's also according to the model, also what we had in our mind. And that's why we have taken the conservative approach this pending missing confirmation, but we will see how this will evolve. I think for this customer and this product is a little bit unique because it's -- the fluctuation is quite tough. I cannot share you with you with which kind of treatment, we are talking here about. Otherwise, it's clear for which product and customer you're talking about. But this will maintain and going on. So of course, this product will be also important for the customer in the near future in 2027 and afterwards and also for Siegfried. Fynn Scherzler: Okay. So if I can just follow up on timing. Do we expect to hear back from you on this specific measure before half year results? Or is this an ad hoc event? Or how should we think about it? Marcel Imwinkelried: Yes. It's -- we have strong, strong relationship with these customers all 3 decades. We were growing together significantly. We had a lot of fun, but also you need to work if you have a little bit uncertainty like this in this moment. And we are continuously in touch with them, and he needs to figure out that we have already next week, the next exchange meeting. And as soon as we know more, then, of course, we will share then also to the external role as well. Fynn Scherzler: Perfect. Second -- sorry, just one final question on the first Barbera contract that you've told us about already earlier that is supposed to start ramping in the second half of this year, if I understand correctly. Can you maybe expand a bit on how the preparations are going there? And maybe also what sort of magnitude of revenue we should expect from that in 2026? Marcel Imwinkelried: This is coming through. So we are starting with commercial production has also announced that this will happen in '27 -- '26, excuse me. And then afterwards ramp-up in '27 and more. This is exactly according to plan, which is great. We had also the second one there as well, which we don't have so prominently announced, but we are filling now step-by-step also Barbera and with the new news, which I have just shared with this protein degrader. I'm looking forward also really for a bright future in Barbera as well. So this is according to plan. Reto Suter: I think it's important to understand, Marcel has answered that in his first answer to the first question, that the momentum in Drug Products is much larger than just one product in one site. It affects all of the dosage forms across all the sites and is broadly diversified and does not just rely on one or two contracts. I think that's important for the general understanding. Peter Stierli: Next question from Daniel. Daniel Jelovcan: Daniel Jelovcan, Zurcher KB. So, still a bit parceled about this order confirmation. I mean, it's -- I heard that for the first time. And when I look at the exit rate from the second half, the momentum, 6.5%, which per se was a bit disappointing, to be honest. When I extrapolate that to the '26 growth, 6.5%, there's a delta of, let's say, 3 percentage points versus your guidance now. So we talk about the CHF 40 million product on a yearly base. So it's significant when I look at your diversification. So, and I'm a bit puzzled how come? I mean, you need the tech transfer and everything you need the approvals from Swissmedic FDA EMEA, and that takes 18 months. So that means that the product is already set up with Siegfried. So is that correct, the assumption? It's only dependent when the customer gives the green light and then you start just to be very sure. Is it more complex? Reto Suter: I can maybe take the technical elements of that, if I may. No. First, I don't buy into the concept of exit valuation, as much of the growth that we see is 1 year compared to the other year, as you know, we have long manufacturing cycles. So you can't take the revenue recognized in the second half and say that's the growth rate that we can assume then also for the first half of the following year. So that's that. On the calculation of the magnitude, yes, of course. I mean, it was significantly large enough for us to change the guidance. And that gives you a bit of an indication and your number is not totally wrong. And then thirdly, your assumption on the product, of course, it's an in-market product, which we already in the last year and the year before manufactured, and which we will continue to manufacture, as Marcel has mentioned. But now due to demand effects on that specific product for that specific customer in specific market there's uncertainty, but we are ready to go as soon as we have the confirmation. Daniel Jelovcan: So it's an existing product? Reto Suter: Yes. Daniel Jelovcan: You already do? Reto Suter: Yes. Since many years. Daniel Jelovcan: This product is then very successful. Reto Suter: Obviously, yes. Daniel Jelovcan: Okay. Marcel Imwinkelried: But maybe our customer thinking it would be even more successful. That's exactly currently the demand. Daniel Jelovcan: That's good to hear. And then the protein degrader. I mean, I'm not a chemist. So is that something which you can patent, I guess, not production process. And then your competition, let's say, I mean, the Chinese, the WuXi AppTec -- as the world, they are all over the place. Can they do that as well? Marcel Imwinkelried: Sure. I think, first of all, we cannot do the patent because that's a mechanism of the -- for the research to do the -- to find the molecules and then to appropriate that. So this has nothing directly to do with us, with Siegfried. It's a new mechanism how to treat because this kind of proteins in the past, they were really successful always to push back the treatment of the APIs. That's also why you have then to build up very specific molecule chains. With this new treatment, you can destroy such proteins. And then you can directly treat with the API then the patients. And that's the revolution and the game changer. But this is at the research companies, big pharma, small mid-sized pharmaceutical research companies. So we cannot patent. However, the unique situation of the setup is really what we have, it's Drug Substance small molecule. Second, due to the fact that so complex, you need to have spray drying, but it's for the majority of the small molecules nowadays. And thirdly, these products are ending up as a tablet or as a capsule. And we have for the colleagues which also have visited 1.5 year ago, Barcelona, Barbera, that's the perfect setup, what we can offer to this kind of product families, which is coming through now. That's the unique position. Daniel Jelovcan: Competition? You can certainly do that as well. Marcel Imwinkelried: Yes, sure. But I think, competition-wise, you don't have a setup like Siegfried who can do everything with small -- Drug Substance small molecules. Of course, we have also -- we have competitors there. With spray drying, also competitors. However, in combination in order to have both Drug Substance plus spray drying we are quite alone. And if you're talking about them to add the tablets and capsule manufacturing, you can research and ask also ChatGPT, you will not find so many. Daniel Jelovcan: Okay. Great. And last question. You still haven't answered to why the second half was to us, to the market, I mean consensus was higher for sales growth. And you were quite vocal in November and December at various events. And so that's why the market was quite bullish. And now you have the 6.5%, which is not bad, but below expectations. So were there some batch delays from December into January, which is quite typical in your industry or any specific reason? Marcel Imwinkelried: No, nothing specifically. I think we have delivered according to our guidance. I know that the market expectation was a bit higher. But for us, it was perfect. And at the end, for us, it's important to come back to look really at the profitable growth and not just at the top line. And I think top line-wise, you have expected a little bit more, but I think we were doing much better than the bottom line. So at the end, for me, it was great. Peter Stierli: Laura, again. Yes. Laura Pfeifer-Rossi: Maybe a question on the EBITDA margin guidance here. You guide for above 23%. So what are the drivers and the headwinds we should consider this year? I mean, will there be kind of a negative impact from -- if we assume this order is not coming through? So this could be one of the headwinds. Just keen to listen to your thoughts here. And then also when we use 23.0% as the clean base from '25, is there still the possibility for 60 to 100 basis points uplift as you did in the past? Reto Suter: Yes. I mean, for 2025, you guided ahead of 22%. So we define somewhat the floor. And our concept of guiding has not changed from 1 year to the other. Then secondly, on the positive side, what will we see as tailwinds for the guidance. It's, of course, commercial excellence, efforts of portfolio optimization, it's continuing process excellence, it's continuing operational excellence, and it's a bit of scale. That's what we're going to see on the tailwind side. On the headwind side, of course, cost of doing business also in 2026 will increase. So we have continued inflation in the U.S. We have continued inflation in Germany. Both countries, we will have 700 in the U.S. We will have 1,000 -- continue to have 1,000 in Germany. That hurts a bit. So there, we will need to become more efficient, increase prices a little bit. And that's what allows us to also, as in the past, increase the margin from '26 compared to '25. Marcel Imwinkelried: May to add that, the first question about this product, will this have also an impact on EBITDA? No. Also in the worst case, contractually, we are protected for the margin. So this will have any way no impact at the bottom line, and that's -- I'm really convinced that we will be above the 23%. Peter Stierli: Next question, we have online from Ed Hall. Ed, can you hear us? Edward Hall: Yes. I think maybe switching gears up. I was curious if you can talk about the outlook of multiclient versus exclusive. And we've seen another year where multiclient performance in the double digits and [indiscernible] business as a structural trend. Is there how much pricing is associated with this growth? That would be my first question. Reto Suter: No. The question was on the split between multiclient and exclusive products, if I got that right. Whether there is a structural shift or so, something taking place. No, we just also have quite an attractive set of multiclient products that we manufacture. I think that's the answer. Is this something which is structural? No, I don't think so. I honestly believe that over time, in the midterm, we will have and see a quicker growth in the exclusive part versus the multiclient part, which will, all-in-all, remain stable. However, from period-to-period in the short term, there can be a little fluctuations around that, but it's nothing which is structural. Edward Hall: Okay. And you mentioned pricing a little, just last question. And how much is pricing that contributed to growth when [indiscernible] Reto Suter: Honestly, we can't hear you. You sound like you spend your time in a wine seller or somewhere. Could you please repeat and maybe move a little closer to the microphone, Ed. Edward Hall: Is that a little bit better? Okay, perfect. Yes, I was just curious about the contribution of pricing to the generics and compare that to maybe some of the exclusive business. Reto Suter: Honestly, I don't think that there is a pricing difference between exclusive and the generics business. On top of my head, I don't have the numbers with me currently. Pricing impact on the 2025 numbers was not dominant. To be fair, we have in price here and there, but it was mostly efficiency gains and as well portfolio management, which helped us to increase the margin. Peter Stierli: Good. Is that all, Ed? Or do you have a third question? Edward Hall: Sorry. One final question. I was wondering if you could just share the capabilities that you're looking to bring to the market when we think about these two drugs more holistically. Marcel Imwinkelried: Sorry, we really -- we are having difficulties to understand. The capabilities... Edward Hall: I'll send an e-mail. Marcel Imwinkelried: Yes, please send an e-mail, and then we will answer to you for sure. Peter Stierli: Then we have another online question from Kristina. Kristina Blaschek: It's Kristina Blaschek on for Max Smock, William Blair. I just wanted to circle back on the large Drug Substance contract driving uncertainty in your guide. Curious what's leading to a large range of outcomes in the customers' demand outlook for the already commercial product in the short term. And given your very strong RFPs in 2025 in Drug Substance and assuming likely strong backlog. Here's why you cannot so in some of the project work to offset potentially lower volumes from this one large contract in 2026. It was just a timing and ramp consideration. I'm really trying to get at if the contract ends up on the low end of volumes, will you be able to offset the shortfall with current projects in hand for 2027? Or will it require some more contract wins to offset? Reto Suter: Yes. No, a very good question. And Marcel was indeed referring to some project wins that we had. Now obviously, if you win a project of an exclusive product, this is still in the development phases, which means that the equipment that you use is mostly small scale, pilot scale and not commercial. The same is also true for the revenue expectation. These products gain size as they enter the commercial manufacturing. So the product and the wins that Marcel was referring to, these are products which are still in clinical phases, II entering III maybe. So even if we wanted, we couldn't slot them in, in the large commercial equipment that we use to produce this other product in question. Peter Stierli: And the first question was whether if we would win or if the customer gets green light for the DS product, would we be closer to the consensus expense? Reto Suter: Yes, of course, yes. Immediately. Kristina Blaschek: Got it. And then, [indiscernible] The second and final question is on the recent acquisition. In terms of valuation, I know you've said impressive under 10x EBITDA multiple. But wondering if you can give the purchase price and also expected incremental capacity and revenue on an annualized basis. I realize it's not exactly clear when the acquisition will close, just if it were to close on January 1. Marcel Imwinkelried: I take it. Yes, I think I understood it. Regarding the acquisition, here, I think -- first of all, the price. We were sharing the evaluation compared to the EBITDA that we are paying or will pay less than 10. So really an affordable multiple. Now I think you need also to understand that we have not incorporated any synergies. So that's exactly what I was highlighting during the presentation to free up this 80 cubic meter capacity for the exclusive business. This would be on top, but this is not included in the price. So for us, that's why I'm so exciting. It's one of the top corporate targets for 2026 to make that happen, to free up the capacity and to start then to ramp up in 2028. That's the big opportunity what we have, and we will make -- we will take care to make that happen, yes. Peter Stierli: Good. There is no more question from the webcast. Is there any other questions here from the room? If not, then thank you so much. For those who still have some time, we would like to invite you for a drink and some snacks here around the corner. It would be great to meet as many as possible. Then yes, we're looking forward to see all of you again at the half year results on August 26. Thank you so much. Marcel Imwinkelried: Hopefully, earlier for the closing and new guidance. Thanks a lot for your attention.
Operator: Ladies and gentlemen, thank you for standing by. Welcome to PTC Therapeutics Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded. I would now like to turn the conference over to Ellen Cavaleri, Head of Investor Relations. Please go ahead. Ellen Cavaleri: Good afternoon, and thank you for joining us to discuss PTC Therapeutics' Fourth Quarter and Year-end 2025 Corporate Update and Financial Results. I am joined today by our Chief Executive Officer, Dr. Matthew Klein; our Chief Business Officer, Eric Pauwels; and our Chief Financial Officer, Pierre Gravier. Today's call will include forward-looking statements based on our current expectations. These statements are subject to certain risks and uncertainties, and actual results may differ materially. Please review the slide posted on our Investor Relations website in conjunction with the call, which contains information about our forward-looking statements and our most recent annual report on Form 10-K filed with the SEC as well as our other SEC filings for a detailed description of applicable risks and uncertainties that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. Additionally, we will disclose certain non-GAAP information during this call. Information regarding our use of GAAP to non-GAAP financial measures and reconciliation of GAAP to non-GAAP are available in today's earnings release. I will now pass the call over to our CEO, Dr. Matthew Klein. Matt? Matthew Klein: Thank you all for joining the call today. 2025 was a year of many significant successes for PTC, positioning us well for 2026 and beyond. I'll start by reviewing the highlights from 2025 and then share our key objectives for 2026. The main highlight of 2025 was the initial global approvals and launch of Sephience for children and adults living with PKU. As we have discussed, Sephience will be the foundational product for PTC's near-term growth. In 2025, we gained approval for Sephience in the U.S., EU, Japan and other countries, all within several months. The global launch is off to a strong start with broad uptake across all key patient segments and age groups. In 2025, we also made a number of advances in our R&D pipeline, including achieving positive results from the Phase II PIVOT-HD study of votoplam and progressing a number of early-stage programs, including those from our RNA splicing platform. And in 2025, we delivered another year of strong revenue performance. Fourth quarter net product and royalty revenue was $263 million, and full year 2025 total net product and royalty revenue was $831 million, exceeding guidance of $750 million to $800 million. Total revenue includes $587 million of net product revenue with solid contributions from our mature products and from the early Sephience launch. For Sephience in the fourth quarter, we achieved $92 million in revenue. And for 2025 since launch, we achieved $111 million, a really impressive start. In addition to the strong revenue performance, non-GAAP R&D and SG&A OpEx for 2025 was $728 million, coming in below our guidance of $730 million to $760 million. With our strong commercial execution, disciplined OpEx management as well as the monetization of the remainder of the Evrysdi royalty for $240 million in December 2025, we ended the year with $1.95 billion in cash. This financial strength will enable us to continue to support our commercial and R&D portfolios as well as engage in strategic business development. For 2026, we are providing product revenue guidance of $700 million to $800 million, with the majority coming from Sephience. This guidance represents 19% to 36% year-over-year product revenue growth. The 2026 revenue guidance excludes Evrysdi royalty revenue given the sale of the remaining portion of the Evrysdi royalty. We are providing expense guidance of $680 million to $720 million. And based on our revenue and expense guidance, we have the potential to reach cash flow breakeven in 2026, a significant milestone for the company. As we move into 2026, our main focus will be continuing the strong momentum of the Sephience launch. To date, we have seen broad uptake across all disease severities and age groups. This year, we expect revenue growth through increased penetration in our current markets as well as expansion into additional geographies. By the end of 2026, we expect to have patients on commercial drug in 20 to 30 countries across multiple regions, including Japan, where we gained approval in December and expect to launch in the coming weeks. Based on Sephience's highly differentiated profile, the large unmet need for adults and children with PKU and the early broad uptake into all patient segments, we believe Sephience has a potential multibillion-dollar global revenue opportunity. In 2026, we also look forward to progress across our R&D portfolio. For the votoplam Huntington's disease program, an end of Phase II meeting was held with FDA in the fourth quarter of 2025, where alignment was reached on the Phase III study design. Novartis will be initiating the Phase III trial INVEST-HD in the first half of this year. This trial could serve as the confirmatory study in the context of accelerated approval or as a registration trial. We also expect to have results from the Phase II PIVOT-HD extension study in the first half of 2026 once all participants cross the 24-month time point. For vatiquinone, we had a Type C meeting with FDA last December, where we discussed potential next steps in the development program following the CRL for the vatiquinone NDA. FDA has indicated that additional study will be necessary to support NDA resubmission and stated in the meeting minutes that this study could be a single-arm study with a natural history comparator group. We plan to meet with FDA in the second quarter to align on the protocol for this open-label study, including the matching strategy for the natural history control arm. In 2026, we expect to advance several programs from our innovative R&D platforms, RNA splicing and ferroptosis and inflammation. We expect to elect a development candidate for our MSH3 program for HD and myotonic dystrophy as well as to advance some of our earlier preclinical programs. From our inflammation platform, we look forward to initiating the Phase I study for our NLRP3 program by midyear and to potentially elect a development candidate for our ferroptosis Parkinson's disease program as well as our NRF2 activator program. In summary, with our robust commercial engine, innovative R&D programs and strong financial position, we look forward to a successful 2026. I'll now turn the call over to Eric to discuss our commercial performance, including details on the Sephience launch. Eric? Eric Pauwels: Thanks, Matt. We are incredibly pleased with the strong launch of Sephience reflecting its differentiated safety and efficacy profile and the experience and preparation of our global commercial organization. The PTC team has delivered on all key aspects of the early launch. Our customer-facing team's engagement across all key segments, including centers of excellence, health care providers, payers and patient advocacy groups has accelerated adoption of Sephience following FDA and EMA regulatory approvals. The breadth of adoption we are seeing across all patient segments in the first few months of the launch is highly encouraging. In the fourth quarter of 2025, global Sephience revenue was approximately $92 million, including $81 million in the U.S. and $11 million ex U.S. Sephience generated $111 million in revenue worldwide in 2025 since launch and is expected with the U.S. accounting for the vast majority of the revenue. As of December 31, 2025, we had 946 patients on commercial therapy worldwide and in the U.S. received 1,134 patient start forms. As Matt mentioned, we are seeing uptake from the full spectrum of the disease severity and patient age, including therapy-naive adults. We are also seeing breadth in terms of prescription base with 80% of PKU centers of excellence in the U.S. having written prescriptions for one or more patients. We are hearing positive feedback from health care providers highlighting broad adoption and have seen many patients of various disease severities, treatment histories and all ages from newborns to 80-year olds. We are pleased to see that treatment-naive adults, many who have been called "lost to follow-up" or those who have tried and failed therapies in the past have actively been seeking Sephience in the initial stages of the launch. While it's still early, we continue to see high refill rates and low discontinuation rates, which we view as an important sign of building on the launch momentum. Importantly, the PKU community has been very active on social media, playing a meaningful role in sharing real-world experiences, driving awareness and influencing other patients to engage earlier with their health care providers. We continue to see favorable payer mix dynamics with the majority of prescriptions covered under commercial payer plans. Importantly, the AMPLIFY head-to-head study demonstrating significant superiority over BH4 has been well received by payers who are supporting open Sephience access with very few barriers, including no step edits and 12-month refills before reauthorization. Our teams are also working on geographic expansion of the launch outside the U.S. We achieved regulatory approval in Japan in December and are finalizing pricing and reimbursement. While the U.S. continues to be the main driver for growth near term, we expect Sephience commercial patients to come from 20 to 30 countries by year-end, steadily building international presence in terms of both revenue and patients. In Europe, we have submitted health technology assessment dossiers for pricing and reimbursement in key markets and are leveraging paid early access programs for PKU patients to receive treatment as we finalize pricing negotiations. As we accelerate the launch in 2026, we believe the long-term opportunity for Sephience remains significant. In the U.S. alone, there are approximately 17,000 patients and new patients being identified via newborn screening with the majority of these patients tied to PKU centers of excellence. The clinical data package of Sephience highly differentiated efficacy, safety and dual mechanism of action supports broad penetration across the PKU population and position Sephience as the potential standard of care. These compelling data and the large orphan patient pool create a significant runway for the future growth of the brand. In the fourth quarter and throughout 2025, we continue to generate revenue from our more mature products, including the DMD franchise, given our ability to successfully defend Translarna and Emflaza despite significant headwinds. In conclusion, we are very pleased with the exceptional results delivered by the customer-facing teams in 2025. We are excited by the early launch Sephience metrics as we continue to build and execute on a world-class rare disease product launch. With that, I will now turn the call over to Pierre for a financial update. Pierre? Pierre Gravier: Thanks, Eric. I will now share the financial highlights of our fourth quarter and full year 2025. Beginning with top line results. Total net product and royalty revenue for the fourth quarter was $263 million, including Sephience net product revenue of $92 million. DMD franchise revenue for the quarter was $66 million, with Translarna net product revenue of $39 million and Emflaza net product revenue of $27 million. For Evrysdi, Roche achieved fourth quarter global revenue of approximately USD 584 million, resulting in royalty revenue of $79 million. Our full year 2025 total net products and royalty revenue was $831 million, exceeding guidance. Total product revenue for 2025 was $587 million, including $111 million of Sephience revenue and $382 million of DMD franchise revenue. For Evrysdi, full year royalty revenue was $244 million. For the fourth quarter of 2025, non-GAAP R&D expense was $124 million, excluding $9 million in noncash stock-based compensation expense compared to $116 million for the fourth quarter of 2024, excluding $9 million in noncash stock-based compensation expense. Non-GAAP SG&A expense was $87 million for the fourth quarter of 2025, excluding $10 million in noncash stock-based compensation expense compared to $76 million for the fourth quarter of 2024, excluding $8 million in noncash stock-based compensation expense. In December 2025, we sold the remainder of our Evrysdi royalty to Royalty Pharma for $240 million upfront and up to $60 million in sales-based milestones. Importantly, we maintained the right to receive $150 million milestone from Roche based on single-year Evrysdi sales of $2.5 billion. Based on the prior accounting method for the royalty, we will continue to show Evrysdi in our financial statements. However, there will be no cash proceeds for PTC. We have provided product revenue guidance for 2026 of $700 million to $800 million. This represents 19% to 36% product revenue growth from 2025. We anticipate non-GAAP R&D and SG&A expense for the full year 2026 of $680 million to $720 million, excluding estimated noncash stock-based compensation expense of $95 million. Based on this revenue and OpEx guidance, we have the potential to reach cash flow breakeven in 2026. Cash, cash equivalents and marketable securities totaled $1.95 billion as of December 31, 2025, compared to $1.14 billion as of December 31, 2024. Our strong financial position provides a solid foundation to pursue our strategic objectives, including supporting our commercial and R&D programs as well as potentially pursuing business development opportunities. And I will now turn the call over to the operator for Q&A. Operator? Operator: [Operator Instructions] And our first question comes from Kristen Kluska with Cantor Fitzgerald. Kristen Kluska: Congrats on a really strong start for the Sephience launch. So first question for me. I just wanted to ask what's baked into your internal and external guidance for Sephience sales this year. Understandably, most of the sales will come from the U.S., but I would imagine if you're going to be in 20 countries versus 30, that will have an influence as well. So anything you can guide us for what's baked in and if you would consider this conservative at this stage? Matthew Klein: Yes. Kristen, thanks so much for the questions. So as you indicated, the total -- so the revenue guidance this year is strictly product revenue, as we highlighted in the call of $700 million to $800 million, which is 19% to 36% growth over last year. We expect the vast majority of it to be from Sephience. The remainder, obviously, from our more mature products, as we said, we'll continue to have headwinds on the DMD franchise, including a larger number of generics in the U.S. for Emflaza and such. So we've been conservative in that regard of understanding where that could go. And as usual, as we get more visibility into DMD franchise as we move into the year, we can always adjust and raise guidance as needed. On the Sephience front, we expect the majority of revenue to come from the U.S. with contributions ex U.S. that should -- as Eric and I both highlighted, we expect to have commercial patients in 20 or 30 countries by the end of the year, but we'll expect those revenue contributions to come later in the year. And I'll let Eric go into more detail on those dynamics in just a second. But I'll say that, again, we're still very early in the launch with 1.5 quarters as we ended 2025 with an incredibly strong start. We continue to see great momentum. And with just 2 points on the line thus far, obviously, we'll make adjustments to guidance as needed as we continue to move in the year and have greater visibility on the revenue trajectory. Eric, do you want to provide a little bit more color on the rollout globally and the contributions to overall revenue? Eric Pauwels: Yes. And thanks for the question, Kristen. I'll just add, Matt said a lot of different things here, and I think it's really important that you know that the U.S. will continue to drive the vast majority of our revenue during the course of this year. We continue to see very nice momentum in Germany as well. And we have prepared HTA dossiers in Europe as well. So much of this pricing and reimbursement will take place during the course of the second half of the year. We're also really excited that we have the Japanese launch that's coming up in the second quarter. We finalized pricing and reimbursement. We will do that in the next few weeks and anticipate revenue to start in Q2, but more meaningful revenue in the second half. The good news as well is we had approval this week in Brazil, a very important market as well, and we'll begin processes with the named patient programs. And then as Matt said, when you potentially add 20 to 30 countries during the course of 2026, incrementally, they will be contributing over the course of the second half of this year, but really set us up nicely for 2027. Kristen Kluska: And then my follow-up question is in your prepared remarks, you mentioned that you are seeing some of these patients that are "lost to follow-up" now becoming aware and wanting to get on the therapy. How is that dynamic working? How are they becoming aware of it? And do you think that they've just kind of been "lost to follow-up" because there was really no reason for them to go to office in the past? And maybe if you could just comment on some of the trends you're seeing within each of these specialty centers uniquely, like some of the feedback we hear is physicians are trying it on their more difficult patients first and if they respond well, then they're kind of encouraging others to consider treatment as well. Matthew Klein: Yes. Thanks, Kristen. You've captured a number of the complex dynamics that we're seeing early on. So let's first start with this "lost to follow-up" bucket, which I think was a term, I think that really started with the physician saying that there's a lot of adults that they don't see who are not on therapies and they don't see them in clinic. And what we've learned is that there's a number of these adults out there who still have -- some of them still have associations with the clinic, whether it's periodic with dietitians or nurse practitioners and others who maybe not are associated with the center. But I think what they have in common, and I believe this came out in your session today with the [indiscernible], adults want to be on therapies. And so I think what was a little bit misunderstood early on is "lost to follow-up" and not coming to see a doctor was equated with not wanting to be on therapy, and that's not the case. I mean it's 2026 now, social media [indiscernible] people are plugged into what's going on in the community. And I think as you talked about as well, what we see is a lot of activity on social media sharing the transformative benefits a lot of the patients have had with Sephience including being able to try foods for the first time, having Phe control, overall feeling better. And this gets out there. I mean there's actually social media influencers in the PKU community. So there are -- just because someone is not seeing a doctor doesn't mean they're not in network, doesn't mean they don't want to be on the therapy. So I think what we're starting to see is engagement of these folks as a new therapy is available that has demonstrated to be safe, at ease of use and has been able to deliver benefits that are so, so important to patients. In terms of the center dynamics, it's not a one size, fits all necessarily, but we are seeing early on that centers are tending to want to try those who are therapy naive or tried and failed other therapies before those who are on therapies. And as you pointed to, we've heard from a few centers, they're trying -- some of them are more challenging patients who desperately need therapy. And the feedback there has been really positive with some of the more severe patients having really strong responses, which is really helping to put Sephience right there as first-line therapy to try for all patients regardless of severity. And then, of course, if it works in the most severe patients, there's greater confidence over time that those who are on current therapies, including oral therapies could get switched over. So overall, it's been a very strong response. And I would point out this "lost to follow-up" doesn't mean "lost to follow-up," it's just one of those lessons that when a drug is launched and you're out in the real world, the dynamics play out as the dynamics are not always as the docs may have predicted. And again, overall, it's just been really impressive to see that those hardest-to-treat patients and hardest-to-reach patients are being reached and helped so early in the launch. Operator: Our next question comes from Tazeen Ahmad with Bank of America. Tazeen Ahmad: I wanted to get a little bit of color on vatiquinone. So FDA has asked for an additional study for FA. Can you provide any color on details? So do you know what kind of a study you would need to run? How many patients? Over what time period? Any kind of color that you could provide would be great here? Matthew Klein: Yes. Sure, Tazeen. Thank you for the questions. As we've talked about before and is visible to everyone publicly, the CRL for vatiquinone was really based on statistical considerations. We had demonstrated significant effect on the upright stability scale, which is the most relevant and meaningful scale for the young patients enrolled in that study. This drug continued to show to be safe. And I think in our discussions with FDA, this may be FDA giving us an opportunity to provide additional data through an open-label or single-arm study within natural history control. And I think that, again, this speaks to the potential need to just have some additional evidence beyond what was there in MOVE-FA to provide the totality needed to gain approval. So we obviously want to meet with FDA as they have suggested we do to go over that open-label protocol, go through all the details of the matching criteria with the FACOMS natural history database as we've talked about before, Friedreich's ataxia and the FA community has done a great job of building a rigorous and robust natural history database that was used by Reata for approval, so this is regulatory precedent using it. And so we will again be using that. And we're just in the process now of finalizing what the subject number would look like and duration of treatment. So more to come on that. We expect to meet with the FDA in the second quarter. That meeting has been requested and scheduled so that we can get final alignment and then we can share those details and look to get this study started as quickly as possible. Obviously, we're excited to have an opportunity to do a study like this that wouldn't subject younger patients to a placebo and really allows us to get that additional treatment evidence that we would need for approval. Tazeen Ahmad: So then just a follow-up on that. Since they gave you a suggestion, should we just assume that, that's what you are planning on doing? And is that also baked into your OpEx guidance for this year -- OpEx expenses for this year? Matthew Klein: Yes, absolutely. They had written it into the minutes that this is -- that this was an option for us to take to collect the additional evidence and so that will be what we'll pursue, discussions would be on that protocol. There is some OpEx for the FA study, and there'd be no change to that. It's entirely possible with an open-label study, it obviously be less costly since it's a little less involved than having to manufacture placebo and all the blinding and some of the logistics required in the CRO operations, but no -- for sure, no increased OpEx related to doing this study. Operator: Our next question comes from Ellie Merle with Barclays. Eliana Merle: On Sephience, first, just what are your expectations for the discontinuation rate commercially? Specifically, how long do you think physicians will wait to see if patients respond or not? And I guess, the threshold that physicians view for response. And then just a separate question, just in terms of the cadence of new starts from here. Are you seeing a steady number of new start forms this year so far? Or did you see a bolus upfront? And if you could just talk to sort of how you see the rate of new starts evolving, I guess, in the U.S. over the course of the year. Matthew Klein: Thank you very much for the questions, Ellie. I'll just start and I'll pass it over to Eric. As we've talked about thus far, it's still early days in the launch, and we're seeing very low numbers of discontinuations, very high prescription renewal rate. It's still early days, but it's obviously very encouraging. Eric, do you want to talk a little bit how we're thinking about that dynamic over time and cadence of starts going forward? Eric Pauwels: Yes. I mean on the discontinuation rate, that's really important because obviously, part of what we're doing is building a prevalence and where discontinuation rates as well, as refills are something we're watching very carefully. As we've mentioned before, we have very low dropouts, single digits. And usually, these are based on patient decisions, not necessarily for clinical reasons, safety or efficacy, which is incredibly encouraging. With regards to cadence, we see we have gone through. And of course, we've gone through the course of the 5.5 months of the launch. We continue to see very nice momentum with new patient starts. And we anticipate that cadence to continue throughout. It is a combination of consistency of bringing in new patients and maintaining the base of patients that we have by ensuring that our case managers and our teams are involved in making sure that medical education awarenesses, reauthorizations, dose adjustments and all of that are taking place. So we're very, very confident that not only the momentum that we've had that we started in the first 5 months will continue, but adding 20 to 30 countries over the course of the second half of the year will bring in meaningful revenue to this truly global launch. Operator: Our next question comes from Brian Cheng with JPMorgan. Lut Ming Cheng: How should we think about Sephience's growth in Europe once we reach the end of the 6-month free pricing period. Specifically, how is the negotiated price balance out the projected uptick in the market? Matthew Klein: Thanks very much for the questions, Brian. And Eric, do you want to talk a little bit about German dynamics and pricing? Eric Pauwels: Sure. First of all, we're really pleased with the launch because the vast majority of the centers of excellence in Germany have prescribed Sephience. So we have an incredibly experienced team that's been managing that process. Keep in mind, we've also had a number of products that we've launched. And we've gone through this process right now to get pricing and reimbursement. We have already gotten the assessment from G-BA and AMNOG on the benefit rating. And we're in this process right now for pricing and reimbursement. We've submitted our HTA dossier. It has a very strong clinical package right now that includes both all of the APHENITY data as well as the AMPLIFY data, which will give us a lot of really important strength in terms of supporting the highest possible price. These discussions are ongoing, and they will be going for the next 5 to 6 months before we finalize pricing and reimbursement with the AMNOG process. So I think we need to stay tuned. But we're anticipating with the strength of the data that we'll be able to maintain the highest possible list price and lowest rebate. Operator: Our next question comes from Judah Frommer with Morgan Stanley. Judah Frommer: Maybe just a follow-up on Sephience. Anything you can point to in reimbursement dynamics that have kind of shifted as we move through the initial stages of the launch, maybe specifically for those patients getting approved to be on first-line therapy with Sephience? And then separately, just on the comments around potential to pursue business development. I guess, how do you think about prioritizing the internal early-stage pipeline and bolting on to that versus kind of going in alternate directions? Matthew Klein: Yes. Thank you for the questions, Judah. I'll let Eric talk a little bit about the color on reimbursement dynamics and Pierre briefly on BD. So Eric, you want to go first? Eric Pauwels: Thanks for the question, Judah. First of all, we're really pleased with the interactions that we've had with both the U.S. commercial payers and the government payers. I mean, we've had some pretty experienced teams of our field-based teams with both MSLs as well as market access, that they have met with payers now that cover more than 250 million lives. We've been leveraging again the APHENITY data. But more importantly, the AMPLIFY data has really, really opened up a lot of good discussion in terms of policies. Government and commercial policies have been written. It shifted in the positive sense in the context that -- where they've been written, they've been favorable to Sephience. They're primarily prior authorization to label. They're either limited or no step edits with refills from 6 to 12 months. And some of the biggest commercial payers have finalized their policies with refills to 12 months and no step edits. So that's very encouraging. In terms of reauthorization, the processes seem to be very straightforward and generally positive. After 6 to 12 months, the criteria seems to be fairly consistent with our clinical results, so they're looking for fee reduction, goal attainment for dietary needs as well as potentially the physicians or healthcare provider's judgment on clinical improvement. So all in all, I think the shift has been very quite positive, and we're seeing now a number of plans, both at the government and commercial level that have been favorable to Sephience. Pierre Gravier: And on BD, first of all, we're in a strong financial position with $1.95 billion cash as we start the year. Sephience is off to a great start, and we see it to be a multibillion dollar opportunity. We're obviously focused on the launch and continuing to expand globally as well as develop our internal R&D pipeline. Rest assured, we have enough cash to do both at the same time, no problem. But we're open to accelerate top line growth via business development opportunities. We will be disciplined, and we will make sure to always look at maximizing shareholder returns. Operator: Our next question comes from Ben Burnett with Wells Fargo. Benjamin Burnett: I wanted to ask also about Sephience. Just, what kind of Q1 dynamics should we expect? I guess, any color on discounting or any other sort of typical Q1 dynamics that we should be modeling? And then also, like where do you expect kind of the majority of the demand to kind of come from going forward? So kind of talked about some of these, lots of follow-up patients. But is -- going forward, are the switches kind of the more important group? Or do you see kind of adoption from both? Matthew Klein: Thanks for the questions, Ben. Let me grab the second question -- take the second question first. Look, I think one of the things that has been impressive to us early on in the launch is the breadth of uptake both in terms of age with patients as young as a couple of months of age up to 80 years, as well as the full spectrum of severity, seeing less severe patients, classical patients with non-BH4 responses and different patient segments, those that are currently on therapies with those who are in therapy naive, and I just talked about. And I think we had the majority thus far coming from those who've tried and failed previous therapies. Being that we're still in the early stages of the launch, I think what we expect in the short term is continued broad penetration as we go deeper and deeper. There's no reason to see a slowdown in those that have tried and failed coming on, those that may be therapy naive. And I think over time, we'll probably see more of the switches that goes on therapies for the simple reason that what we're hearing is there's a preference at the centers to try to get those who don't have a therapy right now or have tried and failed therapy, to get on a correct therapy first before switching. Of course, the AMPLIFY data shows as well as other studies continue to show every patient who's been on BH4, generic or branded, has a much better response to Sephience whether that's in terms of fee lowering or fee lowering and diet liberalization. So time and time again, that is the case. And there's awareness about that in the healthcare provider community, which is why we expect over time, we'll see those switches come. But for now, I think the story is going to continue to be breadth, breadth in terms of the segments, breadth in terms of severity. And the other thing I'll point out that early on, as Eric raised in his comments, we've gotten prescriptions from over 80% of the centers of excellence. And at this stage of the launch, it's usually the opposite. It's usually 20 have prescribed, and you're trying to get into the larger numbers. What we're seeing again is a story of breadth. We're getting penetration into these expert centers, which again, we expect will continue over time. Operator: Our next question comes from Clara Dong with Jefferies. Unknown Analyst: This is [indiscernible] on for Clara. I just wanted to ask, for Sephience, as you think about Japan and Brazil and these other ex-U.S., ex-EU markets that you could launch in, how would you kind of force-rank those by revenue contribution potential? And then also on timeline to kind of contributing meaningfully? Matthew Klein: Great. Thank you for the question. As we said, we expect going forward, the majority will continue to come from the U.S., but we'll start seeing those contributions from ex U.S. And Eric, do you want to talk little bit how we're thinking about timing and contribution\? Eric Pauwels: Yes, timing and contribution in those key markets are very important. We're already getting to the very end of this quarter, and we will have price, negotiated pricing and reimbursement in Japan. I think we're really pleased with the approval there. It's a full and broad label. Our staff is already on the ground. They're fully trained. They're profiling the centers of excellence. And we anticipate first commercial sales from Japan in the second quarter, with more meaningful revenue in the second half. I want to remind you, there's about 1,000 PKU patients in Japan. However, it's a very, very high priced and premium-priced market with 10 years of orphan drug exclusivity. So we've got a long runway and a very experienced team there. We're also really pleased with the dynamics of Brazil, because Brazil has over 5,000 diagnosed patients, and they're concentrated in major cities. We're pleased because our team there is incredibly experienced. They've launched multiple products in the rare disease space. They know how to navigate the named patient program aspects in Brazil. So the team has gone through already for more than a year, profiled a number of the centers of excellence, healthcare providers, KOLs and the advocacy groups. And the named patient programs are in place and ready to go since the approval this week. So we have a number of patients already identified. Pricing submission will take place shortly in the coming days. And we anticipate, again, more meaningful revenue because the name patient programs do take a little longer to go through in Brazil, but we would anticipate more meaningful revenue towards the end of this year. Operator: Our next question comes from Brian Abrahams with RBC. Unknown Analyst: This is Joe on for Brian. I wanted to ask on votoplam. Can you walk us through the Phase III study design? How are you thinking about potential approval pathways there? What might be some scenarios that could enable approval prior to primary reading out? And separately, can you also quickly comment on your net pricing expectations for Sephience? Matthew Klein: Sure. Joe, thanks for the questions. Let me take the first one, and then I'll turn it over to Pierre to talk about net pricing. So this -- as we talked about that we -- there was an FDA meeting in the fourth quarter, where the key focus of that meeting was achieving alignment with FDA on the design of this Phase III study, INVEST-HD. As you know, this will be conducted fully by Novartis, funded fully by Novartis, but obviously, we participate as a member of the Joint Development Committee. And the idea was to set this study up to either serve as a confirmatory study in the context of potential accelerated approval based on the PIVOT-HD open-label extension data or itself as a registration study. And as we shared at JPMorgan, this will be a placebo-controlled study with a 3 to 2 randomization of votoplam to placebo and a targeted enrollment of approximately 770 participants in over 30 countries with a primary end point in change in cUHDRS. There is an interim analysis planned for both efficacy and futility, so there is that potential that if accelerated approval is not achievable based on the PIVOT-HD study with an interim analysis, that could potentially bring an earlier approval prior to the completion of all patients getting through that INVEST-HD study. Pierre, you want to talk a little bit on net pricing? Pierre Gravier: Yes, absolutely. The interesting dynamic in the PKU pricing is 2/3 of the patients are commercial, which is very rare. And usually in some other settings, for instance, Duchenne, it's 50-50 split. And we said we expect the gross to net between 15% to 25%. At the start of the launch will be in the lower hand of that side, and as we get to steady state will increase over time. Operator: You next question comes from Joseph Thome with TD Cowen. Joseph Thome: Maybe to follow-up on the Huntington's program. I guess now that Novartis is in charge of the program, are they also in charge of any further disclosures from Phase I/II program? Or should we expect anything in May of this year? Kind of how does that work? And then I guess is there another planned FDA meeting on the data that you have right now, I guess, to use that package for accelerated approval? Just trying to understand that component. And then lastly, in the Phase III, what triggers that interim analysis? Matthew Klein: Thanks for the question, Joe. So the -- as we talked about the other objective of that fourth quarter FDA meeting was to just have a high-level discussion around the potential for accelerated approval and not surprising the neurology division in CDER is open to that potential given the significant unmet need for those living with Huntington's disease. I think it's quite clear from the comments we've made publicly and Novartis has made publicly that there's a great enthusiasm in both companies to pursue that pathway based on the data, if that's possible. Clearly, the next step is the analysis of the open-label data, which will occur once all subjects across 24 months. That would give us an opportunity to look at those data, make a decision through the Joint Development Committee, consisting both of Novartis and PTC, whether we believe we have data there worthy of a discussion about accelerated approval. And then as you can imagine, there would be a subsequent needed regulatory and feeding to get an alignment with the division about the data and the potential for accelerated approval. That analysis will be done by Novartis as they're overseeing the program now. We would expect that we would have a disclosure. The details of that will get worked out, as we go through the analysis. And as we said that, that analysis will occur in the first half of this year. So we would expect to be sharing the data. Those details are still to come. In terms of triggering the interim, those details haven't been disclosed as of yet. I think the idea, though, is to make sure that there is a sufficient number of subjects that have gotten through a significant duration of treatment to allow for an opportunity to understand if there's a sufficient efficacy signal that could allow for potential stopping or at least a data cut and analysis to support discussions around accelerated approval. Operator: Our next question comes from Sami Corwin with William Blair. Samantha Corwin: Congrats on the progress. I was curious how we should interpret the Translarna sales allowance in France, and if we could see a similar adjustment in the future? And then regarding the vatiquinone, did the FDA have any recommendations or input as to whether you could use upright stability as the primary endpoint? Or if they prepare you to use mFARS? Matthew Klein: Thanks, Sami. On the first question on the Translarna France allowance, this was kind of a unique thing to France. It's a onetime France specific thing that we had sold Translarna there under an early access program since the beginning of time where we set the price when the license wasn't renewed, France ended the early access program and set their own price and they issued a charge for the difference. So this is a something specific to the France early access system. In fact, it's something specific to Translarna that I think would never happen again for any other drug in, and it was a one-time thing. On vatiquinone, so I think one of the questions in terms of what the end point is will be based on the duration of that study because one of the important findings we had in the MOVE-FA study was that certainly, over the short term, 12 to 18 months that upright stability is clearly the endpoint that could capture is most sensitive to capture treatment effect in the population we enrolled in MOVE-FA, which would be consistent with the one that we would enroll in this new study. However, what we saw in the data is that by 18 months and certainly as we went out to 36 months, we continued to record significant effect on slowing of disease progression. But now that slowing was captured on the other subscales as well, including lower limb and upper limb. So that's why I say that depending on the duration of the study, if we're looking at something a little bit longer than 18 months, then it would probably make the most sense to have the mFARS as the primary endpoint. Because really, the goal here is to demonstrate significant effect on slowing of progression and how that's done with mFARS and the subscale is based on the patients and the duration of the study. Operator: Our next question comes from Geoff Meacham with Citigroup. Jarwei Fang: This is Jarwei on for Geoff. Maybe going back to Sephience and thinking about OUS geographies. A lot of the early trends that we've been seeing in the U.S. are pretty encouraging with regard to capturing the loss to follow-up patients and some of these early start trends and also awareness on social media. So maybe thinking about Japan and Brazil and other geographies you're thinking about. Could these trends also be similar or is your internal expectation, that is just too early to tell? Matthew Klein: Thanks, Jarwei, for the questions. I would say that it's probably a little early to tell, but what we do know is true is that patients, regardless if they live in the U.S., if they live in Brazil, or they live in Germany, or they live in Spain, or they lived in Japan, UAE, they're networked. There's social media networks everywhere. There's patient organizations, there's aggregation of patients. And so there are -- these communication channels like we're seeing in the U.S. that drive awareness, that enable patients to share the stories of success in trying foods for the first time and such. We see that globally. What may differ, Jarwei, in country to country is a little bit of just the dynamics of patients attached to centers. For example, I already talked about the number of patients in Japan 1,000. It's much more concentrated, about 12 centers of excellence. There's a number of centers of excellence in Germany where things are concentrated. So the dynamics in the segments may differ a little, but I think what there is in common in some of these countries is a higher attachment to the centers of excellence and social media channels. And I think the dynamics in Brazil may be different yet. But as Eric pointed out, our teams have a lot of experience working in all of the different regions in states of Brazil, understanding the dynamics of patient organizations, the importance of local governments and advocacy groups, how do you establish access, what's necessary to leverage the digitalization process for early treatments while still trying to get access and reimbursement through CMED and CONITEC. So I think this is where having that experience in understanding the dynamics unique to certain geographies will allow us to have early success as we launch. Jarwei Fang: Maybe one follow-up is that you mentioned earlier that about 80% or maybe slightly over 80% of centers of excellences in the U.S. have prescribed Sephience. So maybe just thinking about the remaining 20% of the pie, what do you think they need to see in order for them to get on board Sephience, proven efficacy and excellent tolerability and safety profile? Matthew Klein: Yes, I'll let Eric talk about that. I mean, we're -- because this is a unique dynamic at this stage of launch to be an 80/20 instead of the 20/80, but Eric... Eric Pauwels: I mean to Matt's point, it's remarkable to have after 5 months, 80% of your centers that have written multiple prescriptions in the U.S. And we have seen the same dynamics in Germany in these centers of excellence. So that's very encouraging. It means that the efficacy -- clinical efficacy of the product in the real world experience is playing out. Of course, there's always going to be a few laggers. We have a number of key things that we're doing in the field. We have frequent touch points with all of the centers of excellence on either daily or weekly basis. And with those few laggers, we're doing a number of key medical education programs that peer to peer. We have newly published data that is now going to be in peer review, obviously, with the APHENITY, the long-term extension, AMPLIFY, the mechanism of action. Number of these things that we can bring forward. But I think one of the main points is patient demand, social media, and the push through that these inquiries will have on these centers to accelerate adoption. I think these patient testimonies from other centers that have utilized this will move those remaining few laggers. Operator: Our next question comes from Luke Herrmann with Baird. Luke Herrmann: Just another on vatiquinone. Are you able to share some additional color on your base case for the external control matching strategy in order to maximize the likelihood of a statistical hit. And I guess, what are the key features you need to align on with FDA at this point? Matthew Klein: Thanks for the question, Luke. Obviously, we have experience from the MOVE-FA study of having done this natural history match on key factors that we had aligned with FDA on as part of the statistical analysis plan and had 50% slowing over 3 years relative to natural history. So I think we've got a good sense as does FDA on those matching factors, and there are the things exactly that you'd expect, age, age of onset based on mFARS scores, things that get at making sure that you have similar baseline severity as well as similarities and things that drive progression. Again, we're fortunate to be in a situation where there's regulatory precedent for using these natural history matching with the FA natural history of registry. We've done it ourselves and FDA is familiar with it. So that really helps. So really, what comes down to the alignment is making certain that the FDA is comfortable with this matching approach, details of the model, statistical aspects of the model, how we're going to do the analysis and duration of study and subject numbers. So really those key points. So as we move down what is a relatively unprecedented path for a neurological disease having this opportunity to do it have an open-label natural history comparison to allow for us to file. We just want to make sure that everything is buttoned up and we're as aligned as much as possible prior to starting that. Operator: Our next question comes from Joon Lee with Truist. Unknown Analyst: Congrats on the strong quarter. This is [indiscernible] on for Joon, just a couple from us. So firstly, Palynziq has an upcoming PDUFA for adolescents with PKU coming up in the next week. Is that something that we should be paying attention to? And just quickly on the gross to net, the move towards the 15% to 25% range you previously mentioned, should we expect that this year? Matthew Klein: Thanks for the questions, [indiscernible]. So the first question is the potential label expansion of Palynziq to adolescents. Look, I think as we've talked about, one thing that's becoming clear to us is Sephience is reaching that point where it will become the first line of treatment. It will be the first line of care, given that it is oral, convenient, strong safety tolerability profile and demonstrated efficacy across the full spectrum of patients. And I think even if Palynziq is approved in younger patients, I think given its history of safety tolerability, challenges with administration, duration for lengthy time for titration to get to a dose that may be effective and safe. All of those things, I think, will keep it as sort of second line behind Sephience. As you can imagine, for adolescents, there would be a lot of benefits to being having an effective drug that's oral, strong safety and tolerability record versus one that may have more challenges in that regard. Your question on G to N, 15% to 25%, Pierre, do you want to follow up on that? Pierre Gravier: Yes, absolutely. I think, as I mentioned, we're on the lower end, and it will take multiple quarters to reach the top end. So it's going to be a slow and steady, and it will not be our expectation to hit the top end this year. Operator: Our next question comes from Joseph Schwartz with Leerink Partners. Unknown Analyst: It's [indiscernible] on for Joe. Just one question from us. At R&D Day, you highlighted your new splicing and inflammation programs. What are the first clinical proof-of-concept milestones that would provide validation and/or how you view the catalyst path for these programs? And how are you prioritizing capital allocation as you target cash flow breakeven for these? Matthew Klein: Thanks for the question. I think, first of all, in terms of splicing, we can confidently say that has been a well-validated platform. I think certainly, both, Evrysdi, the success of Evrysdi and the success of votoplam certainly substantiates the potential for splicing to deliver transformational and very valuable therapies. So I think as we move through in terms of specific program validation, as we move forward, we look -- as I mentioned in the prepared remarks, we look forward to bringing that, the MSH3 molecule to development candidate status this year and then as quickly as we can trying to get that into the clinic. So the next step really is making sure we have all the necessary preclinical work done in IND-enabling studies done to allow us to move that into the clinic. Similarly, on the inflammation and ferroptosis platform, there, we've got some clinical stage programs, as we talked about being able to move into Phase I within our NLRP3 inhibitor program, which we expect to do by mid-year. The next big stage gate there are your typical Phase I type things of being able to understand the safety and the pharmacology. We also have the potential to start the Phase II program for the DHODH inhibitor this year. And then the early stage programs I highlighted both the Parkinson's ferroptosis program as well the NRF2 activator program and both are nearing that DC stage. So we're still at that point where we're ticking the boxes to make sure we have all those gearing nonclinical toxicology and pharmacodynamic studies done to allow us to move those forward. So we look forward to hitting those milestones and being able to get these programs forward as quickly as possible. Pierre, do you want to talk a bit about capital allocation? Pierre Gravier: Yes. I will mention a few things. Number one, we demonstrated over the last few years that we're very disciplined from an OpEx management. You see revenue increase and strong Sephience launch and OpEx over the years. We've been very disciplined. We'll continue to be. That's important to us to reach cash flow breakeven and be cash flow positive after that. We are highly focused on the momentum of Sephience and expanding globally. That's important to us. You mentioned R&D Day and our R&D programs, which will continue to develop both on the splicing platform as well as ferroptosis and information. And finally, we're open to look at the opportunities, as I mentioned, and ways to accelerate top line growth. Operator: Our next question comes from Paul Choi with Goldman Sachs. Kyuwon Choi: Congrats on all the progress. And I also wanted to ask on the early-stage pipeline as well, Matt, which is just with regard to your [ NFRP ] program, as you mentioned. Is there a particular area of fibrosis, which, in your view, allows for the shortest clinical development time and time to market. And then for your NLRP3 program, I think you guys were still in the stage of indication selection. Can you maybe just comment on what your latest thoughts are on that program and just sort of where your target focus might be? Matthew Klein: Just to clarify your first question is, I mean NRF2 program, is that correct? Kyuwon Choi: Yes. Just sort of what area of fibrosis or fibrotic disease, I guess, provides you the sort of the easiest or shortest path to market? Matthew Klein: Yes. So I think the way we're thinking about it for both programs is 2 things, right? One is where can we see overlap between the target pathway, the mechanism and mechanism of drug and disease state. And then the second is how do we think about that in terms of efficiency and moving things forward? When you talked about the R&D day, how our NRF2 activator program is pretty unique in that it has a differentiated mechanism of action that has what we like to consider comprehensive NRF2 activation which modulates both the cellular stress response as well as inflammation pathways. So we're able to see effects and as we share data from both kidney studies, and I believe lung studies as well showing great activity and benchmarked to others. So I would say at this point, while we're still doing indication selection there, we should have a beat on that soon. But where we want to go is understand where there's been a clear evidence that by targeting NRF2 the way we can that we can deliver clinical effect. And obviously, we're going to be in the rare disease realm. And as usual, from a developability standpoint, we'll look for things that have allow us to have objective biomarkers or clinical effect that can not only facilitate the development program, but also get to that acceleration piece you talked about, get confidence early that we're having a meaningful effect that could either open up an accelerated approval portal or allow us to move forward faster in initiating a registrational study. On the NLRP3 front, as we shared at the R&D Day, PTC612 has demonstrated really strong potency due to its selectivity and we benchmarked it to a number of compounds as we shared that day with favorable potency. We talked a bit about that day and continue to believe that our initial targets will be lung inflammation of fibrosis, given the overlap between the NLRP3 pathways and lung fibrosis. So we are still honing on final indications, but I think our first goal will be at pulmonary fibrotic conditions. Operator: Thank you. I would now like to turn the call back over to Dr. Matthew Klein for any closing remarks. Matthew Klein: Thank you all very much for joining the call today. 2025 was a really successful year for PTC. We're excited about the Sephience launch, the R&D platform, our strong financial position, all of which really sets us up for great success in 2026 and beyond. Thank you all again, and have a great evening. Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.
Operator: Good day, and thank you for standing by. Welcome to the Telix Full Year 2025 Results and Investor Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kyahn Williamson, SVP of Investor Relations and Corporate Communications. Please go ahead. Kyahn Williamson: Thank you, and thank you to everybody for joining us on this call this morning, this evening, wherever you are in the world. We launched our annual report and full year results on the ASX about 30 minutes ago. We also have the slides on the screen via webcast for you to see today. I'm just going to take you through a brief introduction and some disclaimer statements before handing over. If you just move to the Slide 2. Very pleased to have on the call with us today, Chris Behrenbruch, our CEO and Managing Director; Darren Smith, our CFO; and Kevin Richardson, our CEO of the Precision Medicine business. I should also mention that we have Dr. David Cade, our Chief Medical Officer, on the line for the Q&A session. We'll be running through today our strategy, financial results, and update on our Precision Medicine and Therapeutics business. If you can move to the next slide, please. I am required just to give you an excerpt from our forward-looking statement disclaimer statement. So please note that on today's presentation includes forward-looking statements, including within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to, among other things, anticipated future events, financial performance, plans, strategies, and business developments. These forward-looking statements are based on current information, assumptions and expectations of future events that are subject to change and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our filings with the ASX and SEC, including on our half year annual report. You are cautioned not to rely on forward-looking statements, which are made only as today's date, and the company disclaims any obligation to update such statements. Please refer to the disclaimer slide in the presentation for further information. With that, I'm very pleased to hand over to Chris to kick off the call. Christian Behrenbruch: Thanks very much, Kyahn, and I hope that my audio is nice and clear, and I certainly appreciate the introduction. Before Darren Smith, our Chief Financial Officer, goes into the numbers, I thought a bit of strategic framing would be useful for investors to understand where the company is heading and, of course, our key accomplishments in 2025. Next slide, please, Slide 5. Over the last 12 months, we started to put the depth and execution around what has been a multiyear corporate development strategy. It's useful to think of Telix as a platform with these 5 major segments, as illustrated on this slide. Moving from left to right, first up of key focus is our therapeutics pipeline, which has grown significantly and now features 3 programs in pivotal studies, as well as several high potential earlier-stage programs in rare diseases. I'm going to come back a little bit towards the end of the presentation on this topic. Because of the explosive growth of activity in the radiopharma landscape, we have also pivoted to some extent to an internal innovation model alongside our business development activities. Clearly, when big pharma is willing to pay $1 billion for an asset that has been in a few mice, there's clearly an incentive to do in-house innovation. And so we now have a significant set of technical and clinical capabilities around fundamental R&D and discovery technologies. In the middle of this vision and the engine room of the commercial business today is what we call the Precision Medicine business. This is far more than just an ATM machine that throws off a couple of hundred million of cash each year. It's a strategic validation of the targets we develop our therapeutic drugs for. It is more robust and streamlined clinical trials because we can see where our drug goes, and it's an early opportunity to build deep relationships with the physician stakeholders that underpin the future of the business. Fourth, one can obviously look at sales and a commercial team simply as SG&A. We view it as building a specialty sales organization that very few companies have. Selling nuclear medicine is not selling a vial or a blister pack. It involves selling complex clinical workflows. And as our product portfolio expands, this is a strategic differentiator because it enables us to build depth with key referral physicians and drive preference towards our product. It's also fair to note that in the major markets, this is a significant financial investment that most of our competition, both present and emerging, cannot afford to undertake. Lastly, you can develop all the great ideas you want and convince people to buy them, but if you can't deliver them reliably every single day, you aren't going to succeed. In most industries, vertical integration is probably wasteful and doesn't offer much of a moat. In radiopharmaceuticals, where you are dealing with products that have shelf life of hours to days at most, there's a huge amount of market share ownership dynamic, intellectual property, and customer differentiation in how you deliver. This is why we have invested over $0.5 billion in the last years to better control our destiny and pave the way for high-value therapeutic products. Next slide, please. To do all these things, you need cash, and we have a very high-growth business that made a step change this year, both through organic growth of our Precision Medicine business and through acquisition. We expect all of our revenue streams to continue to diversify and grow in 2026 and beyond, and Darren will cover this off on guidance later in this presentation. Kevin is also going to frame this in terms of the core growth of the Precision Medicine portfolio, which is extremely exciting. The key point is we have a hyper-growth business, and it generates the cash we need to aggressively expand, further diversify our revenue and dominate the field. Slide 7, please. This slide puts the whole strategy into perspective. As I've already said, to deliver on our bold vision for being the dominant player in radiopharma, we need a cash-generative business. We have one, and we grew it significantly this year with revenues exceeding USD 800 million or over AUD 1.2 billion for anyone that prefers their green back surge with shrimp on the barbie. Our margins have remained extremely stable despite competition, and this excellent commercial performance enabled us to invest $0.5 billion into growing our product pipeline, funding the best commercial team in the industry, and building our infrastructure and supply chain. Think about that. $0.5 billion to grow the future value of the company from earnings without shareholder dilution. Telix is a very unique and valuable story. Moving on to Slide 8, please. Before handing over to Darren, I thought it would be useful to give you a condensed view of our priorities for 2026. I get a lot of feedback that Telix is complicated, but it really isn't. This year is about doing three things and hopefully doing them better than we did last year. One, we are going to continue to grow our core business around our approved products. We actually did get a new and innovative product approved by the FDA last year in Gozellix that also leverages the ARTMS isotope production acquisition. The launch of Gozellix has been successful and is not only growing our ASP and market share, it will pave the way for many future products through both the RLS network and partner distributors with Zircaix being the next prime example of this technology platform. Two, we have 2 new products to launch, Pixclara, which is known as Pixlumi in Europe. This is for glioblastoma and Zircaix for renal cancer. We understand the disappointment that these did not get approved last year, but this is the price of being at the forefront of innovation in new technology areas. While people are well aware, it has been a tumultuous period within the FDA itself, we also made certain we took valuable learnings from the experience. We have made extensive changes to the management team. We boosted our regulatory affairs capabilities, and these programs are in good shape for resubmission and approval this year. They are highly anticipated products and will become significant revenue streams, and we have not taken our foot off the gas pedal in terms of market readiness for these products. We are preparing to launch, and I want to make that very clear. Last of all, we have several very high-value clinical programs. This is not an exhaustive list. In fact, we have over 30 sponsored and collaborative studies running from early stage to pivotal trials. But these are the ones that are going to generate the greatest commercial and financial inflection points this year and are the priority in terms of our resources and R&D investment. I note that 4 out of 5 of these studies are pivotal or Phase III studies. We have imminent data point coming out on ProstACT Global, which we will take to the FDA to gain clearance to commence Part 2 in the United States. I remind you that the study has already progressed to randomizing patients ex-U.S. for Part 2 of the study and talk a little bit about this later in the presentation. Our BiPASS biopsy study will complete enrollment this year, and we expect to generate significantly enhanced revenue in 2027 as a consequence of this Phase III study. Our current late-stage clinical studies pave the way to our first therapeutic commercial inflection point likely in 2028. So these are not distant thoughts. They are all near-term catalysts. And I will come back at the end of presentation to some of the broader sets of upcoming catalysts. Now Darren, over to you for the numbers. Darren Smith: Thank you very much, Chris. We have today reported a 56% growth in revenue to $804 million. This is in line with our revenue guidance. Notably it's our third consecutive year of double-digit revenue growth. Revenue from Precision Medicine business year-over-year. Can I just ask, I think that the... [Technical Difficulty] Operator: Please check your mute button. Darren Smith: This year -- sorry, can people hear me now? Operator: Yes, we can hear you. Darren Smith: So this is in line with our uplifted full year guidance. And notably, it's our third consecutive year of delivering double-digit growth -- revenue growth. Revenue from our Precision Medicine business increased 22% year-over-year with EBITDA improving 25% to $216 million, driven by strong demand of Illuccix and the launch of Gozellix. The Precision Medicine commercial performance permitted Telix to self-fund and derisk our investment into our R&D pipeline and commercial infrastructure to drive future growth. Further, 2025 was a year of significant investment, yet we maintained a solid cash balance of $142 million. We achieved this while exercising disciplined cost management. Next slide, please, which is Slide 11. Thank you. We've added this slide for our non-account investors. As at a glance, this slide presents the strength of our business model. The left side of the chart shows our revenue sources and their materiality. The middle of the graph highlights our gross margin in the green and that 94% of the GM is generated from our Precision Medicine business. That is approximately $400 million. As you can see, about half of the gross margin, the red flows om right are invested into our commercial sales and marketing capability, our global supply chain and our corporate functions. But more importantly, flowing right at the top half of the gross margin is approximately $200 million. That's 25% of revenue. And with this, we decide to either invest it in our development pipeline to create future value or recognize it as operating profit. So as business models go, a business that throws off 25% of revenue as operating profit to reinvest in value creation or the bank is pretty damn attractive. Now moving to our traditional P&L. I've spoken to most of the financial highlights on the previous slides, but will take some time to talk to further highlights. The group's gross margin of 53% remained consistent with the first half performance. We invested $157 million into product development, in line with 2025 guidance and mainly focused on our late-stage pipeline. General and administration expenses decreased to 12% of revenue from 17% last year, reflecting the efficiencies of scale achieved as the company continues its strong growth trajectory. As a result, we posted an adjusted EBITDA of $39.5 million, in line with market consensus. Now moving to our next slide. Telix Precision Medicine business is clearly our cash machine. Its financial metrics demonstrate its excellent performance. Precision Medicine delivered an additional $113 million in revenue, representing 22% year-on-year growth alongside a 28% increase in operating profit and a 25% increase in its EBITDA. This demonstrates the high-growth business with capacity to generate significant funds to invest in long-term value creation. Sales and marketing investments supported the launch of Gozellix, the geographic expansion of Illuccix and the launch readiness activities of Pixclara and Zircaix. As a side comment, if this was a stand-alone business growing at 20% plus per annum on an extrinsic value basis, it would be worth up to 8x revenue. This is a huge value creation for shareholders. Now moving to our next slide, in Telix Manufacturing Solutions or TMS. We've provided this level of detail on TMS in our half year results for two reasons. Firstly, to give investors and analysts clear visibility into the financial impact of the RLS acquisition; and secondly, to provide transparency into the cost base of the remaining TMS business, helping with financial modeling. As you can see, RLS delivered positive EBITDA for the first 11 months post-acquisition. At the remaining TMS facility, we increased investment compared to last year to permit us to advance operational activities facilitating clinical and commercial supply. As we now close out the full year of having RLS in the business, we will revert back to reporting TMS as one segment for commercial and competitive reasons. Now moving on to cash flow. As you can see in this cash bridge, Telix continued to generate strong operational cash flows, which we then invest into our pipeline. In 2025, Telix generated $206 million from operations, enabling the investment into progressing the R&D pipeline. Excluding our last contingent consideration earn-out payment of $52 million for Illuccix, we produced a net positive operating cash flow of $35 million. I reiterate that our investment into R&D is discretionary and can be flexed depending on our commercial performance, permitting us to effectively manage our cash position. Additionally, Telix utilized cash on hand to support targeted strategic investments such as RLS, ImaginAb, and in our FAP asset. As a result, we ended the year with a prudent cash position of $142 million. Next slide, please. As we prepare for our next phase of growth, we continue shifting allocation of R&D investment into our therapeutic pipeline. In 2026, R&D investment is planned to be in the range of $200 million to $240 million, with the largest allocation directed to the therapeutic development. This highlights our focus to transition to a high-value therapeutic business. I'd like to take the opportunity to reiterate our investment strategy. Over the next 2 to 3 years, we expect to grow revenues by advancing assets from clinical development to commercialization, expanding indications and geographic reach. We will invest the funds from this commercial growth into our portfolio and ensure that we have the capabilities, infrastructure, and readiness to deliver on our therapeutic programs. Our focus will remain on reinvesting revenues back into the business over the next couple of years rather than optimizing near-term earnings per share. We are committed to building long-term value. We believe prioritizing earnings too early can impede the strategic investments required to fully unlock the potential of our pipeline. Next slide, please. Telix has a disciplined capital allocation approach that is aligned to our corporate strategy, and it has matured a great deal over the last 12 months. We have previously spoken about our 4 areas of focus, and they are investing into our R&D, optimizing our commercial performance, strategic growth opportunities through M&A, and supply chain resilience and production capacity. We believe these 4 areas of focus will underpin our growth long term. We have continued to deliver on our strategy in a disciplined way, ensuring that we have a prudent cash buffer on the balance sheet. Next slide, please. Looking forward, we see strong momentum heading into 2026 with another year of roughly 20-plus percent revenue growth anticipated. Our full year 2026 revenue guidance is set at $950 million to $970 million, and this is based on current approved products in approved jurisdictions. This range does not include revenue contributions from pending product approvals, which will be incremental. This growth implies up to 25% growth in our Precision Medicine business and a full year of RLS revenue. Our corresponding R&D investment will be in the range of $200 million to $240 million and will be dependent on the achievement of certain clinical outcomes and development milestones. In conclusion, we delivered another year of double-digit revenue growth, made high-value strategic investments across the business, and maintained a prudent cash position. Looking ahead, 2026 is set to be an inflection year with numerous important milestones. Our revenue guidance reflects the confidence we have in the business, and we remain committed to disciplined financial management throughout 2026. I'll now hand you over to Kevin Richardson, Precision Medicine CEO. Thank you. Kevin Richardson: Thank you, Darren. My first slide, please. Last year, our Precision Medicine portfolio delivered $622 million in revenue, up 22% year-over-year. Importantly, we delivered sequential growth every single quarter. That includes Q3, our most challenging quarter, which was the first full quarter following the expiration of Illuccix transitional pass-through status and the transition to MUC, MUC or mean unit cost reimbursement for a subset of Medicare patients. Q3 allowed us to see the full impact of that change on the business. Even in that environment and despite ongoing competitive pressure, we still delivered 3% quarter-over-quarter dose growth and 1% sales growth. That performance speaks to our disciplined approach to business fundamentals and the strength of our customer-facing team. We continue to gain share based on clinical differentiation and operational reliability, our PSMA agents demonstrates fewer indeterminate bone lesions and higher inter-reader agreement compared to F-18 assets, driving confidence in clinical decision-making. We pair that clinical value with highly specialized commercial organization that engages customers every day and consistently differentiates Telix in the market. Our reputation as an innovator also positioned us for a successful launch of Gozellix. Gozellix was FDA approved in April of 2025, and transitional pass-through status became effective in October, enabling a transitional pass-through supported full launch in Q4 of 2025. We are very pleased with the early uptake and our 2026 full year guidance underscores our strong conviction in the growth outlook for our Precision Medicine portfolio. Today, we are the only company with 2 PSMA agents on the market. This dual product strategy is a competitive advantage, offering different types of customers meaningful choice across economics and scheduling flexibility while reinforcing our commitment to meeting diverse clinical and operational needs. In short, resilient growth, clinical differentiation, disciplined execution and a platform built for sustained growth. Next slide, please. What does it take to win in a maturing PSMA market? Winning in a mature PSMA market is no longer about being first. It's about executing at scale. Clinical credibility is nonnegotiable. Products must deliver consistently high image quality, strong inter-reader agreement and reliable detection at low PSA levels across all patient types. Incremental claims aren't enough. Confidence in clinical decision-making is what sustains adoption. Workflow integration matters. In a high-volume market, solutions must fit seamlessly into established clinical pathways, enable same-day imaging and support high patient throughput without disrupting nuclear medicine operations. Reimbursement sophistication is a competitive advantage. Success requires multiple product strategies that give customers economic flexibility while navigating complex and evolving reimbursement frameworks over extended period of times. Commercial infrastructure is a must. This is a contract-driven market that demands experienced field teams, market access expertise, compliance rigor, and long-standing customer relationships. These capabilities take a large investment in years, not quarters to build. Supply chain excellence separates winners from participants. Reliable, flexible dose production and delivery at scale, supported by high service nuclear pharmacy last mile experts is critical. There is no proven shortcut to mass market large volume coverage. Sustained investment fuels durability, indication expansion, life cycle management and camera technology advances all require ongoing clinical and operational investment to maintain leadership. In short, leadership in PSMA is earned through clinical trust, operational reliability, commercial scale and disciplined investment, not novelty. Next slide, please. We continue to execute our strategic plan to grow the Precision Medicine business by expanding our product offering, expand our indications on those products and expand the geographies where we market those products. Global expansion is a priority for Precision Medicine here at Telix. Illuccix is now available in 17 countries with reimbursement secured, and we hold marketing authorizations in more than 24 markets. In 2025, we focus on country-by-country access. In '26, we pivot to driving uptake, particularly across key markets, including the U.K., France, Germany, Italy, and Spain. In China, we delivered strong Phase III results with 94.8% positive predictive value, including patients with very low PSA levels. We submitted the NDA to the regulators with our partner, Grand Pharma. And with prostate cancer incidence rising and PET/CT infrastructure expanding rapidly, China represents a significant growth opportunity. While in Japan, our 105-patient Phase III study is progressing well with the first patient dose. This positions us well in the world's second largest pharmaceutical market where prostate cancer remains a leading cause of mortality. New products and new indications enhance our ability to take share and grow the market and Gozellix is off to a strong start, and we are focused on accelerating commercial momentum in 2026, and you can see that is reflected in our 2026 guidance. BiPASS is a Phase III study that represents the next wave of innovation, combining PSMA imaging, Illuccix or Gozellix with MRI to improve diagnostic accuracy and potentially reduce or eliminate invasive biopsies. This is about moving earlier in the care pathway, reducing patient risk, lowering system costs, and expanding the total addressable market to include frontline biopsy candidates. We believe moving to the front line where patients are diagnosed will give us a competitive advantage, both as the lead PSMA in diagnosis, but also in sequential scans that happen later on in the patient journey as physicians want to see consistency scan to scan. For Zircaix, we've completed 2 Type A meetings with the FDA and believe we have full alignment on key resubmission requirements. We are now focused on completing the agreed deliverables and documentation required for the resubmission. With breakthrough therapy designation, supportive ZIRCON-X data and the inclusion in major international guidelines, this remains a top priority for approval and launch this year. This is a really exciting and highly anticipated product. Moving on to our neuro platform. We are pursuing complementary submissions in both the EU and the U.S. TLX101-Tx was filed with the European regulators recently, and the U.S. submission will follow closely. As a reminder, the FDA has granted both orphan drug and fast track designation for Pixclara. Our commercial, medical, and supply chain teams are launch ready. Our expanded access programs serve patients and our customers very well, and they anticipate commercial use of Pixclara. In short, we built a global commercial platform, delivered successful launches, taken share, penetrated the available market and advanced multiple late-stage assets in high unmet needs markets. We are entering our next phase of growth with momentum and discipline. Next slide, please. So what does this strategy mean in terms of financial impact? Our current baseline business with some further life cycle management, which we've talked about, should be able to sustain a 15% to 20% annualized growth. This partially reflects the growth of the field overall, as well as our ability to continue to capture market share as the size of the market expands. The recent addition of Gozellix certainly derisked this. With indication expansion in prostate cancer alone, particularly a major opportunity in the BiPASS study, this growth over the 5 years can be closer to a 30% CAGR. And then when you add in Pixclara and Zircaix, this growth rate defensively looks more like 40% compounded annual growth, especially with metastatic indication expansions that further drive procedural volume. In short, our current product strategy, which is fully baked from a clinical perspective, just needs to clear a few more regulatory hurdles as it represents future upside for the company. It is a direct consequence of the market presence we are building, the depth of our pipeline and the quality of service we are able to deliver to the patients. This is really an exciting business with a bright future. The growth in Precision Medicine gives us the ability to finance the growth potential of our Therapeutics business. On that note, I'll hand it back over to Chris, to give you a bit of perspective on that. Christian Behrenbruch: Thanks very much, Kevin. Great update, and congratulations on all the success that your team had this year. It was a really remarkable year of accomplishment. So moving on to Slide 25, please. In a way, this slide is a simplified version of my opening slide, a highly profitable cash-generative business that would garner, as Darren said, a very healthy revenue multiple. It was a stand-alone business, but it's our engine room. And the future growth trajectory of the business will come from how that cash is invested. Kevin has already shown you very clearly, I think, how the Precision Medicine business alone can grow expansively over the next 5 years based on clinical, regulatory, and commercial inflection points that we expect to achieve this year. So again, I just want to reemphasize the point that the growth trajectory that Kevin has talked about comes from events that will be completed this year. I think it's also important to reinforce our commitment to manufacturing and supply chain. But in the context of our Therapeutics business, it's more than just reliable and on-time dose delivery. It's about R&D cost and efficiency and perhaps most importantly, intellectual property capture. We've learned over the last decade that when we use contract manufacturing organizations, do product scale up, that we simply educate the ecosystem in a way that potentially empowers competition, and we no longer wish to do that. So especially, as our therapeutics go into late-stage trials, this has become an important strategic objective of the company. To be clear, we still use CMOs, but where there's key IP around platforms, targeting agents and certain key isotopes, we are increasingly tackling this in-house or with selected partners. Moving on to the next slide, please. And this slide shows the reason why. As I've said, Kevin has already talked about what share of the Precision Medicine side of the business we think we can tackle over the next 5 years or so. And on a TAM basis, it's actually pretty conservative. But the therapeutics opportunity is about 3x or 4x bigger for the targets and indications that we are already pursuing. This doesn't even capture the potential for indication expansion into new disease areas that some of the pan-cancer targets we are developing, like carbonic anhydrase IX and FAP can potentially expand into. So it's a really bright future for the theranostics strategy. Moving on to Slide 27, please. Over the last 5 years, we've built a very strong pipeline with some key disease focus areas, and you're going to increasingly hear us talk about these disease areas as multiproduct concentration areas, frankly, much as we have done with Gozellix and Illuccix on the Precision Medicine side of the business. Indeed, to tackle some of these major unmet clinical needs, it's going to, in some cases, require a multi-asset approach at different stages in the clinical development or in the clinical patient journey. And so -- and also well-considered combination therapies with standard of care medical oncology. This is evident already, for example, in the design of the ProstACT GLOBAL and IPAX-BrIGHT studies. There are three particular attributes of our pipeline that I'd like to specifically comment on. Firstly, by taking a theranostic approach, we built a very deep relationship with the referral and prescribing physician in each of these disease areas. This is a competitive advantage, and this relationship depth has already started with our existing commercial product portfolio and will only intensify over the next 12 months. Investors often view the Precision Medicine and Therapeutics business areas as adjacent, but they are clearly not. Secondly, while we have some very high potential early-stage programs, and this has not exhausted this list because we have a pretty decent preclinical portfolio coming in behind, we have 3 late-stage programs in prostate, renal, and glioblastoma that will generate significant data over the next 12 months. Based on the current valuation of the company, these programs are essentially a free option, but we think that the data and clinical basis of these programs are very compelling. Most importantly, while 2026 and 2027 financials will reflect the commercial expansion of the Precision Medicine business, 2028 is our commercial launch year for our Therapeutics business. So it's not far away. This is why we have so much execution focus on the [Technical Difficulty] targets, learning about disease extend, exploring new patient populations and ultimately increasing the market size and market share. For the therapeutics, when they become available, the Precision Medicine business will pave the way. And so notwithstanding a few challenging but also educational regulatory speed bumps we've had, our commercial imaging gives us the skills and confidence that we can deliver on the therapeutic programs in the future. We've learned a lot this year, especially last year. Can you hear me, okay? All right. Moving on to the next slide, please. As I noted earlier, we have many different clinical studies running, some company-sponsored, some in collaboration with key opinion leaders around the globe. But the 4 major trials to watch this year are outlined here. I'm not going to go blow by blow on these because this is an earnings call, but I think it's important for shareholders to understand where the research priorities are and what the development goals and catalysts are. We are collecting a ton of patient data this year, and it's very exciting to have 3 programs in pivotal studies. This is important for patients and important for shareholders, and it's taken a lot of work and investment to get here. Moving on to Slide 29. Of course, front of mind for patients and shareholders alike is the ProstACT GLOBAL study. The study is now recruiting into Part 2 randomized part of the study ex-U.S. and is ramping up very nicely. Unlike Part 1, which is a safety dosimetry run-in study that the FDA required in order for us to include U.S. patients in the randomized part of the study, Part 2 is very streamlined and straightforward. Part 2 commenced recruitment last year following an independent data safety review that determined that Part 1 data met prespecified safety criteria to progress. We will be shortly releasing the details of the Part 1 study concurrent with our submission to the FDA to request approval to add U.S. patients into the study. We are looking forward to getting these results out into the market and to show the great progress we are making, particularly given the unique combination therapy design of the ProstACT GLOBAL study. To remind you, the data we will be putting out from Part 1 will be safety data on the 3 standard of care combinations in the global study, as well as comparative dosimetry data, which will be very interesting to see, particularly for the 2 different androgen deprivation therapies used in the study. So this is coming soon. Moving on to Slide 30. Before I wrap up with a summary of the catalysts, I thought I would share a montage of patient case studies to really tie together the company's strategy and to illustrate how integrated the Precision Medicine, Therapeutics, and Manufacturing businesses are. In short, why we are here. This slide illustrates 4 patients in 4 different cancers, all of which are advanced, extremely difficult-to-treat cases. Every day across the entire portfolio, we see examples of where our development and commercial pipeline changes lives. Sometimes it's a better understanding of the extent of disease. Sometimes it's a profound disease modification, such as the metastatic prostate and breast cancer examples on this slide. And at times, it's the glioblastoma or the kidney cancer patient that has stabilized disease or enough reduction in pain to be able to return to work. These are the real outcomes from our research, and they deliver profound and life-changing outcomes for patients. This is what motivates us and why we believe that investing our hard-earned cash into this future is so important. The technology works and will get better as we learn more and get more clinical experience. I'm also obliged to point out that for the most part, what you're seeing here are images created with the companion diagnostic imaging agents that we are also developing and highlights that this -- that not only is imaging technology critical for diagnosing and staging patients, but will play a fundamental role in predicting and measuring disease control as well. Moving to the last slide. To wrap up, this slide summarizes the year ahead. It is a big year with many inflection points across the entire business. I will not go line by line, but we have a lot to talk about in 2026, with the next 3 major catalysts being resubmission of Pixclara and of course, Zircaix and the release of the Part 1 global data. We are looking forward to delivering these important milestones to patients and shareholders as the year progresses. With that, I will pause and hand it over for questions. Operator: [Operator Instructions] Our first question comes from Laura Sutcliffe with Citi. Laura Sutcliffe: At the risk of potentially making myself a bit unpopular, I think we'd like to understand a bit more about when we might see some data for 591, the safety data. And perhaps given that you said you will disclose at the same time that you go to the FDA, whether the next steps are things that you need to do at Telix or whether you're waiting for the FDA to do something on their end to be able to get to that point? Christian Behrenbruch: Laura, thanks for your question. It's not a bad question or an unpopular question at all. So we have had an independent data safety review board that has under the clinical charter of the study has reviewed the data and progressed to randomization ex-U.S. However, in order for us to send the information to the FDA and disclose the information publicly, we need just to complete the clinical case report forms and formally close out and quality control and validate the data because that's obviously what the FDA wants to see. As soon as we have that data -- and I haven't seen it, I'm not privy to it. But as soon as it's available, we will simultaneously disclose it and submit it to the FDA. So we're not waiting on anything from the FDA. It's all on the company side, and you will not have long to wait. Operator: Our next question comes from Tara Bancroft with TD Cowen. Nicholas Lorusso: This is Nick on for Tara. Congrats on the progress and the strong guidance for 2026. We were hoping that you can dive in a little more on what you've seen in the early innings of the 2-product strategy for Illuccix and Gozellix and how you anticipate that will evolve this year to reach the 25% growth in the precision medicine revenue? Christian Behrenbruch: Yes. Thanks very much for the question. Kevin, do you want to pick this one up for your wheelhouse? Kevin Richardson: Sure. Yes. Thank you for the question. So the 2-product strategy is -- enables us to really manage the economic needs of HOPPS accounts and the way that they perceive and their preference for a reimbursed product over really a non-reimbursed product. As you know, MUC or Main Unit Cost has really kind of changed the environment and the reimbursement environment there as well as the way that the pricing happens in the HOPPS accounts. So being able to have a 2-product company enables us to manage that particular customer type and the self-standing -- or we call them IDTF group -- in a different way as we manage the preference they have for a reimbursement price or one that might be a little more price sensitive. So and then, of course, we have a longer view of the precision medicine business and PSMA specifically, as we think through what over time can happen and what will happen with CMS as they continue to evolve and change reimbursement. So that enables us to kind of manage the ASP, if you will, as the CMS may or look more towards the ASP reimbursement model. So it gives us options in the future without locking down a singular product on that. Operator: Our next question comes from Shane Storey with Canaccord Genuity. Shane Storey: Kevin, I'm going to stick with you, if that's okay. Question on Pixclara. Just maybe some descriptive piece, I guess, around the customer channel there. It's quite different from your PSMA urology presence. Is that potentially a first work example for how the Varian relationship might evolve? Just some thoughts on that, please. Christian Behrenbruch: Kevin, are you there? Kevin Richardson: Yes. So I'll take that first then, Chris. So Varian is -- we're really excited about the possibilities in that, a lot focused, of course, on PSMA and Illuccix, Gozellix. And so as we think about that from a commercial perspective, we have a -- what we call a Ninja team. As you know, there's not as many sites as there are that do PSMA prostate scanning as there are that are going to do neuro scanning. So we have a smaller team that's focused on the referral, the neurologist. And the idea behind that is we already have the relationship at the NucMed level. So we're able to drive those patients into the scanner, if you will. And then we have a team that already has the relationships at the other end of that where they're reading it. So the idea is it's a referral and then into the existing relationship we have at the nuclear medicine side. And of course, if that is not an Illuccix or Gozellix site, it gives us good access into those sites, and it's a real competitive advantage to be able to offer these more orphan drug type technologies because of that. Does that answer your question, Shane? Okay. Chris, anything to add? Christian Behrenbruch: All right. No, that's good. Operator: Our next question comes from David Stanton with Jefferies. David Stanton: I might be following a dead horse here, but I just want to make it clear and help you to make it clear. You'll be reinvesting earnings to get close to 0 NPAT for F '26, F '27 and F '28. Is that what the market should be thinking going forward, please? I ask because it's a question I get asked the most. Christian Behrenbruch: Yes, that's fine. No horse is flogged, David. Happy you asked the question. So we're not giving guidance beyond 2026, but it's a reasonable expectation that in 2026 and 2027 that we will be investing -- other than for risk management and for appropriate balance sheet management purposes, we'll be investing the majority of our earnings back into the company, okay? So that's in a number of different areas. That's in R&D. That's also in growing and developing our commercial team. And of course, we continue to also invest in infrastructure and capital works to support the business. So it's not all just R&D, but a profit objective for this year and next year is not the name of the game. Operator: Our next question comes from David... Christian Behrenbruch: Do you have a further comment, David, that you'd like to ask? All right. Well, we'll move on. This is a very challenging conferencing service, and I apologize to those that are participating. David Bailey: It's a follow-on from Dr. Stanton's question. Just from Darren, there was a clear comment there that I think that the investment in growth will consider the commercial performance. I think that was interesting from our perspective. Just as we look at the sales guidance for '26 and the R&D guidance for '26, should we think that if the commercial performance is at the upper and lower end of those ranges, the R&D will follow? As an extension of that, within the R&D spend, is the earlier stage clinical trials, are they the ones that would potentially be put on hold for a little bit to the extent that the commercial performance doesn't meet expectations? Christian Behrenbruch: I can start, Darren, and then maybe if you want to add anything. I mean -- so yes, we've focused -- we've chosen in this presentation to highlight the clinical studies that are the real priorities for the company. So that's the 5 studies, including the BiPASS study. We are obviously going to be investing in other clinical studies this year. And to the extent that we need to make adjustments -- it will be outside of that sort of ring-fenced 5 studies, the 4 therapeutic studies and the BiPASS study. We clearly expect that 2026 is going to be a strong year. We don't expect to have any difficulties in financing our R&D pipeline. But as you have noted, and as Darren, I think, made it very clear, generally, we take the view that our R&D investment is discretionary, and we can make adjustments as required. Darren, do you want to add anything? Okay. I'll take that as a no. Operator: Our next question comes from Craig Wong-Pan with RBC. Craig Wong-Pan: Just a question on the 25% growth in Precision Medicine. I was wondering how much growth was coming from markets outside of the U.S. Christian Behrenbruch: Sure. I'll answer that one and then maybe, Darren, if you want to chime in on anything that I've missed. Right now, because we only achieved our European reimbursements towards the back end of last year, it's a very small proportion of the revenue is currently ex-U.S. The majority of it is -- 95% of it is U.S.-based. We obviously expect that mix to change over the course of this year and also as we add in other markets, such as Japan, which has a high-value PET -- advanced PET procedure code that's quite internationally competitive. But for the moment, for the most part, the majority of our revenue is U.S.-based. Operator: Our next question is coming from Andy Hsieh with William Blair. Tsan-Yu Hsieh: Chris, I want to ask you about the recent collaboration with Atley and Stanford, focusing on astatine-211. So in your pipeline, you have 3 alpha emitters: Actinium-225, you have lead generator that's in progress, and then now astatine having a California supply chain. So I'm curious about your view on this isotope, another short half-life. Just wondering about how it fits into your product portfolio. Christian Behrenbruch: Yes. It's a bit of sort of outside of the major sort of activity area. But essentially, we do see value in alpha emitters. The majority of our late-stage programs, as you know, are beta-emitting isotopes. We think that they're going to be a workhorse for the foreseeable future, but we can see ALPHIX coming over the horizon. As you know, most of our clinical stage programs are with actinium. It's probably from a supply chain perspective, the lowest hanging fruit. We have one program, TLX102, which is with astatine that's in early clinical translation. We think that for applications where a targeting agent needs to cross the blood-brain barrier that radiohalogens are a better perhaps a more practical pathway than a radio metal with a chelator. So we are exploring astatine mostly in the CNS setting. Then we do, as you know, have a lead generator that we've developed. It's a very novel and very compelling generator design that we think can be rolled out for large-scale lead production. We currently today do not have any clinical programs using Lead-212, but we have a number of preclinical programs that we expect to take into patients by the end of this year that are not currently disclosed, and they have the potential to use Lead-212. We are exploring several different isotopes. But I think as a company, we've elected to put a proportion -- not a large proportion, but a modest proportion of our R&D expenditure into understanding the future landscape of alpha because we think it has some potential. I hope that answers your question. Operator: Our next question comes from David Dai with UBS. Xiaochuan Dai: Just on the gross margin for the business, it seems like it's remaining stable at 53%. But then the RLS business, the gross margin has been quite poor. So just thinking about the gross margin for RLS business moving forward, what are some of the key drivers of gross margin expansion for the RLS business that you can provide? Christian Behrenbruch: Well, I'll just make a comment, and then I'll invite Darren to chime in. So the RLS business -- so just to be clear, when we report the RLS segment, we report the RLS segment purely in terms of third-party products. So these are not Telix products. These are, for the most part, fairly generic nuclear medicine products. And RLS' operating cost is largely covered by delivering those third-party products. So a useful way to think about it is as a subsidized -- third-party subsidized manufacturing infrastructure. When we report the products that go through the RLS network that are Telix products, they are captured in the segmental reporting for precision medicine. So I just really want to make that very clear. So when you say the gross margins for RLS are not very good, it's got nothing to do with Telix's product portfolio. RLS margins -- because these are generic sort of fairly commoditized nuclear medicine products, they have a much, much lower margin. We provided an average margin last year, which I think frees a lot of people out because all of a sudden, we went from mid-60s margins down to mid-50s margins or low 50s margins. That was an average effect across all of the products in the group, including the RLS products. Does that make sense? Xiaochuan Dai: Yes, that makes sense. Yes. Christian Behrenbruch: So yes, so don't be sidetracked by RLS. The most important thing is that when we put our products through RLS, we -- that gross margin number, which we report faithfully for the Precision Medicine business as sort of mid-60%. That's our -- that above-the-line cost is our distributor margin, which clearly is different when we run a product through our own pharmacy network. Now it's critically important for us to maintain key distribution partnerships in key markets. So we obviously, do pay that above-the-line cost. But when we produce a product that goes through our nuclear pharmacy network, the gross margin is rather different. So you should expect to see, as we have a larger share of our product volume going through our in-house pharmacy network that, that gross margin number has the potential to improve and trend towards 70%. Operator: Our next question comes from Andrew Paine with CLSA. Andrew Paine: Maybe one for Kevin, but you mentioned winning in the PSMA is about executing at scale, and we've seen that in the growth and the challenges you've overcome in that market so far. You spent a bit of time talking about this, but how clear is it that moat -- how clear is that moat there for you given the potential competition on the horizon? And also, can you just dig into the changes in camera technology and how you see that as supportive to the sensitivity of PSMA imaging, which may not be fully appreciated? Christian Behrenbruch: Well, I think Kevin has done a great job of running through what the competitive barriers to entry, and there are multiple. I mean it's not just product, it's also clinical, it's also manufacturing and supply chain. So I'm not sure what competitor you're talking about that's coming immediately on the horizon. But nonetheless, we see those as, I mean, pretty well enumerated sort of barriers to entry for competition. On the topic of camera technology, generally speaking, we've seen a step change in sensitivity on PET cameras over the last 3 to 5 years because of the demand for PET imaging, not just in prostate cancer, but across a whole lot of indications, including neuro-oncology, neurodegeneration, cardiovascular disease. We're seeing a lot of camera installation going in and the next generation of scanners are in order of magnitude more sensitive. And so that just means that we have to keep abreast of it. We need to make sure that we're running clinical trials and clinical studies that demonstrate the improved utility. We are clearly detecting disease early and earlier. I mean, we have our most recent studies that were done in China, for example, with absolutely state-of-the-art scanners because they're brand-new scanners. We're seeing PSA levels down to fractions of a nanogram per ml. And so the camera technology is part of the complementary story to Tracer development that should not be forgotten about. I think I'll pause there in terms of that particular topic. There isn't too much more else to say. Is there another question? Operator: Our next question comes from Melissa Benson with Barrenjoey. Melissa Benson: So Kevin mentioned you had a full alignment on the agreed deliverables with the FDA for the... Christian Behrenbruch: Melissa, I'm sorry, I can't hear you. Now I can hear you. Go on. Melissa Benson: I'm sorry. So I think Kevin was mentioning there was alignment on the agreed deliverables with FDA, [ per the K ]. So I was just wondering if there's anything you can share regarding what those agreed deliverables are, but specifically, if there's any new clinical data required or if it's more preclinical analytical data only? Christian Behrenbruch: Yes. Most of the CMC remediation topics are around laboratory documentation, manufacturing documentation and process documentation. We do have a deliverable to the FDA around comparability between the research grade material that we used in the Phase III trial and the commercial scale-up material. But we have that data set well in hand, and it's not a material time delay to the resubmission. Operator: Our next question comes from Steve Wheen with Jarden. Steven Wheen: It's Steve here. So my question was just a bit of an extension of some of the others. But I guess for Kevin, I'm just trying to understand the European market with regards to Illuccix and Gozellix, I guess. Just they've been approved for some time. The launch in the U.S., obviously was incredibly rapid. And just trying to understand what's holding it back or slowing it to not really be much of a feature for your growth in the next 12 months? Christian Behrenbruch: Kevin, I can start and then maybe you can finish. I mean, it's not that it's not a feature. It's just that the European market has a very different reimbursement landscape. The U.S. has a much more immediacy between product approval and reimbursement, whereas in Europe, sometimes there can be as long as 9 or 12 months delay between product approval and reimbursement. And there's simply no material product sales until you have reimbursement. It's also not a class reimbursement. It's an individual product reimbursement in most countries. So until you have reimbursement, you simply don't have material sales. So for the -- what you would classify as the traditional EU 5 countries, we have only just received reimbursement in some of them. Kevin, I don't know if you want to add anything there? Kevin Richardson: Yes, there's very little other color to add in my prepared remarks, which was really 2025, the international team under that direction was really focused on gaining market access through reimbursement. And now we in that EU 5, the plans now are to execute those market launches. And so you'll see that as we continue to grow in 2026 as we execute against that launch. But Chris is right, in each country is different, each product is different. So it takes a bit to get that approved in the system and then begin the launch. So we're in the midst of that right now. Steven Wheen: Can I just ask an unrelated question just with regards to your R&D the expensing of Zircaix through the R&D line, is there a shelf life for that particular inventory just with regards to just noticed your comment that there is the potential once it's approved by the FDA that, that could then come back and be backed out of the P&L? Kevin Richardson: Yes, that's right. That's our expectation. And the shelf life goes far beyond the launch time of the product. Operator: Our next question is a follow-up from Shane Storey with Canaccord Genuity. Shane Storey: Sorry for extending the time, everyone. My question was going to come off the back of Melissa's question actually on Zircaix and except everything you've just said there. But just as far as how we should think about FDA's review phase once the resubmitted BLA is accepted, we've been sort of assuming 6 months. I just unsure how the breakthrough status and priority review might influence that, if at all? Christian Behrenbruch: Yes. We don't know yet for Zircaix. For Pixclara, we have a reasonable idea that it's going to be a rapid review also because it's a single a single issue CRL. We could imagine for the Zircaix review because there is a number of issues that it may take longer, but we haven't received guidance yet from the FDA on this topic. We will be engaging with the agency shortly on this topic as we are preparing to resubmit, but we won't know that information for a little bit when it comes to Zircaix. No worries. But I do note that it has a breakthrough designation. And I actually want to compliment the agency. They've been highly engaged, very helpful, very proactive. They gave us a lot of extra time around the Type A meeting that they really didn't need to do. So we feel like it's a pretty good collaboration, and we're working with the agency towards the drug approval and nothing less than that. Okay. I think I have a feeling that we're wrapping it up there. I don't know if there's any more questions coming through. Operator: We do have a final question, a follow-up from David Stanton with Jefferies. David Stanton: Saving the best for last. Chris, just I note that you've talked to a Part 2 interim analysis in calendar '26. I wonder if you could sort of give us any kind of timeline as to when that might be? Is it third quarter? Is it fourth quarter? What should we be thinking there? Christian Behrenbruch: Yes. Obviously, I get increasingly reluctant to estimate timelines on clinical trials because [Technical Difficulty] by like to the day or to the week rather than to the quarter. But right now, the Part 2 study is recruiting really nicely. We're seeing good site expansion and getting plenty of patients consented into the study. That interim analysis is based on about 80 or 90 events, I don't know the exact number, sometime -- somewhere around that. And we would expect that, that should lead based on the current recruitment trajectory for some time in Q4 of this year for that futility analysis to read out. So that's the reason why we have it sitting there in the calendar for this year. Well, I think that was the last question. I just want to apologize profusely to all the attendees for the audio challenges we've had today. It's a new conference provider. I'm not sure we'll be using it again in the future. But I just wanted to thank you for your questions and for your attention. Obviously, if there are follow-up questions, we'll be happy to receive them directly and follow up in due course. Thank you for your time today. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Operator: Greetings, and welcome to Weave's Fourth Quarter and Full Year 2025 Financial Results and Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. [Operator Instructions] I would now like to turn the conference over to your host, Moriah Shilton, Investor Relations. Thank you. You may begin. Moriah Shilton: Thank you, Kevin. Good afternoon, everyone, and welcome to Weave's Fourth Quarter and Full Year 2025 Financial Results Conference Call. With me on today's call are Brett White, CEO; and Jason Christiansen, CFO. During the course of this conference call, we will make forward-looking statements regarding the anticipated performance of our business. These forward-looking statements are based on management's current views and expectations, entail certain assumptions made as of today's date and are subject to various risks and uncertainties described in our SEC filings. We've disclaims any obligation to update or revise any forward-looking statements. Further, on today's call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. Unless otherwise noted, all numbers we talk about today will be on a non-GAAP basis, which excludes onetime acquisition-related costs, amortization of acquired intangible assets and stock-based compensation. A reconciliation to comparable GAAP metrics can be found in today's earnings release, which is available on our Investor Relations website and as an exhibit to the Form 8-K furnished with the SEC before this call as well as the earnings presentation on our Investor Relations website. Before I turn the call over to Brett, we want to let you know that we'll be participating in the Raymond James Institutional Investors Conference on March 2 at the JW Marriott in Orlando, Florida. And with that, I will now turn the call over to Brett. Brett White: Thank you, Moriah, and thank you to everyone joining us today. We've delivered another strong quarter in Q4 with 17% year-over-year revenue growth, gross margin expanding to a company record of 73.3% and operating income increasing to $2.3 million, our highest level, both in dollars and as a percentage of revenue. This marks the 16th consecutive quarter of meeting or exceeding the high end of our revenue guidance range. For the full year, we generated 17% revenue growth and 24% growth in free cash flow. These results demonstrate the strength of our model, consistent top line growth, expanding margins and disciplined cash generation while continuing to advance the platform for our customers. We're proving we can scale profitably and deliver new capabilities that deepen Weave's value to the practice. At our core, we serve the professionals who care for patients. Our customers provide care at every stage of life from the first pediatric visits to restorative procedures, chronic care management and everything in between. They are trusted professionals delivering essential services in their communities. Health care is fundamentally human. AI will not replace providers, it will amplify them. What it can do and what we are building toward is removing the administrative friction that pulls people away from patients. Our vision is simple: elevate patient experiences through a unified platform that improves business operations so health care professionals can focus on patient care. This vision is not a slogan. It guides how we build, invest and operate. The health care industry is one of the largest and most complex in the world, making it right for AI adoption, and SMB practices have historically been slow to embrace digital transformation. Health care professionals navigate increasing administrative burdens like staffing shortages, rising patient demand and reimbursement complexity. They require technology solutions to manage growth, communication, schedules, billing, insurance and payments, so they can focus on the patient in front of them while staying competitive in the local markets. Missed patient calls, scheduling challenges and shifting insurance dynamics waste time, reduce patient satisfaction, increase burnout and strain practice revenue and profitability. These operational inefficiencies create a clear and durable opportunity for automation and value creation. That's where Weave comes in. Weave is the unified AI-powered patient communications and engagement platform purpose-built for small- and medium-sized health care practices. We bring together AI agent and practice staff conversations across voice and text into unified workflows. Weave is the orchestration layer that helps practices continuously improve patient relationships, proactively assigns tasks for staff follow-up and delivers insights so practice owners can measure, analyze and optimize. Weave is a mission-critical practice system of work, built at the center of patient interactions 24/7. All conversations flow through Weave, creating operational data to drive process continuity inside our platform. This continuity extends across communication channels. A patient conversation can begin on the phone, continue over text with an AI agent and escalate back to a staff member when needed. Our platform treats this as a single persistent interaction, preserving contacts end-to-end, so patient requests are addressed sufficiently. This is coordinated teamwork between the Weave AI platform and the practice staff we support. Weave is powered by authorized secure integrations with practice management systems, making our platform reliable enough to manage scheduling, insurance verification, billing and payments. This goes well beyond responding to basic inquiries. As customers continue to recognize the value of our agentic workflows, Weave evolves from a product that practices use to an always-on teammate they rely on. We reduce administrative burden, improve conversion and collections and free staff to focus on high-value patient care. Most importantly, we strengthen the patient practice relationship, which ultimately drives more revenue and profitability for our customers. With communication history, automation and real-time performance insights, all in Weave, practices run smarter, grow faster and build lasting operational resilience. Customer reliance on Weave makes our platform indispensable, strengthening customer retention, expanding share of wallet, increasing customer lifetime value as we continuously add value through AI-powered solutions and additional products that our customers demand. We believe that AI will augment software companies that leverage and deliver its value. This is especially true in vertical, highly regulated markets like health care where moats and years of expertise matter. Weave has spent almost 2 decades building for the unique needs of SMB health care practices. Health care workflows are highly customized. Scheduling, billing, insurance verification and patient communication vary by specialty and by location. Delivering reliable AI-powered workflows in these environments requires authorized integrations with systems of record, regulatory compliance, scalability and predictable execution. Most importantly, it requires trust with providers and patients. With almost 40,000 customer locations and billions of patient interactions flowing through our platform annually, we have the data moat at scale that cannot be replicated by horizontal generative AI providers. Our extensive industry-specific data allows us to deliver high accuracy without exposing PHI. This domain expertise and trusted data foundation are durable competitive advantages. Our customers are health care providers, not technologists. Doctor owners are focused on delivering care and running their businesses. They do not have the time, resources or desire to build and maintain custom applications, particularly in an industry that has historically lagged in digitization and monetization. And that is a huge opportunity for Weave. Practices operate within strict privacy, security and regulatory frameworks. They look to trusted software partners to navigate that complexity. Weave integrates with the practice management system, utilizes the trusted practice phone number, owns the phone hardware and telephony stack and is deeply embedded in daily operations. We have yet to encounter a customer or prospect planning to replace that infrastructure with a homegrown solution. Instead, practices are seeking greater automation inside the systems that they already rely on. The acquisition of TrueLark added AI Receptionist to our offering, embedding agentic functionality directly into our platform. Our capabilities go beyond reactive automation to deliver proactive execution, scheduling appointments, verifying insurance eligibility, collecting payments, identifying coaching opportunities, analyzing outcomes and escalating to staff for full conversational context is preserved. This further establishes Weave's role as a system of work inside the practice. Additionally, we recognize that AI has the potential to disrupt some software revenue models such as seat-based licensing. However, we license per location and based on consumption, not per seat. In fact, headcount reductions in a practice lead to even higher usage and dependency on the Weave platform. As we add agentic solutions to handle additional workflows, we capture share of wallet from the practice's labor budget historically allocated to administrative staff or call centers. This simultaneously reduces practice costs and improves ROI. Adding isolated AI tools does not reduce the cost or complexity of running a health care practice. As AI becomes table stakes, the premium shifts to platforms that can act, not just inform. Weave is uniquely positioned to be that platform. Turning to our plans for 2026. TrueLark is the foundational building block of our AI Receptionist capabilities. TrueLark accelerated our road map by adding an established text-based AI agent that handles common FAQs, manages inbound leads and automates scheduling and rebooking. The acquisition materially expanded our TAM by extending Weave deeper into the front office automation and addressing -- and directly addressing the single largest component of the practice's cost structure, staffing. This is both the biggest expense and one of the most operationally complex challenges practice owners face. One of our largest customers is now booking over 1,200 appointments per month using our AI Receptionist, work that would otherwise require full-time front desk staff or just be missed. As that customer put it, "When you're thinking of software cost to cut, it is one of the last things you will ever consider because it is one of the few things that actually is bringing in revenue to the business". In Q4, we launched a unified inbox that consolidates TrueLark agentic conversations and Weave's staff interactions into a single contextual view, removing the need to toggle between systems. We continued building voice capabilities, enabling the same AI agent to operate across text and phone. In the first half of 2026, we expect general availability of our omnichannel AI Receptionists across all vertical markets. This enables practices to answer calls 24/7 with an AI agent that can address common questions, request or book appointments and intelligently hand off more complex interactions to staff when needed. These conversations are transcribed and posted into our unified inbox, preserving full context across both AI agent and staff interactions. Weave Call Intelligence then automatically prioritizes important requests and creates follow-up tasks. In the second half of 2026, we plan to extend beyond scheduling to more autonomous intake and payments, including automated payment requests after claims adjudication and the collection of co-pays and pretreatment deposits directly within scheduling flows. This is a deliberate phased rollout with a larger opportunity to expand AI across front and back-office workflows. We are excited about the opportunity ahead in 2026. Our AI road map expands our TAM, deepens Weave's role in the practice and leverages our market-leading position and scale. Before Jason dives into the financials, I wanted to recap a couple of additional highlights from our 2025 growth vectors. The specialty medical vertical continues to stand out as one of our most attractive growth opportunities. This space grew to become our second largest vertical by location count in Q2 of '25. That momentum continued, and we added more specialty location -- specialty medical locations in Q4 than in any quarter in our history. Specialty medical comprises 29 specialties, and we currently focus on just 4: primary care, physical and occupational therapy, aesthetics and medspa. Next, Weave payments grew at more than twice the rate of total revenue in 2025 with strong early adoption of new capabilities like automated payment reminders, bulk collections and surcharging. Today, we announced a partnership agreement with CareCredit, the leading patient financing solution used by over 285,000 health and wellness locations nationwide. This integration is expected to give Weave customers greater visibility into available patient credit, streamline the credit application process and improve treatment acceptance rates by making care more accessible. In conclusion, we've delivered consistent revenue growth, expanded margins and free cash flow while continuing to invest in innovation. Just as importantly, the customer successes we see today give us confidence that this value creation is repeatable and sustainable. Weave is defining the intelligent health care front office. We are building a durable, scalable business that delivers on our commitments, and we are excited about the long-term value we can create for both our customers and our shareholders. Both myself and the Weave management team entered 2026 very excited about not only the opportunity ahead of us, but also our very unique position to capitalize on the opportunities and deliver additional value to our markets. I want to thank our customers, partners, team members and shareholders for your continued trust in Weave. The progress we've made gives us strong confidence in the path ahead. With that, I'll turn the call over to Jason for a deeper discussion of our financial performance. Jason Christiansen: Thanks, Brett, and good afternoon, everyone. It was another solid quarter and a strong finish to the year for Weave, reflecting continued momentum in our growth initiatives and disciplined execution across the business. The growth in our product suite this year, including the acquisition of TrueLark, expanded our estimated total addressable market by roughly $7 billion to an estimated $22 billion. We believe there is further TAM expansion on the horizon as we add capabilities to our AI Receptionist. Across our established verticals, we see a meaningful runway for continued growth. In dental, our initial market, we are in fewer than 15% of U.S. locations, highlighting the depth of opportunities still ahead. For example, we has recently been selected and endorsed by the American Dental Association as its exclusive patient engagement solution, giving us co-marketing access to their 160,000 members and reinforcing our leadership position in the dental market. Specialty medical is our largest and newest U.S. market opportunity, and we remain in the early stages of penetration with roughly 1% share. We see a clear path to building a significantly larger business with our growing suite of AI-powered solutions, expanding market share and increasing average revenue per location. Moving to our financial results, starting with the fourth quarter, we produced $63.4 million in total revenue, which represents 17% year-over-year growth, driven by payments and the addition of new locations. Gross margin for the quarter was 73.3%, representing a year-over-year improvement of 70 basis points. We have delivered sequential gross margin expansion in 15 of the past 16 quarters, including a 30 basis point sequential improvement in Q4. Margin improvement was primarily driven by ongoing efficiencies in our cloud infrastructure and amortization of phone hardware and payment terminals as devices older than 3 years become fully amortized. We also continue to benefit from the growing contribution of higher-margin payments revenue. Total operating expenses for Q4 were 70% of revenue. General and administrative expenses were $9.6 million and provided the most year-over-year operating leverage improvement in our business. General and administrative expenses improved to 15% of revenue from 17% in Q4 2024, a decrease of over 200 basis points. Research and development expenses were $8.9 million or 14% of revenue, which represents a decrease from 15% in Q4 2024. Sales and marketing expenses totaled $25.6 million or 40% of revenue. As discussed in previous earnings calls, we made a number of targeted investments in 2025. We added sales capacity in mid-market. We grew our upsell team to increase product attach rates, including payments through a new dedicated payment sales team, and we built out a channel sales team that focuses exclusively on selling through commercial partnerships. We also increased our marketing program spend to increase brand awareness and demand in the specialty medical vertical and in promoting our AI Receptionist to new products. Mid-market and specialty medical sales accelerated in 2025, and we finished the year with strong sales performance and a healthy pipeline to start 2026 behind these investments. We continue to optimize our sales and marketing efforts and anticipate some improvements in sales and marketing efficiency in the second half of 2026. Operating income for the quarter was $2.3 million, an improvement of over $500,000 compared to Q4 2024. This represents an operating margin of 3.6%, a 30 basis point improvement over the prior year and a 90 basis point improvement sequentially. Turning to the balance sheet and cash flow. We continue to see strong liquidity and free cash flow. We ended the quarter with $81.7 million in cash and short-term investments, an increase of $1.4 million sequentially. Cash provided by operating activities in Q4 was $6.2 million, and free cash flow was $4.4 million. Free cash flow for the full year was $12.9 million, which represents 24% year-over-year growth. Our net revenue retention rate in Q4 was 93%. Our gross revenue retention rate was 89% and remains very strong for companies serving SMB customers. As a reminder, our reported retention rates are a weighted average of the previous 12 months retention rates. As such, it can take several quarters for the progress we are currently making to show through our reported retention metrics. I will provide additional onetime metrics in this year-end recap, which we believe may be helpful in understanding 2025 retention rate trends. First, when looking at gross retention, we implemented a number of initiatives in 2025 that improve the customer experience, including more tailored onboarding, new products and refined product packaging, which along with greater integration coverage and depth across all verticals, helps ensure customers receive the value they expect. These efforts yielded a steady reduction in churn in the second half of 2025, and Q4 churn returned to our 2023 and 2024 churn levels. We expect gross revenue retention rates to trend back to historical ranges of 91% to 93% over time. Previously, we highlighted how integrations with practice management systems affect churn. Customers who purchase Weave products that are not yet integrated with practice management systems or that have basic read-only integrations typically have higher initial churn rates. New verticals like specialty medical typically start with higher churn rates, which improve over time as we increase the number and depth of practice management integrations. Additionally, we have seen the ongoing trend of single locations being acquired by larger groups. While we may lose single locations to multi-location groups through acquisition, our investments in mid-market and AI, combined with high customer satisfaction rates, position us to potentially win those businesses back as part of a larger deal. Transitioning to net revenue retention rates, we discussed previously that our net revenue retention rate in the first half of 2025 was bolstered by the effects of a price increase in 2024, which accounted for approximately 250 basis points of uplift. We lapped the effect of that price increase in the first half, and our net revenue retention rate has subsequently decreased accordingly. It's also important to note that our reported retention metrics are measured on a location basis, not on a customer or logo basis. Approximately 2/3 of our current customer base is single-location practices. The addition of another location within a multi-location customer does not improve our net revenue retention rate. Looking solely at multi-location groups on a logo basis, our net revenue retention rate is 102%, while our net revenue retention rate is 93% for single-location practices. Multi-locations have a higher net revenue retention rate on a logo basis because of location additions. My final point is that our ability to expand net revenue retention has been limited because customers often adopt most of our product suite upfront. Customers often consolidate multiple point solutions when they purchase Weave's unified platform. This establishes higher initial revenue capture, though this historically limited our near-term upsell opportunities. We have seen this dynamic reflected in average revenue per location growth, which grew 10% over the past 2 years even as net revenue retention declined over the same period. However, the addition of TrueLark and faster product development cycles are now meaningfully expanding the upsell opportunity within our installed base. Our insurance eligibility and TrueLark products drove acceleration of upsells in Q4, and our penetration into the installed base for both products is still less than 2%. We ended 2025 with 39,625 active customer locations, an increase of 4,628 locations year-over-year. Before turning to our outlook, I'll briefly recap full year performance. For 2025, total revenue grew 17% to $239 million. Gross margin for the year expanded to 72.7%, up 80 basis points from 71.9% in the prior year. We delivered full year operating income of $4.1 million, representing an operating margin of 1.7% compared to 0.4% last year. This marks another year of progress in profitability, and I would like to highlight that this year's improvement came while also making targeted investments in growth initiatives, which reflects our ability to balance growth while making investments into our business. We are pleased with our progress this year and would like to thank our team members at Weave, our customers and partners for their contributions throughout the year. Looking ahead, we remain encouraged by the strengthening foundation of the business and the opportunities in front of us. For the first quarter of 2026, we expect total revenue to be in the range of $64.2 million to $64.8 million. We expect to improve first quarter operating income year-over-year and for it to be in the range of $1 million to $2 million. As a reminder, there are seasonal factors that result in a sequential increase in expenses in Q1, including the reset of payroll tax limits, benefit renewals taking effect and the timing of the annual audit fees, which are weighted more heavily in Q1. We remain committed to delivering improving margins while maintaining our bias toward growth. We are beginning to benefit from the investments made in 2025, such as those made in sales and marketing, and we will be flowing an increased percentage of incremental revenue into operating income in 2026. For the full year 2026, we expect to grow total revenue to be in the range of $273 million to $276 million. With the new products Brett discussed, which will be released throughout the year, we expect the impact of these products to positively impact revenue growth in the latter half of the year. We also expect to improve non-GAAP operating income year-over-year to be in the range of $8 million to $12 million. We expect our weighted average share count for Q1 to be approximately 78.7 million shares and approximately 79.9 million shares for the full year. In closing, I share Brett's excitement about our 2026 road map and our position in the market. We delivered a strong 2025 marked by solid revenue growth, continued margin expansion and improving profitability and cash generation. We remain confident in our strategy and our ability to execute as we continue to balance growth and profitability improvements. With that, I'll turn the call over to the operator for Q&A. Operator: And our first question comes from Parker Lane of Stifel. Matthew Kikkert: This is Matthew Kikkert on for Parker. To start, can you talk a little bit more about the CareCredit integration that you announced this morning? Just curious if that your focus is to drive incremental payments attach rate, more average payments volumes across existing customers or something else? Jason Christiansen: Yes. Great to catch up with you, Matthew. The CareCredit partnership, what that really does is open up another avenue for us to capture volumes that otherwise would flow through CareCredit themselves. They are the largest provider of patient financing solutions in the market. And this gives us access through the partnership to some of the volumes that otherwise would flow through them. So there's work now to be done on the integration and bringing that directly to market. So today, we just announced that we completed the partnership, and we'll have more color to provide in the future. Brett White: And I would add, this is kind of just the next step in our payment strategy. So kind of starting with basic payment processing, then moving into more additional financial tools, additional financial vehicles that allow our customers to offer their patients. So it makes -- takes our payment solution to basically a financial solution and the practices have more tools to offer their patients, whether it be financing through CareCredit, financing through themselves, using the Weave tools to schedule payments. So it just makes the payment product more attractive, stickier in addition to attaching more volume. Matthew Kikkert: Okay. And then secondly, for 2026, what are your expectations for growth rates across the different subverticals? Jason Christiansen: Yes. We're starting the year in a great position. We haven't broken out the growth rates for each one of the different -- the verticals that we serve. But we continue to anticipate strong growth across the growth vectors that we've talked about around specialty medical. We just talked about how Q4 was our strongest quarter from an additions perspective there. Mid-market grew nicely in 2025. We expect that to continue. And so not -- I can't speak to the underlying components, but we do anticipate to continue to see momentum and growth through those -- through the same channels. Brett White: Yes. And I would add, we expect specialty medical probably will be the strongest grower just because of the opportunity set here and all the work that we've done on adding integrations throughout this year, continue to add them throughout the year. Some of the marketing dollars that you saw that we spent in Q4 is really around developing our brand presence in that sector. So we expect that to grow, continue to be the fastest grower. I expect all of our verticals to grow nicely. The omnichannel AI Receptionist that we're rolling out is really valuable to kind of all verticals in integrated and not. I mean the tool is quite useful even without a PMS integration. So I think I expect solid growth in all verticals, but I think specialty medical will probably lead the pack. Operator: And your next question comes from the line of Alex Sklar with Raymond James. We'll move on to our next question from Hannah Rudoff with Piper Sandler. Hannah Rudoff: It was encouraging to hear that stat about the one customer, I believe you said who scheduled 1,200 appointments using your AI Receptionist. I guess longer term, as you think about it and you launch more AI capabilities and you complete the rollout of this unified inbox, how do you think about pricing to capture the value that you're delivering? Brett White: Yes. So we will definitely be able to monetize it. I think still being worked out is, is it priced as an additional module? Or is it priced as included in a bundle. So for example, you may have stand-alone TrueLark now and if you want to go to the fusion inbox where that brings everything from TrueLark and we -- all together in one place, which is the ultimate destination, is that a premium product that we price for. The really important concept, though, is that we're now going ability to attach to the labor budget because we can just prove how we save labor and how we drive revenue. So we're very confident that we can monetize the additional AI omnichannel Receptionist functionality, and I think we'll work it out over time. I think a really important point is we don't license by seat. We license by location and then consumption. And we're confident that these tools will produce a lot of value for the practices, and we'll be able to monetize them accordingly. Hannah Rudoff: Totally makes sense. And then, Jason, I really appreciate the additional color you gave this quarter around NRR and the multi-location NRR you shared. I guess you've talked about churn being higher and average sales prices being lower initially in some of your newer verticals as you have newer integrations and some of the solutions are nonintegrated. I guess have you seen these metrics stabilize for some of your oldest specialty medical cohorts? Or does that take longer than a few years to kind of stabilize and average with historical metrics? Jason Christiansen: Yes. Thank you for the question. We saw the same phenomenon. I highlighted how we saw churn decrease through the second half of the year in Q4 return to 2023, '24 rates. We saw a nice improvement in specialty medical as well in Q4. And so we've already started to see some of the improvements there. We've delivered a number of integrations on that front. We've expanded our coverage on that front. And so as those have started to mature, we're encouraged about making that declaration about where churn will trend back towards because we're already starting to see some of the proof points there that we've been talking about. Brett White: Yes. And I would add, Hannah, you mentioned, does it get better over years. And it actually happens more quickly than that. We're seeing it improve over quarters. And it's just as you get your -- improve your integrations, depth, breadth, churn rates come down. And not only do churn rates come down, but CAC comes down over time as you develop a brand, you have more word of mouth, you're more familiar in the trade shows. So it's a virtuous benefit that comes over -- trends over time. And then if you say, well, how do you know that? It's just from our history, looking through all of our verticals that we enter. And that's one of the reasons we do it as a step function as opposed to just doing a shotgun blast in a lot of verticals because the idea is you go into initial vertical, ASP is lower, CAC is higher, churn is higher. You work through that, ASP comes up, CAC comes down, churn comes down and then you kind of go into a new vertical and you kind of just stage it that way. And I've been in vertical SaaS and payments for over a decade, and this is the pattern I've seen throughout that entire period. Operator: And we will come back to Alex Sklar for your next question from Raymond James. Okay. We will move on to Mark Schappel with Loop Capital. Mark Schappel: Can you hear me okay? Brett White: Yes, we can. Mark Schappel: Okay. Great. Brett, starting with you, I was wondering if you could just kind of walk through your investment priorities and also hiring priorities for the coming year. Brett White: Sure. So I think they're the same, our investment priorities and our hiring priorities. So that's good. I think #1 on our hiring and investment priorities are product and engineering, where we've got a really unique advantage with -- since we own the telephony stack, we have the practice phone number, we have the data, we are really uniquely positioned to take the AI Receptionist technology from a text experience to kind of a native inside of Weave and then make it a full voice experience. And so we are really leaning hard into that, and investing against hiring engineers and product people to make sure that we can execute effectively on that one. I think other investment priorities are on the GTM side, go-to-market side. And we've actually made a couple of changes to our model at the end of this year and into next year, we're actually -- we used to go to -- we used to have a full-service AE model, and now we're kind of moving more to an SDR AE model. It's more efficient, and it seems to be working. So early proof points are good there. And I think those are the big investments we're making certainly in the first half of the year. Mark Schappel: Okay. Great. And then as a follow-up, some of your competitors are also highlighting AI in their products. I was wondering if you could just talk a little bit about how Weave is either differentiating or plans to differentiate its AI automation capabilities from those of your competitors? Brett White: Sure. So we see lots of companies who are -- some have some products, some just put AI on their website. I think our unique -- well, I know our unique differentiators are kind of what I started with is we own the telephony stack. We've got the trusted relationships, and we own the very specific complex industry-specific workflows. We're a trusted partner of these businesses. And they really -- I meet with customers, and they'll show me all the products they have and they say, what? Which of these can Weave do, please? They really want to consolidate functionality. So the idea of saying, for example, having an AI chatbot up in one window and Weave up in another window and the PMFs in another window, it just doesn't work great. And so we have the opportunity to bring all of those workflows together. And because we have the full experience, we can retain context through the whole discussion. So you may start with a text or you may start with a call and then the call transitions to text and then the text maybe gets escalated to a specific person and the staff who can handle only -- specifically handle that question. All of that interaction, whether it's voice or text gets retained in one place. And it also gets analyzed by our Weave call intelligence, so then you can create action items, you can create tasks, you can actually perform work, whether it be issuing an invoice, filing and checking on insurance verification, booking an appointment, rescheduling an appointment. So having the deep integrations, the deep workflows, the subject matter expertise, the relationships and the ability to kind of have seamless handoff is a real, real differentiator. These highly specific workflows are hard, and you have to learn them over time. If you get an appointment wrong, so for example, someone wants a crown done and you book a 30-minute appointment for a cleaning that really hurts the practice's day. And so having that knowledge, that experience, we've got billions of these interactions, and we know kind of over time, what type of calls result in what type of outcomes, and we can optimize practice operations using that knowledge and that deep expertise. Operator: And we will come back one more time to Alex Sklar with Raymond James. Alexander Sklar: Can you hear me now? Operator: Yes, go ahead. John Messina: It's like third time's a charm. This is actually John on for Alex. Brett, maybe we'll start with payments here. It's great to hear about the continued strength in payments. It's been a nice growth driver for you. I'm curious, though, any comments you can share on growth differences you're seeing by end market? And then maybe how we should think about payments growth and payments attach rate in 2026 and over the medium term? And then I have a quick follow-up. Brett White: Right. So I can give you some product growth highlights, and maybe Jason can talk about sectors. So we released this year a couple of really cool new features, bulk collection, but surcharging. Surcharging has been very well received. It's a great upsell product. And that is actually driving some pretty reasonable, almost significant volume growth from the new customers who adopt it. And of course, surcharging is your ability to charge the patient for the credit card fee. And so that gets us not only a better take rate, but more importantly, it just gets us more volume. So that's in early stages, but we're seeing some very nice green shoots on that one. And I'll let Jason talk about sectors. Jason Christiansen: Yes. So some of the -- I think the best -- one of the best ways to think about payments in the sectors and how it differentiates for us is when you think about the economics of a practice, the average dentist within a practice will do about $1 million in gross billings a year. And about 50% to 60% of that will go through an insurance process. So the remaining 40%, 50% is our opportunity to go after that. So when we think about going after the performance in different sectors, what's really important is to understand what the insurance component within each one of the sectors we go after or that we sell to have and what just the nature of their economics are. And so like in specialty medical, when you're dealing with primary care, you're dealing with significantly higher insurance coverage rates. And so the payments opportunity for us in that space isn't as great as it is in like aesthetics or in veterinary. And so we try to align our go-to-market efforts with the needs of those industries and the opportunity for us to expand revenue per location through them. So that's how we think about the different specialties. And it's a contributing factor. Brett talked about how we approach the different specialties and the next verticals in a step function. we look at the overall economics of those specialties as we decide what are the next specialties or the next verticals that we open up. And it's something we consider there across all the different solutions that we offer. John Messina: That was great color there. And then, Jason, maybe just a follow-up on the NRR improvements. I know it's been touched on in earlier questions, but specifically, I do want to understand how additive do you think some of the newer products like the TrueLark and your organic product expansion can be to NRR growth in 2026 and maybe over the medium term, kind of what's embedded in the guide there? Jason Christiansen: Yes. So what's embedded within the guide, a lot of the growth from the AI receptionist follows the time line and the road map that Brett laid out in his remarks. So it biased more towards the second half just based on the time line for when those products roll to general availability. I think the opportunity for growth is really strong. From a net revenue retention perspective, we're still in the early days of selling that. The impact it will have, I guess I'm not ready to provide a lot of color on that today. There's a significant upsell opportunity, but we also know that customers have typically landed heavy whenever we bring these new capabilities, which could lead to further average revenue per location expansion without necessarily leading to significant net revenue retention expansion. And so I guess we'll -- I'd like to let the dynamics play out a little bit more as we get more sales experience there, but the opportunity is quite significant, really encouraging. Brett White: Let me just add a little bit more color to the earlier question about why we stands out as having an advantage as we move to these omnichannel AI Receptionists and there's a bunch of them out there. In addition to the things I mentioned like domain expertise, a really important one is, frankly, our scale and the fact that because we're a public company, because we have scale, we have to do it right. So when it comes to data, maintaining the data security, maintaining and ensuring that the data is used properly. compliance. We've got HIPAA, we've got PHI, we've got PCI. We've got all these rules and that we have to comply with and reliability and scalability and security and being able to support the full experience front to back. These are just a lot of things that buyers are becoming more and more concerned about, especially large groups that some of these smaller kind of newer businesses just don't have the scale or the financial ability to comply with or frankly, it's probably not as much of a focus for them. And for us, it's just absolutely table stakes. Operator: There are no further questions at this time. I will now turn the call back to Brett White for closing remarks. Brett White: Well, thank you all for joining the call. We're super excited about 2026, and thank you again to the entire Weave team for posting an incredible 2025. Thank you. Operator: This concludes today's call. Thank you for attending. You may now disconnect.
Operator: Good day, and thank you for standing by. Welcome to the Superior Plus 2025 Fourth Quarter Results Conference Call [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chris Lichtenheldt, Vice President of Investor Relations. Please go ahead. Chris Lichtenheldt: Thank you. Good morning, everyone, and welcome to Superior Plus' conference call and webcast to review our 2025 fourth quarter and full year results. On the call today, we have Allan MacDonald, President and CEO; Grier Colter, Executive Vice President and Chief Financial Officer; and Dale Winger, President of Certarus. For this morning's call, Allan and Grier will begin with their prepared remarks, and then we'll open the call for questions. Listeners are reminded that some of the comments made today may be forward-looking in nature and information provided may refer to non-GAAP measures. Please refer to our continuous disclosure documents available on SEDAR+ and our website. Also note that dollar amounts discussed on today's call are expressed in U.S. dollars unless otherwise noted. I'll now turn the call over to Allan. Allan MacDonald: Thanks, Chris. Good morning, everyone, and thanks for joining us today. Well, 2025 was a year of significant transition for Superior Plus. Over the course of the year, we continued to reshape how we operate across North America, advancing our Superior Delivers transformation while maintaining operational continuity in a challenging environment. We made real progress and also learned some hard lessons, particularly as change met a difficult winter. Superior Delivers has a clear purpose to build a propane business that operates at a lower cost, handles volatility better and performs consistently, especially in winter. As we integrated teams across the U.S. and Canada, implemented new systems and aligned leadership around a single operating model, the organization navigated a meaningful amount of change. While the pace and scale of that change created execution pressure at times, it also strengthened our foundation. In CNG, Certarus operated in a difficult macroeconomic environment, driven by a downturn in oil and gas activity. Pricing pressure in wellsite created a $40 million gross margin headwind, which our team was able to largely but not entirely offset. Despite that backdrop, we maintained a strong operational discipline and continue to diversify the business. Overall, 2025 was demanding, but it improved our visibility into the business and sharpened our focus as we move into 2026. To be clear, we are staying the course, maintaining our $75 million Superior Delivers target and managing what we can control. Turning to results. We delivered modest organic growth in both the fourth quarter and the full year, in line with our revised guidance. As we redesigned how we schedule, route and deliver propane, we are transitioning to a more efficient delivery model. Now that transition is still in progress, and this winter tested the system under very difficult conditions, including sharp localized demand, icy and snowy road conditions and a network that hadn't yet reached full optimization, adding complexity during peak period demands. These challenges were not unique to Superior though. The broader propane industry faced elevated demand alongside supply constraints and extreme weather events across multiple regions. I want to recognize and thank our teams for their extraordinary efforts during this period. We expanded our driver base, increased call center capacity and applied every available short-term measure to support our customers. While the winter highlighted areas where execution can improve, we are on the right path and the network we're building is performing more consistently as optimization progresses. As a result of strong winter demand, we expect higher-than-normal deliveries to continue into March and April as customer inventories are replenished. Based on what we've learned, Superior Delivers will require more time to fully realize its intended benefits than originally anticipated. This reflects executional complexity, but not a change in strategy. We were ambitious, and that's a good thing. It's now more likely a 3-year journey rather than 2. But that's because we want to get this right and take the time to build a truly transformational platform, and we are absolutely staying the course. Superior Delivers contributed to propane growth in 2025 and is expected to contribute more meaningfully in '26. We also acknowledge that early iterations of our delivery tools did not perform as intended and contributed lower than optimal customer tank levels heading into winter. These issues have been addressed with updated tools and delivery methodologies now in place, we are seeing improved performance and better predictability through peak demand. On the customer side, we continue to make progress. We've developed proprietary capabilities that allow us to precisely target attractive customer segments and allocate sales and marketing resources accordingly. Conversion rates are improving, and we are building the organizational capability required to scale this approach over time. Turning to CNG. 2025 was a challenging year for Certarus, especially in the wellsite business. Early in the third quarter, wellsite pricing declined materially and has not yet recovered. This pricing pressure overshadowed several positive developments, including 2 new data center contracts and the opening of a hub in Florida to support industrial growth. Despite lower oil and gas activity, Certarus delivered record volumes, reflecting strong market share retention in wellsite and continued success with our industrial customers. Wellsite remains the largest end market for Certarus and the current pricing environment represents a meaningful change. While pricing will improve over time as the cycle evolves, the timing and the extent of it remain uncertain. As a result, we're resetting our outlook for Certarus to reflect current market conditions, guiding to lower EBITDA in 2026 and adjusting our expectations for '27, and Grier will discuss this in more detail. With that context, we're introducing 2026 guidance that reflects approximately 2% expected EBITDA growth. Increased contribution from propane is offset by lower earnings at Certarus, reflecting a full year of lower CNG pricing. Now while we remain confident in Superior Delivers and maintain our $75 million target, we are updating our '27 outlook to reflect the CNG market conditions and a slightly longer execution cycle for Superior Delivers. We believe this provides a realistic and transparent view of our path forward while maintaining confidence in the long-term potential of the business. On capital allocation, we remain confident in the underlying value of Superior. In the near term, we expect to continue repurchasing shares. However, over the medium term, we anticipate shifting debt repayment -- shifting toward debt repayment, sorry, as we prepare for the potential redemption of our $260 million preferred shares in mid-2027 assuming, of course, our share price remains below the conversion price of approximately CAD 12. Now while 2025 presented its challenges, it also strengthened our operating discipline and clarified our priorities. We're executing a more focused plan, building a more resilient platform, staying the course and managing what we control to position Superior to deliver sustainable value over the long term. So with that, thank you. I'll hand things over to Grier. Grier Colter: Thank you, Allan, and good morning. As discussed, 2025 was a year of significant change that brought both successes and some challenges across the business. Propane had a decent year and grew EBITDA modestly, but did not benefit fully from the cold weather in Q4, given we are in the midst of our transformation and still adjusting to our leaner operating structure and new delivery methods. In CNG, the factors within our control were managed well, but not able to fully offset the pricing pressure in the wellsite business. I'll start by recapping our consolidated financial results for the full year and for the fourth quarter. Full year adjusted EBITDA of $463.5 million was up approximately 2% due to modestly higher adjusted EBITDA from U.S. and Canadian propane, which was up about 4%, partially offset by a decline in CNG, which was down about 4%. Q4 adjusted EBITDA of $161.9 million increased 2% versus Q4 2024, driven by higher contributions from Superior Delivers and propane, offset partly by pricing pressure in CNG. Full year adjusted EBTDA per share of $1.46 increased by 15% compared to 2024 due to lower average shares outstanding, higher adjusted EBITDA from North American propane and lower interest costs, partially offset by lower adjusted EBITDA from CNG. Adjusted net earnings per share of $0.31 increased by 94% and free cash flow per share of $0.87 nearly doubled for the same reasons with lower CapEx also contributing to free cash flow growth. For Q4, adjusted EBTDA per share of $0.55 increased 12% due to the same factors driving the full year increase. Adjusted net earnings per share of $0.27 increased 17% from last year due to lower shares outstanding and higher adjusted EBITDA. Free cash flow per share of $0.37 increased 23%, again, driven by lower shares outstanding and higher adjusted EBITDA in addition to reductions in CapEx and interest expense. Turning now to the businesses. For the full year, adjusted EBITDA in North American propane increased 4% to $346.7 million, driven by benefits from Superior Delivers as well as favorable weather. Looking into the regions. Full year adjusted EBITDA in U.S. Propane was $246.3 million, a 5% increase, driven by Superior Delivers and higher volumes due to colder weather. In the fourth quarter, adjusted EBITDA for U.S. Propane was $96.7 million, which was up 9% from last year. This increase was primarily due to the positive impact from Superior Delivers, which contributed to higher margins and lower costs, partially offset by a temporary reduction in capacity as the business adjusts to the new delivery methodology. Full year adjusted EBITDA for Canadian Propane was $100.4 million, an increase of approximately 2%, primarily due to higher sales volumes and lower operating costs, partially offset by a stronger U.S. dollar and the sale of fewer carbon credits compared with the prior year. In fourth quarter, adjusted EBITDA for Canadian Propane was $36.2 million. This was relatively in line with Q4 '24 as the benefits from Superior Delivers and lower operating costs were offset by the sale of fewer carbon credits compared with Q4 2024. In total, our propane transformation, Superior Delivers contributed $16.2 million to full year results and $11.2 million in the fourth quarter. Moving now to CNG. Certarus' full year adjusted EBITDA of $142.5 million was down 4% compared to 2024 primarily because of lower realized prices in the wellsite business, partly offset by growth in industrial markets and higher volumes across the business. Notwithstanding a more challenging marketplace, Certarus is making significant progress on factors within its control, including a 6% reduction in operating cost per MMBtu in fiscal 2025. Our continued focus on capital discipline drove a 50% or nearly $50 million reduction in CapEx at Certarus, which contributed to a record year for free cash flow. Fourth quarter adjusted EBITDA in CNG was $34.3 million, down $4.9 million or 13% compared to last year. This was mainly a result of pricing pressure in the wellsite business. Consolidated capital expenditures for the year were about $140 million or 26% lower compared to 2024, driven mostly by lower spending in CNG. Within the regions, CapEx in Canada increased to 11% as the company executed a significant fleet refreshment in order to reduce maintenance costs and optimize asset availability going forward. For the quarter and full year, corporate operating costs were $5.3 million and $25.7 million, respectively, which was in line with last year and also with our guidance. Our leverage at the end of 2025 was 4.0x, down about 1/10 of a turn compared to a year earlier due to higher adjusted EBITDA and to a lesser extent, lower net debt balances. We continue to believe that share repurchases are an excellent use of capital. During the year, we repurchased 19.6 million shares or approximately 8% of our shares outstanding. From November 2024 until today, we have now purchased approximately 32 million shares or about 13% of our shares outstanding. And this has been a meaningful driver behind our improved per share metrics. As Allan mentioned, we are expecting adjusted EBITDA growth of 2% in 2026. In propane, the growth of 3% to 8% assumes warmer weather in 2026 versus 2025, in line with the 5-year average. It also includes a contribution from Superior Delivers of approximately $50 million, up approximately $16 million from 2025 -- in 2025, sorry, as the transformation continues to progress. We have also assumed some continued customer attrition as our churn reduction and customer acquisition programs continue to ramp up. It's worth noting in propane, we expect the first quarter of 2026 to be modestly lower than Q1 2025 due to warmer weather and delivery capacity constraints. The remaining 3 quarters are expected to grow as Superior Delivers continues to provide benefit, including the peak shaving dynamic of our delivery methodology. In CNG, we have not seen a material reduction in pricing since Q3 2025 and are assuming relatively stable prices through 2026. However, 2026 adjusted EBITDA at Certarus is expected to decline between 4% and 9% based primarily on realizing lower prices over the full year as well as a reduction in ancillary revenue from utility winter standby services. Notably, the expected decline in full year EBITDA in CNG is expected to take place entirely in the first quarter. Specifically, we expect Certarus' first quarter EBITDA to be relatively flat with Q4 2025 or down about 30% to 35% from Q1 2025, with growth expected in the following 3 quarters. This decline in first quarter EBITDA is due to the aforementioned reduction in ancillary revenue as well as well site pricing declines. We expect overall CapEx, including lease additions of approximately $160 million in 2026, up from about $140 million in 2025 as we plan to invest in updating our U.S. propane delivery fleet to ensure optimal utilization and maintenance costs. We are also planning to modestly increase our investment in CNG. Regarding share repurchases, we continue to see a significant opportunity in repurchasing our shares at these levels. However, we may spend less on share repurchases during 2026 as we shift some of our capital to additional debt repayment. As a reminder, we have a $260 million convertible preferred share instrument outstanding with a conversion price materially higher than where we are trading. These preferred shares are redeemable at par in mid-2027, if not converted. And therefore, we believe it's prudent to increase our financial capacity ahead of this potential redemption to partly offset the incremental leverage associated with taking out the preferred equity. Taking out these preferred shares also eliminates the potential $30 million common share dilution associated with this instrument and is, therefore, consistent with our capital allocation strategy aimed at reducing our common shares outstanding and improving per share metrics. As Allan mentioned, we are revising our multiyear outlook. We now expect a 3-year CAGR on EBITDA of about 2% over the years from 2024 to 2027, which is down from about 8% previously. This reflects lower pricing at Certarus and a more gradual progression of our propane transformation with 2028 now expected to be the first full year of $75 million in benefits from Superior Delivers. With this extended time line to execute Superior Delivers, we are also tempering our customer growth expectations, which has contributed to our reduced outlook going into 2027. And with that, I will turn it back for Q&A. Operator: [Operator Instructions] Our first question comes from the line of Aaron MacNeil from TD Cowen. Aaron MacNeil: You said something to the effect of the original tools didn't perform as expected. I can appreciate that Superior Delivery is a work in progress. But how are you thinking about optimization of the business versus having redundancy and the ability to ensure you're actually able to deliver for your customers? And then also energy affordability is a bit of a hot button there is becoming a bigger hot button. You've had some negative press in terms of hiking rental fees. Do you see a scenario where public or political pressure could be a potential headwind to sort of enact some of your delivers agenda? Allan MacDonald: Aaron, it's Allan. Thanks for joining us. Thanks for the call -- for the question. So for the first thing in terms of coverage, I wasn't as -- taken a back by our coverage capability in terms of what our plans are at Superior Delivers. I think what really was challenging for us was we went in -- as you recall from our last quarterly call, we went into Q4 with a slight delay in the rollout of this tool. It doesn't take much in this industry to put you on your back foot. But that delay caused us to not be able to pull tickets forward out of Q4 and Q1 into our sort of slower season. And that backlog that we went into with slightly lower tank inventories, coupled with really, really challenging weather was what got us. So we've got a couple of things that in terms of redundancy we're planning. One, full realization of the optimization capabilities is going to be a big one. Two, getting our tank inventories levels exactly where we want them to be going into the winter this year is going to be important. Three, having those once-a-year deliveries that happened in Q4 and Q1 pulled into the slower seasons is going to be really important for us. And then finally, we've learned a lot, but one of the things we learned is that we have a whole contingency of staff propane specialists that work on things like service or tank setting that are also able to shift over to help us address peaks or demands that happen to be local. And that actually worked well for us through this year and helped us maintain our service to our customers. So the flexibility that we've built into the propane specialist role, I think, has proved itself to be really, really critical. So I don't think that we're in no way creating an organization that's incapable of handling these peaks. It was just -- it was, to be honest, a bit of a perfect storm. In terms of the rental and regulation, I mean, never say never. That was less of us introducing anything untoward when it comes to pricing and more of us cleaning up contracts and customer agreements that were put in place that were, frankly, shortsighted, maybe misinformed. So we had customers that had, in some cases, no volume over a 2- or 3-year period, but had assets that we placed on site and that we were responsible to maintain from a regulatory standpoint. Going forward today, if a customer come in and said, "Hey, we want propane storage on site, but we're not going to be a high-volume customer, " we'd be more than happy to accommodate them. But we do it via a rental agreement as opposed to a price per liter or price per gallon agreement. And what we were doing there was really just addressing some of the customer agreements that we had historically. Now that's totally understandable when you realize how many acquisitions we did. And through the course of acquiring hundreds of thousands of customers, you're going to have situations like this. So we don't think the pricing is in any way unreasonable. It's easy when you're talking about a new customer is sometimes a bit of a hurdle when you're addressing kind of sins of the past. Aaron MacNeil: Appreciate that. I can appreciate it's a tough question as well. I'm not sure if Dale is on, but... Allan MacDonald: Sitting right next to me. Aaron MacNeil: Perfect. Dale, I'm hoping you can speak to the magnitude of the pricing headwinds that you're facing relative to the prior quarter. And then maybe can you speak to the Florida opportunity specifically in terms of the types of volume you might see in a sort of non-oil and gas hub versus what you typically see in the more traditional business? Dale Winger: Aaron, thanks for the question. We'll talk about the wellsite pricing dynamic first. So as Grier mentioned, the pricing that we experienced in the fourth quarter was flat to the pricing we experienced in the third quarter. So the big pricing erosion that happened -- happened in the middle of the year, which creates some tough comps in the first part of this year. As Allan mentioned, we've had -- the overall 2025 impact was $40 million. And you can see based on our volumes, what the impact of $1 of price erosion means. And so overall, like over the last 2 years, we've seen the price to win in the marketplace decline by 25%, 15% decline overall 2025 versus 2024. But we are encouraged that pricing has been stable over the last 6 months. Our guidance sort of incorporates the fact that we'll not -- we're not expecting to recover that in 2026. We're kind of expecting conditions to continue as we've seen over the last 6 months or so. And then over the Florida opportunity, we do have -- we're actually really excited about that. It signals like good demand that we opened that hub and immediately had customers that were interested in being able to provide the service. I think it speaks to the dynamic that we're really seeing right now is access to energy is really important for lots of different types of industrial and utility customers and whether it's the speed or the reliability or the cost, sometimes they can't get those kind of on the time line or at the cost or the reliability that they want. And so we're excited about the start that we had in Florida. Right now, I mean, in the first quarter, it's going to represent like less than 1% of our volumes. But you can see the Florida represents our 21st hub. So the volume that we generated in 2025, we did that off 20 hubs, and so you can kind of get a sense of the volume per hub. It can be a few thousand MMBtu per day. And of course, new hub development and expansion is a huge part of our accelerate growth strategy going forward. We're excited that we have signed an agreement for a property for a Houston location. And so we're actively driving forward plans to progress that and have gas flowing there serving customers in the Houston metro area by midyear. Operator: Our next question comes from the line of Ben Isaacson from Scotiabank. Ben Isaacson: Just -- actually just one question on Certarus. I might not ask this correctly, but I'm trying to understand the cost curve. What is the marginal cost to deliver? And what is your kind of price point? I'm trying to understand how much downside is there in pricing when it comes to looking at some kind of cost curve, if that's even the right way to look at it? Allan MacDonald: Ben, it's Allan. You just cut out on us a little bit there, but you're talking about Certarus, right? Ben Isaacson: Yes, sorry. I'm just trying to understand the cost curve of Certarus. Allan MacDonald: No, it makes sense. Do you want to have a go at that? Or do you want me to? Dale Winger: Yes. Well, of course, we have disclosures on our kind of cost per MMBtu. And you can see that we improved that by 6% 2025 over 2024. We have continued plans to continue to advance that. I mean we are the market leader. And so of course, in an environment of increased price-based competition, having scale as it relates to driver utilization, the ability to employ internal drivers, some of the operating experience in terms of loading MMBtu per gas per trailer with compression technology to make sure that we're driving efficiencies on each load delivered, some new technology that we installed in 2025 called smart trailers. We've equipped 50% of our fleet that gives us real-time visibility into the trailer levels regardless. Ben Isaacson: Sorry. Can I just refocus the question? I guess what I'm trying to drive at is the current pricing environment, are those producers that are lowering prices right now, are they making money? And if they are, how much lower can prices go to the point where they become marginal and they start to exit the industry? I'm just trying to find out how much downside there could be to prices and kind of where you fit relative to that downside on the cost curve. Allan MacDonald: Dale is going to have a comment on this, but I'm going to -- I can't resist. I've got an opinion. I think you got to think about it in terms of 2 markets, Ben. In the wellsite business, especially in West Texas, you've got a very dense -- you've got a very dense customer base with high demand and a lot of capability, both on the vendor and the supplier side. So that's one microcosm, if you will. And then when you factor in what's the complexity of the job, what's the distance that is required to be traveled, what's the volume and in which geography, that's when the economics really change because this is like an airline business, and it's not obviously fully saturated the way the convenience store business is where there's one in every corner. So the more you -- the bigger your fleet and the better your utilization, lower your cost base. And when you're starting with jobs big or small outside of West Texas, that's where we have a pretty strong advantage versus our competition because we've got the ability to handle complexity at a lower cost. We've got scale. And we can take on a small job in Florida because we've got other jobs to rationalize the fleet across in the same geography. So Dale, I'm going to something here, but maybe you'd like to. Dale Winger: The 2 other just things to think about, Ben, that we observed in 2025. Prior to that, 2023 and 2024, many companies were adding trailers to the fleet. And so some of the market pricing is going to be determined by supply of trailers versus demand for trailers, right? And we did not see that trend continue. There were not people adding trailers to the fleet in 2025. And so that's kind of a good sort of early indicator of sort of supply, we're now kind of in a window where demand can kind of catch up to supply. And we have had a couple of small cases where people that were supplying mobile CNG exited basins either to shrink their footprint or to pursue other opportunities. And so those are both early indicators that the supply that we're in a situation where demand can catch up to supply. And some of these mobile power opportunities and getting energy to people in industrial markets are going to further help increase the demand and allow that to improve the market pricing levels as that equipment goes to serve that marketplace. Ben Isaacson: And then just quickly, have prices fallen to the point where some high-cost guys have exited the market? Or I guess they just don't participate in that particular contract. Is that right? Dale Winger: What we've seen is more local decisions to shrink footprint. So we haven't seen anybody exit the market entirely. What we've seen is maybe they were servicing a geographic area, now they're servicing fewer or a smaller geographic area. Ben Isaacson: And then just to flip to the Investor Day, the $1 to $1.10 target, is that pushed back? Or is that now off the table? Grier Colter: And just to be clear, are you talking Superior Delivers? Or what specifically? Ben Isaacson: I'm sorry, you had a target of USD 1 to USD 1.10 of free cash flow. I think that was the goal in '27 overall, I think, company-wide. And so the question is, is that target -- is that free cash flow target kind of set back? Or do you think that needs to be revisited? Grier Colter: Yes, certainly set back. I don't think we're going to get that specific about when exactly that free cash flow target would be, but yes, definitely pushed back. Like as we said, there's -- there are some differences here with the environment that we're operating in, in CNG. And of course, that's had some impact. That may turn, but our assumptions are that let's assume that this is the environment that we've got and this is what we're operating that's reflective of that. So that has an impact. If that were to change, then it gets you a lot closer to that number or if not, then yes, it's going to take you quite a lot longer on the CNG side. Superior Delivers, I think we've been pretty clear that's just going to take a year longer, still $75 million. So that's pretty much intact. And then the third big factor is just like the longer it takes to kind of have the business, the platform or the foundation fully intact to go after new customer growth. That's, again, delayed by about a year. And so there's kind of an impact on the overall customer growth. So I'd say, yes, that's a delay. To give you the exact numbers and when that cash flow target exactly would occur is pretty difficult for me to do, but hopefully, that is somewhat helpful. Operator: Our next question comes from the line of Gary Ho from Desjardins. Gary Ho: Just wanted to dig into -- continuing with the Certarus discussions a bit, something that came up from your press release and comments this morning. So 2 things. First, I think you noted 2 new data center contracts. Was there a new one that was just one and how many MSUs are expected to deploy there and the duration? And then second, I think Grier, you mentioned the ancillary revenues from a utilities contract in your prepared remarks. Correct me if I'm wrong, I think that's the U.S. Northeast customer. Maybe can you elaborate on that a little bit more? And if I remember correctly, that contract goes from late fall into the winter. So will some of that negative impact flow through to 2027 as well? Dale Winger: Yes, I'll start. Thanks for the question, Gary. We're pretty enthused about early inning progress with the data center. I want to give our team a lot of credit for operating 100% safely and 100% reliably for our new customers in those segments as we've mobilized and helped bring them an energy solution that's really valuable for their business. We currently have -- the jobs are scaling up. And so there were 2 new that started in the fourth quarter, and those are approximately 30 to -- we'll probably get to close to 40 trailers for those 2 jobs. Grier Colter: And, yes, Gary, so on the second part of your question, just the ancillary revenue, yes, you're right. That's referring to the customer, the Northeast kind of utility customer. The way that I would think about it is we had several contracts with this customer. They got a number of sites, and we had a number of sites. And through this winter, we have fewer sites. And so the business actually from that customer right now is not nearly as large as what it was in previous winters. And so the exposure, I guess, if we think about it this way, the exposure going forward for the kind of 2026, 2027 winter, if you will, I'd say is not that great because we have much less exposure to that customer today through this winter. And that's part of the impact that you're seeing to the Certarus numbers through Q4 and what we indicated would happen kind of Q1 of 2026. That's reflecting a big chunk of that business, well over half, actually, I'd say, of the business that's already out. And so that's reflected in those numbers. So yes, the future potential. Now look -- and Dale can speak more to this. We'll continue to be competitive and participate in ongoing bids to keep business with what's a great customer and a great relationship that we've got. But the exposure certainly is not nearly what it was a year ago. Allan MacDonald: Yes. What's interesting, Gary -- what's interesting about that is we were talking about this yesterday, the dynamic nature of the contracts at Certarus means your contracts are almost always at market price because they tend to be short term in nature. When you have utility contracts that are multiyear, they're reflecting -- the impact of pricing changes over the course of that contract happen all at once. So some of that -- and of course, if you renew the contract, the pricing implications still happen all at once, but you go into a new contract at a lower price. So part of what you're seeing in the Northeast is really moving to more market pricing. The second thing is our MSUs are overutilized right now. We've got every MSU that we own in production right now, along with some rentals. So it's not like this created debt capacity for us. It was really just more normalization of pricing in my mind. Having said that, a good customer, and we'll continue to work with them with every opportunity. Gary Ho: So I just want to put a finer point. So that the negative impact from that customer would be fully reflected in your '26 numbers? Allan MacDonald: Sorry, yes, I kind of whispered that, but yes. Gary Ho: Okay. Great. And then, Grier, maybe just on the revised buyback assumption, USD 50 million to USD 100 million and your 3.5x leverage target for 2027. Can you maybe walk me through how the Brookfield preps gets modeled into those numbers? The lower buyback still wouldn't get you to the full USD 260 million. So are you thinking of repaying the rest of that with incremental debt? I just want to pick your brain on that. Grier Colter: Yes. So a few things here. And if I don't answer what you're asking, just ask again. But the numbers we've assumed, so when you look at that 3.8x target and the -- that's assuming that we would shift, that's the lower end of the buyback range. So if you say like we will buy back $50 million to $100 million. If we buy back $50 million, that's how you get to the 3.8x. And then getting out to the 3.5x would assume that you continue to be shifted to debt reduction. There's various refinancing alternatives. But if the thinking is if we could partially refinance this through rediverted share repurchases and ultimately, the extra liquidity will come from all likelihood, a public bond and the rates obviously are quite attractive, as you know. And so that's kind of probably the refinancing plan. A couple of things I'll say, though. Look, we have been buying back stock this year, and we are going to continue to buy back stock for the foreseeable future. That I just want to make clear. We still think that this is an excellent use of capital. And really, this is an intention to add flexibility to shift to debt reduction in half 2 as our leverage is a priority. And we've been, I think, very consistent on that. The factors that will kind of dictate what we do will be cash flow EBITDA based, obviously, and we'll look at the share price and likelihood of redemption, those will be kind of the considerations. And then lastly, I just want to reiterate the point that while this is obviously a -- is important from a debt reduction standpoint, this preferred share instrument, we could keep in and it's got step-ups in coupon and other features. This is an equity -- it has an equity component to it, right? And so our view is that if we're in a position to redeem this, that you're removing this potential for dilution of 30 million shares, which is like 12%, 13% of the equity. And so while it would be in one way, may be viewed as a shift from buyback to debt reduction, the intention here would be to shift to redeem an instrument that has equity in it. And you could very much view that as share repurchase as well as well as making sure that the leverage component is under control, which, as I said, is an important piece of this. So I just wanted to make sure that's clear. Operator: Our next question comes from the line of Daryl Young from Stifel. Daryl Young: I wanted to talk a little bit about the propane business and the guide for 2026. If you strip out the incremental Superior Delivers contribution, it implies negative organic growth of sort of 3% to 5%. So I just wanted to get a sense of, is that a function of customers that would have left your platform last year because I know there's a big lag dynamic there? Or is that a function of customers that you expect to leave because of some of the challenges that have been incurred this winter? Any color there would be great. Allan MacDonald: Daryl, it's Allan. To be honest, it's a combination of both, primarily the first. We're not that bearish on churn going into 2026. But from the outset, we had built Superior Delivers in 2 stages. The first was getting the operational optimization done and dusted, which is, of course, delivery optimization and it's our wholesale network optimization and things like that. And then the second piece was frankly, a little more complex, and that's how do you manage churn in the propane space, which is very difficult to see. As you well know, there's big lag times, and there's not a lot of predictive indicators. And then customer acquisition has been a challenge for us and a lot of majors because of the history of growth through margin expansion. So the good news is we're obviously well down the road on the first piece. On the second piece, we are starting to put tools in place or we've got tools put in place for predictive modeling on managing customer retention. We've developed marketing programs that are having a much higher success rate in customer saves, if you will, when we identify customers that are at risk of churn. And we've got -- we're making good progress on a higher conversion rate of sales leads. So that's all really encouraging. It's harder for that to make a material impact when you're talking about quarter-over-quarter or even year-over-year because you don't get the full run rate benefit, obviously, of a new customer acquired in a given financial period. So we've always been of the mindset that, first, get the operational optimization under place and then second, start to build that commercial capability. So you're really just seeing -- I don't want to use the word delay, but we're still doing that in succession, but the extra work that was required on the first piece just means that the second piece is going to come in a little later. So that's probably the long and the short there, I think. Daryl Young: Okay. So it sounds like then as it relates to the $75 million of upside from Superior Delivers, you still feel confident and you're seeing regional examples of how the customer acquisition model can work, and that's what gives you the confidence to keep the $75 million target? Allan MacDonald: That's right. Absolutely, we are. Operator: Our next question comes from the line of Nelson Ng from RBC Capital Markets. Nelson Ng: So my first question just relates to propane. I wanted to better understand the tank inventory situation. So I think, Allan, you mentioned that you entered into Q4 with lower inventory than you'd hoped for. And then you ended Q4 with, I guess, low customer in tank inventory. Due to the cold weather in Q1, do you also expect -- has inventory continued to decline as you face some, I guess, delivery issues. And I know that you flagged earlier that you expanded your driver base to like help with the situation. But can you just talk about the in-tank inventory and when that would normalize? Like are we looking at March or sometime in the spring? Allan MacDonald: Yes. Nelson, Sure. Yes. Well, as we said, we went in with the launch of version 1 of our delivery optimization tool that caused us to go into Q4 with lower in-tank inventories than we traditionally would. Q4 and Q1 are really interesting because Q4 starts low in terms of demand and ends high. So you're ramping up. Q1 is the opposite. It starts high and you ramp down. So going into Q4 with a bit of a backlog, you've got demand coming. So you get that double whammy. We've managed to obviously sustain our capacity through December and January. And as winter starts to look a little bit more like spring, it gives us the opportunity to recover some of that -- well, some or all of the in-tank inventory levels. In other words, to get the customers to the level that we think is optimal. So you got to remember, too, when we sit here in Toronto, sometimes you forget that we operate in everywhere from Southern U.S. to northern parts of Canada. So spring doesn't come in March and April in every part. We're well into it in some parts of the U.S., and that's exactly what we're seeing is we're using that continued capacity that we've had through December and January to get our tank levels to where we want them to be. So it's my expectation that -- said simply, yes, we had a tank inventory challenge that complicated the winter. We maintained service through that. And coming out into the spring, you're going to see tank inventories normalize to where we think they should be. Grier Colter: And Nelson, maybe I'll just -- it's Grier. I'll tack on a little bit here. It is a bit tricky to estimate exactly when that's going to happen, like as you can probably appreciate, if you had a really cold January, February, March, pretty tricky to catch up inventory in March. If you had a cold January and a cold February and a warmer March, obviously, makes it a little bit easier to catch up the inventory levels. And so some of this is a little bit difficult to predict and will be somewhat predicated on what kind of weather you get, if that makes sense. Nelson Ng: Yes. So does that mean we should generally see like with the cold weather we've seen to date, that volumes in the first half of this year should be looking pretty good as you push inventory back up? And then I just want to just clarify, given the -- some of the delivery challenges, have you been -- is that -- if that was a benefit, like is a lot of that benefit offset by maybe it's like paying overtime wages and things like that to meet customer demand? Allan MacDonald: Well, one of the important things to remember is we don't have unlimited capacity. So when you get to a point where it's so cold that you have opportunities outside your normal customer bank, customer-owned tanks or we'll call customers that deal with multiple companies, you don't have an unlimited supply to be able to capitalize on every opportunity in the market. So -- and I said otherwise, no matter how cold it is, we only have a finite delivery capacity, and that's dedicated to keeping our current customers fueled. In terms of -- sorry, the second part of your question was coming out of the volumes with getting tank inventories back? Nelson Ng: Yes. Like are you seeing a benefit from moving inventories back up and have you been paying overtime wages? And are you going to see elevated costs in Q1, which might offset that benefit? Allan MacDonald: Yes. So I'm going to ask Grier to comment. The only thing I would say is our -- there's 2 kind of variables, our capacity and the customers' propensity to take deliveries. And the customers' propensity to take deliveries going into a warm season is not universally 100%. So we're going to be -- we have the capacity, and we're putting incentives in place to make sure that our customers are receptive to refills going into the lower season. But Grier will offer some comments with the cost piece. Grier Colter: Yes. So Nelson, what I would say is that when -- so when we're running at kind of full capacity and you push on overtime, yes, the overtime rate is a little bit higher. But you could still make really good economics on the delivery. If you draw also from what we would call like service or service staff who might be whatever, installing tanks, doing like regulatory work, if there are things that are movable, some are movable, some are not. But if some of these things are movable, I would view it as a delay. So if you had service-related revenue where you've moved service people to delivery, you may not get that revenue in that quarter, but it wouldn't be necessarily lost. It would be delayed. And I think we talked about at third quarter, we kind of thought there was roughly $5 million, and we kind of thought it would be hard to get that back. The reason for that is we thought going into the fourth quarter, it's pretty difficult to get that back because you're getting busier. So for you to recoup that, it's pretty tricky. The way I would think about the backlog is that, yes, the inventory levels are a little bit lower. We think we will get that back in 2026. As it sat kind of at end of third quarter last year, it wasn't a huge number, call it, maybe $5 million. That's a bigger number at the end of the year. If I said it's $10 million to $15 million, you're probably in the ballpark. As we ran into January, yes, January, you're right, was cold. Inventory levels, we've certainly not been able to gain ground on that. So like leaving the month of January, that number is probably even a little bit larger than that. So do we think we'll get all that back? I think we'll get most of it back. And the reason is that even though they're using overtime, as I said, you can still make margin, maybe not quite as good, but pretty good. And the service revenue, it would just maybe come later in the year, right? So things that are as I say, nonemergency type service things, you do them a bit later. And so that revenue that you might have got from service through those people in February, you're using those people to help keep tank levels up and keep customers happy. And those people can then do that service stuff that's noncritical in April, say, or May. And so you get that revenue within the year. It's much easier to see it like when you have a busy season and then going through the shoulder where you can catch up on some of the stuff and get that back, whereas in third quarter, that dynamic wasn't available, and that's why we kind of thought it would be tricky to get that $5 million back after third quarter. I said a lot of stuff there, but hopefully, that is somewhat helpful. Nelson Ng: Yes, that's very helpful. And then just moving to Certarus. I had a few questions there. So I think, Dale, you mentioned that pricing kind of bottomed out in Q3 for MSUs and it's been pretty flat since then. But can you just talk about -- and that -- I think that was at the wellsite, but can you just talk about like MSU pricing outside of the wellsite? Because I presume like there's no longer any supply constraints to MSUs. So are the competitors out there like reducing pricing on areas outside of the wellhead? Dale Winger: Yes. It matters the most for us in the wellsite just because on a volume basis, wellsite is still 80%. But the oversupply of sort of the market sort of growing into the demand for the supply of trailers obviously does impact pricing in other segments. But it's been most severe on the wellsite, and that's been the big impact kind of in our financials and in our outlook. Nelson Ng: Okay. And then I was just doing some rough math. And are you adding roughly 20 MSUs at Certarus this year? Is that the plan? And also, like are you seeing a big decline in the cost of purchasing MSUs? Dale Winger: Certainly, so the 23 MSUs to be added have been added. As Allan mentioned, our utilization through kind of winter demand, we were 100% utilized and we were renting trailers. And so we decided the trailers were most valuable to us to go ahead and bring those in. And so those were brought in. And yes, good news. I mean, as part of our overall kind of cost savings initiatives and capital efficiency initiatives, we were able to achieve meaningful reductions versus last price paid on the acquisition of that equipment. Nelson Ng: Got it. And then just one last question for Grier. Just on the preferred shares, I think, obviously, you have the option to redeem the preferred shares, I think, starting in July of next year. So if -- I guess if your forecast -- your financial forecast doesn't turn out or if there's downside to your numbers, I guess this is an option at the end of the day, right? So you could potentially just delay the redemption. Can you just talk about that like optionality? Like your base case is probably to redeem the prefs, but it's -- you obviously have the optionality to let the coupon increase and redeem it at a later date, right? Grier Colter: Yes, you're right. There's a few options here. The base thinking is that, yes, we -- if we got to a scenario, and you're right, it's mid-2027, where if the equity price wasn't high enough such that the holder of the instrument was going to convert to equity that we would likely redeem it. The most likely source of that would be a combination of building up some extra cash as we talked about from shifting of the capital allocation strategy, but also high-yield bond, which would have a coupon lower than that. But that's one option. That's kind of the main line of thinking. We would have -- we don't need to redeem, you're right. And so if the holder of the instrument doesn't convert to equity, there's 2 things we can do. One is redeem the other, you're right, we can leave the instrument in place. Currently, the coupon on it 7.25%, there are step-ups. I can't remember exactly how the step-ups work, but 7.25% goes to 7.75% and this kind of thing. And so it's not the most favorable coupon. But certainly, we do have the option to keep that around at those stepped-up coupons, and we can send you the detail on what those are. I'm not sure if it's public, it might actually be public, but we can easily send you those. And then, of course, there would be -- depending on how you're trying to manage your debt and your rating agency equation, there's obviously like views that it's equity or part equity or whatever. So that is definitely an alternative that we have in front of us, not kind of the baseline thinking, but you're right, that would be something that we have at our disposal. Operator: Our next question comes from the line of Patrick Kenny from National Bank. Patrick Kenny: Maybe just to continue on with the conversation on the prefs there, Grier. So you mentioned the likely refi with public debt. But just given the time you have between now and then, just wondering if you might be contemplating an asset sale program of similar size just to help shore up the liquidity position ahead of next summer or any other sources of funds that might help mitigate your exposure to the credit markets over the next year or so? Grier Colter: Pat, it's Grier. I don't -- I think that that's -- other than -- so I would say, as part of Superior Delivers, we have been kind of coming through and making sure that we don't have obviously excess assets. A decent example would be if you've got 2 bulk plants that through acquisition, we acquired and they're right next to one another. Obviously, those have been easy ones. And you see those kind of showing up in the proceeds. But meaningful businesses or geographies, that is not high on the list of things for us. We think there's way more inherent value in keeping these businesses and running them better and driving more value out of them. And so the base thinking is that no, that would not be a focus for us other than what we would kind of call extra things like extraneous or surplus infrastructure that we've got, which a lot of that we've been through already. So no, that's not the base line of thinking. I think, obviously, like there's a price for everything if there was some asset that attracted a bid that was too hard to refuse, obviously, we're always open. But I think we're not out looking to divest assets. We think that this company is probably better if it's bigger. It's better if it has more density. It's better if it's a bigger business. And so the baseline, I think, is not to get smaller. Patrick Kenny: Got it. And then just maybe to double-click on the buybacks versus debt repayment decision here over the medium term. So you touched on it, but can you just clarify your thought process here in terms of what the key macro or micro gating items might be over the next couple of quarters as you decide which path to take for 2026? Grier Colter: Yes, for sure. So as I say, I think like we've been buying back this year, we'll continue to buy back for the foreseeable future. This range we put out there really was to try to talk about what might happen in the second half. That would be kind of the timing like if we were to shift, we really would -- we wouldn't get at it at least until kind of halfway through the year. What would be the considerations? It's going to -- it will be based on the winter cash flow that we're generating EBITDA as that becomes clearer for us, that will be a factor. And then, of course, the likelihood of redemption. So what happens to the share price will be an input. So those will kind of be what we'll look at. As I say, I think that we view the -- as I said earlier, we view these as -- if there is a redemption of preferred share, they're like -- it is a low delta call option in it right now, but it is equity and it has an equity element to it. And so even if we were to shift, I think it's important that we view that as an equity-friendly or shareholder-friendly shift. And it is, as I say, like a synthetic or has similar elements of maybe I would say as a buyback. But anyway, that's kind of the way we're thinking about it. As I say, it would be -- it's watching the cash flow, watching the EBITDA, watching the share price and those really are the inputs, but we're not going to do anything probably until at least halfway through the year. Operator: Our next question comes from the line of Robert Catellier from CIBC Capital Markets. Robert Catellier: I just wanted to see if you could clarify what the key issues are on the reduced delivery capacity in the propane business. And more importantly, just confirm that the solutions and time lines required to resolve these issues have been identified. Allan MacDonald: Rob, yes, you know what, it's obviously been a challenging winter, but I don't think that it's necessarily the delivery capacity. I think it was a combination of us creating some headwinds for ourselves with in-tank inventories and coupled with what was a very, very unusual winter from a weather standpoint. So my confidence level in terms of our being able to meet demand, first of all, is very high going forward. But secondly, coupled with that, we want to drive even really see those optimization savings coming through. So we're able to not only meet the demand of the customers, but also do it in a much more efficient way than we've done in the past. So a bit of a perfect storm coming through this winter. Some of it self-inflicted, unfortunately. But I don't see this as a trend, and it's not something I'm concerned about repeating. Robert Catellier: So you think just the fullness of time and straightening out the inventory levels is going to resolve the challenges you've experienced? Allan MacDonald: Yes. Yes, 100%. I think where we to handle this -- have the same weather pattern next year, our positioning to be able to not only satisfy the requirements of our customers, but do it in a very efficient way, I think it would be dramatically higher. Robert Catellier: Okay. And just turning to Certarus here. I'm wondering if you have a view on what has to happen to see more well site activity for Certarus in your opinion? Is it the oil price level or some other risk factor customers are dealing with, generally speaking? Dale Winger: Well, I mean, wellsite activity, volumes are very good. I mean we had record volumes in the fourth quarter. Certainly, we're in a lower oil price environment than where we were a year ago. And so -- but that's actually had more of an impact kind of on pricing than it has had on kind of overall activity. I visited with several customers to start the year. I would say, Rob, the median of those conversations, I mean, this is from all across North America is customers have spending plans somewhere between down low single digits to flat. So the range is larger than that. Some are planning to have increased spending, some less than down low single digits. But kind of down low single digits to flat is the range with oil prices kind of in this mid-60s price environment. And so we continue to stay focused on offering the best value proposition to those customers. They care a lot about safety. They care a lot about reliability and between reducing our costs to be efficient and be competitive. We feel good about our position. And then I think for sure, commodity prices would be the thing that could change the trajectory of those spending plans as the industry kind of works its way through cycles. And certainly, 2025 was a downward trajectory on that cycle. And for 2026, we haven't planned an inflection. We're planning to kind of compete in market conditions as they are. And certainly, we'll be encouraged as the cycle begins to turn. Allan MacDonald: What's interesting about that, too, Dale, and Rob, is -- the growth in our renewables and industrial business means as the biggest player in the market, we're not flooding West Texas with excess capacity. So that shift in strategy and the work that Dale has done has been a godsend because in some weeks, we're actually taking trailers out of West Texas, which is alleviating some pricing pressure. But certainly, that's caused us to not have to rely on the sort of traditional originating vertical and be contributing to oversupply. So we're -- that's one of the reasons we're staying the course. And one of the reasons that we're optimistic that a recovery is going to be beneficial because we've got other options that are actually serving us really well. And the work that Dale has done on the operating leverage means that sort of pricing recovery goes right to the bottom line. So all that to say, yes, it's going to be activity for sure. But it's worth noting that we're also not contributing to an oversupply in that market right now. Operator: At this time, I would now like to turn the conference back over to Allan MacDonald, President and CEO, for closing remarks. Allan MacDonald: Well, thank you very much for joining, everyone. It's good to talk to you all. We appreciate your questions, and we look forward to speaking to you in May. Thanks very much. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.