AI Investor Insight

ST 2025 Q4 财报电话会议

Operator: Good day, and welcome to Sensata's Fourth Quarter and Full Year 2025 Financial Results Conference Call. [Operator Instructions] please note this event is being recorded. I would now like to turn the conference over to James Entwistle, Senior Director of Investor Relations. Please go ahead. James Entwistle: Thank you, operator, and good afternoon, everyone. I'm James Entwistle, Senior Director of Investor Relations for Sensata, and I would like to welcome you to Sensata's Fourth Quarter and Full Year 2025 Financial Results Conference Call. Joining me on today's call are Stephan Von Schuckmann, Sensata's Chief Executive Officer; and Andrew Lynch, Sensata's Chief Financial Officer. In addition to the financial results press release we issued earlier today, we will be referencing a slide presentation during today's conference call. The PDF of this presentation can be downloaded from Sensata's Investor Relations website. This conference call is being recorded, and we will post a replay on our Investor Relations website. As we begin, I would like to reference Sensata's safe harbor statement on Slide 2. During this conference call, we will make forward-looking statements regarding future events or the financial performance of the company that involve certain risks and uncertainties. The company's actual results may differ materially from the projections described in such statements. Factors that might cause such differences include, but are not limited to, those discussed in our Forms 10-Q and 10-K as well as other filings with the SEC. We encourage you to review our GAAP financial statements in addition to today's presentation. Much of the information that we will discuss during today's call will relate to non-GAAP financial measures. Our GAAP and non-GAAP financial measures, including reconciliations, are included in our earnings release, in the appendices of our presentation materials and in our SEC filings. Stephan will begin the call today with comments on the business. Andrew will cover our results for the fourth quarter and full year of 2025 as well as our financial outlook for the first quarter of 2026. Stephan will then return for closing remarks. We will then take your questions. Now I would like to turn the call over to Sensata's Chief Executive Officer, Stephan Von Schuckmann. Stephan Von Schuckmann: Thank you, James, and good afternoon, everyone. Let's begin on Slide 3. As I typically do at the start of our earnings calls, I would like to begin today with an update on Sensata's transformation journey. Throughout the year, I've spoken about our transformation through a framework of 3 key pillars: operational excellence, capital allocation and growth, along with the various initiatives which underpin them. These key pillars for value creation are fundamental to everything we do. Initiatives that we discussed this year are simply building blocks, laying a foundation on which we build our future. As we enter 2026, I'm proud of the work we did to put those building blocks firmly in place, and I'm excited to share more about the next phase of our transformation. Before we get to the next phase of our transformation, I would like to take a moment to acknowledge the magnitude of what we accomplished this year and to thank the Sensata team for their tremendous work. Our team demonstrated resilience and determination to perform, continuously overcoming the many challenges that came our way and always delivered on our commitments. I'll share more proof points in a moment, but at a high level, as we reflect on the year, the outcome of our 3-pillar approach is compelling. With our focus on operational excellence, we reported results at or above the midpoint of our guidance ranges every quarter this year. With our focus on capital allocation, we created urgency to improve cash generation, reducing both gross and net leverage and returning capital to shareholders. And with our focus on returning to growth, we overcame structural challenges in our business and end market mix, ultimately returning to outgrowth in the second half of 2025 and returning to revenue growth in the fourth quarter. We have a structured way of working, starting with a measure-based approach to prioritize hitting our targets. To compound value over time, we continuously raised the bar, setting new targets incrementally higher than the previous ones. This way of working is now ingrained in our organization and is embedded in everything that we do. Maintaining this rigor requires determined, resilient leadership. Let's turn to Slide 4, as I would like to highlight the industry-leading executive team we have assembled over the past year. Our leadership team is a balanced mix of new talent with best-in-class industry experience and proven Sensata performance. The team has demonstrated that they will rise to meet the challenge of the moment, and I'm confident that we have the right team in place to lead us through the next phase of our transformation journey. With that, let's turn to Slide 5, and I'll share a bit more about this past year's transformation. This year's performance demonstrates not only the progress we made, it also sets a benchmark for the organization we expect to be. We finished 2025 with a strong fourth quarter, capping off a year in which we met or exceeded our expectations across each of our key metrics for 4 consecutive quarters. The results are proof points for the progress we made across each of our key pillars. Let's start with operational excellence. We exited the year with Q4 adjusted operating margin of 19.6%, representing 30 basis points of year-over-year margin expansion despite headwinds from tariffs. With that strong finish in 2025, we delivered on our commitment of 19% adjusted operating margin for the year. This was a major inflection point for us and it was the first year since 2021 without year-over-year margin contraction. This is a testament to the resilience we have installed in this business and the seriousness with which we take our commitment to our margin floor of 19%. Free cash flow has been an area of significant focus, and we believe our progress is a leading indicator of the impact to come from the operational improvements we are making. We made significant strides in improving free cash flow this year, generating a record $490 million at a 97% conversion rate. This conversion rate was an improvement of 21 percentage points from prior year and is significantly higher than any year in our history aside from the abnormal 2020 pandemic year. With our strong free cash flow, we accelerated value creation through our capital allocation pillar, returning $191 million to shareholders through buybacks and dividends while also retiring $354 million of long-term debt in the fourth quarter. Our net leverage now stands at 2.7x trailing 12 months adjusted EBITDA and with $573 million of cash on hand as of December 31, we have ample liquidity. Our third key pillar is growth. In our long-cycle business, the initiatives we took this year to drive growth will show up in the quarters and years ahead, and we're already seeing compelling signs of progress. We delivered on our commitment to return to outgrowth in the second half of 2025, outgrowing production in Q3 and delivering 4% organic growth in Q4. With this progress, we are doubling down on our growth mandate moving forward. I'm tremendously pleased with the transformation that we've executed this year and the value we created in our first year on this journey. I also want to be clear that we are not done. What we have accomplished sets the foundation for an even brighter future. I'm excited to share more about the next phase of our transformation. Turn to Slide 6, and I will start by more clearly defining Sensata. Sensata is a uniquely diversified business. We install sensing and electrical protection products into multiple end markets with automotive being our largest market. This at times creates confusion. Some see Sensata as an automotive business with exposure to other end markets. Others see Sensata as a diversified Industrial business with outsized Automotive exposure. Neither view is entirely accurate. As we look towards the next phase of our transformation, we reconsidered how we are organized. We looked at factors such as business cycles, market cycles, customer mix and go-to-market strategy. After careful evaluation, we reorganized Sensata into 3 operating segments, each with a distinct mandate for value creation and growth. These 3 segments are Automotive, which was approximately 57% of 2025 revenue; Industrials, which was approximately 21% of 2025 revenue; and Aerospace, Defense and Commercial Equipment, which was approximately 22% of 2025 revenue. Each operating segment is aligned to market verticals that are clearly delineated by customers, sales channels, growth drivers and business cycles. Automotive is a relatively mature end market with limited underlying production growth, making this a market outgrowth-driven segment. We enjoy high volumes and revenue certainty tied to underlying vehicle production because our products are designed in on long-lived vehicle platforms. We outgrow production by increasing our content on vehicle platforms and by positioning the business to succeed on all propulsion technologies. Our ability to grow regardless of propulsion type is an enviable position in the automotive market compared to many of our peers and competitors who are levered primarily to either ICE or EV. This also positions us to grow in all geographies despite differing powertrain trends. Industrials is a highly diversified and primarily short-cycle business with a mix of direct to OEM distribution channel and project-based sales. Our Industrial segment includes derivatives of sensor products from our other end markets as well as products developed specifically for Industrial applications such as gas leak detection and certain electrical protection devices. Because the Industrial segment is so diversified, it offers the most growth opportunity in terms of new applications or markets for our products. This includes several areas with secular growth such as thermal management, grid hardening and data centers. Aerospace, Defense and Commercial Equipment is also highly diversified, but is more long cycle and platform-driven. The end markets we serve include commercial aviation, defense, commercial trucking, construction equipment and agricultural equipment. The platform lives in these markets are significantly longer than in automotive, often spanning multiple decades. The applications for our products cyclically support long service lives often in harsh environments, leading to much higher specifications and at premium price point for higher durability. Each of the markets we serve in this segment experienced cyclical growth. The cyclicality is influenced by macroeconomic factors as well as by government policies such as defense spending, environmental standards, tax incentives and farm subsidies. As a result, we see a confluence of different cycles, often affording us the flexibility to manage the segment by balancing contracyclicality. Historically, the market thought of Sensata as having high automotive concentration and therefore, being a market outgrowth business in a low-growth market. Sensata's growth history has, to a certain extent, reinforced that view. As we think about value creation moving forward, we see a much wider field of opportunity, which is best summarized in our 3-part growth framework. Let's turn to Slide 7. First, we design, produce and sell sensing and electrical protection products in multiple end markets, each with the different growth dynamics I just described. Second, we leverage our automotive scale and pedigree to our advantage. The high volumes and production certainty afford us the flexibility to manage through market volatility in our other end markets while underwriting growth investment. And the high quality and delivery standards in automotive enable us to win in other markets. Third, we use the common characteristics of our most successful programs to set clear guardrails for new business opportunities. That means we stick to our core products and technologies while focusing on high-volume platform-driven business opportunities, serving mission-critical or regulated applications. As we develop growth strategies for each of our segments, we have been disciplined about filtering the market for growth opportunities that fit this framework, and we're excited about the opportunities we see. With that, I would now like to offer a glimpse into the next phase of our transformation, accelerating value creation by delivering growth in each of our segments. Let's turn to Slide 8, and I will discuss our Automotive segment, where our mandate is to foster our core business while delivering growth across all propulsion types. Recently, we have seen content accretive business opportunities on plug-in hybrid vehicles or PHEVs, and extended range electric vehicles or EREFs. This vehicle type is particularly attractive for Sensata. Allow me to illustrate as we turn to Slide 9. Approximately half of the dollar value of content that we have on a traditional ICE vehicle is outside of the powertrain and thus is still relevant on an EV. This includes sensor sockets in the air conditioning and brake systems as well as tire pressure sensors. On a typical EV, we see these same sensor sockets as well as additional content opportunity from electrical protection sockets in the electric powertrain and charging architecture. In aggregate, our content per vehicle opportunity on an EV is approximately double that of an ICE. In between ICE and EV are various hybrid platforms. A mild hybrid will look more like an ICE vehicle, while a plug-in hybrid or range extender will be more like an electric vehicle. Let's turn to Slide 10 to unpack this further. In 2026, in an automotive market that is expected to be approximately flat, PHEV and EREV production is expected to grow 17%. And over the balance of the decade, we expect a 12% CAGR for these vehicle types. The content potential on a plug-in hybrid or range extender is attractive due to the availability of all 3 socket categories: ICE powertrain, high-voltage electrical protection and sensor content outside of the powertrain. As these vehicles win in the market, we expect they will emerge as a meaningful outgrowth driver for us and yet another proof point for our competitive advantage in not being indexed to any single propulsion technology. Now let's turn to Slide 11 and take a look at Industrials. Our Industrial segment has a strategic mandate to deliver growth across 3 key technology areas: power and peak management, thermal management and electrical protection. We see demand over these products in multiple areas, including HVAC, appliances, buildings and microgrid. One of the most compelling growth vectors is data centers, and I'd like to briefly click down to share more about where we see opportunity. Let's turn to Slide 12. In the past, we have shared that we have some content in data centers today, but that we are underpenetrated in this market. These opportunities span our key Industrial product areas. As you can see illustrated on this page, the content opportunity inside the data center is significant. Turning to Slide 13. There are meaningful opportunities outside the data center as well. One of our growth initiatives in 2026 is to expand our share in data centers. What I can share today is that in the fourth quarter of 2025, we stood up an initiative to deliver growth in data centers. We allocated some of our top performers to this critical growth initiative. And as we demonstrated in 2025, we take execution of our initiatives seriously. I look forward to sharing positive update here as the year progresses. Lastly, I will discuss our Aerospace, Defense and Commercial Equipment segment, starting on Slide 14. We serve multiple market verticals in this segment, which can be grouped as aviation, ground transportation and off-highway equipment. We have a dual mandate for this segment to position the business to weather market cycles and to grow our aerospace and defense business into a more meaningful part of the portfolio. We see ample opportunities for revenue growth in the super cycle that is developing across both commercial aviation and defense. With that, again, I will briefly click down to share a bit more about where we play and where we see opportunity. Let's turn to Slide 15. Aerospace is one of our smaller and often overlooked market verticals today, yet it is one of the darlings of our portfolio with high margins and outstanding growth potential. Earlier, I talked about our automotive pedigree. In aerospace, pedigree matters too, being in flight on commercial airliners is the gold standard, and we're in flight today, both with position sensors and aircraft circuit breakers. Given the backlog for commercial aircraft, we expect meaningful growth from this part of our portfolio. With increased defense spending as a clear secular trend, let's turn to Slide 16 and take a look at that sector. UAVs offer high-volume platform-driven opportunities for both sensing and electrical protection products, perfectly aligned to the growth framework I described. We look forward on future calls to sharing more about our progress on accelerating growth in this key end market. With that, I will now turn the call over to Andrew to offer more insights into Q4 and full year results as well as to share our outlook for 2026 and guidance for the first quarter. Andrew Lynch: Thank you, Stephan, and good afternoon, everyone. Let's begin on Slide 18. As Stephan mentioned earlier, 2025 was a transformative year for us as we rolled out new initiatives framed around 3 key pillars. Our Q4 and full year results are proof points for the progress we made. We reported revenue of $918 million for the fourth quarter of 2025, which exceeded the midpoint of our guidance range by $13 million. Fourth quarter revenue represented an increase of $10 million or approximately 1% compared to $908 million in the fourth quarter of 2024. This was the first year-over-year quarterly revenue increase since the first quarter of 2024. On an organic basis, revenue increased approximately 4% year-over-year in the fourth quarter. We delivered adjusted operating income of $180 million and adjusted operating margin of 19.6% in the fourth quarter of 2025, an increase of 30 basis points, both sequentially and year-over-year. Adjusted operating margin was diluted by approximately 30 basis points due to approximately $15 million of 0 margin pass-through revenues related to tariff recovery. Excluding the dilutive impact of tariff pass-through, fourth quarter adjusted operating margin increased by 60 basis points year-over-year and 40 basis points sequentially. Tariff pass-through revenues did not meaningfully impact sequential performance as we recorded similar levels of tariff cost and pass-through revenues in both the third and fourth quarter of 2025. Adjusted earnings per share of $0.88 in the fourth quarter of 2025 increased by $0.14 year-over-year as we delivered on our margin expansion plans. Adjusted net income was $130 million in the fourth quarter of 2025, an increase of approximately 16% year-over-year. We recorded approximately $50 million of restructuring-related and other charges in the fourth quarter. While these charges primarily related to our ongoing transformation efforts, they also included approximately $16 million of primarily noncash charges related to an electric vehicle program cancellation by an OEM customer. These costs were excluded from our non-GAAP financial metrics. Now let's turn to Slide 19 to review our financial performance for the full year 2025. 2025 revenue was $3.70 billion compared to $3.93 billion in 2024, a decrease of 6%, primarily due to our previously disclosed divestitures and product life cycle management actions. On an organic basis, revenues were approximately flat year-over-year against a challenging market backdrop. We delivered $705 million of adjusted operating income in 2025, which was a decrease of 6% from $749 million in 2024, primarily due to lower revenue. Adjusted operating margin was 19.0%, flat to 2024 despite the 6% lower revenue as our productivity gains offset any deleveraging impacts. 2025 adjusted operating margin was diluted by approximately 20 basis points due to approximately $40 million of 0 margin pass-through revenues related to tariff recovery. Excluding the dilutive impact from tariff recovery, 2025 adjusted operating margin increased by 20 basis points year-over-year. 2025 adjusted earnings per share of $3.42 decreased by $0.02 year-over-year and 2025 adjusted net income of $503 million decreased by approximately $16 million year-over-year. The primary driver of these decreases was lower net revenue due to product divestitures. Adjusted net income as a percentage of net revenue increased by 40 basis points year-over-year from 13.2% in 2024 to 13.6% in 2025. Now let's turn to Slide 20 to discuss our free cash flow performance. We delivered record free cash flow of $490 million in 2025, an increase of 25% compared to 2024 free cash flow of $393 million. Free cash flow conversion was 97% of adjusted net income, an increase of 21 percentage points year-over-year. In 2025, we reduced net leverage from 3.0x trailing 12 months adjusted EBITDA as of December 31, 2024, to 2.7x as of December 31, 2025. In the fourth quarter, we took advantage of favorable bond market conditions to retire $354 million of our long-term debt. In connection with this transaction, we recorded a net gain of approximately $3 million, which we excluded from our adjusted operating results. Turning to Slide 21. We returned $191 million to shareholders in 2025, which consisted of $121 million in share buybacks and $70 million in dividend payments. Last month, we announced our first quarter 2026 dividend of $0.12 per share payable on February 25 to shareholders of record as of February 11. Our capital allocation strategy continues to prioritize deleveraging as a means to compound value for our shareholders. ROIC in the fourth quarter increased to 10.6%, which is an improvement of 40 basis points year-over-year compared to the fourth quarter of 2024. Now let's turn to Slide 22, and I will walk through the results for our segments for the fourth quarter of 2025. In connection with the reorganization that Stephan described, our reporting segments are now Automotive, Industrials and Aerospace, Defense and Commercial Equipment. This new segmentation reflects a reorganization of our business and leadership to align with our strategic imperatives and to most effectively execute our strategy. With this new reporting structure, we look forward to giving investors enhanced visibility into our business results and the ongoing progress of our transformation journey. Growth is an increasingly important metric for us as we move to this next phase of our transformation journey. We were pleased that each of our segments delivered year-over-year organic revenue growth in the fourth quarter. Automotive segment net revenue was $527 million in the fourth quarter of 2025, a decrease of approximately 1% year-over-year on a reported basis, primarily due to product divestitures. Organically, revenue increased approximately 1% year-over-year, which was approximately in line with the market. Segment adjusted operating income was approximately $129 million in the fourth quarter of 2025 or 24.4% of segment revenue, representing year-over-year margin expansion of 100 basis points. Industrial segment net revenue was $191 million in the fourth quarter of 2025, an increase of 6% year-over-year on a reported basis and 8% organically. This strong year-over-year growth was driven by continued growth in our gas leak detection business. Segment adjusted operating income was $59 million in the fourth quarter of 2025 or 30.9% of segment revenue, representing year-over-year margin expansion of 620 basis points. Finally, Aerospace, Defense and Commercial Equipment segment net revenue in the fourth quarter of 2025 was $199 million, which grew approximately 4% year-over-year on a reported basis and 7% organically. Segment adjusted operating income was approximately $56 million in the fourth quarter of 2025 or 28.1% of segment revenue, representing year-over-year margin expansion of 310 basis points. Adjusted corporate and other costs include higher variable compensation costs associated with the improved segment performance. Before we get to our guidance for the first quarter of 2026 and outlook for the year, I will share what we are seeing in our end markets. Let's turn to Slide 23. In automotive, we saw Q4 light vehicle production growth of a modest 2%. For the year, we saw light vehicle production growth of nearly 4% with the market in China growing 10%, while production in the West, where we have higher content per vehicle, decreased by 1%. Looking ahead to 2026, we expect global light vehicle production to be flat to down 1% with similar trends across each region. In Q1, we expect global light vehicle production to decrease by 3% to 4%, and then we expect modest year-on-year production growth each quarter thereafter. In our Industrial segment, 2025 GDP growth was just under 2% in the West and just over 4% in Asia. We expect similar regional growth differences in 2026, including in the first quarter. Our Industrial business is primarily indexed to housing, construction and HVAC, and we continue to see soft end market demand and limited year-on-year market growth as the market works through the drawdown of inventory that was built up in response to tariffs and regulatory changes. We expect this drawdown to continue through the first half of 2026 and we are optimistic that market expectations for lower interest rates set up a second half recovery. In our Aerospace, Defense and Commercial Equipment segment, North America On-Road truck production decreased 26% year-over-year in 2025 and decreased 22% in the fourth quarter. We are expecting similar decreases through the first half of 2026, followed by modest recovery in the second half with an overall production decrease in the mid-single digits for the year. However, as this end market recovers in the second half of 2026 and ramps sequentially from the first half, it will be margin accretive for us. In Aerospace and Defense, we saw low single-digit blended growth for both Q4 and full year 2025, and we are expecting similar growth throughout 2026. With that, let's turn to Slide 24, and I will walk through our expectations for the first quarter of 2026. We expect first quarter revenue of $917 million to $937 million, adjusted operating income of $168 million to $175 million, adjusted operating margins of 18.4% to 18.6%. Adjusted net income of $118 million to $125 million and adjusted earnings per share of $0.81 to $0.85. At the midpoint of our guidance range, we expect year-over-year revenue growth of approximately 2%, year-over-year adjusted operating income growth of approximately 3%, year-over-year adjusted operating margin expansion of 20 basis points and year-over-year EPS growth of $0.05 per share. At the midpoint of our guidance range, we have assumed approximately $12 million of tariff costs and pass-through revenues. As noted in our press release and earnings materials, our guidance and tariff assumptions are based on trade policies and tariff rates in effect as of February 18, 2026, and do not incorporate any impacts from potential changes to trade policies. As we discussed last quarter, our Q1 guidance range reflects Q4 to Q1 margin seasonality related to the timing of customer pricing, supply chain productivity and inventory turns. We have taken measures to improve this dynamic, which is reflected in the 110 basis point step down at the midpoint of our guide compared to the approximately 200 basis points experienced during the reference period of 2015 to 2019. Similar to 2025, we expect margins to normalize to 19% or better in the second quarter and then expand each quarter thereafter. While we are not providing full year guidance, I would like to share some early thoughts on our outlook for 2026. We currently expect low single digits year-over-year revenue growth. We expect to participate in market growth in both our Industrials and Aerospace, Defense and Commercial Equipment segments, and we expect to deliver market outgrowth in our Automotive segment. Precious metals pricing has emerged as a headwind for us to mitigate in 2026. Our most significant exposures are silver, gold and platinum, all of which we hedge, affording us time to work through pricing with our customers. With the work we did to mitigate tariffs last year, we developed a toolkit of measures, which we are now deploying to manage precious metals inflation. We do not see risk to our Q1 guide associated with metals. On a full year basis, we expect to offset any precious metals headwinds through a combination of supply chain optimization, product redesign and pass-through of these costs to our customers. Our cost recovery muscle is well developed, and we take margin resilience seriously. We reiterate our annual margin floor of 19%. However, we are targeting margin expansion of at least 20 basis points on a full year basis. Finally, with respect to free cash flow, we were thrilled with our 2025 free cash flow performance, converting at 97% of adjusted net income, which allowed us to accelerate the execution of our deleveraging plans. As we look ahead to 2026, we may see slightly lower free cash flow conversion than what we delivered in 2025, particularly in the first half of the year. First quarter seasonality is impacted by variable compensation payments related to prior year performance, which in 2026 are approximately $20 million higher than they were in 2025 due to the stronger underlying performance. We have additional seasonality related to interest payments, which are largest in the first and third quarter. Consequently, we expect Q1 free cash flow conversion to be our seasonally lowest quarter and likely below our 2025 result, primarily due to the higher variable compensation payments. On a full year basis, we are targeting performance in the high 80s, well above the 80% floor that we established last year. With that, I will now turn the call back to Stephan. Stephan Von Schuckmann: Thank you, Andrew. Let's turn to Slide 25, and I'll make a few closing remarks. I'm tremendously pleased with the 2025 results that Andrew just shared. We are in the early stages of what we expect will be a multiyear transformation journey. However, these results are evidence of just how significantly our business has changed for the better in such a short period of time. As we look ahead to 2026, we are in a fundamentally different place than we were a year ago. We have built an organization that is intently focused on execution, and we have adopted a highly structured way of working. We start with KPIs that are designed to create value. We underpin those KPIs with targets that are benchmark-driven always against best-in-class performance. For each target, we define metrics against which we regularly evaluate progress. And behind those metrics are a pipeline of measures, each with accountable owners. The structured style of working is deeply ingrained in our organization. While 2025 was indeed a compelling proof point that our approach is working, maximizing value creation must always be our goal. Unlocking value means continuously raising the bar. As we turn the corner into 2026, we must build upon the foundation we laid in 2025. We have taken bold steps to do exactly that. We have reorganized our business into 3 distinct operating segments, each with unique growth and end market characteristics and specific growth mandates. We developed a clear framework through which to pursue growth, and we installed the right leadership team, including new segment leaders to execute the next phase of our transformation journey. As with everything we do, the goal of this transformation is value creation, and that is how we will measure our success. I could not be more excited for what is ahead. The future is bright, and I look forward to updating you on our progress along the way. I'll turn the call back to James for Q&A. James Entwistle: Thank you, Stephan and Andrew. We will now move to Q&A. In order to ensure adequate time for all participants to ask a question, we will limit each participant to one question. Should you wish to ask a follow-up question, please reenter the queue. Operator, please introduce the first question. Operator: [Operator Instructions] The first question today comes from Wamsi Mohan with Bank of America. Wamsi Mohan: Stephan, given the transformation underway where you've made a lot of progress here, can you just talk about how you see the longer-term revenue potential of the portfolio? I appreciate your 2026 guidance that you have given. But how should investors think about the ultimate like revenue growth potential here over a longer period of time, especially since you emphasized how key it is to your strategy? Stephan Von Schuckmann: Wamsi, thanks for the question. So I think it's very important to mention that the overall growth opportunity that we've shown you on the slides today and especially in the call and in the different segments, that is real. So it's definitely real growth. We have different products, different solutions for each segment. So we feel that's real, and that's definitely also the next building block of value creation. Secondly, we have a very clear growth mandate per segment. And also equally important to mention, we have the right team in place to execute this growth. So we've had our proof points, as we've mentioned in the call, and Sensata has returned back to growth in the second half of 2025. And -- additionally to that, we have a broad opportunity for growth across all products and all segments. So if you ask me, I feel really good about the growth opportunities that we have in 2025 (sic) [ 2026 ], and I feel equally optimistic around the growth opportunities that we've shown in each and every segment in 2027 and onwards. Yes, there's still a lot of work to do. And we still need to penetrate some of these markets and some we're in, like I've mentioned. But I feel very confident that we're on a good track, and I feel very confident about growth going forward in 2027 and onwards. Operator: The next question comes from Joe Giordano with TD Cowen. Joseph Giordano: Look, I think you guys explained the segmentation well in terms of like the thought process behind it. My first initial thought when I saw it was, okay, 2 of these segments are fairly small, and this is a company like focused on efficiency. So Stephan, can you talk to me how you balance like, okay, now we have 3 reporting structures, 3 presidents, you kind of add a little, like -- I don't want, bureaucracy is the wrong word there, clearly. But like you add more kind of fixed structure there. How do you weigh that against what you're getting by separating it this way? Stephan Von Schuckmann: Let me let Andrew start on the fixed cost structure part on the overhead, and then I'll jump in. Thanks, Joe. Andrew Lynch: Yes. So Joe, I mean, just from a cost perspective, you're right. We've added a little bit of cost to the overhead structure here in our corporate costs, and we expect that to be sort of the normalized run rate moving forward, take variable compensation costs out. That was a little higher in Q4. But in general, we expect the second half run rate to sort of be our normalized run rate moving forward. We expect that to pay for itself. I mean the expectation is that, that's an investment. And with that investment, we will drive growth and margin expansion in each of our segments that more than offset that incremental cost. And I'll let Stephan talk to the thinking around strategy here. Stephan Von Schuckmann: Exactly. So Joe, I see it as this, the resegmentation, and we mentioned it in the script, is all about value creation. And we've been executing, which is the first building block around value creation. But if you look at the second building block, which is everything around growth, we felt that with this segmentation, this gives us this level of opportunity. And allow me to order that a bit strategically. So the resegmentation is anchored in our end markets. And I think that's very important around value creation. It also reflects how we structurally manage and operate the business at Sensata despite now having 3 instead of 2 segments. What it also does, it strengthens alignment with our strategic pillars. So driving focused growth and again, operational excellence, which was a focus in 2025, and does this by recognizing the distinct characteristics and value drivers of each segment. That alone is for me, value creating. And additionally to that, each segment now operates with a clear growth mandate and defined accountability, supported by designated leadership, which is responsible for executing these very segment-specific strategies. So that's our path to value creation by splitting up into 3 segments coming from 2 in the past. Operator: The next question comes from Mark Delaney with Goldman Sachs. Unknown Analyst: You have [ Vermont ] on for Mark. The company mentioned that they're targeting low single-digit outgrowth in the Auto segment in 2026. And you previously talked about targeting bookings with domestic OEMs in Asia and in China. Can you maybe talk a little more about how those bookings with the domestics have been tracking and to what extent that and other factors are underpinning the low single-digit outgrowth expectation in 2026? Andrew Lynch: Yes. Absolutely. Thanks for the question. Do you want to start? Stephan Von Schuckmann: So let me jump in first and then Andrew, please add. So to the point in winning additional business in Asia, let me explain it the following way. So since the last call -- so let me start differently. So what we've done, and this has been very supportive in the business development in these last couple of months, is first of all, we've strengthened our Asia team from an organizational point of view. So we've implemented a China President, and you saw that in the beginning, a gentleman called Jackie. Jackie has been highly successful within China in winning new business. And since the last call that we had together, Jackie has won additional business, specifically with Chinese OEMs. So it's been very successful, and I feel very bullish about that. We've been winning business with contactors, but also with other content around sensing. And it's been a great part for us, utilizing our plants and -- with broad business wins. Now addition to that, so if I look at the -- allow me to look at the region maybe a little bit more from a broader perspective. We've also won good solid business in Japan. And let me give you one specific example. So we have doubled our revenue with a leading Japanese OEM, and we've also won further business in Japan in these recent months. I've actually just been in Japan, and it was very, very good to see what business the team has won there and exciting to see that. And then I've actually -- while I was down there, I traveled over to South Korea to meet our team in South Korea. And we've also won good business with customers in South Korea. And think about it from this point of view, the content per vehicle of the business that we've now won in South Korea with local customers has exceeded the North American OEM content and -- content per vehicle. And that is obviously traditionally the highest content per vehicle for Sensata, and we've now managed to exceed that in South America. So overall, I think we've made good progress there. Look, again, a lot of work to do, and we have a great ambition for 2026 to win further business, but I'm very, very happy with the progress that we've made in China and Japan and South Korea and overall in Southeast Asia. Andrew, any point you wanted to add? Andrew Lynch: Yes. I'll just add on the content per vehicle dynamic. As you noted, we had a challenge earlier in the year with our mix and our exposure to local OEMs. The enabler for us returning to outgrowth in Q3 was effectively that we've overcome that headwind. We won enough business with local OEMs in China that if you take the top 10 to 20 OEMs in that market and compare them to the multinationals where we've historically had really strong content, we're effectively at parity. And so we've overcome that mix headwind in China, which has enabled us to outgrow that market in the back half. And then more broadly, the automotive market as a whole, we saw production start to normalize in the sense that China was not outgrowing the broader market by such a rate that it made it impossible to outgrow the market. And we expect similar in '26. We expect market growth across regions to be more or less similar. And so our content difference in China will be less relevant because of the similar market growth in each region. Operator: The next question comes from Robert Jamieson with Vertical Research. Robert Jamieson: Just want to focus back on the new segment structure. And I think the separation obviously makes a lot of sense. And as Joe alluded to, there's obviously some costs that come with that. But as we think about this as we go forward, does this potentially help you become more nimble from an organic reinvestment standpoint in the different segments where you see fit given you have dedicated leadership and potentially have them -- have a higher ability to capture opportunities as they arise, more quickly to drive growth through the cycle, particularly given the focus on winning with the right products and customers across the portfolio? Is that the right way to think about part of this change? Stephan Von Schuckmann: To keep it short, that's exactly the right way to see it, yes. That's exactly the thinking behind it. Each segment that we've defined is unique for itself and each segment has ample opportunity for growth. And with a very strong and partially new leadership team in place, we feel very confident that we can generate values by doing that. I think this is -- you summarized it very well. Robert Jamieson: Okay. Perfect. And then sorry, just one quick follow-up there, too. Stephan, as you've traveled quite a bit across the globe, any new learnings or areas of focus outside of what you've discussed today that you'd like to improve upon just across any of the new segments? Stephan Von Schuckmann: So one big learning is, especially now that I've also been to Southeast Asia and I met my teams in Japan and Korea -- and I'll still travel on beyond that. To be open, I'm even more confident with what I see and the strong team that we have and the capabilities that we have. This is really, I think, something that stands out with Sensata in comparison to others. When I travel to Japan, we have a long, long-standing team with a great amount of experience and have been with the company for many years. So they know exactly how to generate business and how to generate value there. With the right guidance and with the right leadership now in place and especially with the new team, I really feel good about that. So that's basically been a reconfirmation of what I have seen in other areas that I visited, for example, in China, which I see a similar picture or even in Mexico and other regions. I wouldn't list them all up now, but that's been very encouraging. And I think that foundation gives us the opportunity around value creation and growth and everything that we have ahead of us. Operator: The next question comes from Joseph Spak with UBS. Joseph Spak: I wanted to touch, Stephan, on some of the opportunities you mentioned in the data center, and I know you have some content in and outside, as you highlighted on the slides. And some of that actually looks new for '26. But I guess the question is, as you sort of form this team to focus more on the opportunity, is that expected to deliver mostly organic results? And if so, is that leveraging existing tech and finding new uses? Or does that mean new R&D? Or will there be some inorganic opportunities potentially that present themselves? And then I guess just a quick aside to that as well. Like I know you've taken like almost $400 million of write-downs on Dynapower, but were those -- were any of those asset write-downs, meaning that if you start to leverage that tech for these opportunities, the margin accretion could be quite good? Stephan Von Schuckmann: Thanks for the question. Let me elaborate a bit how we see data centers and what organic growth opportunities we have with them. So I think, first of all, very important to mention that we have -- that our products are in data centers today. So in existing data centers that are up and running. And I'll say that for products that are both inside data centers and outside of data centers. And that's really broad. So inside data centers, we're talking about electrical protection. So we're talking about circuit protection, circuit breakers, fuses, content. Those are all existing products. Think of sensing, so pressure and temperature sensing, think of refrigerant leak detection and so on. Those are all existing products within data centers today. They are designed in hyperscalers that design those Sensata products into data centers that exist. The same applies to products outside of data centers or Sensata products outside of data centers. So we're talking about power and peak management, which is converters, inverters. We're talking about electrical protection, so like contactors, motor protection and so on. So these are all existing products inside of the data center. That's very important. So this is all organic -- organic growth if we grow with -- if data centers are growing, we grow with them if they're designed into the concept. Now beyond that, it's still within the range of organic growth. We're also designed into future data center concepts. So you have the hyperscalers that specify the Tier 3 components. And basically, once they specified and once they're approved, they're designed into these future concepts. So we're designed into future data concepts with certain hyperscalers. So not all, but with certain. And on the other hand, we're in deep discussions with others. So we obviously have the ambition within 2026 to try and get design into most hyperscaler concepts of the Googles and Amazons and Meta and so on. And now beyond that, we want to leverage our sensing capabilities to develop further unique products to broaden the product portfolio that we have today, everything that I've just mentioned, which is organic growth, we're going to broaden that, and that is related to own R&D. And you could see on some of the slides, that's, for example -- one example is flow sensors. So that's within our own development, and we're going to design a specific flow sensor for data centers and going to design that in the future data centers that we're currently discussing. So that's just -- that's it. And then we have -- within data centers, we have specific focus areas, like liquid cooling for data center racks where we feel we have a very competitive position. So overall, strong position with existing products, a lot of ideas for future products that we're currently working on, and that will give us ample opportunity to grow within the data center segment -- market. Andrew Lynch: And on the Dynapower question, just to add some clarity there. So the charge that we took was a goodwill impairment charge. And so we won't see any margin lift associated with lower amortization or depreciation for that example. But I think it does raise an important point, which is how we think about margin expansion and productivity. And we're focused on real margin expansion. And so when we say we're looking to expand margin at least 20 basis points next year, we're focused on doing that through a combination of improved volume and volume leverage and productivity. One of the things that will help margins over time is the fact that we've gotten more disciplined about our capital expenditures and deploying flexible line concepts to keep CapEx lean, and we expect that will show up in lower depreciation expenses over time. But our focus is on real margin expansion and not write-offs. Operator: The next question comes from Luke Junk with Baird. Luke Junk: Just curious about a couple of the newer areas that you unearthed tonight, specifically data center and defense. Just wondering if you'd be able to speak to materiality for both of those in terms of percentage of sales today. And then just as we're trying to think about the growth profile potential, I don't know if you could speak to any historical growth in terms of recent growth trends or maybe put a finer point on some of the opportunity from here? Andrew Lynch: Sure, Luke. I'll take the first part of that question on the size of the segment. So Aerospace, Defense and Commercial Equipment segment in total is about $800 million of revenue on an annualized basis. If you break that down, there's obviously multiple market verticals that we serve within that segment. I'll give you sort of a high-level breakdown. About 40% of that is on-road truck across the 3 key regions that we serve there. Another roughly 25% tied to the construction end market. Another roughly 10% tied to the agricultural market. The balance of that segment would be in other off-road vehicles as well as commercial aviation, defense, aftermarket, distribution. Those all break down pretty equally in sort of the 7% to 10% size range each. So pretty diversified. And within those, we see the highest growth opportunity from end markets in commercial aviation and defense given the higher level of spend. And then on top of the end market growth opportunity, there's obviously opportunity around new content that we called out. And I'll turn it over to Stephan to talk a little bit more about the growth that we see. Stephan Von Schuckmann: Exactly. So let me explain the growth opportunity around defense in a bit more detail. So here, I think it's important to mention, we also said it in the script, we're obviously in a period of a super cycle growth of EU and U.S. Defense spending. And Sensata has a fantastic opportunity to participate in this growth. And today, there are multiple defense applications being served with our products across fighter jets, helicopters, ground transportation vehicles. These are obviously all strongly growing applications. And then we have the emerging UAV, or unmanned aerial vehicle market, where we really see significant growth opportunities. And you also saw in the slide that within those UAVs, we really have existing business with all different types of products in powertrain systems and precision sensing and feedback, flight control and actuation systems and mission systems and targeting, where we have a broad range of products within the actual drones or UAVs today. And because this market where we expect a double-digit percent CAGR is growing significantly, we feel we're going to participate with our products in that growth. Luke Junk: Andrew, it would be possible just to break down the Industrials segment as well, similar from an end market standpoint, quick? Andrew Lynch: Sure thing. Industrials, as you know, is -- we've historically talked about that in terms of commercial versus residential. And I think that split still largely applies. We're focused on those verticals rather than applications, like HVAC and appliance, like, we've previously disclosed. So I'll just give you the breakdown here. So that resi and commercial sort of combined would be about 80% of the segment and then the remaining 20% would be the clean energy opportunities that we see around, for example, Dynapower microgrid applications outside of the data center as well as electrical protection components that we sell into grid hardening applications. Operator: The next question comes from Samik Chatterjee with JPMorgan. Manmohanpreet Singh: This is M.P. on behalf of Samik Chatterjee. I just wanted to ask how much of the industrial growth during 4Q was linked -- sorry, during the full year was linked to A2L gas leak detection sensors and how did the rest of the Industrial business track during the year? And also we'll squeeze in another one there, you will be launching this flow sensors in 2026. Will that be a similar contribution like the A2L this year? Andrew Lynch: Yes, I'll take the first part of the question on the size. So we launched A2L last year -- in 2024. We saw somewhere in the order of magnitude of $10 million to $15 million of revenue primarily in the fourth quarter of 2024. And then that ramps significantly to about $70 million in 2025. So you could think of the year-on-year growth is somewhere in the order of magnitude of $50 million to $60 million. And then we think that matures at north of $100 million annualized run rate business as our incremental wins continue to stack and as we see that market mature. Stephan Von Schuckmann: And let me add to that. So that's actually been a success story in 2025. We've won 2 major new businesses with OEMs long term -- with long-term agreements with A2L. So that's, I think, was a really, really good success in 2025. The team has done a fantastic job to fill our order books, and we have a really high market share in North America. And what's quite interesting with this business is -- and that's something we also discussed now during the trip in Japan and in Korea, obviously, depending on regulation, we see great opportunities there as well. And if you're looking at a market size, a SAM in North America of roughly $150 million, you see the same amount of sizable business in Southeast Asia. So in this case, more in Japan and in South Korea. So that's a great opportunity. And by the way, with A3, similar size of business that we're working on. So great growth in '25, and we're going to see continued growth in '26 onwards and especially now if South Korea and Japan comes in, that will be good for us as well. Operator: The next question comes from Konsta Tasoulis with Wells Fargo. Konstandinos Tasoulis: Just going back to the data centers. How long have you guys been working on the opportunity there? And where do you feel the bigger value-add opportunity is? And where are you more differentiated? Is it more like electrical protection side? Or is it the sensors? And is that something that could be another -- in terms of dollars, look like A2L, the leak detectors in the next year or 2? Stephan Von Schuckmann: So we've been working on this quite some time. We've spent a lot of time in 2025 where we've intensified our efforts. And look, it's pretty broad. So I wouldn't say it's based on a single group of products, be it electrical protection sensors. It's pretty broad. I mean we want to -- when we speak about designing into future data center concepts, we don't only want to do that with a specific group of products. We're looking at all opportunities that we have and all the opportunities that I've just mentioned in this call, so inside and outside of data centers. Look, give us some time, this is developing, and we'll be more precise once we go further through the calls of every quarter. But it's got a lot of opportunity, and we feel very confident that this could be a significant growth driver for the segment and for Sensata. Operator: The next question comes from Steven Fox with Fox Advisors. Steven Fox: I was just curious if you could provide any more color around the segment margins from the aspects of where do you see the most opportunity for margin expansion and maybe where the incremental margins may differ? Andrew Lynch: Yes. So I mean, we're focused on operating margin expansion across all of our segments over time. Now certainly, growth is going to be an element of that operating margin expansion, and we see higher growth opportunity in Industrials and Aerospace, Defense and Commercial Equipment, given the stronger underlying market growth that we expect in those sectors over time. So I would say Automotive will continue to be sort of our -- we'll look to outgrow the market by a couple of percentage points, and we'll look for variable contribution margin in the 20% to 30% range on that business, depending on the product mix and region. Industrials and Aerospace would be similar, but with higher growth rates. Stephan Von Schuckmann: When it gets to strengthening our margins, we don't differentiate between segments. So when we speak about improving productivity or plant performance irrespective of the individual segment, we do that across all segments. When we speak about reducing product costs, we tackle all our products in every single segment. We don't only focus on specific products per segment. So it's an exercise that we've been pushing very hard in 2025 overall businesses that we have with Sensata, and we're going to do exactly the same, if not, even harder in 2026 going forward. So it's not a specific segment-related exercise. This is a very, very broad initiative to push on margin improvement. Operator: The next question comes from Shreyas Patil with Wolfe Research. Shreyas Patil: So looking at Q4, you mentioned organic -- Auto organic growth was 1%, but it looks like industry production was up 2%. So it looks like you underperformed the market by about 1 point. You're pointing to low single-digit outgrowth in '26. Just thinking maybe if you could help give us some of the drivers of outgrowth for this year? And are there opportunities to add content in areas outside of the powertrain, such as domain consolidation or autonomy? Andrew Lynch: Yes, sure. I'll take the first part of that question. So a little bit of this is a function of using whole numbers here on the percent. But yes, you're right, the Auto production rounds to 2% and our revenue rounded to 1%. Biggest reason for that is, again, regional mix. So if you unpack the growth rates in Auto production in the fourth quarter, China grew about 4% year-over-year in Q4. The North America and Europe both decreased by about 0.5%. Korea, where we mentioned we now have even higher content per vehicle, dropped by about 6% year-on-year in the fourth quarter. And so while there was average market growth of close to 2%, the market mix of where that growth occurred was not in our favor from a content per vehicle perspective. Looking ahead to 2026, as we look at third-party production forecasts as well as what we're hearing from our customers and seeing in our order book, we're seeing relatively similar growth rates in every region. And so we don't expect this regional mix dynamic to be meaningful in 2026. And that's important because as the regional mix and growth rates normalize, our underlying content growth will be the true driver of our market outgrowth. Stephan Von Schuckmann: And let me add to that. I think you asked the question around growth opportunities. And let me start a bit broader. And I think it's -- in this case, it's important to mention that Sensata is in a really desirable position. And let me explain that. Let me explain why I call it a desirable position, is because we can literally grow in any region with any type of application, and that's really irrespective of it's an ICE, hybrid or EV related. So what does that ultimately mean? We can follow any pace of electrification. If it speeds up or if it slows down, we will follow that pace. So take an example where we have a high push in content. Andrew mentioned the content increase, for example, in China. Strong push towards electrification. We benefit from that. We have doubled the content of an ICE. If we win business, that obviously supports our growth path in China. Around plug-in hybrids and EVs, we also said we have growth potential in that market. I mean that's actually a strong growing application where we see a 12% CAGR overall. And if we win business with PHEVs or EREVs, we will grow with the market depending where PHEVs and EREVs are sold the most. So that is another area where we see a content bridge opportunity for Sensata to grow. Operator: The next question comes from Joe Giordano with TD Cowen. Joseph Giordano: I appreciate the follow-up here. One thing I just wanted to like a more existential question, I guess. But Sensata in the past got itself into trouble by chasing the shiny thing, right, and then ending up with a bunch of businesses that were subscale. So as you talk about small businesses today into attractive markets like data center and grid hardening and all these things, I think we all appreciate why Sensata would want to chase that. But how do you make a decision and be confident that these are businesses that we should win, that we can participate in profitably and then we can ultimately have scale and kind of prevent the same issues that we all kind of saw years ago? Stephan Von Schuckmann: So I think in this case, it's important that a lot of these products exist really today with Sensata. So these are an existing product range within our portfolio. It could be within Auto. They could be within other areas of business. So it's not a new development of a product. It might be a slight adaption of a product, but we have high standards, high-quality products that we can apply out of, for example, Auto and apply into other applications, be it data centers. So I would say, in that case, the risk is manageable. The second thing is, Joe, if you look at our growth framework that we've set for ourselves. So we say we want to maximize value from our core products, as I've just mentioned, that is maximizing because we're using an existing product portfolio. And then we'll leverage our scale and pedigree. So a lot of these products that are already produced at high scale, where we have existing production line and existing equipment that we can use in this case, no additional assets required. No additional plant structure is required. We use our competitive footprint around the world, and we produce our products as we do every day, just for a new type of segment. And then, look, we've also defined rigorous standards for this new business. So it's not just an area where we would step in. It needs to be high volume. It needs to be platform-driven business. It needs to be -- they need to be mission-critical. They need to be regulated socket. That's important for us. And they also need to be hard-to-do applications. I think that's also important. So it's not something that you can copy that easily. So we have, I think, a high standard that we've set ourselves before we enter these markets or we enter new markets within the segments to manage that risk accordingly. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to James Entwistle for any closing remarks. James Entwistle: Thanks, everyone, for joining today's presentation. This concludes our fourth quarter and full year 2025 earnings conference call. Operator, you may now end the call. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

85天前Insight Analytics约5分钟阅读

UFGSY 2025 Q4 财报电话会议

Operator: Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Unipol Full Year 2025 Preliminary Results Conference Call. At this time, I would like to turn the conference over to Mr. Matteo Laterza, CEO of Unipol, for a brief introduction. Please go ahead, sir. Matteo Laterza: Good morning. Thank you to all of you for participating to this call. Before opening, as usual, the floor to the questions. Let me make some remarks on the number that we disclosed this morning. We closed the first year of the industrial plan achieving results mainly above our targets in all the principal, industrial and financial KPIs. First of all, in P&C, as you have seen, premium performed very well, both in motor and in non-motor, where in non-motor, as usual, the main driver was the health insurance, where we are following a very solid and important trend in the Italian market. The combined ratio closed at 92.9% that is in line with our target. But I think it's important to underline once again the prudence that we decided to adopt in assessing our technical reserve and in particular, in defining the loss component related to natcat event in the property line of business, which explains in a big part, the impact of natcat event of 9 percentage points in a year where, as a matter of fact, was quite benign in terms of natcat. In Life, we had a very strong performance in terms of premium driven both by agents, distribution network and bancassurance. And at the same time, we reached our target of new business value and contractual service margin. So also in Life, we performed very well. In terms of investments, we had a very robust contribution coming from the ordinary yield, which means coupons and dividends coming from our investments. And it has been a very important driver for the result that we achieved in 2025. As a result of all these items, we reported a consolidated result, as you have seen, of more than EUR 1.5 billion, which reflects, of course, a positive impact, also the positive impact coming from the participation to the tender offer that BPER launched in Banca Popolare di Sondrio. But much more important for us, and you have to focus on the insurance group net result that was above EUR 1.2 billion because it represents the contribution coming from the insurance business. And it gives to you the idea in a sort of sense of the cash remittance of the group. We think this number is very robust in terms of quality of all the items that contributed to produce this number. And this is the reason why we decided to pay and to propose a dividend of EUR 1.12 per share, which means more than 70% of the insurance group result. We think it is a very solid number. That can be considered a floor in terms of dividend that can be paid also for the year that we last in the present industrial plan. It is a very solid number also considering the very strong solvency that we reported, 233% that, as you know, is burdened by the very expensive contribution coming from the -- our banking stakes. If you look at the number of the insurance group, we are at 281%, which is a very solid number. And again, the main contribution to the solvency number come from the organic capital generation that we achieved in 2025 that once deducted the EUR 804 million of dividend is close to EUR 500 million. That is more or less half of the capital generation -- net capital generation target of all the industrial plan. So summing up all this number, we are above the first year KPIs in terms of industrial and financial numbers. Of course, we are still in the first year of the industrial plan. We have still 2 years ahead of us. But our commitment, as we said, when we disclosed and we published industrial plan is to deliver and hopefully over-deliver the number that we have as KPIs and that we disclosed 1 year ago. Having said that, with Enrico San Pietro, we are open to answer to your questions. Operator: [Operator Instructions] The first question is from Tommaso Nieddu of Kepler Cheuvreux. Tommaso Nieddu: The first one would be on dividend distribution. As you said, you moved the payout to around 71% of insurance group earnings, which I believe surprised the market. But how should we see it going forward? Also given that you have had a very strong capital generation, a lot of excess of capital, why shouldn't we consider 70% the new structural payout? And -- but even if we consider the EUR 0.12 dividend per share would be already well above the cumulative guidance of the industrial plan. So either perhaps you can either give us a bit more color on the payout or on the cumulative guidance? The second question is on technical profitability. It was very strong, but with, as you said, slightly higher natcat load in non-motor. So my question is, are you running with additional prudency buffer. And why is that? I thought you were already very, very prudent. And the last one on solvency. Yes, there was a very strong factor coming from organic capital generation, but part of this strong number also seemed due to lower SCR, can you explain us the dynamics there? Was it all due to BPER. Matteo Laterza: Thank you to you. First of all, in terms of distribution, as I said, we look very closely to the insurance group result because it gives to you the idea of the cash remittance of the group. 71% is a very solid number. And we think that going forward, we are able to consider it as a sort of floor in terms of dividends also for the next couple of years. As you can see, it is above the target that we disclosed in the industrial plan. And so consequently, concerning at least the dividend, we are working on an overdelivery compared to the EUR 2.2 billion of dividend accumulated in the industrial plan. You talk about excess capital. I don't think it is excess capital. I think that we must be always in the condition to have capital and to raise capital when there are good market opportunities to do it because once you need it, you must have in your balance sheet, the capital to finance the growth in the business in which you want to grow like bancassurance or health insurance or for whatever opportunity that you can have in the future. Because when you have the opportunity, you must have also the capital. It is not suggestible on our point of view to take in consideration the opportunity without having the capital in your balance sheet. And this is the reason why I don't consider it excess capital, but only a good buffer that we can have in order to face any kind of scenario. Also the fact that we are in a very good situation in terms of performance of financial market. And consequently, you can also have in the future a risk of period for financial market that can have also a negative implication on your solvency. Concerning solvency, you said correctly that the main driver is the organic capital generation. There has been something also in the reduction of SCR, mainly driven by some change in the solvency capital requirement coming from the banking business in the final quarter of the year. But mainly the increase in the solvency is due to the organic capital generation, and there is also a positive contribution from the economic variance as a consequence of the fact that financial markets performed very, very well. On the technical profitability, I said that we were very prudent in both in motor and in non-motor, but I leave Enrico to elaborate on it. Enrico Pietro: Yes. So as far as nat cat is concerned, we decided to take a very prudent approach on what is, as we all know, a very volatile risk. So basically, we calculated the risk adjustment on this specific risk, taking the distribution curve of the expected loss and put at the 92nd percentile the figures that amounts around EUR 220 million of additional risk adjustment. This is probably the most visible prudent move, but the overall technical profitability was very good, both on motor and non-motor business. Operator: The next question comes from Andrea Lisi with Equita. Andrea Lisi: The first question comes back on the solvency, which increased significantly in the quarter. we know that then you issued an AT1 at the beginning of the year. And so this will further increase the capital position. So just to understand what are you planning to do with such a level of capital? I understood that it is not considered excess capital for you because you won't have a wide buffer. But also to understand if you currently see M&A opportunities in the sector or other ways to deploy to accelerate organic growth? And related to that, we have seen that you already achieved EUR 0.5 billion of excess organic capital generation this half of your business plan target. Can we consider medium debt to be distributed to shareholders at some point? The other question is on the evolution of the business. We have seen a really good dynamic on non-motor premium, while a bit of deceleration on motor. I think this is mostly related to comparison basis. But just to have a bit more insight about what are you observing in the industry currently. Matteo Laterza: Thank you to you, Andrea. And yes, we issued restricted Tier 1 in January that, of course, strengthen further our capital position today. As I said before, when there are opportunities in the market, we tend to take advantage of them. And the credit market situation at the end of last year, beginning of this is very positive. We were able to issue a restricted Tier 1 where we had plenty of room of computability -- was executed at a very moderate cost, 6% of coupon. And we took advantage of it. And of course, we have a very, very strong capital position, and it will be used to finance our opportunities of organic growth in excess of our assumption of the industrial plan. You know that we are growing very fast in health insurance, in bancassurance. There are no M&A transaction on the table. But once you have and this could be an opportunity in the future, as I said before, you must have the capital to exploit it. And finally, we are in a very positive situation in terms of financial market, but you never know. The geopolitical situation is very uncertain today, and we must prepare ourselves to the worst. And this is the reason why we decided to take advantage also following a lot of insight that we received from our investors to take advantage of the very positive situation of financial market. This is not excess capital. So of course, the redistribution of capital to our -- to the shareholders is not an alternative for us at the moment. We recently raised EUR 1 billion, and the reason why we did it are the one that I mentioned before. Concerning the trend in P&C before leaving the floor to Enrico. As I said before, the main driver is health insurance, but all the line of business grew in the P&C area, both in motor and in non-motor. Of course, our commitment is to combine this strategy of growth of premium with our commitment in maintaining a decent level of technical profitability in all the lines of business. But on this, I leave -- I let Enrico to elaborate on it. Enrico Pietro: Okay. So as Matteo just said, we had growth in all our business lines. Of course, in non-motor, the main driver of growth for us, but also for the market is health that is growing double digit in this period and in which we are a market leader. And we can add also that property business is growing. Property business is growing for the market and also for us. There is, of course, an impact related to the compulsory nat cat cover for Italian companies. And this is something that is driving growth on all our distribution channels. So good growth on property for Unipol and agency network, but also on Arca, so means BPER network. As far as Motor is concerned, we have a growth of 2.6% in motor third-party liability that is the result of an increase above 3% in the average premium and a small -- very small decrease in the number of contracts and solid growth in motor other damages, 6.7% that is due both to a price effect and also an increase in the demand of motor other damages cover. Operator: The next question is from Michael Huttner of Berenberg. Michael Huttner: I had 4, please. Two of them on Motor, one on health and one on the CSM. On Motor, my first question is on the frequency benefit, the 12 bps, which you mentioned in the slide. I just wanted to understand how to measure that. It sounds big, but I don't know what the base number is. Is it like a 5% improvement or 10%. In other words, 12% divided by what? And maybe you can give a feel for how sustainable this is? In other words, is it structural or cyclical? Then on motor pricing, I wonder if you can give us a quick update of where we are now. On Health, just to understand the business better, can you outline what the product is. It's just to understand what the risk is. The feeling I have is it's an annual policy. It's not a lifetime policy. And therefore, the pricing, therefore, resets, and it gives cover for hospital and medical care. I mean, a fairly standard thing. But just to understand. And then the final thing, you didn't mention it, but I just wondered whether you can give a little bit more color. The CSM is up, I think, 15%. A large chunk of that is the economic variance. And I can just -- I just wondered if you can give us a bit of color of where it's coming from. Matteo Laterza: Yes. On CSM, I will answer and then I will leave Enrico to answer on motor and health. The increase in CSM is driven by the -- also by the economic variance. Of course, the contribution to economic variance comes from the change in the assumption in financial -- and the assumption in the trend of financial market concerning the solvency, I said that also in this case, economic variance gave a positive contribution as a consequence of the fact that equity market, credit market, the spread of government bonds narrowed versus the bond. And as a consequence of that, we had a very positive contribution coming from the economic variance. Also in the case of CSM, we had a positive contribution coming from the trend of financial market. And in particular, the contribution come from the widening -- sorry, narrowing of the spread, contribution of equity and consequently from the mark-to-market value of the financial guarantee. Enrico Pietro: Michael, So as you have seen, we had very good results in terms of technical profitability as far as motor business is concerned. As I told a few minutes ago, there was a relevant contribution in this improvement related to motor other damages classes that is not only growing at a quite fast pace, but also improving the technical profitability since, of course, 2025 was a very benign year for nat cat events, but also for the overall business line. But also in motor third-party liability, we were able to improve our loss ratio in the loss ratio has improved since -- basically, we were able to offset the increase of the average cost of the claim with the increase of the average premium. And we can consider about your question that the increase in loss frequency, the improvement in loss frequency, sorry, was something that is explaining the improvement in the current year loss ratio in motor third-party liability. We also have to add that in motor business, there was a more positive evolution of prior year reserves compared to 2024. So a couple of points are about this issue in which -- in 2024, we suffered a little bit in motor other damages because our reserves of the nat cat event of Summer '23 were not perfect. And so we didn't have the positive evolution we usually have in this kind of business. So this is about the overall result in motor. But if you can go to the second one. Second question is about motor pricing. The market had an overall average increase of prices related what happened on Milan Court schemes for permanent disability indemnization. Now we are entering a new phase in which prices are still going up, but at a very slow pace. So basically, my opinion is that we are in a very good situation. Our profitability is above our expectation in the strategic plan. So we are now below the 95% of combined ratio that is our target. And I expect that in 2026, price increase continue to be quite low because also the other players were able to recover profitability. As far as health insurance is concerned, there are different kind of product line we offer. The main one is related to corporate big businesses. So UniSalute was set up 30 years ago, 1995, believing that the Italian market will need some health insurance cover to have with a faster way services that the national health system is more and more in trouble in delivering. So what's happening is that for many years, this was the main business line for health, for UniSalute, so big agreements with trade unions, but also big corporation and funds. And we were able to grow this way. We are still growing. Now of course, there is also a relevant price effect on that because the loss frequency is increasing, and we are one step ahead increasing prices and changing condition to keep the profitability good enough. But in recent years, there is another relevant growth engine in the individual offer, both with bancassurance and our agency network that are individual products that cover basically all your possible health needs. So diagnostic examination visits for specialists, doctor specialists and of course, also if you need surgery or other medical services. So the big part of the portfolio is still corporate business, but the individual business is growing at a very fast pace. Operator: The next question comes from Gian Luca Ferrari of Mediobanca. Gian Ferrari: Sorry to come back on solvency and economic variances. I was trying to reconcile the 15 points increase, thanks to the economic variances. And I understood, Matteo, you mentioned BTP bond spreads going down, but actually, they went down 50 basis, which means 5.5 points, if I look at your sensitivities. Equities up could have added another couple of points. So I can reconcile only half of these 15 points. So if you can help us with all the moving parts to rebuild this impact. The second is I cannot find any more the PVNBP and the new business value in the presentation in the press release. I was wondering if you don't consider these KPIs any relevant? And if there are just somewhere else, if you can provide us the numbers. The third is some write-downs in Q4. I think it is as usual, linked to some realignment of real estate assets. But if you can give us some color on what are these write-downs in Q4 in the P&C segment. And I cannot avoid asking you the hot questions of the moment, which is about autonomous driving and AI, how these 2 factors can change your industry going forward, if you see only threats or also opportunities? Matteo Laterza: Thank you to you, Gian Luca, concerning the economic variance, this is the breakdown of the economic variance versus the number at September '25. We had a positive contribution in the whereabout of EUR 300 million plus, where we had a positive contribution of EUR 240 million coming from the spread. The EUR 200 million coming from equity plus our noninsurance stakes and the negative contribution coming from interest rates of EUR 131 million. Maybe you were misleaded by the fact that there were also negative contribution coming from interest rates. Then if you have -- want to have more color on that, you can ask our IR to have more color on it. The other question was the new business value. New business value is a very important KPI for us. It is not a secondary Tier 2 industrial CPI. I said this in the introduction of -- to the result. We achieved a new business value that is in line with our target. And for us, it is important because you know that in Life, it is not so important. On our point of view, to be #1 in terms of premium collected, but it is much more important to the quality of the premium that you collect. And a proxy of this quality is the new business value that is, of course, strongly related to the contractual service margin that you produce with the new production. And it is a number where we reached our target overall. I have to say that in 2025, we grew in Life premium more than 20% also because of the 2 very important and very big contracts in the pension funds. Pension funds is a very interesting business, but with a very low profitability in terms of new business margin. So what we have to do going forward is to work more on the high profitability line of business like term premium, annual premium, where I think that we have room for improvement. Finally, on AI, autonomous driving, there is also some study, if I remember well, concerning the AI applied to the brokerage business that had a negative impact on the performance of the sector. We are discussing for a very long time on the implication of the autonomous driving on the Motor TPL business. Of course, there is this trend. As usual, there are threats, but also opportunities. I'm not very worried about it, both concerning the autonomous car and the use of artificial intelligence for the brokerage. But on this, maybe Enrico is much more skilled to answer to this issue than me. So I leave the floor to him. Concerning the real estate, yes, we took the opportunity to make some provision on the real estate portfolio above all in some of the building that we have, in particular, there is -- the headquarter that we have in Milano, San Donato, there is a tower that is not used as instrumental but is rented. And this rent has got to maturity, and we are looking for a new tenant. And in the meantime, we took this opportunity to restate the value of the tower to the fair value of the asset, and we took a charge in this case of EUR 20 million. On top of that, we did other restatement of a little bit less than EUR 10 million, but are very fragmented in a lot of buildings. The main one is the one that I mentioned. Enrico Pietro: Gian Luca, so let me add something about both autonomous driving and AI. On autonomous driving, yes, I remember we were able to organize in 2015 an International Congress in Rome that was named Mobility 2025. So international expert coming from U.S.A. and of course, all over Europe about what could be the evolution of autonomous driving. And what can we see now after 10 years and is that -- this phenomenon was slower than expected. Of course, it's limited today to shared mobility. So the Waymo taxi in San Francisco that now are expanding in other 10 cities in U.S. but is what we understood in this period that is slower and probably strictly related to a change in the pattern of mobility. So much more keen to used for shared mobility solution and not yet visible for private vehicles mobility solutions. So in the end, we are -- we still are really interested in this, but I see something that will have a very limited impact on our business and very, very slow impact on our business. As far as Gen AI is concerned, we can probably discuss about the impact on our business in terms of distribution changes. And of course, we are interested in what's happening, but I think that the impact, the perception of this issue was really exaggerated. Basically, what is concerned is for the Italian market, digital distribution that never became a real relevant distribution channel. And so I don't think we will have a visible impact on the Italian market for a very long time. On the other side, Gen AI is a very important new technology in which we are investing -- already investing both to become more efficient, but also to be able to serve better our customers. Operator: The next question is from Elena Perini of Intesa Sanpaolo. Elena Perini: I've got 2 of them and then 2 follow-ups. The first question is about your dividend. You mentioned the possibility of over delivering versus your EUR 2.2 billion cumulated target. Are you also considering the possibility of introducing potentially an interim dividend? The second question is about your combined ratio evolution. Considering that you have already overachieved compared to your target for the motor business. Do you expect the convergence to your 2027 consolidated target to be driven from -- by the non-motor business, also considering the higher weight of higher margin businesses like the bancassurance and also the health. And how could the property business produce some noise in this. Then about the 2 follow-ups, I was wondering whether the pension funds mandates, which impacted the first quarter for Life were limited to the first quarter? Or did you have something also in the final part of the year? And then on the real estate, I was wondering whether the write-offs impacted only the other sector or in some aspects also the P&C business. Matteo Laterza: Thank you, Elena. Concerning the dividend, we said quite clearly that EUR 800 million is for us a floor going forward. So we are already today in a sort of overdelivery mood in the dividends. So it is not a possibility, but it is a thing in which we are working on. And we are in the condition to say that we can propose this number also for the next couple of years, EUR 1.2 billion of insurance group result is a very good number above all, if you consider the quality of the number in terms of contribution coming from the technical profitability, the investment income and whatever. So we are in the condition to say that EUR 800 million is today the floor of -- in terms of dividend payment in cash. The interim dividend, of course, it has not an economic impact, but also not only a financial one. I know that the market likes this kind of payment strategy. We have to consider if our bylaw, I don't think that allow us today to do it. But in the future, we can -- by changing the bylaw, we can think about doing it. It is not a strategy that is on the table today. I can't exclude it in the future. Concerning the combined ratio evolution, I leave the floor to Enrico and then I will answer maybe to the other one later. Enrico Pietro: Elena, so the motor combined ratio is already better than our target. But still, I think it's prudent to keep the 95% combined ratio target for the plan, considering that we had a very good year for motor other damages and also that market condition in MTPL can change in the next 2 years. And as far as the non-motor is concerned, the relevant growth, both in bancassurance and in health, of course, is a very good news, but it was already for a very big part included in our strategic plan. So our aim is to grow where profitability is high and volatility is low. And so both of those businesses are perfectly fit in this strategy. So maybe it could be a little better, but the biggest part was already included. And the third question was about the property business. Yes, can produce some noise because, of course, nat cat is volatile, but we are very careful in growing in property and especially in cat nat, very careful to avoid risk concentration, both geographical risk concentration and also peak risk concentration. And last but not least, we have a very solid reinsurance coverage. So we don't -- we added to our traditional reinsurance program about the excess of loss treaties. The aggregate treaty that protect us also from frequent medium-sized events that can be below the attachment point of the reinsurance treaty in excess of loss. So it could happen, but I think in this case, we will be able to deliver good results anyway. Matteo Laterza: Elena, concerning the pension funds, we had, as you said, the impact in the first quarter of the year. But also in the final quarter of the year, there was an impact as well. And concerning the contractual service margin overall, the contribution to the CSM is overall coming from the pension fund is EUR 25 million on a total of EUR 287 million of total new production profitability. And finally, concerning the provisions, there are part in the P&C business, in particular, EUR 20 million concerning the tower in San Donato that I mentioned before. But also in P&C, there are EUR 30 million of charge that we very prudently booked on the financial investment in fiscal credit coming from the bonus 105%. Very prudently, we decided to put this further EUR 30 million. So total, EUR 50 million. And other EUR 10 million are in the other activities. Then there is in Life also more or less EUR 10 million coming from the integration of Cronos that, as you know, we incorporated in the final part of the year. Operator: The next question is from Antonio Gianfrancesco of Intermonte. Antonio Gianfrancesco: Two from my side. The first one is on the financial investment yields. You reported a gross financial investment yield of 5.2% in 2025 with a 4.2% running yield. So given the current rate environment and your asset allocation, how should we think about the forward-looking running yield for the next 2, 3 years? And I was wondering if -- do you see scope for improvement. Or should we assume a sort of stabilization around current levels? And the second one, sorry for that is a follow-up on the CSM because I understand that in 2025, there was -- there were some, let's say, one-off, for example, Cronos integration and extremely favorable economic variances. But looking ahead, how should we think about the sustainable growth rate of the CSM? For example, 15% growth year-on-year before release could be a reasonable assumption, also considering your -- what you said about the driver for the life premiums in the future? Matteo Laterza: Thank you to you. Concerning the financial investment yield, looking forward, you should trust on the ordinary component of the investment yield because you never know, and we never do assumption neither positive nor negative on the performance of financial markets. So we tend to assume no capital gain or capital loss coming from the mark-to-market of financial assets. And consequently, the 4% running yield could be assumed as a proxy also of the ordinary contribution coming from the investment. Having said that, in the history, we always succeeded in producing additional alpha on that, but it is not, of course, a certain event. And so prudently, you can maintain the 4%. Concerning the CSM, our target, and that is the -- what we achieved in the past, is to have a final CSM that is in line or higher than the opening CSM. It means that the CSM creating from the new production plus the expected return that is a part of the organic and ordinary CSM is in line or above the CSM released. We don't consider the economic variance component because it is something that has nothing to do with the performance of the company because it is a byproduct of performance of financial market. And as you correctly said, in 2025, there was the extraordinary contribution coming from the CSM that we inherited from Cronos that is a one-off. In Life, we are working on the quality of the production in order to increase the contribution coming from annual premium, terms product and all the line of business where we can have a profitability that is a multiple of the profitability that we can have from investment product. We look forward as a consequence of that, to increase the contribution coming from CSM, but it is a very long path that you have to follow through a strategy focused on the quality of the product, the kind of product that we distribute, the quality of the distribution with our agents that are all drivers in which we are fully committed to execute an improvement of the quality of the production in Life. But in general, what we look forward is to produce with the expected return more than we release. Operator: The next question is from August Marcan of UBS. August Marcan: My first one is on your reinsurance renewals. Some of the -- your European peers were saying they could either get quite better terms and conditions or lower prices. So I was just wondering if you have any comments on how your renewals went. The second one is, I just wanted to get your thoughts on -- it seems that the dividend is going to run ahead of the target. The motor combined ratio already is ahead of target. I was just wondering, have you considered internally just upgrading the '27 targets? And then finally, on capital, I think you made it quite clear that you want to be ready if there's any inorganic opportunity on the market. But my question is, if it's the case that there is no opportunities by end of the plan, would you then consider returning that capital to shareholders? Matteo Laterza: Okay. I start answering to the first question about reinsurance renewals. Yes, the market has evolved after a couple of years of hard market started a new phase of softening market for reinsurance cover, especially, of course, nat cat covers that accounts for the vast majority of the premium. We are paying to reinsurer to cover our profit and loss account and our capital position. So yes, it was a year in which due to the improving results of the reinsurance market on a global base, but also on our homework on our risk management activity, we were able to obtain a risk-adjusted decrease of low double-digit decrease. Of course, at the same time, there was an increase in the amount of risk we have to cover, and this partially offset this decrease in the cost of the main treaties that is the excess of loss in properties. So for the near future, we expect that there could be another period in which if things on nat cat business continue to go this way, we could obtain a further reduction in prices and improving in condition of reinsurance treaties. Enrico Pietro: On the other question, again, on dividends, it is not in our attitude to restate target in any way. our commitment is in over-delivering the target. We said quite clearly several times that EUR 800 million is a floor. So by multiplying by 3, EUR 800 million, you can understand what our target is today. It is not necessary to restate target. But what is important is the substance of the concept that says that EUR 800 million is a sustainable number in our industrial plan. On the capital, I've been doing this job for more than 30 years, and I have been also a portfolio manager, and I did the same question several times to the CEO of the company. Believe me, it is not a good situation being my shoes to be short of capital when you need it. So asking to restate capital to a company could be in the short term, a very positive action for the stock price, but it is not a good idea in the medium, long term because when you are in a situation like the COVID that we had a few years ago or the Lehman bankruptcy in 2008, being short of capital is a very awful situation for a CEO of the company and asking for capital in a very bad situation in financial market is not very easy. And so it is not an option for us. We are committed to use this capital in a very profitable way. It is a duty of an administrator or a CEO of a company. And this is the commitment in which I can assure that this capital will give -- will deliver a very good and satisfactory remuneration for the shareholders. Operator: The next question is from Alessia Magni of Barclays. Alessia Magni: Last question from me on -- the others have been asked. On capital, if you have to invest outside, so inorganically, what would be the areas of interest that you potentially look at? And would you also look for assets outside Italy? Matteo Laterza: Yes, we are interested to all the opportunities that can create value for our shareholders, of course. And in our country, there are not so many opportunities in the market also because we are the first player in P&C. And so there are not so many -- no opportunities at the moment to use the capital that we have. It doesn't mean that in the future that can -- we can have some opportunities that we can exploit in the insurance business where we are -- we have our core business. Outside the country, as we have always said, we look at all the opportunities that can create value. It is quite difficult to create synergies in the cross-border transaction. But nevertheless, and it is a commitment that we have already had in the past, we don't have a bias in an area or in another. Of course, we are interested to our core business that is P&C. And if we would have an opportunity to look at, we would do it with interest. At the moment, there are not also in this case, interesting opportunities also because in this moment, in the other area outside Italy, again, we don't have transaction that can be -- in which we can be interested, too. Operator: [Operator Instructions] Mr. Laterza, there are no more questions registered at this time. Matteo Laterza: Thank you very much to all of you, and we will see again in May for the first quarter. Thank you very much. Operator: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.

85天前Insight Analytics约5分钟阅读

BTS-B.ST 2025 Q4 财报电话会议

Daniel Thorsson: Okay. Good morning, everyone, and welcome to Q4 presentation with BTS. My name is Daniel Thorsson, analyst at ABG Sundal Collier. And with us today, we have Jessica Skon, CEO of BTS. So I'll let you present the fourth quarter. I will have a couple of questions afterwards. And for both analysts and investors joining the call, feel free to add questions in the chat, and I will ask Jessica the questions afterwards. Jessica Parisi: Perfect. Thank you. Hi, everybody. Good morning. So let me start with an executive summary. Q4 marks a turning point for us. It brings an end to our quarter-over-quarter decline in profit results for the last 3 quarters. Just to remind you, 2 out of our 3 units delivered growth in 2025, and we expect Europe and other markets to continue to deliver the revenue and profit growth during 2026. The North America turnaround, which has been all of our focus for the last 2 quarters, is progressing very well. The unit is expected to return to moderate organic revenue growth and significantly improved quarter-over-quarter EBITDA performance already in the first quarter. We have continued to have breakthrough AI innovations during 2025, which is benefiting us in 3 significant very strategic ways. Number one, we have a much more competitive portfolio, one that we are getting daily feedback from our clients that is ahead of our competition within our space. Number two, we have implemented and pushed new services that help our clients with their own AI maturity and adoption going from initial training to workflow reinvention. And number three, which has just been absolutely profound, and we're learning from ourselves and bringing it to the market, is we continue to, I would call it, radical simplification of our internal operations. And in the fourth quarter, we even had a second wave of breakthroughs, which led to productivity gains. And we expect to reestablish earnings growth throughout 2026. We go into more details. The fourth quarter 2025, yes, it was a continued weak revenue performance in BTS North America, which we're very disappointed by, which resulted in a poor quarter. This wasn't a surprise. It was seen for the last few quarters, but it marks an end to that trend. Almost half of the Q4 profit decline was due to noncore things. So it was due to a mix of currency headwinds and then the severance that was related to our AI-based rationalization in the fourth quarter. BTS Europe had a revenue slowdown in the fourth quarter, but that was temporary. And Q4, the year before was an exceptionally strong quarter. BTS Other Markets had solid growth, but profit decline, which was due to BTS operations in Asia and specifically in our Thailand operations, Korea and China. If we're looking forward to the full year or if you look go backwards to the fiscal year 2025, obviously, this was a very disappointing year for us with no growth, a 25% decline in EBITDA. But it's important, I think, to remember the real story of 2025. It's a mixed picture. BTS operates in 3 units. 2 of the units, which is half of the business performed very well, very well, and you could say in a tough market, especially in Europe. So with continued growth in BTS Europe and BTS Other markets in both top line and bottom line. Half of the business did poorly. That was North America, with very weak revenue and profit performance. We've made a lot of organizational shifts back in June and the organizational turnaround is progressing very well, both from bookings when rates are up, opportunity pipeline is growing and so forth. We are very proud of the year. It was not wasted in true BTS fashion. We are, I think, can be very proud of our internal AI innovations and our external ones, and we're bringing those learnings to the market. So if we look forward into 2026, as I mentioned, the BTS North America turnaround is progressing very well. The unit we expect will return to organic revenue growth in the first quarter with significantly improved profit already in the first quarter, which should be 1 quarter ahead of schedule. We expect BTS Europe and other markets to continue to deliver on revenue and bottom line performance in 2026, and the AI innovation will continue to benefit us in 2026. If I double-click into the AI innovations of the year, I've made a time line for you all. Basically, we made a Wonderway acquisition in 2024, which you remember. That gave us kind of an AI technology platform that does AI conversational practice. In the first 4 quarters, basically of its existence, we have it in 115 different projects, 28,000 users, and we have clients who are now doing self-service on that platform. But in addition to that, we've launched an AI super companion coach that goes across our leadership development initiatives. On our executive communication practice, we've launched a Digital Mirror. To support our end-to-end coaching portfolio, we have AI coaching fit for purpose, 3 different offerings for our clients. And these AI coaching offerings are not stand-alone. They're also integrated in Teams, Slack and Salesforce CRM. We have retrofitted and completely changed our simulation platforms across the business, giving our clients the ability to enjoy speed to develop, scale to deploy and for some clients who want to, they can build their own simulations. And within our CRM offering, we've also launched an agentic practice offering for our go-to-market sales clients. It was a really big year of innovation for BTS. If you add up the revenue associated with our AI services and our AI technology, it was $19.6 million in bookings last year, which will obviously carry forward into 2026. And so now as we -- when we talk to our clients about partnering with them, we have our traditional practices, which you're used to seeing, and we've built those out with your support over the years. And now we're overlaying essentially our own AI technology offering across our practice areas. And the feedback that we're getting in the market is, yes, there's plenty of shiny objects and HR tech start-ups, but most of our large clients are looking for an integrator. They're consolidating. They're looking for less vendors. And I think BTS is very well positioned to play that role. We have been innovating with companies for 40 years, how they learn, how they drive change, how they improve performance, and now it feels like the beginning of the next era. Of course, the AI productivity gains that we did in 2025 are going to have a material impact on 2026. So just to remind you, the total severance that was paid in 2025 was SEK 8 million in Q2 and Q3 and another SEK 10 million in December. Resulting in 2026, $5 million reduction in costs from our May AI breakthroughs and $2.6 million reduction in operating costs based on our Phase II AI breakthroughs, and we expect more to come. I would say a realistic conservative estimate in 2026 is probably about USD 1 million, SEK 10 million. And best feel on that right now is the majority of that would start to hit in the third quarter. So given all of this, we believe that our results will be better than 2025. This would be consistent with how BTS historically starts the year. Thank you very much. Daniel Thorsson: Excellent. Thank you very much, Jessica. I have a couple of questions, but just to let everybody know that if you have questions, feel free to write them in the chat and the Q&A field, and I will ask them to Jessica. But I start off with one in North America in Q1. You are extremely clear on recovering to growth in Q1 and also see profit going up in the first quarter versus last year. Is that driven by what you have seen in January, February or what you expect to see in March kind of... Jessica Parisi: Both. Daniel Thorsson: Both. Okay. So it has started off well and you expect to see it continue throughout Q1. It's not only that you started off slower in January, but you see that we're going to do a lot in March, and that's going to save the day. Jessica Parisi: No. we're not hoping for a hockey stick in March. Daniel Thorsson: Yes. I see. That's very clear. And on the guidance in 2026, would you consider the EBITDA guidance to be driven mainly by sales growth or lower costs if you have to divide them? It's obviously both. But which is the biggest one. Jessica Parisi: You can imagine how good it's going to be with good growth, right? So -- but it's -- I would say it is 50-50. We expect double-digit revenue growth in Europe and other markets to continue. And we expect North America, at least in the first half to have moderate organic growth. And because we did so much cost savings, that's kind of the cherry on top, right? So... Daniel Thorsson: I see. And on AI, you share very interesting proofs here with numbers, et cetera. While we can all see the reality that the global stock markets are extremely fared about AI for global management consulting firms, software firms, everything. And all the companies I talk to at least, they haven't really seen anything on the threat downside, but they see all the favors they can do internally. So where do you think the reality is on what you see? Do you see that your customers have a lower demand because of AI recently? Or do you only see that you can favor from it? Because there's a big discrepancy. Jessica Parisi: I mean, obviously, there's things that are in favor for BTS, and there are things that are posing challenges for us. Some interesting proof points, and I didn't mention this yet in the presentations, but an additional advantage for BTS is a new client base opportunities. So if you think of the AI hypergrowth companies to go after as clients, our West Coast office, in particular, is doing a great job of that. In fact, I can tell you that Anthropic has chosen us as their go-to-market enablement partner. That's the company behind Claude, for example. And they're using us both for our approach to driving change and enablement, but also using our technology as kind of an evidence point that there's also a new customer base, which is very exciting for our team. If I think about how the clients are reacting to the moment, I would say they shifted quite a lot over the course of the year. They started the year being very apprehensive, very slow to adopt AI. Many of the buyers saying we can't have it yet in our function and IT is on lockdown and they're only giving everybody one tool. By the end of the year, we saw much more of a stronger appetite to experiment, right? In terms of how can we do leadership development differently? How can we drive scale change? What should we do for our sellers? And BTS do have ideas on how to do things differently. I think they're still slow in general, but I think the appetite is changing. Yes, maybe I'll let you ask follow-up questions because there's probably a lot to... Daniel Thorsson: No, that's fair. We'll take one from the chat here from Oscar Ronnkvist from SEB. You say significantly improved EBITDA already in Q1. Can you specify what it means in terms of EBITDA year-over-year when it's up significantly and not only quarter-over-quarter in absolute terms? Jessica Parisi: I mean we're basically doing what we've historically done, right, which is we start the year if we see it, look better than as a forecast, and then we learn more as the months progress. But North America, in particular, because of the cost savings that we did in 2025, plus the return to moderate organic growth in the first quarter is what gives us the confidence. And for us, significantly better is 15% or higher. Daniel Thorsson: Okay. That's clear. The second question from Johan Sunden. It's related to this as well. How good visibility do you have for EBITDA outcome in North America in Q1 '26? It's probably similar to my question already. But the follow-up is how is license revenue expected to develop quarter-over-quarter and also year-over-year in North America in Q1? Jessica Parisi: We have good visibility. We're halfway into the quarter right now in terms of cost and revenue. In terms of license development quarter-over-quarter in North America, it's a mixed story on license. It's like old school and new school, right? So on the old school stuff, fortunately, for us, only about 2% of the company's total revenue is related to content license, and I kind of think that market is dead, right? And so we don't have that much more license for our clients to cancel from us on the content side. And at the same time, growth in our Verity product from the Wonderway acquisition and those AI technologies that I shared with you are progressing very well. So there will be a turning point sometime in 2026, where the license of the new products helps our overall license picture grow, right? My best gut feel is that will probably happen by the third quarter, but it's -- it will be a mixed bag until then. You don't anticipate any major decline in license, let me just to be clear. So it's more iterations here or there client by client. Daniel Thorsson: Yes, because licenses were down in Q3 and Q4 year-over-year. Jessica Parisi: Yes, yes. Daniel Thorsson: Okay. So not much more from this level down. Johan Sunden also had a follow-up on the EBITDA margins in North America, how they are expected to develop year-over-year in Q1. You already answered that by saying profits up more than 15%. I don't know if you would like to add anything on margins, but... Jessica Parisi: Not really, but it will be significantly better. Daniel Thorsson: Yes. No, true. We have another one on capital allocation. With a record low valuation, trading at 7x the EBITDA you actually did in 2025 and you expect growth in 2026. Why does the Board not consider buybacks as an alternative to drive extra growth? Jessica Parisi: Yes, yes, we've been talking about that. Daniel Thorsson: Okay. And what was the conclusion? Jessica Parisi: We have not concluded yet. It's been discussed. Daniel Thorsson: Okay. Discussed not concluded yet. I see. And then we have a question from Jonathan [indiscernible]. Could you please help one understand dynamics in the license sales as a percentage of revenue? It has historically been around 10% of sales, but it is now 7% and total sales are down. So that's down even more. Jessica Parisi: This is specifically unique to the North American market. And in the fourth quarter, there was one deal that we had done in the last 3 years with one more traditional software company, not an AI growth company. And they did not renew that in the fourth quarter. Instead, they said, we're not going to work this way with you because it was a new buyer, new budgets, but you're going to continue to be our partner this year. So we couldn't take that revenue in the fourth quarter like we had year-over-year. That's the real reason behind the decline in the fourth quarter. Daniel Thorsson: Do you think licenses will be back to 10% of sales over time? Jessica Parisi: They do. Daniel Thorsson: Yes, over time, in detail? Jessica Parisi: Yes, because we have a whole bunch of new technology now that's unique and in demand and supportive of the value proposition. So... Daniel Thorsson: Excellent. We have another one from Oscar Ronnkvist at SEB. Can you add some color on the magnitude or quantify the positive orders in North America? I guess it is up year-over-year. Jessica Parisi: Sure. I mean I think, I think the data point I can share with everybody here is that the bookings in North America in the fourth quarter was around 25% or 26% higher than the fourth quarter the year before. It was actually over 40%, but then when I took out the decline from that one renewal, we brought it down to 26%, 27%. That's probably the best data point I can give you in terms of increased demand coming into the -- into 2026. Daniel Thorsson: Perfect. We'll see. I think we have a couple of more here. License revenue, again, they are still under pressure. How important are these for your margins going forward? Jessica Parisi: This is going to sound silly, but not that important in the short term. And with, if the AI tech can take off in terms of the portfolio of the new products, it will be significant upside. Daniel Thorsson: Okay. Clear. And can you elaborate a bit on how your license revenue works? Are there -- are these onetime fees for perpetual licenses? Or are those recurring? Jessica Parisi: Thank you for the clarification. The license -- the old school license, which is the majority of our license, do not have a renewal date on them typically. Maybe that's 5% of them did that, right? Most of them were initiative based, and it was clients saying, okay, we want you to build a custom simulation for us, but we want to bring it in-house and deliver it and do the rollout, and we'll pay you license for the use of that simulation as a onetime event. And typically, they use it then for somewhere between 3 to 12 months and then it's over. The new tech offering has renewal dates, and it's just a different -- slightly different, more sticky service. Daniel Thorsson: Okay. That's clear. How should we think about employee growth in 2026? You are still a consulting firm, have been driven by a number of employees historically, maybe less so in the future, but how do you think? Jessica Parisi: Yes. So there's 2 categories of employees. There's our billable consultants who generate revenues for us and then there's the operational staff, right? And the operational staff about a year ago was 41% of our total employee base, and we could see we are going to have quite improvements in that total percentage. So I expect the number of operational staff to continue to decline, and we are expecting to increase the number of our billable consultants and revenue generators in all 3 markets this year. Daniel Thorsson: Okay. So net-net, you feel rightsized if we exclude future M&A, obviously, but on an organic basis? Jessica Parisi: In terms of total headcount delta, the interesting... Daniel Thorsson: In '26. Jessica Parisi: Yes. Obviously, the billable consultants are more expensive than the operational ones. We have plenty and low market as well. It's probably going to be about flat, to be honest. Daniel Thorsson: Cool. Fair enough. And we have another question from Jon Hyltner. You say that you expect growth in Q1 '26. That refers to year-over-year growth, I assume, you said. And is that both for the group and for North America? Jessica Parisi: Correct. That's quarter compared to Q1 the year before, and that would be both for North America and for the group. Daniel Thorsson: For the group. Excellent. That's clear. We have another one here. Could you elaborate a bit on how your unit economics have changed after this new AI revolution in BTS? Jessica Parisi: Not that much yet. So if you look at the average pricing across our services, we have had very little change, both in the fees we're charging to build and customize and co-create and the fees that we're using to deploy. That said, given the new simulation platforms, it is faster for us to do the customization and the co-creation process, right? So I think that our speed will yield smaller upfront fees in some cases, which will allow us to deploy faster. And for us, the revenue is in the deployment. So that's the profitable part of the business, and our clients usually want to move quickly. So I think overall, it will be beneficial to us to get to deploy faster than to quickly customize or co-create. That will be the biggest change. And then with the AI technology with much higher margins on that offering, that would obviously be the other one. Daniel Thorsson: I see. I also have a question on the full year guidance on '26 that EBITDA will be better than last year. If we look at the nonrecurring items in 2025, only -- if we assume 0 in '26 as a base case, that will drive 10% EBITDA growth. Jessica Parisi: Correct. Daniel Thorsson: On a flat underlying performance, and you already guide for growth in Q1 and for lower costs full year '26. Jessica Parisi: Yes. Daniel Thorsson: Doesn't it sound like a significantly better EBITDA guidance rather than a better EBITDA guidance? Jessica Parisi: Sure does. And we always start the year this way. Daniel Thorsson: I know. Excellent. I will see if we have any final questions in the chat. No, we don't. And I had the opportunity to have mine, and we got all the questions from the chat as well. So -- thank you very much. If you would like to have any final words, otherwise, I think this Q4 presentation is finalized with BTS. Jessica Parisi: Super. Thank you. Daniel Thorsson: Thank you very much.

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ALK-B.CO 2025 Q4 财报电话会议

Per Plotnikof: Hello, and welcome to the presentation of ALK's Q4 and Full Year 2025 Results. My name is Per Plotnikof, I'm Head of Investor Relations, and thank you all for joining. On Slide 2, I will present the speakers and agenda for this call. And with me today are CEO, Peter Halling; and CFO, Claus Steensen Solje. Peter and Claus will walk you through the Q4 and full year highlights, market and product trends as well as the full year financial performance. Then we will provide an update on the strategic progress and priorities before presenting our outlook for 2026. As usual, we will end with a Q&A session. And to get us started, I'll hand you over to Peter on Slide #3. Please go ahead, Peter. Peter Halling: Thank you, Per, and thank you all for joining the call. We delivered a solid performance in the fourth quarter, leading us to end 2025 at the very top end of our latest outlook. So let me start out by highlighting 3 key strategic developments in the quarter. Firstly, the pediatric rollout of our house dust mite and tree pollen tablets, ACARIZAX and ITULAZAX, provides wider access to prescribers in key markets and continue to perform very well. Secondly, the European rollout of EURneffy or just neffy continues following our initial launch in Germany in late June, At the end of 2025, EURneffy achieved an 18% value share in Germany. And since then, we have now also launched in the U.K. and by year-end, market access were also in place in Greece, Denmark, Slovenia with launches expected shortly. While we're still in the early phases, the initial market response to neffy supports the product's long-term potential. At the same time, established clinical practices still favor traditional anaphylaxis treatments, and we'll continue working diligently with the medical communities to drive adoption. Most recently, we received a positive opinion in late January from the European authorities for the approval of the 1 milligram version of EURneffy for emergency treatment of anaphylaxis in children weighing 15 to 30 kilo. Thirdly, we continue to make good progress across our existing and newly established partnerships in China, Japan and the U.S., both in terms of execution and preparing additional activities for 2026. These developments will be covered later in the slides. Now turning to the financials. Revenue in Q4 increased by 17%, driven by strong performance across all geographies and with tablets in Europe and anaphylaxis as key drivers. EBIT increased by 88% with a margin of 22%, as expected, reflecting continued strategic investments in commercial initiatives to support future growth and innovation across markets. With that, I will now move to the full year picture on Slide 4. 2025 became a landmark year for ALK, and we clearly exceeded our initial expectations for the financial performance. Revenue grew by 15% in local currencies to DKK 6.3 million (sic) [ DKK 6.3 billion ], which is USD 1 billion, driven by double-digit growth across our sales regions. And importantly, we are proud that we also hit our long-standing target of 25% in '25. This is a big achievement for the company, 25% EBIT margin and 26% last year. So let me highlight 3 full year milestones. The commercial momentum was underpinned by a solid expansion of our patient base. We treated 500,000 patients more in '25 so that a total of 3.1 million patients are now treated with ALK's products. This was made possible not at least through the continued expansion of our tablet business. For example, the rollout of ACARIZAX and ITULAZAX for children helped broaden the patient inflow and adoption across the tablet portfolio. In anaphylaxis, the main growth driver last year for ALK, but also on top of it, we saw positive contribution for EURneffy, speaking to the portfolio strategy of ALK. And importantly, this is consistent with the strategic direction we have followed since 2024. Key in executing on Allergy Plus is expanding the addressable market, broadening the patient reach, especially through the pediatric indications, but also leveraging partnerships to help even more patients. As one example, in China, we have successfully transitioned sales and marketing activities to our new partner, GenSci. And at the same time, we are further strengthening our profitability. EBIT increased by 53% and the EBIT margin improved to 26%, supported by higher sales, improved gross margin and diligent cost control. This also marks the delivery on our 25% in '25 ambition and reinforces our commitment to maintaining an EBIT margin at around 25% while we continue to invest in our continued growth. Encouraged by this strong momentum, the Board of Directors recommends a dividend payment of DKK 355 million for '25 or 30% of the net profit after tax, in alignment with our capital structure and long-term ambitions. So on that note, I'll hand it over to you, Claus, for the market review on Slide 5. Claus Solje: Thank you, Peter. First, let's take a look at the performance across our sales regions and then on the different product groups. Let's start with Europe. Europe remained our main region with 71% of group revenue. We saw 14% broad-based growth across the portfolio and geographies, including in our largest markets, Germany and France. Demand was solid and market conditions were largely stable. Growth was primarily driven by tablets up 19%. Volumes increased especially on a good inflow of new house dust mite patients on ACARIZAX supported by the buildup of patients who had started on grass pollen tablets in prior years. The new pediatric indications for ACARIZAX and our tree pollen treatment ITULAZAX also added positively to the growth. Overall, ACARIZAX and ITULAZAX were the biggest contributors, while our grass treatment GRAZAX continued to grow steadily. Performance was particularly strong in Central Europe, including Germany, France and several Eastern European countries, and the U.K. In the U.K., we continued to progress market access for our key tablet products. ACARIZAX and ITULAZAX became the first AIT tablet treatments admitted to the National Health Services or NHS systems with general reimbursement. This is an important step in what has historically been a low penetrated AIT market. We are now working to extend these approvals to include children while also progressing to make GRAZAX available within the NHS. It is also worth noticing that in contrast to 2024, pricing adjustments had a limited impact in 2025. And this year, tablet sales were only marginally impacted by pan-European trading dynamics among wholesalers. Combined sales of SCIT and SLIT drops were up modestly by 3%. SLIT drops continue to benefit from a growing prescriber and patient base in France, while SCIT were more muted. In our main SCIT markets, Germany and the Nordics, patient initiations were, to some extent, impacted by patients choosing tablets over SCIT for the indications covered by our tablet portfolio. Finally, anaphylaxis and other products grew strongly by 34%, driven by Jext on solid execution, tender wins in Southern Europe and competitor supply issues. We also saw a positive although modest contribution from the initial EURneffy introductions in Europe. This growth also underlines the value of having a portfolio approach in anaphylaxis. Turning to North America. In North America, revenue gained growth in 2025 and increased 19% driven by tablets and anaphylaxis and other products. The U.S. legacy business recovered from last year stagnation and growth was driven by continued adoption among existing allergist prescribers, and to a minor extent, uptake among pediatric prescribers. Canada sustained a higher growth rate. Here, tablets remain the main product line and the growth reflected a sound underlying demand, supported by the children indication for the house dust mite and tree tablets. The 34% growth in anaphylaxis and other products revenue was driven by cost compensation from ARS Pharma related to the co-promotion of neffy in the U.S. together with higher sales of life science products as we continue to gain customers on our higher-margin solutions. Let's turn to International markets. In International markets, revenue increased 16%. Tablet revenue growth was 8% with continued positive contribution from smaller markets across the Middle East, Southeast Asia and India, while revenue from Japan was impacted by phasing of shipments, especially in the second half of the year. In-market demand in Japan remains strong, and our partner, Torii, now part of Shionogi, continue to grow sales by double digit, although capacity constraints still limited its ability to fully meet demand for CEDARCURE tablets. As a new facility has recently become operational, we expect Torii to increasingly be able to supply higher volumes to the market. China remains the largest SCIT market in the region, and revenue increased as we continue to normalize shipments following the renewal of our import license. In China, in-market sales also continued to grow by double digits, supported by the ongoing expansion of the prescriber base at hospitals. Now let's turn to a brief update on the product lines on Slide 6. In 2025, tablet sales grew by 17%, reinforcing tablets as our primary revenue stream. Growth was largely driven by the expansion of the patient base, mainly in Europe and Canada with pediatric launches of ACARIZAX and ITULAZAX adding to the momentum, as mentioned earlier. Overall, the number of new patients starting on tablets increased by well above 10% during the year, which bodes well for the continued solid growth in 2026. SCIT and SLIT drops delivered a 5% sales growth for the year based on resumed shipments to China, offset by the previous mentioned conversion to tablets in Europe. Finally, anaphylaxis and other product sales increased by 34%, mainly driven by a 58% increase in anaphylaxis sales. This was mainly related to increasing Jext sales although neffy also contributed to that growth. Now let's turn to Slide 7 for the full year financials. Revenue for 2025 increased by 15% in local currencies to DKK 6.3 billion. It is marking the first time that ALK exceeded DKK 6 billion in annual revenue. It also represents the seventh consecutive year of growth, with results clearly exceeding our initial expectations of a 9% to 13% increase in revenue. Gross profit increased to DKK 4.2 billion, yielding a gross margin of 67%, up 3 percentage points from last year. The significant and extraordinary improvement came from higher sales volume, a more favorable sales mix and production efficiencies, demonstrating that scale effects are increasingly materializing in the business. Capacity costs increased by only 6% in local currencies to DKK 2.6 billion. In comparison, capacity costs increased by 9% when excluding the impact of restructuring cost in '24. In line with our plans, R&D expenses increased by R&D -- by 15%, reflecting investments in our pipeline, including the peanut tablet development program, preclinical projects and the Phase III bridging trial with ACARIZAX in China. Sales and marketing costs increased by 3% and 6% when adjusting for the last year's one-off costs driven by tablet launches and the rollout of neffy, while administrative cost increased modestly. Unlike last year, capacity cost in 2025 did not include any one-off expenses. Operating profit, EBIT increased to DKK 1.65 billion and the EBIT margin improved to 26%, up by 6 percentage points from last year. This means that we delivered on our important profitability journey and 25% in '25 EBIT margin target, which we officially set back in 2021 when the EBIT margin stood at just 4%. This expansion of the EBIT margin by more than 20 percentage points has been accomplished at the same time as we have invested significantly in growth, reflecting disciplined prioritization throughout the organization and allocation of resources towards the most impactful growth levers. Free cash flow was positive at DKK 1.4 billion compared with negative DKK 204 million in 2024. The improvement reflects the higher earnings and an upfront payment from GenSci of DKK 244 million. In addition, 2024 included a DKK 1 billion license payment to ARS Pharma and DKK 115 million related to the PRE-PEN acquisition. 2025 investments primarily reflect the buildup of capacity for tablet production, upgrades to legacy production, a milestone payment to ARS Pharma related to the first commercial sales of EURneffy and other infrastructure investments. With this, we conclude our operations review of 2025 and turn to Slide 8 for a closer look at execution of our Allergy Plus strategy. Please go ahead, Peter. Peter Halling: Thanks, Claus. So before diving in to our strategy progress, I would like to address the change in management announced this morning. Henriette Mersebach will step down from her position as member of the Board of Management and Head of Research & Development. Her departure is by mutual agreement, and this is a strategic leadership decision focused on the long-term needs of the business. We have appointed Henrik Jacobi, ALK's former Head of R&D, as a Special Adviser to the executive leadership team reporting to me, and we have initiated the search for a new Head of R&D. I would like to thank Henriette for her contributions over the past 3 years. She and her team secured important regulatory approvals, including for our pediatric treatments, and also advanced our peanut allergy program, among other achievements. We remain committed to our ambitions in our different therapy areas and in particular, the development in food allergy as well as other disease areas. So now looking at our progress in Allergy Plus. We entered 2025 with a clear focus on launching our respiratory allergy tablets for children. And we have taken important strides forward. Supported by the children launches, we expanded both our prescriber and patient basis during the year, increasing the number of patients treated with ALK's products by around 0.5 million or 500,000 to an estimated 3.1 million. The majority of this increase, around 300,000, came from tablets, including children and adolescents. So tablets remain an important driver for growth going forward. We remain on track towards our ambition of helping 5 million people every year by 2030. Today, the house dust mite tablet, ACARIZAX or ODACTRA in North America is approved for children in 30 countries and launched in 21 of them. Our tree pollen allergy tablet, ITULAZAX or ITULATEK in North America is approved for children and adolescents in 20 countries and launched in 13 when including the very recent launch in Norway just a few days ago. These rollouts have reshaped our prescriber base. By year-end, more than 4,000 prescribers in our directly served markets had already prescribed one of the 2 tablets to children, and we continue to see strong cross-tablet adoption. In key European markets, more than 90% of pediatric ITULAZAX prescribers also prescribe ACARIZAX. And in Germany, among other countries, pediatricians have emerged as an increasingly important prescriber group. In the U.S., we expanded our reach in the pediatric segment with the co-promotion agreement with ARS Pharma. In the U.K., the admission of ACARIZAX and ITULAZAX to the NHS with general reimbursement represents an important structural step in a historically underpenetrated AIT market with further work ongoing to extend access locally. We also made good progress with our 2 new partners, GenSci in China and Shionogi in Japan, following the acquisition of Torii in '25. We see a strong commitment from both partners to further develop both the Chinese and the Japanese allergy market, respectively. Looking ahead for 2026, our key priorities in the respiratory therapy area will be to maximize the value of the tablet portfolio. This means continuing the rollout to children in the markets where we've already secured access to prescribers. At the same time, we expect to launch tablets for children in additional markets so that adult, adolescents and children all can benefit from our treatments, no matter where they live. In anaphylaxis, neffy is a strategic enabler of Allergy Plus. In 2025, we have moved into early commercial execution in Europe and in North America. The co-promotion agreement with ARS Pharma in the U.S. is a lever to expand our market reach and build further insights. For this year, our focus is to succeed with neffy. We expect 2026 to be a buildup year focused on driving market access and initial rollout. In practical terms, that means continue the market-shaping activities across geographies and patient groups and build a clear market position that allows us to move from introduction to broader commercial execution. We will do this with a combined portfolio approach where we bring together both neffy and Jext to serve different patients and channel needs and to further strengthen our overall footprint in emergency allergy care. So let's continue to Slide 9. In food allergy, we initiated a Phase II clinical trial of our peanut SLIT tablet, which has received Fast Track Designation from the FDA. We are on track to report Phase II top line results in Q2 this year. Our focus for '26 is to advance the peanut program into progressing it into Phase III, of course, again, subject to positive data coming out of Phase II. In addition, we progressed preclinical programs in new disease areas, and our partner, ARS Pharma, initiated a Phase IIb trial with neffy acute flares associated with chronic spontaneous urticaria. We also have the rights for this indication in our territories. And finally, we'll continue to invest in our infrastructure to be able to scale up ALK. This includes investments in tablet production capacity, IT and AI. We'll also continue to explore further business development and partnership opportunities. This could be both commercial stage as well as research stage opportunities. So in short, 2026 is all about continued execution, and we have a strong foundation. ALK is in a unique position to sustain growth for many years to come to the benefit of an increasing number of patients suffering from severe uncontrolled allergies. So with this, I'll hand it back over to you, Claus, and the full year outlook on Slide 10. Claus Solje: Thank you, Peter. So for 2026, we expect to continue our trajectory of double-digit revenue growth, while the EBIT margin is planned to remain on par with our long-term earnings ambitions. First, revenue is expected to grow 11% to 15% in local currencies and the EBIT margin is expected at around 25%. Let me take you through some of the main assumptions. Revenue is expected to grow organically in local currencies across all sales regions and product groups. Growth will predominantly be volume-driven. The lower end of the range reflects a potential negative impact from price and rebate adjustments, mainly in Europe, and less growth in anophylaxis and SCIT. The upper end assumes stable price and rebate conditions and potentially upsides related to tablet and anaphylaxis sales. As usual, the timing of product shipments to China and Japan may lead to quarterly fluctuations. Tablet sales are expected to grow by double digits across sales regions, fueled by continued expansion of prescriber and patient bases, naturally with children and adolescent projected to account for a higher share of the sales. Anaphylaxis and other product sales are expected also to grow by double digit, led by the continued commercialization of neffy. SCIT and SLIT drops revenue is projected to grow by single digits driven by higher SCIT volumes to China, modest volume growth in Europe across SCIT and SLIT drops and improved SCIT pricing in North America. The gross margin is expected to decrease slightly as the 2025 favorable volume and mix, especially higher tablet sales in Europe, will be offset by growth in partner-related revenue in Japan and China at lower margins as well as increasing neffy sales, which also holds lower margins. Production efficiencies, reduced scrapping and procurement savings are expected to largely compensate for inflation. Capacity cost to revenue ratio is expected to remain unchanged as we will reinvest the benefits of increased scale into the key strategic growth opportunities. R&D expenses are planned to increase but remain at around 10% of revenue. Sales and marketing expenses are expected to increase while administrative costs are planned to decrease slightly. Finally, free cash flow is expected to be positive at DKK 800 million to DKK 1 billion. CapEx is projected at around DKK 500 million with a focus on production capacity expansion and IT infrastructure. Potential changes to international tariffs are not expected to material impact growth or earnings given our geographical footprint. To sum up, we expect 2026 to deliver continued volume-driven organic growth while we keep investing to support our long-term ambitions. And with this, I would like to hand it back to you, Per, and Slide 11. Per Plotnikof: Thank you, Claus, and thank you, Peter. And this concludes our presentation, and we will now open up for the Q&A session, and I kindly ask the operator to go ahead, please. Operator: [Operator Instructions] The first question today comes from Thomas Bowers with SEB. Thomas Bowers: So what level of contribution should we think for the pediatric indication here for your 2026 growth guidance? And given the early launch trajectory, any first stakes here on how we should think about the peak potential here? And then secondly, can you maybe just add a bit of flavor? You did address this in the prepared remarks, but maybe there's a split here between specialist and pediatricians among those plus 4,000 prescribers. And how does it look like now with the high-volume pediatric prescribers at this point? So any color here will be very helpful to us. And then lastly, just in regards of the pricing impact or the pricing rebate impact. So I understand that France is mostly a done deal here. So is that part of your sort of midpoint growth guidance? And how should we actually think about the impact when you look at sort of the competitive situation in France? Is there -- are we looking at potentially even sort of a price parity here on SCIT drops and tablets? So I guess the question here is whether there maybe be some sort of any dynamics that could give you any potential some headwinds or tailwinds in France in the wake of this price adjustments? Peter Halling: Thomas, Peter, I think we caught them all. I'll start out, and I'll have Claus and Per jump in as well. But let me start on the contribution from peds and the peds potential. I know last year that we gave an indication of 1% to 2% from the peds and the 1% on neffy or less than 1% on neffy and then we upgraded. We are not guiding on this. But what we can say is that we expect it to be higher given the continued positive progression of the business. Then you cut out a little bit. So if I'm not answering 100% correctly on your second question, the specialist versus peds question. I think basically what we are seeing is obviously, as we also mentioned here, with the 4,000 that this is a new development which is positive. I do think that what's important and what we're also learning is where allergists are fully focused on allergies, then do remember pediatricians are treating a multitude of diseases and different types of patients. So even though that we see a good progression and we talk typically around 25,000 prescribers normally, then with the pediatricians on top, it's not a 1:1. But obviously, we are very positive that this continues and the interest is there because that gives us the future prescriber expansion and allow us to do more for children going forward. So if I didn't answer completely, then please ask again. And then finally, on the pricing, I'll let Claus talk. I can talk to the last part on the competitive side. We don't really comment on that. But obviously, there is a rebalancing also in the French market, which we believe, is overall putting things more straight, but that's as much as we can say at this stage. And maybe you want to talk more about the impact? Claus Solje: Yes, I can do that. Thanks, Thomas, for the questions. Related to the pricing and what has been included kind of in our midpoint or in our guidance, then you are right, that the French price decrease that we saw at the end of last year and in the beginning of this year, '26, which was not sustainable, had really big, you can say, impact on us, we have included into the guidance for this year. So when we are talking about the rebates, especially in the lower part of the guidance, it's, of course, very much the German rebate. It can also be other smaller ones across the world, especially in Europe, but it's, of course, the big one in Germany that can really impact us. So yes, the French price has been included into the guidance. Operator: The next question comes from Benjamin Jackson with Jefferies. Benjamin Jackson: I guess my first one would be on peanut allergy. We're obviously creeping closer to the top line results in the study. So what should we expect from you in terms of the communication around this? Are you going to provide us with any details at the time of the headline? And also what are you looking for beyond just the actual signal seeking in this study? Are you trying to meet an internal bar to take it forward? Or it's just simply a good -- a signal enough for you to continue exploring that? So that's my first question. The second one, just to back off that, obviously, respiratory tablet has been a bit tricky in the U.S. given the dynamics there. So how should we be thinking about a potential food allergy tablet in the U.S. and where -- and what can be done to better establish that market there? And then third and finally, I imagine quite a short answer, but is there any kind of more commentary you can provide about the potential for neffy and CSU in your regions? Obviously, your partner has been quite vocal about how big they see that opportunity. But what are you seeing it for you? Is it something you're willing to get behind and potentially actually fund as well? Obviously, no requirement to, but any thoughts around that would be great. Peter Halling: Perfect. Thanks, Benjamin. Per, if you take the first one on the communication, I'll answer the last 2. Per Plotnikof: Yes. So thanks, Ben. So on the communication of what to expect from our accounts when we have top line results here later in the second quarter of this year. As we do consider this as material to us, we will be putting out a separate company announcement on the news just to confirm that. And of course, when we look into the data, we will try to give as complete and a meaningful picture as we can once we've gone through the top line results. And the -- and then, of course, the ultimate aim of this study and the results is to establish a clear proof-of-concept for the peanut tablet and to guide our decisions related to the design of the Phase III study. So that means what exact dose will we be going with, what's the treatment regimen going to be looking like beyond titration schemes, potentially also what will be the treatment duration we see in the maintenance phase, et cetera. So there will be a lot of information. And obviously, also the safety profile of the drug. Sorry, I forgot that. So there will be a lot of information that we can draw out of this Phase II. And of course, that will inform our Phase III plans that in the best of all worlds, we can initiate at the end of this year and then have results read out maybe in '28 and then with the submission that year and hopefully an approval late '29 and then launch and roll out into the 2030s. I hope that clarifies that one. Over to you, Peter. Peter Halling: Okay. Thanks, Per. So your question, Benjamin, on respiratory tablets and kind of the comparison with U.S. peanut. I think it's -- first, it's 2 different ways of looking at things. You have to look at the economics for the prescribers behind the products. And also that today for the tablets, there is an alternative to the treatment, whereas U.S. peanut tablet will both take into account the patient needs, first and foremost, but also looking at how do we make this attractive also to the prescribers. So -- and then thirdly, on that one, you have to remember that there are really few alternatives and the ones that are in the market are different, both in terms of treatment regimes potentially also from a patient pool, et cetera. So this is a very different way of looking at it. So rather than looking at the modality or the technology, if you wish, whether it's an injection or whether it's a tablet or not, then look at the patient pool, the prescriber pool, the economics and the op-dosing of the tablets. So I just want to make sure that that's clear. So that's the U.S. So in other words, to keep it pretty clear, we believe that the tablet potential for the allergists or with the allergists is quite intact and it's broad-based and not a subgroup. It's broad-based. Then you had a question around neffy and CSU. And we also see the numbers, and we're also obviously excited about what we see everybody else get to. I'll just caution because this is a market which is very new and needs to be developed. But what we do see and where we do agree with the analysis out there, that is we do see the patient population, and we do see the need, and I think that's very important. But there are major differences both between how you treat and use products in the U.S. and in Europe. So emergency room treatment, the cost of an emergency room visit in the U.S. versus Europe, et cetera. So there are some differences and we need to understand that better. And moreover, and importantly, we need to understand what would the product look like, what's going to be the final profile of the product, how is it going to work with the patients, and what does it -- what kind of impact will it have on the patients. So we need to understand that. And that's going to tell us what's the price points we potentially could get and how many patients can we actually reach. So we're still doing all of that diligence. But again, boiling it down, potential we see out there, we think it's very interesting and relevant for us, but we also have still a lot of learnings before we can assess how big this is going to be for ALK. Operator: The next question comes from Jesper Ingildsen with DNB Carnegie. Jesper Ingildsen: I have a few as well. Maybe also just on peanut, I mean, I'll be interested to hear your sort of like on how you see this -- the recent developments in the space, amongst others, GSK acquiring RAPT Therapeutics, and also Stallergenes taking proportion of the market. If this changes your view on the opportunity? And then secondly, on the departure of the Head of R&D, maybe just a bit more flavor here. What has led to this departure? And I guess there could be some concerns that's taking place just before the peanut read out here in Q2. But on the other hand, I also understand it's maybe more related to sort of like the longer-term pipeline. So I'd be interested to sort of like get a sense of what specifically with the long-term pipeline are we talking about here in terms of looking for a different profile? And then maybe lastly on neffy. So you highlighted in your report that you have captured about 18% market share in value in Germany in '25. Just be curious to hear like what you're seeing in terms of the volume terms? And also, have you seen any negative impact on sort of cannibalization on Jext in Germany specifically, but also overall for neffy what kind of growth contribution you expect in '26? Peter Halling: Yes. So thanks, Jesper, for the questions. I think they most likely ended up with me, all of them. So let me start out by commenting on peanut. Obviously, first and foremost, I think it's really good to see the high interest on food allergies or around food allergies. Specifically on the GSK RAPT, it is obviously a positive thing for us that a company like GSK shows interest in the space and also acquires a biologic like RAPT which is mostly a competitor to Xolair. The price point I cannot comment on, but obviously, more than $2 billion, I think, sends a signal, and this is my personal opinion, sends a signal that they find this market quite interesting. And that's a good sign for us. Again, I think we've said it all along, we welcome competition. Do remember that it's different pockets and different types of patients that the different products address, the same with DBV. So I think that's important. We think that the DBV progression is a positive when we start seeing building the market, including for toddlers, et cetera. And you also notice when you look at the data that there's actually quite a wide span of data points out there also in terms of efficacy, which we also find interesting. Then on PALFORZIA, it's been pulled from the market. I don't think it was a secret that initially was struggling, then Stallergenes took over and for whatever reasons that we are not aware of, they've kind of seen that this is not going as planned in the market, and hence, they've chosen to withdraw it. So I don't think there's a lot more we can say around that, except for the fact that we don't believe it's a matter of potential in the market. It's pertaining specifically to PALFORZIA. So I think that's on the peanut allergy. So -- and the food allergy space. It's a really interesting market, a lot of opportunity, and I think we have more to be done in that space. Then you asked about Henriette. Again, and just to be very clear, I also said it to the media, I think the key around this is this is a mutual agreement. This is good timing or the best possible timing. There's never a good timing for any of these things. But we are in a good position with our short-term pipeline. We believe we've made good progression both with the regulatory approvals we've had but also in terms of Allergy Plus, overall peanut, et cetera. We do believe and this was also what we said at the Capital Markets Day that when we look ahead, ALK wants to be present in a broader number of therapy areas, food, anaphylaxis, respiratory, potential new areas like urticaria. And part of that is also going to be partnerships, BD&L. And this is where we believe that as we have a very strong R&D organization, and we believe we have a solid early-stage pipeline, which we also have a good control of, where Henriette has been a major contributor, we believe that when we look ahead, also into the '30s, there's an opportunity to strengthen some of these activities further. And this is why we've said this is a good time to look for a profile that may have tried some of these activities in the past and could be a good fit with ALK. So nothing about Henriette's performance otherwise because we are happy where we stand. So I think that's the best answer I can provide you on that one. Then you asked about the neffy and the 18% value share in Germany. So obviously, like any other market, you see the swings depending on the season. Germany is slightly different than some of the other markets. This is more a venom market, which is in itself positive, where some of the other markets like the U.K., U.S. and Canada are more food allergy markets. But we have been positive to see that the mix of food and venom in Germany have provided us fairly quickly with that 18% value share. It's around 11%, 12% volume share in the market, and it's mainly been driven by a digital effort, which we also find positive and interesting. So I hope that answered most of your questions, Jesper. Operator: The next question comes from Sushila Hernandez with Van Lanschot Kempen. Sushila Hernandez: Could you share a bit more about ALK-014? Is it for IgE-mediated food allergies? And also at what stage of pre-clinical development is this asset? When could it potentially go into the clinic? And also maybe connected to the previous question, what kind of profile are you looking for, for your new Head of R&D? Peter Halling: Thanks. So Per, will you jump on the ALK-014? Per Plotnikof: So the ALK-014 program is an early stage program currently in preclinical development. And we work here with a different modality. So it's a [indiscernible] like antibody protein we work with. So it works upstream in the immune cascade, so to speak. So different modality. It's a biologic, still early stage. But we do expect, if everything goes well, that over the coming 1 to 2 years that this could be progressed into clinical development, if everything works out. So that's where we are on it. So it's also a different approach compared to our historic programs where they've all been allergen-specific programs. This is allergen agnostic. So here, it's also a molecule that potentially can be used in multiple indications if everything goes well. So right now, we're investigating in food allergy, but we're also investigating in other non-disclosed indications at this stage. More on that later. Super exciting program, but still early. Peter Halling: Yes. Thanks, Sushila. So let me just, again, on Henriette, I think I said most of it when Jesper asked. But the profile we're looking for is someone who have tried more broadly the partnership BD&L space, but also who can complement our broader allergy portfolio. So basically, you can say, Henriette brought in a lot of experience around the preclinical. We have a lot of good competencies around this. We feel that the organization and R&D in general, could benefit from a profile who has tried some of these other areas. So nothing dramatic around it in that sense and just a good time for making a potential change. So that's basically the background. Also just a note that Henrik Jacobi will be assisting ALK as a Special Adviser to help us also continue to progress the internal pipeline. So I think we are in a good position. I hope that answered, Sushila. Sushila Hernandez: Yes. That's clear. Operator: [Operator Instructions] The next question comes from Thomas Bowers with SEB. Thomas Bowers: So just a quick question on International markets tablet sales. So of course, I understand the phasing, the quarterly phasing here. But how should we look at, at least Q1, Q2? And then how much is actually still dependent on the Shionogi takeover completing, the stand-fill here? So of course, going from a rather weak Q4, are we going to see a bigger number here in Q1? That's the first question. And then on the gross margin outlook, of course, I understand the mix effect year-over-year. But are you still seeing an underlying improvement here also in '26? And maybe if you can address sort of what magnitude we're looking at here? And then last question, just on neffy. So to understand the 18% market share here in Germany, that's quite impressive, I think. So first of all, is there any specifics that is driving this? And also in regards to Canada, you're seeing a sort of a delay here. I'm not sure whether you expect this to be coming through here in the first half. But is there sort of a risk here that you will miss the back-to-school season? Or is that mainly the U.S. that is dependent on that compared to Canada? Peter Halling: Thanks, Thomas. Claus will take International markets and the gross margin, and I'll comment on neffy. So Claus? Claus Solje: Yes, I will thank Thomas. Related to the International markets and what we are seeing there from a growth perspective, then you should not expect a significant impact in the first half of '26. I suppose something about what you saw last year in '25 versus here in '26. You should expect the higher growth contribution from the International market shipments, Japan and China, to come in the second half of '26. So this is where you're going to see the significant impact coming from there. So don't expect -- there will still be shipments, no doubt about that, but don't expect, from a growth perspective, a big impact in the first half. That will come in the second half. If I then take the gross margin, just to go up a bit in the helicopter then, then yes, we had this 64% -- increase from 64% to 67%, quite significant and extraordinary than what we have normally seen in the gross margin. We aim at getting this 1 percentage point year-on-year improvement, that's in our plans. But due to the product mix and especially how we have sold tablets and the higher sales of tablets, especially in Q4 than what we had expected, but also this with the quarterly shipments between the International markets there and our partners, then we saw this extraordinary jump in our gross margin. As we have already said a few times related to the last quarterly announcement, then we should expect us to see a slightly decline here in '26 versus '25. And that is due to the mostly the increased sales of in the partnership. So when we do it with Torii, now Shionogi, and then GenSci in China, and, of course, the increase of our neffy with ARS, that is all coming with lower gross margin. And since that is a higher portion of our total sales, that will impact the gross margin negative. There's nothing related, you can say, to the underlying gross margin development. That is still positive, and we are still working on yield improvement and scrap reductions and so on, and we expect that to continue. So it is mostly our product mix that is going to impact the gross margin negatively, so to speak, in '26. I hope that explains. Peter Halling: On the neffy question and the market share, obviously, we've been positively surprised about the ability for neffy to win 18% value share in the market. Do remember, I think we also noted before that the German market is typically a smaller market, slightly different also both from a reimbursement and payer perspective than other markets. But it gives us obviously hopes also because we can see the composition of the prescribers in Germany is with general practitioners, et cetera. So it's not kind of what you would normally expect, which is, in this case, a positive. When we look at the U.K. and Canada, U.K., it's really about getting in on formularies in all 42 regions. And this is the hard work. We do believe once it's in and it starts, then it's going to be a growth driver for the company. But we don't see this happening as fast as one could hope. It takes time because it's a public process. Is it an issue with back-to-school? We don't know in that sense, but we have budgetedly conservatively around it. So we don't see the back-to-school being a major issue. But obviously, we'd like to see an uptick and an effect from the back-to-school, but we're not betting everything on it because we're also realistic on that one. Canada, again, another different -- you have the different provinces in Canada with different health care regimes. Firstly, we need to get the regulatory approval in place. We do expect that to happen here in Q1. And then if we can launch, then we should also be able to get on the back-to-school season in Canada. This is also going to be an interesting one where there seems to be a little more open as to get some penetration in the Canadian market. So again, a different market than U.K. and Germany. And then lastly, I'll just mentioned that we still are waiting on launching the 1 milligram in Europe, so for smaller children or children between 15 and 30 kg. So that's obviously also something we're looking forward to getting into the market. What I'm saying, Thomas, is, 2026 is, as we've previously said, a year where we're building up and continue to build up. We benefit from the full portfolio, but we do hope and expect that neffy is going to be an increasing contributor to the business. So I hope that gives you some answers and nuances. Operator: This concludes our question-and-answer session. I would like to turn the conference back over for any closing remarks. Per Plotnikof: Thank you, and thank you all for the good questions. Before we close, I'll just highlight our upcoming events and financial calendar on Slide #12, and we hope to see you in the near future in Copenhagen, London, Paris or in the U.S. As always, you are welcome to contact us if you have additional questions. And with this, we will end today's session, and thank you all for joining. Goodbye.

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COV.PA 2025 Q4 财报电话会议

Operator: Ladies and gentlemen, welcome to the Covivio 2025 Full Year Results Presentation. I am Mathilde, the Chorus Call operator. [Operator Instructions]. The conference is being recorded. [Operator Instructions]. At this time, it's my pleasure to hand over to Christophe Kullmann, CEO of Covivio. Please go ahead. Christophe Kullmann: Thank you. Good morning, everyone. I'm happy with Paul to present our full year '25 results. And let me kick off with our profile, Page 2. You know our diversified business model, but this diversification, which relies on leading platforms has been incremental to our growth in '25. See Page 3, the main KPI of '25. Performance has been very solid on operating side, as you see on the left part, on financial results as well, as you see with plus 6% in recurring results per share, plus 7% in dividend and plus 4% in NAV per share. On the balance sheet with a new year of debt ratio improvements. Let's go more into details our operating performance first with Office, Page 7. In a market where the key question is whether we are on the right part of the polarization in the office market, we have been able to demonstrate another time that Covivio is on the right side. We benefit from a high qualitative portfolio. The best proof of that is simply to look at the occupancy rate, 95.7% for city center assets, 95.6% for the one in the major business hubs. Thanks to this portfolio quality and to our approach of real estate as a service, we were able to record a very active year in terms of lettings. Page 8, 135,000 square meters of lettings and renewals, on which 81,000 square meters of new lettings. We flag a few examples there. example, let me focus on CB 21 Tower. You remember that Suez vacated 44,000 square meters in this tower in July '25. 6 months after only, we already secured 50% of those surfaces. Another great achievement is in Milan, moving to Page 9. We are among the leaders of office in Milan with a EUR 2.1 billion portfolio. This is 27% of our office portfolio. The Milan market is very dynamic. See the market figures on the bottom right of the slide, a take-up above the 10-year average and a lack of Grade A building, while 75% of Milan take-up is focused on those assets. In '25, we benefited from this positive environment in 2 ways. First, through renewal, we secured 20,780 square meters of renewals with a plus 19% increase versus passing rent. Second, through redevelopment, see Page 10. We launched 3 projects in '25 for EUR 139 million with a 7% yield on cost. Let me focus on one of those 3, Vitae in Symbiosis area. Fastweb already our tenant needed more spaces. We managed to extend the existing link for 8.5 years and to pre-let for Fastweb, 75% of this new development with a 12-year lease at delivery in '27. Moving now to hotel. '24 was about M&A, '25 was about extracting growth from the portfolio. Moving to Page 12. Remember, our deal with S&D, we made at the end of '24. We bought the OpCo of 43 hotels to S&D in order to merge and the propcos of those hotels and get the full ownership. On top of the high quality of this portfolio, there were 2 rationales in this deal. The first one was to transform obsolete assets into new hotels. And the second one is to optimize the contract with the operator and to choose the right brand. '25 results show the success of this deal, 7.9% yield, 13% value creation extracted in '25, but there is more to come. See Page 13. We didn't catch yet most of the value of this portfolio. It will come in the years to come, thanks to the CapEx program we plan to implement on 20 of those hotels. It is a EUR 760 million portfolio value. We plan to invest EUR 330 million of CapEx by '28 to '29, thanks to that, our target is to catch EUR 46 million of additional revenues and EUR 300 million of value creation. 5 projects are already committed and 15 will be in '26 or in '27. Another driver for growth in hotels is in optimizing the rental contract, see Page 14. there is many ways to improve the revenue by changing the contract. We can move from management contract to lease. This is what we did with Radisson Blu Roissy signing a 12-year new lease, which will bring 50% additional revenues. In our management contract portfolio, we can also decide to change the brands. See the example in the middle in Paris [ Montparnasse ] hotel, we will increase our RevPAR by 25% by changing Ibis to Moxy. We can finally change the operator and optimize the contract. We have 2 discussions ongoing with EUR 6 million target saving here. Operated real estate is a strength for our industry. It enables us to be closer to the end user wishes and evolutions to be more efficient. In hotels, our operated real estate model is illustrated by our own hotel platform. We are not a hotel operator and it is 10% of our hotel portfolio, but this skill is key to get closer to the final customer and to be stronger when it comes to negotiate with hotel operators. This platform already delivered good performance, thanks to a plus 7% EBITDA growth and a 30% operating margin. Moving to residential, Page 17. We pursue our growth by leveraging our 4 drivers: Rental growth. On average, we were able to get plus 24% rental uplift on new leases, modernization CapEx with a 7% average yield on CapEx Privatization, we sold 186 flats for EUR 72 million above, with 30% margin and on the last appraisal value and also ancillary revenue with EUR 15 million additional revenue, see the detailed Page 18. The revenue are made of build-to-sell development. This has generated EUR 6 million of margin in '25, but also service to client with energy trading, insurance brokerage, connectivity services. This brings already EUR 9 million of revenues. Last but not least, in resi as well, we intend to push on operated real estate. See Page 19. Operated resi is a long term following more single-person households and students' needs. It is also a profitable one. See the 30% average operating margin we catch already on this activity. At Covivio, we already managed 420 units in Berlin and want to accelerate. We will do it with 308 new service apartments into our Alexanderplatz development to be delivered in the second half of next year. And now I let the floor to Paul to present the results. Paul Arkwright: Thank you, Christophe. Good morning, everyone. So this positive performance of the year is also illustrated by our financial results. Let me start first with the portfolio and capital rotation you see on Page 22. So we continued in 2025, our qualitative asset rotation activity by selling EUR 463 million of assets 72% of it is offices. And in parallel, we invested EUR 446 million, mostly in CapEx programs in order to increase the quality of our portfolio. Acquisition relates mostly to the opportunistic acquisition of the minority shares in our CB21 tower for less than EUR 3,000 per square meter. The value creation of this acquisition is not included in the like-for-like value growth of the portfolio. We will now present and you see Page 23. So moving to the portfolio, we stand at EUR 16 billion group share at the end of '25. After more than 2 years of value decrease, our value starts to grow again by plus 2.1% on a like-for-like basis. In office first, the polarization continues. City center assets are growing by 1.7%, thanks to Paris and Milan, while major business hubs are impacted by a lack of liquidity and especially in Germany. German residential then is gaining 4.9% following the increase of the rents. And hotel is growing by 3.7% on a like-for-like basis. We have here the plus 13% value creation on the former SND portfolio, and we benefit from the good performance in South part of Europe. Let's move now to the financial results and directly to Page 25 with our rental revenues, which includes the operating results of the hotel -- those revenues has grown by 3.7%. The main driver you see it in the right part of the slide, it's the 3.4% like-for-like growth, which is thanks to 1.9% of indexation, thanks also to the increase in occupancy rate, 1 point and to the rental uplift for 50 bps. Looking by activity, office rents are benefiting from the drivers I just mentioned before and are growing also by 3.4% on a like-for-like basis. Hotels revenues increased by 1.6% on a like-for-like basis despite the negative base effect of the Olympic game and of the Euro football game in Germany in 2024. So variable revenues are improving in Q4 when we compare to Q3, showing a positive trend for 2026. Those figures also does not take into account the good performance of the former S&D portfolio, which recorded a 3% growth in EBITDA in 2025. Finally, rents in German residential are growing and are showing an acceleration with a plus 4.8% growth in rents versus 4.3% in 2024. So this rental performance has been the main driver of the earnings growth. You can see Page 26. We recorded in 2025, a plus 10% growth in our earning -- recurring earnings in million euros. On a per share basis, this growth stands at plus 6% as it takes into account the full effect of the new shares created in 2024. Looking at the main block of the bridge you see in this slide, first of all, portfolio rotation has a positive effect to the results, which is thanks to the reinforcement in hotels made in 2024, thanks also to the acquisition of the former S&D hotels and to the acquisition of the minority shares of CB21. Rental activity brings the bulk of the growth, EUR 20.5 million of additional results. Ancillary revenues also has been a good driver, plus EUR 12 million, benefited from EUR 10 million of additional property development margin and EUR 2 million of additional asset management fees. Finally, net financial expenses are better than in 2024. This is due to the fact that we capitalized more financial costs in 2025 following the increase of the development pipeline and the increase of the cost of the debt. This effect will be negative in 2026 with the deliveries of large development projects such as Beige in Paris or ICON delivered in Dusseldorf at the end of '25. Page 27. Moving to the balance sheet. So in parallel of the increase in the results, we continue to reduce the leverage of the company. EPRA LTV is decreasing from 43.5% to 42.9% -- if we include the EUR 386 million of disposal agreements that are yet to be cashed in mostly in '26, that leads to an EPRA LTV below 40% -- 42%. Net debt to EBITDA is also decreasing from 11.4x to 10.7x. As you see on the right part of the slide, our balance sheet is well secured and our rating has been confirmed by S&P at BBB+ stable outlook. Staying on the balance sheet and with net asset value, Page 28. The growth in earnings despite the dividend payment brings EUR 1.3 per share additional Value creation of CB21 brings EUR 0.4 and the growth in values, EUR 1.8, which leads to a plus EUR 3 per share increase in NTA and plus 4% year-on-year at EUR 82.9 per share. You notice on the right part of the slide that the NDV is growing faster by 5% due to the positive effect of the deferred taxes decrease linked to the decrease of the German tax from 15% to 10% from 2027 to 2032, which is included in our deferred tax accounts. The outcome of those strong results and of the sound balance sheet is a significant increase in the dividend, as you can see, Page 29. So we will propose to the general meeting a dividend of EUR 3.75 per share in cash, which leads to a growth of 7%. In order to linearize the dividend payment and in line with the practice of our peers, we will pay this dividend in 2 installments, one in March and the other in July. Let's now focus to 2026. Our priorities. First, Page 31, we want to pursue the portfolio rebalancing. That means more hotels and more city center offices. To this extent, we have a strong start to the year, as you can see in the right part of the slide. Let's focus on the 3 main news in the next slide. First of all, Page 32. So we signed at the end of December 2025, a new partnership with Blue Owl, an alternative asset manager for closing expected at the beginning of Q2 2026. This partnership confirms the creation of a JV owning the Thales buildings in our Velizy campus for a valuation of EUR 503 million. Blue Owl will take 49% of the JV buying part of Covivio existing shares and also the Credit Agricole Insurance (sic) [ Assurance ] shares in the building Helios 1. This transaction for Covivio means the disposal of EUR 138 million of peripheral assets at a 6.4% yield net of incentives. This transaction confirms the attractiveness of our portfolio. It brings additional revenues and it participates to reach 80% of office in city centers, and it's also the start of a new partnership. Secondly, in parallel, we are increasing our stake into hotels. First of all, with the Page 33. So we have 5 projects ongoing of transformation of offices into hotels in Paris and in Bologna in Italy, that represents EUR 407 million of cost, including the land value of those assets. Those deals will enable us to increase exposure to hotel, but also to improve the portfolio quality and to increase the profitability with incremental yield on CapEx of above 9% Hotel reinforcement is also about acquisition, as you can see, Page 34. So in parallel of increasing through transformation, we also are reinforcing through acquisition and especially in the south part of Europe. South part of Europe, it's 17% of our hotel portfolio today. We target 1/3 over time. So we are under final stage of buying EUR 300 million of hotels in Italy and in Spain. It's actually mostly city center hotel with long-term leases and a 6% minimum yield. If we include the variable part, we target a 7% yield for those acquisitions that we expect to sign by the end of Q1 2026. All this means that considering the recent asset rotation, we will increase by 2 points our exposure to hotel, as you can see, Page 35. That means if we look versus 2022, a 50% growth in exposure to the hotel business between 2022 and 2026. Thank you. Now I let the floor to Christophe for the key takeaways. Christophe Kullmann: Thank you, Paul. So just to sum up what we say this morning before the Q&A session. First, we are on track on our target sharing that we shared during the Capital Market Day, last Capital Market Day in terms of portfolio shaping, in terms of new businesses, in terms of ESG leadership and in terms also on growth targets. Really for us, 2025 is really an important year for us. We are starting really a new EPS growth phase fueled by 4 drivers. First one is hotel reinforcement that means also higher yield than other asset classes, but also asset management then, especially with the hotel CapEx program at 15% average yield. Ancillary revenues are part of our business model and will continue to grow. Finally, hospitality and operated real estate model drive occupancy, but also profitability. So that leads to another year of growth for '26. See the detail of our guidance, Page 39. So we target a 4% growth in recurring result per share, thanks to the pursuit of good operating performance, active asset management and further growth in ancillary revenues. You see that this guidance includes also some headwinds. We expect that 2 of them, indexation of CB21 letting and indexation are actually transitory and should reverse positively in '27. So to sum up and before taking your questions, what should we keep from this result publication? First, '25 has been a strong year for growth. And also for implementing structural tailwinds for future EPS growth. We enter into '26 with a good momentum, thanks to the work achieved in '25 and thanks to the first achievement of the first week of the year that Paul just described before. Thanks for your listening, and we are not now available also with Paul, but also to [indiscernible], Hotel CEO; and Olivier Esteve, our Deputy CEO, to answer your questions. Operator: [Operator Instructions]. The first question comes from the line of Valerie Jacob from Bernstein. Valerie Jacob Guezi: Congratulations on your results. My first question is looking at your 2026 guidance, I just wanted to clarify a few things. The first one is, I assume that the EUR 300 million of acquisition in hotels are in this guideline. And I guess my question is, I just wanted to understand what are the building blocks in your opinion, leading to the 4% increase per share because you said that the capital impact are going to be -- to contribute negatively in 2026. So I just wanted to -- if you could sort of tell us what's coming from acquisition disposals, is there anything beyond this EUR 300 million and what's coming from the different part of the business? Christophe Kullmann: Thank you, Valerie, we don't give full details of the future budget, but Paul will try to give you some points. Paul Arkwright: Valerie, of course, I mean, first of all, going to your first question on asset rotation, the hotel acquisition is included, but it will be signed progressively over the year. And in parallel, as you noticed, we have EUR 386 million of disposal agreement to be cashed in. So asset rotation is actually quite even in terms of impact to the guidance 2026. The main effect is more on revenue growth following also the fact that the performance of Q4 in terms of letting for offices has been strong. Hotels in Q4 has been better. So here also, we are positive. And you notice that the like-for-like rental growth in German residential is strong. So that's, let's say, the first and main block. Then we will continue to increase ancillary revenues. Those 2 things will compensate the full effect of the CB21 departure of Suez. We are relating, but it's the departure of the lease are progressive and higher financing costs, less capitalized interest and a bit more cost of the debt. Valerie Jacob Guezi: Okay. And my second question is on your capital rotation strategy. I mean you've been very successful lately and congratulations on that. And I just wanted to understand given what you're seeing today on the market, do you think that you will be able to do sort of similar volume this year or even more? What is your take at the moment in terms of rotating offices into hotels? Christophe Kullmann: In terms of rotation and capital allocation, what is important is that we have this roughly EUR 400 million of disposal that had already signed that need to be cashed in. So that will support the financing on the CapEx that we have imagined to spend in '26, mainly in office, but now we're also starting to spend an important amount of CapEx in hotels. And the disposal we imagine to deliver in '26 could be roughly the same amount that we have in '25, mostly linked to office, not in central location. That's where we want to continue to dispose mostly office today. Also flats in German resi, we want to increase progressively our privatization program and some hotels mostly in Northern Europe. With this disposal, we'll be able to continue to invest in hotels because the acquisition will be focused on hotels in '26. Operator: The next question comes from the line of Vanessa Guy from JPMorgan. Vanessa Maria Guy Vazquez: I had 2 questions. The first one is a follow-up to Valerie's one on what is driving the guidance for 2026. Is it mainly from the hotel? I'm just trying to figure out if there are any underlying trends that have improved, which is getting you to this guidance? And also, my second question is on your disposal versus investment strategy dynamic and how this plays out. Obviously, you have a lot of investments planned in the future, as you mentioned in your Capital Markets Day. And I was wondering, you have to draw a fine line to maintain that 40% LTV target. So how much of disposals do you have in order to provide the firepower for investments going forward. Are they enough? Or will you have to pull other levers in order to do this? Christophe Kullmann: I don't know if Paul, you want to give more color on what you said, but it's difficult to give more detail as of today. Paul Arkwright: I mean, it's more across the board than specifically linked to one activity out of the -- of one other. So without repeating myself. Christophe Kullmann: On your question on the capital allocation and so on, our long-term target is to go to 1/3, 1/3, 1/3 in terms of allocation. But what we say also in the Capital Market Day and as I will continue to stress today, it will take time. We are really not in a hurry. We are not the first buyer. We will do that progressively through financing through disposals. But also you know that we have this idea to increase our stake into our subsidiary in hotels by exchanging shares as we have done that in the past. So we will see how that will be put in place. Really keep in mind that what we want to do is always accretive acquisition per share, and we want also to keep our LTV below 40%. That's really our target. And so that's why it will perhaps take more time, I don't know. But really, the direction is this one. We will take opportunities. What is really important and what we try to demonstrate during this presentation is that we have a lot of drivers -- and we will push on one and on the other that will depending on the opportunities also where we stand exactly on each topic. Operator: We now have a question from the line of Jonathan Kownator from Goldman Sachs. Jonathan Kownator: Perhaps a question for Tugdual. But it would be great to have your outlook on your hotel market. I mean obviously like-for-like rent growth came a bit down this year. That's just a higher level in the previous years. Can you give us maybe some color on where you're seeing trends, RevPAR and any countries in particular that you're seeing strong and obviously, you're expanding to Southern Europe? And the second question on the German resi, obviously, very strong growth this year. Are you expecting this to be relatively stable? Are you expecting growth to accelerate? And do you see more CapEx opportunities there to further boost that growth? Tugdual Millet: Okay. On the outlook and what we see on the market in terms of operating performances, I think that starting with what we've seen in '25 is a good starting point for '26, which means that the trends that has been strong on Spain and Italy will continue to be there. And what we see beginning of this year is still those areas and also cities like Paris, cities like South of France continue to be strong. We see that on the books. We see that on the preliminary results of January. Probably what could change a bit, and that's also taken into account in our, I would say, forecast is after a difficult year in Germany, Germany should improve in '26. It's been a tough year there in most of the cities, and we've seen that on the performance of our operating portfolio. And this is probably where we are a bit more optimistic. And then leading the U.K. at the end, it's been quite decent year last year effectively and mostly based on London and Edinburgh, where we have most of the portfolio today. So quite positive. And I have to say that, yes, the beginning of the year is quite encouraging and validating what we are expecting. Jonathan Kownator: Any exposure to the -- I mean, U.S. consumers obviously got a weaker dollar to deal with. Is that any impact on your portfolio? Is that a factor at all? Tugdual Millet: Yes. So basically, the U.S. customers, it has been a big question last year mostly. And we've seen that nothing has changed. Even it's been stronger. It's been strong in south part of France. It's been still strong in Paris or cities mostly exposed to the U.S. customers. So no drastic trends there. Europe is still cheap for the U.S. customer, I have to say. And probably what could be a bit different is -- so for the U.S., it has been quite tough last year. And probably it would be a bit better for them, but for the inbound clients going to the U.S. But as far as we see, U.S. customers is still there and eager to travel to the most European cities. Operator: The next question comes from the line of Veronique Meertens from Kempen. Veronique Meertens: Congratulations on the results. A few questions from my side. So first, another follow-up on the guidance. I think a big chunk of the beat is also explained by your net financial costs. So could you give some color on how much did the capital -- capitalized interest costs actually increase this year? And can you also give some more guidance on what you expect for next year? And did you also change the way of capitalizing interest? Or is it purely the volume that changed? Paul Arkwright: Yes. So we didn't change the methodology. It's a methodology which is validated by auditors, so we don't change it. It's simply the volume and the rate as well. You notice that the cost of debt is increasing. In terms of amount, so we have an increase in 2025 by EUR 8 million, and we expect this to decrease by roughly the same amount in 2026. So this is included in the guidance. Veronique Meertens: Okay. That's very helpful. And in terms of the development pipeline, could you give some additional color on how you see the pre-let going for Beige, for instance, and some of the other projects? Unknown Executive: So on the development side, on for example, we have a lot of pending discussion. And it's fair to say that it's a refurbishment project, so difficult for the future tenant to project themselves in the building, but now we are really in the market, and we have, I would say, last week, for example, we have one visit per day, so we're quite optimistic the fact we'll be able to fulfill this building along the year. Veronique Meertens: It looks like there is quite some pressure on rent levels. Obviously, in Paris, would you say when you look at your pipeline that you can still achieve the rent levels that you've underwritten these project for? Unknown Executive: No, no, no, no. We have -- effectively, what you mentioned is right. There is a little bit more supply in Paris, but also more polarization and giving the quality of the building. And I can say that today, the discussion we have are totally in line with our expectation on the rents. Operator: We now have a question from the line of Aakanksha Anand from Citi. Aakanksha Anand: I have 3, and I'll take them one by one. The first one is on the acquisition opportunities in hotels. Could you just give some color on the kind of opportunities that you've been able to find that suits your return hurdles? Or is it reasonable to expect that the development pipeline, the conversions, et cetera, are expected to contribute more significantly to the portfolio rebalancing target to the 1/3 for hotels? Christophe Kullmann: Tugdual? Tugdual Millet: So for the opportunity. So basically, I hope that we will be able to give some more detail in the next few weeks on the pipeline that we have secured today. It's a mix of different things. Obviously, we are focusing on Southern Europe. So the most important market are Spain and Italy with 2 very different structure. Spain is very organized, quite and very liquid. So we have been there for, let's say, 10 years. We know quite well all the hotel operator and investor. And here, we are mostly focusing on investment either on resort on urban. So there is quite a decent level of opportunity even if I would say this is probably one of the most competitive market we have today because of liquidity and, I would say, professionalism of the sector, which is a bit different from what we see in Italy, where there's probably a bit more opportunities for us, considering our long-term view there, the fact that we, as Covivio are quite strong there, so establishing quite nice relationship. And here, the opportunities are more coming from kind of sale and leaseback opportunities. This is part of the discussion that we have with historical owner that wants to team up with real estate investor and able to sign long-term lease with a mix of fixed and variable. And I have to say that so far, the opportunities there are quite interesting and sometimes branding the hotel and sometimes keeping those hotels with, I would say, a group of families, et cetera. So that's the part of the opportunities that we have. Aakanksha Anand: That's clear. The second question is just on the cash. So there is about EUR 1 billion of cash on the balance sheet, and that has been the case for the past few years, kind of moving between the EUR 0.5 billion to EUR 1 billion. And it feels like there is surplus cash if we consider the recurring earnings, level of disposals and then the dividend and CapEx obligations. I just wanted to understand what are the priorities for the allocation of this cash? So probably split between from what I can see right now, is it the debt repayment to reach the 40% LTV an increase in acquisitions? Or could a share buyback also be under consideration? Christophe Kullmann: Paul, will let you answer this. Paul Arkwright: First of all, in terms of metrics, LTV is on net debt. So it already takes into account this cash. This cash is here mostly to reimburse debt that comes to maturity in 2026. And we have a positive arbitrage in terms of remuneration versus the existing cost of this debt that we took a long time ago with a cheap cost. So it's mostly the explanation of why we have so much cash. It's really to get an opportunity in terms of remuneration versus the cost. Christophe Kullmann: And as of today, we are not intending to implement a share buyback program. We consider that we have to finance our development at good conditions, and we don't imagine to do that in the short term. Aakanksha Anand: Understood. And the third one, just on the hotels like-for-like. So obviously, there has been a base effect for this year. But how should we look at a steady-state level of like-for-like rent growth in hotels? Christophe Kullmann: Can you repeat Anand, please? Aakanksha Anand: I'm just trying to understand the -- for the hotels like-for-like rent growth, there's always -- there's obviously been a base effect, an unfavorable base effect for this year, where the like-for-like is up, I think, around 1%, 1.6%. I'm just trying to understand, going forward, what do you think is a more steady-state like-for-like rent growth that we can expect from hotels? Christophe Kullmann: Yes, I'll take it, and Tugdual will complete. Tugdual Millet: So this year was 1.6%. We expect that to be above this level. As we've seen, in fact, in the past is growth -- overall revenue growth on hotel was always above inflation. So that's the target when we invest in hotels is to overall to beat inflation trends and being able, thanks to the long-term macro very positive view to, thanks to the asset management and the choice that we've made in terms of hotel mix to have performance above inflation. Christophe Kullmann: Yes, what is not taking account is these figures is really all the asset management matters that we will put in place that will help us significantly to do -- to have higher growth in hotels, and that's what we expect for the next years, really thanks to all what we have today in-house. And some of the example was given by Paul before. So we are really positive on the evolution on the hotel sector in terms of like-for-like despite the fact that this year, inflation is low and because we see this significative trend, especially really in Southern Europe, and we imagine that will really continue there, but also in France. Operator: The next question comes from the line of Florent Laroche-Joubert from ODDO BHF. Florent Laroche-Joubert: I will have maybe some 2 or 3 questions. Maybe the question -- a follow-up question on the guidance. So at the end, so could you please tell us what you take into account in terms of variable revenues for 2026 and you don't take into account and that mean that what could be an improvement later in the year? So that would be my first question. Christophe Kullmann: Really, we don't give a full detail on the P&L because after that, I understand your point, it's probably difficult for you to reconciliate the data today. But I think we are confident on this guidance. You know that in the past, we are always confident. It's a lot of different topics that are inside. We're also working a lot on the cost side, what Paul said in terms of also improvement on EBITDA margin linked to renegotiation of fees. We have also a lot of topics that are linked to the fact that we are reviewing all the fees with all the partnership that we have that really will be supportive. We have this new partnership that we put in place starting in '26 in German resi, but also with Blue. All of those topics are taken into account in the guidance. After that, we will not give you the full detail line by line of this budget because we have also -- there are also risks in this guidance, as you imagine, and positive and negative topics. So sorry for that, but we can give more detail. Florent Laroche-Joubert: No, I can understand. And then so I would have 2 more questions. The first one on the CB21 tower. So would it be possible to have more color on where you are today on the letting process. And after that, the last question would be in hotels. So I understand that you are strongly committed in acquisition to come. But after that, are you already looking for further opportunities later in the year? Unknown Executive: On CB21, if I understand correctly, the question is how we are doing on the field. I think we have very positive results with 22,500 square meters already relate after the departure of Suez. It's also a very, I would say, dynamic approach of the market with a tailor-made solution for different tenants. And we have targeted also medium-sized, I would say, demand. And if you compare with some competitors are still focusing on very large demand, I think it's the heart of the market of La Defense today, and we have been able to provide to the people, of course, comfort with the product they will have at the end in CB20, which is one of the best located assets in La Defense and gives also all the amenities needed by tenants today. And I think we are successful. We are still discussing on other, I would say, with other tenant potential. And I think we'll be able to have the same trends in '26 on that asset. Paul Arkwright: And just to remember, as of today, we don't let the higher part of the tower, which is the best part because we will put there more works. And we -- so that's the part that will arrive later on in terms of letting. Could you add in terms of other acquisition in hotels that you are looking? Tugdual Millet: It's, I would say, the summary of what I described before, a mix of different opportunities around Spain and Italy. Basically, the target for us is I would say, minimum size of EUR 30 million to EUR 50 million hotel, obviously, good location and target yield of 6%, which made the return quite attractive for this asset class. It's mostly leased, but we are also looking for quite selective acquisition in terms of operated hotel also in this destination and in France and with this same objective of increasing return and exposure to this asset class. Operator: We now have a question from the line of Markus Kulessa from Bank of America. Markus Kulessa: First question on -- as usual, on your disposals, which is always clear. Can you tell us what's the effective disposals in '25 and what is signed and which is coming in H1 '26? This would be my first question, please. Christophe Kullmann: Effective disposal, you have that in the slide, EUR 463 million. And in 2026, we will have most part of the EUR 386 million that remains to be cashed in. After that, let's say, spread over the year, I would say. Markus Kulessa: Okay. And yes, I'm following up a little bit on the guidance. I know you can't help much. But if I got it right, it's just to understand how you get to the, let's say, 19p EPS growth while everyone expected -- so if I understand right, your like-for-like rent growth impact compensates your higher cost of funding. So the difference comes all from developments, which means you're going to have higher contribution from developments than expected. So is it due to the timing of your development pipeline letting? Or is it the hotels refurbishment, which are already coming in this year? And so what's part of the question? Second one is just to reconfirm, so there's no acquisition or disposal in this guidance. Christophe Kullmann: We have some acquisition clearly on top of what is already taken into account and also the disposal plan that I explained before that is also there. There is really also what you say, development is really a strong contributor of this positive evolution, thanks to the letting that we expect to do or that we already have done in terms of office, but also margin development, especially on the -- also on the disposal on that has a positive impact -- will have a positive impact in terms of results in '26. Markus Kulessa: What will have -- sorry, what did you should say what will have a positive impact? Christophe Kullmann: The disposal with the stake that we will sell -- that we announced beginning of the year that we will stake to Blue Owl has also a positive impact in terms of development margin in '26. Markus Kulessa: So how does it contribute to your EPRA EPS? Christophe Kullmann: You will see that in June because it will be done. We need to finalize the disposal, but it will have positive impact. As of today, we will give more color on that, I imagine in June. Operator: We now have a question from the line of Stephanie Dossmann from Jefferies. Stephanie Dossmann: Just a follow-up on the guidance still. Maybe in other words, I was wondering about the development of the flex office revenues. How do they develop currently? And what should we expect in '26, please? Christophe Kullmann: Really, what we can say is that really it's a positive contribution and '25 was really good and '26. We imagine that will be better. Just to give you an example, in Lat, our headquarter, we record this year close to EUR 1 million of extra revenue, thanks to what we let on top of the flex part, thanks to all the amenities that we get. It's something that's really developing. We will push more and more on that. And it's really for us a way really to increase structurally our results. What we see today is really the demand for office is really different than it was before. And our capacity to have this in-house skills today is really a point of strength that really what we implement also in CP21, I have to say, and the fact that we are able to relet significantly in a market which is not so easy in a short-term period. It thanks to all this hospitality approach that we put in the office sector. You know that we started that 10 years ago. So now it's a long story. It was not easy initially because it was an investment phase, but now it's delivering, and we want to continue to push on that in the future, and it's really -- it will have a positive impact in '26 on top of our '25 results. Stephanie Dossmann: All right. Could you give the magnitude in euro million? Paul Arkwright: This activity is roughly EUR 15 million of revenues. It includes the fact that we let the flexible spaces in the different sites in France and in Milan. Operator: [Operator Instructions] The next question comes from the line of Celine Soo-Huynh from Barclays. Celine Huynh: Just one question for me, please. There was a EUR 10 million increase in your income from other activities. Could you help us understand where this growth is coming from? Paul Arkwright: Yes. So it's coming from 2 things. The main one is the property development margin. We delivered assets in Paris and in Milan. So we've got the margin on build-to-sell. And the second one, as Christophe described, is the increase in the flexible workspaces activities. Celine Huynh: Okay. What's the development margin you're achieving in those countries? Can you remind us? Paul Arkwright: So this line, other activities, half is coming from the flexible workspaces activities and half in million euros is coming from the property development activities. Celine Huynh: Okay. It's a little bit hard for us to forecast. Can you help us for next year, what should that number look like? Paul Arkwright: That's basically what Christophe said. It's this line will increase in 2026, especially also due to the fact that we have this development of Roissy new asset to Thales, which is shared with Blue. We'll give more figures in June, waiting for the closing of this transaction before giving specific details, but you can count on the growth for this line. Operator: We have a follow-up question from the line of Veronique Meertens from Kempen. Veronique Meertens: Sorry, one follow-up question from my side because I realize we haven't touched up on one topic, and that's German resi and the Berlin elections. Could you give some color on where you see downside risk, how those discussions are ongoing? And if Covivio is also involved in some of the political discussions and yes, how you view the elections in Berlin? Christophe Kullmann: It's always regulation election is always a topic for German resi -- during the last 20 years, it was the case. Well, we are involved. We are -- all the association of all the lenders is working to explain the situation. And the question is really the lack of products and not the current regulation of the rent that is a problem. I should say, they are debate in Berlin as usual before the election arrived. But what is the feeling of today is that really is really continue to support mainly the activity of landlord, and we imagine that they will be part of the new coalition. And if it's not the case, it could also arrive, but it's really not what we imagine. As of today, we saw in the past that the Federal court was really strong to refuse the things like the meat and Nickel story or story like that. So we imagine that it will be the case if such ideas will come back in the field. So we don't -- there is a question uncertainty as usual, but we have not a lot of fears directly linked to that. Operator: Ladies and gentlemen, that was the last question from the phone. I would now like to turn the conference back over to Christophe Kullmann for any closing remarks. Christophe Kullmann: Thanks a lot for all your questions, especially on the guidance. And see you everybody during the roadshow in the coming days. Bye-bye. Thanks a lot. Operator: Ladies and gentlemen, the conference is now over. Thank you for participating in the conference. You may now disconnect your lines. Goodbye.

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EGO 2025 Q4 财报电话会议

Operator: Thank you for standing by. This is the conference operator. Welcome to the Eldorado Gold Fourth Quarter 2025 Results Conference Call. [Operator Instructions] And the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Lynette Gould, Vice President, Investor Relations, Communications and External Affairs. Please go ahead, Ms. Gould. Lynette Gould: Thank you, operator, and good morning, everyone. I'd like to welcome you to our conference call to discuss our fourth quarter and year-end 2025 results in addition to details of our 2026 guidance and overview of our 3-year production outlook. Before we begin, I'd like to remind you that we will be making forward-looking statements and referring to non-IFRS measures during the call. Please refer to the cautionary statements included in the presentation and the disclosure on non-IFRS measures and risk factors in our management's discussion and analysis. Joining me on the call today, we have George Burns, Chief Executive Officer; Christian Milau, President; Paul Ferneyhough, Executive Vice President and Chief Financial Officer; and Simon Hille, Executive Vice President, Operations and Technical Services. Louw Smith, Executive Vice President, Greece, is at site today and not able to join the call. So Simon Hille will speak on his behalf for Skouries and Olympias. Our releases yesterday detail our fourth quarter and year-end 2025 financial and operating results as well as our 2026 guidance and 3-year production outlook. They should be read in conjunction with our year-end 2025 financial statements and management's discussion and analysis, both of which are available on our website. They have also both been filed on SEDAR+ and EDGAR. All dollar figures discussed today are U.S. dollars unless otherwise stated. We will be speaking to the slides that accompany this webcast, which can be downloaded from our website. After the prepared remarks, we will open the call for Q&A, at which time, we will invite analysts to queue for questions. I will now turn the call over to George. George Burns: Thanks, Lynette, and good morning, everyone. I'll begin with an overview of our fourth quarter and full year 2025 results and highlights and then provide an update on construction and the time line at Skouries. I'll then hand the call over to Paul to review the financials and then to Simon with an update on projects and operations. Following that, Christian will provide an update on our 2026 guidance and 3-year production outlook before I conclude with some closing remarks. It's been a busy start to the year. We have continued to execute on a clear value creation strategy, achieving the high end of 2025 production guidance, launching a quarterly dividend to formalize a capital return framework and advancing a disciplined exploration program that reinforces the company's discovery strategy. The announced acquisition of Foran Mining further strengthens the company's long-term growth pipeline, adding a high-quality Canadian copper-gold development asset and enhancing portfolio diversification with a focus on per share value creation and sustainable free cash flow growth. Turning to Slide 4 and our fourth quarter and full year highlights. 2025 was a year of strong execution and meaningful progress across our portfolio. We delivered safe gold production at the upper end of our guidance, finishing the year with 488,268 ounces. This performance was supported by another strong year at Lamaque Complex, steady contributions from Kisladag and Efemçukuru and a solid finish at the Olympias mine, bringing it back on track. Solid operating execution, combined with a favorable gold price environment drove strong financial results, including $1.8 billion in revenue, $743 million in operating cash flow and $316 million in free cash flow, excluding Skouries investment. In Greece, we are reaching a key inflection point. The first production from Skouries later this year, together with the Olympias expansion and ongoing advancement of the Perama Hill project, Greece is set to deliver meaningful growth. This momentum is complemented by the continued long-life potential at the Lamaque Complex, supported by production from the Triangle deposit, development from the Ormaque deposit and a robust exploration pipeline and by our Turkish operations, which remain a stable cash-generating foundation for the company. Turning to Slide 5. In the fourth quarter, our lost time injury frequency rate was 0.55, an improvement from the LTIFR of 1.02 in the fourth quarter of 2024. While there is always room for improvement, this safety performance also comes during the peak of our construction activities at Skouries. We continue to implement multiyear programs to support continuous improvement in workplace safety, supporting our vision of everyone going home healthy and safe every day. During the quarter, we achieved safe production of 123,416 gold ounces at $1,894 all-in sustaining cost per ounce sold. Simon will speak further to each of the assets' performance later in the call. With a strong balance sheet, we are well positioned to advance our growth pipeline while maintaining flexibility to return capital to shareholders. As previously announced, we were active on our share repurchase through the NCIB program, and we repurchased approximately $204 million of shares during 2025. Additionally, we announced in January the initiation of a quarterly dividend program, which commences in the first quarter of '26. Coupled together, these mark an important milestone in delivering value to our shareholders and reflect the company's strong financial position and confidence in executing our growth strategy. At Skouries, first concentrate production has been modestly delayed and is now expected in early in the third quarter of 2026 with commercial production anticipated in the fourth quarter. This timing adjustment is expected to increase construction capital by approximately $50 million. The delay relates to primarily required replacement of the cyclone feed pump variable frequency drive capacitors in the process plant due to moisture damage that occurred while in storage. And secondarily, our power line connection delays resulting from a slower-than-expected approval of the detailed engineering and delayed ramp-up of the subcontractor. Prior to commissioning, final electrical regulatory authority approval requires completion of inspection and energization protocols. Importantly, the project is mitigation measures well underway and Skouries remains a multi-decade high-quality asset expected to generate meaningful cash flow in the second half of 2026 and beyond. Ramp-up of first production towards commercial production is expected to accelerate as the project team will continue to complete additional areas as we advance toward first production. We see the impact of the delay is minimal when looking at the long-life nature of the asset, and we are confident in the delivery of this multi-decade mine. With that, I'll turn the call over to Paul for a review of our financial results. Paul Ferneyhough: Thank you, George, and good morning, everyone. Turning to Slide 7, I'll summarize our fourth quarter and full year 2025 financial results. Consistent and reliable operational performance through the fourth quarter enabled us to deliver results at the high end of our tightened production guidance, while operating costs for both the quarter and the full year remained within expectations. Strong gold prices contributed positively to operating cash flow, further supporting the execution of our strategic and operational investments. Net earnings attributable to shareholders from continuing operations were $252 million or $1.26 per share in the fourth quarter. For the full year, net earnings attributable to shareholders totaled $520 million or $2.56 per share. Net earnings increased both for the full year and the fourth quarter compared to the prior year periods, driven by higher revenue, partially offset by increased production costs, including higher royalties and losses on derivative instruments. After adjusting for onetime nonrecurring items, adjusted net earnings for the quarter were $126 million or $0.63 per share. The primary adjustments in the quarter included a $104 million recovery related to the recognition of deferred tax assets and a $27 million unrealized gain on derivative instruments. For the full year, adjusted net earnings were $355 million or $1.75 per share. Adjustments during the year primarily included a $178 million recovery related to the recognition of deferred tax assets, a $39 million unrealized loss on derivative instruments and a $19 million foreign exchange gain related to the translation of deferred tax balances. Free cash flow in the fourth quarter was negative $55 million or positive $109 million when excluding capital investment in the Skouries project. For the full year, free cash flow was negative $233 million or positive $316 million when excluding Skouries. Cash flow generated by operating activities before changes in working capital totaled $752 million for the year compared to $636 million in the prior year. The increase was primarily driven by higher revenue, which rose to $1.8 billion in 2025, supported by higher average realized gold prices, partially offset by lower production volumes during the year compared to 2024. Production costs for the full year increased to $678 million from $564 million in 2024, primarily due to higher royalties, which accounted for approximately 40% of the year-over-year increase. Royalty expense totaled $124 million, up from just over $79 million in 2024. The balance of the increase reflects labor cost inflation across the operations, notably in Turkiye, where local inflation continues to outpace devaluation of the local currency, the strengthening euro impacting Olympias and increases at Lamaque related to labor and contractor costs required to support the Triangle Mine as it operates at greater depth. Fourth quarter total cash costs of $1,295 per ounce sold were at the lower end of our tightened guidance range and $1,176 per ounce sold for the full year. The year-over-year increase was primarily driven by higher royalty expenses driven by regulatory change in Turkiye and by the stronger gold price environment and overall lower gold volumes sold. Higher total cash costs resulted in increased all-in sustaining costs for both the quarter and the full year. AISC in the fourth quarter was $1,894 per ounce sold and $1,664 per ounce sold for the full year. Year-over-year comparisons were also impacted by higher sustaining capital expenditures in 2025. Growth capital investments at our operating mines totaled $74 million in the fourth quarter and $218 million for the full year. At Skouries, growth capital investment totaled $475 million for the year, including $137 million in the fourth quarter. Accelerated operational capital at Skouries amounted to $35 million in Q4 and $86 million for the full year. Current tax expense was $85 million in the fourth quarter and $229 million for the full year. This full year $115 million increase compared to 2024 was driven by improved profitability across all jurisdictions. Deferred tax was $118 million recovery in the fourth quarter and a $207 million recovery for the full year, primarily related to the recognition of deferred tax assets in Canada and Greece. Turning to Slide 8. Our balance sheet remains strong and provides the flexibility to support growth initiatives while returning capital to shareholders. Total liquidity was approximately $976 million at the year-end, positioning us well to complete construction at Skouries, support ramp-up and continued disciplined capital allocation, including to our recently announced dividend program and ongoing NCIB repurchases. During the fourth quarter, we purchased and canceled approximately $80 million of Eldorado shares under the NCIB. Following our additional investment in AMEX announced in December, our year-end cash balance was $869 million. Before turning the call over to Simon, I'd like to take this opportunity to announce that commercial terms for the Skouries concentrate offtake arrangements have been agreed and contracts are being finalized ahead of execution. These contracts cover approximately 80% of planned copper concentrate production over the next 2 to 3 years at terms significantly better than those assumed in the Skouries 2022 technical study. With that, I'll hand the call over to Simon, who will provide an update on our operations, beginning with Greece. Simon Hille: Thanks, Paul, and good morning, everyone. Let's begin with Slide 9, which highlights the progress at our Skouries copper-gold project. As George outlined, we have adjusted the timing of our Skouries project. However, I want to be very clear, the project continues to make strong progress and execution on the site remains solid. As of the end of 2025, overall construction has reached 90%, and our focus is firmly on delivering safe and high-quality startup. The open pit is operating ahead of plan. Substantial ore stockpiles have been established and grade control drilling is substantially complete from Phase 1, which has confirmed the first 3 years of production. While the timing has shifted modestly, the fundamentals of the project are unchanged, and the team is executing with discipline as we move towards the first production. Turning to Slide 10. Photos here and on the following slides illustrate the advancement of the work underway. Work in the process plant remains focused on mechanical, piping, cable tray and electrical installations in preparation for first ore. As mentioned, recent inspections have identified the need to replace the cyclone feed pump variable speed drive capacitors in the process plant, which experienced moist damage during storage. We have ordered and expect to install temporary replacement equipment in Q2 with permanent equipment in Q3. The prefabricated electrical distribution room for the compressors has been installed with cable and terminations progressing. The reagent areas are advancing in line with the commissioning plan. Moving to Slide 11. Two of the 3 tailings thickeners are mechanically complete with electrical cabling and instrumentation installation underway. The third thickener not required for start-up is in progress in line with the plan. Water testing is complete, piping installation is advancing and the support infrastructure, including pump house and flocculant building is moving forward. Slide 12 focuses on filtered tailings plant, which remains on the critical path with electrical installation and commissioning being the final step. The prefabricated electrical room was installed and electrical work is advancing. We're also making steady progress on the tailings handling infrastructure, including the stacking conveyance system. The accessibility and productivities of the tailings infrastructure have been mildly affected by recent rain fall above the historic levels. However, these are short-term challenges that the team is actively managing. As seen on Slide 13, construction of the crusher building is advancing well. Concrete work is complete. The crusher is mechanically installed, electrical work is underway. Conveyors to the coarse ore stockpile and the process plant are in place. The stockpile dome assembly is progressing. The installation of the prefabricated electrical distribution room was completed and electrical cable installation and terminations are in progress. Moving to Slide 14 and Olympias. Fourth quarter gold production was 18,473 ounces. And all-in sustaining costs were $1,676 per ounce sold. Progress continued on the planned mill 650,000 tonnes per annum expansion during the quarter. All of the major equipment, including the verti-mill, flotation cells, thickener, cyclones and e-room have been delivered and installation has commenced. We expect progressive commissioning and ramp-up in the second half of 2026. Turning to Turkiye on Slide 15. Kisladag production totaled 41,140 ounces with all-in sustaining costs of $1,933 per ounce sold. On the growth initiatives, the long lead procurement for the whole ore agglomeration circuit is underway with installation targeted for 2027. The new secondary crusher has been ordered with delivery expected in the second half of 2026 and the geometallurgical study to assess future screening needs to remain on track for completion in the second half of 2026. On Slide 16, at Efemçukuru, fourth quarter gold production was 14,496 ounces at all-in sustaining costs of $2,536 per ounce sold. Compared to Q3 of 2025, gold production was lower due to lower grade and recovery despite higher mill throughput. And now moving to Lamaque on Slide 17. Lamaque delivered production of 49,307 ounces at all-in sustaining costs of $1,392 per ounce sold for the fourth quarter. During the year, the second Ormaque bulk sample was processed, and this higher-grade ore was treated in a blend with the Triangle ore and performed very well. We look forward to advancing Ormaque into production later this year. And with that, I'll turn the call over to Christian for an overview of what's ahead. Christian Milau: Thanks, Simon, and good morning. Turning to our 2026 guidance and 3-year outlook. Eldorado enters the year from a position of strength. Skouries' exciting value proposition is unchanged. It's a high-quality, long-life asset that will generate strong cash flow for decades. As it advances towards production, Skouries will be transformational, resetting our production profile and cost base well into the next decade. Slide 18 outlines our consolidated 2026 guidance and 3-year growth profile. From our existing portfolio, we expect production to increase by approximately 40% in 2027 versus 2025, supported by a solid base of relatively lower cost operations. The addition of Skouries further accelerates this growth, enhancing scale, margins and long-term cash flow generation. For 2026, we expect total gold production to be between 490,000 and 590,000 ounces with copper production of between 20 million and 40 million pounds. On a consolidated basis, all-in sustaining costs are expected to be between $1,670 and $1,870 on a per ounce of gold sold basis. Growth capital and operations is expected to be between $375 million and $405 million and sustaining capital is expected to be between $140 million and $165 million for the year. As previously announced, we've increased our planned exploration investment for 2026 by 60% compared to 2025. We expect to spend between $75 million and $85 million during the year, focused on resource conversion drilling at Lamaque and Efemçukuru, resource growth and discovery programs in Quebec, Turkiye and Greece. All-in sustaining costs at Skouries are expected to be between negative $100 and plus $200 per ounce of gold on a net of by-product basis. Over the life of the mine of Skouries over the life of mine, Skouries is expected to be a low to negative all-in sustaining cost mine given spot and higher copper prices in the current market and forecast by market commentators. As a result, Skouries will have the potential to transform Eldorado into one of the highest free cash flow yielding companies in the sector for 2027 onwards, with free cash flow yields estimated by some groups of over 20% based on their gold and copper price forecasts. Given we anticipate Skouries' first production in early Q3 2026, commercial production in Q4, we have provided cost guidance for our current operations. Following commercial production at Skouries, we expect to issue updated consolidated cost guidance later in the year. On Slide #19, we provided the mine-by-mine 2026 detailed production guidance. At the Lamaque Complex for 2026, production is expected to be between 185,000 and 200,000 ounces, reflecting the start-up of Ormaque. Our focus remains on advancing Ormaque development and continuing resource conversion drilling at both Triangle and Ormaque. In Turkiye Kisladag, we expect 2026 production of 105,000 to 130,000 ounces. Expected production compared to the previously guided range has been impacted by a high waste stripping year, coupled with longer-than-planned leach cycles and lower grade stacked. The higher metal price environment has opened up a significant opportunity for the Kisladag open pit to allow us to evaluate the opportunity to move from $1,700 to $2,100 pit shell, which is expected to unlock the western area of the pit to support resource expansion. To facilitate this opportunity and assist in resolving ongoing geotechnical challenges at the open pit, we expect to increase waste stripping in 2026 by 6 million to 8 million tonnes. The mine optimization plan is expected to be beneficial in the long term by improved balancing of ore and waste movement and supporting consistent year-over-year performance. At Efemçukuru, we expect production of 70,000 to 80,000 ounces in 2026. Costs are expected to be higher this year due to increased labor, electricity and royalty expenses. Finally, in Greece and Olympias, production is expected to be between 70,000 to 80,000 ounces, reflecting the ramp-up of the 650,000 tonne plant in the second half of the year. Our focus will be on executing the plan, managing feed blends and supporting stable flotation performance. Higher gold production and improved payability terms are expected to support lower unit costs, though quarterly variability will continue due to timing of by-product shipments. With the portfolio we're genuinely excited about and clear path to cash flow inflection, we believe we are well positioned to create long-term sustainable value. And I'll now turn it back to George for concluding remarks. George Burns: Thanks, team. Our 2025 performance reflects the dedication and capability of our employees and contractors across the organization. I want to thank our teams for their ongoing commitment to responsible production, safety, operational excellence and collaboration. As we look ahead to 2026, our focus remains on safely delivering Skouries, strengthening our operating foundation and continuing to create long-term value for our shareholders. Before we conclude, I want to briefly revisit the announcement we made almost 3 weeks ago regarding the combination of Eldorado and Foran. Together, we bring 2 high-quality assets entering into production in 2026, in addition to 4 operating mines that support near-term growth and long-term value creation. The combination enhances free cash flow potential, strengthens our production base, improves our cost profile while maintaining a strong balance sheet to fund growth, advance exploration and return capital. It also adds meaningful copper exposure alongside long-life gold production, creating a more balanced and resilient portfolio. Overall, this creates a compelling platform for growth and operational excellence that will drive sector-leading cash flow per share. We're confident in the opportunities ahead. Thank you for your time today. I'll now turn the call back to the operator for questions from our analysts. Operator: [Operator Instructions] The first question comes from Cosmos Chiu with CIBC. Cosmos Chiu: Maybe my first question is on Kisladag. As you mentioned, in the 3-year outlook, 2026 guidance is lower than what there was before. And I think you explained why part of it, lower grade, higher strip. But how about 2027? I noticed that 2027, your 3-year outlook is also lower than what you had previously disclosed. So the reasons in 2026, are they also sliding into 2027? Simon Hille: Cosmos, this is Simon. Thanks for the question. So yes, as we explained, we are looking to open up the Western area. I think that's going to provide us with a new ore source, and we're quite excited what that could do for us by adding some more mine life into Kisladag. So that's one of the positives coming out of the extra stripping required this year. As we look forward into sort of 2027 and beyond, we are probably setting up the mine to be in that range that we've sort of 150,000 to 160,000 ounces on a steady year-on-year basis. However, there will be focus on making those profitable ounces through cost initiatives and other things. But that's sort of the outlook for right now. We don't see it really spiking in any given year. Cosmos Chiu: So I guess to confirm, it sounds like 2027 numbers that you've given today, 140,000 to 160,000 ounces has incorporated some of the potential impact from an increase from a $1,700 an ounce to a $2,100 an ounce pit shell. Is that what I'm getting? Simon Hille: Yes, I think it's fair to say that. Cosmos Chiu: Okay. And then so in terms of the stripping then, the 6 million to 8 million tonnes of pre-strip in 2026. Is that going to stay high then potentially if you move to a $2,100 an ounce pit shell? I'm just trying to figure out if that's a good sustainable number of tonnage to use to think of continue on a going basis. Simon Hille: Yes, that's a good question. To clarify, we typically move roughly around 20 million tonnes of waste every year. And so that's been driving our -- it's split across growth and sustaining capital. Beyond -- for 2026, what we're flagging is an increase -- an extra increase on top of that of roughly around 6 million to 8 million tonnes. The extent of that moving forward will be, I think, fairly modest. This year is probably where we're trying to open up the area. And the $2,100 shell was, I think, always a part of our long-term plan with the metal prices moving in the direction they have. Cosmos Chiu: Great. And then maybe just another question, switching gears a little bit. George, as you mentioned, it's been almost 3 weeks now since you announced the acquisition of Foran Mining. You've had a chance to talk to a lot of investors and shareholders of both companies. How has the reception been so far? George Burns: Thanks, Cosmos. Yes, we're out explaining to both sets of investors why this transaction is really a 1 plus 1 equals 3 transaction. I think our shareholders are listening to the benefits that flow to both sets of shareholders. In the case of Eldorado, this is a compelling opportunity to have a multi-decade life asset with massive exploration upside. We also, with our balance sheet, know we can lower the cost of capital relative to a development company and then accelerate investment in things like a lead circuit and doubling the capacity of the plant much faster than the Street is assuming. So we're selling the benefits, compelling benefits to our shareholders, and it's going to be up to them and a shareholder vote in the not-too-distant future. So we remain optimistic. Operator: [Operator Instructions] The next question comes from Tanya Jakusconek with Scotiabank. Tanya Jakusconek: Can you hear me? George Burns: Yes. Tanya Jakusconek: I don't know, George, if you want to take this or maybe Simon wants to take this. I just want to circle back to Skouries. With this delay that we've had, does this give us any -- I'm assuming it gives you a little bit more breathing room on the tailings. Maybe just review the tailings and you mentioned weather, Simon. Are we getting drier weather? Does this help us a little bit on the tailings side is what I'm asking, this additional time. George Burns: Yes, it's George. So yes, a couple of things I'd point out. So this 3- to 4-month delay in getting to first concentrate does give us some breathing room in really 2 areas. The plan all along on the plant construction was to get 2 filters up and running and begin the ramp up. With this delay, we're going to be able to get more of that equipment finalized before first concentrate. So we'll have more than 2 filters at start-up, and we'll have a number of other equipment required for ramp-up complete before we start. So that's a positive. And yes, I mean, we've seen heavy rains in the Mediterranean, both in Greece and in Turkey. Some record rainfalls are hitting the area. So it's a nuisance when you're out trying to do earthworks, open pit mining, but these haven't caused any significant delays in the construction. It's just we're being transparent about those issues. So for sure, the delay in start-up will advance all of our earthworks and put us in a better position for a solid ramp-up in the second half. Tanya Jakusconek: Mean you're going to have a very big -- well, I'm going to say big, but you're going to have a nice stockpile ready to feed that mill. And I think Simon mentioned we've done the drilling for 3 years of mining, detailed drilling in the pit. So we've defined for 3 years with a nice stockpile. Is that safe to assume that I'm understanding it correctly? George Burns: You are. We're going to be in a fantastic position to feed the mill. We're at more than 1.5 million tonnes today on the ground stockpiled. And with this 3-month delay, that stockpile is going to grow even further. So the beauty in all this, we're going to have more ore than we're going to process this year. We're going to be able to select the higher grade, more valuable ores to feed the plant. So we're in a great position from a mining perspective, great position from an ore body quality perspective. We've got 3 years of the open pit infill drilled, confirming the grades and recovery. And the underground has been unfolding very positively. We're 900 meters ahead on development. We're going to do 4 test stopes this year rather than 2. And the 2 test stopes that -- one that we've completed mining, the other one is roughly half completed. Fragmentation was excellent. The cavity is holding up. It's increased our confidence to go to larger stopes this year. So the 4 stopes we're going to mine this year around 97,000 tonnes compared to the 2 last year were just over 60,000 tonnes. So we're in a great shape for mining. This delay does allow us to have the plant more ready for a faster ramp-up. And it's unfortunate we had an issue with one of the key pieces of equipment, but I think we're in good shape for a strong year. Tanya Jakusconek: And George, I'm assuming that with these -- with the issues on the cyclone feed pump, all other areas have been checked, like we're not -- checks have been done is the only damage the nothing else be checked? George Burns: Yes. I mean that's a great question. To put it in context for this concentrator, there's over 4,000 pieces of electrical mechanical equipment. There are 891 motors, and there are 190 variable frequency drives. And so yes, all of this stuff has been inspected. Unfortunately, with the cyclone feed pump -- let me back up. All the electrical equipment had been stored since 2017 in warehouses that were constructed in the first phase of construction. I think that's a testament to the original design of this that often doesn't happen at the beginning. So when we went into care and maintenance in 2017, the electrical equipment was stored under cover. What we have found is we put this VFD into the motor control center just days ago. There were some signs of some moisture damage on this particular unit. And as a result, we got the manufacturer involved, opened up the capacitors and found this damage. And we've remarkably been able to find the quickest solution is to repurchase new capacitors. The repairs are going to take longer. And essentially, that's our critical path now to start up. So to answer your question, all of that equipment had been stored other than this one piece. These capacitors were marked cyclone feed pumps on the crating. And we now believe these were stored outside for a while and then later brought into the warehouse. So unfortunately, we were just in the phase of installing these, brought them into the MCC, notice a bit of moisture damage on the outside of the gear and got the manufacturer there to open up this electrical equipment and found the damage. No other equipment had any of those indications and all the additional variable frequency drives have been checked and confirmed to be okay. So we think we're out of the woods on any repeats to this unfortunate issue. Tanya Jakusconek: Yes. It sounds like the manufacturer is working with you, and I think Simon said they've already been ordered, and I think we're expecting them on site soon. George Burns: Yes. So the replacement new capacitors have been ordered. The rebuild of the damaged capacitors will come in Q3. So our best estimate from accelerating the manufacturing and shipment to site is we will be ready to run in 3 to 4 months from our late Q1 original date. Tanya Jakusconek: Okay. And then just maybe just turning to the power line connection. So I'm assuming the subcontractor is there now ready to working away and the critical path there is just getting that approval from the regulators. Is that how I should think about this power line? There's nothing else that needs to be done? George Burns: Yes. I mean we wanted to just point this out being transparent. We've talked all along that the dry stack tailings facility was the critical path. and that the power line and substation were not too far behind it. We did have some slippage in the detailed engineering. And just to describe this part of the infrastructure, it won't be owned by Eldorado. This is being constructed for our project, but it will be owned by the regulatory authority in Greece. And so it involves 11 power transmission poles and associated line and then this main substation. So the engineering took a bit longer. The subcontractor that's constructing it wanted full sign off before they started the work, and we saw some slippage there. But we've mitigated that. And with this delay now on the capacitors, we'll have this energized and ready ahead of time. But we did want to point out that we're not also in control of the inspection. So once the construction is complete, the regulator will come out and inspect all of that infrastructure that will be handed over to them, and they'll make the final determination when it's ready to flip the switches and energize our plant. And we've got temporary generators on site that we can do our commissioning on all areas of the plant with the exception of our grinding mill. So we have to have this power for that final commissioning and then start up. So at this point, it's not the critical path to actually the capacitors. We just wanted to highlight there was a bit of slippage, and we're focused on mitigating that. Tanya Jakusconek: Okay. So just so that I know when is that going to be ready, the power plant? George Burns: We expect the power plant in late Q2 and then shortly after that, the capacitor is up and running for the cyclone feed pumps. Tanya Jakusconek: Okay. Good luck with all of that. I'll be asking again on the Q1 call. George Burns: I'm sure you will. Operator: That's all the questions we have for today. This concludes the question-and-answer session and today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

85天前Insight Analytics约5分钟阅读

AAL.L 2025 Q4 财报电话会议

Unknown Executive: Okay. Good morning, everyone, and a very warm welcome to Anglo American's 2025 Results Presentation. Just a few words from me before I hand over to Duncan and John. Of course, first, as always, safety. It's our very first value and our #1 priority, and we are making very, very good progress. We recorded our lowest ever total recordable injury frequency rate last year. But in spite of this great progress, we actually had two workplace fatalities last year, tragic and of course, unacceptable. Duncan will mention this and talk a little more about it in his presentation, but let me add that we cannot and will not rest until we are consistently achieving zero harm. So now as many of you know, 2025 was a year of transformational progress at Anglo American. We've executed major portfolio changes to unlock substantial value for our shareholders, and that has paved the way for what we now see as the next step in our journey and our strategic phase of value creation. And that is, of course, to form a global minerals champion in the shape of Anglo Teck, setting up exceptional investment exposure to copper in particular. Now whilst offering compelling value, of course, through the exceptional synergies, both industrial and other, this combined entity will be set up also to create long-term value based on the many things that these two companies have done so well over so many years, focusing on safety and health, being responsible and inclusive, environmental stewardship and social progress for our many stakeholders. Our Board looks very much forward to progressing this formidable combination towards completion once we have received the final outstanding approvals. Briefly on Board changes, Anne Wade joined our Board at the beginning of last year as a Nonexecutive Director, joining also our Audit and our Sustainability Committees. She's already made a significant contribution to our Board discussions, particularly bearing in mind her deep buy-side capital markets experience. And then in December, Hixonia Nyasulu stepped down after 6 years with the Board, and we thank Hixonia for her many contributions to our discussions over that time. Thank you. That's it from me. Let me now hand over to our CEO, Duncan Wanblad. Duncan? Duncan Wanblad: Good morning again to everybody, and thank you for that introduction, Stuart. As Stuart said, a pretty big year for us in 2025 and one that I do think was pretty transformational in the context of Anglo American's history. We had significant strategic delivery, laying very strong foundations for the next phase of our journey, which will be in the form of Anglo Teck. Now those of you who are regular attendees at our results will recognize this slide particularly. It is the 3 pillars of our strategy, which is operational excellence, portfolio optimization and growth. And these are the key drivers of how we move this business forward. And 2025, as I said, was a year with substantial execution progress against each one of these three objectives. My pages got stuck together, so I nearly got to the conclusion. Questions, Jason. Starting off with operational excellence. Our focus was unwavering here and I believe continues to drive the right results for us. We've got very high-quality assets, and we are running them very well with a focus on maximizing returns for the long run, which is after all and after safety, the most crucial deliverable for our shareholders. Our copper and iron ore businesses have performed very well, delivered on their 2025 production guidance with effective cost control across the businesses, seeing us deliver our cost savings targets, and John will talk about those a little bit later. Now these cost savings were supported by the delivery of the recent head office transformation program that we ran, which resulted in a 21% headcount reduction. The growing stability in our asset base is allowing us to better identify and manage risks early and also to increasingly realize opportunities within the businesses. The evolution of our culture to prioritize and drive local accountability, where people on the ground actually have the power to shape the best outcomes is enabling these results. The portfolio optimization also took great strides forward during the course of last year, and I'm thrilled with the execution of the PGMs demerger. The successful demerger of Valterra and the full sell-down of our residual 19.9% stake has helped to unlock material value for our shareholders. And of course, very helpfully, we raised approximately $2.5 billion out of those sell-downs, which went a long way to helping us delever our balance sheet. We continue to work towards streamlining the business, and I'm going to talk a little bit more on that later on when we get to the transactions underway. Copper is absolutely at the forefront of our growth ambitions. Finalizing the agreement with Codelco to implement a joint mine plan for our adjacent operations, Los Bronces and Andina, was a truly remarkable transaction. It in and of itself unlocks $5 billion of pretax value across the complex and more copper tonnes for both companies as well as for Chile with minimal incremental CapEx. We've demonstrated what is possible when we can come together as an industry and partner with each other, and that translates, I believe, into compelling industrial synergies with huge significant upsides. And finally, we announced the merger with Teck to create a global critical minerals champion. The merger will position us in an increasingly competitive landscape to be able to create substantial value through industrial and financial synergies and cement the combined company as a world-leading copper producer. Now since announcing the merger in September of last year, we've made very good progress in forming Anglo Teck. Over the recent months, we've achieved several major milestones. First, overwhelming support from our shareholders on both sides. Several major regulatory approvals have already been secured, including the approval under the Investment Canada Act at the end of last year. Our focus now is, of course, moving to integration planning, and that is progressing at pace as we work together with Teck to find the optimal organizational structures, the optimal systems and processes that will make this the most outstanding business in the sector. We have had fruitful conversations in the context of integration planning. As I said, the new Board and management team will be formed on completion, and we are aiming to hit the ground running in Vancouver from day 1. I will continue to oversee the crucial integration work together with Jonathan, that our teams are now progressing jointly ahead of closing. I would hope that everyone will understand that this is going to now take some time during the course of this year, which will mean that we're not going to have a lot of new news publicly certainly anyway until we get much further along this process. We still do expect completion around 12 to 18 months from the date of announcement. So closing, our best estimate remains now somewhere between September of this year and March of next. Real process is still to happen are the regulatory processes, which includes China. So we've got South Korea and China to go. These processes are on track, and we'll update you all as that happens. Once these processes are cleared, we would expect the path to completion to be relatively swift with the $4.5 billion special dividend payable to the Anglo American shareholders of record on or around completion. I remain really excited by the benefits that this merger is going to deliver. Now moving to safety. And as Stuart said, this is absolutely our first priority and will continue to be our first priority. I've said it before, and I'll say it again, there isn't a single tonne of any material that we produce that is worth the cost of a human life. And during the first half of this year, we sadly had to report two fatalities in separate incidents at our managed operation. One was in Brazil, a projects contractor working on our filtration plant in Minas-Rio, who fell from heights and the other in an LHD accident in Unki in Zimbabwe just prior to the demerger of Valterra. These tragedies weigh very heavily on all of us and in the starkest terms, I think, remind us of the critical importance of running a safe business. There is always going to be more work to do, but I am encouraged by the improvement that we're seeing in our injury rates across the business with the frequency rates now, as Stuart said, down to the lowest recordable levels in the history of the company and 20% lower than they were last year. We're driving on the right path with the right trajectory, and this is enabled by the critical action programs that we've installed in the business and further strengthen our focus on the most impactful safety actions as well as leaders having the time to spend in the field and more meaningfully engage with the frontline teams and specifically on safety. In 2026, we're going to continue to strengthen that approach with our leaders and allowing them to spend even more time in the field. We do this by, as I said to you a couple of years ago, ruthlessly prioritizing their work and simplifying the work that they need to do, and that gives them time to properly engage with the people doing the work, not only in a one-way conversation, but in a two-way conversation that helps us understand better how we can design the work for people to execute. These changes reflect our unwavering commitment to safety as the foundation of stable, predictable and high-quality performance. We have more work to do here, of course, but the progress is clear and our focus remains firm. Turning then to our operational performance and our outlook. I'm very pleased with the performance that we've seen in our copper business during 2025 and the fact that it met its production guidance. In Copper Chile, as you know, Collahuasi will be going through a much lower grade phase in 2026 with performance expected to improve significantly from 2027 onwards as they access the fresh ore in the Rosario pit. Pleasingly, we are also seeing the benefits of our previous reset to the Los Bronces mine plan, and that has restored both optionality and flexibility within that business. The team has delivered really well on the development of Donoso 2. Donoso 2, as you all know now, is the next production phase of the mine, and it is characterized by much higher grades than where we're mining today and slightly softer ores. So coupled with the very strict cost control and discipline that's being embedded across the business, this has enabled us to reassess the economics of restarting the second plant at Los Bronces in light of the current copper price environment. So we have now restarted that plant, and it will deliver cash-generative tonnes throughout 2026, but we will need to shut it down again, of course, at the end of the year because we need the water that we use to run that plant to move a tailings dam to be consistent with our GISTM commitments. That's the Perez Caldera tailings dam. We will then obviously have a lot more flexibility on restarting this plant again permanently when we combine the two mines, Andina and Los Bronces closer to the end of the decade. Our newest copper mine in the portfolio, Quellaveco, has delivered strong operational financial results with throughput exceeding the design capacity. And while we continue to increase our understanding of this ore body, which is pretty typical for new mines, Quellaveco remains positioned as a high-quality, high cash flow generative asset, operating stably producing around 300,000 tonnes of copper a year in the coming years. And although Quellaveco is not going to have the same long-term grade benefit that will accrue to the likes of Collahuasi or Los Bronces over time, the mine is an absolutely key asset in the portfolio and provides a very strong base for expansion in Peru. We are now entering a phase where we should see rising copper volumes without doing too much differently. The stripping at Collahuasi will have caught up, and we will be fully into Donoso 2 at Los Bronces. This should drive around 125,000 tonnes of lower risk growth in the short term. After 2028, we will be approaching the integration for our two major JVs, leading to the next leg of growth, which I'm going to speak about a bit later. And then the new Anglo TecK will also have substantial optionality into the future. Turning to the iron ore business, which has been demonstrating consistent and strong performance. In South Africa at Kumba, preparations are now well underway for the UHDMS tie-in, which is set to happen later this year at Sishen. That project is progressing to plan and on budget, and we see the production will be down around 4 million tonnes during the course of this year as we do that tie-in because the DMS plant is offline as we do it. We do, however, have -- I mean we have, however, prepared and do have ample stock available, which we will draw down on during this tie-in period, and therefore, we should see sustained sales volumes to similar levels of those that we achieved in 2025 as a result. This is a project that is going to significantly increase the proportion of premium quality iron ore as it ramps up to full capacity by the end of 2028 and allows for more flexibility in our mining. We retain conviction in the long-term demand fundamentals for higher-quality products, where we expect to see increased price realizations as steelmakers decarbonize and as steel markets evolve. Our Brazilian iron ore operation at Minas-Rio has really been the star of operational excellence during the course of this year. Despite the impact of the planned pipeline inspection, which was conducted in August of this year, production was broadly flat versus prior year. This is a testament to the focus of the team on continuous improvement to optimize an integrated system. This operational effectiveness will especially be helpful from 2028 onwards when the mine transitions from its current ore body in the soft, friable ores into areas with much more feed variability. Work to integrate even higher quality DR-grade Serpentina resources to supplement the production in 2030 is progressing well. Turning now to portfolio optimization. In steelmaking coal at Moranbah North, following a very long journey with a number of stakeholders, which include our own workforce, the regulatory authorities in the form of the RSHQ and other industry safety and health representatives were very pleased to receive regulatory approval for a remote start of these operations back in November of last year. And in the couple of weeks -- in the last couple of weeks, so beginning of February, we received the final lifting of the directives by the regulator, which now enable the mine to ramp up in the normal course to full production. There is also good news from Grosvenor. We secured approval for the first stage reentry back in August, and that enabled visual inspections, which then confirmed limited damage to critical infrastructure as a result of the fire there several years ago. The teams are now developing plans for a restart, which could enable longwall production to recommence from as early as 2027 under new ownership. Off the back of solid operational progress and the strong inbound interest that we have received over the last few months, we restarted the formal sales process at the end of last year. The first phase of the new tender process commenced in early January with us aiming to achieve an announcement of a sale during the second quarter of this year, and we are targeting completion by the end of this year. There is healthy interest in our steelmaking coal assets. Long-term supply and demand fundamentals remain relatively attractive for this sector and prices have recovered in recent days. In nickel, we signed a definitive agreement with MMG back in February of last year for proceeds of up to $0.5 billion. The regulatory processes to complete the sale for the business are continuing. And now we have the final stage to go, which is the European Commission, but they have progressed this now into a Phase 2 review. So both MMG and Anglo American are working very closely with European Union to ensure that they have a complete understanding of what we believe a transaction -- that this transaction means to the market and one where we believe it preserves and actually may even enhance market competition. Lastly, a word on De Beers, where we have now a very well progressed and responsible exit in the advanced stages of discussions with a select group of interested parties. All of these parties are strategic, and we are at the back end of our formal processes. We continue to have very constructive discussions with the government of Botswana, who, of course, are going to be crucial in the determination of the endpoint of this process. With respect to diamond markets, although we have seen stability in the end market for natural diamond jewelry over the last 6 months or so, the diamond market remains very challenged, exacerbated by the increased supply, specifically from Angola and tariffs-driven uncertainty. We are focused first and foremost on achieving a responsible exit, but we will continue to work closely with the De Beers team on the actions required to optimize cash flow performance, both now and over time. And as I've said before, with some of the best diamond mines as well as resources and marketing capabilities in the world, De Beers is very well positioned to emerge and thrive as the market leader and as the market recovers. We continue to believe that there is significant upside potential to this business for the right owners, and we continue to keep the market abreast of these developments. And with that, I'll hand over to you now, John, just to take us through the '25 financial performance and the guidance. John Heasley: Thank you, Duncan, and good morning, everyone. I'm pleased with the financial performance of the business for this year. We delivered on our production and cost guidance as well as our $1.8 billion cost-out program and saw further reductions in working capital. This focus on total cost and cash is now firmly embedded throughout the organization and our performance management processes. These achievements are all evident in our financial results. But of course, as we progress through the portfolio transformation, the financial reporting again is complex. This slide aims to try and help navigate through that complexity. Our continuing operations include our end-state simplified business, but also include De Beers at least until the sales process is further advanced. While our discontinued operations include PGMs up to the demerger in May of last year as well as steelmaking coal and nickel. So continuing operations EBITDA of $6.4 billion and earnings of $0.9 billion are not fully reflective of the high-quality financial profile of the go-forward business. The simplified business focused on copper and premium iron ore delivered $6.9 billion of EBITDA, 44% EBITDA margin and underlying earnings of $1.6 billion, benefiting from strong realized prices and delivery of our cost savings. De Beers reported negative $0.5 billion of EBITDA, and I'll come back to that in more detail later. The discontinued operations generated $0.1 billion of EBITDA in the year, reflecting 5 months of earnings from PGMs before the demerger, partially offset by losses in steelmaking coal following the operational incident at Moranbah North. The effective tax rate for continuing operations was 52%. This reflects the impact of De Beers rather than any underlying tax rates with the go-forward simplified portfolio tax rate being 39%, as I'll explain shortly. The combination of continuing and discontinued operations has resulted in underlying earnings per share of $0.54, which translates into full year dividends of $0.23 per share, in line with our 40% payout policy. That includes the final dividend declared by the Board of $0.16 to be paid following shareholder approval at the beginning of May. I'll now move on to talk through each of these areas in a bit more detail. Starting with the simplified portfolio, we've delivered a strong set of results. Our basket price was up 2% as higher LME copper prices were partially offset by lower benchmark iron ore prices. Realized prices, however, were up in both businesses, benefiting from provisional pricing impacts. Production was down 4%, mainly due to lower ore grades and recoveries at Collahuasi as we process stockpiles while developing the mine towards the sustainable higher grades expected from late 2026. There was also an impact from lower plant throughput at Los Bronces as the smaller processing plant was on care and maintenance. Despite the lower production, revenue increased by 4% due to the higher realized prices. And when combined with our focus on costs, this flowed through to generate EBITDA of $6.9 billion, a 9% increase year-on-year. As you can see from the slide, copper and premium iron ore contributed $4 billion and $2.9 billion, respectively. Consequently, our EBITDA margin improved 2 percentage points to 44% with return on capital also higher at 17%, underlying earnings increased by 1% to $1.6 billion with higher net finance costs, partially offsetting the benefit from a lower effective tax rate with a simplified portfolio of 39%. This reduction in tax is driven by a lower unrecovered corporate costs and is broadly reflective of the blended rate across our operating jurisdictions. Looking specifically now at our unit costs. In copper, we benefited from lower TC/RCs, partially offsetting the impact of lower production from Collahuasi. Quellaveco delivered another standout performance with unit costs of only $0.89 per pound. In our premium iron ore business, Kumba was broadly flat year-on-year, while Minas-Rio incurred higher costs from the planned pipeline inspection activities. And as you've heard me before say, I know the industry focuses on unit cost reporting, but we are focused on managing the total cost base. And on that basis, I'm pleased to show only a 1% increase year-on-year, reflecting good cost management across the business as well as the impact of lower volumes, which offset the impacts of stronger producer currencies, CPI and one-off impacts such as increases in rehabilitation provisions. Looking now into the drivers of our continuing EBITDA after stripping out the impact of De Beers. Favorable realized pricing in copper and premium iron ore resulted in a $1 billion EBITDA uplift. That was partly offset by the stronger South African rand and CPI inflation, which together impacted EBITDA by $0.3 billion, while lower volumes from Copper Chile had another $0.3 billion impact. However, I'm delighted once again with our focus on cost savings this year. We realized gross cost savings of $0.6 billion, while cost headwinds of $0.2 billion, primarily from additional stripping at Collahuasi were fully offset by that $0.2 billion benefit from lower copper TC/RCs. The other bucket mainly reflects the nonoperational impact of increases in long-term rehabilitation provisions for Copper Chile, bringing EBITDA to $6.4 billion. Over the last 2.5 years, we've committed to delivering total cost savings of $1.8 billion across our business operations, corporate overheads and initiatives. As a reminder, in 2024, we realized $1 billion of savings and at a run rate of $1.3 billion coming into 2025. We targeted to realize an incremental $0.5 billion in 2025 and have managed to deliver slightly ahead of that at $0.6 billion. That reflects $0.2 billion of operational savings from the business as well as $0.4 billion from corporate restructuring and initiatives. So we now stand with realized savings of $1.6 billion, and we've executed all the initiatives needed to achieve the total $1.8 billion, with the final $0.2 billion before the impact of dissynergies also of around $0.2 billion to be realized in 2026. Of course, we've embedded a strong cost culture through the organization and our core processes, which will support continuous improvement going forward, including through the Anglo Teck integration process. Now moving on to our exiting business, starting with De Beers. Market conditions continue to be challenging, driven by the impact of lab-grown diamonds, U.S. tariffs and increased supply. As we came into the year, we were very focused on ensuring that De Beers was self-sufficient from a cash perspective. This meant that we undertook initial cost-out initiatives and drove inventory down by both managing production closely and responsibly increasing sales. You can clearly see the impact of these actions in the results. Sales volumes and revenues are up despite lower prices, while unit costs are down 8%. These actions could not offset the lower pricing environment, and so EBITDA was a loss of $0.5 billion compared to breakeven last year. However, the fact that we fulfilled a large portion of those sales from inventory meant that we reduced that inventory by $0.9 billion in the year and kept the business at broadly cash breakeven. This means that we now have midstream inventory at broadly normalized levels. As part of our year-end processes, we undertook an impairment review of De Beers and have recognized a $2.3 billion impairment within special items. This reflects our latest views on the near-term adverse macroeconomic conditions and industry-specific challenges. Since last year, the key changes are largely attributable to an extended period of lower rough diamond prices, driven by a slower differentiation of lab-grown and natural diamond markets, continued weak China demand and increased supply. The impairment, along with other movements in capital employed, brings the carrying value of De Beers as a whole to $2.3 billion, of which our attributable share is $1.9 billion. As we move into 2026, we will continue to focus on cash preservation. With less opportunity to release cash from inventory, we will be very focused on taking action to reduce structural costs and capital as we transition through this challenging market period and towards exit. Briefly touching on our discontinued operations, EBITDA was $0.1 billion, reflecting lower PGM's earnings with only 5 months consolidated in 2025 and those 5 months being impacted by the flooding at Amandelbult. This was offset by a loss in steelmaking coal, given the impact of Moranbah and Grosvenor. This translated into an underlying loss of $0.3 billion. There was then a loss on demerger of PGMs that we reported in the first half of $2.2 billion, which drove the statutory loss of $2.5 billion. The net impact from the discontinued operations was a net cash impact, sorry, from discontinued operations was a $0.7 billion outflow for the full year, and I will explain this in a subsequent slide. We continue to maintain a strong focus on cash generation. Our sustaining attributable free cash flow benefited from $0.6 billion working capital inflow, primarily from that reduction in diamond inventories. Excluding that benefit from De Beers, the go-forward business kept working capital broadly flat, which was a good achievement given the increased copper prices. This resulted in the conversion of operating profit to cash, including sustaining CapEx of 107% for continuing operations as a whole and 91% for the go-forward business. And this left sustaining attributable free cash flow for the year at $1.4 billion. Moving on to net debt, we've seen a $2 billion reduction to $8.6 billion. The sustaining attributable free cash flow generated by the continuing operations of $1.4 billion more than funded growth CapEx as well as returns to shareholders. Discontinued operations resulted in a net cash outflow of $0.6 billion, reflecting the Jellinbah proceeds, offset by the impact of the PGMs demerger and the negative cash cost of steelmaking coal following those operational incidents. The overall reduction in net debt was therefore largely driven by the $2.4 billion proceeds from the sale of the residual 19.9% stake in Valterra, which happened in September and leaves net debt to EBITDA at 1.3x. Excluding shareholder loans, net debt stands at $6.8 billion. The group continues to have a strong liquidity position, and I would expect to see leverage come down further as we conclude the remaining portfolio transactions, coupled with the strong underlying momentum in the go-forward business. On capital expenditure, we took decisive action in 2024 to reduce CapEx and rationalize the spend, and we've seen a 16% decrease in our CapEx in continuing operations to $3.3 billion, which was below our guidance. This has been supported by the establishment of our projects group, who manage a significant portion of our spend, thereby driving efficiency and effectiveness benefits across the group. Growth CapEx included $0.3 billion at Woodsmith as well as spend for the Collahuasi debottlenecking and the Kumba UHDMS project with a reduction year-on-year driven by our slowed approach at Woodsmith. Excluding De Beers, the CapEx for the simplified portfolio was $3 billion. Turning now to our guidance. In 2026, our copper unit costs will increase to around $1.72 per pound from $1.50 per pound. This is mainly due to the impact of a stronger currency where we're assuming CLP 860 and PEN 3.2 to the U.S. dollar and in part due to the change in production mix between Los Bronces and Collahuasi. Our premium iron ore unit cost will be around $41 per tonne, once again, predominantly driven by stronger producer currencies with ZAR 16 and BRL 5.3 to the dollar incorporated, but also reflecting the tie-in of the tailings filtration plant in Minas-Rio. On our other 2026 guidance, the group underlying effective tax rate for our continuing operations is expected to be between 44% and 48%, subject to the mix of profits and timing of the exit of De Beers from the portfolio. It's not shown on the slide, but our long-term guidance for the simplified portfolio, excluding De Beers, remains unchanged at 38% to 42%, in line with the 2025 outcome that I shared earlier. Continuing depreciation will be between $2.4 billion and $2.6 billion, a slight increase from 2025, reflecting some major projects coming online in copper, such as the Collahuasi desalination plant. From a cash flow perspective, next year, we're expecting around $0.2 billion of restructuring and merger costs. And from a net debt perspective, we expect a one-off noncash impact of $0.5 billion from the recognition of lease liabilities associated with the Los Bronces integrated water solution project that will ramp up during this year. Moving on now to CapEx. Clearly, all of our capital allocation decisions for 2027 and beyond will be shaped by the merger with Teck, which will only be determined by the new Board in the period post completion. As such, our CapEx and asset plans will, of course, be subject to revision in due course. But in the meantime, we expect CapEx for the next 3 years for the simplified portfolio to range between $2.6 billion and $3.1 billion, which is very close to our previous guidance. We also expect De Beers's CapEx to be around $0.5 billion in 2026, similar to previous guidance, but slightly higher than 2025 due to deferred spend at Venetia Underground, although we will obviously be keeping that under close review. Sustaining CapEx for the simplified portfolio over the long term will be around $2 billion per annum with fluctuations over the next few years, reflecting modestly higher stay-in business CapEx across a few of the businesses. On our growth CapEx over the next 3 years relative to previous guidance, we're seeing lower capital spend come through in copper due to the Los Bronces/Andina joint mine plan and the potential Collahuasi QB adjacency as we pursue more capital-efficient options. On Woodsmith, we will be spending less than in 2025, at $250 million of CapEx in 2026 and 2027, in addition to $50 million of OpEx as we continue to work towards having at least a real option for consideration over the coming years. This is, of course, still guided by our three conditions needed to move towards final investment decision. Those three options -- those three conditions being a completed feasibility study, having the project syndicated and our balance sheet being in robust financial health. This will be in 2028 at the earliest, at which time the Board of Anglo Teck will be able to consider this project within the context of the wider portfolio. To finish off, I'll recap briefly on the key financial messages. Our focus on safe and stable operations as well as structured cost control is driving strong EBITDA margins across our copper and premium iron ore businesses. We've successfully delivered our $1.8 billion cost-out program with realized savings in 2025, slightly ahead of plan. Strong cash conversion reflects our focus on working capital management and capital efficiency. And together with the proceeds from the sell-down of our stake in Valterra, we reduced net debt by $2 billion with further deleveraging expected as we secure proceeds from the divestments of SMC, nickel and De Beers. All of this means we look forward with confidence as our reshaped portfolio will deliver higher margins, higher cash conversion and higher returns on capital employed. Thank you, and I'll now hand back to Duncan. Duncan Wanblad: Thanks, John. So turning now to the biggest component of our go-forward business, which is copper. If you go back 100 years and look at the copper returns on capital employed, it helps to contextualize, I think, the current copper price environment. So while copper prices may be at record levels in nominal terms at the moment, the increase is only now just starting to translate to the returns that we've seen in comparable historic situations. This makes sense in the context of the inflation in capital intensity and operating costs that has been experienced, especially since COVID. This is also very unlikely to be a short-term phenomenon given the combination of structural demand growth and the extended length of the capital cycle on the supply side, which has been key to extended upward trend patterns in the past. This is where the inherent value in our portfolio of copper assets and growth pipeline optionality really shines through. We have world-class assets well positioned to benefit from this upturn. And for Quellaveco, for example, that means it's now on track to deliver a capital payback this year, only 4 years after first production, which in and of itself is quite an incredible milestone. So this follows on well to the next slide, which says that the copper industry has generally been pretty awful at estimating costs for new projects. The chart on the left here shows that the average milled copper head grade for new greenfield projects is materially lower than the current installed capacity. But despite this, the estimated average capital intensity for new projects is at $19,000 a tonne, and that is materially lower than actual projects that have actually been built since 2010, which are at almost $30,000 a tonne adjusted for inflation. So we have two key things going in our favor in copper. One is our project development and sustainability capabilities, and I'll talk about that on another slide in a moment. But second is that we have a much lower starting point relative to the intensity of our capital projects than the industry average. This difference in our growth profile where we will have the ability to develop less complex brownfield adjacencies should reduce the risks around the magnitude of the potential cost overruns that have consistently plagued the industry over time. As we move through the merger with Teck, we will have a host of projects to choose from that further cement this low capital intensity base. One such option is the Collahuasi-Quebrada Blanca adjacency, which we've talked about in some detail when the merger was announced. The industrial synergies are really attractive there, and it is also very capital efficient. There is, of course, plenty of work to do to make this a reality, and that's getting underway now. The focus now is on working towards the right plan to optimize that value, and we are working with our other stakeholders to achieve this common goal. We have extensive experience in negotiating adjacencies, so we are well aware of the commercial considerations that will be required. This is an opportunity to drive substantial value creation for all. Just to note, as it relates to the broader copper pathway, no decisions have been made about the sequencing of projects in the combined portfolio, and all of this will need to be planned within the capital allocation framework that we will have to put in place for the merged company. However, the slide highlights that we do have the benefit of many options to consider. Our project delivery and development capabilities are the foundation of how we expect to create value from this growth pipeline. Our approach to project development is a fully holistic one. Our study and project teams are focused on investing both the time and the money upfront on the right type of analysis underpinned by years of expertise and experience in delivering well-sequenced brown and greenfield projects, which inform the optimal development pathways for the growth options that we have. We believe that this rigor in our studies approach is a differentiator, enabling projects to be confidently delivered at pace. Given the recent uptick in commodity prices, we do expect that the industry more broadly is likely to rush to bring tonnes online. And history has shown that this less mature approach leads to having to build and adjust plans in the field as risks reveal themselves pretty late on in the execution. And therefore, you have less flexibility for adjustment, and that typically is much more detrimental to project returns. The other side of the project development capability, which drives our differentiated positioning is sustainability. Our capabilities there have been built up over decades. Sustainability is not something that is stand-alone. Environmental and social considerations are deeply integrated into the way that we design and develop our mines, operate our assets, market our products and leave an enduring benefit, we believe, to the environment and the communities at the end of the life of a mine. As a responsible operator with a long-standing reputation to match, we have the experience and track record, which helps secure our social license to build projects and supports our ability to access future development resources and opportunities, both from the significant endowments within our business as well as more broadly. In the same vein, our sustainability strategy is designed to enable our business ambitions and is focused on three key themes that will be familiar to you certainly since 2018. These are being a trusted corporate leader, enabling a healthy environment and supporting thriving communities. We have been updating the strategy for our simplified portfolio, ensuring that it is aimed at protecting and creating value for the business and for all of our stakeholders with a real impact tailored at the local level, the communities and the natural environment around our operations where it matters the most. Now to be clear, our update work has so far only been focused on Anglo American simplify portfolio, and we will now need to work together on the Anglo Teck sustainability strategy. This will, of course, need to follow completion of the transaction. But given the associated time lines of that, we wanted to provide the market with an interim update. And on that basis, a little later today, Helena Nonka, who is our Chief Strategy and Sustainability Officer, will be joined by Patricio Hidalgo, who is the Chief Exec of our Copper business in Chile; and Mpumi Zikalala, who is the CEO of Kumba in South Africa for a webcast panel discussion and Q&A on the way that we are evolving sustainability in Anglo American and why we believe that is a real enabler of value creation. So please do join that session and learn a little bit more about how we're putting all of this into practice. In conclusion, we've had a truly transformational year. The business continues to embed operational excellence and leaves us well positioned to deliver strong performance in the coming years. We are working hard on the final elements of our portfolio transformation alongside the final regulatory approvals to create a global critical minerals champion. The merged company will have an outstanding portfolio with leading exposure to copper and other commodities and products with a structurally attractive outlook. That includes a variety of pathways to accretive expansion in shareholder value, including some of the most exciting adjacencies that exist in the mining industry today as well as a number of project development options. We know there is plenty to do again this year, but we are completely energized by the opportunity and the belief that we are creating something very special here indeed. And with that, Tyler, I'll hand over to you to moderate the questions. Tyler Broda: Great. Thanks very much, Duncan. I see Liam is in the Golden Chair here today. So here you are. Liam Fitzpatrick: Liam Fitzpatrick from Deutsche Bank. Just had 2 or 3 questions on Collahuasi and QB and kind of the timing and process. So I think you originally said you wanted to begin construction from 2028. So can you walk us through when you would hope to reach an agreement with Glencore and the other partners and when you would need to make the relevant permit license applications to meet that deadline? I think Glencore has said recently that they would like to be a kind of equal owner with you in that future JV if that's where it heads. Is that a deal breaker? Is that on the table? And final quick one, has your team visited QB since the due diligence in the summer? And are you happy in general with how the TMF work is progressing? Duncan Wanblad: Okay. Thanks, Liam. Look, the baseline for growth at Collahuasi is the fourth line. And that has a very key milestone in and around the back end of 2027, where you have to commit to the development of the fourth line. Once you start deploying large amounts of capital into a new plant, that starts to materially impact the viability and the returns associated with the combination of Quebrada Blanca and Collahuasi. So around 28 on current production rates at Collahuasi is when we would need to be sure that we are going down the combined mine path or we are taking a stand-alone fourth line pathway. I mean it is clear to me that based on all the economics that I've seen of both of those options that the combined QBC option is by far and away the most attractive, not least of all because of the lack of complexity, relatively speaking, in terms of building that plant and infrastructure, but also because of the capital intensity associated with it. And that's a very big driver of returns in the copper mining industry. So on that basis, we really do need to get a crack on and we need to get the ownership arrangements sorted out. We need to get the shareholder agreements in place and move on. I'm very well aware of Gary's wishes. We have had a conversation. So Gary and I directly, he's been very forthright in terms of what he would like at the end of the day. I have been similarly forthright as to what I would like at the end of the day, and now we are negotiating. I'm not sure what Gary will choose to do here, but I won't negotiate this in public. So we will just keep going until we've got a plan that makes sense for all shareholders and get it done as quickly as we can because the value at stake is pretty high here. I don't believe we have actually visited [indiscernible] Quebrada Blanca since the diligence in -- just before the announcement in September. But I do know that we have provided some assistance to Quebrada Blanca on the technical side in terms of them working through the most optimal way to manage the paddocks around the development of the tailings dam and provided some advice and information to them on the cyclone modifications that they have just installed and seem to be operating okay. Tyler Broda: We'll go to Ian [indiscernible] back and forth with Russouw equally. Ian Rossouw: Ian Russouw from Barclays. First question on Woodsmith. It would be great to get a bit of details around that and how the feasibility study is going in the shaft. And around the -- I guess, how should we think about this partnership? Obviously, you mentioned a 25% equity stake. Is that a fixed number? Or can that swing around? And then secondly, just on De Beers, obviously, it's been great to see the working capital release sort of help bring that cash flows to neutral. You won't have that card to play this year in a still challenging market. How can you sell a cash negative asset? Are you confident that you can do that? And how should we think about the structure? Should we think about a sort of low upfront value and then deferred sort of number contingent on the recovery in the diamond market? Duncan Wanblad: Okay. On Woodsmith, the progress of the feasibility study. So I think last year, this time, we were pretty clear on the three requirements that we needed to get to a point where we could ever even contemplate a full notice to proceed sanction for the project. One of those was a feasibility study. The second was a syndication and the third was having a balance sheet that was robust enough to carry the development of the project in its syndicated form forwards. Specifically to your question on the feasibility study. So in accordance with the slowdown plan, it's progressed really rather well during the course of last year. So they got to about 30 kilometers on the tunnel of 37 kilometers with a single tunnel boring machine, and we got pretty well into those sandstones. The outcome of that experience in the sandstones is that we can absolutely mine at more than a meter a day, which was the key determinant point in terms of whether it was going to swing one way or the other. There's more water than we would like in those sandstones for sure, but the drilling rate is fine or the cutting rate is fine to support the current economics in the feasibility study -- in the pre-feasibility study. And then as far as the syndication is concerned, of course, we're delighted that Mitsubishi has taken an option on this thing. They have invested quite a lot in this thing, both directly into the project, but also in their own understanding of the end markets themselves. So Mitsubishi have now got a reasonably well-developed trading desk in fertilizers. They've developed an understanding and knowledge of this. And I think that, that gave them enough confidence to acquire an option for a 25% stake in the project if and when it gets to feasibility study. So I think that that's very positive on a momentum basis, but still a long way to go given the timing to get to feasibility. I mean just on feasibility, the next hurdle now having understood the sandstones and the impact of sandstones to the project is to get close enough to the ore body, so we can put some lateral long holes on top of the ore body with some deflections down into it, and so we can start to characterize and define the detail of the ore body to help us develop a mining plan that will ensure the payback period if we sanction the project. And I think as John said, given all of that stuff that's going on, I mean, it's running exactly as per the slowdown plan at the moment, no chance of any of that happening before 2028. On De Beers, regarding the working capital release, yes, I think Alan and the team did a really good job of that. And as John said, we now have inventories that are down more at sort of normal levels, the consequence of which is whilst there's probably still a little bit that we could do there, it won't have the same impact in 2026 as it did during 2025. The consequence of which is Alan and the De Beers team are looking really hard at other mechanisms of cash flow preservation during the course of this year. And some of those are going to be potentially big changes in terms of overhead costs and other areas of that De Beers have under management at the moment. As far as the divestment process is concerned, I'm not really worried about that because the parties that we have in the divestment process all genuinely understand diamonds and diamond markets. All of them have deep experience in the type of cycles that are experienced in diamond businesses. And certainly, all of them recognize the deep value in De Beers and the quality of the assets that we have in De Beers, so not only the brand in the business, but also the quality of the underlying assets, particularly the Botswana assets. So I don't think that this has a material impact in terms of where we are in terms of the desire for a strategic buyer for the business. Of course, that will play through into the structure of the proceeds that you get for the business because if the business is cash flow negative for a while, it will need to be funded for a while. And I suspect that we will see some form of structure in the consideration of the business. So some upfront payment perhaps and then some contingent payments depending on the time it takes for the industry to recover. Tyler Broda: We go to Ephrem? Ephrem Ravi: Just a first question follow-up on De Beers again. I get it that like the participants in the bidding process are our industry veterans in the diamond industry. But at what point in time or at what parameters would you consider a spin-off or a spin-off to shareholders versus a demerger versus a sale? I mean, in terms of how much of that value deferral can you take versus a demerger. So I think just some criteria like the fertilizer, three points that will guide your decision, North Stars would be helpful. Secondly, on copper, and the thematic in general, streaming has been a big sort of theme for all the diversifieds this result season. And you are one of the few people whose cost is actually going up year-on-year from a guidance perspective, presumably due to lack of precious metals credits. Is there some rabbit in the hat that you have, which we are not aware of where you could kind of stream and surprise the market? Duncan Wanblad: Let me deal with that one first. There aren't really any rabbits in the hat because the streaming of the minor metals is a function of what's actually in the ground and the resources that we have aren't well endowed with silver and gold, unfortunately. The fundamental underpin to the costs going up, as John pointed out on his slide, are driven by two factors. The first of these is that we have strengthening producer currencies relative to the dollar. But at the same time, it also reflects the mix of products that we have during the course of 2026 relative to 2025. But that mix also changes back again in 2027. So we're producing from the lower grade, higher cost Los Bronces mine more proportionately than we would be from Collahuasi, just given that we're moving through that pushback phase and still reliant quite heavily on some of the stockpile production during the course of the year. But as we move now into in 2027 back into the fresh ore in Rosario, that cost profile changes again because we're in that better, higher-grade ore. And at the same time, in 2027, we will have moved more around the mine in Los Bronces, and we'd be producing predominantly from the Donoso 2, which is a higher grade phase of the ore and so the costs will adjust associated with that too. So those are the two primary drivers. And unfortunately, I don't have enough silver and gold in the ore bodies today. Quellaveco has some silver, by the way, and doing very well out of that. John Heasley: Can I just add on the cost point on the -- on that point on some silver at Quellaveco, our cost guidance doesn't assume those prices are at sort of current levels. So more consistent with a little bit more conservatism given volatility. So if we were to see silver prices stay up at sort of current levels, then there would be some upside to that cost guidance. Duncan Wanblad: Your question on the spin of De Beers is a good one and slightly complicated in the context of if we were to spin De Beers today, it would be a real challenge in the context of where markets are and where comparables are for a company like De Beers. And therefore, we've chosen to prioritize the strategic sale of the business. This does not remove the option of being able to list De Beers at a time in the future, but it's unlikely to be in the current market environment. And therefore, the sale is the priority that we are focusing on right now. Tyler Broda: Go to Myles, and we'll come back after that. Myles Allsop: Myles Allsop at UBS. With the demerger, is there anything that could go wrong now? I mean, how have your discussions with the Chinese regulators been progressing? Is there anything kind of that we should be mindful of? And then thinking about the $800 million, obviously, you're doing more work. That was an audited number. How much upside do you see to the $800 million? That's the first question. Duncan Wanblad: Myles, so there is actually nothing to comment about in terms of the China regulatory process as it is at the moment. It's pretty much going as we expected it to do at this particular point in time. There have been no odd asks at all, and we're just in the process of providing the information that they've required under the usual process at this point in time. So as I said, we expected fully that this would take sort of 12 to 18 months. Nothing has changed our view on that at this point. As far as the $800 million go, I don't have a new target that I'm putting out in the public at this particular point in time. Safe to say that cost management is a very key component of what we think makes a successful mining company going forward. And we are in the process of developing a really strong muscle on cost management throughout the business. And I think you should expect that to continue as we go forward. So whilst there isn't another target at this point in time, we are still absolutely working on bringing the overall operating costs in the business down. As John said, we are less focused on C1 type of costs because it's like a balloon, you squeeze it here, it pops out somewhere else. I care a lot about the total costs in the business, and that's what we manage on a day-to-day basis. Myles Allsop: And then maybe just a bit like the streaming question, infrastructure, and other assets in the portfolio, things like water assets, obviously with one at Collahuasi. Do you see -- are you actively exploring other opportunities to kind of optimize value through the portfolio? Samancor as well, I guess that's always one that kind of sits in the shadows and there's potentially a pathway to some restructuring there? Duncan Wanblad: Yes. So I suppose the simplest answer to your question is we look through the portfolio all the time and look for these value-accretive opportunities. And to the extent that they are genuine and are long-lasting in their effect and not just a sugar hit, we will pursue them pretty rigorously. So that includes having a look at the infrastructure options that exist throughout the portfolio too. But very often, you are kind of hooked up on the back of the fact that unless you have multiple offtakers on a particular set of infrastructure, it still all flows directly through to your balance sheet on a look-through basis. So it doesn't really change much other than add potentially a margin that you're going to have to swallow somewhere along the line. But where there are opportunities, where there are multiple offtakers and you can do something with the assets, and it doesn't compromise the viability of the current operations or the potential future viability of expansion or development of those businesses, we look at that very closely. Samancor, I mean, that's manganese. As I've said it before, that's a wonderful option that we've still got in the portfolio. It's producing really well. So now having come back after the cyclones in Australia a year ago. It's a nice little cash producer. I don't feel like I'm in a great rush to have to restructure anything on that at this particular point in time. I think it provides good optionality within the portfolio on a future basis. Tyler Broda: All right. Let's geographically go with Dom. Dominic O'Kane: Dominic O'Kane, JPMorgan. I just want to touch on Codelco. So you have a very strong and a very close working relationship with Codelco. So is there any update you can provide us with on your Andina conversations, but also how do you sense the engagement with Codelco is maybe changing for your organization and the industry more broadly? Do you see more opportunities for your group and the industry more broadly to work more closely and pursue those type of opportunities that Codelco has at its disposal? Duncan Wanblad: Yes. Thanks, Dom. Look, I mean, you're right insofar as we've had a very long-standing relationship with Codelco given that they have been a partner of ours for many, many years now on Anglo Sur, which is on Los Bronces, El Soldado and the Chagres smelter. And certainly, through many years of that sort of partnership, the operational relationships have been excellent. So even before we did the Los Bronces/Andina deal, we had to work very closely with them in terms of managing operational interfaces on the border of Andina and Los Bronces, and that was generally very effectively done by the two general managers and the people working for them. What we were able to do with the synergy and liberating that wages that exists between the two, dropping the huge expansion CapEx load on both sides of the fence, I think, is very much a function of how Codelco has been thinking for several years, certainly under the leadership of Maximo Pacheco. Given that these were hugely value-accretive opportunities for Codelco, very commercial in the way that they approached it and thought about it and just certainly given how I perceive it has been accepted nationally in Chile and within the various arms of government, I can't really see why that should change in the future. Of course, we know we are going into a phase now where there's a new government in Chile and there could be some changes in the leadership of Codelco. But I think what fundamentally underpins, what's happened today is a very hard core commercial rationale and Chile is still very, very positive foreign direct investment growth and copper growth, particularly. Tyler Broda: Jason? Jason Fairclough: Two quick ones. First one is on BHP. So you had a brief follow-up with them in November. Some investors were surprised it was so brief. So I don't know if that's a question for you or for the Board? Duncan Wanblad: And maybe for Mike. No, I mean there was -- it was a conversation that was had and neither party felt it was worth pursuing after that conversation. Jason Fairclough: Okay. Second one, just to follow up on our favorite salt mine. How do you justify putting more capital into this when you're trying to capture a re-rating based on being seen as more of a copper pure play? Duncan Wanblad: So it certainly is completely consistent with the strategy that we laid out and presented to the market in the middle of 2024. There's no new news in terms of this particular story, and it is the best value-accretive option that we've got for that asset. So it just makes sense in terms of option preservation to get it to a point where we rarely do know whether we can or can't take it forward from an investment point of view. Otherwise, it would be a massive write-off and that wouldn't make any sense given the direction of travel and what we understand of that asset today. Jason Fairclough: Can you just remind us the carrying value and the Sun Capital in the asset, Dunc? Duncan Wanblad: John, can you? John Heasley: Yes. We've -- the carrying value today is just around $2 billion and total invested capital over the period is about $5 billion. Tyler Broda: Matt, please. Matthew Greene: It's Matt Greene at Goldman Sachs. Probably just continuing Duncan with Woodsmith. You touched on the fact that you want to get through the sandstones to get to a technical point to underpin the feasibility study. You're now going and seeking $0.5 million to go that little step forward. So it sounds like this agreement with Mitsubishi that you're still taking on a lot of the risk here. So what do they -- do they need to see anything in particular here? And I guess just when it comes to bringing in further partners and syndicating here, are you -- what are you looking for in a partner? Because -- is this just a financial partner? Or are you looking at someone that's going to take perhaps disproportionate risk on the marketing side of this product? Duncan Wanblad: No. So I think Mitsubishi are looking for exactly the same things that we're looking for in terms of a feasibility study. One is continued confidence in an ability to build the market for the product. And as I said earlier, they have developed an in-house capability to test that. So it's hugely validatory from our perspective that it's not just us in an echo chamber about how we think this product is landing in the market and how effective it is in the market. We've got a genuine independent view of somebody else who's trying to look at it through the same sort of lenses that we are. And of course, they are absolutely going to need to understand what the capital cost for development of this project is on a go-forward basis, and what the risk inherent in the development of that project is, and that can only be determined by a quality feasibility study. They do cost a lot these feasibility studies. I'm completely cognizant of that. And -- but the reality is that this was true for Quellaveco 2, slightly different scale, but we had to spend a lot of money upfront to fully characterize the risk that we had in that ore body and in the development of the infrastructure around that ore body to know for sure that we had a very high probability of meeting the capital costs within the contingency that we had specified for that project. And this is no different, right? I mean these are -- if you want a proper and a secure understanding of what these projects are going to cost and how much they are going to likely to be -- to return to you, you need to do the homework upfront. And so it is this trade-off of how much you spend upfront versus how much of a risk or a gamble you're prepared to take on imperfect information and data to go forward on a project. We elect to spend a little bit more upfront to get much better security of information and data that then defines not only the execution period of the project, but also the life of the project. And I think that, that was well underpinned by what we saw happen at Quellaveco, not only during the project development and execution phase, which is one of the very few projects in the industry in recent times that was absolutely on time and on budget. But not only that, it did kind of what it said it was going to do on the [ tin ] and reduced an 8-year payback period to a 4-year payback period. I mean that is real value going forward. And that's sort of what I believe Mitsubishi is looking at in the same way that we're looking at, very like-minded, right? Bear in mind, Mitsubishi is also our partner on Quellaveco. In terms of do we have criteria for other types of investors. So Mitsubishi now have an option to go up to 25%. They're not limited to 25%. So if they chose to, they could go more than that if they would like to. And we are absolutely open to bringing on at least one more partner. The idea here is that it's not only financial. I mean financial risk mitigation is a very big important part of that. That's exactly why we brought on a partner for Quellaveco. But at the same time, to the extent that we can leverage a partner's capabilities, particularly in the mid and downstream of this is where we'd like it to go. And as I said, Mitsubishi is developing that capability. They have a very strong trading capability in that business anyway. So they have access to markets and are learning quite a lot about the product, too. So it's that type of partnership that we would see as very valuable going forward. Matthew Greene: That's great. Sorry, if I could just have a follow-on on Collahuasi on the fourth line. Just to get your guidance next year, you had about, I think, $600 million on copper growth. Los Bronces was in there. Obviously, that's not happening anymore, and you had Collahuasi fourth line. There's no mention of that anymore. Should we read into that at all? This fourth line option has been floated around for 15 years or so. You presented your slides of how many options you have in the pro forma portfolio with Teck. If Glencore doesn't come play with QB, is there an option here that we could see the fourth line deferred again? Duncan Wanblad: If Glencore doesn't? Matthew Greene: Obviously, you want to get a QB scenario here. But is there a point that you actually decide as Anglo, you do not want to pursue the fourth line because you have alternative options? Duncan Wanblad: No. Look, I mean, we'd never be churlish about this for sure. I mean what we're trying to do is, is mine the right resources in the right way and at the right time? The fourth line is an option, but it's certainly not the preferred option for Collahuasi. As I say, as I look at the pre-feasibility studies versus the concept studies and so on at this particular point in time, there is a much better option in terms of both risk and capital intensity by doing the combination of Quebrada Blanca and Collahuasi. I mean I would hope that all the partners would see it that way as we move forward. And certainly, I mean, that has been fundamentally the driver of the thesis for Collahuasi on all sides of the fence for a long time. It's -- now it is fundamentally how do we set up a new shareholders' agreement? How do we share the value of the synergies, and that's the negotiation. Tyler Broda: We go to Chris. Christopher LaFemina: Duncan, it's Chris LaFemina from Jefferies. So first, Jonathan mentioned yesterday on the call that you received U.S. regulatory approvals. You mentioned it again today. Is that like full Hart-Scott-Rodino, DOJ, FTC, U.S. regulatory approvals are done, which, in my opinion, would be a major step forward because of the fact that copper is a critical mineral now as per Congress and Teck's biggest shareholders are Chinese. I thought that would be a hurdle to getting this across the finish line. So are you fully done with U.S. regulations is the first question? Duncan Wanblad: Yes. Well, certainly, all the regulations that we needed to have applied for consent under we have at this particular point in time. The only two outstanding are South Korea and China. Christopher LaFemina: And then secondly, on Moranbah North, I think back in August, you said the run rate was costing you $45 million a month or something that was 6 months ago. In the last couple of months, has it been similar to that level? And then with the phased restart of the longwall now, and I think you referred to it as a structured restart of the longwall, what exactly does that entail? And what are the cost run rates on -- as you're ramping this thing back up? Duncan Wanblad: Okay. John's probably got exactly the numbers, but of course, they will be lower for two reasons. One is from November, Moranbah South -- Moranbah North got back into production in a limited fashion, but there is actually coal being cut and it is being sold. That's point one. Point two, it's being sold into a higher price environment at the moment, which is also pretty helpful. But specifically, to your question about what is actually happening in terms of the ramp-up again at Moranbah North. First of all, the permission that we got to restart the mine in -- at the end of October last year, so really restart in November was conditional on the fact that when we were actually cutting coal with the longwall, we didn't have anybody underground. Until such time as we got far enough away from what was believed to be the source of the incident. And during that period, therefore, we had to remotely operate the longwall, which is a good thing, right, because that's generally a more productive way of doing it over time. But because if you have a roof fall or anything that sort of impacts the whole chain and the longwall and so on, you have to stop. We had condition that said we had to see what happened to the atmosphere, the environment down there. They had to get to sort of stable levels in terms of carbon monoxide and then we could send people down. And so the gap between a stop and a restart was anywhere between 6 and 12 hours. So it's pretty unproductive. We are now, as of the beginning of February, in a position that we can run the mine completely unrestricted in that context. We have an agreement with our own workforce to be about 120 meters away from where that incident occurred before we actually start running it in an unrestricted sort of fashion. We're at about 90 meters now. So another few weeks to a month is where we would now then be able to just start ramping up under normal conditions with the natural variations, which are attributable to that type of ore body. Tyler Broda: Can we go to Alain quickly, if that's all right. And we keep it to one question from here on, as we've only got a few minutes left, if that's okay. Alain Gabriel: One question from my side, Duncan, is granted, you've got your hands full with completing the Teck transaction, but you've also got a very capable project team at Quellaveco. Do you see opportunities to leverage their capabilities in exploiting inorganic options such as partnership with other majors in Latin America where you can best utilize this team? Duncan Wanblad: Alain, you are quite right. I have an absolutely capable team across all fronts. And certainly, [ Alan ] and the projects team are looking for every opportunity that they can as well as Helena and the business development team. And to the extent that there are opportunities for us, we would, of course, engage in those. They would have to fit all the criteria that we have in terms of how we allocate capital, how we manage risk in the business going forward. We don't have any external options that are on the table that you don't know about today in that space and particularly not in Peru at this point. Tyler Broda: Tony? Anthony Robson: Tony Robson, Global Mining Research. Possibly for John. Carrying values for De Beers, $2.3 billion. Could you remind us, please, I'm sure it's in the accounts. Is that before or after any debt within De Beers? Or is it net or gross? And secondly, any -- given it's a discontinued asset and you're much closer now to realizing its value or knowing what its value is, any accounting IFRS rules that say you have to market to market? So is that -- but I still assume it's on future prices, cost discount rates and so on, your $2.3 billion. John Heasley: Yes. So the $2.3 billion is on an enterprise value basis. So of course, there is some intercompany funding within De Beers, but from a valuation perspective, that sort of nets out that sort of some capital from an Anglo American perspective. So the $2.3 billion, which is 100%, remember, not the Anglo American share is on an enterprise value basis. In terms of the accounting, then you have to sort of look at the fair market value and the value in use when you're doing your impairment assessment. So you have to take both of those things into account. So there is no absolute requirement to mark-to-market, but you, of course, have to take into account information you have around what that market value could be as you are forming the impairment assessment. Tyler Broda: And we go to Ben and Alan quickly here. Benjamin Davis: Ben Davis, RBC. Just on De Beers, I was wondering if you could give us any color on the potential bidders. Has that settled down now? Has that bedded? It feels like we've had a lot of media reports of various government interest, consortium interest and how well financed those are? And also, are those consortium include governments, et cetera? Duncan Wanblad: So they're all consortia that are involved. Some of them include governments and some of them don't. So there is a possibility that there will be -- our share will be sold in three parts potentially or two parts potentially. That depends on where we get to in the negotiation in the next few weeks. Tyler Broda: Grant? Patrick Mann: Patrick Mann from Investec. Can I just ask a little bit more on the time line? So it looks that the optimal scenario here would be dispose of steelmaking coal, close nickel and De Beers before Anglo Teck closes at the end of the year and pay the special dividend. Are you confident in the timing of that De Beers thing? Or could we see a scenario where Anglo Teck closes and you're still trying to exit De Beers post that fact? And then I understand that your -- still your best estimate is 12 to 18 months. But given there's only two outstanding regulatory requirements, I mean, what is the soonest this could happen? I mean, could we wake up in a couple of months and it's done? Duncan Wanblad: There is nothing in terms of the Anglo American portfolio restructure that is contingent on the completion of the deal with Teck. So the sequence that you described would be absolutely ideal if indeed we could make that happen. But there's no contingency of that to -- or contingents of that to the completion. So the consequence of that is that it is highly likely if the deal closes in that 12-month window, so around about September or so of this year, that De Beers will still be in the portfolio. I'm targeting, of course, to have it sold at that particular point in time, but it then will be running through its statutory and regulatory processes for completion. So it would be in Anglo Teck's portfolio until such time as it was gone. In terms of the 12 to 18 months, I mean, I think theoretically, that there's not much change in that 12-month time. And therefore, that is the most likely period where we would expect it to be completed. Tyler Broda: Very good. I think is that -- are there any other questions left in the audience? There aren't. Okay. Well, in that case, thank you very much for all of your questions at the end of a very long week. We really appreciate it. And I look forward to following up with you in due course. Thank you. Duncan Wanblad: Thank you.

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AKBLF 2025 Q4 财报电话会议

Per Plotnikof: Hello, and welcome to the presentation of ALK's Q4 and Full Year 2025 Results. My name is Per Plotnikof, I'm Head of Investor Relations, and thank you all for joining. On Slide 2, I will present the speakers and agenda for this call. And with me today are CEO, Peter Halling; and CFO, Claus Steensen Solje. Peter and Claus will walk you through the Q4 and full year highlights, market and product trends as well as the full year financial performance. Then we will provide an update on the strategic progress and priorities before presenting our outlook for 2026. As usual, we will end with a Q&A session. And to get us started, I'll hand you over to Peter on Slide #3. Please go ahead, Peter. Peter Halling: Thank you, Per, and thank you all for joining the call. We delivered a solid performance in the fourth quarter, leading us to end 2025 at the very top end of our latest outlook. So let me start out by highlighting 3 key strategic developments in the quarter. Firstly, the pediatric rollout of our house dust mite and tree pollen tablets, ACARIZAX and ITULAZAX, provides wider access to prescribers in key markets and continue to perform very well. Secondly, the European rollout of EURneffy or just neffy continues following our initial launch in Germany in late June, At the end of 2025, EURneffy achieved an 18% value share in Germany. And since then, we have now also launched in the U.K. and by year-end, market access were also in place in Greece, Denmark, Slovenia with launches expected shortly. While we're still in the early phases, the initial market response to neffy supports the product's long-term potential. At the same time, established clinical practices still favor traditional anaphylaxis treatments, and we'll continue working diligently with the medical communities to drive adoption. Most recently, we received a positive opinion in late January from the European authorities for the approval of the 1 milligram version of EURneffy for emergency treatment of anaphylaxis in children weighing 15 to 30 kilo. Thirdly, we continue to make good progress across our existing and newly established partnerships in China, Japan and the U.S., both in terms of execution and preparing additional activities for 2026. These developments will be covered later in the slides. Now turning to the financials. Revenue in Q4 increased by 17%, driven by strong performance across all geographies and with tablets in Europe and anaphylaxis as key drivers. EBIT increased by 88% with a margin of 22%, as expected, reflecting continued strategic investments in commercial initiatives to support future growth and innovation across markets. With that, I will now move to the full year picture on Slide 4. 2025 became a landmark year for ALK, and we clearly exceeded our initial expectations for the financial performance. Revenue grew by 15% in local currencies to DKK 6.3 million (sic) [ DKK 6.3 billion ], which is USD 1 billion, driven by double-digit growth across our sales regions. And importantly, we are proud that we also hit our long-standing target of 25% in '25. This is a big achievement for the company, 25% EBIT margin and 26% last year. So let me highlight 3 full year milestones. The commercial momentum was underpinned by a solid expansion of our patient base. We treated 500,000 patients more in '25 so that a total of 3.1 million patients are now treated with ALK's products. This was made possible not at least through the continued expansion of our tablet business. For example, the rollout of ACARIZAX and ITULAZAX for children helped broaden the patient inflow and adoption across the tablet portfolio. In anaphylaxis, the main growth driver last year for ALK, but also on top of it, we saw positive contribution for EURneffy, speaking to the portfolio strategy of ALK. And importantly, this is consistent with the strategic direction we have followed since 2024. Key in executing on Allergy Plus is expanding the addressable market, broadening the patient reach, especially through the pediatric indications, but also leveraging partnerships to help even more patients. As one example, in China, we have successfully transitioned sales and marketing activities to our new partner, GenSci. And at the same time, we are further strengthening our profitability. EBIT increased by 53% and the EBIT margin improved to 26%, supported by higher sales, improved gross margin and diligent cost control. This also marks the delivery on our 25% in '25 ambition and reinforces our commitment to maintaining an EBIT margin at around 25% while we continue to invest in our continued growth. Encouraged by this strong momentum, the Board of Directors recommends a dividend payment of DKK 355 million for '25 or 30% of the net profit after tax, in alignment with our capital structure and long-term ambitions. So on that note, I'll hand it over to you, Claus, for the market review on Slide 5. Claus Solje: Thank you, Peter. First, let's take a look at the performance across our sales regions and then on the different product groups. Let's start with Europe. Europe remained our main region with 71% of group revenue. We saw 14% broad-based growth across the portfolio and geographies, including in our largest markets, Germany and France. Demand was solid and market conditions were largely stable. Growth was primarily driven by tablets up 19%. Volumes increased especially on a good inflow of new house dust mite patients on ACARIZAX supported by the buildup of patients who had started on grass pollen tablets in prior years. The new pediatric indications for ACARIZAX and our tree pollen treatment ITULAZAX also added positively to the growth. Overall, ACARIZAX and ITULAZAX were the biggest contributors, while our grass treatment GRAZAX continued to grow steadily. Performance was particularly strong in Central Europe, including Germany, France and several Eastern European countries, and the U.K. In the U.K., we continued to progress market access for our key tablet products. ACARIZAX and ITULAZAX became the first AIT tablet treatments admitted to the National Health Services or NHS systems with general reimbursement. This is an important step in what has historically been a low penetrated AIT market. We are now working to extend these approvals to include children while also progressing to make GRAZAX available within the NHS. It is also worth noticing that in contrast to 2024, pricing adjustments had a limited impact in 2025. And this year, tablet sales were only marginally impacted by pan-European trading dynamics among wholesalers. Combined sales of SCIT and SLIT drops were up modestly by 3%. SLIT drops continue to benefit from a growing prescriber and patient base in France, while SCIT were more muted. In our main SCIT markets, Germany and the Nordics, patient initiations were, to some extent, impacted by patients choosing tablets over SCIT for the indications covered by our tablet portfolio. Finally, anaphylaxis and other products grew strongly by 34%, driven by Jext on solid execution, tender wins in Southern Europe and competitor supply issues. We also saw a positive although modest contribution from the initial EURneffy introductions in Europe. This growth also underlines the value of having a portfolio approach in anaphylaxis. Turning to North America. In North America, revenue gained growth in 2025 and increased 19% driven by tablets and anaphylaxis and other products. The U.S. legacy business recovered from last year stagnation and growth was driven by continued adoption among existing allergist prescribers, and to a minor extent, uptake among pediatric prescribers. Canada sustained a higher growth rate. Here, tablets remain the main product line and the growth reflected a sound underlying demand, supported by the children indication for the house dust mite and tree tablets. The 34% growth in anaphylaxis and other products revenue was driven by cost compensation from ARS Pharma related to the co-promotion of neffy in the U.S. together with higher sales of life science products as we continue to gain customers on our higher-margin solutions. Let's turn to International markets. In International markets, revenue increased 16%. Tablet revenue growth was 8% with continued positive contribution from smaller markets across the Middle East, Southeast Asia and India, while revenue from Japan was impacted by phasing of shipments, especially in the second half of the year. In-market demand in Japan remains strong, and our partner, Torii, now part of Shionogi, continue to grow sales by double digit, although capacity constraints still limited its ability to fully meet demand for CEDARCURE tablets. As a new facility has recently become operational, we expect Torii to increasingly be able to supply higher volumes to the market. China remains the largest SCIT market in the region, and revenue increased as we continue to normalize shipments following the renewal of our import license. In China, in-market sales also continued to grow by double digits, supported by the ongoing expansion of the prescriber base at hospitals. Now let's turn to a brief update on the product lines on Slide 6. In 2025, tablet sales grew by 17%, reinforcing tablets as our primary revenue stream. Growth was largely driven by the expansion of the patient base, mainly in Europe and Canada with pediatric launches of ACARIZAX and ITULAZAX adding to the momentum, as mentioned earlier. Overall, the number of new patients starting on tablets increased by well above 10% during the year, which bodes well for the continued solid growth in 2026. SCIT and SLIT drops delivered a 5% sales growth for the year based on resumed shipments to China, offset by the previous mentioned conversion to tablets in Europe. Finally, anaphylaxis and other product sales increased by 34%, mainly driven by a 58% increase in anaphylaxis sales. This was mainly related to increasing Jext sales although neffy also contributed to that growth. Now let's turn to Slide 7 for the full year financials. Revenue for 2025 increased by 15% in local currencies to DKK 6.3 billion. It is marking the first time that ALK exceeded DKK 6 billion in annual revenue. It also represents the seventh consecutive year of growth, with results clearly exceeding our initial expectations of a 9% to 13% increase in revenue. Gross profit increased to DKK 4.2 billion, yielding a gross margin of 67%, up 3 percentage points from last year. The significant and extraordinary improvement came from higher sales volume, a more favorable sales mix and production efficiencies, demonstrating that scale effects are increasingly materializing in the business. Capacity costs increased by only 6% in local currencies to DKK 2.6 billion. In comparison, capacity costs increased by 9% when excluding the impact of restructuring cost in '24. In line with our plans, R&D expenses increased by R&D -- by 15%, reflecting investments in our pipeline, including the peanut tablet development program, preclinical projects and the Phase III bridging trial with ACARIZAX in China. Sales and marketing costs increased by 3% and 6% when adjusting for the last year's one-off costs driven by tablet launches and the rollout of neffy, while administrative cost increased modestly. Unlike last year, capacity cost in 2025 did not include any one-off expenses. Operating profit, EBIT increased to DKK 1.65 billion and the EBIT margin improved to 26%, up by 6 percentage points from last year. This means that we delivered on our important profitability journey and 25% in '25 EBIT margin target, which we officially set back in 2021 when the EBIT margin stood at just 4%. This expansion of the EBIT margin by more than 20 percentage points has been accomplished at the same time as we have invested significantly in growth, reflecting disciplined prioritization throughout the organization and allocation of resources towards the most impactful growth levers. Free cash flow was positive at DKK 1.4 billion compared with negative DKK 204 million in 2024. The improvement reflects the higher earnings and an upfront payment from GenSci of DKK 244 million. In addition, 2024 included a DKK 1 billion license payment to ARS Pharma and DKK 115 million related to the PRE-PEN acquisition. 2025 investments primarily reflect the buildup of capacity for tablet production, upgrades to legacy production, a milestone payment to ARS Pharma related to the first commercial sales of EURneffy and other infrastructure investments. With this, we conclude our operations review of 2025 and turn to Slide 8 for a closer look at execution of our Allergy Plus strategy. Please go ahead, Peter. Peter Halling: Thanks, Claus. So before diving in to our strategy progress, I would like to address the change in management announced this morning. Henriette Mersebach will step down from her position as member of the Board of Management and Head of Research & Development. Her departure is by mutual agreement, and this is a strategic leadership decision focused on the long-term needs of the business. We have appointed Henrik Jacobi, ALK's former Head of R&D, as a Special Adviser to the executive leadership team reporting to me, and we have initiated the search for a new Head of R&D. I would like to thank Henriette for her contributions over the past 3 years. She and her team secured important regulatory approvals, including for our pediatric treatments, and also advanced our peanut allergy program, among other achievements. We remain committed to our ambitions in our different therapy areas and in particular, the development in food allergy as well as other disease areas. So now looking at our progress in Allergy Plus. We entered 2025 with a clear focus on launching our respiratory allergy tablets for children. And we have taken important strides forward. Supported by the children launches, we expanded both our prescriber and patient basis during the year, increasing the number of patients treated with ALK's products by around 0.5 million or 500,000 to an estimated 3.1 million. The majority of this increase, around 300,000, came from tablets, including children and adolescents. So tablets remain an important driver for growth going forward. We remain on track towards our ambition of helping 5 million people every year by 2030. Today, the house dust mite tablet, ACARIZAX or ODACTRA in North America is approved for children in 30 countries and launched in 21 of them. Our tree pollen allergy tablet, ITULAZAX or ITULATEK in North America is approved for children and adolescents in 20 countries and launched in 13 when including the very recent launch in Norway just a few days ago. These rollouts have reshaped our prescriber base. By year-end, more than 4,000 prescribers in our directly served markets had already prescribed one of the 2 tablets to children, and we continue to see strong cross-tablet adoption. In key European markets, more than 90% of pediatric ITULAZAX prescribers also prescribe ACARIZAX. And in Germany, among other countries, pediatricians have emerged as an increasingly important prescriber group. In the U.S., we expanded our reach in the pediatric segment with the co-promotion agreement with ARS Pharma. In the U.K., the admission of ACARIZAX and ITULAZAX to the NHS with general reimbursement represents an important structural step in a historically underpenetrated AIT market with further work ongoing to extend access locally. We also made good progress with our 2 new partners, GenSci in China and Shionogi in Japan, following the acquisition of Torii in '25. We see a strong commitment from both partners to further develop both the Chinese and the Japanese allergy market, respectively. Looking ahead for 2026, our key priorities in the respiratory therapy area will be to maximize the value of the tablet portfolio. This means continuing the rollout to children in the markets where we've already secured access to prescribers. At the same time, we expect to launch tablets for children in additional markets so that adult, adolescents and children all can benefit from our treatments, no matter where they live. In anaphylaxis, neffy is a strategic enabler of Allergy Plus. In 2025, we have moved into early commercial execution in Europe and in North America. The co-promotion agreement with ARS Pharma in the U.S. is a lever to expand our market reach and build further insights. For this year, our focus is to succeed with neffy. We expect 2026 to be a buildup year focused on driving market access and initial rollout. In practical terms, that means continue the market-shaping activities across geographies and patient groups and build a clear market position that allows us to move from introduction to broader commercial execution. We will do this with a combined portfolio approach where we bring together both neffy and Jext to serve different patients and channel needs and to further strengthen our overall footprint in emergency allergy care. So let's continue to Slide 9. In food allergy, we initiated a Phase II clinical trial of our peanut SLIT tablet, which has received Fast Track Designation from the FDA. We are on track to report Phase II top line results in Q2 this year. Our focus for '26 is to advance the peanut program into progressing it into Phase III, of course, again, subject to positive data coming out of Phase II. In addition, we progressed preclinical programs in new disease areas, and our partner, ARS Pharma, initiated a Phase IIb trial with neffy acute flares associated with chronic spontaneous urticaria. We also have the rights for this indication in our territories. And finally, we'll continue to invest in our infrastructure to be able to scale up ALK. This includes investments in tablet production capacity, IT and AI. We'll also continue to explore further business development and partnership opportunities. This could be both commercial stage as well as research stage opportunities. So in short, 2026 is all about continued execution, and we have a strong foundation. ALK is in a unique position to sustain growth for many years to come to the benefit of an increasing number of patients suffering from severe uncontrolled allergies. So with this, I'll hand it back over to you, Claus, and the full year outlook on Slide 10. Claus Solje: Thank you, Peter. So for 2026, we expect to continue our trajectory of double-digit revenue growth, while the EBIT margin is planned to remain on par with our long-term earnings ambitions. First, revenue is expected to grow 11% to 15% in local currencies and the EBIT margin is expected at around 25%. Let me take you through some of the main assumptions. Revenue is expected to grow organically in local currencies across all sales regions and product groups. Growth will predominantly be volume-driven. The lower end of the range reflects a potential negative impact from price and rebate adjustments, mainly in Europe, and less growth in anophylaxis and SCIT. The upper end assumes stable price and rebate conditions and potentially upsides related to tablet and anaphylaxis sales. As usual, the timing of product shipments to China and Japan may lead to quarterly fluctuations. Tablet sales are expected to grow by double digits across sales regions, fueled by continued expansion of prescriber and patient bases, naturally with children and adolescent projected to account for a higher share of the sales. Anaphylaxis and other product sales are expected also to grow by double digit, led by the continued commercialization of neffy. SCIT and SLIT drops revenue is projected to grow by single digits driven by higher SCIT volumes to China, modest volume growth in Europe across SCIT and SLIT drops and improved SCIT pricing in North America. The gross margin is expected to decrease slightly as the 2025 favorable volume and mix, especially higher tablet sales in Europe, will be offset by growth in partner-related revenue in Japan and China at lower margins as well as increasing neffy sales, which also holds lower margins. Production efficiencies, reduced scrapping and procurement savings are expected to largely compensate for inflation. Capacity cost to revenue ratio is expected to remain unchanged as we will reinvest the benefits of increased scale into the key strategic growth opportunities. R&D expenses are planned to increase but remain at around 10% of revenue. Sales and marketing expenses are expected to increase while administrative costs are planned to decrease slightly. Finally, free cash flow is expected to be positive at DKK 800 million to DKK 1 billion. CapEx is projected at around DKK 500 million with a focus on production capacity expansion and IT infrastructure. Potential changes to international tariffs are not expected to material impact growth or earnings given our geographical footprint. To sum up, we expect 2026 to deliver continued volume-driven organic growth while we keep investing to support our long-term ambitions. And with this, I would like to hand it back to you, Per, and Slide 11. Per Plotnikof: Thank you, Claus, and thank you, Peter. And this concludes our presentation, and we will now open up for the Q&A session, and I kindly ask the operator to go ahead, please. Operator: [Operator Instructions] The first question today comes from Thomas Bowers with SEB. Thomas Bowers: So what level of contribution should we think for the pediatric indication here for your 2026 growth guidance? And given the early launch trajectory, any first stakes here on how we should think about the peak potential here? And then secondly, can you maybe just add a bit of flavor? You did address this in the prepared remarks, but maybe there's a split here between specialist and pediatricians among those plus 4,000 prescribers. And how does it look like now with the high-volume pediatric prescribers at this point? So any color here will be very helpful to us. And then lastly, just in regards of the pricing impact or the pricing rebate impact. So I understand that France is mostly a done deal here. So is that part of your sort of midpoint growth guidance? And how should we actually think about the impact when you look at sort of the competitive situation in France? Is there -- are we looking at potentially even sort of a price parity here on SCIT drops and tablets? So I guess the question here is whether there maybe be some sort of any dynamics that could give you any potential some headwinds or tailwinds in France in the wake of this price adjustments? Peter Halling: Thomas, Peter, I think we caught them all. I'll start out, and I'll have Claus and Per jump in as well. But let me start on the contribution from peds and the peds potential. I know last year that we gave an indication of 1% to 2% from the peds and the 1% on neffy or less than 1% on neffy and then we upgraded. We are not guiding on this. But what we can say is that we expect it to be higher given the continued positive progression of the business. Then you cut out a little bit. So if I'm not answering 100% correctly on your second question, the specialist versus peds question. I think basically what we are seeing is obviously, as we also mentioned here, with the 4,000 that this is a new development which is positive. I do think that what's important and what we're also learning is where allergists are fully focused on allergies, then do remember pediatricians are treating a multitude of diseases and different types of patients. So even though that we see a good progression and we talk typically around 25,000 prescribers normally, then with the pediatricians on top, it's not a 1:1. But obviously, we are very positive that this continues and the interest is there because that gives us the future prescriber expansion and allow us to do more for children going forward. So if I didn't answer completely, then please ask again. And then finally, on the pricing, I'll let Claus talk. I can talk to the last part on the competitive side. We don't really comment on that. But obviously, there is a rebalancing also in the French market, which we believe, is overall putting things more straight, but that's as much as we can say at this stage. And maybe you want to talk more about the impact? Claus Solje: Yes, I can do that. Thanks, Thomas, for the questions. Related to the pricing and what has been included kind of in our midpoint or in our guidance, then you are right, that the French price decrease that we saw at the end of last year and in the beginning of this year, '26, which was not sustainable, had really big, you can say, impact on us, we have included into the guidance for this year. So when we are talking about the rebates, especially in the lower part of the guidance, it's, of course, very much the German rebate. It can also be other smaller ones across the world, especially in Europe, but it's, of course, the big one in Germany that can really impact us. So yes, the French price has been included into the guidance. Operator: The next question comes from Benjamin Jackson with Jefferies. Benjamin Jackson: I guess my first one would be on peanut allergy. We're obviously creeping closer to the top line results in the study. So what should we expect from you in terms of the communication around this? Are you going to provide us with any details at the time of the headline? And also what are you looking for beyond just the actual signal seeking in this study? Are you trying to meet an internal bar to take it forward? Or it's just simply a good -- a signal enough for you to continue exploring that? So that's my first question. The second one, just to back off that, obviously, respiratory tablet has been a bit tricky in the U.S. given the dynamics there. So how should we be thinking about a potential food allergy tablet in the U.S. and where -- and what can be done to better establish that market there? And then third and finally, I imagine quite a short answer, but is there any kind of more commentary you can provide about the potential for neffy and CSU in your regions? Obviously, your partner has been quite vocal about how big they see that opportunity. But what are you seeing it for you? Is it something you're willing to get behind and potentially actually fund as well? Obviously, no requirement to, but any thoughts around that would be great. Peter Halling: Perfect. Thanks, Benjamin. Per, if you take the first one on the communication, I'll answer the last 2. Per Plotnikof: Yes. So thanks, Ben. So on the communication of what to expect from our accounts when we have top line results here later in the second quarter of this year. As we do consider this as material to us, we will be putting out a separate company announcement on the news just to confirm that. And of course, when we look into the data, we will try to give as complete and a meaningful picture as we can once we've gone through the top line results. And the -- and then, of course, the ultimate aim of this study and the results is to establish a clear proof-of-concept for the peanut tablet and to guide our decisions related to the design of the Phase III study. So that means what exact dose will we be going with, what's the treatment regimen going to be looking like beyond titration schemes, potentially also what will be the treatment duration we see in the maintenance phase, et cetera. So there will be a lot of information. And obviously, also the safety profile of the drug. Sorry, I forgot that. So there will be a lot of information that we can draw out of this Phase II. And of course, that will inform our Phase III plans that in the best of all worlds, we can initiate at the end of this year and then have results read out maybe in '28 and then with the submission that year and hopefully an approval late '29 and then launch and roll out into the 2030s. I hope that clarifies that one. Over to you, Peter. Peter Halling: Okay. Thanks, Per. So your question, Benjamin, on respiratory tablets and kind of the comparison with U.S. peanut. I think it's -- first, it's 2 different ways of looking at things. You have to look at the economics for the prescribers behind the products. And also that today for the tablets, there is an alternative to the treatment, whereas U.S. peanut tablet will both take into account the patient needs, first and foremost, but also looking at how do we make this attractive also to the prescribers. So -- and then thirdly, on that one, you have to remember that there are really few alternatives and the ones that are in the market are different, both in terms of treatment regimes potentially also from a patient pool, et cetera. So this is a very different way of looking at it. So rather than looking at the modality or the technology, if you wish, whether it's an injection or whether it's a tablet or not, then look at the patient pool, the prescriber pool, the economics and the op-dosing of the tablets. So I just want to make sure that that's clear. So that's the U.S. So in other words, to keep it pretty clear, we believe that the tablet potential for the allergists or with the allergists is quite intact and it's broad-based and not a subgroup. It's broad-based. Then you had a question around neffy and CSU. And we also see the numbers, and we're also obviously excited about what we see everybody else get to. I'll just caution because this is a market which is very new and needs to be developed. But what we do see and where we do agree with the analysis out there, that is we do see the patient population, and we do see the need, and I think that's very important. But there are major differences both between how you treat and use products in the U.S. and in Europe. So emergency room treatment, the cost of an emergency room visit in the U.S. versus Europe, et cetera. So there are some differences and we need to understand that better. And moreover, and importantly, we need to understand what would the product look like, what's going to be the final profile of the product, how is it going to work with the patients, and what does it -- what kind of impact will it have on the patients. So we need to understand that. And that's going to tell us what's the price points we potentially could get and how many patients can we actually reach. So we're still doing all of that diligence. But again, boiling it down, potential we see out there, we think it's very interesting and relevant for us, but we also have still a lot of learnings before we can assess how big this is going to be for ALK. Operator: The next question comes from Jesper Ingildsen with DNB Carnegie. Jesper Ingildsen: I have a few as well. Maybe also just on peanut, I mean, I'll be interested to hear your sort of like on how you see this -- the recent developments in the space, amongst others, GSK acquiring RAPT Therapeutics, and also Stallergenes taking proportion of the market. If this changes your view on the opportunity? And then secondly, on the departure of the Head of R&D, maybe just a bit more flavor here. What has led to this departure? And I guess there could be some concerns that's taking place just before the peanut read out here in Q2. But on the other hand, I also understand it's maybe more related to sort of like the longer-term pipeline. So I'd be interested to sort of like get a sense of what specifically with the long-term pipeline are we talking about here in terms of looking for a different profile? And then maybe lastly on neffy. So you highlighted in your report that you have captured about 18% market share in value in Germany in '25. Just be curious to hear like what you're seeing in terms of the volume terms? And also, have you seen any negative impact on sort of cannibalization on Jext in Germany specifically, but also overall for neffy what kind of growth contribution you expect in '26? Peter Halling: Yes. So thanks, Jesper, for the questions. I think they most likely ended up with me, all of them. So let me start out by commenting on peanut. Obviously, first and foremost, I think it's really good to see the high interest on food allergies or around food allergies. Specifically on the GSK RAPT, it is obviously a positive thing for us that a company like GSK shows interest in the space and also acquires a biologic like RAPT which is mostly a competitor to Xolair. The price point I cannot comment on, but obviously, more than $2 billion, I think, sends a signal, and this is my personal opinion, sends a signal that they find this market quite interesting. And that's a good sign for us. Again, I think we've said it all along, we welcome competition. Do remember that it's different pockets and different types of patients that the different products address, the same with DBV. So I think that's important. We think that the DBV progression is a positive when we start seeing building the market, including for toddlers, et cetera. And you also notice when you look at the data that there's actually quite a wide span of data points out there also in terms of efficacy, which we also find interesting. Then on PALFORZIA, it's been pulled from the market. I don't think it was a secret that initially was struggling, then Stallergenes took over and for whatever reasons that we are not aware of, they've kind of seen that this is not going as planned in the market, and hence, they've chosen to withdraw it. So I don't think there's a lot more we can say around that, except for the fact that we don't believe it's a matter of potential in the market. It's pertaining specifically to PALFORZIA. So I think that's on the peanut allergy. So -- and the food allergy space. It's a really interesting market, a lot of opportunity, and I think we have more to be done in that space. Then you asked about Henriette. Again, and just to be very clear, I also said it to the media, I think the key around this is this is a mutual agreement. This is good timing or the best possible timing. There's never a good timing for any of these things. But we are in a good position with our short-term pipeline. We believe we've made good progression both with the regulatory approvals we've had but also in terms of Allergy Plus, overall peanut, et cetera. We do believe and this was also what we said at the Capital Markets Day that when we look ahead, ALK wants to be present in a broader number of therapy areas, food, anaphylaxis, respiratory, potential new areas like urticaria. And part of that is also going to be partnerships, BD&L. And this is where we believe that as we have a very strong R&D organization, and we believe we have a solid early-stage pipeline, which we also have a good control of, where Henriette has been a major contributor, we believe that when we look ahead, also into the '30s, there's an opportunity to strengthen some of these activities further. And this is why we've said this is a good time to look for a profile that may have tried some of these activities in the past and could be a good fit with ALK. So nothing about Henriette's performance otherwise because we are happy where we stand. So I think that's the best answer I can provide you on that one. Then you asked about the neffy and the 18% value share in Germany. So obviously, like any other market, you see the swings depending on the season. Germany is slightly different than some of the other markets. This is more a venom market, which is in itself positive, where some of the other markets like the U.K., U.S. and Canada are more food allergy markets. But we have been positive to see that the mix of food and venom in Germany have provided us fairly quickly with that 18% value share. It's around 11%, 12% volume share in the market, and it's mainly been driven by a digital effort, which we also find positive and interesting. So I hope that answered most of your questions, Jesper. Operator: The next question comes from Sushila Hernandez with Van Lanschot Kempen. Sushila Hernandez: Could you share a bit more about ALK-014? Is it for IgE-mediated food allergies? And also at what stage of pre-clinical development is this asset? When could it potentially go into the clinic? And also maybe connected to the previous question, what kind of profile are you looking for, for your new Head of R&D? Peter Halling: Thanks. So Per, will you jump on the ALK-014? Per Plotnikof: So the ALK-014 program is an early stage program currently in preclinical development. And we work here with a different modality. So it's a [indiscernible] like antibody protein we work with. So it works upstream in the immune cascade, so to speak. So different modality. It's a biologic, still early stage. But we do expect, if everything goes well, that over the coming 1 to 2 years that this could be progressed into clinical development, if everything works out. So that's where we are on it. So it's also a different approach compared to our historic programs where they've all been allergen-specific programs. This is allergen agnostic. So here, it's also a molecule that potentially can be used in multiple indications if everything goes well. So right now, we're investigating in food allergy, but we're also investigating in other non-disclosed indications at this stage. More on that later. Super exciting program, but still early. Peter Halling: Yes. Thanks, Sushila. So let me just, again, on Henriette, I think I said most of it when Jesper asked. But the profile we're looking for is someone who have tried more broadly the partnership BD&L space, but also who can complement our broader allergy portfolio. So basically, you can say, Henriette brought in a lot of experience around the preclinical. We have a lot of good competencies around this. We feel that the organization and R&D in general, could benefit from a profile who has tried some of these other areas. So nothing dramatic around it in that sense and just a good time for making a potential change. So that's basically the background. Also just a note that Henrik Jacobi will be assisting ALK as a Special Adviser to help us also continue to progress the internal pipeline. So I think we are in a good position. I hope that answered, Sushila. Sushila Hernandez: Yes. That's clear. Operator: [Operator Instructions] The next question comes from Thomas Bowers with SEB. Thomas Bowers: So just a quick question on International markets tablet sales. So of course, I understand the phasing, the quarterly phasing here. But how should we look at, at least Q1, Q2? And then how much is actually still dependent on the Shionogi takeover completing, the stand-fill here? So of course, going from a rather weak Q4, are we going to see a bigger number here in Q1? That's the first question. And then on the gross margin outlook, of course, I understand the mix effect year-over-year. But are you still seeing an underlying improvement here also in '26? And maybe if you can address sort of what magnitude we're looking at here? And then last question, just on neffy. So to understand the 18% market share here in Germany, that's quite impressive, I think. So first of all, is there any specifics that is driving this? And also in regards to Canada, you're seeing a sort of a delay here. I'm not sure whether you expect this to be coming through here in the first half. But is there sort of a risk here that you will miss the back-to-school season? Or is that mainly the U.S. that is dependent on that compared to Canada? Peter Halling: Thanks, Thomas. Claus will take International markets and the gross margin, and I'll comment on neffy. So Claus? Claus Solje: Yes, I will thank Thomas. Related to the International markets and what we are seeing there from a growth perspective, then you should not expect a significant impact in the first half of '26. I suppose something about what you saw last year in '25 versus here in '26. You should expect the higher growth contribution from the International market shipments, Japan and China, to come in the second half of '26. So this is where you're going to see the significant impact coming from there. So don't expect -- there will still be shipments, no doubt about that, but don't expect, from a growth perspective, a big impact in the first half. That will come in the second half. If I then take the gross margin, just to go up a bit in the helicopter then, then yes, we had this 64% -- increase from 64% to 67%, quite significant and extraordinary than what we have normally seen in the gross margin. We aim at getting this 1 percentage point year-on-year improvement, that's in our plans. But due to the product mix and especially how we have sold tablets and the higher sales of tablets, especially in Q4 than what we had expected, but also this with the quarterly shipments between the International markets there and our partners, then we saw this extraordinary jump in our gross margin. As we have already said a few times related to the last quarterly announcement, then we should expect us to see a slightly decline here in '26 versus '25. And that is due to the mostly the increased sales of in the partnership. So when we do it with Torii, now Shionogi, and then GenSci in China, and, of course, the increase of our neffy with ARS, that is all coming with lower gross margin. And since that is a higher portion of our total sales, that will impact the gross margin negative. There's nothing related, you can say, to the underlying gross margin development. That is still positive, and we are still working on yield improvement and scrap reductions and so on, and we expect that to continue. So it is mostly our product mix that is going to impact the gross margin negatively, so to speak, in '26. I hope that explains. Peter Halling: On the neffy question and the market share, obviously, we've been positively surprised about the ability for neffy to win 18% value share in the market. Do remember, I think we also noted before that the German market is typically a smaller market, slightly different also both from a reimbursement and payer perspective than other markets. But it gives us obviously hopes also because we can see the composition of the prescribers in Germany is with general practitioners, et cetera. So it's not kind of what you would normally expect, which is, in this case, a positive. When we look at the U.K. and Canada, U.K., it's really about getting in on formularies in all 42 regions. And this is the hard work. We do believe once it's in and it starts, then it's going to be a growth driver for the company. But we don't see this happening as fast as one could hope. It takes time because it's a public process. Is it an issue with back-to-school? We don't know in that sense, but we have budgetedly conservatively around it. So we don't see the back-to-school being a major issue. But obviously, we'd like to see an uptick and an effect from the back-to-school, but we're not betting everything on it because we're also realistic on that one. Canada, again, another different -- you have the different provinces in Canada with different health care regimes. Firstly, we need to get the regulatory approval in place. We do expect that to happen here in Q1. And then if we can launch, then we should also be able to get on the back-to-school season in Canada. This is also going to be an interesting one where there seems to be a little more open as to get some penetration in the Canadian market. So again, a different market than U.K. and Germany. And then lastly, I'll just mentioned that we still are waiting on launching the 1 milligram in Europe, so for smaller children or children between 15 and 30 kg. So that's obviously also something we're looking forward to getting into the market. What I'm saying, Thomas, is, 2026 is, as we've previously said, a year where we're building up and continue to build up. We benefit from the full portfolio, but we do hope and expect that neffy is going to be an increasing contributor to the business. So I hope that gives you some answers and nuances. Operator: This concludes our question-and-answer session. I would like to turn the conference back over for any closing remarks. Per Plotnikof: Thank you, and thank you all for the good questions. Before we close, I'll just highlight our upcoming events and financial calendar on Slide #12, and we hope to see you in the near future in Copenhagen, London, Paris or in the U.S. As always, you are welcome to contact us if you have additional questions. And with this, we will end today's session, and thank you all for joining. Goodbye.

85天前Insight Analytics约5分钟阅读

TBCG.L 2025 Q4 财报电话会议

Operator: Hello, and welcome, everyone, to the TBC 4Q and FY 2025 IFRS Results Conference Call. My name is Becky, and I will be your operator today. [Operator Instructions]. I will now hand over to your host, Andrew Keeley, Director of Investor Relations to begin. Please go ahead. Andrew Keeley: Thanks very much, Becky, and welcome, everybody, to TBC Group's 4Q and Full Year 2025 Results Call. It's great to have you with us today. As usual, I'm joined on the call today by our Group CEO, Vakhtang Butskhrikidze; our Group CFO, Giorgi Megrelishvili; and we'll also be joined for Q&A by Oliver Hughes, our Head of International Business. We'll also start with a presentation from Vakhtang and Giorgi and then go to Q&A. And with that, I'll hand over to Vakhtang. Thank you. Vakhtang Butskhrikidze: Thank you, Andrew. Hello, everyone, and thank you for joining us today. I am pleased to present our results for the fourth quarter and the full year of 2025. Overall, we had a very good final quarter, bringing 2025 to a successful conclusion. For the full year, the group delivered over GEL 1.4 billion net profit, up by 9% year-on-year with 24.2% return on equity. As for the final quarter, it was a record quarter in which we also printed our highest return of equity of the year with almost GEL 390 million net profit and 24.9% return of equity. It was an excellent final quarter for our core Georgian franchise with net profit up by 15% year-on-year and 25.7% return on equity, driven by a strong combination of robust loan growth and net interest margin and low cost of risk and strong cost controls. The quarter was more mixed in Uzbekistan as the changes in regulations that I have previously discussed meant the slight contraction in lending, impacting revenues and earnings. That said, taking the year as a whole, the team made a huge progress in scaling up the business, including 45% loan growth year-over-year, 67% revenue growth and almost 1 million daily banking Salom card issued and digital MAU topping 6 million. As a result of our strong operating performance and the solid capital position, the Board has declared a final dividend of GEL 3.87 per share, bringing the total 2025 dividend to GEL 8.87, which is a 10% increase year-on-year. I won't dwell too long on this slide, but the main point I want to get across is that 2025 is another example of the TBC's long-term track record of delivering a nice combination of growth, profitability and returns. Moving to our 2025 targets. Overall delivery against most of the -- overall, delivery against most of these targets has been good. Our digital monthly active user numbers have almost doubled over the past 3 years to 7.3 million. We have also consistently maintained return of equity above our 23% target level. Similarly, we have been paying out at the top of our guided range. As we discussed at the third quarter results, unfortunately, net profit in 2025 came in lower than targeted due to some challenges in Uzbekistan. That said, taking the past 3 years as a whole, we have still grown our group's earnings by over 40%. We also delivered 90% loan CAGR in Uzbekistan above our target and comfortably surpassed our 5 million monthly active users target. Turning now to Georgia. As you can see, the Georgian economy remains strong with the real GDP growth standing at 7.5% in 2025. We see growth starting to normalize, but our economies and IFIs like Monetary Fund and the World Bank still expect around 5% growth in 2026, which is not a bad figure at all. The inflation rate is slightly above NBG's 3% target, driven by the combination of a low base of effect from 2024 and elevated domestic and global pressures on food prices. That said, we expect the NBG to resume cutting rate this year as inflation trends back down. 2025 was a strong year for our business in Georgia. We had a number of good operational achievements through the year. This included our flagship daily banking TBC card hitting almost 1 million cards in issuance, a doubling of our retail brokerage customer base to over 100,000 and 50% growth in our market-leading affluent product, TBC Concept. We also saw a number of tangible developments driven by AI with our mobile application chatbot launched in September and already handling over 100,000 iterations a month with a 50% of floating rate. I like the next slide as it shows the highly consistent performance of our Georgian Financial Services business over the past 3 years as we continually delivering mid-20% return of equity. We continue to be a leading player across most of the key banking segments in Georgia. In 2025, our gross loans were up by 11% year-on-year. I'd like to highlight particularly strong performance in cash loans, a key focus area for us, where our loan book portfolio grew by 36%. Meanwhile, our Georgian customer deposits decreased by 12% over the same period. Digital engagement among our retail customers in Georgia continues to grow. Having brought our core banking technology platform in-house, 2025 was a year when we started to clearly see the benefits of having full control over all aspects of our digital banking. With faster deployments and the revamped customer experience, we have been strongly increasing our digital customer base. We added over 250,000 customers during the year, growth of 24% year-over-year. Engagement levels also remain very high with a 47% DAU to MAU ratio, and we continue to see very high levels of digital unsecured loans and deposit issuance. Now let's turn to our Uzbek businesses. Starting with the economy. The Uzbek economy remains highly dynamic with real GDP growth of 7.7% in 2025. Inflation continued to decline to 7.3% in December. Importantly, seasonally adjusted annualized monthly inflation is now below the CBU's 5% target, which we think will help enable interest rate cuts this year. Next slide highlights some of the key milestones in our Uzbek business in 2025. We scaled up our business in a number of areas during this year. In business lending, we have issued over 130,000 loans, while our BILLZ acquisition gives us access to more than 3,000 retail merchants, processing over $1.4 billion of transactions. At the same time, payment volumes have increased over 60% year-on-year to $9.2 billion. We have also had a great take-up of our daily banking products such as Salom and Osmon cards. We also now have an excellent 600,000 Payme Plus subscribers as we deepen engagement with our ecosystem customers. On the next slide, we have an overview of Uzbekistan's progress over the past 3 years. During this time, we have more than doubled our registered users to 23 million, and we have hit 6 million monthly active users. As I mentioned earlier, our loan book has grown at 90% 3-year CAGR, while our retail deposits have increased at 65% 3-year CAGR to around $550 million. As mentioned previously, we saw a softening of operating income and the net profit in the final quarter. But for 2025 as a whole, operating income grew at excellent 67%, while we returned our 18% return of equity. Next slide shows Uzbekistan increasing market share and the material contribution to the group. By the end of 2025, our market share of our retail loans and deposits stood at 4.2% and 3.8%, respectively, as TBC established itself as a top 10 bank in both retail loans and deposits. In 2025, Uzbekistan contributed 9% of the group's net profit and 20% of the total operating income. Before handing over to Giorgi, I'd like to mention a couple of other important pieces of recent news. As you may have seen, we recently announced some changes to our management team. I have decided to commit my time fully to my role as the Group CEO, which will enable me to focus more closely on overall group strategy, including our business in Georgia and Uzbekistan as well as exploring international opportunities. As a result, Goga Tkhelidze will take over from me as the CEO of TBC Group Georgian subsidiary, Joint Stock Company TBC Bank, effective from the 1st of March, subject to the regulatory approval. Goga has been Deputy CEO for 12 years, the last 10 years of which he has been running CIB and Wealth Management. During this time, he has built these businesses into a dominant franchise player today. I'm very confident that Goga will be a great leader for our Georgian business. The other news, as you probably already know, is that we will be holding our Strategy Day next week in New York on Tuesday, 24th of February. I very much like forward to welcoming you to this event. And for those who are unable to join in person, there will be a live webcast as well. With that, I hand over to Giorgi. Giorgi Megrelishvili: Thank you, Vakhtang, and thanks, everyone, for joining our call today. Now I'm going to take you through our full year and Q4 results. Andrew, if we move to the Slide 20, that shows our strong profitability. So the first quarter was a record quarter, again, where we delivered GEL 387 million net profit, up by 16% year-on-year. That translated into a very solid 24.9% return on equity and full year profit exceeded GEL 1.4 billion, up by 9%. And again, our return on equity was about 24%, precisely 24.2%. Now if we move to the next slide, Slide 21, that actually shows one of the key drivers of our solid profitability. Our top line increased by 15% in Q4 year-on-year. That was mainly driven by excellent performance in our net interest income. It was up by 23%. Our noninterest income remains flat, but that was mainly driven by very high FX revenues in Q4 last year, as you may remember. And on a full year basis, we also have a great 20% increase year-on-year, and that was driven both by net interest and fee and commission income. So now if we move to the Slide 22, like I'm very glad to see NIM actually retains at a very solid level, 7%, broadly stable quarter-over-quarter. That was supported by 6% Georgia NIM that actually stood its ground. And on a full year basis, we saw NIM increasing by 30 basis points. That was mainly driven by increasing share of TBC into our portfolio. So moving now next slide, Slide 23. So we are very much focused on our cost. As you can see, growth was very well contained both for the quarter and for the full year. In Q4 on year-on-year basis, it increased just 10% and on a full year basis, 18%. That translated into a decrease in cost-to-income ratio, both for the quarter and full year. On a full year basis, it landed at 37.5%, down by 40 basis points. Now moving to the Slide 24. I would like to touch on our credit risk. It's like we saw our cost of risk declining by 50 basis points to 1.1%. We saw this decrease in both Georgia and TBC Uzbekistan. That's a very nice dynamic to see. I would like to comment a bit on the Georgian cost of risk that was below our normalized level. The better risk profile was supported by model recalibration and higher recoveries. In '26, we do expect Georgian cost of risk to be at the lower end of our normalized range, around 80 basis points. Now move to Slide 25, our balance sheet growth. We see that also we had great growth into both our loan and customer funding side. Loans increased 12%, customer funding 13%, both on constant currency basis. However, the Q4 was also exceptionally strong by 5% up year-on-year and driven by Georgia an increase of 6%. Now next slide, Slide 26, our capital positions. And despite the high growth, we do maintain very healthy capital levels, well above regulatory limits in both countries. And now moving to Slide 27. Exactly the strong capital position allows us to distribute a decent level of capital to our shareholders. As Vakhtang mentioned, our Board has approved GEL 387 final dividend that brings full year dividend to GEL 8.87, 10% up year-on-year, bringing dividend payout ratio to 35%. However, we also completed -- just completed GEL 75 million buyback. And with this, we returned 40% capital back. On this note, I would like to thank you and open for Q&A. Andrew Keeley: [Operator Instructions] And yes, the first question is from Alex Kantarovich of Roemer Capital. Alexander Kantarovich: My first question is on OpEx. It was kind of flattish in Q4, which is fairly unusual given that normally banks have elevated OpEx in Q4 and so did you historically in the previous years. So can you comment on that? Second question is, can you give us a bit more color on cost of risk? It seems like NPLs were sort of steady and a bit elevated. And in Uzbekistan, cost of risk, whatever it was in the quarter, 8%, 9%, and you obviously guide higher cost of risk for 2026. So suddenly, you have this drop in Q4, which kind of caught my eye. And third question is on capital restrictions on cash loans. And clearly, your loan portfolio actually dropped quarter-on-quarter in Uzbekistan. If you can comment on the details, how cash loans compared to SME as kind of substitute and what we can expect going forward? Giorgi Megrelishvili: So Oliver, I'll take the first question on the cost and probably you can cover Uzbekistan cost of risk and cash loans. So to start on OpEx, it increased in Q4 10% year-on-year for Georgia, 18% for the group. But as I mentioned, we managed our cost very consciously. We spread our costs throughout the year. So it is what it is. It actually indicates our strong control of the cost that results in our very strong profitability. Oliver Hughes: Alex, it's good to speak again. Yes, on cost of risk, as you said, NPLs ticked up throughout the year. But in terms of cost of risk, if you compare third quarter to fourth quarter, as we previously signaled, it was -- it topped out in quarter 2, quarter 3 and then started to come down in quarter 4. So that was exactly as planned and communicated. So basically, we had a lot of tests that we've done in the latter part of, let's say, the second half of 2024, early '25 as we pushed into thin file segments, stuff that we've communicated thoroughly in the past, and that started to mature and come through the numbers in -- from quarter 2 onwards in Uzbekistan. So that topped out, started to come down. And the trend when you look at all of our leading indicators, means that, that will continue. There is some volatility for sure. Some of it is seasonal. So for example, in quarter 1, you always see a bit of an uptick, so numbers can be softer in quarter 1 for seasonal reasons, and that will be true again this year, but it will still be within our range, the corridor that we've provided of 7% to 10% in terms of cost of risk, and that trend will continue throughout the year. However, it has to be said that we are moving, pivoting during the first half of this year, as again previously communicated. So the loan book in terms of what we call ICL, instant cash loans, which is called micro loans in Uzbekistan is running off on the bank side, and I'll come on to that in a second when I answer your third question. And we are scaling up other products. So credit cards, business loans, and we'll be launching secured loans, hopefully, second quarter going into the third quarter, starting with auto loans. So the mix of the loan book is changing. Some of those are products which have been around for a while, but we're scaling. Others are new products, which we'll be learning and there'll be a different loan book mix and therefore, stuff moving around a little bit on the cost of risk side as we build and scale those businesses. But as I say, we expect our cost of risk to come in within the corridor as previously guided of 7% to 10%. On the third question, so we had some regulatory changes as obviously, we discussed a lot over the last couple of quarters in Uzbekistan. The Central Bank for a number of different reasons, including tackling inflation and bringing that down, including stimulating the growth of SME lending, including preventing the longer-term buildup of potential risks in consumer lending in the country, decided to cap the portfolio shares of various unsecured asset classes. So that covered auto loans, which have been -- the portfolio cap of 25% have been in place for a while. That added to that portfolio cap 25% caps on micro loans, credit cards, and that happened in April last year. And then in November, they decided to accelerate that by announcing risk weights, which have been reintroduced, also based on portfolio shares, and they come into force the new risk weights from the 1st of July this year. Again, we talked about this on the last call. So we are basically pivoting. So we've done a few things in order to make sure that we climb into the new structure of our loan book that the Central Bank wants to see in the medium term. So the share of ICLs, micro loans has been declining as we run off our loan book in that particular class on the bank's balance sheet. We have been ramping up credit cards. We've been ramping up business loans, and there's a couple of different products in terms of business loans. We'll be adding more during the course of this year. And as I said, we'll be launching secured loans in the next couple of quarters. So this means that the loan book is changing. That also explains what you saw coming through in terms of the numbers on the loan book, which dropped in quarter 4 last year. We expect that in the first half of this year, it will be -- maybe diminishing, maybe reducing a little bit more, the loan book or flat. And then as we go into the second half of the year, that will pick up again and we'll go back into growth. And we expect growth to be, maybe around 20%, maybe more for this year in total for the year of the gross loan book. Alexander Kantarovich: Okay. That's actually quite positive. So 20% for the year is positive. Andrew Keeley: Next question is from Piers Brown of Investec. Piers, can you hear us? Can you go ahead. Giorgi Megrelishvili: We can't hear you, Piers. Andrew Keeley: We can't hear you. Giorgi Megrelishvili: Yes, we may take another question and... Andrew Keeley: Yes. We'll come back to you, Piers, because we can't hear you. Can we have Dmitry from Wood. Dmitry Vlasov: Congrats on the results. I have 2 general questions, if I may. The first one is at this moment of time, I mean, at least in the end of the 2025, how many percentage of deposits in Georgia are still opened by Russians, Ukrainians and Belarusians? And since we are in the process of the negotiations, how much would that close if we would see a ceasefire or the end of the war? That's the first question. And the second one, I noticed that on your macro forecast for Georgia, specifically, you are a bit more conservative than IMF and World Bank and [indiscernible], you are more bullish. I was just wondering why is that? What are the main reasons for that? Vakhtang Butskhrikidze: Giorgi, please answer the first question and the second question, I will take. Giorgi Megrelishvili: Okay. So generally, before the war, our total share of nonresident deposits were around 35%, 40%. Nowadays, it's around 60%, 70%. Therefore, we don't have any major concentration to the deposits from migrants as we call them, and we don't have any dependency on the liquidity. Therefore, even if suddenly like whoever put deposit with a minimum number decides to kind of walk away, we won't have any liquidity. So that's -- hopefully, that answers your question. Vakhtang Butskhrikidze: Yes. To answer on the second question about the growth for the GDP. So as I mentioned already in my part of the presentation, our internal target 5%. I agree, probably it looks pessimistic assumption. And just to remember in 2025, 2 times we made upgrade of the forecast for 2025. But what we see, we are already February, probably it looks that economy will grow more. But for the budgeting purposes, we prefer to have a more pessimistic assumptions for our targets and for our guidance. Andrew Keeley: Next question is from Rahim at Cavendish. Rahim Karim: Three questions, if I may. The first was just to get a sense on the outlook for NIMs, if I can, in the 2 jurisdictions. I mean, Oliver, you talked a little bit about cost of risk movements in Uzbekistan because of the loan book shift. So it would be useful to understand that from a NIM perspective and then obviously the same for Georgia. The second question was just on Uzbekistan in terms of the regulatory changes. I was just wondering if there was any remorse from the Central Bank or any other emotions that came out as a result of the changes that they've implemented, any regret or how have they received the changes to the industry's or the response to the industry's activity there? And then just third, Vakhtang, thanks for your comments with respect to your evolving role. Just a sense on how you see opportunities with respect to M&A in the international business as well and how your increased focus on that is, how we should think about that over the next year or so? Giorgi Megrelishvili: Thanks, Rahim. Good to see you again on the call. So now I'll take the first question on the NIM. So Georgia NIM, we expect to remain at the same level as it is around 6%, high 5s. We don't expect material changes. On Uzbekistan side, generally, we've seen like high teens in Q4. That's the level probably we may continue in Q1, Q2, but it will gradually start picking up to high -- to around 20s, high teens, that would be our expectations as gradually funding costs will tick down over the period. There is a timing lag and that will be kind of will be caught up. That's on the NIM side, and I'll hand over to Oliver to go on the exchanges. Oliver Hughes: Sure, yes. Maybe just to spell out the outlook for Uzbekistan as we see it today. And again, please bear in mind that things are still moving around in an environment which is a little bit fluid, as we've said. So as Giorgi just explained, we expect to finish the year with NIMs recovering to around 20% for the year. We expect the loan book to grow by 20% plus, and that will be backloaded in the second half of the year, as I said earlier. Thirdly, we expect our ROEs to be at least what they were last year, if not higher, and we'll see how it goes in the rest of the year. In terms of the regulatory backdrop, so it's pretty busy, let's put it that way. So there's a lot going on as the regulator implemented varying new policies. So there's actually been more regulation coming out since we had our last call. Some of it in payments, some of it in consumer lending on secured and unsecured, including the introduction of DTI, so debt-to-income ratios on top of payment-to-income ratios, PTI. There's lots of stuff happening on the anti-fraud side on cybersecurity. So it's busy. In terms of emotions of the regulator, I'm not sure if the regulators are supposed to have emotions, but they obviously have an agenda. The agenda is quite a forthright one. This is the environment in which we're in. This happens in different markets, especially markets that are learning and adjusting and let's say, frontier/emerging markets. Again, this goes with the territory. So organizations such as ourselves, which are high growth and high adaptation do well in these environments. We deliberately chose this country because it has some challenges, which makes it interesting, but also lots of upside when you get it right. And we have a very good execution track record. We adapt this year. We've talked about this a lot. And we're already doing lots of stuff to respond, get ourselves back on the front foot and launching tons of new products and services, and we like the direction of travel. But it remains a little bit interesting, let's put it that way. Vakhtang Butskhrikidze: Yes. And to take -- I will take the last question, what are our plans for international expansion? We don't have any specific timing in mind. But on the other hand, we are open and looking at different international opportunities. And we believe that we have our competitive advantages, taking digital, retail, SME and other type of competitive advantages. Andrew Keeley: And we'll go back to Piers at Investec. Piers. Let's have another go. Piers Brown: Yes, I've got one probably for Giorgi and one for Oliver. Maybe just on the question for Oliver. Just a clarification on Uzbekistan. You've given a very helpful slide on Page 27, which gives the current breakdown of the loan book as per the Central Bank methodology, and you've got sort of 71% there in micro loans. Is that the number that we need to look at that needs to move to 25%? And as I sort of understood it from your earlier answer, you sort of think you can get there by just rebalancing the book, i.e., growing the other businesses rather than shrinking necessarily the absolute level of outstanding micro loans. So if you could just clarify if that's the right understanding. And the second question for Georgia on the Georgian business. Just on the retail cash loans progress, I mean that's 36% growth year-on-year. The book is now at GEL 2.4 billion. How should we think about the future opportunity there? What sort of market share have you got? What's the size of the market? Where do you think the market share could get to? And is that GEL 2.4 billion number going to get a lot bigger? Is it still got a lot of growth potential ahead of it? Oliver Hughes: Thanks for the questions, Piers. So I'll start. So on that slide, which you referred to, I think, is 27, there are 2 parts to it. On the left-hand side, you can see the consolidated numbers, which is very important. So that's the group-wide -- Uzbekistan group-wide numbers, which I'll come back to in a second. And on the right-hand side, the text at the bottom is what you're asking about, which is the Central Bank view because that's -- they look at the bank's balance sheet. So we got our -- the share of our micro loans down to 70% by the end of the year from what was over 90% at the beginning of the year. The direction of travel is downwards because it has to be. And we believe we will be below 50%. That's what we're aiming for on the bank's balance sheet by the end of the year. And thereafter, it will decline more because obviously, we have to get to the 25% target by the 1st of January 2029, if not before. So that's the bank view of the answer to your question. However, we have a group. So we have lots of -- well, not lot of, but several other balance sheets. We have the microfinance organization. We have TBC Nasiya, which is installment loans or installment finance. And we also have a new company that we're using for BNPL. So there are different balance sheets that we can deploy. And we've actually restarted micro loans or instant cash loans, as we call them, on the MFO balance sheet. We're doing this in a very gentle way, just building it up and restarting the machine, which means that you will see one of the sources of growth coming back into the overall consolidated balance sheet view this year from the microfinance organization's balance sheet off the bank's balance sheet. So I think the short answer to your question is on the bank's balance sheet, this is our way of climbing into the structure below 50% ICL share -- micro loan share by the end of this year. But the growth will be coming from other non-micro loan asset classes that we're building in the bank or we're scaling up, example, credit cards, which is already 7% of the bank's balance sheet and stuff which is off the bank's balance sheet. So there's plenty going on. Giorgi Megrelishvili: Now to go to your cash loan side. Probably I will hold back the answer on these questions for 2 days. When during Strategy Day, my colleagues will cover it in more details, our strategic goals and directions. I don't want to put a spoiler. What I can say we have a big focus on cash loans. It will be a big driver of our profitability, and we are very comfortable making a great progress. How and exact targets to come in 2 or 3 days' time, 24th, on Tuesday. And I'm pretty certain you will be pleased with what you hear. Andrew Keeley: Thank you, Piers. It doesn't seem like there's any further questions in the queue at the moment. Becky, do we have any on the phone line? Operator: We currently have no questions on the phone line. Andrew Keeley: Okay. Then all it remains for me to say is thank you very much for joining our full year call. It's great to see so much interest. And just to reiterate, we hope we will meet again shortly next Tuesday in New York and via the webcast for our Strategy Day. So thank you very much. And with that, it's goodbye from us. Thank you. Giorgi Megrelishvili: Thank you. Vakhtang Butskhrikidze: Thank you. See you see you next week. Bye. Operator: This concludes today's webinar. Thank you, everyone, for joining. You may now disconnect your lines.

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MALRY 2026 Q2 财报电话会议

Operator: Thank you for standing by, and welcome to Mineral Resources FY '26 Half Year Results Briefing. Your hosts today are Malcolm Bundey, Independent Non-Executive Chair; Chris Ellison, Managing Director; and Mark Wilson, Chief Financial Officer. We will start with 15 minutes of prerecorded opening remarks before we move into live Q&A. [Operator Instructions] This call is being recorded with a written transcript being uploaded to the MinRes website later today. I will now hand over to Chris Ellison, Managing Director. Christopher Ellison: Good morning, everyone, and thanks for joining us. This is the MinRes FY '26 half year results announcement. I'm Chris Ellison, Managing Director. I'm joined today by our Chair, Mal Bundey; and our CFO, Mark Wilson, and Mark is going to run you through the financials when I get through this section. Before we begin, I want to acknowledge the tragic loss of our colleague and friend, Tim Picton, who sadly passed on the 19th of January. As our Strategy Director, Tim's brilliant strategic mind and extraordinary work has left a long-lasting legacy to our company. Last month in Federal Parliament, the Prime Minister paid a fitting tribute to Tim, which detailed the many extraordinary achievements he had made in just 36 years on the planet. He's deeply missed by his colleagues. He's missed by his MinRes family. He's missed right across Australia by a lot of people, and our thoughts remain with his family. This morning, I'm proud to report the first half of FY '26 has been our strongest 6 months ever. We delivered record underlying EBITDA of $1.2 billion for the half based on revenue of $3.1 billion with nearly $300 million in free cash flow. Over recent years, MinRes has seen periods when iron ore prices have been over $220 a tonne and spodumene up beyond $8,000 a tonne. Remarkably, this half outperformed them all and despite much softer commodity prices. Iron ore had an average of around 100 tonnes during this period, less than half the historic highs. And while lithium prices have rebounded in recent months, the September quarter only averaged $849 a tonne and the first half sat at around $972 per tonne. This first half result was the result of 3 main areas. Firstly, outstanding operational performance. Onslow hit nameplate in August. And we improved performance in the lithium mines, which resulted in recent guidance upgrades. Secondly, record mining services earnings, which was up 29% on the prior year. And finally, cost discipline. The Onslow Iron FOB cost of $52 a tonne and costs at Wodgina and Mt. Marion both track to the bottom end of guidance. Let me just reiterate what Onslow Iron means to MinRes because it's central to the quality and the strength of our earnings. At $100 a tonne iron ore price, Onslow Iron will generate over $1 billion of annual EBITDA. That's demonstrated by Onslow Iron having contributed just over $500 million in the past 6 months. This result validates the key strategic decisions made over recent years. Many of those decisions related to the investment, planning, construction and ramp-up of Onslow Iron. It's worth remembering that many thought this project couldn't be done without building a costly rail line and a deepwater port. We saw opportunity where others didn't and put our in-house expertise and world-class innovation to work, which prompted some to question our capability to deliver. Despite this and some early challenges, we stayed the course and we delivered in record time. As a result, we entered FY '26 with plenty of momentum and achieved several key milestones. We safely ramped up production to nameplate capacity in August. We completely finished the upgrades to the haul road in September. And most importantly, we've sustained nameplate production, and we've proved the quality of our innovative supply chain from the jumbo road trains to the transhippers. Importantly, Onslow Iron also showcases the scale, innovation and executional excellence of our Mining Services business. In the half, Mining Services delivered record volumes of 166 million tonnes and generated EBITDA of $488 million, up 29% on the prior year. The division is firmly on track to generate almost $1 billion in annualized EBITDA. Our Mining Services capability is world-class and fundamentally different from traditional listed peers who focus largely on civil and mining work. The Engineering and Construction division has decades of experience and a reputation of delivering lump sum fixed price projects. We're the only organization I know of in Australia that can do these feats, and we've done them for over 20 years. We design, we build and we operate, and we do it faster and more cost effectively than anyone in the industry. That integral capability gives us a clear competitive advantage and highlights the unique service we bring to our clients and JV partners. After the success of Onslow Iron, interest has increased from potential clients looking to similar integrated solutions. We were awarded 2 new contracts and renewed 3 contracts during the period, and the long-term outlook for the mining services remains strong. We expect to continue growing volumes and earnings into the future. Let's talk a little bit about lithium. In June last year, we sold cargoes for around USD 600 a tonne. We averaged around $970 a tonne during the half and prices continue to rise. We sold a cargo for $2,500 in recent weeks and the supply-demand curve certainly is changing significantly. We stayed disciplined through the weaker price environment. We cut costs. We drove efficiency improvements. We made tough decisions but necessary to ensure that we could capture the upside as the lithium demand increases. Wodgina achieved processing recovery rates of around 70% in the December quarter, a key milestone. We expect recoveries to improve further as we access more fresh ore and we go deeper into the pit towards the end of this calendar year. Marion also saw some great gains with higher feed tonnes, improved recoveries, and we're continuing to progress the study around the flow plant and the underground. The POSCO transaction was announced in November. It reflects our track record monetizing assets with world-class partners. The JV will materially strengthen our balance sheet while ensuring we retain significant exposure to the lithium market, and we retain our mining services contracts. We're also assessing further growth options in lithium, including the potential restart of Bald Hill. These studies are ongoing and we'll update the market when appropriate. I'll now briefly touch on the balance sheet. When we committed to Onslow Iron, I described it as a transformational project that would generate significant cash flow and drive the deleveraging of our balance sheet. That vision is now a reality. The project's earnings power has significantly improved our balance sheet. In 6 months alone, our net debt balance fell almost $0.5 billion to below $4.9 billion and our leverage more than halved. Our liquidity has strengthened to over $1.4 billion, and the POSCO transaction is expected to be completed in the first half of calendar '26. MinRes will receive approximately $1.1 billion in additional proceeds. With 2 more transhippers coming online from the middle of this year, we expect to lift Onslow Iron capacity towards 40 million tonnes run rate. This will support stronger cash generation and it will further assist our deleveraging trajectory. Looking ahead, we're focused on more of the same, operating safely, delivering on our guidance, optimizing our existing assets and continuing to strengthen our balance sheet. There's still a lot of work to be done, but let's remember, the past few years have been the best growth and development period in our history. This has included bringing Onslow Iron from concept to full production in 3 short years, responding quickly to the changing lithium market. We exited the hydroxide business. We idled the mines. We optimized the hard rock deposits and improved the recoveries. We've grown our Mining Services business. In short, from '23 to '26, we've doubled it. And we've not just doubled it, the earnings are sustainable for decades and decades to come. They're a high-quality income stream. We're recycling $3.3 billion in capital through world-class partnerships through the iron ore, lithium and the gas businesses. We sold down on the haul road. We were in the process right now of concluding a deal with POSCO on our lithium business. And we sold down on the gas and brought Hancock in as a long-term JV partner on the exploration assets that we have in both the Perth and Carnarvon basins. And look, finally, I want to acknowledge the most important part of our business. We've got over 7,000 men and women in our business that tirelessly work every day. They underpin our success. I'm proud of everything they've achieved, and I'm excited about what's to come in the months and years ahead. I also want to acknowledge Mal Bundey, our new Chairman. Mal come on board in April, and he has just been a powerhouse. He's done a huge amount of work right across the business, including refreshing the Board who again have worked tirelessly, and they continue to strengthen our governance and our framework and in step with the operational and financial performance the business is driving. Finally, I want to thank all of our shareholders and our partners, our JV partners and our clients for their unrelenting ongoing support. Thanks, and I'll hand over to Mark. Mark Wilson: Thank you, Chris, and good morning, everyone. I'm pleased to present MinRes' financial performance for first half fiscal '26. It's a strong result that reflects the fundamental transformation of our business now underway. As Chris outlined, we delivered record underlying EBITDA of approximately $1.2 billion on revenue of $3.1 billion for the half year. This was the strongest 6-month period in the company's history. What makes this result particularly significant is the quality of the earnings. This wasn't the result of commodity price luck. Rather, it was built on operational excellence, volume growth, cost discipline and the successful commissioning of Onslow Iron at its nameplate capacity, driven by our Mining Services business. This performance reflects the strength of our diversified business model and the repositioning of our portfolio to transition to higher-quality assets, along with increasing recurring Mining Services earnings. Mining Services continues to be the bedrock of the business and delivered a record underlying EBITDA of $488 million. This was driven by record production volumes and an EBITDA per tonne margin of $2.10. It also included a significant contribution from the Onslow Iron Road Trust, which is an infrastructure-like cash flow annuity stream that is inflation indexed. It's important to note sustaining CapEx for Mining Services was only $24 million, highlighting the strong free cash flow generation of that business. In iron ore, underlying EBITDA was $573 million. And of this, $519 million was from Onslow Iron, demonstrating the substantial positive cash flows from this long-life project. In lithium, we reported an average SC6 equivalent price of USD 972 a tonne, which delivered underlying EBITDA of $167 million. Importantly, balance sheet deleveraging has clearly commenced. We generated free cash flow of $293 million in the 6 months after CapEx of $600 million with net debt declining by almost $0.5 billion to approximately $4.9 billion. Liquidity strengthened to over $1.4 billion, consisting of more than $600 million in cash and a fully undrawn $800 million revolving credit facility. In October, we successfully refinanced our USD 700 million bond, pushing the maturity out to April 2031 at our lowest ever coupon rate of 7%. That offer attracted significant demand and was a clear vote of confidence from the debt capital markets, both in MinRes and in our strategy. Completion of the POSCO partnership, which is expected in the first half of this calendar year, will bring in $1.1 billion and put us on a clear path to be below our 2x net leverage target by June. At our AGM last November, we outlined an updated capital allocation framework and financial policies following extensive Board review. This framework provides clear discipline and transparency around how we allocate capital and manage the balance sheet. First, liquidity. We significantly raised our liquidity buffer from a minimum of $400 million to $1 billion at all times, including at least $400 million in cash. This ensures we have a substantial buffer to withstand commodity price volatility and take advantage of potential opportunities. Second, leverage. We've amended our target to below 2x net debt to EBITDA through the cycle, allowing only temporary exceptions during major capital projects, provided there's a clear path back to target within 12 to 18 months. The amendment from a prior gross leverage target better aligns with market practice and does not penalize the business for holding elevated levels of cash on the balance sheet, and we believe this is a prudent measure in a cyclical industry. Third, dividends. Our discretionary dividend policy of paying out up to 50% of underlying NPAT remains in place. However, dividends will now only be paid if our liquidity and leverage thresholds are met or there's a clear line of sight to meeting them within 12 months. And ultimately, any dividend decision will be weighed against the growth opportunities available at the time. Right now, however, the Board has taken the prudent decision not to declare an interim dividend as we focus on fortifying the balance sheet. Finally, growth investment. All growth decisions must satisfy high return thresholds of 20% return on invested capital post tax and remain firmly aligned with this refreshed capital allocation framework. In summary, first half of fiscal '26 demonstrates that we're delivering on our commitments, record earnings driven by operational performance rather than extraordinary commodity prices, a strengthened financial position with increasing free cash flow generation and a clear framework for disciplined capital allocation that will drive sustainable returns for our shareholders moving forward. Thank you. We're now happy to take your questions. Operator: [Operator Instructions] Our first question today comes from Lachlan Shaw from UBS. Lachlan Shaw: 2 from me today. Maybe can I start just at Onslow. So obviously, transhippers 6 and 7 coming in shortly, getting your notional capacity towards 38, but you are flagging sort of pushing towards 40. How do we think about that in terms of -- is that just a case of sweating the chain overall? Is there sort of incremental capital to come there? How do we think about that? And then I'll come back with my second question. Christopher Ellison: Yes. I think, look, I've said that a couple of times, much to my team's dismay, but they like call it, call out 38, and 38 is a safe number. We should get there fairly simply. I mean, we're running 35 now. Transhipper #6 will get us to 38. Given time, with the crews bedding in, getting the channel passing and all of those incremental things happening, we've got a bit of dredging to do that'll give us a bit more weight on board, over the next few months. So my expectation is I want to drive them towards sweating the assets up to around $40 million. Operator: Lachlan, did you have your second question? Okay, our next... Lachlan Shaw: Yes, I do. Operator: Sorry, go ahead. Lachlan Shaw: Should we think -- be thinking about 40 million tonnes in FY '28? Christopher Ellison: No, no. Think about 38. Transhipper 6 and 7 rock up around about May, June. We'll be trying to get 6 in action, so it will probably kick into life about late July. It will start performing. Transhipper $7 will be there to sort of support them on the maintenance and kick in a few tonnes as well. That really won't come to life until about October, so we already lose those tons going into the first year. If you want to go out a year beyond that, you can be a bit more hopeful. Lachlan Shaw: Got it. And then just my second question then. So just in terms of Wodgina, we've seen a few of your peers start to talk about restarting capacity, latent capacity, but also some potential new operations and DSO coming in as well, maybe in the second half. Obviously, you're still talking to getting on top of the strip by the end of this calendar year. And then likely having the mine capacity, the fresh ore feed to support 3 trains from the start of calendar '27. Can you just help us understand, is that -- what's driving that? Is that a sort of purposeful decision to target margin? And just the context here, I suppose, is just a really good performance in terms of recovery uplift there, and potentially more to come once you get more fresh ore feed coming into the concentrators. Christopher Ellison: Yes. No, look, that's all about the strip. I mean, we were going a lot quicker, going back 18 months ago when the price turned down. We pulled back on a lot of the mining equipment just to make sure we could control the spend. But we expect to have most of that rock off by the end of this year. And once we've done that, we'll have a clear run on those 3 trains, and the actual feed going into the plant, the grade increases a little bit as well, so another kicker for it. So come start of next calendar year, Wodgina will be in a truly good place. Operator: Our next question comes from Adam Martin from E&P. Adam Martin: I suppose first question, just on the sort of deleveraging. Clearly you've had to slow spending. I'm just wondering whether that's sort of held the organization back in any way, thinking maybe about Mining Services, whether there's sort of more opportunities to delever, but maybe you could just comment on that, please? Christopher Ellison: Yes. No, I wouldn't say that holds us back in Mining Services. We take advantage of every mining services opportunity. That's the expectation from our clients. We always make sure we're there to deliver for them, as if we own the ore ourselves. We've certainly, it's probably a once-in-a-generational event to build an iron ore project. I mean, Rio done it once, BHP done it once, FMG did it once. It takes a lot of capital. We had a window of opportunity to do that. And I think that there's no doubt now our shareholders are going to see the benefits in spades. So we're still out there looking around at other opportunities, but at the same time, I mean, carefully managing the balance sheet as we've set out that we would. Adam Martin: Just a second question, just on gas. It looks like you're sort of ramping up exploration. You've got a few wells there in the Perth Basin and one or two in the Carnarvon Basin. Is that -- just to sort of refresh on the strategy there, you're sort of building up resources to get in production. Just talk us through, what the strategy there is, please? Christopher Ellison: Yes. Well, look, we've got a couple of areas in both the Perth Basin and the Carnarvon Basin that look very promising. And what we'd like to be able to do is we'd like to be self-sufficient in gas for the long term, at least for the next sort of 10-15 years out. It's all about -- in our business, it's really all about controlling the costs that you can control, so energy, transport, shipping, all of those sort of things, we work hard to control. Exchange rate, commodity prices are out of our control, but the more we control, the more we can reduce that bottom line. Operator: Our next question today comes from Rahul Anand from Morgan Stanley. Rahul Anand: Chris, indeed, a good set of numbers and obviously a business really starting to hum along now. Look, I've got 2 questions on the Mining Services business. First one is around the Mining Services EBITDA margin realized at about $2.0. Quite a good result there, and I think perhaps a bit higher than I think where your guidance was, I guess, just sub-$2 I think from Mark. So I guess, where do you see that trajectory going forward as Onslow continues the ramp up or is fully ramped up, and then you're kind of looking at a mix of contractor trucks coming off in your system? That's the first one. I'll come back with a second. Christopher Ellison: Okay. Look, that's a little bit higher than what we expected, but I mean, we overperformed at Onslow Iron. We got the contractor trucks out quickly, got the road repairs done, got all our trucks back on the road. So we got back to a normal, steady state of operation. And we were sitting in there on ramp-up rates, which were higher than the steady state rates. So that really sort of was the kicker that that give us that little bit extra. It wasn't intended that way, it's just that we got super-efficient and we over-earned on the mining services. Rahul Anand: Just to clarify then, Chris. Are all the contractor trucks now off then? Christopher Ellison: Yes, yes. So we're 100% on the main haul road. And we only have the big jumbo trucks running there. We're not mixing any other trucks with them. They've been gone for a number of months now. Rahul Anand: Brilliant. Okay, look, my second question is around the order book in the Mining Services business. I guess, how are you seeing the order activity currently in the market? And then also, in terms of the new contracts that you're looking at, is that primarily going to be in the crushing space that your focus is given how good the margins are? Or would you also consider to kind of pick-up projects where there's an opportunity to build, followed by crushing, so to speak, just because the way the contracts are being given out, given construction can have pretty variable margins as well? And then, how are you thinking about the book in terms of domestic and international as well? Christopher Ellison: Yes, we're mainly sticking to domestic right here, right now. We have been -- as you know, we've been looking further afield, but I've been waiting to get some resources off the Onslow Iron build so that I could use them. We've got one fairly large construction team, probably I rate it the best in Australia. We've had them together for we got members in there that have been around for 30 years. So that's part of our Mining Services business. We can actually go out and build a project on a lump sum number. So that allows us to be able to deliver high quality, build, own, operate, crushing and processing plants, so we know what that number is. We can build it for a lesser cost than almost anyone in the industry, that helps us with the margin. Going forward, there's going to be a mix of Mining Services. The big trucks, the jumbo road trains are proving fairly popular. We've got a number of them out to third parties. We're also looking across the board to use that combined skill and currency we've got. So we go out there and we'll go and build a processing plant or a total mine site where we can operate it for a period of time. It may end up down the track that we pass it over, and they write us a check, but there's a whole combination of things that we're offering our clients, where we can sort of satisfy their needs. We're getting a lot of inquiries around that. We've been able to prove that we can still do what we do through building Onslow Iron. And it's awfully tough out there in Australia right now with the industrial relations and a range of other things, the costs. I'm going to say in the last 5 to 6 years, the cost of building a mine in Australia has all but doubled and the time to get them built has even grown as much. So it's getting to a point where it's really tough to get a return on these big commodity mines. Operator: Our next question comes from Mitch Ryan from Jefferies. Mitch Ryan: First one, just with regards to sustaining capital, obviously relatively low in the half. I'm trying to get a feel if it's been suppressed to aid in deleveraging or what you think a steady state number will look like going forward? Mark Wilson: Mitch, it's Mark. We're still thinking in terms of about $500 million a year. Recognize it might have been a little bit lower in the first half, but yes, still holding the $500 million that we've talked about previously. Mitch Ryan: Okay. And then my second one, can you just provide a timeline of when we can expect capital numbers for each of your lithium projects or growth projects that you're thinking about, such as Wodgina Train 4, Mt. Marion [ float ] and underground and Bald Hill? Can you just remind me of when we should expect that? Christopher Ellison: Yes. Haven't got a fixed time on that. As we've said, we're looking at a few of those brownfield opportunities and the returns on them are fairly significant at -- even at reduced values of lithium. We'll probably look -- as soon as we get through them, we're looking at, obviously float and going underground down at Marion. We're halfway underground now. That's almost a no-brainer to get that sort of moving, but again, we're trying to be cautious. We want to make sure that we deliver on the balance sheet. So we're not going to jump the gun on that, and I want to make sure before I go spend any money on those sort of areas around the lithium, that we got something sustainable going forward in terms of the value of, selling the spot. It's feeling good at the moment. It certainly feels like the supply has got a deficit in it. It's pushed the prices up and it pushed them up dramatically. But look, we need just a little more time. I mean, to be comfortable, I want to get to the end of this financial year and be able to have a look at the leverage on our balance sheet and go that we've delivered and now we're in a position where we can go out and start developing the business. Operator: Our next question comes from Kaan Peker from RBC. Kaan Peker: 2 questions from me. One, what is the maximum growth CapEx range MIN is willing to spend while the leverage is still remaining above that 2x? Is there a hard cap on group CapEx until this metric is achieved? I'll circle back with the second. Christopher Ellison: Yes. Look, the Board has done a lot of work around the balance sheet. As you know, we've been really vocal about it over the last 6 or so months. There's been a lot of work done around that. So we've got a Strategy Day coming up in for all of the management, the Board are getting together and trying to have a look at where we're going. And look, I think post that, we'll be able to make some statements. But look, at the moment, pretty hard and fast on just sitting here and doing as we said, just keep growing the balance sheet, keep delivering, making sure that the tonnes are coming out of Onslow Iron. Let's see how the lithium settles down. I mean, we're just really not going to go out and do too much. The one thing I might consider doing over the next few weeks, we're just doing a lot of work around the Bald Hill mine, and it kind of makes sense to bring that back online. But again, we just want a bit more evidence that the demand out there is sustainable. I don't want to go turning that on and keeping it running for a short period of time. Kaan Peker: And on Onslow, I noticed that you talked about dredging, but given that transshipping is the bottleneck, what's the tipping point or the trade-off with capacity transshipping, particularly around the channel passing and dredging costs? I mean, can you materially move above 40 million tonnes without additional CapEx on the fleet? Christopher Ellison: The jury is out on that at the moment. Look, all of the stuff that we've got, the transhippers and everything, they're the first in the world. And I mean, there's no doubt they are operating above expectations and what we hoped we would get out of them. Same with the road and the haulage. But right at the moment, we're right in the middle of cyclone season. We bring those other 2 transhippers in. We've got a lot more control over our planned maintenance. The weather, we're always at the beck and call of the weather up there. We're in the middle. We've just had a cyclone go across. That cost us 5 days. But we expect probably 10x that sort of downtime per annum. We've allowed for it in our run rates. But it's sort of a wait and see. In terms of the channel, look, we had a bit of silt that's come into the channel from the cyclone, and down in the turning basin, down to our Perth, the bow thrusters have stirred up the bottom a lot and we've got some uneven ground down there. In the next few weeks, we're going to drag a bar across it with one of our tugs and sort of smooth that out. And then down the track, April, May, we'll bring in a little suction dredge and we'll hoover that bit of silt out of the channel. So there's no real restrictions on that. But look, we're just going to keep doing what we're doing. We're saying 38 million tonnes, the number you can hang your hat on at the moment, but we'll incrementally keep working our way at all of those efficiencies and 18 months from now, I hope I'm telling you even better news. Operator: Our next question comes from Ben Lyons from Jarden Securities. Ben Lyons: Maybe just following on that line of thinking, Chris, please. You mentioned the Tropical Cyclone Mitchell. More interested, I guess, in how the haul road held up. Can you just enlighten us to how much water was on the ground? Whether you observed any sort of superficial damage? Whether you had water across that sort of estuarine section near the port loadout facilities, et cetera? Christopher Ellison: Ben, it was about -- it was only about 1/3 of the rain that we had going back a year ago. And when you get 3x the volume, I mean, we had all that pooling up there and it was brand new. I mean, we thought we got it right. We got it 95% right. And I mean, it was good you went up and saw the road and there was nowhere near the damage I don't think that MinRes was expecting. There's been zero damage to the road, is the answer. That new surface that we put on and taking the asphalt right out to the edges and not letting the water ingress down into the base has worked 100%. So yeah, really happy with that. We pretty much -- as soon as the cyclone was gone and the roads were open, we had the trucks straight back on the road. And there was no concern about it getting spongy or anyone. I mean, it's going like a treat. I mean -- and as you know, we put a fair bit of concrete down inside the base of the road and just paid dividends. So we're getting everything that we expected. Ben Lyons: Second question's on the POSCO lithium transaction. Just obviously, you've seen a very sharp recovery in prices. Just wondering if there's a bit of seller's remorse, having struck the deal at lower prices. I guess, historically, we've been somewhat habituated to expect a renegotiation of previously agreed contractual terms, about sort of watching our sell downs in and out of downstream processing, et cetera. So just in light of that robust recovery in lithium prices, just wondering whether there's any CPs that might possibly work in your favor to extract some more favorable terms on that sell down? Christopher Ellison: No. Look, Ben, when you -- we're sort of traders. We buy and sell a lot around assets. And you always look back and wonder if you've done the right thing. But look, I've got no doubt. I'm happy with the deal that we've done with POSCO. They were fairly generous on the day. They were looking at the next 30 or so years out when they set the number. And we get that equal value. So we'll take that capital, we'll be able to reduce debt and we're going to have some capital left out of that to take some of these brownfield opportunities we got both at Wodgina and down at Marion. So by the time we do those upgrades, the flotation plant at Marion and Wodgina, we'll actually have more attributable ore to MinRes than we've actually got now. So it's really positive. So we'll end up with more spod coming out of the ground that we can sell. We'll have that capital to put into the projects. And of course, don't forget, we're going to have Bald Hill sitting down there. It's 100% owned by MIN. Look, I expect not too far down the track when we can afford it and when it sort of fits in the jigsaw puzzle, we'll probably be able to grow that place. I mean, it's a great ore body and very large crystals. It separates incredibly well, so the recoveries down there are great. So yeah, look, just great opportunity in front of us, but the POSCO capital is going to make that work really well for us. Operator: [Operator Instructions] Our next question today comes from Rob Stein from Macquarie. Robert Stein: Chris and team, a quick one regarding commercial structures of lithium offtake. You've seen some of your competitors strike some deals with floor pricing to protect downsides. Is that something that you guys are willing to entertain at this point in the cycle, noting prices are well above some of those floor terms, just to secure baseline returns for some of these capital decisions you're potentially going to make in the future? And I've got a follow-up. Christopher Ellison: The answer to that is no. We wouldn't put those in place. Those sort of deals take an average of about 5 indexes, and typically on a rising market over the last 3 months. We're typically getting above the top index on all of the cargoes that we've been selling. So no, we have no need to do that. Robert Stein: No problems. And then a follow-up, just on your capital allocation framework. If we project at spot going forward, looks like you could be paying a dividend next year or even at the end of this year. How do you think about that in terms of incremental sources of capital and returns? You've obviously got the 20% return hurdle, but is there internal tension on some of those projects that you're progressing to try to get back on the dividend-paying machine? Christopher Ellison: Yes. Look, I can certainly tell you, the largest shareholder is not opposed to dividends. But in saying that, too, I mean, we've got to balance, I mean, and we have a look at what the opportunities are sitting in front of us. I mean, if we can go and invest, for example, in some of that brownfield stuff or if something comes along that looks like it's got those 20%-30% ROICs, we're going to weigh that up with where the best value is for our shareholders, and sometimes that capital growth is a much better option. But it just depends on the day. Again, I mean, there's a lot of work being done around that. And when we go through our week on strategy, we'll be looking at all those sort of things. Operator: Our next question comes from Paul Young from Goldman Sachs. Paul Young: Chris, it's been a pretty good last 6 months, but it's been a pretty tough couple of years. And I might be getting ahead of myself here a bit, but I know you're always thinking about sort of what's next. I mean, Ashburton has transformed the business. So I'm just curious around when the leverage is below 2x, have you been thinking about adding any new sort of Tier 1 greenfield mining projects to the portfolio or is the focus more around the Mining Services growth? Christopher Ellison: Look, the answer is, I mean, we never stop looking. We've always got our BD people always out there in the market looking. We never turned down a Mining Services contract. Look, there's a range of opportunities sitting out there and there's no doubt. Well, I think we've got to start looking a little bit offshore as well. And again, good opportunities out there. One of the strengths that we've got is that we've got a long history with a lot of the bigger mining companies. And there's always opportunities out there to be able to partner up with those mining companies that, for example, they may have deposits in different parts of the world, but they don't have the skill set or the in-house capability of being able to get that thing built at a predetermined number, where they know they're going to get the right return, and we can bring that to the table. So yes, look, well, the answer is, I mean, we've never stopped looking at opportunities. And again, over the next few months, we're really going to start having a look at what's available to us, because as you know too, it takes a bit of time to get an Onslow Iron permitted and to get everyone on board. Paul Young: Maybe just the second question on Mining Services again. You said I think you won 2 contracts in the half and your CapEx was $31 million, so pretty looks like 2 modest contracts in the half, but good to see some growth coming through. Just domestically, looking at the opportunities, are the opportunities really in the Pilbara still and maybe up in Weipa? Just the capability of the team, like, how much volume and new projects can you actually add? What are the capabilities of the team? When do they actually start getting stretched? Christopher Ellison: Again, we can handle 2 or 3 of those sorts of projects at any given time. It's rare that that happens. You mainly get 1, sometimes 2 coming along. But there is -- look, certainly, in the top half of Australia, there's some amazing opportunities sitting out there over the next 4 or 5 years, and I'm going to go, I said this a couple of years ago, it's probably the best I've ever seen, but I think it's even looking better now. And a lot of that compounds what I just said, that all of the construction companies in Australia have basically disappeared over the last 20 or 25 years. We have that capability in-house and it's kind of rare. So we'll give them a fixed number and go out and deliver. That gives us that really good partnership opportunity. We bring real value to our clients. Operator: Our next question today comes from Ben Lyons from Jarden Securities. Ben Lyons: Not sure if it's one for you, Chris, or possibly Mark, but just a question on iron ore spreads. Still recently early days for Onslow and we've seen a bit of fluctuation in the price realization over the journey so far. Just looking at some various price reporting agencies that we track, and we can see, like, a lot of variance between the 61% FE and the 58% and lower grade iron ore spreads. So just wondering if you can possibly comment on what your commercial team might be seeing at present, just in terms of realizations or discounts versus the benchmark? Christopher Ellison: The discount has been, in terms of us as a seller, it's been very good over the last 6 or so months. We've got another advantage too, Ben, is that, the Onslow Iron product, I mean, 3/4 of the MinRes product goes to Baowu. Baowu have spent in excess of USD 500 million, putting a couple of yards up in China, blending yards, and the Onslow Iron ore is going to get blended with the Simandou ore. So that's a big help to us. There's no doubt there's a bit of a drive on with this China Mineral Resources Group. And they've been in discussion with a number of the big miners. And I have no doubt that's all around trying to manage the pricing going forward. But look, certainly, I mean, we still see good demand. I mean, I keep reading in the paper the stockpiles are up or something's expected to downturn, but we seem to be sitting in there around that sort of $95 to $105 range, and it feels like it's going to hang in there for some time to come. We do try and put about 1/3 of our product out that we sell it, forward sell it, to make sure we have that locked away, but we try and keep a balance with that as well, because it's not always smart to -- sometimes you can outsmart yourself on that. Ben Lyons: Yes, okay. Maybe just a two-parter, Mark, just on housekeeping, just to make sure I can squeeze it in. The first part is, obviously, Aussie inflation's been running a bit hot recently, so just wondering what that calendar year, haul road charge has reset to versus the $8.27 last calendar year, please? And the second part, it looks like you've stopped capitalizing interest, which is great in terms of quality in the financial statements, but we didn't get a note to the accounts for the interest expense. So I just wanted to clarify that there is no capitalization of interest in this interim result? Mark Wilson: Ben, it's $8.54. And in terms of the capitalization of interest, it's almost negligible. There was a tiny bit at the start, carrying over from July, at the start of July, but not of any significance. Operator: Our next question comes from Lachlan Shaw from UBS. Lachlan Shaw: Great. I just wanted to go to Mt. Marion and just to understand, you're signaling capacity there, about 500,000 tonnes of SC6 versus rough sort of guidance around 390 at midpoint, for the [ BFY ]. What's in that capacity? So is that inclusive of the float circuit? And what's the expected sort of upstream there? Is that inclusive of the underground that needs a bit more work? Obviously, you've got more pit work happening, but just keen to understand sort of how that comes together. Christopher Ellison: No, the 500,000 tonnes is based on current steady state. That does not include the extra recoveries we're going to get out of the float plant and there's no feed there coming from underground. So it's just moving forward as is. Operator: Excellent. Thank you very much. There are no further questions. That concludes today's call. Thanks for your time, and have a great day. Please reach out to the MinRes team if you have any follow-up questions. You may now disconnect.

85天前Insight Analytics约5分钟阅读

CC 2025 Q4 财报电话会议

Operator: Good morning. My name is Carmen, and I will be your conference operator today. I would like to welcome everyone to the Chemours Company Fourth Quarter 2025 Results Conference Call. [Operator Instructions]I would like to remind everyone that this conference call is being recorded. I would now like to hand the conference over to Brandon Ontjes, Vice President, Head of Strategy and Investor Relations for Chemours. You may begin your conference. Brandon Ontjes: Good morning, everybody. Welcome to the Chemours Company's Fourth Quarter 2025 Earnings Conference Call. I'm joined today by Denise Dignam, Chemours' President and Chief Executive Officer; and our Senior Vice President and Chief Financial Officer, Shane Hostetter. Before we start, I would like to remind you that comments made on this call as well as in the supplemental information provided on our website contain forward-looking statements that involve risks and uncertainties as described in The Chemours SEC filings. These forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events that may not be realized. Actual results may differ, and Chemours undertakes no duty to update any forward-looking statements as a result of future developments or new information. During the course of this call, we'll refer to certain non-GAAP financial measures that we believe are useful to investors evaluating the company's performance. A reconciliation of non-GAAP terms and adjustments is included in our press release issued yesterday evening. Additionally, we posted our earnings presentation on our website yesterday evening as well. With that, I will turn the call over to Denise Dignam. Denise Dignam: Thank you, Brandon, and thank you, everyone, for joining us. During today's call, I will begin by discussing a few recent developments across Chemours in addition to highlights from our recent performance. I will then turn it over to Shane, who will provide details around our outlook for the first quarter of 2026 and key drivers for the full year ahead. Finally, I will provide updates on our meaningful progress against our Path to Thrive strategy before taking your questions. First, as we should in January, we have reached an agreement to sell our Kuan Yin site. Since the shutdown of our titanium dioxide operations at this facility in 2023, we've been actively decommissioning the site and preparing to sell the remaining property. I'm happy to report that the estimated net proceeds of $300 million we expect to receive from the landfill will make a significant impact in reducing our outstanding debt and support our continued progress towards lowering our targeted net leverage below 3x. I'm proud of our team's effort to get us to this point. Additionally, I want to welcome Mike Foley as the new Business President of TT. And joining Chemours, Mike brings extensive leadership experience in the chemicals industry, running multiple business units with experience centered on operational excellence. As an established leader, I'm confident that Mike will continue to drive improvements in our titanium dioxide business staying true to our value-based commercial strategy, strengthening reliability across our asset base and advancing our long-term cost position initiatives. Turning to our fourth quarter results. We are pleased with the robust cash flow generated and the ability to drive sales performance within our expectations. Net sales met expectations largely due to TSS achieving record sales driven by continued strong Opteon adoption and consistent commercial performance across all divisions. We posted solid earnings overall. However, for the APM business due to near-term end market weakness, we shifted our focus to promote cash flow as the quarter progressed. -- resulting in certain noncash charges and the sale of certain products to reduce inventory levels. These decisions enabled us to make meaningful steps towards driving cash flow while setting a foundation for improved earnings as we get deeper into 2026. While these incremental costs resulted in us just missing the low end of our earnings range, we are pleased with our ability to generate strong quarterly free cash flow of $92 million, which we believe is more reflective of Chemours' longer-term cash generation potential to drive value for our shareholders. With this background, I'd like to provide some additional context on our business level performance. Our TSS business reported a fourth quarter record for Opteon sales with double-digit growth of 37% compared to the prior year quarter, in line with our expectations. Overall, TSS' top line increase was primarily due to higher pricing and moderate volume increases, supported by a favorable mix for Opteon refrigerant blends driven by the U.S. AMX residential HVAC equipment transition and opportunistic sales for certain Freon refrigerants. This could not have been achieved without the TSS team's excellent commercial execution, which resulted in new sales opportunities and efficient use of our quota allowances. TSS had record annual sales in 2025 despite a year with subdued shipped HVAC units in the residential stationary OEM market. Additionally, these efforts led to overall annual Opteon refrigerant growth of 56%, making up 75% of total refrigerant sales in 2025, up from 56% the year before. top line success helped to drive annual adjusted EBITDA margins of 32%, up from 31% in the prior year. Despite additional costs of approximately $22 million in liquid pooling and next-generation refrigerants R&D investment over the same period. Moving to TT. In the fourth quarter, the TT team had strong execution with our top line performance results coming in line with our expectations and our adjusted EBITDA remaining ahead due to stabilized pricing and cost performance. While we continue to operate in a more tepid global market experiencing volume seasonality in certain key markets, we have maintained a strong result in implementing our pricing efforts across all key end markets. To these efforts and our pricing announcement in December, we experienced pricing stability between the third and fourth quarter, laying the groundwork for continued pricing strength in 2026. We are confident in our conviction of our value-based commercial strategy and remain resolute in this approach. Our overall objective to drive improved operational and longer-term cost performance remains unchanged. Consistent with that, we shared in the third quarter we have calibrated our production expectations to be more closely aligned with anticipated market conditions, and we continue to challenge what we can control. including improvements on all our costs while continuing to prioritize cash flow generation in the business. As part of our recent strategic portfolio management initiatives for TT we commenced a restructuring of our mining operations in early January, including the temporary idling of 1 of our mines in North Florida and transitioning to a third-party earthmoving contractor. This revised approach will support our overall cost efforts and promote improved cash generation. Shifting over to APM. While our cash flow driven changes weighed on our earnings results this quarter, the decisions we made strengthened our cash generation, even as we navigated headwinds in certain cyclically sensitive end markets, notably in auto and industrial construction, which we believe will stabilize as we get into early next year. Entering the first quarter of 2026, the APM business in Performance Solutions observed a strengthening order book, particularly within the semiconductor sector, which shows preliminary signs of recovery. Additionally, growth was noted in data center materials and other key end markets. In January, Washington Works, a key manufacturing facility experienced a disruption that necessitated a temporary shutdown, limiting our capacity. This event was traced to equipment affected by a local utility service outage in August, which is integral to our fluoropolymer supply chain and involves complex chemical processing technology. Although operations have now resumed the unplanned outage coincided with challenging winter weather resulting in delays to the restart. Our strategy has always included additional work on these assets and for Q1 of 2027. Despite less an ideal earlier timing, these efforts are critical to ensuring long-term reliability and establishing operational stability to meet improving demand for APM's Performance Solutions products. Lastly, I would like to briefly address corporate level performance, which demonstrated a significant decrease in expenses compared to the same quarter last year. This cost reduction reflects ongoing efforts in expense management and underscore the progress achieved through our operational excellence pillar as part of the Pathway to Thrive strategy. With that, I'll turn it over to Shane to walk through our first quarter outlook and key drivers for the full year 2026. Shane Hostetter: Thank you, Denise, and good morning, everyone. As was shared in the earnings materials available on our investor website, I now would like to discuss our expectations for the first quarter and factors that will drive our business as we look ahead. Beginning with TSS. For the first quarter, we project net sales to rise sequentially in the mid-20s to 30% range, primarily attributable to favorable seasonal trends and continued growth in Opteon refrigerants, where we are also forecasting a sequential increase of 30% to 40% in the first quarter. This sustained double-digit Opteon refrigerant expansion is expected to be driven by the continued regulatory adoption associated with government mandates under the U.S. AIM Act. Adjusted EBITDA for TSS is also anticipated to grow sequentially, ranging from $170 million to $185 million, also driven by seasonality and the continued transition to our Opteon stationary refrigerants. As we look beyond the first quarter, we expect year-over-year double-digit growth for Opteon refrigerants to continue into the second quarter of 2026, but will then begin to normalize to more typical seasonal patterns in the second half of the year as year-over-year comparison points will reflect the regulatory-driven market demand we saw in late 2025. Additionally, we believe that pricing strength stemming from favorable pricing mix for Opteon blends and opportunistic pricing in free on refrigerants will continue into 2026. Also, we expect benefits from cost out efforts throughout 2026, including our recent Corpus Christi capacity expansion, which will be partially offset by increased raw material costs primarily due to R32, a key component of our stationary preference. Overall, we anticipate that the confluence of these factors will underpin strong sales and earnings growth for TSS in 2026, with consistent overall margins compared to that of 2025. For our TT business, we expect sequential net sales to decrease in the low to mid-single-digit percentage range in the first quarter. In our recent reporting, we split out our mineral sales from our TiO2 pigment sales to provide greater visibility in line with recent strategic decisions. In the first quarter, we anticipate that our mineral sales will be down 60% sequentially driven by sales timing and the impact from the recent changes in mining efforts while our TiO2 pigment sales are expected to be down in the low single digits. The slight anticipated decline in TiO2 pigment sales during the first quarter is due to weaker seasonal volumes in non-Western markets, which will offset the volume increases we expect in Western markets. supported by our global pricing efforts as highlighted in the previous quarter across all of our regions. Our global pricing improvement is driven by our pricing announcement in December of last year, which we have seen signs of strong adoption globally as we continue to demonstrate our value-based commercial strategy within our TT segment. It is our expectation that overall average global pricing for TiO2 pigment should be generally in line with the prior year quarter. For the first quarter, we expect TT's adjusted EBITDA to be between breakeven and $5 million. This low level of EBITDA is due to the timing of mineral sales, paired with an additional approximately $17 million of net costs we expect in the quarter tied to inventory and ore mix as well as overall impacts from low plant utilization. The combined force of these near-term impacts is expected to result in higher net costs for the quarter. However, TT is positioned to grow earnings and cash flow during the year. Beyond the first quarter, we see a year where our top line will be driven by positive TiO2 pricing trends across regions and stabilized volumes in Western markets, followed by non-Western markets as the year progresses. For pricing, we've already seen expected increases start to take form through stabilized Q4 pricing, which has reflected growth into 2026. Our portfolio and operational initiatives will continue to drive improved earnings as the year progresses with a clear realization of important cost savings efforts becoming more visible, further underpinned by improved cash generation. Now for our APM business. In the first quarter, we expect net sales to decrease in the high teens percentage range sequentially due to sustained market weakness, combined with customer timing and constraints from the Washington Works outage. Adjusted EBITDA is projected to range from breakeven to $5 million. primarily due to the previously referenced outage at the Washington Works facility. This outage is expected to result in a negative impact of $20 million to $25 million for the quarter, with most of this effect attributable to restricted sales associated with the facilities interruption. As Denise noted earlier, the plant has returned to normal operations and will be a key contributor to the improved earnings we anticipate in APM throughout the rest of 2026. Specifically, we see a return to more profitable quarters for APM after the first quarter of 2026, with progressively improved sales and earnings as we move further into the year. While the overall top line will include lower net sales due to closure of the Advanced Materials SPS Capstone line in 2025, and we plan to replace those lost sales with an increase of specialty-focused Performance Solutions products with higher bottom line contributions. Although we are facing constraints from our outage, demand remains strong in the semiconductor and data center end markets, which are driving current and anticipated sales growth of our Performance Solutions products. These are sectors where we see tremendous inroads for APM's chemistry to help enable the growth and adoption of artificial intelligence across global economies. While we expect some negative cost effects to carry over slightly into our second quarter, we plan to counter these through increased operations at our Washington work site and the increased realization of existing and continued cost reduction efforts as production improves. While the year did not begin as we had planned, we are confident that APM will finish strong in 2026 as we work to recover lost volume on our plant circuit at elevated levels and continue to drive commercial and operational excellence. Through these initiatives, we anticipate adjusted EBITDA to be slightly higher than 2025 levels, while cash generation will see meaningful improvement. On a consolidated basis, we anticipate our first quarter net sales to increase in the range of 3% to 5% sequentially with consolidated adjusted EBITDA expected to range between $120 million to $150 million. Also, we anticipate corporate expenses to range between $45 million and $50 million. Our capital expenditures for the first quarter are expected to be in the range of $50 million, with free cash flow reflecting a use of cash not to exceed $100 million. For the full year 2026 at a consolidated level, we anticipate overall net sales growth to be between 3% and 5% and adjusted EBITDA to range from $800 million to $900 million, primarily driven by increased TSS and APM Performance Solutions demand, expected pricing strength in TT and further benefits of more pronounced cost realizations in TT and APM throughout the year. Additionally, we expect capital expenditures to be between $275 million and $325 million, with free cash flow conversion to be above 25%, supported by improved earnings and working capital improvements that we expect to realize as the year progresses. As we advance into 2026, we remain committed to executing our Pathway to Thrive strategy, and are focused on prioritizing a platform of robust cash flow generation annually going forward via various initiatives across all areas of the company. We view these cash flow efforts to be based in driving clear performance goals across our cash conversion cycle, which we are already seeing take for. These initiatives will take time to fully implement, but we believe improved cash generation in 2026 serves as a starting point where we anticipate further free cash flow expansion in the future. Through these efforts, coupled with approximately $300 million in net proceeds from the sale of our Kuan Yin facility, which will be used to reduce our debt. We anticipate our net leverage ratio to be below 4x adjusted EBITDA by the end of 2026. This is a key milestone that further positions us to achieve our long-term objective of a net leverage ratio of below 3x adjusted EBITDA across economic sites. Given these perspectives on the first quarter and full year 2026, I'd like to now hand the call back over to Denise to share her thoughts and perspectives on our strategic execution under Pathway to Thrive. . Denise Dignam: Thank you, Shane. As we look ahead to 2026, it is important to build upon the substantial strategic progress achieved in 2025. Our Pathway to Thrive strategy remains central to how we make decisions allocate capital and conduct our business operations, and I believe our team has demonstrated notable success in delivering results across every pillar of the strategy. Starting with operational excellence. We continue to advance the disciplined work in driving cost out and making meaningful step-change improvements in how we operate. We fulfilled our commitments for 2025, delivering at least $125 million of gross controllable cost savings. While these efforts have been more visible at the corporate level and through SG&A, we believe that this work will become more clear as operational levels improve, primarily across our TT and APM businesses this year. In the case of TSS, our focus on operational excellence and controllable cost improvements has been concentrated around the completion of capacity expansion efforts at Corpus Christi. This expansion represented a sizable capital investment made in late 2024 and has established a foundation for TSS to further vertically integrate and reduce reliance on third-party YF purchases. While this has provided benefits in 2025, over time, this will provide a substantial cost upside for TSS in support for increased customer demand in connection with the global low GWP transition. More recently, we formally rolled out the Chemours business system, which we have established to embed lean principles to reduce waste and drive increased productivity across the organization. Our team is energized by this effort, which we are already actioning across our manufacturing circuit. Our enabling growth pillar is where we continue to demonstrate the strength of our market positions and the value of our innovation. As we've shared, TSS delivered another great year, breaking quarterly records as adoption of our Opteon refrigerant accelerates. We also made meaningful progress towards commercializing our 2-phase liquid cooling solution, including the qualification of our fluid by Samsung Electronics and the start of a manufacturing agreement with [Navin] Flooring where we are targeting initial commercial production in the third quarter of 2026. Public and next-generation refrigerant growth opportunities reflect important ventures serving as long-term growth opportunities, where we look to continue to invest at a rate of roughly $5 million per quarter. These ongoing investments also contribute to expanding our overall presence in high-value data center and semiconductor end markets, where we are experiencing sustained growth and continued order book strength in APM's Performance Solutions products, particularly in high-purity PFA sales. Furthermore, we anticipate that TSS' double-digit data center growth achieved in 2025 will persist and serve as a catalyst for increased refrigerant sales. Across our businesses, we are sharpening commercial effectiveness and investing selectively where our differentiators position us to win and support long-term growth. Turning to portfolio management. We made decisive progress across the portfolio to drive significant economic value to Chemours. Outside of the Kuan Yin site sales, and the restructuring of mining efforts in our TT business, we continue to advance our European asset review, which will extend into 2027. After completing the APM SPS Capstone business exited 2025, we are now announcing the closure of our Real Estate Paul site in France, originally intended for additional hydrogen development. This decision aligns our industrial operations with current market demand. Moving now to the significant progress made under our strengthening the long-term pillar, which includes reaching a proposed judicial consent order with the state of New Jersey. This milestone provides greater clarity for our stakeholders and reflects our continued commitment to advancing measurable progress in resolving legacy liabilities in close partnership with our MOU partners. With responsible manufacturing at the center of how we deliver essential chemistry, we also reported strong progress against our 2030 corporate responsibility commitment goals. At the same time, independent government level assessments, including from the EU Industry Research and Energy Committee and the U.S. Department of are reinforce the essential role fluoropolymers and gases play across critical industries. Building on Shane's remarks, our recent efforts have positioned us to generate more cash with our previous working capital headwinds clearly behind us. Going forward, we aim to grow earnings, improve free cash flow conversion and continued deleveraging. As we close out 2025 look ahead to our opportunities in front of us, I want to emphasize that Chemours is focused on executing with discipline across every pillar of pathway to thrive, and we believe by remaining dedicated to doing the hard work now that will provide strong returns to our shareholders through long-term stable value creation. The progress we've made gives me great confidence in our trajectory. I want to thank our employees for the focus, resilience and commitment they have demonstrated throughout 2025. With the talent, technology and portfolio we have today, and the clarity of strategy guiding us and confident in our ability to deliver for customers, communities and shareholders in 2026 and beyond. Thank you for your continued support. With that, I'd like to open the line for your questions. Operator: [Operator Instructions] Our first question comes from Pete Osterland with Truist Securities. Peter Osterland: I just wanted to start on the TT segment. Could you share some more detail on the assumptions for TiO2 volume growth that are embedded in your 2026 guidance? What do you expect the global industry to grow volumes at this year? And how would you expect your volume growth to compare to the industry average? Denise Dignam: Sure. Peter, thanks for the question. I would say our outlook is that demand is stable and there's not major demand triggers. Our outlook is really based on -- we announced a price increase in December we've seen, I'll say, strong yield of that price increase. We talked about flat pricing from Q3 to Q4, flat year-over-year pricing as we head into Q1 and we feel really good about that. So that's kind of how we see it progressing stabilized demand with our pricing power. Peter Osterland: Great. And then just switching gears, I just wanted to follow up on your comments on your legacy liabilities. Do you have a lot of sight for meaningful progress towards resolving what you have left during 2026. Any key items or dates to be watching out for this year that you could share? Denise Dignam: Sure. We've made significant progress in the fourth -- our fourth pillar, strengthening the long term. And we're really proud of the work that was done in -- with New Jersey, really kind of laid a framework and hopefully, you can see how we're going to progress going forward. The 2 other areas where we're focused and continue to make progress is in our West Virginia facility as well as in North Carolina. So I would expect to hear additional information relative to those facilities as we progress the year. Operator: Our next question comes from the line of John Roberts with Mizuho. . John Ezekiel Roberts: It seems like there are a lot of mix effects running through the APM segment. Maybe you could peel apart some of the different end markets there to let us know how much some are down and where some of the strength is? Denise Dignam: Yes. Thanks, John. I mean as we said in my prepared comments, things like auto, industrial production, those things are down. But -- there's a real opportunity in our Performance Solutions portfolio of products. If you think about PFA and the expansion that we did in our Teflon product line, there's a lot of demand related to the AI search and the build-out of data centers which is also building out the semicon and all of the demand for additional memory that those chips will need. So it's really, I would say, in those -- in that area really a pull on the AI side. John Ezekiel Roberts: And my understanding is there's still some more maintenance to be done in 2027 on washing works. Why not pull all of the 2027 maintenance until whatever downtime you've got here in the March quarter of 2026? Denise Dignam: Yes. Actually, thanks for the question. All of the -- we have regular turnaround. So that's something that happens every 3 years at our site. So we had already had that plan for the beginning of next year. We actually pulled all the maintenance related to the situation, the disruption in January forward. So we've actually taken scope out of that turnaround. There's still more work to do. It's just a regular turnaround. But yes, we have pulled that forward. And really, our decision was we wanted to have really reliable operations and to make sure we did not -- that particular issue that hit us last summer did not continue to pull it down. We really wanted to make sure we had stable operations. So I would call it more of the turnaround more of a tune-up versus significant maintenance work that would drive stability. Operator: It comes from Arun Viswanathan with RBC Capital Markets. Arun Viswanathan: I guess my first question is just on the Q1 and the full year guide. So the midpoint for Q1 is 135, looks like the full year midpoint 850. Maybe you can just talk a little bit about how -- what are some of the bridge items as you move into Q2? I imagine, obviously, there's seasonality for both TSS and TiO2 that's pretty pronounced in Q2 and Q3. But I guess I'm just curious what else we should think about or some disruptions that you had last year in the middle of the year as well. Obviously, is it your assumption that those don't repeat. Maybe you can just understand how you plan to see that uplift from, say, the 135 to maybe a $200 number or so for the middle of the year. Denise Dignam: Thanks, Aaron. Yes, we have full confidence in our full year guide. As I said in the prepared comments, we expect earnings growth in all 3 of our businesses. I'm going to turn it over to Shane to give you a bit of the walk. Shane Hostetter: Arun, so specific to kind of -- you got the midpoints right in Q1 and year-end guides and then you really -- as we look at Q2, right, just thinking through what happened in Q1, we are looking at low ranges of 0% to 5% in TT and APM that is inclusive of some, what I'll call, unusual items specific to APM, we had the Washington Works outage of roughly $20 million to $25 million of an impact. And then for TT, we had roughly $17 million of inventory and really mix areas around the ore. So as you think about that with the midpoint of the guide in the first quarter, the $40 million in addition to that onetime it's going into next year or going into the second quarter, it's a good start. Then as you pointed out, it's really seasonality. It's really strength in our refrigerants and Opteon business. It's getting the price in the fact that Denise had earlier talked about in TT and continuing that momentum as well as pricing over assess. And we're going to continue to control what we can control across each one of our businesses and getting cost out across on that side, which is going to progress as the year goes on as well. Arun Viswanathan: Great. And then as a follow-up, just on the free cash flow, you noted that, obviously, your teams did a lot of good work in Q4 to harvest some of that, especially in -- could you just maybe walk us through, I guess, Denise, you may have mentioned that $92 million is more reflective of the quarterly run rate of cash flow generation. So is it also the implication is that you feel comfortable that free cash flow could eclipse $300 million or $350 million as you go through the year? Shane Hostetter: Yes, Arun, why don't I take that one. First of all, I'm very proud of the team of what we've done in Q4, ending the year driving free cash flow over our high end of the range. As we look ahead, Denise talked about the normalization thinking through what the cash generation capabilities of this business are, we're really thinking that as reflective of the full year. As you probably know, right, we are seasonal as it relates to working capital. And I mentioned in my script that in Q1, we don't anticipate over $100 million of outflow, but we do anticipate an outflow in Q1 given working capital seasonality. But for the full year, we wholeheartedly stand by the above 25% free cash flow guide, and we feel comfortable attaining that. So really excited for the capabilities of the team and really driving through cash conversion through unlocking further working capital and really hitting the mark on earnings to generate that cash flow in '26. Operator: Our next question comes from the line of Duffy Fisher with Goldman Sachs. Patrick Fischer: First question is on TT. Can you walk through the 3 geographies that have some antidumping activities going on in India, Brazil and Europe? And just -- what have you seen in those areas already from those antidumping actions? And what do you think is still left on the come for the Western players? Denise Dignam: Duffy, thanks for the question. I mean we see that there is -- we're seeing benefits from the antidumping duties. If you look at Brazil, we see really high duties really good market for us out of our Mexico facility. So really feel very good about that. India, I'm sure you know, there's been a little bit of back and forth. We're confident that those duties are going to come back, but it's just a process that has to come through. We've seen in Europe that, obviously, we've had some uplift in Europe there has been some currency changes since this dumping went in, which gives some benefit to Chinese producers, but it's not anything that is going to dramatically change our view of Europe. Patrick Fischer: Fair enough. And then jumping to TSS, can you walk us through what impact has kind of the bringing online of Corpus Christi been either increased costs? Is it ramping -- and then what's left as far as benefit as that plant fully fills out? Denise Dignam: Yes. So what we talked about in our -- before with TSS is that it was going to be a 2-year ramp. So you could see last year, we talked about improvement in margin that comes from cost out as well as price. So we saw -- started seeing some improvement last year. The second half of that facility will be ramping up this year. So we will continue to see improvement there. The technology we have is the lowest-cost technology in the world. So we feel really good about the tailwinds that we're going to get from that facility. Operator: Our next question comes from the line of Josh Spector with UBS. James Cannon: You have James Cannon on for Josh. I wanted to touch back on the ore mix impact that's flowing through in TT this quarter. I know there's some noise around some legacy purchase contracts. And I was wondering I think the last 1 of those continues to run through, I think, this year or next year. Is any of that something that we should be modeling continuing? Or is it something that should be contained in the first quarter? Denise Dignam: Yes. I would say that for the first quarter, the change in our mix was really related to the winter interruption and the need to consume higher grade ore. Definitely, as you've said, we had 2 contracts, long-standing contracts that were unfavorable. One is completed, 1 is finished, and we're working through the second contract right now. we have laser focus on our input cost in the TT business. So you will continue to see that improving over the year. We also talked about our restructuring that we've done in our mines in -- by taking down 1 mine, it's all aimed towards lowering our input costs. One of the primary costs that go into our plants and actually a competitive advantage for us. James Cannon: Okay. Got it. And then on the -- just a follow-up on the Freon side. It seemed like you called out some opportunistic sales that drove a pretty solid sequential in the quarter. My math gets me to a first quarter guide that has continued growth there. Can you just talk through what you expect on that side of the business without the transition happening this year and new step downs as far as I'm aware. Shane Hostetter: Yes. Thanks for the question. We're pretty happy with some of the tailwinds we saw in the fourth quarter related to the Freon business. As we look ahead, in my script, I mentioned really thinking through the tailings of pricing around both Opteon and Freon, and we can look at '26 and see that continuing. So we're really proud of both the execution on the Opteon side and Freon side in '25, and we'll continue to execute and grow in both next year. Operator: Our next question comes from the line of Hassan Ahmed with Alembic Global Advisors. Hassan Ahmed: Just wanted to revisit some of the questions asked earlier on TT. Particularly as it pertains to you guys as volumes, you obviously reported volume declines in Q4 and the volumes aren't looking that great for Q1 as well. And I'm just trying to sort of think through the antidumping duty side of things, the 4 countries, large regions, in particular, where those antidumping measures have been announced. I mean if I sit there and think through for lack of a better way of putting it, the volume that is up for grab, it's around 800,000 tons, right? So I mean, what is baked into that $800 million, $900 million EBITDA guidance that you guys have given in terms of any potential antidumping related market share gains for you? Denise Dignam: Yes. Hassan, thanks for the question. When you think about us in TT for the year, we're really focused on executing on our price increase. And I know you're smart, and you can figure it out, kind of put the pieces of the puzzle together. We are really focused on our pricing. Our pricing was a global price increase all regions, there's no mix impact. So while we talk about the duties and they clearly have been helpful, we are really focused on delivering value and creating value for this business through our pricing efforts. Hassan Ahmed: But I mean, just any sort of guidance in terms of the market may typically grows at 2% to 3%? I mean, will you be in line with the market? Will you be better than the market in terms of volume growth? Denise Dignam: Yes. We are projecting a stable market. I don't think anyone sees any big reason to expect significant growth. Again, we're focused on value and our pricing and with stable volumes. Maybe I'll kind of take it up a level 2. We have -- I talked about seeing growth in our businesses throughout the year. we're super proud of what was accomplished with our TSS business. We are coming off a record quarter, a record year, strong foundation. If you look at what we've been able to do, we have a leading market position with OEMs in the aftermarket -- and we're really close to our customers. And we are very, very well positioned for growth this year in TSS. Additionally, as we talked about with APM, as we look at the AI trend, we also see great opportunity for growth there as well. Hassan Ahmed: Understood. And as a follow-up, Denise, if you don't mind, just sticking to the TT side of things. I mean a lot of folks you guys included, had talked about 1.1 million tonnes of capacity rationalizations since 2023. Are you guys still comfortable with that figure? And what are you guys seeing in terms of potential rationalizations in China on the back of anti involution? Denise Dignam: Yes. I mean we're so confident in that. I mean, those announcements were made, they're all public. We feel we feel confident in that. As far as additional with anti evolution, I really can't speak to that at this point. We don't know that we've seen much more than that. Operator: Our next question comes from the line of John McNulty with BMO Capital Markets. Caleb Boehnlein: This is Caleb on for John. I was just hoping you could provide a little bit more color on what would get you to the high end of the range and the low end of your range for the full year? Shane Hostetter: Sure. Thanks, Caleb. As I think about the range of possibilities here, I think it really depends upon a couple of things. The high end, depending upon market evolution how the actual economic returns comes. -- if there's further rate cuts, for instance, and that really has impact on the overall market. I would say the other parts on the high end is really just overall cost out and thinking through where the net inflation and cost improvements go side. I would say then finally, would be really continued execution on the pricing side and broader adoption across the businesses. I would say, on the low end of the range, continue to thinking through the cost inputs and thinking through if there's additional costs that we're not seeing right now as we kind of evolve throughout the year. I would say on the opposite side of what I just said, if there's less price receptivity going through there. And then I would say on the other areas is if there's any thoughts around volume depression on the adaptation right side. Denise Dignam: Yes. Maybe I'll just add on to that. I think we've been -- we're focused on things we can control. So I would say the market would be the really a key variable in that. Caleb Boehnlein: Okay. That's helpful. And then for TSS in the -- over the past couple of years, you've seen the benefit of the AIM act and then the H2L transition. Going forward, how do you see the growth algorithm for that business kind of playing out? And especially relative to your previous commentary for like mid- to high single-digit sales growth over the longer term. Denise Dignam: Yes. Thanks for that question. So I would say coming into the first part of this year, we still see significant growth from HFO transition, whether it's additional units the mix of HFC versus HFO units that get sold as well as replenishing inventory that was drawn down in the fourth quarter. So we see that through the first half of the year. One thing to keep in mind is this is a pretty depressed market when it comes to the residential segment. So we see as new units are put on and as the housing market picks up, we see substantial growth there. So we will continue to grow in line with the residential segment. But the other areas to focus on our growth in data centers and chillers and some of the other spaces where we participate. Operator: Our next question comes from the line of Vincent Andrews with Morgan Stanley. Vincent Andrews: I just kind of want to follow up on that a little bit. Could you talk about what your residential HVAC customers are doing. It seems like they're reducing production for various reasons. Is that leading to a destock from you? And can you help us understand how much of that mix -- how much of your mix that is now versus other parts of the TSS business, whether it's data centers or aftermarket and how much of those are going to contribute this year volumetrically? Denise Dignam: Yes. Thanks for the question, Vincent. Yes. I mean, first of all, I want to say that we have -- hopefully, we've established a lot of credibility in this business to this point and what we see going forward. I kind of laid out what we thought was -- what we believe is going to happen as we enter this year. So we do see our customers Actually, inventory was drawn down in the fourth quarter. So we do see some of that coming back in the first half of the year as well as the -- the HFC to HFO transition of the mix of what gets sold to customers. We also see on that, the aftermarket that comes with those installations. So we see solid growth, especially we'll talk about the first half double-digit growth for this space. Vincent Andrews: Okay. And Shane, if I could ask you on the cash flow, the target to do at least 25% conversion this year. What are the things that are inhibiting you in 2026 from doing better than that from getting up to, say, 40% or 50% conversion. I noticed there were some line items for full year '25, whether it was an inventory build or your payables went down a couple of hundred million dollars and also a fair amount of movement in the crude liabilities and other liabilities, which I know is below the working capital line. But maybe you can just help us reconcile some of the important lines on the cash flow statement this year? And what's going to help you year-over-year and what's going to inhibit you? Shane Hostetter: Yes. Thanks, Vincent. First, we put out at least 25%, and I really feel comfortable with that, and we will obviously strive to be more than 25% as we go forward into '26. Specific to the areas that I will keep in mind, it's story a lot is around inventory and getting our DIOs improved. We do -- earlier, there was a question around contracts and TT that are going to wane through the year. Unfortunately, that is a headwind coming into the year because that is mandated high-grade ore that we had to fight against, but we feel very confident, even though we will have additional ore put on that throughout each 1 of the businesses will have inventory reductions outside of that. So I think the inventory is a big story. I think navigating, as you just mentioned, other areas around cash conversion and driving up DPO as well as being efficient on the collections is certainly areas that we'll focus on. And then going forward, I really feel that the CapEx in this company is going to increase year-over-year, but that's really around -- we talked about planned maintenance activities or in the year. So I think it's going to kind of impact our free cash flow in a given year compared to last year as well. So all in all, I think really the story here is we're control what we control, really confident in that 25% number and really will drive ahead to get them even more into the year. Operator: One moment for our next question. It comes from Jeff Zekauskas with JPMorgan. Jeffrey Zekauskas: In the titanium dioxide segment, actually, your revenues in North America and in Europe were flat to up, the issue was in Asia, where for the year, your revenues went from roughly $660 million to $465 million. So you're down 30% in Asia. What happened in Asia? And where is that business going? Denise Dignam: Yes. So I mean, as we've talked about, our strategy is we're focusing on the fair trade markets, and there's been in India in particular. So I mean, that was a trend that was happening for us as we move towards the fair trade market. And India, there was a pullback on the tariff. So -- as I said, we're confident it's going to come through, but I'll say it's temporary. Jeffrey Zekauskas: Okay. So secondly, there's a focus on free cash flow generation. And basically, if you look at Chemours from, I don't know, 2019, your inventories used to be $1.1 billion, and now they're $1.6 billion, and even this year, they're up 7%. And your revenues over that from 2019 to 2025 were up about 5%, inventories are up 50%. What's all that inventory? Is it titanium dioxide? Is it something else? Why do your inventories keep growing? And what can you do about it? Shane Hostetter: Thanks for the question, Jeff. I think certainly, it's -- obviously, we are carrying more inventory than we need right now from that side and we'll own to that. When you look at back to 2019, as you mentioned, we're different business right now. As we think about TSS with Corpus Christi up and running in other areas. So you can't really look at the past trends, but I own up to the fact that their inventory is an area that we are concerned reduce. Certainly, as I mentioned earlier on the call, we have contracts to take-or-pay contracts with a high or that is areas that we don't necessarily need, but we can use so that some of that that's put on there. But I would say across each 1 of the businesses that we're carrying too much inventory and we have stretch goals in 2016 and beyond to get it back to more normalized levels on that area. Operator: So we have reached the end of our Q&A session. Thank you for joining the Chemours Fourth Quarter 2025 Results Conference Call. You may now disconnect.

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MGR.AX 2026 Q2 财报电话会议

Operator: Welcome to Mirvac Group's First Half 2026 Results Briefing. [Operator Instructions] Please be advised that today's conference is being recorded. It's now my pleasure to hand over to Mirvac's CEO and Managing Director, Campbell Hanan. Campbell Hanan: Well, good morning, everyone, and welcome to our half year results call. Joining me is Courtenay Smith; Richard Seddon; Scott Mosely; and Stuart Penklis. I'd like to begin by acknowledging that we present today from Gadigal land, and I'd like to pay my respects to elders past and present. At our full year results in August, we spoke about the momentum that was building across the business. So it's pleasing to present our results today having delivered a strong half year performance and even greater visibility of earnings growth in FY '26 and beyond. What you'll notice in these results is a material pickup in residential sales in both build-to-sell and land lease, like-for-like income growth in all of our asset classes, positive leasing spreads in all of our asset classes, and valuation growth in all of our asset classes. You will also notice that we've made significant inroads in securing future development pipeline opportunities beyond FY '28. And we have continued our strong track record of capital partnering, completing a major 50% joint venture with Mitsubishi Estate at Harbourside, a key objective at the start of the year. We've recapitalized our LIV BTR fund with Australian Retirement Trust, positioning the fund for growth. And we've completed a $430 million capital raise within MWOF. It's been a very busy start to the financial year. You can see the solid progress across all parts of the business with every business unit contributing to the 10% growth in group EBIT. EPS was up 5% and NTA growth has returned, increasing $0.04 to $2.30 per security. It's also pleasing to see headline gearing moderate to 25.8%. We are also executing against our key strategic objectives. Two years ago, we outlined a focus on enhancing the quality and cash flow resilience of our investment portfolio, and we've made excellent progress with our industrial and living EBIT up 15% year-on-year. Our office portfolio allocation has reduced from 65% to 51% today. And importantly, we've almost doubled our exposure to premium-grade assets over the past 6 years to now sit at 60%. Premium grade is the most resilient asset type in office, and this is reflected in our consistently lower vacancy rate. Our repositioned portfolio is now delivering strong operating metrics. As mentioned, each asset class has positive re-leasing spreads, positive like-for-like rent growth and positive valuation growth led by build-to-rent, which illustrates our confidence in the growing capital demand for this asset class. We have a strategic objective to be the leader in the living sector, and we've made excellent progress here. We now have one of the largest operational BTR portfolios in Australia and recent development completions are leasing well. The fund's recapitalization will support future growth with 2 new BTR projects identified. Our growing land lease portfolio secured another 2 sites, bringing the platform to over 7,500 lots, with sales in the first half up 50%. This is becoming an increasingly important part of our strategy and provides future opportunity to accelerate our MPC business. And our creation capability is a key differentiator, and we're unlocking value and improving returns with residential sales up 38%, margins increasing to 22.5% and positive leasing in all of our developments. The execution of these initiatives is providing enhanced visibility of earnings growth in FY '26 and beyond. Our existing investment portfolio continues to grow its earnings contribution with a further $100 million of future NOI currently in production to be realized over the next 3 to 4 years. We also have additional NOI to be realized from our land lease and uncommitted commercial development pipeline. Our committed developments will also drive a $2.3 billion increase in our funds under management across our established growth platforms as they complete, generating new recurring management fee streams, with further fund growth to come from the deployment of recently raised capital across MWOF and further expansion of our LIV BTR fund. Our commercial development pipeline will unlock development profits and development management fees in coming years, along with NTA gains as the projects complete. Our residential growth outlook is supported by a significant step-up in active MPC projects, where we expect to move from 11 communities last year to 16 over the next 12 to 18 months and a step-up in apartment completions on normalized margins. This year, 2 new MPC projects have had their first releases with near sellouts of both. Our recent restocking initiatives support the next wave of value creation opportunities beyond 2028. Sustainability remains important to our business. With 80% of the largest corporate tenants having net zero targets in place, we remain focused on reaching our net zero goals by 2030. This month, we launched our first ever integrated Mirvac brand campaign, which you may have seen at the start of today's webcast. This campaign highlights our amazing brand and celebrates our imagination as our unique competitive advantage. We've been keeping our brand a secret for too long, and this campaign will make sure that we share that story more broadly to raise awareness and enhance value across the group. I also want to call out our recent efforts in learning and development with the continued rollout of our Mirvac Masters program. This is a series of university-style modules across development, asset management and investment management that have been accredited by the University of Sydney. This investment in our people has been recognized as the best learning and development program in Australia. Our employee engagement has returned to top quartile and is an important reflection of our culture and ability to attain and attract talent. With that, I'll now hand over to Courtenay to talk through our financial results. Courtenay Smith: Thank you, Campbell, and good morning, everyone. Today, we're pleased to share financial results that reflect the effective execution of our strategy with increased contributions from every part of the business and a strong balance sheet that positions us well for future growth. Firstly, to the earnings result. We delivered a strong first half with operating profit after tax of $248 million or $0.063 per stapled security, up 5% on the prior half. The investment segment contributed $307 million, up 2%, driven by development completions in living and industrial and improved leasing outcomes in retail. These were partly offset by office asset sales. The funds segment contributed $19 million, up 38%, driven by the completion of 2 further assets in the LIV BTR fund, along with improved asset valuations and increased leasing activity. The development segment contributed $111 million, up 37%. Within this, commercial mixed-use was $27 million with contributions from our committed projects such as 7 Spencer Street and 55 Pitt Street as well as development management fees from Harbourside. Residential contributed $110 million, up 9%, reflecting higher settlement volumes, improved average sale prices, contribution from the sell-down of Harbourside and development management fees from joint venture projects. Net financing costs were $129 million, an increase of $19 million compared to the prior half, primarily due to lower capitalized interest. This was partly offset by a decrease in gross interest expense, we are seeing -- where we are seeing the benefit of reduced debt levels and lower cost of debt. Our statutory profit for the half was $319 million, significantly higher than the prior half and includes $120 million of positive investment revaluations across all sectors. In summary, strong execution over the past 6 months has yielded increased contributions from every part of the business. Turning to the balance sheet. We've continued to actively manage capital, and our balance sheet is in a strong position. Gearing has reduced to 25.8%, well within our target range, and we have maintained strong credit ratings and have interest cover of greater than 3.5x, well above our covenant requirement. Our average cost of debt is 5.3%. And after refinancing $1.3 billion of bank debt at average margins of around 115 basis points this half, we have a further $3 billion of existing long-term debt with average margins of around 180 basis points, representing an opportunity to capture upside as these facilities mature in coming years. Following the creation of the Harbourside partnership with Mitsubishi and the sale of 25 (sic) [ 23 ] Furzer Street now completed, we have clear pathways to fund committed projects and are now focused on future growth opportunities. New opportunities acquired this half have been achieved on capital-efficient terms, ensuring that we maximize returns and make the most effective use of our capital. To support these and other future opportunities, we have multiple sources of funding available to us, providing flexibility as we grow. We have $1 billion of available liquidity with no maturities in the next 12 months. We have a distribution policy of between 60% to 80%, balancing distributions with retained earnings to fund development. And our team has built a strong and consistent track record in active capital management with over $9 billion raised over the last 5 years, $6 billion from capital partners, improving the velocity of our development capital, unlocking value, strengthening returns and generating management fees, and around $3 billion of asset sales, which have reweighted and improved the shape of our investment portfolio. In summary, as a result of active capital management, our balance sheet is in a strong position, and we are set up to support future growth. I'll now hand over to Richard. Richard Seddon: Thank you, Courtenay, and good morning, everyone. We continue to execute our strategy with discipline and focus. We've up-weighted living and logistics through development completions, while sharpening our office exposure through the sale of non-core assets. This has further improved the quality, sustainability and resilience of the portfolio. The outcome is clear, 98% occupancy, 4.4% like-for-like growth and positive valuation movements in every sector. What I'm most excited about is how this positions us for the future. We have clear visibility of growth with further opportunity for rental reversion, $100 million of future income from our committed development pipeline with strong delivery and pre-leasing momentum and a resilient valuation outlook underpinned by robust fundamentals at a time in the cycle where quality and location matter. In office, we've fundamentally repositioned the portfolio for a market recovery that rewards quality. 60% of our office portfolio is now premium grade, up from 34% in 2019, and the benefits are evident in the numbers. Occupancy is strong. Like-for-like growth is positive and successful leasing progress has reduced our forward expiries to just 12% over the next 2.5 years. Market conditions are improving. We're seeing positive net absorption in all major CBDs, double-digit effective rental growth in Sydney and Brisbane and the lowest supply outlook in 30 years, potentially on record. Our committed office developments provide clear visibility of future income and further uplift portfolio quality. In industrial, our strategy to up-weight to the sector through development continues to deliver. NOI is up nearly 80% in the past 7.5 years. Occupier demand has clearly shifted towards quality, and our 100% Sydney focus positions us extremely well as evidenced by strong leasing performance and recent completions at Aspect. Further growth is underpinned by around 17% of under-renting to play for, continued delivery of our secured pipeline with the first stage of SEED, now DA approved and construction set to commence ahead of the Western Sydney Airport opening later this year and structurally low vacancy with constrained supply in Sydney. Industrial remains a long-term growth engine, and our Sydney-focused portfolio is exceptionally well placed. In retail, we continue to benefit from the strength of our urban catchments as highlighted in the operating metrics on this slide. The metric I'm most focused on is driving improved sales productivity through active management of our assets. In fact, of the 34 new partners we've introduced in the past 18 months, we've already seen a 50% improvement in turnover. With resilient trading conditions, extremely tight occupancy and a continued decline in retail floor space per capita, we're confident in the opportunity for further growth. So retail is not just about the footprint, it's about driving productivity and our centers are delivering. Our living exposure continued to expand and perform with EBIT up 15%. Our build-to-rent portfolio of around 2,200 completed apartments is delivering exactly the resilient performance we expected with 6% like-for-like growth and the strongest valuation uplift in the portfolio at nearly 4%. LIV Anura and Albert are leasing up strongly with Anura already at 76%. In land lease, momentum remains very strong. New home settlements were up 21% in the period. Sales are up 50%, comparable EBIT growth is up 50%, and we expect to be selling across 7 new projects over the next 18 months. We've increased total platform sites by 23% since acquisition just over 2 years ago with a further 580 sites secured. So living is performing very well and provides significant runway for further growth through these 2 established market-leading platforms and will continue to be an increasingly important part of our portfolio. I'll now hand to Scott. Scott Mosely: Thanks, Rich. Good morning, everyone. We've had an amazing period of execution in our funds business, which continues to attract quality institutional capital to the platform, which is attracted to our asset creation capability, our deep sector expertise, our alignment model and our strong fiduciary mindset. Our third-party capital has grown to $17 billion with the funds under management component growing by over $1 billion in the 6 months, reflecting our BTR completions and broader valuation growth. Capital demand for our established vehicles across living, office and industrial remains strong, with all 3 vehicles completing equity raisings or asset acquisitions over the last 12 months. All have visible growth opportunities and importantly, have capacity to invest. The recapitalization of our BTR fund with Australian Retirement Trust marks an important milestone, not just for our fund, but for the entire sector. Our LIV BTR fund now has 5 income-producing assets, generating core to core plus inflation-linked low volatility returns. ART's investment reflects the unique quality of our platform and the attractiveness of this living asset class to sophisticated domestic investors. ART is aligned to our 5,000 apartment medium-term target, and we now have 2 new opportunities in exclusive due diligence since closing the recapitalization in December. MWOF's $430 million equity raise from a broad range of investors demonstrates there is capital demand for office portfolios with the highest quality assets in the best locations. The fund is extremely well placed to assess investment opportunities at this point in the cycle, having no redemptions in the queue, no secondary units being marketed, gearing at 26%, a reaffirmed A- credit rating and further inbound equity interest. Over the period, the fund was the #1 performing fund in the MSCI Index and transacted on over 100,000 square meters of leasing deals at greater than 8% spreads. Our Mirvac Industrial venture has grown to $1.7 billion over the last 3 years, and we've got clear visibility for further industrial partnering opportunities now that Aspect Central and SEED Stage 2 are set to introduce capital over the next 12 months. We have embedded FUM growth of approximately $2.3 billion as our development assets reach completion, but that is before we consider on-market opportunities and our replenished development pipeline. So there is clearly momentum in the business with $13.9 billion of high-quality institutional capital coming on to the platform in the last 3.5 years. This ability to continue to attract highly aligned capital not only provides us with diverse funding sources to expedite our development pipeline, but it is also generating recurring management fees and co-investment income across our development, asset management, investments and our funds business. I'll now hand to Stu. Stuart Penklis: Thank you, Scott, and good morning. We've had a strong first half with significant momentum in the development business with sales up 38%, a strong recovery in margins and significant restocking of our pipeline. This momentum gives us clear visibility of earnings and the recovery of returns. The success we've had in restocking our pipeline includes securing 3 major opportunities at the right time in the right locations and in the right structures that will drive the next wave of value creation and growth for Mirvac. These transactions are aligned with our strategy and leverages our core capabilities and are expected to deliver above hurdle returns with future capital partnership potential. At the upcoming new Hunter Street Metro in the heart of Sydney CBD, we expect to deliver approximately 70,000 square meters of premium state-of-the-art office space with an end value of around $3 billion and a yield on cost above 6%. With expected completion in 2034, Hunter Street will deliver into a deeply undersupplied market, positioning us extremely well for the next commercial cycle. At Blackwattle Bay on the site of the former Sydney Fish Market, we expect to deliver approximately 800 apartments in a precinct we know extremely well in close proximity to our successful Harold Park and Harbourside developments with first settlements targeted for 2030. Finally, at Karnup in Western Australia, we expect to deliver approximately 1,500 new homes in partnership with the WA government in one of the fastest-growing catchments in Australia. Turning to commercial and mixed-use. We have good visibility of earnings over the next few years, underpinned by significant progress on our committed projects. Construction costs are stabilizing with stronger competitive tendering and programs returning to normal, creating a more supportive environment for new project commencements. Pre-leasing momentum is also encouraging, particularly given the tightening market conditions. At 55 Pitt Street in Sydney, we have AFLs in place for 40% of the building, including Baker McKenzie, Aon and MinterEllison and discussions on the remaining space are progressing well. Construction is advancing with the new iconic terra-cotta facade installation now well underway. At 7 Spencer Street in Melbourne, construction remains on track with practical completion expected in the half. A new heads of agreement has increased leasing to almost 25%, and we're in advanced discussions that would take pre-leasing towards 60%. At Aspect Industrial Estate in Western Sydney, we completed Aspect North and Aspect South to follow this half. These precincts are now 91% leased. At SEED, adjacent to the new Western Sydney Airport, we've received Stage 1 DA approval with construction to commence in the coming weeks. Across these major projects, including Harbourside, these projects will generate significant and valuable development management fees during construction. Turning to residential. We delivered a strong first half with momentum building across all key metrics. Sales were up 38% year-on-year, supported by particular strong growth in our masterplanned communities with Victoria up 99% and New South Wales up 141%. Leads were up significantly with the December quarter delivering the highest level of inquiry in 4 years, overcoming market sentiment around increasing interest rates. Settlements were up 22% year-on-year, and we're now 90% secured for full year with a notable improvement in gross margins. Our focus on design, quality and investment in upfront amenity continues to differentiate Mirvac and win market share. Our projects are attracting upgraders and downsizers who have built up significant equity, ensuring demand across our portfolio remains resilient through the cycle. We continue to focus on innovation and modern methods of construction and completed our first volumetric prototype prefabricated home at Cobbitty. Capital partnering will remain a key feature of our strategy, helping us unlocking earnings, recycle capital and enhance portfolio returns. A good example of this is our recent JV with Mitsubishi at Harbourside, which unlocked value and created capacity for investment into future opportunities. Our restocking efforts over the past 2 years have been significant with more than 12,000 lots secured in capital-efficient structures and on above hurdle returns. We've made strong progress on rezoning and planning across our residential business, including at Wantirna South in Melbourne, the largest infill housing development in Victoria, which will deliver more than 1,700 built-form homes. At Green Square in Sydney, we have converted proposed commercial to residential with the project expected to deliver over 1,300 homes into this new town center. The underlying market fundamentals remain supportive, including strong population growth, continued undersupply, resilient house price and rental growth expectations and an increasingly supportive state planning process. And it's important to note that we remain uniquely positioned across the full residential spectrum: growth corridors, middle and inner rings with the capability to deliver land, built-form housing and apartments. This is a major competitive advantage in this point in the cycle and allowing us to provide diversity, which allows us to respond to the market swiftly changes in demand. Finally, our restocking success sets us up for a material step change in project activity. Over the next 12 months, we expect to launch 5 new developments, including our trading projects from 11 to 16. This activation is already underway with strong releases at Mulgoa, followed by the near sellout of our first release at Bullsbrook in WA just 2 weeks ago. First sales at Monarch Glen in Queensland are scheduled to take place in just a few weeks' time. We will also see a significant increase in apartment completions heading into FY '27 with 4 projects settling in the year. These are already over 60% presold on average, providing strong visibility of earnings. So with a material step change in sales activity, a recovery in margins and more new project releases to come, we are well placed to deliver continued momentum and growth across our development business. I'll now hand back to Campbell to conclude. Campbell Hanan: Thanks, Stu. As you've heard this morning, Mirvac is in great shape, and we have now a balance sheet that can fund our growth. Our repositioned investment portfolio is well placed to outperform. In an environment of higher bond rates, the quality and location of what we own will become increasingly important for future total returns. We've made great strides in our capital allocation strategy and stand to benefit from organic like-for-like growth and new quality investment income as developments complete. We're seeing improved returns from our development business with a stabilization in costs, higher margins and strong sales volumes across our residential build-to-sell and land lease businesses, providing near-term confidence around earnings growth. Restocking our future development pipeline for FY '28 and beyond has been a key focus area. Securing opportunities at better than hurdle returns and on capital-efficient terms will be important contributors to future earnings. And finally, we continue to attract capital to invest alongside us, improving the capital efficiency of our business and boosting returns through the corresponding fee streams. We're pleased with our strong progress to date and are focused on executing our key objectives in the second half, particularly around residential settlements and capital partnering initiatives. We reaffirm earnings guidance of between $0.128 and $0.13 per stapled security and a distribution of $0.095. I'll now open up for questions. Operator: [Operator Instructions] Our first question comes from Tom Bodor at Jarden. Tom Bodor: I was just interested in your development expectations of $270 million of earnings this year. And just considering that in light of your $3.2 billion of invested capital, that return being below 10%, how should we think about this normalizing? Where could it get to over time as your 0 margin projects roll off? Campbell Hanan: Look, thank you. Thanks for the question, Tom. And yes, without doubt, the development returns in the business have been hurt a little bit by the increased costs that we noticed in the last couple of years, but we're now moving through that, as you've seen, and we're starting to get a much better return on our invested capital. But Stu, did you want to talk to that? Stuart Penklis: I think to Campbell's point, we are seeing improvement in margins across the portfolio, and that's a key focus of the business to continue to improve those returns. We've done some great restocking, as we mentioned, at above hurdle benchmarks. And as those projects start to commence and coupled with the projects in the field, as I mentioned, we're moving from 11 to 16 projects, all of which are performing extremely well. We'll continue to see improvement in the returns from the development business. Tom Bodor: But from a ROIC perspective, I mean, can you get to mid- to high teens? Is that realistic? Stuart Penklis: Yes. Look, as we said, we will -- with the roll-off of those projects that were heavily impacted by COVID over the last few years, we expect to get back to our through-cycle returns. Tom Bodor: And then on the Serenitas minority or sort of JV partners, how do you think about funding the buyout of those partners and the timing of that intention you might have? Campbell Hanan: Look, that's probably a little bit of a hard question to answer because it's obviously not our asset to sell. Yes, we are interested in the opportunity of increasing our exposure to Serenitas. Look, I think as we get our balance sheet in better shape, which has been a key focus for the last 2 years, it starts to open up opportunities. I think as liquidity in office markets and investment property full stop starts to improve, it gives us optionality. So to that extent, we'll just continue to monitor and respond to any opportunity that may present itself at a future time. Operator: The next question comes from Lauren Berry at Morgan Stanley. Lauren Berry: Just another one on land lease. Like you said multiple times how important this segment is to you going forward. I was just wondering if you've given any thought to potentially doing some land lease on balance sheet rather than in the Serenitas venture? Campbell Hanan: Yes. Look, we have. We've got a really great platform in Serenitas as is, and we certainly have lots of future opportunity with our own land bank. And that's things that we'll consider over time as we understand the ownership opportunity. Lauren Berry: Okay. And -- there's obviously been a change in the interest rate environment as reported. Could you please give us a little bit more color on how your January and February sales have been tracking and whether there's any incentives placed across the projects? Campbell Hanan: Look, I might start, and then I'll hand to Stu. Look, I think our inquiry levels were similar in January as they were in December, and they're certainly similar again in February. Look, I just can't stress enough, there is a chronic undersupply of housing in Australia. And that chronic undersupply is going to be there for a while, and there is a lot of pent-up demand that is looking to find a solution to this housing problem. So to a certain extent, one interest rate movement is probably not enough to move the needle. We certainly haven't seen any evidence on the ground. And Stu, in particular, spoke to a recent release where we had 100% sellout in our Bullsbrook first masterplanned release in WA. Stu, did you want to add to that? Stuart Penklis: Yes, Lauren, the only thing that I'd add to that is really sentiment around interest rates going up really occurred in September and October. And as I mentioned in my speech, we've seen just continued momentum across our projects, particularly from a leads perspective, leads are obviously the strongest they've been in 4 years in the December quarter, and that has continued in January and February. I think the resilience of our portfolio, particularly obviously not heavily reliant just on first homebuyers and that focus on upgraders and rightsizes, particularly the contribution coming through from the middle ring and particularly the contribution coming through from New South Wales exposure has just demonstrated, I think, the resilience of the portfolio that we have. Operator: The next question is from David Pobucky of Macquarie. David Pobucky: Strong first half result implies a 49%, 51% oEPS skew across the halves, so a bit better than we had expected. Did anything land in the first half versus your prior expectations of landing in the second half, particularly around CMU? Campbell Hanan: Courtenay, do you want to take that? Courtenay Smith: Thanks, David. Look, I think all parts of the business have performed well, which you can hear from the results. I think resi settlements performed a little better. The NOI uplift like-for-like growth was a little better. So I would say it's across the business, the performance has been strong, which is why we're indicating that all parts of the business is up. David Pobucky: And just the second question on the office portfolio, 275 Kent Street and Westpac's 12-year lease there. If you can provide any update on that, please? Campbell Hanan: Rich, do you want to take that? Richard Seddon: Yes. Well, I think as we mentioned in the previous period, we've been busily leasing up a portion of the skyrise space, which was handed back. We've made great progress on half of that, which has contributed to the improved performance across the NOI line for our office portfolio. Westpac do have an expiry coming up in 2030. And naturally, we'll be progressing discussions on that one as we get closer to that time. Operator: The next question is from Suraj Nebhani at Citi. Suraj Nebhani: Two quick ones. Firstly, on the disposals, you called out $0.5 billion. Where are you looking to sell? And across the portfolio, should we see more potential for disposals? Or is this sort of the last year where we see a lot of disposals coming through? Campbell Hanan: Look, I think so. Thanks for the question, Suraj. I think you'll continue to see sales as part of our longer-term strategy. But ultimately, we've got key strategy objectives in our asset allocation plan. And I'd just ask you to keep referring to that. You'll see that we want to keep trimming office, but certainly not premium grade office. We're probably slightly overweight retail at the moment. We're fast approaching market weight of where we want to be in industrial. So you'll still see a little bit of trimming on the edges. But the most important thing is obviously that we're adding a whole lot of new real estate to the portfolio, that $100 million of NOI we keep referring to is going to be an important ingredient in growing our investment portfolio. And we're focused on growing the investment portfolio contribution. This has been a part of the business that hasn't grown for a number of years. It's been a funding source to ensure that our balance sheet is in good shape. Now that the balance sheet is in good shape, for the first time in a long time, we've got a growth profile in the investment portfolio, which we think is very important. Suraj Nebhani: Perfect. And one for Stuart on two specific developments. Firstly, on 7 Spencer, comfort levels on leasing that up before completion? And what sort of structure is there? Do you have to provide any guarantee? And then secondly, if you can clarify what happened on Green Square with the zoning conversion that you've talked about? Stuart Penklis: Yes, certainly. So I'll start with 7 Spencer Street. As I said, during the period, our commitments have ticked up to 24%, and we've got good line of sight through negotiations at the moment to get us around 60% pre-committed as we complete that building in the second half. We're comfortable with the allowances that we have in the feasibility in terms of the balance of that space. Turning to Green Square. Green Square has obviously been a very successful and long-dated project with multiple stages. But however, more recently, that project has been called in or has qualified for a state government approval process. And essentially, as part of the original master plan, a segment of that site was earmarked for a 45,000 square meter commercial office building. We have been able to navigate through state government a pathway to convert that to residential. And ultimately, the next 2 stages of that project will deliver approximately 1,300 additional apartments to what has already been delivered into the precinct. So a very important and good outcome for Mirvac in terms of being able to pivot to residential and obviously respond to the need for critical housing here in Sydney. Operator: The next question comes from Richard Jones at JPMorgan. Richard Jones: Just in terms of the timing around proposed sell-downs of Aspect Central in Kemps Creek and Stage 2 at Badgerys Creek, do you envisage that will happen in the second half? Campbell Hanan: We're targeting one of those for the second half. And then the other one is likely to drag into FY '27. Richard Jones: Okay. And just in terms of the new BTR opportunities, can you comment on what yield on cost you would expect on putting new money into BTR and I guess, how you, I guess, justify that as the best use of capital? Campbell Hanan: And I might turn to Scott for that, given it's a fund question. Scott Mosely: Yes. Thanks, Richard. Firstly, I'd just say the recapitalization of the fund has allowed us to actually broaden the mandate of that vehicle. Previously, it was purely debt to core, and it's gone through a period of completing 4 developments, which is through, and now we're actually getting stabilized income. But with that new mandate, the vehicle now has the ability to consider not only debt to core, but stabilized income-producing assets as well as fund-throughs. And so the yield on cost will depend whether that's a fund-through deal or a full develop to core opportunity. And right now, we do see some opportunities to participate in fund-through deals where, as you'd expect, that yield on cost is lower, but we think that we can target in the range of 65 to 85 basis points yield on cost spread to core cap rate, which is making commercial sense for those investors. Operator: The next question is from Ben Brayshaw at Barrenjoey. Benjamin Brayshaw: A question for perhaps Stuart. If you could comment, please, on the production outlook for the communities business, just with the 5 new projects coming online that you referenced in the presentation. Just wondering whether that implies that communities can operate at a sustainably higher volume? And could you quantify roughly when that might be reflected in the sales or the settlement rates for communities, please? Stuart Penklis: Yes. Look, I think you're already starting to see the tailwinds of those projects starting to contribute to our sales numbers. Obviously, over the second half of '26, just with our existing projects, we propose to release around 800 additional lots. And then the new launches in projects such as Monarch Glen and Bullsbrook, you'll start to see those also contributing. So it is a significant step change in terms of what the MPC business will be contributing to the overall portfolio from a volumes perspective. And I think importantly, what we've seen in recent times is, as I mentioned earlier, obviously, Queensland and WA continue to perform extremely strongly. We've seen New South Wales and particularly projects such as Mulgoa, Cobbitty and Menangle contribute significantly to the sales numbers. And we've obviously also now seen Victoria start to improve, particularly in the Southeast corridor. And that's reflective of, obviously, some of the comments I made probably at full year last year in terms of the immigration and the significant immigration that's happened over the last 24 to 28 months. And those immigration numbers now starting to contribute to sales sort of as they've settled and started to buy. So we'll continue to see a strong contribution from MPC, both in land, but also in build for housing. Benjamin Brayshaw: And could you just give a high-level update on how the 3 Victorian apartment projects are tracking? Just interested in how confident you are in those being delivered at the target margins for residential? And any feedback on presales over the last 6 months? And finally, just a comment as well on Prince & Parade. It looks like the timing might have been pushed out a little bit. So if you could clarify that as well. Stuart Penklis: No, Prince & Parade, firstly is still on target to complete next year. Albertine will be completing in the next few months, and Trielle will be completing in FY '27. So all those projects have held program, held budget. We have seen a tick up in sales. And I think we've moved from -- across those projects in '27, an uptick from 50% to 60% on average being presold. Inquiry has improved and particularly as we've started to complete the first wave of display apartments, again, very heavily weighted towards owner-occupiers, upgraders, downsizes. So we are seeing an improvement in the Victorian market, albeit it has been a pretty tough environment down there for the last few years, but we certainly feel like we've turned a corner there. Benjamin Brayshaw: I'll just clarify my question around Prince & Parade, the annexures show that the expected settlement is now spread across FY '27 and '28. Hence, my question as to whether it's been deferred. Stuart Penklis: No, no. Sorry, that's probably just the allowance in the settlement tail extending into '28, but the practical completion date hasn't changed. In fact, we're hopeful that we might be able to bring it in a month earlier. Operator: The next question is from James Druce at CLSA. James Druce: Can we just go through how you're seeing the second half this year in terms of residential margin? I think you commented on sort of Richard's project, a question around which commercial development profits will be coming through second half. But just also just comment on the settlement skew and how secured that is. Campbell Hanan: So just on the -- maybe start with settlement skew, 835 settlements in the first half. We've guided to sort of 2,000 to 2,300. So clearly, we've got a skew to the second half. The timing of -- just in terms of sales, kind of just over 90% sold. So really, that comes down to risks around weather or risks around titling, which are risks that exist always. So we're working through those. We've got stock on the ground, which is the last 9-odd percent that we need to sell, which will help us get there. But we're largely through it. We've sold more of those through January and February as well. So that sort of feels okay. Is there anything on the development pipeline that you want to call out, Stu? Stuart Penklis: No. I suppose the point I'd make is that, that remaining sort of 9-odd percent and the projects contributing to that 9% are achieving the required sales rates to hit our target. So we remain comfortable in terms of, obviously, the settlement range that we've provided. And I think the other question that you asked just in terms of earnings from CMU in the second half. And obviously, we spoke about the SEED project, and we also spoke about contributions continuing from 55, 7 Spencer Street and development and construction management fees coming through on Harbourside. James Druce: Okay. And just on the gross margin, how you're seeing that in the second half? Stuart Penklis: In line with what we've stated in the first half. James Druce: Okay. And then just a question for Stuart. How do we think about restocking for the high density or inner ring projects? I mean it still sounds like only really the luxury projects stand up at the moment. Are you seeing any change there? Stuart Penklis: Yes. Look, I think that we've been very focused on unlocking value from not only our existing pipeline. So Green Square is a great example where a rezoning and state government pathway has given us ability to obviously achieve additional yield and through conversion from commercial to residential. So that sort of middle to upper market, we think, continues to be very attractive for our business. Obviously, we continue to see a number of opportunities, particularly as planning progress has been made with state governments and the state government here in New South Wales is obviously very, very focused on the delivery of additional housing. So we're seeing a lot of landowners looking -- coming to Mirvac to look to partner. So that's really great in the sense that there's an abundance of opportunities. We're certainly picking the eyes out of the right opportunities. And to my earlier point, being able to recycle capital out of projects, bring capital partners in to ensure we've got the capacity to be able to pick up these opportunities at the right time in the right location is a key focus of the business. So I think we've obviously had a very successful restocking program over the last few months, and we continue to ensure that we're well positioned to be able to secure that next wave of opportunities in the inner and middle ring. Operator: The next question comes from Cody Shield at UBS. Cody Shield: I don't want to labor the point, but just to be crystal clear around Aspect and SEED, which one of those projects will be slipping into '27 in terms of partnering? Campbell Hanan: Look, it's probably likely that Aspect Central will and SEED Stage 2 is more likely to fall into this year is sort of the target. Stuart Penklis: And I might just add with SEED, we've been able to secure our Stage 1 DA, obviously, ahead of many in the precinct with the M12 opening later this year and the new Western Sydney Airport also opening, we're well positioned, obviously, with earthworks due to commence in the next few weeks. So an exciting time in terms of our opportunity to be able to capitalize on demand in that precinct. Cody Shield: That's great. And then just a small one. There's been a change in the treatment of DevEx for land lease. Could you just walk me through the change there? Campbell Hanan: Yes. Courtenay, do you want to speak to that? Courtenay Smith: Yes. Look, I think the first thing to say is the land lease business is performing really well, as Richard talked about, sales are up. EBIT is up period-on-period. We've had a change in ownership on a like-for-like period. So it went from 47.5% to 40%. And then we have had a change in the allocation of some of the development costs. And the way to think about it is we're allocating some of the civil costs to the development to unlock the value of the home essentially. Longer term, you'll see that value come back in the NTA even from next year. And we've done that because we think that's the most appropriate treatment of those civil's costs to unlock the value of the home. But otherwise, the business is performing well. Richard has talked about the sales, as I said, and we're really happy with the performance of it. Operator: The next question is from Adam Calvetti at Bank of America. Adam Calvetti: Look, just on -- you've moved your -- you had a slide that showed the value creation of profit energy uplift that's been moved and you haven't disclosed where that value that number is. I think it was $540 million for the full year. Any idea of how that's trended or what we can expect? Campbell Hanan: Look, probably part of that movement is timing. So as we finish projects, clearly, the value is created. You see that come through the NTA line, and there'll be more of that this year, particularly as we finish. We stabilize BTR assets, you'll see that start to participate in the income line and certainly Aspect South, which is due for completion shortly. And I think as Stu mentioned, now 91% leased, you'll start to see contributions to both NTA and contributions to income, which really will lead into a slight second half, but predominantly an FY '27 contribution. Adam Calvetti: I mean just looking at the future years, is it still safe to assume that $540 million is intact? Campbell Hanan: It will shift because we're actually starting to work our way through it. And I think the most important thing we're trying to highlight in this set of results is that, that earnings expectation that comes from delivering new projects, we're now actually finishing these projects. And so with that, you'll start to see the development contribution start to diminish because we're actually finishing projects. Hence, the focus for us now on earnings contribution beyond FY '28. We've got a pretty full pipeline up until '28. The focus beyond '28 has been important to us, and we're seeing some really good opportunities, which we've executed on, which we've announced today. Adam Calvetti: Okay. Great. And then just on 7 Spencer Street, I mean, you've got some -- you've done one deal there, and you've got a percentage that's in discussions. How does those incentives levels track versus underwriting? Are they in into any of the development profit that you're expected in the second half and going forward? Campbell Hanan: So Stuart, do you want to take that? But maybe just to start with, we are always updating feasibilities to ensure that they reflect current market conditions. And certainly, there's nothing that we're seeing or dealing which is irrespective of that at this point. But Stuart, do you want to add any further color? Stuart Penklis: Yes. No, it's precisely that. The feasibility reflects where current incentives are at, and we've got adequate allowance to see the letup of that building through. Operator: The next question is from Sholto Maconochie at Millennium Capital. Hello, Sholto, please ask your question. Okay. It seems we can't hear from Sholto. So as there are no further questions, I'll now hand back to Campbell for closing remarks. Campbell Hanan: Well, thank you. Look, thank you to all of you for taking time today to hear our half year results presentation. We look forward to meeting with as many of you as we can over the coming weeks. But thank you for your time.

85天前Insight Analytics约5分钟阅读

TU.BK 2025 Q4 财报电话会议

Conversation: Unknown Executive: Good morning, everyone. Welcome to Thai Union's Analyst Meeting for the Fiscal Year of 2025 Results Announcement. My name is [ Malanyali Jadulong ] and I will be your MC today. First of all, I would like to introduce our management. First Khun Thiraphong Chansiri, President and CEO; Khun Ludovic Regis Garnier, our Group CFO; and Khun Pinyada Saengsakdaharn, Head of Investor Relations. Today's session will take around 1.5 hours, including Q&A session, and then followed by a 10-minute break before we begin the TFM Analyst Meeting. Without further ado, I would like to invite Khun Thiraphong to begin the presentation. Thiraphong Chansiri: Good morning to all the analysts and the executives from financial institutions joining us today. Today, we're going to share our performance results with you for the fourth quarter of last year as well as for the full year of 2025. 2025 was a year that is very memorable for us because we have so many stories, important stories, whether it's in terms of the reciprocal tariffs, which was something quite new for us, and also the exchange rate for the Thai baht, which has strengthened. The appreciation of the Thai baht is one issue, but what is important is that our neighbors, their currencies have weakened. And this is a challenge -- this was a challenge that we faced in the past year. Nonetheless, I believe that thanks to our adjustments, and which we have continued to adjust, we've been continuously adjusting. Over the past 2 years, we have put in place our Sonar program, our transformation initiatives, our Tailwind program for [ item ] to improve our PetCare profitability, and this has helped us achieve or be able to manage our costs in terms of productions and SG&A as well in the past year. Thus, in the past year, we have prepared for growth in 2026. If we take a look at our transformation program, you will see that we have our Sonar program where the goal is to achieve savings at USD 25 million, and our Tailwind project, where we want to have an operating profit of USD 20 million. And these 2 projects, we are on track. In terms of cost resetting, we have a target to reduce our cost by USD 118 million by the year 2027. And in the past year, we have had refinancing worth THB 24 billion. And this led to a decrease in our interest expenses significantly. And we also have our portfolio focus where we have adjusted our portfolio to emphasize on higher profit margin products. Innovation is also extremely important for us. Every business unit of ours, we have launched new products, whether it's our Ambient branded in America and in Europe. In the pipeline, the products in our pipeline that we're seeing significant achievement in that area. We have our innovation hub in Netherlands -- in the Netherlands. In the PetCare business, innovation is also extremely important as a key driver for the sales growth for ITL. In our Frozen business and the culinary-ready meals, this is something that we have seen major development in the past year. If we take a look at the full year results, you can see that in terms of Thai baht, the sales went down by 4.1%. But what is positive is that our volume has returned to growth at 2.5%. The overall volume that we have produced and exported is at 900,000 tonnes and the demand is very positive for Frozen feed and PetCare products. And with the feed, this is another business of ours where we have achieved a new record high in terms of market share and sales and profitability. And later on, Thai and Pinyada will present their performance results for you. And we also have PetCare positive results. So we've done very well in the past year in that regard. Our gross profit margin is at a high level, although it is below our target. With 19%, the drop is because of the foreign exchange impact. Another issue that I believe is something that is a highlight for us is despite our net income decreasing year-on-year, our earnings per share, or EPS, has grown compared to -- comparing year-on-year, it's gone up 7.2%. And this has enabled us to pay dividends, higher dividends. And on the next page, you can see that our EPS has grown from THB 1.8 to -- THB 1.08 to THB 1.16. And our adjusted net profit has gone down by 3.1% despite that. And this is something that we are very happy with. We are able to provide that earnings to our shareholders, and it continues to remain at a constant rate, more or less constant rate. And on the next page, you can see that our sales is at THB 35 billion. The advantages here are if we do not include the foreign exchange impact, our sales have gone 0.7%, which is a strong momentum in the fourth quarter. Our gross profit is at 18.3%. This is mostly due to the tariffs -- the increase in tariffs as well as the higher selling prices in the fourth quarter in Europe. Our adjusted net profit is at THB -- adjusted operating profit is THB 1.65 billion. Operating profit margin is 4.7%, and our adjusted net profit has gone down 22.7% in the fourth quarter. And on the next page, we'd like to point out our track record in terms of consistent dividend payouts. Ever since we founded the company, we have been able to provide dividends, and our policy has been no less than 50%, and we have paid at this high level, ever since the founding of the company. From 2023 onwards, 2024, you can see that we have -- can pay -- continue to pay out higher and higher dividends. And in 2024, it was 0.66 and in 2025, it is 0.7. And in this year, we have already paid TWD 0.35 per share. And in the second half of this year, we will pay TWD 0.35 per share as well. The ex-dividend date is on the 2nd of March and the record date is on the 4th of March and the payment date is on the 24th of April. And that's all of the details regarding dividends. And the reason for our higher EPS is our share repurchase program, which today, we have repurchased about 10%, most recently, at the beginning on the 8th of January, we lowered our shares by 200 million shares. We have 400 million shares remaining. That is our last program, and we will be implementing that plan in the future. And here, you can see, as always, we continue to be awarded and receive recognition from various organizations. And we received the leadership award from the Thai government and also from the Stock Exchange of Thailand. And also our products have been recognized, whether it's ECOTWIST that we launched in the U.K., we received an award. It's a Packaging award in the past year that we are proud of. And another recent news that we're very proud of is our sustainability recognition. We have received ranking in the top 1% globally by S&P Global. So we're included in the S&P Global Sustainability Yearbook for 2026. And this is something that we continue to be a pioneer and leader in. We have been upgraded in terms of our ESG ratings by FTSE Russell ESG. The climate disclosure, we have been upgraded from B to A. And from the SET, Exchange of Thailand, we have been -- our rating has improved to AA in Agro & Food. And there are other awards and recognitions that you can see from the presentation. And as for the financial performance for the fourth quarter 2025, I would like to hand things over to LUDO to share those details with you. Ludovic Garnier: Thank you, Khun Thiraphong. Good morning, everyone. Very happy to be with you. I will start with our usual 5 years picture on the sales and the GP margin. The few takeaways for you are, we are extremely proud this year to achieve our best performance ever in terms of GP margin for the whole year, just below 19%. We're expecting to reach 19%. We are just below for the whole year. And you can see achieving this performance in such a volatile environment with the U.S. tariff and the FX playing against us, I think we can be very happy about that. Of course, we don't want to deny that over the past 2 quarters, we have been under pressure because of the U.S. tariff. You can clearly see that in our numbers. However, the full year performance is very encouraging, and I think this is something we have to acknowledge. The second one is, please have a look at the sales development quarter after quarter. For you to remember, we started Q1 with a decrease by 10%, mostly because of the FX, and then in Q2, minus 5%; Q3, minus 1% and almost stable in Q4. We are very close to be flat or even back to growth. But I think all of these are very encouraging KPI that we are looking for. If I deep dive on the FX impact, and you know the FX has been a very strong impact for us. You can see here, we have a small table. In Q4 alone, the USD versus Thai baht has been deteriorating by 5%. The same for the GBP by 2%. Euro has been the opposite way by 3%. So it's partially offsetting this impact. So we are facing even in Q4, some very strong FX impact compared to last year. And this is something we have to keep in mind, even if we do a lot of hedging, of course, we have our U.S. operations, which are affected by this one. And Khun Thiraphong mentioned this one. One of the issue is all our competitors in the countries around Thailand have been -- have not seen such an increase of their own local currency. okay? So we are one of the only one where the local currency has been strengthening so much versus USD over the year. So here a few things. What is important for me is the dark blue, okay? The dark blue is the organic growth. You can see now it's 2 quarters where the organic growth is positive. I think this is encouraging. If you look at the light blue also, this is the FX impact. And the good news is the FX impact is reducing quarter after quarter, okay? You can see in Q1, it was significant Q2 also, Q3 dropping a bit, and then Q4 now, it's almost nothing, but it's offsetting our organic growth in Q4. One good takeaway also from this slide is our volume growth, okay? We told you when we've been facing with the U.S. tariff in Q2, we have been facing one of the key question mark will be the reaction on the demand in the U.S. You can see here, we have been generating some volume growth consistently every quarter, every quarter. Of course, we have different pictures depending on the category, and Khun Kuan will elaborate on this one, but I think this is also a very encouraging signal for all of us. Next slide, you can see our raw material prices. I think, overall, it has been under control. This year, we have been facing a bit of inflation. You can see in Q4, we had $1,573 for Skipjack, increasing a bit compared to last year, but overall, within our comfort zone of $1,400 to $1,700. Shrimps also has been increasing overall quarter-on-quarter, but still an acceptable range. And the salmon also, I think, is also more steady compared to where it had been the years before. So I think we have been quite happy with the salmon development. You have also, for each of these raw materials, our assumption in terms of budget for the year '26, of course, what we provide is always the average for the whole year. You can have some ups and downs during the year depending on the quarters. But overall, we don't plan for very significant changes in terms of raw materials next year. In tuna, the same in salmon, the same in shrimps, okay? We do expect a bit of inflation, but nothing dramatic for the business. So next one is regarding the FX. And I think this is the most important slide that we do have. Of course, the deterioration of the USD versus Thai baht. I mentioned this one has been impacting our business. You can see in Q4, we are 32.2%. In Q1, it is deteriorating a bit further on this one. This is one of the key components of the performance, and it was quite far away from our budget assumptions for the year '25, which was much higher than this level. Euro, there were some ups and downs. Euro has been increasing over the past 2 quarters. So I think we're in a better shape here. GBP also has been deteriorating versus Thai baht. Japanese yen, I don't need to comment. We know it's very weak versus all currencies. If I now move to our net debt bridge, '24, '25. The first thing is our net debt has been increasing in '25 from THB 53 billion at the end of '24 to THB 61 billion, okay? Let me walk you through the key components of this one. First of all, the EBITDA, I think the EBITDA is quite aligned with our expectation, THB 12 billion, THB 13 billion. This is where we are usually. But then next to the EBITDA, you can see we have a big box, which is net working capital, increasing by THB 6 billion. That was kind of a surprise for us, especially in Q4. Our inventories, our AR have been increasing in Q4. A few drivers for that. First of all, the U.S. tariff now are inflating our inventories in the U.S. on average by 20%, 25%. In the U.S., we import a lot of product coming from Thailand, from Indonesia, but also from India. The average tariff rate that we have is something close between 20% to 25%, depending on the mix country. So this is one of the reasons. We have been facing also some good issues, a lot of orders in our U.S. Frozen business at the end of the year. So we built up a lot of inventories at the end of the year to face with this situation. Also, our sales in December were high. So our AR are also higher compared to what we have usually, okay? So the impact of all of this THB 26 billion over the full year. CapEx are under control. For you to remember, at the beginning of the year, the guidance for '25 was THB 4.5 billion to THB 5 billion. When we have been facing with the tariff, we have been reducing our guidance, we say we want to keep under control. And then after we have been loosening a bit the CapEx, okay? But still, we have been spending below our guidance for the full year. And you will see when Khun Thiraphong will talk about our guidance '26 for the CapEx, we are catching up a bit of CapEx, which have been delayed from '25 to the year '26. All the rest, tax, dividend is kind of normal. You can see, of course, on the right, we have also one box, which is very unusual, which is our treasury share buyback for THB 4.3 billion, which is the last program we have been doing in the year '25. So the consequence is our net debt to equity has been increasing. It was below 1 at the end of '24. It's 118, 118 at the end of 2025. There is one good news. The cost of debt has been decreasing, okay? It was 3.65% last year. In '25, it was 3.31%. Here, you can see the impact of the interest rates gradually reducing in the world. We have a clear action plan for '26. We are not happy with our cash performance in the year '25. So we have a clear action plan to improve and to generate more cash in '26 and especially to reduce our net working capital across all our locations, okay? I think we can understand '25 with the tariff, we had to build up a lot of inventories, but now the tariffs are becoming part of the routine. We have also some good news. You heard that India, the tariff for India are reducing from 50% to 19%. We do have a lot of inventories in the U.S. coming from India. So that will help us to decrease also our level of inventories next year. So you can see here the impact in terms of ratio, the inventory days. You can see here clearly the inventories in terms of absolute amount have been increasing by THB 4 billion. In terms of inventories, inventory days, we have been gaining 3 days, and the same roughly for our net working capital, okay? In terms of ratio, net debt-to-EBITDA, we are exceeding 5x, okay? We are not happy with that. And again, I mentioned to you that we have an action plan. The goal for us will be to reduce our net debt, and our net working capital during the year '26. We want to get back very close to 1.1, okay, by the end of 2026. And also in terms of net debt to EBITDA, right now, we are at 5. We want to go more in the territories of 4.5, 4.4x at the end of 2026. Very strong actions are expecting next year on that part. Now I move to the transformation program. You know about Sonar. You know about Tailwind. You know this is the end of the Sonar program. We told you it was a 2-year program, '24, '25. I think we are on track. We are slightly exceeding our target in terms of savings for the year 2025. We did achieve $20 million versus a target of $15 million. For you to remember, next year, we are planning to have even more savings because we have the full year annualized savings coming from this one. We did give you here some few initiatives we have been doing in Sonar, okay? One of the most important one for us was to move to one global non-fish procurement organization, okay? For you to remember before, our procurement organization was very fragmented by regions or even by companies or even by factories. Here, we moved to one global one, and we have been consolidating a lot of our purchase, okay, especially in terms of fees, in terms of olive oil. Now we are doing some purchases for the whole group. And of course, our bargaining power is much stronger. So we had some very interesting savings coming from that. You can see especially the impact in our Feed business, okay? Please stay for the TFM Analyst Meeting right after this meeting. There are a lot of good and exciting news to share with you. But you can see the performance has been really improving in '25. And clearly, Sonar is one component of that. For you to remember, our Feed business, the lead time is very short, okay? We have all our operations in Thailand. We are selling in Thailand. So you see directly the impact in our P&L. This is different for our Ambient and Frozen product where our factories are quite far away from our market. So we have very often 6 months lead time between the production, the transportation to the market, and then the sale to our customers. You have also a few examples of initiatives we've been doing in terms of production. We have been shifting some SKU across the factories from the U.S. to Africa. It's the first time that we have some -- our factories in Africa producing for the U.S. So we are becoming more agile, okay? And of course, we did all of this when we were facing the risk of 38%. Now that we're at 19%, of course, we don't need to do dramatic changes in our supply chain. However, I do believe that we became much more agile this year, okay? Our factories in Africa, especially at PFC in Ghana, they can source for the U.S. So for us, it's more one more interesting sourcing. We want to stay ready. Of course, the tariff situation is extremely volatile. Every morning, we are watching the news about what did they say in the U.S. There could be some positive news also, but we are careful also on that. Tailwind, Tailwind is a 3 years program. So there is one more year in 2026. Again, I think in terms of pure savings, we are on track. We slightly over deliver compared to our expectations. For you to remember, there is 3 work streams in this one, the commercial, the operation and the procurement. Also in this one, we are happy about the results, okay? Of course, for you to remember, we told you in '24, the combination of the 2 program will be a net negative, okay? The costs were higher than the savings in '24. In '25, we told you it's kind of a wash. We have kind of the same amount between the cost and the savings. '26, we would expect a different situation because, of course, the cost related to Sonar will almost disappear, but then all the savings will be here. So it will turn to be positive in '26, but we will still have some costs on the tailwind program. And then '27, we don't have any more all the transformation costs. And then we expect that we will maximize the profit on this one. Of course, all these savings are partially being offset by the inflation, okay? So you don't expect to see the savings directly floating in our bottom line. We have some inflation, the tariff also here. So you can see directly the $20 million in our bottom line. But overall, I think we are moving in the right direction. We told you also since last quarter that we did launch the cost reset program. And in fact, the cost reset is just a transition from Sonar, which was a very specific 2 years window to a continuous improvement. okay? Cost reset is some initiatives we have been launching on the COGS and on the SG&A. We started in the middle of the year to face with the U.S. tariff. And the idea is also to continue to slash our cost and to reduce our commercial cost, and our cost in the factories. We put here some few initiatives. Again, the cost reset is applicable across all our categories within the business. The target for '26 is around $60 million, 6-0. There is a part which is duplicated with Tailwind, okay? So we have $50 million, which is also in Tailwind. So if you want to focus only in -- on the cost reset, it's more in the range of $45 million. Again, that will help us to face with the inflation to face with the impact of the U.S. tariff. I think we have a lot of good initiatives going on right now for this one. This program, very clearly, we are capitalizing on Sonar, okay? I think through Sonar, we have been learning a methodology, which is not applicable for the whole group. And we just want to transition now to continuous improvement. We don't have any more the support from the consulting firm. We do it by ourselves, but we take it very seriously. And clearly, this is one of the key initiatives that the GLT is following within the group. I wanted to share also with you just one slide on the impact of tariff. So you can see here, of course, all our operations in the U.S. are being impacted by the tariff. Also, our operations in Thailand are also impacted because we do export a lot in the U.S. Pricing, we told you from the beginning, the strategy for us is to transfer the impact of the tariff to our customers and to the consumers. So far, we can see we could not do it across all our category, okay? Why? Because we have to watch out what our competitors are doing. We are not the only one, of course, in this market. Depending on the competitors, depending on the category, we are facing different situation. We are also monitoring what is happening in the other proteins, okay? So here, we cannot say the tariff go up by 20%. We just increased our prices by 20%. That will be too easy, okay? So we do some gradual increase. We did a bit in '25. We'll continue to do more in '26, but it will be gradual, okay? Quarter after quarter, we increase the prices to finally, at the end of the day, push everything to the consumers. One thing also you need to have in mind, and maybe it's not clear for everyone, the vast majority of our business in the U.S. is FOB, okay, meaning the buyer will take care of all the tariff impact. There is one exception, which is in our Frozen Thailand business, okay? In our Frozen Thailand business, we are DDP, okay, meaning we take care of the tariff basically, okay? So the impact for us, it will trigger an increase of our SG&A because of the tariff impact. And of course, we increase our prices, so our sales will increase, okay? So you will see that our GP margin is being inflated by the tariff impact in our Frozen business. That's why Khun Kuan will comment after a record high GP margin for our Frozen business. But our SG&A are also increasing coming from that, okay? So it's almost a wash in our OP margin, but you have a bit of inflation for these two. And of course, in the Ambient in the PetCare, as long as we are not able to transfer all the impact of the tariff to the customers, our GP margin is a bit under pressure. We have been trying to estimate just an estimate the negative impact on our OP for the full year '25, we estimate it's around THB 350 million, okay? It's not a small amount for you to remember, it's mostly Q4 and Q3. There was nothing before that time. That is a hit for us of around THB 350 million. Again, it's an estimate. It's very complex to have a detailed calculation, but it provides a good overview, I think, about where we are. One more thing also, and I think maybe we were not vocal enough during the year. We told you since the past 5 years that we have been very active now in our portfolio management. And we continue to do that in '25. And here, we -- I just wanted to give you an overview about a few divestments we have been doing in '25. We did not really talk about this one because the impact are very small. These were small businesses and very often, we sell very close to net book value. So you don't have any large gain or loss in our P&L. But we sold our shares in our factory we have in PNG in Papua, New Guinea. We sold our shares also in our supplement business in Q3. And the same for a small joint venture, who we are having in Thailand together with Interpharma. And finally, you heard the Feed business saying that they sold their factory in Pakistan. These are small things, but we told you from the past few years that now we are clearly addressing all the loss-making businesses, okay? There was one common point to all these businesses, they were all loss-making. Okay? So clearly, we are fixing them. We have less and less loss-making businesses within the group. I think it's a good thing, it's a good sign. We still have a few of them to be focused on, and we are working very actively on this one. But I think it's a good, it also avoids some distraction, okay? Even if sometimes the business are very small, it always creates some distractions of business, and we want to focus on what is having some impact. Finally, the last part for me. We just wanted to give you a heads-up regarding the top-up tax. It was a lot of triggering a lot of questions from your side all along the year. We told you last time the impact will be between THB 100 million and THB 150 million. Finally, it's THB 91 million, THB 91 million for the whole year. For you to remember, the impact for us is only in Thailand, okay? In Thailand, we have an effective tax rate, which is close to 10%, 10.5%. So we have to bridge the 15%. So we have a top-up tax, which is between 4% to 5%. And this is THB 91 million, you can see here. However, you can see that for '26, we expect the impact to be higher. And here, we expect the top of ETR impact to be around 1% to 2% and the amount to be again back in the range of THB 100 million and THB 150 million, okay? For you to remember, we are still waiting for some compensation from the Thai authorities. We know they are working on that. It takes time. At that stage, we have no visibility about when they will release anything, but we do expect at one stage, they will get back with some compensation measures, especially for the exporters business like we are. And now, I will give the head to Khun Kuan to go through the business performance. Pinyada Saengsakdaharn: Hello, everyone. For our business performance, as always, we're looking at it by category. In 2025, the company had sales of about THB 132.7 billion. This is mostly impacted by foreign exchange. And if we take a look in specific areas, just our sales volume, as Mr. Thiraphong told you earlier, we have a sales volume that has increased by 2.5%. And in the graph on the bottom slide, you can see our sales volume. They are driven by our Frozen and PetCare categories. In our gross profit margin numbers, this year, we have a record high gross profit margin at 19.8%. And in every category, we have gross profit margin numbers that are in line with our guidance that we provided earlier. Let's begin with a look at the fourth quarter in the Ambient category, our sales is at THB 15.67 billion going down around 2% year-on-year, and this is mostly due to the negative FX impact that led to lower average selling prices. However, if we take a look at the bottom left, you can see the sales volume in the fourth quarter for the Ambient category increased by 1.7% year-on-year. This is mostly because of increasing demand in Europe and the Americas and in Thailand. In terms of gross profit margin, it is at 18.4%, going down by 2.2% year-on-year. The reason -- the primary reason for the decline is the U.S. tariffs, which have led to increasing cost for us, while the prices -- our selling prices were not adjusted to cover those costs. And we were also impacted by the raw material prices for tuna, which increased by about 3% year-on-year. We have plans in place to deal with this risk because we have increased our prices for products in America and the American continent since the third quarter of last year. And in January of 2026, we also increased product prices to mitigate that risk that has led to a lowering margin. And for the full year for Ambient, our sales have gone down 6% year-on-year, and this is mainly due to the FX impact. The sales volume also went down by 2% year-on-year. In 2025, the company we -- our customers in the U.S. were waiting to see the situation regarding U.S. tariffs. Taking a look at our gross profit margin, you can see that our gross profit margin was able to achieve a level of 19.8%, and this is very close to our target range that we provided in our guidance of 20% to 22%. In the fourth quarter for the Frozen business, our sales was at about THB 12 billion, increasing 3.4% year-on-year, and this is due to sales volume increasing by 5.6%. Our sales volume that has increased is from the Feed business for the most part. And Thai Union Feed Mill will be providing more information on their business operations that have led to an all-time high. And the sales volume for the U.S., you can see that it is still soft due to the U.S. tariff impact. Nonetheless, we have a gross profit margin for the Frozen business that is the best ever. It's an all-time high, quarterly high at 14.5%. And this is thanks to our increasing selling prices in the U.S. and the costs were relatively stable. As our executive shared with you, the Frozen Thailand exports to the U.S., we have increasing SG&As because of the inco terms or the logistics terms, which are delivery, duty paid or DDP, where we had to absorb those freight costs. Our margins, however, continue to expand, and our Feed business has provided support in this regard. For the full year, in the past 5 years, we have had low range sales, but we have plans to remove the low-margin businesses as well as those companies that are not generating any profit. We informed you last year that our new baseline for the Frozen business will be at around THB 42 billion. And this year, we have a drop by about 2.5% due to the FX impact. Our sales volume for the Frozen business for the entire year increased by 7.6% year-on-year. And this is mostly due to the volume from the Feed business, which increased gross profit margin has also improved to an all-time high of 13.2%. As for our PetCare business, you can see that in the fourth quarter, we had sales at about THB 4.69 billion, increasing 1.4% year-on-year. If we take a look at the sales volume, it increased by 2.8% year-on-year. And the lowering sales opposed to the increasing volume is a result of the FX impact as well. In U.S. dollar terms alone, our sales have increased by 6.7% year-on-year, and this is due to improving volume in the market in the U.S. and in Europe. And the gross profit margin for the PetCare business is at 26.3%. And this is, we have exceeded the range that was provided 3 quarters in a row. And this is a reflection of strong operations. The PetCare results for the full year, our sales went up 2.8% year-on-year, driven by the increase in sales volume. If we take a look at the -- take a look at this in USD terms, PetCare increased by 9.2%, while the gross profit margin continued to be in line with the target range of 23% to 25%. And lastly, as for the sales for value-added in the fourth quarter, sales dropped by 9.2%. And this is mostly a result of demand in the U.S. market. Under the value-added category, the various products, there's a big mix, which include Ambient and Frozen value-added products as well as packaging ingredients, byproducts and also other products. When our sales decreased, it was mostly due to the value-added in Frozen sales, which reflected lowering demand in the U.S. Our gross profit margin for value-added went down to 21.8% and the full year performance for the value-added business went down by 9.5% year-on-year. It went down in every category, as I explained earlier, but the ingredient business has done quite well. And the gross profit margin for the value-added was also favorable at 25.4% for gross profit margin. This is higher than our market range. It's above the target guidance of 25%. I'd like to return the presentation to Mr. Thiraphong now. Thiraphong Chansiri: In 2025, we have reset our baseline, and it was a year for us where our sales went down. But in 2026, we expect to see growth -- a return to growth. And we had set a target for sales at 3% to 4%, and we expect growth in every category, especially high growth in the PetCare for ITL and also our Feed business from TFM. The sales growth will be mainly driven by higher volumes, not just the prices. And our assumption that we're using in 2026, the FX rate is at THB 32.5. This is based on the financial institutions, and we have not adjusted that number so far. Our gross profit margin, the guidance, we are committed to improving the gross profit margin to a level of about 20%. Our guidance is 19% to 20% for this year, and we expect that the margin will increase in the Ambient and Frozen and PetCare value-added. SG&A is at 13.5% to 14.5%. I feel that this is an appropriate level because we are at our branded businesses -- we've included our branded businesses, and we have our lower transformation costs, and we will not -- not in the transformation cost, in the Sonar function. CapEx is at THB 5.5 billion [indiscernible]. This is primarily due to increases primarily due to our projects that continue on from last year. We had a lower CapEx for last year, lower than our target. In addition, we are investing in other areas, such as the Feed Mill in Ecuador, which we have been recognizing CapEx numbers this year. We have an automated warehouse for PetCare as well, which has been completed, and we will see CapEx numbers regarding that as well. We have a new facility for Packaging, whether it's cans, Asia Pacific can, that's one of the businesses and also our printed materials, graphics, where we continue to invest. Our dividend policy remains at least 50% twice a year. And that is the guidance for 2026. Unknown Executive: Thank you very much for joining us today. We will now take a 10-minute break before TFM session again. Thank you very much. [Break] Unknown Executive: The Sonar cost which almost disappear, okay? And we expect roughly transformation cost to decrease by half. However, we do expect this positive impact to be offset by the negative impact coming from the full year impact of the U.S. tariff in the U.S. in our frozen business. That's why when you saw the guidance provided by Konrapong, it's almost a wash, okay? We keep the guidance quite close compared to what we have been doing in '25, decrease of our transformation cost, increase of the tariff impact. We want also to increase further our marketing expenses in our P&L. And that's why you see our guidance. We don't see any drastic improvement of our SG&A to sales compared to what we have been doing in '25. Pinyada Saengsakdaharn: Okay. Now we will have only one question from the online. Regarding the 400 million share repurchase in the first half of 2025, does management still intend to proceed with the planned capital reduction? Or is there any possibility of the reselling and treasury share to help reduce debt to equity in the range? Thiraphong Chansiri: Still have plans to reduce our cost. Nothing has changed. We still have 400 million more shares. If we're going to make any changes, we will inform you, of course. But at this moment, there is nothing -- no changes in our plans. Pinyada Saengsakdaharn: As there are no further questions, we will conclude today's session today. Thank you very much for joining us today. We will now take a 10-minute break before our TFM session again. Thank you very much. [Break] Pinyada Saengsakdaharn: And welcome to everyone for the results [indiscernible] the executives who are joining us today. Our CEO; and our CFO. And without further ado, I would like to ask our to go ahead and share the details of our performance results. Thiraphong Chansiri: Hello to all of the analysts and the investors joining us today. I would like to begin with our meeting. Slide shows that even though the Aquaculture industry in Thailand in the past has faced many challenges many areas, whether it's outbreak in shrimp raw material prices and the global economic uncertainty. The company have been able to maintain strong growth we have delivered performance that have are the best ever best of business too and at the business and we have been able to increase our market share and shrimp feed and fish feed was seen growth in Thailand and in our exports consists strategies in the past TM. We have adjusted in our strategy to include a [indiscernible] of 51% stake and AMG-TFM, which [indiscernible] area that has been Pakistan resulting in our [indiscernible] and this allows TFM to focus on our resources on main businesses and strong markets and to take advantage of PetCare growth [indiscernible] One of the symptoms that are commitment to ESG and sustainability TFM [indiscernible] and managing news to everyone. We have many projects in the lower carbon shrimp project, which helps farmers -- shrimp farmers to reduce their costs and to lower their greenhouse gas emissions from the farms. This is to improve the farming efficiency and effectiveness and to bolster their long-term competitiveness as well. TFM is the first animal feed producer in Asia that has been certified by ASC. It's the ASC Feed Standard [indiscernible] high level. And this reflects our leadership in sustainability and [indiscernible] feed. In addition, to this we had innovation it prevents which are [indiscernible] feed almost to have remain to reduce the last [indiscernible] and the [indiscernible] breaking apart. [indiscernible] sustainability and regain to receive the [indiscernible] in 2025 and it was a year 2025 was a great year for us and this re-emphasizes that TFM in the past with past ex-sustainability in a core front [indiscernible]. In the next line, we tried to talk [indiscernible] for 2025 [indiscernible] increased 4.5% fishes in business except for [indiscernible] animal feed [indiscernible] 16.2% [indiscernible] increasing 33.4% [indiscernible] 22.2%, which is higher than 2022, 18.7% and this is the result of shrimp cage [indiscernible] strong profitability [indiscernible] and raw materials management as well. Since the result on 2025 we had [indiscernible] which is 19% compared to last year. [indiscernible] to our strong business operation. [indiscernible] we have done a track record for gross profit and net profit in the past 2 years and they [indiscernible] gross margin and high-level of [indiscernible] and our net margin of 11.5% [indiscernible] in our business operation that continue on [indiscernible] trade industry and [indiscernible] TFM, were our shrimp feed on 2025 has increased from the [indiscernible] market share including OEM products this in '25, 7% to 8% [indiscernible] exports in Indonesia growing by 25.6% from the [indiscernible] and this is thanks to our increasing share [indiscernible] on shrimp feed -- quality shrimp feed together with providing technical support to the farmers sharing that with them. And this has allowed shrimp farmers to be more successful in the operations and lower costs. On the next slide, you can see the overall operations for the country. In Thailand, we are now going very well, been able to capture more market share in shrimp feed and fish feed. Thanks to our sales team and our technical support team. In Indonesia we faced [indiscernible] pricing in the fourth quarter. We, it was also, the issue of [indiscernible] activity and the shrimp and there also FX in the U.S. market and in the fourth quarter we had sales affecting our value chain and the strong business in Pakistan. We still have sales producing due to the [indiscernible] business model to OEM [indiscernible] 2024. Overall it is now [indiscernible] because it's the small business size [indiscernible] shares in AMG-TFM to throw the partners. In terms to exports to other countries, we are seeing increasing from the [indiscernible] and this is one of the main targets. We have a target [indiscernible] on our portfolio, [indiscernible] we also have new partners in other countries share that with you in the Q&A session. Our exports, we still see a lot of room for growth and a lot of opportunity for sales. Unknown Executive: This is about the dividend payout in the second half of the year for 2025. We announced THB 0.30 per share dividend has to be approved by the Annual Shareholders meeting first. The dividend pay is at 81.8%, which is higher than our policy guideline of no less than 50%. Record date is the 27th of February, and the payment date is the 21st of April. [indiscernible] and update on the employees that we have received in the past [indiscernible] our outstanding innovative. There was nothing innovative company [indiscernible]. This project that we were awarded from and something that we had shared [indiscernible] ever since 2024. We started that end of the year. We have been able to create [indiscernible] small sized [indiscernible] for young shrimp and this small is called [indiscernible] very small and we are the very first organization in Thailand to be able to do this. And this product helps both the production cost and the farming for the shrimp farmers pollution environment -- and this has led to us receiving this outstanding innovative company award. Let's take a look at the details in our performance for the fourth quarter, beginning with sales. Our sales is at THB 1.6 billion, growing year-on-year by 14.3%. You can remember right that this time last year, we said that in the fourth quarter of 2024, there was unusual season with low season 2024 instead of being a low season, that fourth quarter was a high season due to the prices of shrimp, which are very, very high, very, very strong. And even though we have that baseline in 2024, the high baseline, we're still growing 14.3% more. And this is mostly due to the results in Thailand and our exports because our Srilankan products recovered from flooding and we also have new customers from other countries as well. This growth is mostly from the shrimp feed together with the seabass feed. And our gross profit margin is at 22.3% and this has grown year-on-year as well and this is due to many reasons, whether it's raw material prices or the product mix has changed, this had the increasing shrimp feed contribution and SG&A. [indiscernible] has gone up [indiscernible] we have been able to [indiscernible] compared to last year, which was at 10.2%. And for the entire year, you can see, which we have been able to control our cost of sales. Usually, we take our customers -- if they achieve the targets, we take them for a trip and that increases our sales. But overall for the entire year, we have done quite well. There is one special item, which is the sales [indiscernible] TFM in the third quarter, we reported that impairment and in the fourth quarter, the actual sales took place, we had recorded another loss. Despite this doubtful debt due to the shrimp situation, whether it's outbreak. This is outbreak or radio activity in Indonesia to a high level of doubtful debt in the fourth quarter. Nonetheless, our profit margin reached the level of 11.2%, growing 22.1% year-on-year. If you wait and see the contribution from the different fields, shrimp feed has had 65.5% and increasing from [indiscernible] and shrimp feed goes to product [indiscernible] and this is the main source at the [indiscernible]. Once take a look at details on the different products of shrimp feed you can see and we have grown relatively well especially here in Thailand. The volume in Thailand, increasing volume in the fourth quarter by 26%. 26% thanks to the technical support and other measures we have taken. Shrimp prices are also at the level that the farmers are very happy with and you share after they have recovered in the third quarter from the disease outbreak in the first half of the year. They didn't had radiation issues and that led to a quick capture of shrimp, which affected their exports to America, which is their major export market. [indiscernible] month of last year, there was disruption in the value chain for Indonesia and the situation gradually improved. But the farmers they held back on shrimp raising and that led to an impact on our shrimp feed for Indonesia in the fourth quarter, but the situation is improving. In terms of our gross profit compared to last year, it improved and this is thanks to the raw material prices that have improved, especially in terms of soybean meal and fish meal, though the price has increased significantly in quarter 4. On to fish feed, we have seen growth in this respect as well. It's increased year-on-year by 6.7%. This is mainly due to the Seabass, which has grown 26.1% year-on-year. We have been #1 for Seabass feed for quite some time now, but we continue to grow and this -- for this feed compared to our competitiveness. And we are seeing -- and we have consistent quality and for other fish feed, the categories have declined a bit due to many reasons that gourami fish had disease outbreak and the market size decreased. This too working with the farmers to deal with this issue. And we have someapnea fish also risk for [indiscernible] for different kinds of fish and these are reasons credit concerns and this is reason for a decline in that fish feed other fish feed. We continue to work in this area. We've been working for several years now, but we are happy with the formulation and we're going to implement sales promotions to hopefully lead to increasing sales in other fish feed. And our livestock feed, this is a small contribution to our sales, but if you take a look at the volume, volume has increased and this is because of the lowering sales price. This is in line with the raw material prices. The margin is still at a very satisfactory level, and we will continue with this here, the net profit bridge, we've seen an improvement from THB 151 million in the fourth quarter, THB 151 million in the fourth quarter of 2024 have a stronger since we have a stronger margin due to many reasons. So, SG&A in absolute terms increased, but we have been able to control our costs quite well. And there are a few problems with the doubtful debt. And in Indonesia, they are working on resolving that issue. They are following up on debt that resulted from the radiation and disease outbreak. And AMG-TFG had disposals with feed. We also had that and we have taxes, which have improved and thanks to the [indiscernible] benefits, which we regained in the end of August and this is the summary of [indiscernible] this year that's very similar to the year before. We have been able to have a greater [indiscernible] that is strong and we [indiscernible] and the majority that you see here is that [indiscernible] projects and we renowned shrimp the factory and then [indiscernible] factory and also [indiscernible] dividend payment, which doesn't improved the addition that is [indiscernible] per share. We have a low debt level. These ratios are the cash conversion ratio. And we are very happy with the numbers. The cash conversion cycle is at about 35%, dropping a bit from the quarter before and interest-bearing debt to equity is still at a very low level at 0.09. And I'd like to hand this back to Mr. Peerasak. Peerasak Boonmechote: As for the outlook for this year, we expect sales and we expect continuous growth at 8% to 10% and be main driver for be this [indiscernible] in Shrimp feed and fish feed here in Thailand who see a lot of [indiscernible] and who see a lot of in [indiscernible] opportunities. This profit is at 18% to 20% and this is thanks to our [indiscernible] to maintain quality production and our portfolio on fish focuses on [indiscernible] products. SG&A remains the same [indiscernible] CapEx is [indiscernible] and this is from our new [indiscernible] Ecuador. Hence will be informed the [indiscernible] for operational developments going on [indiscernible] Indonesia. Thank you to our executives, we are at the presentation and has anyone has questions [indiscernible] participants. Unknown Analyst: I like to ask about Ecuador. First of all, Ecuador in the Group, are they important to certain producers? Ecuador has a very large shrimp market and one of the biggest in the world. Our entrance into that market, is it due to the fact that we already have customers or have we been invited into the market? Because I understand that the market there is quite large. You're investing THB 680 million and the capacity you would increase 80%. Is it going to be a construction phase by phase or will be all at once? Peerasak Boonmechote: Let's take it question by question. Of course, the investment in Ecuador is in accordance with our road map. If the analysts and investors would be remembering, if you've been following at the news we shared our road map all the way to 2030. The organic growth, we're expecting organic growth of 8% to 10% yearly and joint ventures to up to THB 10 billion in the past few years. That's we have been sharing with you and the road map that we've made for ourselves, we are on track. In terms of opportunity while we looking at Ecuador -- it's because of the market size and the production yield. Ecuador has a 1.5 million tonnes shrimp farmings. They are growing over 10% every year and if we apply with the conversion rate -- conversion ratio, the numbers are very large. And that is why TFM was looking at this market as a great potential of opportunity. At the investment size is about the same that we had been driven 80% is for the production that can grow end to end and [indiscernible] continue to produce at 80% of the market. Second question is about relationship with partners. There are opportunities and risks, of course we're looking at is the partners. It's just like our investment with [indiscernible] in India. Our partners in Ecuador have great networks. And our partner has not just the network, but also the volume, the value. I don't want to share too much detail yet. But we do have a partner that is directly involved in the industry and also has a supply chain network that is very strong. And I think that's all I can share with you about that. In Ecuador, the shrimp farmers, you have your ASC certification. In Ecuador, they are certified as well because their largest export market is the U.S. And the shrimp that they export is world class at a world-class level. Its players to America or China or Europe, and they have tax benefits, benefit in terms of various barriers. They have all the certification. Unknown Analyst: And the margin compared to us -- the gross margin, the average is not different? Peerasak Boonmechote: Not that different, it depends on the situation. The margin was affected by many different things. It's the portfolio, the product mix, the raw material costs, the factory management, the debt that we believe is quite similar. Unknown Analyst: You said 18% to 20% for the gross profit margin in your guidance compared to last year. I know that last year was a special year. The assumption that you're using, what's the assumption for fish meal and the soybean meal? Why are you able to achieve 18% to 20% for gross profit margin? Peerasak Boonmechote: The first quarter is a low season. We adjust our guidance every quarter, but this is standard and it depends on the real-time performance as long. Some raw materials increase prices, some raw materials decrease, they offset one another. So our costs are relatively stable [indiscernible] in the first quarter, it's a low season and will peak in the second and third and fourth quarters. Unknown Analyst: That means that the margin is according to your guidance, right? In the second third and fourth quarter, you'll adjust -- so how -- what is the outlook for the first quarter. Peerasak Boonmechote: For the first quarter will be a low season relative to the [indiscernible] end of the year to the gross profit. There's a small volume. The volume increases in the following quarters, the gross profit will increase. The main variable is the prices of the fish meal, which is on an upward trend. It may not increase as high as in the fourth quarter as we saw earlier. Other raw material prices are not changing that much. Unknown Analyst: You look at low season, right? We're looking at a decrease in the prices the profit for the first quarter year-on-year, what do you expect? Peerasak Boonmechote: We expect growth in line with our guidance. Pinyada Saengsakdaharn: Are there any other questions? Unknown Analyst: Look at production [indiscernible] what percentage do you expect total capacity in Ecuador. Peerasak Boonmechote: Looking at 8% to 10% [Technical Difficulty] would like to update as the [indiscernible] 2026. The strategies for this year was indicated before we are looking at 8% to 10% growth. Last year was an average of 12% to 15%. We will continue to grow this year as well. We will grow in the high margin products. Our shrimp feed share in Thailand production is not increasing towards 250,000, that's flat. Since this year to be about 250,000 as well. We're looking at about 320,000 [indiscernible] for our shrimp [indiscernible] market share, means we have to increase our shrimp feed with care. Despite the fact that shrimp feed is not increasing overall. We will capture more of the market share. Seabass feed is about [indiscernible] we will continue to [indiscernible] to achieve in that area. We will include our market share and seafood, Seabass feed and we want 10% to 15% and is our final destination and for exports. There are many things for us to consider and we will talk more about that in the second quarter. We will be able to provide a better picture for the [indiscernible] we have many countries. [indiscernible] portfolio whether shrimp feed or fish feed, [indiscernible] every portfolio for us is growing. We are looking to move to focus on sustainability and on innovation in line with our scientific and our world class businesses [indiscernible] the entire group, so that our globe rate [indiscernible]. More concerned about our sustainability [indiscernible] communication to farmers and [indiscernible]. In the next quarter and we are taking more action [indiscernible] with the farmers and we are working [indiscernible] demand, the supply chain and we are wondering well our [indiscernible] in the various reasons and to help the farmers and [indiscernible] we work closer with the farmers. That is our key pillar because we want the farmers to be confident in us to help them build the market. If the farmers can grow and the exports can grow, the supply chain can grow. Therefore, we have to make sure that everything in terms of the farmers in the country are strong. This will support our portfolio. And our investors in Ecuador [indiscernible] is another pillar for us. This is depending with SKUs for abroad looking at risk management. Everything is according to our road map. We are still on track, [indiscernible] the road map that we shared with you a few years before. We want to achieve our 2030 targets, and that is our game plan. Unknown Analyst: In the past 2 years, your dividend payout was quite high. It was 100% and then 80%. And after this, you have projects where you will be using -- you need a lot of funding. So how will -- what will your dividend payout look like? Thiraphong Chansiri: We'll have to balance investment and dividend payout, of course, but we will not be lowering our dividends lower than 50%. Of course, it will not be lower than 50%, even though we're going to be investing for the future. We will continue to follow our policy of no less than 50% dividend payout. Unknown Analyst: I'd like to ask about the target market share, especially for the market share for the shrimp business for 2024 and 2025, 2026, [indiscernible] Seabass for 2024, which are 38%, 45% is still in 2025 [indiscernible]? Peerasak Boonmechote: [indiscernible] in 2024 was only 7%, [indiscernible] expect growth every year. The size and the productivity in Thailand is not increasing and for shrimp feed we continue to see growth in the past few years, we had that. In 2024, the market share was about 27%, if I remember correctly. Have 16% [indiscernible] A challenge to increase to 120,000 tonnes overall sea sales in Thailand is 250,000 tonnes. We want to provide about 120,000 tonnes that [indiscernible] that's how we're going to drive the margin for our seabass feed and shrimp feed together with our portfolio management for our foreign investments or for our foreign clients and our exports and we will continue to engage with the farmers. We had our BOI investment last year. The game plan for this year is to use our production capacity and we will increase production without having to invest more in production. We already did so in the year before. If we have a product mix -- a favorable product mix, and we can continue to grow in shrimp feed and fish feed, we will have more volume in the freshwater fish. Our capacity will be able to maximize the utilization of our capacity. So overhead, of course, will go down. And the overall cost will reduce. The keyword for us is to maintain the level of SG&A. Selling prices are not changing and this will allow us to achieve our target. That is the game plan that I like to share with you. Pinyada Saengsakdaharn: Are there any other questions? We have no aligned question. [indiscernible] for 2026, this will transfer the prices. Raw material prices, as we indicated before, the fish price is increasing. We continue to monitor weekly and [indiscernible] soybean meal and wheat flour prices are stable, and we also continue to keep an eye on these two. We try to lock in the prices 3 to 6 months in advance so that we can control raw material costs at a manageable level. We're not hoping to buy at the cheapest price, but at a price that is acceptable to our operations. As there are no further questions, this is [indiscernible] for 2025 and 2026. So for today, we would like to conclude this session. Thank you for joining us. [Statements in English on this transcript were spoken by an interpreter present on the live call.]

85天前Insight Analytics约5分钟阅读

EXR 2025 Q4 财报电话会议

Operator: Hello, everyone. Thank you for joining us and welcome to the Extra Space Storage Inc. Q4 2025 and Year-end Earnings Call. [Operator Instructions] I will now hand the call over to Jared Conley, VP of Investor Relations. Please go ahead. Jared Conley: Thank you, Miriam. Welcome to Extra Space Storage's Fourth Quarter 2025 Earnings Call. In addition to our press release, we have furnished unaudited supplemental financial information on our website. Please remember that management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act. Actual results could differ materially from those stated or [ implied by our forward-looking ] statements due to risks and uncertainties associated with the company's business. These forward-looking statements are qualified by the cautionary statements contained in the company's latest filings with the SEC, which we encourage our listeners to review. Forward-looking statements represent management's estimates as of today, February 20, 2026. The company assumes no obligation to revise or update any forward-looking statements because of changing market conditions or other circumstances after the date of this conference call. I would now like to turn the call over to Joe Margolis, Chief Executive Officer. Joseph Margolis: Thank you, Jared, and thank you, everyone, for joining today's call. We delivered positive core FFO in the fourth quarter of 2.5% and full year core FFO growth of 1.1% despite challenging but improving operating and supply environments. Operationally, we continued to experience the trend of increasing new customer move-in rates, while maintaining strong occupancy levels. In fact, in the fourth quarter, 16 of our top 20 markets experienced positive year-over-year move-in rates to new customers and sequential improvement in revenue growth, contributing to same-store revenue growth returning to positive 0.4% in the quarter. Only 2 of our top 20 markets reached this metric in the fourth quarter of 2024. In the quarter, we also deployed capital strategically in a number of our investment and external growth channels. First, we took advantage of an opportunity to repurchase approximately $141 million of our common shares at an average price of around $129. Second, we closed on 27 operating stores for $305 million, bringing our full year total to 69 stores for $826 million. Third, we executed several high-value JV-related transactions, acquiring 7 stores for $107 million gross while selling our interest in 9 JV properties and unlocking a $37 million promote. Fourth, we originated $80 million in bridge loans, growing the portfolio to approximately $1.5 billion at year-end. And finally, we added 78 third-party managed stores with net growth of 45 stores in the quarter. For the full year, we added 379 stores and 281 net new stores to the program, bringing our total managed portfolio to 1,856 stores. Our diversified external growth platform continues to provide us with opportunities across various channels, which we believe gives us an external growth advantage over all other industry participants. Overall, it was another solid year for Extra Space Storage. We generated positive same-store revenue and FFO growth, and our external growth platform is firing on all cylinders. While only incremental, we are pleased to see progress in most of our markets as they absorb the new supply that was delivered in the last few years. We feel better with regard to our positioning going into 2026 than we did heading into 2025, and in our ability to gradually accelerate performance as fundamentals continue to improve through 2026. I will now turn the time over to Jeff Norman. Jeff Norman: Thanks, Joe, and hello, everyone. As Joe mentioned, we are pleased with the sequential improvement we've experienced in new customer rate growth as well as seeing acceleration in our same-store revenue growth. We were also pleased to see improvement in our same-store operating expenses, which increased only 1.1%, with several notable drivers. Property taxes declined 3.4% due to the expected normalization of prior year increases, and property operating expenses, including utilities, were down over 5%. These savings were partially offset by higher health care costs and elevated marketing expense. Our decision to invest more in marketing has been instrumental in driving our stronger move-in rates and positions us for revenue growth as we move through 2026. The net result was same-store NOI growth of 0.1% for the quarter. Our low leverage balance sheet remains strong with 93% of our total debt at fixed rates, net of loan receivables and a weighted average interest rate of 4.3%. Our commercial paper program launched in December of 2024 saved us over $3 million in incremental interest expense during 2025 and has been another useful tool to optimize our cash management and reduce our cost of capital. We have only one material debt maturity in 2026 and a balanced maturity schedule over the next decade. Our flexible and conservative balance sheet provides us access to many types of capital and we have plenty of dry powder to efficiently execute on our growth strategy. In last night's earnings release, we provided our 2026 outlook. Our guidance reflects our current visibility and represents a slow and steady recovery in storage fundamentals. We have not assumed any specific catalysts that could materially accelerate storage demand or any material positive or negative changes in the economy. Specifically, we have not assumed a meaningful improvement in the housing market, nor a change to current pricing restrictions in Los Angeles County. With these factors in mind, our 2026 same-store revenue guidance is negative 0.5% to positive 1.5%. Our expense growth range is 2% to 3.5%, reflecting disciplined cost management while maintaining strategic investments in our people, our properties and our platform that drive long-term revenue growth. This results in same-store NOI of negative 2.25% to positive 1.25%. Our core FFO range for 2026 is $8.05 to $8.35 per share, approximately flat on a year-over-year basis at the midpoint. Our guidance assumes that average bridge loan balances remain generally flat as compared to 2025. It also assumes that most of our 2026 acquisitions will be completed in joint venture structures. In summary, we are encouraged by our positive momentum in new customer move-in rates and same-store revenue. While it takes time for rate improvements to flow through our rent roll, our stable occupancy and strong customer acquisition platform position us well to capitalize on demand as market fundamentals continue to improve in 2026. The combination of our operational strength, talented team and diversified growth platform gives us confidence that we can continue to deliver long-term value for our shareholders through 2026 and beyond. With that, Miriam, let's open it up for questions. Operator: [Operator Instructions] Your first question comes from the line of Michael Goldsmith of UBS. Michael Goldsmith: First question is just on the same-store revenue guidance. You did 0.4% same-store revenue growth in the fourth quarter, the midpoint of the guidance calls for things to remain the same in 2026 at 0.5%. So recognizing that you've now had the benefit of street rates being positive and that's starting to flow through, I guess I would have expected it to be a little bit higher. So can you kind of walk through kind of like what's the read on how we should interpret the midpoint of the guidance kind of expecting trends to remain kind of flat with where they currently are and if there's any sort of seasonal cadence associated with that, that'd be helpful? Jeff Norman: Sure, Michael. Thanks for the question. You're right that at the midpoint it really implies generally flat same-store revenue growth as compared to our exit in the fourth quarter of 2025. As always, we provide a range recognizing the number of factors that could have evolved throughout the year, and to your point, at the higher end of our range, that would imply continued acceleration in 2026. And at the low end, some deceleration, generally flat at the midpoint, as I mentioned. And based on the trends we're seeing today with steady occupancy improving and steady new customer rate growth and a gradual year-over-year compression of the roll down between move-out and move-in customers, it's setting itself up to provide a better fundamental outlook than we saw last year. All that said, the range does capture a number of potential outcomes, which include both acceleration or deceleration, depending where you are in that range. Michael Goldsmith: And maybe sticking with the trends you're seeing today, can you kind of give us an update with how street rate has trended through January and into February and just to see if anything has changed in terms of demand environment or the existing customer into the new year? That'd be helpful. Joseph Margolis: Sure. So for the first 45 days of the year, we continue to see the trends we saw in the fourth quarter. Mid-February occupancy is 92.5%. It's about 40 bps down year-over-year, and rates to new customers are sort of up slightly over 6%. So all the positive signals continue. Operator: Your next question comes from the line of Samir Khanal of BofA Securities. Samir Khanal: Jeff, maybe sticking to guidance here. On the expense side, it's that 2% to 3.5%. You go back last year and even the prior years, it's been higher. So I guess what gives you the confidence to kind of come out with that sort of lower range this time of the year. Jeff Norman: Yes. Thanks, Samir. The biggest needle mover as we compare to 2025 is property tax. As you know, for the first half of '25, we had outsized property tax increases that impacted our full year number, with that being the biggest driver of the expenses. We saw that normalize in Q3 and improve further in Q4, and we expect that to be at a more inflationary type rate in 2026. That's the biggest factor. Insurance, which is running a little hot in Q3 and Q4, we have a midyear renewal. All indications are that the market's favorable, and we would expect that to improve materially in the second half of the year. And then most of the other line items, we've done a good job of containing and finding additional efficiencies and think those will be low single digits, if not better. So without getting to specific guidance line item by line item, gives you some of the big building blocks. Samir Khanal: Got it. And the other line item that sort of stuck out was the acquisition volume guidance. I know you talked about dry powder, you talked about external growth, but that level is lower than what you were guided to last year. Maybe provide more color on that and kind of broadly what you're seeing kind of on the transaction side. Joseph Margolis: Sure. So we expect in 2026 that most of our acquisitions will be done in a joint venture format where we put in a minority of the capital. So 200 million of our capital may represent a much larger number of gross acquisitions. And that's because given where returns are in the market for deals, we would likely not be interested in many of them wholly owned on balance sheet where if we do them in a joint venture structure, we can enhance the returns so they become accretive to our shareholders. I'd also say it's a guidance number and we have plenty of capital, sources of capital, that if there are other opportunities, we will execute them and increase our guidance like we have for the last 2 years. Operator: Your next question comes from the line of Brendan Lynch of Barclays. Brendan Lynch: Joe, you started by saying that street rates are turning positive in 16 of 20 markets. That's certainly attractive progress there. But on the same-store NOI front, it looks like a lot of -- about half your markets are still in negative territory. How should we think about the transition of those kind of street rates improving and that finally flowing through down to same-store NOI and more markets converting to positive in the next couple of quarters? Joseph Margolis: Yes, I think it's a good question and you kind of hinted at the answer. It does take time for new rates to flow into the rent roll. We only churn 5%, maybe 5% to 6% of our customers a month. So it's really a forward indicator and not something that has immediate impact on our results. Jeff Norman: And Brendan, from an NOI standpoint, property taxes in a lot of those markets that you're seeing in the 2025 numbers were a pretty significant factor. And with that being more muted and we expect it to be more muted in '26, that's another positive driver as we think of how that flows through the NOI where we don't anticipate the same headwind in some of those markets with outsized property tax growth. Brendan Lynch: Great. That's helpful. And maybe another follow-up on the expense front. Jeff, you called out health care costs being a factor in the fourth quarter. We've heard a lot of your peers suggest the same. What is your expectation for that line item going forward in 2026? Jeff Norman: Yes, there still will be pressure on the health care side. That is the headwind that I think all companies are facing. On the other hand, we continue to find efficiencies in general payroll and staffing, which mutes it to some extent. So I won't provide specific numbers in terms of our budget. But overall, the total payroll line item is within our general expectation for expenses as a whole, driven by savings on the payroll side. Operator: Your next question comes from Salil Mehta of Green Street Advisors. Salil Mehta: Just a quick one here to start off. Regarding California's, I think it was, Senate Bill 709 that went into effect earlier this year. Have you guys been able to see any, I guess, tangible changes in customer behavior or patterns as a result, I guess, the forced extra disclosure that was mandated. Joseph Margolis: So our disclosure pre legislation was as robust as what they're requiring. Now they want it in a different spot in the lease, in a specific font and color. None of that made any difference. We had very robust disclosure before the bill, and now everybody has the similar disclosure, kind of more of a level playing field, and we haven't seen any effect on our leasing activity in California. Salil Mehta: Awesome. That's great to hear. And I guess a slight pivot here as a follow-up. You guys mentioned that the guidance is not factoring in any housing market recovery or any improvements in the macroeconomic environment. But I guess more broadly speaking, what are like the top, I guess, macroeconomic drivers outside of home sales that you guys view could help provide a catalyst for the storage industry? Are you guys tracking anything specific, both on a market and national level? Any color here will be super helpful. Joseph Margolis: So a couple factors that we think are very important. One is job growth. Job growth is highly correlated to self-storage performance, and it's one of the reasons that even though in 2025 our exposure to Sunbelt markets was a headwind, that we believe our kind of proportional overexposure compared to our peers to the Sunbelt is going to be a benefit to us, because in the future we do believe that's where there'll be outsized job growth. And then the other most important factor is, of course, supply. And we see not that supply is going to 0. I don't think it will ever go to 0, new supply, but we do see a continued incremental reduction in new stores getting delivered. Operator: Your next question comes from Michael Griffin of Evercore. Michael Griffin: Maybe to start, Joe, just on the interplay between rate and occupancy. I realize you guys are solving for revenue maximization, but just given that you've run at, call it, a higher elevated occupancy compared to the industry group, and it seems to be some pretty constructive commentary on the new customer rate growth side. Does now feel like the right time to lean more into pricing? Or how should we think about the push and pull between rate and occupancy to drive revenue this year? Joseph Margolis: So I don't think you can think about it as we're leaning into occupancy or we're leaning into rate. Our algorithms price every unit type in every building every night. And we'll make those decisions as to whether, to use your words, they want to lean a little bit into rate more or whether they want to pull back to encourage more rentals on a unit type by unit type basis in every single building. So I can't tell you that Jeff and I sit around the table and say, let's lean into rate, lean into occupancy. It's just not the way it works. Michael Griffin: Certainly, that's some helpful context. And then maybe just next, I know there was an earlier question just on the regulatory landscape, but there was some news out a couple weeks ago just related to stuff going on in New York. I realize there's probably only so much you can say, but maybe from a broader perspective, is kind of the regulatory onus more of a focus, a potential headwind as it relates to jurisdictions and municipalities, whether it's on capping rate increases or what have you this year? And how do you think Extra Space is positioned to sort of maybe address some of the concerns out there as it relates to potential regulatory environment? Joseph Margolis: Sure. Good question. So with respect to New York, we were served with the complaint filed by the New York City Department of Consumer and Worker Protection. We disagree with the allegations in the complaint. To give you context, the complaint cites 117 consumer complaints over a 3-year period having to do with our 60 properties in New York City. So we have well over 100,000 customers in that time frame, so 0.1% of our customers issued a complaint to the city. We will defend ourselves vigorously, and because it's active litigation, I really can't say anymore. With respect to the broader question about regulatory patterns, we certainly have seen post-COVID an increase in regulation and proposed or attempted regulation of the self-storage industry. There's been a few jurisdictions that have proposed price caps, as you suggest, but none of those have been implemented, and I think that's a difficult piece of legislation to get passed. I think what's more common is disclosure legislation. That's been successful in many states. And as I said earlier, in many ways, we welcome that because we believe our disclosure is very robust, best-in-class. And to the extent certain disclosure has to be codified that everyone has to do it, that could be a good thing for us. Operator: Your next question comes from Eric Wolfe of Citi. Eric Wolfe: As far as your same-store revenue guidance, I know you just try to maximize your same-store revenue and you're not going to guide the specifics on occupancy versus rate because it's the combination of the 2. But as part of your guidance, you seem to at least be assuming that this current trend of 6% move-in rate growth comes down materially. I think that sort of has to be the case to get to your guidance. First, is that the right conclusion that you're assuming that, that move-in rate growth comes down? And then second, what would cause that? Is it the comps getting more difficult, demand indicators just sort of flattish? Like, what would actually cause that? Jeff Norman: Yes, Eric. Thanks for the question. As you acknowledge in your question, we don't assume that all factors remain equal. So as you talk through it, of course, increases and decreases in occupancy, increases and decreases rates are all factors. But in your scenario referring to rates specifically, if we were to try to isolate that, certainly lapping comps does become more difficult as you move particularly in the back half of the year. So I mean that would be a reasonable assumption. But as Joe led with, we are okay if we're driving revenue growth through any of those levers. So we do provide the range partially to recognize each of those factors and that some could be stronger or weaker. We're also mindful of the fact that you have a headwind of approximately 40 basis points from pricing restrictions in Los Angeles County. So those are all things that we're thinking through as we come up with our range. Eric Wolfe: Got it. And that 40 basis points on L.A., is that like a dilution, like what it would be doing versus what it will actually do? And maybe you could just share what your actual forecast is for L.A. in terms of sort of actual same-store revenue. So when you're forecasting it for 2026, like what's the number that you expect it to end up at for the year? Jeff Norman: No. Thanks for the question. We don't guide at the market level or disclose that at the market level, but you're right that, that is dilution versus what we would have expected growth to be in those markets, absent those restrictions. Operator: Your next question comes from the line of Ravi Vaidya of Mizuho. Ravi Vaidya: Can you offer color on your discounting strategy in the broader promotional environment in 4Q? And what do you have embedded in the guide from a discounting and promotional standpoint? Joseph Margolis: So our discounting strategy is channel-based, based on testing and research we've done for a number of years. So online, we seldom offer discounts, discounts being 1 month free or $1 for the first month, because all of our data is very clear that customers -- long-term customers seeking storage on the web do not respond well to that. We do selectively offer discounts in the stores depending on unit type occupancy and other factors, and we'll continue to do so. I do not envision any change in our discounting strategy until the data tells us there's a reason [ to know ]. Ravi Vaidya: Got it. That's really helpful. Just one more here. Can you describe how your team is using AI or any agentic technologies and maybe how that's an opportunity to lower marketing expense or any other operating expenses? Joseph Margolis: Sure. So we kind of think about AI in 2 big buckets: external use of AI and internal use of AI. And externally, AI's influence on traditional search is real and rapidly changing. We're staying very close to it. So far, the factors, the metrics that make us and other large companies successful in the SEO landscape are the same -- seem to be the same factors and metrics that make a company successful in the Google AIO or ChatGPT landscape. So this is something that we and the other large companies, frankly, have the expertise, technology, focus, resources to stay close to. And I think it's going to be a factor that continues to provide advantages to large companies and differentiates us from most of the industry and allows us to continue to consolidate the industry. On the internal side, I mean we've had machine learning in our pricing models, as I referenced earlier, for years and years and years, also being used in -- to help with marketing spend, software development, certain areas of the call center. We can see it in the future helping us at the help desk, contact management operations. So lots and lots of use cases. We formed an internal platform team to help us make sure that we step into this in a prudent manner and also kind of vet and triage the dozens and dozens of potential opportunities that are coming up. So we think it's going to be a big part of our operations, our technology stack in the future, and we think it will [indiscernible]. Operator: Your next question comes from Todd Thomas of KeyBanc Capital Markets. Todd Thomas: I just wanted to first follow-up on the revenue growth forecast and some of the comments made earlier. Is the base case for guidance at the midpoint, is that currently sort of assuming a stronger first half and a moderating growth rate in the second half of the year as the comps get a little bit more difficult? Is that sort of the right way to think about it based on your comments? Jeff Norman: Good question, Todd. As you can tell by the full range, the growth is still pretty flat, right, high end of 1.5%. Seasonality may impact that 10 to 20 basis points either direction as you move throughout the range -- or throughout the year, excuse me. But that might be as much of a factor as the previous year's comp as anything. So I wouldn't read into that too much. I would look at it more as gradual, slow and steady growth. But to your point, recognizing that you lap more challenging comps the deeper you get into the year. Todd Thomas: Okay. And then, Joe, you mentioned job growth as an important factor for demand. You talked about Sunbelt job growth being a favorable long-term factor. New York, Southern California, Miami, San Francisco, they've been some of the higher performer markets. I realize some of that's Sunbelt, but they've been sort of some of the higher performer markets. It seems with sequential revenue growth really leading the way. Do you expect to see those markets continue to perform or outperform in 2026? Or do you think that you'll see some of the other Sunbelt markets really take the lead next year? Or is it just more of a gradual recovery process for some of the other markets? Joseph Margolis: I think it's more of a gradual recovery process. I think the correlation between market performance in 2025, in particular, has to do with supply, right? The thing that muted Sunbelt market performance -- many Sunbelt market performance was oversupply, and many of the markets that you mentioned did not have that factor. So one thing we know, looking back at kind of long-term trends market by market, is market performance is cyclical. It's really difficult to find correlations between markets, therefore our strategy of having a broadly diversified portfolio with exposure to as many growth markets as we can. And one factor is, how's the market done the last 2 years, right? Atlanta's been a difficult market because we had several years of double-digit revenue growth. So now it's on the other side of that -- so markets will cycle between overperformance and underperformance and having a broadly diversified portfolio can somewhat smooth out that return series. Operator: Your next question comes from the line of Viktor Fediv of Scotiabank. Viktor Fediv: I have a question regarding your ECRI strategy. So you previously mentioned that your ability to drive increases is somewhat limited until street rates start to increase. So what is the average magnitude of increases sent to customers today versus this time last year? And what is your kind of base case assumption for ECRI contribution to same-store revenue growth in 2026? And how does it compare to 2025? Jeff Norman: So Viktor, we don't disclose specifics around the program. We view that as a competitive advantage and part of our overall revenue strategy, but we don't see it changing materially on a year-over-year basis. So at the portfolio level, contributions should be generally similar with the one caveat being Los Angeles County. Viktor Fediv: Got it. And then can you provide some additional details on the 26 properties that you sold during the quarter? So probably some details on pricing and the bidding process overall. And are you largely done with your kind of overall portfolio optimization, or you may consider to sell something as well in 2026 and '27? Joseph Margolis: I think we'll sell a small number of properties every year as we seek to optimize the portfolio and get -- improve our market exposure dynamics. We had a greater number of sales in 2025, largely because of the 22 former Life Storage assets that we sold. And that was part of the original plan when we merged with Life Storage. We wanted with certain select assets to improve the NOI, improve the asset, get beyond the 2-year period and sell them because we didn't think they had the growth characteristics that were attractive to us. They required capital that we didn't think we could get a return on or for market positioning reasoning. So we put that portfolio on the market. We got bids. We executed the sale at a market cap rate for the quality of assets that they were. And they weren't the best assets in our portfolio. And we successfully reinvested the capital, right? We bought stock. We made bridge loans and we did over $300 million worth of portfolio acquisitions in the fourth quarter. I can't give particular cap rate or pricing because of our arrangement with the seller, but it was a market transaction. Operator: Your next question comes from the line of Caitlin Burrows of Goldman Sachs. Caitlin Burrows: You mentioned that you expect continued incremental reduction in new stores getting built. So wondering if you can give more details on your supply expectations, which markets are more versus less exposed, and also which data or source informs that view? Joseph Margolis: So we start with Yardi, which is a national database and might have a little different opinion. We take that data and we apply it only to the markets that we're active in, right? So we don't care what's getting built in North Dakota, for example. And then we use other data that we have through our people on the ground, our investments team, our management team. And when we look at that -- stores that we expect to be delivered in 2026 in our same-store markets, it's an incremental step down, very modest step down, but a step down. I'd also say that when you look -- Yardi does a great job. We think they're the best data source in the industry. I'm not criticizing Yardi, but I think it's hard for them when projects get canceled for them to take it off of their list. They're sometimes behind on taking stores off their list that are -- that don't go forward. And we've seen historically the amount of stores being delivered is always somewhat less than what was predicted. So we think that the situation will get incrementally better. And the markets are the same markets, right? It's the Sunbelt markets that have a lot of this built northern New Jersey, Las Vegas, Phoenix and Atlanta, I guess that's a Sunbelt market. So they're not going to automatically get, where there's no supply, but it will be incrementally better over time. Caitlin Burrows: Got it. Okay. And then also on your comments that you feel better going into '26 than '25, I'm guessing that incremental improvement to supply is part of it. But I guess, is there anything else you can comment on what's driving that? And is there a certain line item in your guidance that reflects that confidence? Because it looks like the full year '25 same-store revenue and same-store NOI results are within the '26 guidance range. So just wondering if that improved feeling is reflected in guidance or not necessarily. Joseph Margolis: So I think the biggest difference between going into '25 and going into '26 is going into '25, we were still experiencing every month negative new rates to customers. And now we've turned that corner for a number of months and that pattern has certainly established itself. So that and the supply situation has certainly helped us feel better going into 2026. With respect to our guidance, we've gotten a lot of questions about that. It's really hard prior to the leasing season to be fully optimistic and fully bake these trends into your guidance, right? We've had 2 years where we did not have the leasing season that we expected, and until we get to that point where we know what the leasing season is going to be like, we're going to remain somewhat cautious. Operator: [Operator Instructions] Your next question comes from the line of Ronald Kamdem of Morgan Stanley. Ronald Kamdem: Just 2 quick ones. One is on the -- just on the operating platform. I think you guys have taken the philosophy that having people at the stores and sort of managing assets, sort of managing sales, I should say, is going to sort of bear fruit. So I guess, one, I just want to hear a little bit more about how you guys think about the potential to replace people in the long-term role in the platform. And, two, any other sort of big changes that you're thinking through about on the platform to be able to reaccelerate growth? Joseph Margolis: So our philosophy is that we want to let the customer choose how to do business with us, and the customer can't choose how to do business with us if we close certain channels to them. So right now, we allow the customer to interact with us online, at the call center or at the store. And 31% of our leases are from customers who walk into the store and have not interacted with us online or on the phone. So if we take those people out of the store, those customers all have a cell phone, they all have a computer, they all could choose to interact with us that way, but they want to go to the store for a reason. And if they get to the store and there's no one there, maybe they'll scan the QR code, maybe they'll go online or maybe they'll go across the street to the competitor. And you don't need to lose too many rentals in a high-margin business where your expense savings is overshadowed by the loss of revenue. So as long as the customers are telling us they want to talk to a store manager, right, 31% of our tenants walk into the store. 5% of our tenants start online, reserve a unit, but will not sign a lease until they go to the store, see the unit and talk to the store manager. 8% call the call center, make a reservation, but will not sign a lease until they go to a store and sign -- talk to a store manager. So the store manager is a very, very important part of our process. In addition, the store manager helps keep the store clean, helps prevent break-ins, helps prevent people from living there, helps prevent the mattress from being left in the drive aisle. The asset is taken care of better when there's a human being there. And one reason our management business is growing much faster than competitors who don't use store managers is because people want -- they want store managers in their valuable assets. So we believe this very strongly. It's why we have a higher occupancy rate, I believe, at higher rents than our competitors. That being said, there are ways to find efficiencies. And we are looking and testing for different ways to reduce the number of hours, but I don't -- until the customers tell us they only want to interact digitally, I don't foresee a future where we have no store managers. Ronald Kamdem: Super helpful. I want to come back to the operating expense question because it was sort of lower than we anticipated as well. I think you hit on the insurance and maybe you sort of talked about property taxes as well, but maybe can you talk through sort of marketing spend and some of the other line items that's getting you to that guidance? Jeff Norman: Thanks, Ron. I think you hit 2 of the biggest ones in terms of primary drivers of growth in 2026, at least as we anticipate in our guidance. And then marketing is the, I would say, the variable expense. And as we've talked about before, we really view that as a revenue driver. So it's a line item that we're happy to pull back on if we're not getting the returns we want and still see healthy transaction volume. On the other hand, it's one that we're also happy to lean into and spend more because it's pretty direct return that we can calculate. So I would say that, that's probably your risk factor, Ron, to the positive and to the negative, is marketing expense. And then on the margins, property taxes, just because of the magnitude of the total expense load that they contribute. The rest, Ron, I would say would be definitely inflationary. Sorry about that. Operator: Your final question comes from Michael Mueller of JPMorgan. Unknown Analyst: It's [ Daniela ] here. On the bridge loans, it looks like you guys have gone through the majority of your backlog of bridge loans. Considering the balance is expected to be generally flat in '26, should we expect the balance to decline beyond '26? Or do you have meaningful activity there to keep it consistent? Jeff Norman: Yes, thank you for the question. We are intentionally guiding to maintaining relatively flat balances. That's not necessarily because there's a lack of volume to keep originating loans, but we have a really flexible structure where we can choose how much of the loan to retain. So if we see higher volume, we can sell more of our mortgage notes and just retain the higher-yielding mezzanine piece, or we can retain both. So we're confident we can retain those balances at this level based on the origination activity we've seen. We've also seen that a lot of these loans -- or borrowers exercise extensions. We see that oftentimes at or before maturity, we are buying these assets, so it serves as an acquisition pipeline for us. So we're happy to participate in the industry in any way we can to partner with other storage participants. And this is just another good tool that helps bring in management, it sources future acquisitions and provides a solid return along the way. Operator: There are no further questions at this time. I will now turn the call over to Joe Margolis, Chief Executive Officer, for closing remarks. Joseph Margolis: Thank you all for the questions. Good conversation. We appreciate your interest in Extra Space and look forward to reporting to you throughout the year how we do on our guidance. Thank you and have a great day. Operator: This concludes today's call. Thank you for attending. You may now disconnect.

85天前Insight Analytics约5分钟阅读

LUN.TO 2025 Q4 财报电话会议

Operator: Good day, and thank you for standing by. Welcome to the Lundin Mining Fourth Quarter 2025 and Year-End Financial Results Presentation. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Jack Lundin, President and CEO. Please go ahead. Jack O. Lundin: Welcome to Lundin Mining's Full Year and Q4 2025 Earnings Call. Our operating and financial results were released last night, and the news release, presentation and webcast replay are available on our website. All amounts are in U.S. dollars unless stated otherwise. You may have noticed a new look in our materials for this call. Today, we are pleased to introduce to you Lundin Mining's new brand, which is aligned with our copper-focused strategy and long-term growth ambitions. Over the past 2 years, we have completed transformative transactions that have streamlined our portfolio and sharpened our focus on copper. Our new brand identity brings together our corporate and sites under one unified recognizable look and feel while strengthening our visibility in the regions where we operate. You'll see the updated brand across our investor materials, website and operations, starting with the financial results we are discussing today. About the logo and colors, the stylized L in our new logo symbolizes momentum and growth, while our new color palette is inspired by copper and the landscapes where we operate. Before we start, we will play a quick video capturing our new look. Please enjoy. [Presentation] Jack O. Lundin: As a reminder, yesterday's results and some remarks made on today's call will include forward-looking statements. Please refer to the cautionary statements on Slide 3 for reference. With me on the call today is Juan Andres Morel, our Chief Operating Officer; and Teitur Poulsen, our Chief Financial Officer, to present operating and financial results for the company. 2025 was another milestone year for Lundin Mining on nearly all fronts of the business, and we have positioned ourselves on a clear path to becoming a top-tier copper producer, completing 3 transformative transactions during the year, which rationalized our portfolio and sharpened our focus on our existing assets in South America. In January, we finalized the merger of our Eagle mine with Talon Metals to create a new pure-play American nickel company. This transaction unlocks meaningful synergies, including the opportunity to leverage the Humboldt Mill as a shared centralized processing facility. At the same time, Lundin Mining has retained a 20% ownership in the combined company, and me and Juan Andres have joined the Board, along with former Managing Director of Eagle, Darby Stacey, as the new CEO of Talon. With this streamlined asset base, we continued to advance our growth initiatives. This includes refining growth plans for our 3 operations and maturing the large-scale growth plans for the Vicu�a project. We recently announced our updated mineral reserve and resource statement and on an attributable basis, the company now has contained metal of over 35 million tonnes of copper, over 60 million ounces of gold and over 960 million ounces of silver, effectively doubling our copper resource base and adding a significant amount of gold and silver to our mineral resource inventory. We delivered our best financial performance in the history of the company and generated record revenue of more than $4.1 billion and adjusted EBITDA of $1.9 billion for the year from continuing operations, not including the Eagle Mine. We declared our 39th regular quarterly dividend, paid out $106 million in dividends during the year and purchased 15.1 million shares for a total return of $256 million to shareholders, demonstrating our commitment to shareholder returns as part of our capital allocation strategy. We are pleased to reinforce today several recent announcements that have been published by the company. The highlight from earlier this week was the announced -- was that we announced the results of the integrated technical report on the Vicu�a project, highlighting an incredible project capable of producing over 500,000 tonnes of copper, 800,000 ounces of gold and over 20 million ounces of silver during its peak production years, which would position it as a top 5 in terms of scale on all of these metal categories. We also announced commitments to upsizing our revolving credit facility to $4.5 billion to enable us to fund the next phase of growth for our company. Operationally, our assets performed exceptionally during the year, and we were able to increase copper guidance in the third quarter while also reducing our consolidated cash cost guidance range. We met revised guidance on all consolidated metals in 2025. Safety remains our top priority. And during the quarter, we continued to strengthen our safety culture through visible leadership and targeted training programs across all operations. We continue to improve our total recordable injury frequency rate, which resulted in achieving the lowest rate in the company's history. Including Eagle, consolidated copper production was 331,000 tonnes of copper for the year, led by strong performance from Caserones and consistency from Candelaria and Chapada. Gold production was 142,000 ounces for the year. Caserones annual production for copper was at the top end of the most recent production guidance range and the fourth quarter copper production was the highest since the mine was acquired by the company in 2023. From continuing operations, we generated adjusted EBITDA of $1.9 billion and adjusted operating cash flow from operations of $1.6 billion during the year, both annual records for the company. For the third year in a row, we met copper guidance, reflecting the accuracy of our planning cycle and our disciplined focus on operational consistency. I will now hand it over to Juan Andres to go through the operational results in more detail. Juan Morel: Thank you, Jack, and good morning, everyone. We shared our production results earlier this year. I will now briefly highlight some of the key points from the year-end release. The company exceeded original guidance -- copper guidance and met revised guidance across all metals. The company produced 331,000 tonnes of copper this year and 87,000 tonnes in the fourth quarter, inclusive of the Eagle mine. Gold production for the fourth quarter totaled approximately 34,000 ounces and for the full year, 142,000 ounces, which was in line with guidance. Throughout the year, Candelaria maintained steady operations with 95% mill availability and processed approximately 7.8 million to 8.1 million tonnes of ore each quarter and 32 million tonnes in the year. Candelaria produced a total of 145,000 tonnes of copper, in line with annual guidance. In the fourth quarter, the mine produced 34,000 tonnes of copper, which was slightly less than previous quarters due to planned lower head grades. Caserones performed very well and annual production for copper beat original guidance and was at the top end of the most recent production guidance range. Fourth quarter copper production was the highest since the mine was acquired by the company, as Jack mentioned earlier. Caserones produced 133,000 tonnes of copper during the year and 40,000 tonnes in the quarter. Higher production was driven by higher head grades and strong cathode production. Additional oxide material placed on the dump leach together with improved leaching practices increased copper cathode production to 25,800 tonnes in 2025. As mentioned at our Capital Markets Day, these optimization efforts have led our annual copper cathode production forecast to increase to approximately 26,000 to 28,000 tonnes in 2026 through 2028, an improvement of 6,000 to 8,000 tons from prior levels. Chapada was slightly second half weighted this year. During the fourth quarter, throughput was 6 million tons, which produced 11,200 tonnes of copper and 44,000 tonnes of copper in 2025, which was at the upper end of guidance for the year. And finally, Eagle produced 2,200 tonnes of nickel in the quarter and for the year was in the midpoint of guidance at 10,000 tonnes. Our assets demonstrated positive progress in 2025. Moving forward, our focus will remain on operational enhancement to optimize margins and further improve the cost profile of our holdings. I will now turn the call over to Teitur to provide financial summary. Teitur Poulsen: Thank you, Andres, and good morning, everyone. So before going into the numbers, as a reminder that with the completion of the sale of our Eagle mine, this operation is presented as discontinued operations in our income statement and the assets and liabilities on the balance sheet have been classified as held for sale as of December 31, 2025. As Jack mentioned earlier, robust copper and gold production, combined with unwinding concentrate inventory, along with high commodity prices led to an outstanding financial performance for the period. We reached record revenue and adjusted EBITDA for 2025. We generated close to $1.4 billion in revenue during the fourth quarter, including $52 million from discontinued operations. Revenue for the full year amounted to a record $4.5 billion, including $409 million from discontinued operations. Our sales mix remains predominantly leveraged to copper and has increased from last year where 75% was generated from copper compared to the fourth quarter this year, where the copper component accounts for 87% for the quarter. Moving to the next slide. In the third quarter, we incurred a shipment delay of approximately 20,000 tonnes of copper concentrate at Caserones due to weather-related impacts. And this resulted in the company carrying higher-than-normal inventory levels at the end of Q3. This elevated level of inventory has been unwound during the fourth quarter, leading Caserones to sell 45,000 tonnes in the quarter. Pricing adjustments on prior period sales of concentrate had a positive impact on revenue by $83 million in the fourth quarter, helping drive financial performance. In the fourth quarter, we realized a copper price of $5.89 per pound, which was higher than the LME quarterly average of $5.03 per pound. For the full year, our average realized price was $4.91 per pound for copper, which is materially higher than the annual LME average of $4.51 per pound copper. This higher realized price is driven by the fact that the disproportionate share of our annual sales occurred during the fourth quarter when the market prices were higher than the annual average price. At the end of the fourth quarter, approximately 80,000 tonnes of copper were provisionally priced at $5.64 per pound and remained open for final pricing adjustments. Moving to Slide 13. Consolidated production costs for the fourth quarter amounted to $585 million, including discontinued operations, which is higher than previous quarters due to the elevated sales volumes and certain one-off costs expensed in the fourth quarter. At Candelaria, the company finalized ahead of schedule labor renewal agreements with Candelaria's 5 unions during the fourth quarter, which led to a onetime increase in costs due to signing payments. Cash costs for the fourth quarter were higher than previous quarters and were similarly impacted by the one-off union signing bonus payment. The higher sales volume at Caserones for the fourth quarter drove a high absolute production cost for the quarter. Cash costs for the fourth quarter were in line with the previous quarter and Caserones full year cash cost of $2.17 per pound is towards the bottom end of guidance. Chapada's full year cash cost of $0.75 per pound outperformed the revised range -- guidance range of $0.90 to $1 per pound. Cash costs were positively impacted by the favorable gold pricing compared to forecast, resulting in improved byproduct credits for both the full year and the fourth quarter. Cost control across all sites remain very robust, and this has resulted in the company's cash cost for the full year of $1.87 per pound coming in below the bottom end of our original guidance and towards the bottom end of the revised guidance. This better-than-expected outcome was achieved despite the unbudgeted union agreement payment at Candelaria being accelerated from 2026 into 2025. Slide 14 shows our total capital expenditure for the full year, which amounted to sustaining CapEx of $499 million, inclusive of Eagle compared to revised guidance of $510 million. The lower sustaining capital investment was primarily the result of reduced stripping and a delay in capital projects at Caserones. Capital expenditure at Vicu�a was $167 million compared to guidance of $215 million, with this underspend mostly relating to timing. Our full year and fourth quarter key financial metrics are presented on the next couple of slides. As previously stated, total revenue for the year, including discontinued operations, reached close to $4.5 billion with almost $1.5 billion generated in the fourth quarter. We generated adjusted EBITDA of $1.9 billion for the year from continuing operations, including $686 million in the fourth quarter. Adjusted operating cash flow from continuing operations exceeded $1.6 billion for the year, including over $665 million in the fourth quarter. Moving to the next slide. Free cash flow from continuing operations was $774 million for the year and $388 million for the quarter. Operating cash flow benefited from higher commodity prices and was offset by a significant negative working capital build of $414 million for the full year and a working capital build of $132 million for the fourth quarter. Full year adjusted earnings from continuing operations amounted to $688 million and $364 million for the quarter. Earnings from continuing operations for the quarter amounted to over $900 million and were positively impacted by a noncash deferred tax recovery at Caserones of $517 million, with the company now having recognized a larger portion of the $3.9 billion tax loss at Caserones. Slide 17 presents in greater detail the sources and uses of cash in 2025. In 2025, our continuing operations generated just over $1.6 billion in cash flow before working capital. This cash generation includes close to $400 million paid in cash taxes during the year. After netting capital expenditure and noncash working capital movement, the free cash flow from continuing operations amounted to $539 million. As per the company's shareholder distribution policy, the company executed on its share buyback program totaling $150 million. And combined with the dividends for the fourth quarter 2024 and the first 3 quarters 2025 has paid an additional $106 million in dividends. Dividends to noncontrolling interest in Candelaria and Caserones amounted to $138 million for the year. The company had a cash outflow of about $150 million on lease payments, interest and hedges and ending the year with net -- with a net cash position of $77 million, excluding capital leases. The company has significantly strengthened its balance sheet during 2025 with the sale of the European assets being pivotal to this strengthening. With last week's announcement to upsize our revolving credit facility from $1.75 billion to $4.5 billion, combined with the strong cash generation from our producing assets, the company is now financially primed to embark on the capital investment required to unlock the exciting Virunyia project in Argentina. And with that, I'll now turn the call back to Jack. Jack O. Lundin: Thank you, Teitur. In January, we announced updated 3-year guidance for production, operating cash costs and capital expenditures for 2026. Copper production is forecast to be 310,000 to 335,000 tonnes on a consolidated basis in 2026. Compared to last year's 3-year outlook, mine sequencing optimizations are expected to increase copper production by 20,000 tonnes in 2027, while the midpoint of 2026 has been adjusted by 5,000 tonnes, resulting in a net increase of approximately 15,000 tonnes over the 2-year period. Revisions to Candelaria's 2026 copper and gold production guidance incorporates lower underground mining rates in the first half of the year as the company in-sources the underground mine operations contractor. The production profile is forecast to be modestly weighted towards the second half of the year due to higher expected grades from Phase 12. We expect the in-sourcing strategy to lead to cost savings and improved productivity for our underground operations, which represents a significant value driver for the future of our Candelaria operation. At Caserones, 2026 estimates remain unchanged, while copper guidance in 2027 increased by 10,000 tonnes to range between 115,000 to 125,000 tonnes, resulting from higher cathode production and increased mill throughput. Chapada copper production guidance has been revised upward by approximately 5,000 tonnes for 2026, resulting in an anticipated range of 45,000 to 50,000 tonnes. Gold production guidance also increased by 10,000 ounces for 2027 compared to previous guidance. The updated mine plan reduces the dependence on lower-grade stockpile material from around 25% down to about 10%, enhancing copper and gold recovery rates over the 3-year period. Consolidated gold production is forecast to be 134,000 to 149,000 ounces in 2026 for the company. Consolidated cash cost for 2026 is projected to range from $1.90 to $2.10 a pound of copper after accounting for by-product credits. Total sustaining capital expenditures are forecast to be $550 million, consistent with prior year's guidance. Candelaria and Caserones account for approximately 80% of the sustaining capital budget with the majority of expenditures directed to stripping, mine development for Candelaria's underground, tailings and mining equipment purchases and replacements. Expansionary capital expenditures are forecast to be $445 million, and this includes the 50% expenditure related to our 50-50 joint arrangement between the company and our partners, BHP for the Vicu�a project. This ramp-up in expenditure gets us ready for a sanction decision on Vicu�a as early as the end of this year. Included in expansionary capital expenditures, we also have $35 million in expansionary CapEx at Candelaria, which includes preproduction stripping related to Phase 13 in the open pit. Exploration this year is estimated to be $53 million, and we will target drilling almost 70,000 meters between Caserones, Candelaria and Chapada. The drill program at Caserones will primarily focus on defining the size of the Angelica deposit, both in terms of leachable copper resources and the underlying copper molybdenum sulfide mineralization, where we are targeting a maiden resource next year in calendar year 2027. Additional drilling at Caserones will be directed towards new discoveries and testing at least 2 new district exploration targets, Centauro and Cordillera. At Candelaria, drilling is designed to continue expanding the underground resources and also growing the shallow La Espanola deposit and neighboring La Portuguesa target. At Chapada, additional drilling at Sa�va will continue to further define higher-grade resources that will be incorporated into an updated resource estimate later this year, which will also be embedded within the updated technical report for Chapada. I'll now hand it back over to Juan Andres to give an update on the Sa�va project. Juan Morel: Thank you, Jack. As mentioned at our CMD last year, we are advancing key growth initiatives at our Chapada mine, including the installation of an additional ball mill and the development of the nearby Sa�va satellite deposit. The ball mill installation will allow a finer grind size, which is expected to increase recoveries by approximately 5% for both copper and gold for the entire life of mine. At the same time, ore from Sa�va deposit will provide higher grade ore, helping to offset the lower grade material at Chapada and further enhance overall plant performance. The pre-feasibility study for Sa�va has been completed and a feasibility study has been initiated. We are targeting to make a sanctioning decision in the second half of 2026, and we expect construction of the new ball mill to begin by the end of 2026 or early 2027, which will put the commissioning of the ball mill near the end of 2027. Permitting at Sa�va will continue to advance in parallel and potentially, we could see first ore from Sa�va in 2029, subject to permit time lines. The pre-feasibility study highlighted an average production increase of 17,000 tonnes per annum for copper and 32,000 ounces per year over a 5-year period for Phase 1. We anticipate this profile will improve as the mine plan is optimized to include Phase 2. I will now turn it back to Jack. Jack O. Lundin: On Monday, we announced the results of the Vicu�a Integrated Technical study, signifying an important milestone for this impressive district scale project. At full capacity, the district is expected to produce over 500,000 tonnes of copper, 800,000 ounces of gold and 20 million ounces of silver each year. The project benefits from a first quartile cash cost profile and will be built to generate sustained significant cash flow for many decades throughout the cyclical nature of the base and precious metal sectors. Furthermore, the stage development approach is designed to use cash flows to fund subsequent expansions, optimizing capital efficiency and value creation. It is great to start off in 2026 with these recent company highlights and on the heels of a record-breaking year for the company. Divesting our European assets simplified our portfolio and strengthened our balance sheet, allowing us to focus on future growth across our South American sites. Our partnership in the Vicu�a District positions us for multiyear growth toward becoming a top 10 copper producer. Filo del Sol, one of the largest undeveloped copper, gold, silver deposits globally and our joint venture with BHP creates a pathway to form a new multigenerational mining district. Anchored by consistent operational performance, we delivered record revenue of $4.5 billion, declared our 39th consecutive quarterly dividend and returned a total of $256 million to shareholders through dividends and share buybacks, highlighting our financial discipline and commitment to shareholder returns. Lundin Mining is uniquely positioned with a strong balance sheet, funding commitments for our ambitious pipeline of growth, a simplified portfolio and a strategic partnership with BHP in the Vicu�a District, offering unparalleled growth opportunities for our stakeholders. With that, I would like to open the lines for questions. Thank you. Operator: [Operator Instructions] Our first question comes from Johannes Grunselius with [ SB1 Markets ]. Johannes Grunselius: Yes. It's Johannes. I have 2 questions. So the first one is on Caserones, where you had really good grades, as you highlighted. I can see that your annual sort of copper output is [ 158 ] or something and your full year '26 guidance is [ 130 ] to [ 140 ]. Are you seeing that more conservative now than you did when you launched the guidance in 1 in December? That's my first question. Juan Morel: Johannes, this is Juan Andres. We -- as I mentioned on the presentation, we have seen a significant improvement in the performance of the cathode plant. So we are forecasting more cathode production. And that is somehow offsetting some of the drops in the grades in the following year, but we are maintaining our guidance overall as previous years. Johannes Grunselius: All right. Okay. So it was sort of in line with your expectations, the Q4 volumes. They didn't surprise you. Juan Morel: No, it was as expected in the mine plan. Johannes Grunselius: Okay. Okay. Okay. Good. And the second question, and you partly answered it in your presentations. But when I look at the OpEx versus, for example, your ore volumes in Candelaria, Caserones, it's a pretty high increase in OpEx per tonne ore mined and ore milled. And you mentioned there was some negotiations with unions that could explain that. But could you -- how should we view it? How much did cost move up sort of on an underlying basis? And is this like in line with the mining industry right now in Argentina and Chile? Teitur Poulsen: Johannes, it's Teitur here. I mean, first off, I mean, it's a great result that we managed to land these 5 agreements with the unions at Candelaria ahead of schedule because that eliminates any risk of any production disruption in 2026. But we are not disclosing the exact details of what those bonus payments are. The sequence here is that every 3 years, we enter into negotiations with the unions. And normally, what happens is you're paying certain one-off bonuses to the labor force in order to extend stability for the next 3 years. And the way we account for that is that whenever we pay these bonuses every 3 years, we expense that payment in the quarter where the payment occurs. So that did elevate the, as you say, the Candelaria absolute costs in Q4, but the return from that is that we now have stability over the next 3 years. And at Caserones, the absolute costs are also up, and that's simply because we report the production cost as per the sold volume, not the produced volume, and we sold an elevated amount of volume for Caserones in Q4. So that's what's driving a higher absolute production cost. But if you look at it on a unit basis, it's as low as it was inQ3. Operator: Our next question comes from Daniel Major with UBS. Daniel Major: Just on the Sa�va update, I'm just looking at the slide from the Capital Markets Day on the scoping study. And I mean, you're sort of guiding for a similar rate of production. I think it was 15,000 to 20,000 tonnes per annum of copper -- it's now [ 17 ], it's fractionally lower gold. But the parameters seem somewhat different. I mean the CapEx has gone down from [ $155 million ] to [ $110 million ]. The grades are lower. The throughput is lower, but the production is the same. Can you just run us through what the difference is between what you're presenting on now relative to the Capital Markets Day and kind of what's changed, particularly the reduction in CapEx? Was that just a conservative initial assessment? Or has the scope changed much? Juan Morel: Daniel, this is Juan Andres. Thank you for the question. So in -- during the CMD, we guided based on a conceptual study. And as we move into the pre-feasibility study, of course, we increased the level of understanding of this opportunity. In the original CapEx estimate, we have considered a secondary crusher for the addition of the ball mill. During the PFS, we learned that, that was not necessary. So that was basically removed from the CapEx estimate. And the rest of the scope remains the same. So we have the ball mill, which is roughly $60 million, $65 million. And then for the Sa�va itself for the open pit is another $45 million for road construction, liners for the waste dumps and a water treatment plant. So that is basically the scope. So that is what triggered this CapEx reduction. Of course, there were some minor adjustments to the mine plan, given also changes in the metal prices that were used for mine design, and that explains the small changes in the tonnes and grades. Daniel Major: Okay. Second question, just around the treatment and refining charges. I think Antofagasta settled what looks like the benchmark essentially close to 0. Would it be fair to say that you're following similar terms? And then is there any difference in the realization when we look at what you're sort of putting in your accounts for treatment and refining charges, -- is that going to dramatically decline? Or are there any additional charges incremental to what a pretty close to 0 benchmark represents? Teitur Poulsen: Yes. Those are also the numbers we are hearing. Certainly, for volume going into China, I think it will be segmented a little bit more than what normally was the case. So we will have to see what the Japanese rates land up and other rates. But generally speaking, it's trending very well. I mean within our cost guidance for 2026, we have assumed 25 and 2.5. So I think we're likely to land ahead of what we assumed in our guidance. So I think that's as much as we can say. And obviously, then depending on the blend of how much we sell on the fixed-term contracts versus spot markets, that might ultimately also impact the weighted average TC/RC charges we have for the full year. Daniel Major: Okay. But you've assumed 25 and 2.5. So there's obviously quite a bit of downside even though it's a relatively small number. Okay. Yes. And then final one, I'll let someone else go. Just wanted to follow up on some of the discussions in the call earlier in the week around streaming in Vicu�a. I mean it felt like the narrative from BHP on their call following the announced transaction at Antamina was the reason they were happy to stream that was that there wasn't a huge amount of long-term growth optionality beyond life extension, which made up with the same dynamic in Vicu�a. Can you just give us another summary of how you're viewing streaming in the district and confirm whether it would be at all possible that one party out of the JV would stream and the other would not. Jack O. Lundin: Daniel, it's Jack here. So I think as we were mentioning and as we released on Friday last week, we've upsized our near finalization of upsizing our revolving credit facility up to USD 4.5 billion, which would put us firmly in position to be fully financed for our portion of the build. Now that also gives us the optionality to look at other forms of financing, streaming being one of them. We're seeing that there are some uniquely structured streaming deals being announced in the market, and we're obviously following what our partners, BHP are doing at Antamina. I think it opens up optionality and opportunities for us. But I think also, as we've mentioned, the Filo deposit is still open in all directions, and we see significant upside potential for the resource to grow, and that includes silver qualities and quantities. But of course, you can structure a deal where you're having step-downs or arrangements where you don't have to run the stream in perpetuity. So we're looking at opportunities, but I would say it's still lower down on the probability list for us in terms of financing. And if there were to be one party working on a different form of financing than another, then as part of the JV, the partners would have to get together and align on what that is. But right now, I think we're in a really good position as it pertains to our funding strategy. Operator: Our next question comes from Sathish Kasinathan with Bank of America. Sathish Kasinathan: My first question is on the long-term outlook, the 3-year outlook. So your 2028 guidance, which currently calls for a modest drop in copper production versus 2027. I guess there is upside from Sa�va, which could start in the second half of 2028. Can you talk about some of the other opportunities you highlighted at the Investor Day, mainly the underground expansion at Candelaria and then the Angelica target at Caserones? Jack O. Lundin: Yes, I can talk about the growth projects, and I'll hand it over to Juan Andres to talk about the 2028 production guidance range. So for Candelaria underground, as we mentioned on the call, right now, the focus for us is to be in-sourcing the mine production operator in the underground. And in order to accommodate that smooth transition, we've lowered the throughput assumption from the underground, and we'll be exiting 2026 getting back to kind of that 14,000 tonne per day baseline production rate. Once we've been able to do that, then we'll look at putting a plan in place to potentially grow in increments up to what could be around 22,000 tonnes per day in the underground, which translates to around 10,000 tonnes of copper per annum for Candelaria overall. Angelica is a very exciting exploration play right beside Caserones. We've got a number of exploration targets that we're following up on through our drilling season this year at Caserones. And really, what we're looking at is high-impact holes that are near the existing infrastructure of Caserones that could quickly translate into mineable inventory to potentially feed higher-grade material to the sulfide concentrator or even more oxide material for our dump leach, which as we have been announcing and talking about the cathode plant is running exceptionally well due to upgrades that we've made to our overall kind of leaching plan. So yes, we're going to be chasing up those opportunities in addition to the Sa�va project, which we just spoke about, and I'll hand it over to Juan Andres to talk about 2028. Juan Morel: Yes. In our guidance in 2028, we have not yet included any of these opportunities yet. So as we move forward, we will be including those. So I don't think there's... Jack O. Lundin: No. And Sa�va is not part of our -- we haven't fully sanctioned it yet. We look to do that before the end of this year. I mean the Chapada plant upgrade for the extra ball mill is something that we will be proceeding on. And right now, the PFS outlined us getting into first production actually in 2029, not in 2028. Sathish Kasinathan: Okay. Understood. Maybe one question on the Chapada stream. So Chapada currently has a stream on the primary metal production. With the change in ownership there with the acquisition of Sandstorm. So have you had any initial talks with the new owners and whether you can potentially take advantage of the current strong gold price and convert it into a gold stream instead of a primary metal stream? Jack O. Lundin: No, we haven't had any discussions since the change of ownership on that stream, but something that we'd obviously entertain potentially in the future. Operator: Our next question comes from Cody Hayden with Deutsche Bank. Cody Hayden: You kind of touched on it already, but as we approach a potential sanctioning decision at Vicu�a later this year, I was wondering if you could comment on how we should be thinking about the balance sheet and capital allocation. Is there any consideration on updating any of your policies? Are you sort of in a holding period until financing agreement is confirmed at Vicu�a? And then second, I noticed the calculation of net debt has been updated to exclude lease liabilities. I was wondering if you could just explain a bit of the rationale behind this change. Teitur Poulsen: Yes, I can address just on the capitalized leases. Most of those actually relate to the Caserones operations. But we just think it's a cleaner story. It's less confusing if you just segregate the actual external debt as debt when we talk about the net debt. The leases are -- financially, it has to be classified as debt, but they really relate to the operations of the Caserones mine. So that's why we prefer to separate the 2, and we are always very clear as to when we talk about net debt that it excludes capitalized leases. So there's nothing more to it than that. We just feel it's a simpler way to communicate the position of the balance sheet. Jack O. Lundin: Yes. And with respect to kind of our capital allocation, I think we've been very consistent in our messaging. We will look to remain distributing capital to shareholders in absolute terms of around $220 million through dividends and our buyback policy. We've got growth opportunities that we're pursuing. And then we've got this upsizing of our revolving credit facility that we're on the cusp of finalizing. And so that puts us in a really good position, right, being in a net cash position. We entered 2025 with a debt of around $1.3 billion, thankfully, to the conclusion of the sales of our European assets and other transactions, we've been able to pay down our debt in addition to the strong cash flows being generated. So I think we're in a very strong position, which gives us the ability to maintain returns to shareholders, pursue our brownfield opportunities at our existing operations and then go after the big growth opportunity with Vicu�a. So we're in good shape. Operator: Our next question comes from Craig Hutchison with TD Cowen. Craig Hutchison: Most of my questions have been answered, but I just wanted to circle back on Sa�va. Just looking at the production profile, it seemed to me pretty accretive, particularly given the high gold grades in year 1. But is any possibility you could give us some kind of sense in terms of what the NPV uplift would be from this project? It's just difficult to kind of understand just based on only having initial capital and some of the grades. But is this a pretty material uplift in terms of how you view the NPV for Chapada overall? Jack O. Lundin: Yes, absolutely. It definitely impacts the overall value of Chapada, adds a significant amount of NPV to the asset. We use base case kind of consensus pricing for the sanctioning decision and for our economic model. But if you were to use spot pricing, I mean, this would significantly enhance the overall value of Chapada. And so these are the exact type of projects that we're tasking our sites to go out and look to pursue given that Chapada has stabilized the operation and is generating strong cash flows year-over-year. I think Sa�va plays a key role to improving the overall value. And I will say as well, targeting before the end of this year, we're going to be updating the technical report, which will update the resource and reserve for Chapada. It will incorporate Sa�va as a reserve as well, and it will include kind of the development plan and overall strategy for making that part of the core of the operation. Craig Hutchison: Okay. Great. I guess you can't give us some kind of a sense of what it's -- what that NPV uplift is at this point? Or we have to wait until sort of year-end? Jack O. Lundin: Yes. We're not disclosing that at this time. But yes, but you'll be able to see it in the near term. Operator: Our next question comes from Matt Greene with Goldman Sachs. Matthew Greene: Congrats on a great year. If I could just carry on that question on Sa�va, Andres. What do you -- I guess, firstly, just a clarification point because I think the language is changing a bit here. At your CMD, you talked about incremental production, and now we're talking about offsetting low-grade material. So I just want to confirm that is still incremental production on top of what the mine plan you presented at the CMD? And then just kind of how you -- since the scoping study in this PEA, has your approach to how you're thinking about this project changed at all? I mean metal pricing has gone up. I guess, are you solving for NPV? Are you solving for capital intensity, the ability to bring this to market quickly? I'm just kind of keen to know if your approach towards this project has changed at all since the CMD. Juan Morel: No. And in general, the approach has not changed, Matt. And we're still aiming for bringing production earlier in the life of mine of Chapada and taking advantage of the current commodity prices. So we're aiming for low intensity -- low capital intensity opportunities as we highlighted during the CMD. And to your initial question, it is incremental production. So we're basically deferring or delaying low-grade material from Chapada and replacing that with higher-grade material from Sa�va. And those 17,000 tonnes of copper are actually incremental over the previous life of mine of Chapada. And just to add one more comment. This is the first phase of this project, which is this near-term opportunity. But as we continue with the study of the project, the feasibility study, we'll also be working on the pre-feasibility study of the remaining of the ore body, which is still very attractive, but we need to understand more the deposit and how we're going to bring that project forward. Matthew Greene: Yes. Got it. That's clear. And I guess just taking a step back on the concentrate markets. You touched on TC/RCs earlier, but I don't think that really tells the whole story, just given the tightness, not getting to get penalized as much on purities, free metal. I think your bargaining power as a mining concentrate producer right now is quite favorable. So is this I guess, changing the way you're thinking about how you produce your concentrates across your mines. I mean, are you able to lower the grade of your concentrates, perhaps mine material if you do have it that has higher impurities and be quite opportunistic in this market? Is this something that is perhaps opening up a few opportunities? Juan Morel: Yes. We have been looking at opportunities from that regard. We are testing some different approaches in Chapada, for example, where we're making a trade-off between lowering the grade of the concentrate and increase our recovery significantly. So we are testing those opportunities. We have seen, on the other side, an incredible increase in the concentrate grade in Caserones as we mine through an area of the deposit where recoveries are higher and concentrate grades are highest, is basically driven by the metal, but those are the kind of trade-offs that we're testing now. Matthew Greene: Okay. And is that looking quite promising? Is that all reflected in your guidance? Or could that be a little bit of upside, you think? Juan Morel: No, they're not yet totally reflected in our guidance. Operator: That will conclude our question-and-answer session. This concludes today's conference call. Thank you for participating. You may now disconnect.

85天前Insight Analytics约5分钟阅读

SKLTY 2026 Q2 财报电话会议

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the SEEK Limited Half Year Results Call for 2026. [Operator Instructions]. I will now hand the call over to SEEK Limited CEO, Ian Narev. Please go ahead. Ian Narev: Thank you. Good morning, all. We are here on the lands of the Wurundjeri Woiwurrung people of the Kulin Nation. I'd like to pay my respects to the elders past, present and emerging. We've got the usual crew here, Kendra, Peter, Simon, Grant, Dan and Pat. And thank you all very much for joining us. I'd only to tell you that these results happen at a pretty volatile time in terms of equity markets and today is not a sales job. The numbers are going to speak for themselves. And we'll add to that our perspective on the main drivers of the numbers and what that means for the future. In terms of our take, I've been generally encouraged by our Board to overcome my natural conservatism and talk about the business. So let me say that over the next hour and in the course of discussions we'll have with many of you over the coming days, I think it will be clear that as a management team, we have a very strong sense of confidence in the position of the business today and in its prospects for the future. We've got a combination of market leadership positions, brand strength, customer trust, technology backbone, product depth and breadth and perhaps most importantly, the data that come from all of those strengths. And that puts us in a unique position to continue and accelerate years of innovation. That takes a lot of hard work, but we've got as good a starting point as we could want. And the momentum, as I said, is clear from the results. As you can see from Slide 6, shares up, yields up, operating leverage is clear. We've got a record dividend. The balance sheet is strong. We know that the translation to the bottom line still needs to come a bit more. And particularly, we can answer questions about the Zhaopin write down in Q&A if people want to know more, but we are well on the way. This is the latest in a series of results we've delivered exactly what we said we would and probably a bit more. This is the best of that series of results. And as we discussed at our Board meeting yesterday, it's probably as good a set of operational results as SEEK has ever delivered. So the momentum is accelerating. I won't go into the detail on Slide 7 and 9, but the message there is very clear. Short-term results are as planned. Progress against our core strategic priorities is very strong. More important than that are the drivers of those results, and I'll just spend a minute on Page 10 because those drivers of the result are the connection between the strength of the results and the confidence in the future. On the top box, put very simply, we are 1 decade on from the establishment of our AI function with that name. We're 2 years on from elevating the function to my direct reporting line, and we can see the benefits of years of doing that investment right through the results. And you can see hundreds of product releases in the last 6 months using AI capability, placement share and yield growth, not prospects, but delivered these results. A high proportion of the benefits come from the data advantage we have. And a very important part of, again, not what we think, but what we've learned is that in this environment, and we believe in the period ahead, competitive advantage doesn't come from AI models. It comes from the extent to which the models can access unique proprietary data that other models can't, and that translates into tangible benefits for customers who, as a result, choose you and will pay for what you offer. You understand SEEK well enough to know we run a marketplace with very complex preferences, not on one side, but on 2 sides of the market. So using data to help elicit those preferences and more significantly to match them creates the value that, as I said, makes people choose us and pay, and that's not a thesis. The evidence is right through the results. It's evident in placement share, it's evident in yield growth, and we've got a long way to go. And you can see that in the second box there, we talk about having roughly 0.75 billion data points, most of which can't be replicated and scraped. And we know from daily experience how to translate that into the products that matter to customers. The last thing I'll say before handing to Grant is that the matching that we're seeing is better than ever, and we really feel we are still only at the start of what we can do. And I just want to dwell on one point, particular words in that first bullet point where we say the most obvious benefits from proprietary data, not just what customers want, but how realistic is it. And I think there's one thought to keep in your head here. There are many models, interfaces that can do a good job of having conversations with people to decide what they want. The big question is what do you need to show people how realistic that is and where they should target their attention. Likewise, on the hirer side, great to have the tools, and we're building them and to elicit what the hirer needs. The question is who are the people out there, how do you target them and how do you get the best person possible. That depends on marketplace data, not on conversational interfaces. You need both. But with the interfaces without the data, you just cannot deliver that experience. The last thing I'll say and that Kendra will talk about this more a bit later, because we've learned so much over a long period of time, we know which investment works. We do more of that less than the other stuff, and we retain our confidence that we continue the investment we need within the target cost envelope. With that, I'll hand over to Grant to carry on for us. Grant Wright: Thanks, Ian. So Slide 11 speaks in a bit more detail to what Ian mentioned about how unique data and our AI capability is driving our 3 strategic priorities of placements yield and operating leverage. If I start with placements, our marketplace, as Ian said, is fundamentally about facilitating 2-sided trusted connections. The candidates trust us to deliver relevant results, but also provide realistic feedback about competition and their chances of getting the role. Hirers always want to understand what's out there, but also who's available and interested right now. That distinction between what looks good on paper to one side versus what's real and agreed to on both sides is critical to reducing wasted effort creating placements. And as AI noise increases in the market, this becomes even more important to generate placements. That's where we have unique data that cannot be scraped to DMZ. We see close to 1 billion and decisions on our marketplace every day. So that's candidates becoming active and being open to looking at opportunities. It's the jobs they review and save. It's what they apply to and then the jobs that they prioritize as their preferred applications that they're very interested in. It's the criteria that hires want to target on. It's who they search for, who they review, who they shortlist and who they contact. That data drives better matching, which leads to more activity, which leads to more data and therefore, drives better matching. So these actions that reveal people's real availability, intent and priorities drive those placements and create even more activity on our platform. That same 2-sided data also enables us to sustainably grow yield because we see real hiring activity and competition. We can predict, understand and manage performance and price. Our pricing system monitors supply and demand for about 45,000 labor market segments across APAC. That data enables us to provide attractive options for hirers to pay for more performance and the choices they make between those options and the performance they want gives us data on willingness to pay, which allows us to then further improve our pricing models. Lastly, on operating leverage, as Ian said, we've been investing in for over a decade. So we're not starting from scratch here. We've got advanced capability in building, deploying and optimizing AI models as well as a strong focus on responsible AI to make sure that we manage risk and retain trust with our users. And we're continuing to experiment and test to ensure that the innovations and algorithms we deliver have real customer impact. So that combination of existing capability, including applying AI internally for efficiency and then the experimentation to make sure that the innovation we're delivering is delivering real customer value enables us to deliver placement and yield growth while maintaining our operating targets -- operating leverage targets. Slide 12 then demonstrates how our proprietary data and AI capability are creating real value today, particularly through personalized matching and AI targeting. Our key inputs on the slide speak to the proprietary data that I talked about previously on both sides of the marketplace. The conversational AI products, live tracking of actions on our platform, verification through CPaaS and reputational products like reviews and reference checks give us a complete view of the requirements, preferences and importantly, the trade-offs and willingness to pay that both sides are willing to make a match. We then use that data in a wide range of AI models. So that includes proprietary ML models that we build in-house. It's LLMs fine-tuned on seat data and it's new technology emerging like sequence models, which is essentially the concept of a large language model that applied to behavioral data. So rather than predicting the next word, aims to predict the next action. We're also experimenting with agentic search systems to further advance our search capability. These prediction models are then used across the marketplace to deliver capabilities, including recommending targeting criteria to hirers based on what we know matters, to predict and manage performance outcomes and set our prices, to deliver highly personalized matches to candidates that manage both what they're interested in and what they're a good fit for. Our increasing ability to predict fit also allows us to target high candidates through exclusive outreach products for advanced and premium ads. And then we explain those matches using generative AI on both sides of the marketplace to increase confidence and encourage people to engage with the opportunities that will drive a placement. And it's this combination of the unique 2-sided data and our AI capability that's continuing to show up in increased value for customers. So candidates are now 1.5x more likely to see and apply for relevant jobs due to the quality of our matching and explanations, and that's underpinned our placement share growth of 7 percentage points over the last 3 years in ANZ. On the hirer side, hires are seeing the benefits of increased performance in advanced and premium ads by high targeting and they're opting to pay for increased performance, increasing depth adoption, which has grown 2.7x over 3 years and underpinning our ability to grow yield sustainably at 15% compound over the last 3 years. So we're seeing these results really show up for customers in our investment in AI. I turn to Simon on Page 13 to talk about how that shows up across our product suite. Simon Lusted: Thanks, Grant. Moving to Page 13. I want to take this opportunity to drill into a little bit more detail on how this AI and data capability is showing up in examples of actual features delivered on SEEK over the last few years. We've broken this into the candidate side and the hirer side. What we're going to talk about is all live product in market that's been delivering for candidates. I want to give you a bit more flavor of the type of impact we're seeing from these capabilities. And our long-run investment in AI infrastructure, we were pretty really to integrating LLMs and natural language search into our core job search discovery experience. That delivered immediate uplift, which continue to compound as Grant and his team retrain models on our data today. But perhaps more important, it put us in a position to experiment pretty aggressively over the last few years with a range of different conversational experiences. We have 2 pretty exciting experiences in market right now, and we plan to use this learning to evolve and improve our candidate search and discovery experience over the next few quarters. While we were doing that, we also saw the opportunity in these capabilities just to do more of the work on behalf of candidates. So we launched our intelligent career feed, which uses candidates profile data, their behavior, all the data Grant talked about to do more of the reasoning on behalf of candidates. And that's given us a really big lift in the number of applications that come from this very low effort engagement experience. In fact, it's less than half the effort to find a relevant job through using our career feed than it is in manual job search. In addition, as our recommendations have become more precise, it's putting us in a position to talk to candidates off our platform with much higher fidelity, much higher cut through. We've really driven huge improvements in our -- the way we notify candidates, and that's allowed us to tap into monitoring job seekers who perhaps aren't active enough to be on SEEK at that time, but are willing and open to engage in new opportunities. That's delivered a 2x growth in channel performance in just a couple of years. And as Ian mentioned, it's not just whether the job is available, it's whether that job is right for you and whether you're a fit and whether the person on the other side is likely to want to shortlist you or progress you. And so we've been doing a lot to help explain to candidates how and in what ways they might be a fit. This has been particularly pleasing because what we found is that many candidates are a little bit hesitant to step outside their frame of reference. And when we can share with them that they actually are potentially a strong and high fit for this role, we're driving much greater levels of engagement and application, which is driving placements. And as mentioned, we've been investing in trust for a long time now. We've always thought that the labor market was sort of noisier than it had to be. And we've got a big team in [ APAC ] over 100 people now. We're in every market across APAC, and we're really scaling our ability to verify trust with new AI models that allow us to add authority, check identity and really deeply understand who is real and whether what they're saying on our marketplace is a genuine claim. And as Grant mentioned, the new products like Strong interest where candidates are able to nominate a few jobs that are their particular priorities. That's all underpinned rather by our trust infrastructure. On the hirer side, we're becoming more of an adviser through the job ad posting process. We're using our market data to explain the marketplace, help hirers build more quality ads, reducing effort, and that's driving up conversion of new hires to job posting. We've made big step-ups in our dynamic job ad pricing accuracy. And what that means is we're better able to understand whether a candidate's actions and the ad they're buying will lead to a placement. That's given us a lot of confidence to align prices to value. Grant mentioned our AI targeting. That's really been central to our ad ladder refresh. We've got an AI targeting feature that's bundled into the advanced ad and the premium ad, which really delivers a material difference in placement outcomes. And similarly, we're explaining to hirers why a candidate might be a great fit. So we're not only saving them time, but we're improving the chances that they make a placement by connecting them with candidates that they might not have considered otherwise. We're also getting further into the placement process. We launched in the last half our reference checking product, which is a full voice agent, a voice agent will interview a referee. It cuts the time to give a reference in half. It generates higher quality data, and it takes what was previously a messy offline event and brings it into our platform in a structured and actionable way. And this is the kind of data and the kind of trust that an intermediary can leverage to help both parties in a way that we don't think many can. So as individual features, I've tried to give you a flavor of how we're applying these capabilities to improve in many different places. But taken together as a system, I think I'm hoping to give you a flavor of how these benefits compound in each other. They lead to stronger, deeper understanding of our candidates and hire preferences, better matching not just more placements, but higher quality placements that drives ROI for hirers and that drives up their willingness to pay. So we're really excited about the progress we've made. But as Ian mentioned, we do still feel like we're just at the start, and we've got more opportunity opening up over the next few years, and it's an exciting time for us. Peter Bithos: Thanks, Simon. I get the privilege of talking about how the data and products that Grant Simon just talked about, pull through into the actual numbers in each of the regions. And just a reminder, kind of the system that we're trying to build here is great data plus great products equal more jobs. And then you combine that with a great brand and great on-ground execution in every single country, and you hopefully drive results across APAC. And actually, that's what I get to talk about here today. So I'll start with ANZ. For those of you who remember last time, I kind of noted last time was actually first time where in a down market, we were able to drive ANZ growth and gain share. This time, actually, the results are even better. So it remains a down market, we were able to drive double-digit revenue growth, gain share, highest share in recent history in ANZ with a 17% yield uplift. So volume is slightly down due to macro, but share up yields and revenue growth well into the double digits. How that happened is explained on the bottom right-hand side of Slide 15, which I won't go into the details, but essentially, it was product driven. So a large chunk of the revenue and yield performance you can see is a dramatic shift in the types of products being offered and taken up by our customers. And those are the products that Grant and Simon just talked to. So you see a dramatic step-up in depth penetration, driving both placements and yield. If I go to Slide 16 and talk about the macros for a minute, it still remains a slightly down market. But I would say the biggest news positive on Slide 16 is the dash on the upper left, where we're seeing New Zealand turnaround after a period of substantial decline over 2 or 3 years. So we're pleased to see New Zealand volumes up on PCP. As for the rest of the slides, you can see the macro kind of stabilizing across ANZ from the previous few years. So good to see a relatively stable macro environment in an area where we can really drive share and drive the business pretty hard. That translates to now not just an increasing share, but importantly, an increasingly large gap in ANZ between us and the second largest competitor. So not only is it at record levels, but the delta between us and competition is now at record levels. And so whether it's the core variable pricing, the depth, the AI products, we're really pleased. It's a very strong result for ANZ. For those of you who have been following the Asia journey, would know we're going through quite a lot of commercial transformation, launching and rolling out freemium, which I'll talk to in a couple of slides. This half continued that journey. We had a full 6 months of Singapore, which we launched late in the second half, and we launched Hong Kong, our largest market. And I think if you kind of took a step back and you said if we were able to generate real revenue growth and launch 2 of our largest markets in freemium as well as have a full year effect of all the emerging markets and produce the results we have, we'd be very, very pleased. So we think it's a really strong performance. You can see paid volumes down. I'll talk to that in a little bit. Revenue up. Placement share as the survey calls it slightly down. But the survey, it's within the statistical variability and noise. We're kind of pleased with the long-term trajectory and all the other indicators that we crosscheck are really strong. And so we're pleased with that result. Paid ad yield, very similar story, and this is very consistent with what we've been doing since unification. Any benefits we're able to launch, we roll it out across APAC, and we seek to get those benefits across APAC. So you can see the advanced and the depth penetration equally shifting in Asia, just the same. You can see Slide 19 and then a few slides later on Slide 20 and 21, really tell the story of freemium as we go. So if you look at Slide 19, you can see the monthly ad volumes on the right-hand side. You can see the total ads increasing as we roll out the markets. You can see the mix shift slightly changed between paid and free between the pink line and the purple line. But then you can start to see now the monthly unique hires, which we've called out as a leading indicator that we need to get right longer term, now 18% up PCP, very pleased. So -- and then as we get more ads on the platform, the marketplace strengthens, we get more unique visitors, and you can see that in the bottom left. So strengthening of the flywheel in the Asian markets is occurring, and you can see it in multiple metrics on Slide 19. Slide 20 just talks to the placement and yield, which I talked to you previously. I'd note across APAC, for those of you that follow the placement over time, every 2 to 3 years, probably 3 to 4 years, we reset the sample size and also supplier. We'll be doing that. That's kind of a normal part of the cycle, and we'll reset the survey in the next set of results. So that's just a note for those of you that follow that. And then last, Slide 21 just talks to the progress in the rollout of freemium. Two weeks ago, we launched Malaysia. It was our last market. So we are now freemium in all markets. So when we get to FY '27, it's a clean full year. We're excited about that, but we're right now, I'm just happy with the results that we've gotten and shows the strength of the business and everything Grant and Sean spoke of. So I'll hand over to Kendra. Kendra Banks: Thank you, Peter. Good morning, everyone. I'll begin with Slide 23 and talk to how all of this you just heard results in our finances for the first half. So we reported revenue of $601 million. That's up 12% compared to the same period last year or 11% when you exclude Sidekicker, which was not included in our prior period results. We delivered again on our commitment to operating leverage as total costs grew 8%, excluding Sidekicker, 3 percentage points lower than the revenue growth rate. This operating leverage is going straight to earnings growth. EBITDA was up 19% and adjusted profit of $104 million, up 35% for continuing operations. We reported, as you know, a $356 million impairment charge against our investment split across continuing and discontinued ops. The appendix slide outlines the details showing how the Zhaopin investment as accounted in our books went from $529 million in June down to $182 million this period. This is a noncash impairment and reflects changes in the last 6 months, which will help set the business up for a stronger future. Back to our core business. Our financial performance and trajectory are strong, and this provides the Board confidence to announce a record dividend amount of $0.27 per share. That's an increase of 13% from the prior year. Turning to Slide 24. Our commitment to operating leverage is clearly evident in these results. As I mentioned, excluding Sidekicker, revenue of growth of 11% exceeded total cost growth of 3%. We primarily focus that increased expenditure on our ongoing and growing investment in AI product and tech and the IT infrastructure and compute costs, which support the product experience. We fund this increased investment by being efficient with our run-the-business costs so that the total cost growth continues to be contained in our mid- to high single-digit total targets. As a reminder, we think about costs as a management team on total cost of OpEx and CapEx to create the right incentives. But of course, we do account for it split into OpEx and CapEx according to the accounting standards. The result for this half is a 7% increase in OpEx and 24% increase in CapEx, and that weighting isn't really a surprise with the prioritization towards grow the business activities, particularly the AI-focused product development that's delivering tangible results. Slide 25 talks to the drivers of adjusted profit, up 35% from last year. The growth was led by strong EBITDA performance, partially offset by a few below-the-line factors. The D&A was higher in line with the increase in CapEx over the platform unification years. Share-based payments expense increased. This included a one-off share grant to all employees and also includes the accounting standards requirement to value share payments on the date of grant, which happen to be close to a recent peak in our share price. Partly offsetting these were lower interest costs and a partial reversal of the Zhaopin performance fee following the impairment. Slide 26 is cash flow performance. I won't go through the detail here other than to say there's nothing unexpected. And as I said earlier, strong cash flows enabled higher dividend returns to shareholders. On Slide 27, our debt position was broadly stable. Our net leverage ratio continues to improve. It's down from 2.3x a year ago to 2 and is well within our target of less than 2.5x. And of course, that's driven by growth in EBITDA. Slide 28 outlines the performance of the SEEK Growth Fund. A reminder, we look at total portfolio value, including the portfolio valuation plus distributions from the fund. As of the 31st of December, this value was up 1% year-on-year. The fund's return on invested capital since inception is now about 33% with an IRR of 8%. There's more detailed appendix on the fund's 4 largest businesses as always. Also considering the fund, you'll have seen in the press today their announcement that they are commencing a process to sell their stake in Employment Hero. On Slide 29 is our capital management framework, which remains unchanged. Strong operating cash flows providing capacity to execute on our strategic priorities and provide dividend growth. Looking ahead, as you know, the fund opens a liquidity window in the 2026 calendar year, following which they must use reasonable endeavors to fulfill a liquidity request within the next 12 to 24 months. In the lead up to this, the Fund's Trustee Board is in active discussions on the optimal approach to maximize long-term value, and we will update you as the year progresses. Finally, briefly on Slide 30, our sustainability commitment continues to be a priority. Employment platforms like SEEK are uniquely positioned to drive fair hiring, and we're continuing to evolve our strategy and approach to expand our impact, strengthening platform controls using AI, working with other experts and organizations to continue to elevate fair hiring standards. Perfect. Ian to touch on the outlook. Ian Narev: Thank you, Kendra. I'll be quick because we want to get to questions and I've learned over time, stick to what's on the page where we talk about guidance. The headlines are here, as you would expect in the half, we tightened the range. And as you will see on the right-hand side, that means for those of you who like to work to the midpoint, which we know many of you do. The guidance is a range, but it gives you a sense of where the midpoint ends up. And the only additional commentary on that, as you can see here is that the revenue and EBITDA is expected to be in the top half of the original guidance. So range contracted. We've done some on the midpoint for your benefit, but it remains a range, but we expect to be in the top half of the original guidance for the revenue and the EBITDA. So look, I think you heard here, I mean, I'll just quickly summarize a very strong result for us. There are no guarantees of success in this business, and we're going to need sustained hard work to maintain the momentum and to make the most of the opportunities. But we've got the foundations we need. And to come back to where I started, I think you'll hear a very strong sense of confidence from the management team based on the results we've seen and the assets we know we've got. And now it's up to us to continue executing. So with that, I'll hand over to Q&A. Operator: [Operator Instructions] Your first question comes from the line of Eric Choi from Barrenjoey. Eric Choi: So my 2 questions. The first one is just on monetizing placement share. So your placement share has obviously gone up to 36% now, but I think SEEK is probably only still doing 15% to 20% share of total placement costs in Australia. So my question is, can SEEK evolve its revenue model to be less reliant on total job ad volumes, but instead more on placement outcomes? Because I guess that might make you less impacted from any AI disruption of job volumes and it kind of still suggests there's plenty of scope to grow your yield over a long period of time. Ian Narev: I'll quickly answer that, Eric, and then hand over to see if Simon wants to add anything. The short answer is if you -- this is quite important for the business. If you look top down at the amount any business is paying for successful placement, all our research shows we have plenty of room to move. Every bit of research shows that what we get for a placement is at the very low end of people's propensity to pay if it's a good match. That gives us a lot of confidence as long as we deliver the match. So we are nowhere near what we would consider to be a ceiling. At the moment, you can also see from here the combination of placement share and yield growth means there's a lot of money value we can create and value we can share through our current model. So we don't see an enormous need to evolve urgently, but we keep looking for ways to share the value with the customers. The team spend enormous amount of time on that. And at the moment, we're happy with what we've got, but we've got other things in the pipeline that we can experiment with and see how they go. I don't know, Simon, whether you want to add to that? Simon Lusted: Yes. Yes, I do. I think we obviously think about this a lot, Eric. The key unlock for us for so much of our marketplace is knowing that a placement happens. I mean the real -- what we want to earn as much or generate as much value as we can when our customers make a placement and less when they don't. And so a lot comes down to our ability to predict whether a placement is going to occur given all the factors. And there's really 2 ways we're coming at that. We talked a little bit about that today. We've got great prediction engines. We've got the opportunity to play further down in the selection process. So we see more about how far candidates get. And that allows us to understand, well, how much value are we creating? And then the other way is just to play directly in the placement. We're doing that with guaranteed hire with SmartHire, which we talked about. Sidekicker is obviously in the placement. So we're thinking about these things. But the real unlock is the degree to which we can drive up our confidence in that placement probability. And we feel like we're making really good progress there, and there's a lot more to do, opportunities opening up for us in lots of different areas. Eric Choi: Lusted, quick follow-up. I'm dumber than you. So can I just ask something a follow-up in dumb terms? Like everyone is worried about AI agents connecting employees and candidates directly. Just listening to your reasoning, like if there's a noisy world where employees are getting spammed thousands of applications by AI bots, it's -- you seem to be suggesting you're going to be giving higher quality matches probably because you've got, I don't know, intent availability data. So are you sort of saying your placements become more valuable in that world? Simon Lusted: Yes. I mean I think what the matching is about sending strong signals of intent and quality. And if that gets easy to imitate at scale, then the role for an intermediary who can reinforce the rules, add trust and help candidates and hirers negotiate in a high-trust environment. That goes up, not down, granted. Operator: Your next question comes from the line of [ David ] from [ Fabris ]. Unknown Analyst: Can I firstly ask about the ad ladder pricing model and strategy? I mean I appreciate you touched on it through the presentation. But can you help us understand whether you're running periodic price increases and then augmenting this with dynamic pricing? Or you're leaning much harder on dynamic pricing now and have moved away from those periodic price rises? Peter Bithos: Yes. So actually, that's a really great question that gets to the heart of this result. This particular result, whether it is both Asia or ANZ, on about half of the yield uplift is being driven by product take-up of new products, right? So it's customers reacting to the probability to place expressed in, say, the advanced ad, saying, "I want that, I'm willing to pay for it," and they're making that decision by themselves. And our job is to educate the customer on the choices that they have. So this is not -- we continue always on the journey of variable pricing and making sure we price to the value we're creating. But this particular result is actually the strongest led by the products that we've actually created. Ian Narev: I'll just add one point to that. Those of you who have been following since we did the dynamic pricing in 2019 know that the probability to place is a driver of the dynamic pricing model. So in the nonproduct-driven parts of it, the more confidence we've got in the propensity to place, the more the dynamic pricing model creates more value when we share in it. So even the nonproduct part, don't think of that as blood price increases. A big part of that is the data on the marketplace utilizing the dynamic pricing model to increase the value and the price because of the confidence in the placement. And that is a really important part of understanding the confluence of investments we've made over a long period of time. Unknown Analyst: Yes. Got it. And then just continuing on, I guess, with the products here. Just that ANZ ad ladder penetration, I mean, if you look at the advanced tier, it looks like it's settling around mid-teens. And I think it was there in July, it was there in December and it was there through the period. Can you share with us where you think that optimal level of penetration may be and how you get there? Or on the flip side, what levers do you have to improve that penetration? Peter Bithos: Yes. So that uplift -- so there's 2 things. One, we think there's further upside. Simon and Grant are working on new stuff, and we look forward to the customers taking that up, too, right? So like increasingly, depth is kind of part of the core revenue. It's not the thing on top. So -- and you can see that in the results. Advanced Ad in particular, pleasingly, we saw growth through the half, driven as our sales channels and marketing channels educated the customer and the product tweaks that we presented. So it's not a one-off. It's something we're driving into the business, and then we're looking forward to further improvements in to come. So this is kind of a -- we can do more of this, and we have very high confidence in that. Ian Narev: Can I just add another thing for the benefit of a bit of historic context for questions you've asked for years? We've had questions for years, if volumes go down, do you get a procyclical effect on yield. Page 15 shows volumes down to yield up 17% and a really very strong performance from what we called the depth products. Now what does that tell us? Even when the volumes are coming down in this kind of economy, what we've learned is when these products transparently show a hirer that they've got a greater chance of a good placement more quickly, they pay for it. And we don't think that's anywhere near exhausted. And we're learning and there's more to go that it's probably less dependent on the economic cycles than we thought, and that's a really good message for everybody to a question we've all been talking about now beyond the 7 years I've been around. Operator: Your next question comes from the line of Bob Chen from JPMorgan. Bob Chen: Two questions from me. I mean just firstly, a clarifying one. Just looking at your cash flows, especially on the free cash flow line, it's obviously sort of come off a little bit. It looks like there is a bit of seasonality in there. Do we expect that to sort of normalize into the second half? Kendra Banks: Yes. So cash conversion is always lower in the first half than the second because -- primarily because we pay out our employee bonus in the first half and revenue seasonally is slightly higher in the second. So that's what we expect to see. And the shift year-on-year is because we did pay a slightly higher bonus that came out of cash in this half than we had the previous year. Bob Chen: Okay. Cool. And then maybe a more sort of general question around AI as well as that investment and monetization. Are we to sort of expect that the monetization of this investment in AI is largely through your depth of tiering as opposed to additional AI products on top? Simon Lusted: I'll have a go at that. I think largely, we think, as Peter outlined, we launched a new ad ladder, and we said at the time, there's a lot of room for us to build new features, especially AI-driven features and enhance those ad ladders and drive more depth. So that is a big part of our future. In the last half, we launched a new add-on called assist. That add-on is really focused on monetizing the value we plan to deliver through things like automating reference checks, better ranking, helping people complete the hiring process more efficiently. I think that's more a long-term product lever, but we are trying to create a frame through which to monetize the efficiency elements of the AI work that we plan to do over the next little while. Operator: Your next question comes from the line of Lucy Huang from UBS. Lucy Huang: I've got 2 questions as well. So firstly, just looking into FY '27, how should we be thinking about the contribution from some of the growth drivers on yields, given like this year, we've had advanced ads, new product like next year, there won't be new advanced ads. So will we be leveraging more on dynamic pricing? Or do you think advanced ad penetration could still be a larger component of the growth there? Peter Bithos: Yes. Lucy, it's Peter. I'll pull you up one level, which is instead of advanced ads specifically, the profit growth, which is we have new products and new constructs that allow buyers to get placements in various high confident ways. And we take those products and constructs and drive it into the base through our sales channels and our brand and our presentation through the product. That is a formula we want to continue. So advanced ad will be complemented by other things over time. But the underlying dynamic that you now have a system of for base price, we have sophistication in the way we price to value as we increase the probability to place. And we now have a system across 8 markets to produce products that are taken up in a very aggressive and fast way. And we're bullish that system will continue. Lucy Huang: Understood. And then also recently, we've noticed you've got a people search tab on the SEEK Australia website. Just wondering if you can talk through how that feeds into the strategy for the company moving forward? And any early kind of statistics you can share on how many profiles there are, how often people are tapping into this database? Simon Lusted: Great question. So we've got within the APAC Group, 45 million candidate profiles until now largely been only accessible to hires who purchased our premium talent search product. We've made the decision that a candidate profile should very much be at the core of the SEEK experience, and we can add trust to that. We want to make that profile more useful for candidates all through the hiring process. They should be able to share it with others, find each other, et cetera. So we made the decision to make candidate profiles free and publicly searchable for candidates who opt into it. We're really pleased with the rate at which candidates are opting in. It's really encouraging. And we think overall, it will not only strengthen our flywheel, candidates be more likely to keep their profiles up to date, invest in adding trust to it. It will drive and improve their job-seeking experience. But we also think that will drive freshness and depth, which will allow us to monetize through a more premium talent search offering, which we plan to launch in FY '27. So it's part of a broader strategic play to put the candidate much more at the center of our marketplace, not just the job, but the candidate, and it's going very well. Operator: Your next question comes from the line of Entcho Raykovski from E&P. Entcho Raykovski: So my first question is around the cost base and your comment that there are efficiencies in the cost base that are enabling greater growth investment. I wonder if you're able to quantify the extent of those efficiencies. I may be difficult, but is it sort of thinking 10%, 20% savings, sort of what that does to the velocity of product rollout. And I'm curious whether there's been a further step change over the past 6 months in those efficiencies with the developments we're seeing in AI. Kendra Banks: Sure. Thanks, Entcho. So when we talk about efficiencies in the cost base, I'd point to a few things. The first is still seeing the benefits of the APAC unification, particularly in the commercial areas, where Peter's teams now run APAC sales and service marketing and all the kind of associated tools and corporate costs that support APAC, still seeing that benefit coming through in terms of tighter functions. The second is across the business in every function, we have very high take-up of AI as a core -- the AI tools internally as a core part of people's workflows. And we are seeing there -- it's a few points of efficiency in lots of different areas that's driving cost efficiency and allowing us to reinvest in the grow the business areas. And then in the grow the business areas, so product tech and AI, we certainly are seeing accelerated product development velocity. We haven't kind of disclosed a particular number there. But certainly, you can see it in the kind of pace of AI product rollout, while we are getting efficiency in terms of that product velocity flow and reinvesting it in continuing to develop our products. Entcho Raykovski: Okay. And my second question is around the employment sell-down. Are you able to talk about the rationale for it given it's obviously a fairly weak underlying market for high-growth stocks in theory, might have been a better time 6 months ago. And then is the fund running an open process or do they have a buyer lined up already? I'm conscious that KKR was the buyer 12 months ago. So not sure if they're the ones who are looking to up their investment. Ian Narev: I'd just say a couple of things. The decision to sell is entirely the funds. We don't control it. When asked our opinion, it's consistent with our goals as an investor to get liquidity over time, so we're fully supportive. Number two, the assets, terrific business done very well for the fund. It's obviously subject to value. And after this long and with this degree of understanding, they will sell if and only if they get a price that they think is good value. But number three, there's really no evidence at this stage that what we've seen in public markets, which has got all sorts of other drivers has translated into private markets. If it really has to this extent, that means the process wouldn't be successful. There's no evidence of that at the moment, and they'll find it out. In terms of who the likely buyers are, et cetera, that's something we have no visibility over. Operator: Your next question comes from the line of Fraser McLeish from MST Marquee. Fraser Mcleish: Great. Just a couple. Just firstly, on SME volumes. I don't think you've given your normal update on what percentage of your volumes are coming from the various customers? Have you got update on that? And then my sort of related question is to what extent, particularly in your SME volumes, do you think they are -- you've got unique listings that aren't going on to other platforms? That's my first one. And then just also, you've obviously outperformed -- you're going to outperform your high single-digit yield target again this year. You're just confirming that sort of over the cycle, high single-digit yield growth is still the target? Peter Bithos: I'll let Kendra speak to the second question of the long-term yield growth. On the first question on SME, actually, when you get into the details, you're right, we didn't disclose it here, but partly because actually, there's nothing distinct or different in SME volumes to what the overall story in ANZ is. I'm assuming you're talking about ANZ. Actually, if anything, the depth penetration was a little bit stronger in SME. And the volumes are pretty consistent with the overall market. So share is up in SME, yield is up in SME, and we're very pleased with the results and SME wasn't differentially performing in any notable way. Fraser Mcleish: Do we have unique ads? Peter Bithos: In terms of our unique ads position, very similar to the flywheel, slightly strengthening, but again, not uniquely against our other segments. Kendra Banks: Fraser, thanks on your question on high single-digit medium-term outlook for yield. We are still maintaining that as our medium-term outlook. We remain very confident, as already discussed, in the ongoing fast to future yield growth and that core dynamic that our customers are not that price sensitive when they're making a solid good placement, and we've talked a lot about how we plan to continue improving that delivery. However, as you know, we will always manage our pricing and yield to ensure marketplace health alongside. And therefore, despite delivering double-digit yield growth now multiple periods in a row, we're maintaining our high single-digit yield growth medium-term guidance there. Fraser Mcleish: Great. Sorry, can I follow up very quickly just on that unique ads? I guess where I'm coming from is just with AI proliferation and having unique listings is potentially going to be more important. So I'm just wanting to try and understand the extent you have unique listings that aren't necessarily on other platforms. Peter Bithos: Yes. So what we look at when we call unique listing, we then double-click and say, is it a unique listing that is directly on our platform versus pointing to a different place. So anybody can scrape and point to a different place and do that. Having said that, the large competitors in the marketplace don't scrape the direct ads from each other. And so we have a large corpus of unique ads that are available on SEEK, and that's remaining constant and consistent over the past few halves. Operator: Your next question comes from the line of Tom Beadle from Jarden. Thomas Beadle: Just my first question is just a follow up from [ choice ] on the cost side. I mean it's obviously nice to see that you've got your costs well under control and the positive [ choice ]. I mean if we take the breakdown of your cost base that you provided at your Investor Day, that growth in BAU bucket, I mean, what level of growth did you see in each bucket? And I guess I'm interested to hear any commentary you have around AI-related cost growth and just any other cost pressures in areas that are worth highlighting? Kendra Banks: Sure. Thanks, Tom. So if we look at that run the business, grow the business split, I sound run the business for very low single digits, and then you can kind of do the math on the rest in terms of high single, low double in terms of our grow the business investment. And that includes all of the AI cost that we're facing into in terms of the cost of the team, the models we use, the compute cost, et cetera. So we still feel confident that the AI cost growth that probably is noticeable in the coming years, we can, at this point, confidently say is within our total cost growth target. Ian Narev: And the other thing I think is your question, I'm looking at Grant here. We have under Grant's leadership, a protracted long-term piece of work just on using the same understanding of technology that drives our customer-facing platform to look for productivity opportunities inside SEEK. I mean you might want to just talk about a couple of areas, Grant, that we're really focused on. Grant Wright: Yes. So Kendra mentioned supplying and encouraging AI tools for everyone at SEEK through their individual processes. We have an internal AI tool for that. We also use Glean, which provides enterprise search and agents and our staff are running about 5,000 agents a month at the moment to help with those individual tasks. The bigger opportunity we see is really reengineering the big processes in the business. And so we now have a team going into those core processes to help people map define them and do good process excellence work as well as bring those AI tools into that. So that's in train as well as then looking at our big opportunities for transformation in sales and service and product development and AI coding. What you tend to find in AI coding is that you can get big efficiencies today in writing the code, but writing the code is only a proportion of that cost base. So we're also looking at how we reinvent that process to become more efficient. Some of the examples of things we're doing sales meeting prep agents to drastically lower the time to pull the information and have a high-quality conversation. So raising the quality of conversation across the board and reducing time and effort. Real-time customer feedback monitoring and products. So we just get much more insight to all our product managers about what's happening over time, which previously was a big time sink and also meant that you couldn't get all that feedback synthesized. So this is showing up all over the business in these sort of processes. We've automated credit checks for our external things through agents. So there's lots of examples of more a process opportunity, and we really want to, in the next year, take that to our big processes and think about how we reengineer them with AI. Ian Narev: The other thing I'd do just to add to that, our beloved Head of Engineering, James Ross, this is what I did in the holidays video that he sent to a bunch of us was a 1-hour video showing him experimenting with the latest developer productivity tools. They're very meaningful. So all these evolutions and revolutions on coding productivity, which the market is sort of looking at a gas and wondering whether they will disrupt our business. Well, we've made clear on the customer side that the data is the advantage. On the internal side, we've got people experimenting with these things as they come out. And as Grant said, we now want to map that to a really good process capability, but we think the opportunity is very meaningful. Thomas Beadle: Great. And just, I guess, the second question just on volumes. I realize there's a little bit of caution in your commentary. I mean, can you just give an update on what you're seeing on volumes over the first 6 or so weeks of the second half across your markets? Kendra Banks: Well, our January SEEK employment report will come out, I think, in a couple of days' time, and we'll give that insight. But as you can see from our guidance, at least on AU, it's very likely that volumes stay about where they are for the foreseeable future, and that's built into our guidance. Operator: Your next question comes from the line of Nick Basile from CLSA. Nicholas Basile: First question on placement share in ANZ. I think there was a stat there that SEEK now has a 4.9x lead versus the nearest competitor, which is, I think, up nicely on some more recent data points. So I'm just interested if you can sort of help us crystallize what you think the key to that result is and how we think about the sustainability of it going forward, I guess, particularly given you're telling us you're going to reset the data points or the survey data you collect, would just be helpful to understand how you're thinking about it. Peter Bithos: Yes. So the key is actually everything that Grant and Simon talked about in their part of the presentation. So effectively, the product and the platforms and you can kind of look at it as a line item product like Advance where the platform overall as the system all of it is getting better. And it's getting better differentially against all other options in the market. And pleasingly, in our recent results, it's getting better against our next largest competitor and so all of that is happening. And it's happening because of the underlying data and AI and the capabilities. And because it's happening because of that, there is nothing that we would see would change that trajectory. Ian Narev: I would just add with the normal point that we make, look at the placement share over a number of periods. And particularly now we're going to refine the methodology, we'll see what happens. It's a great story, both in Asia and ANZ. We probably are concerned less about movements half-on-half, more over 3, 4, 5 periods. That's what we'll continue to look at, but the signs are very good. Nicholas Basile: Okay. Great. And a second question, just on the growth fund. I guess curious how you are sort of rating the performance of the growth fund. I think the IRR of 8% perhaps wouldn't necessarily suggest it's adding a huge amount of value relative to other investment alternatives. But of course, interested to know how you think about perhaps the intangibles associated with this strategy that investors need to consider, for example, playing in the start-up space is an important strategic consideration for SEEK and/or somewhat of a cost of doing business. Ian Narev: Yes. Look, I think the IRR in and of itself looked at in the absence of anything else, is probably less than many people might think it would have been against the benchmarks of what other like funds have done over that period of time. It's actually not bad at all. And we have the capability inside, the team is very strong. So that is what it is. Interestingly, and I'll just remind people, in 2021, we were fielding calls about the valuations that the assets have gone to the fund, the fund is going to have a windfall and we said no. These are very fair market prices at the time. It was always going to be hard to earn the carry, and it's been hard to earn the carry. But we feel that the team is doing a very good job of it. And as a major investor, we're very confident in them. I don't think the informal connections are in and of themselves a rationale to be in the fund or not in the fund, but we talk a lot, and there's a very helpful and healthy 2-way dialogue on that, which I think is good for both us and for the fund. Operator: Due to time constraints, we will now end our Q&A session. I will now turn it back to Ian. Please continue. Ian Narev: Yes. Look, again, thank you all for your time. I think you've heard the main messages. The only thing I'd like to say just at the end is that there are a couple of people who have contributed to this result, who will be departing. Number one, Graham Goldsmith has done an absolutely outstanding job for all of our shareholders as Chair of SEEK and from a management team has provided a really great balance of challenging us and supporting us, and we will really miss him. Luckily, the Board has done a very good job in finding a successor. And likewise, as much as people know, it will pain me to say so, Dan McKenna has really done a great job as our Head of IR, and you've all interacted with him. This is his last result, and he's been a terrific contributor. So we want to thank him before he heads off overseas. And again, in Pat, we've got a ready successor standing in. So I just want to acknowledge the 2 of them. Thank you all again for your time, and we'll no doubt catch up with many of you over the coming days. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

85天前Insight Analytics约5分钟阅读

ELD.TO 2025 Q4 财报电话会议

Operator: Thank you for standing by. This is the conference operator. Welcome to the Eldorado Gold Fourth Quarter 2025 Results Conference Call. [Operator Instructions] And the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Lynette Gould, Vice President, Investor Relations, Communications and External Affairs. Please go ahead, Ms. Gould. Lynette Gould: Thank you, operator, and good morning, everyone. I'd like to welcome you to our conference call to discuss our fourth quarter and year-end 2025 results in addition to details of our 2026 guidance and overview of our 3-year production outlook. Before we begin, I'd like to remind you that we will be making forward-looking statements and referring to non-IFRS measures during the call. Please refer to the cautionary statements included in the presentation and the disclosure on non-IFRS measures and risk factors in our management's discussion and analysis. Joining me on the call today, we have George Burns, Chief Executive Officer; Christian Milau, President; Paul Ferneyhough, Executive Vice President and Chief Financial Officer; and Simon Hille, Executive Vice President, Operations and Technical Services. Louw Smith, Executive Vice President, Greece, is at site today and not able to join the call. So Simon Hille will speak on his behalf for Skouries and Olympias. Our releases yesterday detail our fourth quarter and year-end 2025 financial and operating results as well as our 2026 guidance and 3-year production outlook. They should be read in conjunction with our year-end 2025 financial statements and management's discussion and analysis, both of which are available on our website. They have also both been filed on SEDAR+ and EDGAR. All dollar figures discussed today are U.S. dollars unless otherwise stated. We will be speaking to the slides that accompany this webcast, which can be downloaded from our website. After the prepared remarks, we will open the call for Q&A, at which time, we will invite analysts to queue for questions. I will now turn the call over to George. George Burns: Thanks, Lynette, and good morning, everyone. I'll begin with an overview of our fourth quarter and full year 2025 results and highlights and then provide an update on construction and the time line at Skouries. I'll then hand the call over to Paul to review the financials and then to Simon with an update on projects and operations. Following that, Christian will provide an update on our 2026 guidance and 3-year production outlook before I conclude with some closing remarks. It's been a busy start to the year. We have continued to execute on a clear value creation strategy, achieving the high end of 2025 production guidance, launching a quarterly dividend to formalize a capital return framework and advancing a disciplined exploration program that reinforces the company's discovery strategy. The announced acquisition of Foran Mining further strengthens the company's long-term growth pipeline, adding a high-quality Canadian copper-gold development asset and enhancing portfolio diversification with a focus on per share value creation and sustainable free cash flow growth. Turning to Slide 4 and our fourth quarter and full year highlights. 2025 was a year of strong execution and meaningful progress across our portfolio. We delivered safe gold production at the upper end of our guidance, finishing the year with 488,268 ounces. This performance was supported by another strong year at Lamaque Complex, steady contributions from Kisladag and Efemçukuru and a solid finish at the Olympias mine, bringing it back on track. Solid operating execution, combined with a favorable gold price environment drove strong financial results, including $1.8 billion in revenue, $743 million in operating cash flow and $316 million in free cash flow, excluding Skouries investment. In Greece, we are reaching a key inflection point. The first production from Skouries later this year, together with the Olympias expansion and ongoing advancement of the Perama Hill project, Greece is set to deliver meaningful growth. This momentum is complemented by the continued long-life potential at the Lamaque Complex, supported by production from the Triangle deposit, development from the Ormaque deposit and a robust exploration pipeline and by our Turkish operations, which remain a stable cash-generating foundation for the company. Turning to Slide 5. In the fourth quarter, our lost time injury frequency rate was 0.55, an improvement from the LTIFR of 1.02 in the fourth quarter of 2024. While there is always room for improvement, this safety performance also comes during the peak of our construction activities at Skouries. We continue to implement multiyear programs to support continuous improvement in workplace safety, supporting our vision of everyone going home healthy and safe every day. During the quarter, we achieved safe production of 123,416 gold ounces at $1,894 all-in sustaining cost per ounce sold. Simon will speak further to each of the assets' performance later in the call. With a strong balance sheet, we are well positioned to advance our growth pipeline while maintaining flexibility to return capital to shareholders. As previously announced, we were active on our share repurchase through the NCIB program, and we repurchased approximately $204 million of shares during 2025. Additionally, we announced in January the initiation of a quarterly dividend program, which commences in the first quarter of '26. Coupled together, these mark an important milestone in delivering value to our shareholders and reflect the company's strong financial position and confidence in executing our growth strategy. At Skouries, first concentrate production has been modestly delayed and is now expected in early in the third quarter of 2026 with commercial production anticipated in the fourth quarter. This timing adjustment is expected to increase construction capital by approximately $50 million. The delay relates to primarily required replacement of the cyclone feed pump variable frequency drive capacitors in the process plant due to moisture damage that occurred while in storage. And secondarily, our power line connection delays resulting from a slower-than-expected approval of the detailed engineering and delayed ramp-up of the subcontractor. Prior to commissioning, final electrical regulatory authority approval requires completion of inspection and energization protocols. Importantly, the project is mitigation measures well underway and Skouries remains a multi-decade high-quality asset expected to generate meaningful cash flow in the second half of 2026 and beyond. Ramp-up of first production towards commercial production is expected to accelerate as the project team will continue to complete additional areas as we advance toward first production. We see the impact of the delay is minimal when looking at the long-life nature of the asset, and we are confident in the delivery of this multi-decade mine. With that, I'll turn the call over to Paul for a review of our financial results. Paul Ferneyhough: Thank you, George, and good morning, everyone. Turning to Slide 7, I'll summarize our fourth quarter and full year 2025 financial results. Consistent and reliable operational performance through the fourth quarter enabled us to deliver results at the high end of our tightened production guidance, while operating costs for both the quarter and the full year remained within expectations. Strong gold prices contributed positively to operating cash flow, further supporting the execution of our strategic and operational investments. Net earnings attributable to shareholders from continuing operations were $252 million or $1.26 per share in the fourth quarter. For the full year, net earnings attributable to shareholders totaled $520 million or $2.56 per share. Net earnings increased both for the full year and the fourth quarter compared to the prior year periods, driven by higher revenue, partially offset by increased production costs, including higher royalties and losses on derivative instruments. After adjusting for onetime nonrecurring items, adjusted net earnings for the quarter were $126 million or $0.63 per share. The primary adjustments in the quarter included a $104 million recovery related to the recognition of deferred tax assets and a $27 million unrealized gain on derivative instruments. For the full year, adjusted net earnings were $355 million or $1.75 per share. Adjustments during the year primarily included a $178 million recovery related to the recognition of deferred tax assets, a $39 million unrealized loss on derivative instruments and a $19 million foreign exchange gain related to the translation of deferred tax balances. Free cash flow in the fourth quarter was negative $55 million or positive $109 million when excluding capital investment in the Skouries project. For the full year, free cash flow was negative $233 million or positive $316 million when excluding Skouries. Cash flow generated by operating activities before changes in working capital totaled $752 million for the year compared to $636 million in the prior year. The increase was primarily driven by higher revenue, which rose to $1.8 billion in 2025, supported by higher average realized gold prices, partially offset by lower production volumes during the year compared to 2024. Production costs for the full year increased to $678 million from $564 million in 2024, primarily due to higher royalties, which accounted for approximately 40% of the year-over-year increase. Royalty expense totaled $124 million, up from just over $79 million in 2024. The balance of the increase reflects labor cost inflation across the operations, notably in Turkiye, where local inflation continues to outpace devaluation of the local currency, the strengthening euro impacting Olympias and increases at Lamaque related to labor and contractor costs required to support the Triangle Mine as it operates at greater depth. Fourth quarter total cash costs of $1,295 per ounce sold were at the lower end of our tightened guidance range and $1,176 per ounce sold for the full year. The year-over-year increase was primarily driven by higher royalty expenses driven by regulatory change in Turkiye and by the stronger gold price environment and overall lower gold volumes sold. Higher total cash costs resulted in increased all-in sustaining costs for both the quarter and the full year. AISC in the fourth quarter was $1,894 per ounce sold and $1,664 per ounce sold for the full year. Year-over-year comparisons were also impacted by higher sustaining capital expenditures in 2025. Growth capital investments at our operating mines totaled $74 million in the fourth quarter and $218 million for the full year. At Skouries, growth capital investment totaled $475 million for the year, including $137 million in the fourth quarter. Accelerated operational capital at Skouries amounted to $35 million in Q4 and $86 million for the full year. Current tax expense was $85 million in the fourth quarter and $229 million for the full year. This full year $115 million increase compared to 2024 was driven by improved profitability across all jurisdictions. Deferred tax was $118 million recovery in the fourth quarter and a $207 million recovery for the full year, primarily related to the recognition of deferred tax assets in Canada and Greece. Turning to Slide 8. Our balance sheet remains strong and provides the flexibility to support growth initiatives while returning capital to shareholders. Total liquidity was approximately $976 million at the year-end, positioning us well to complete construction at Skouries, support ramp-up and continued disciplined capital allocation, including to our recently announced dividend program and ongoing NCIB repurchases. During the fourth quarter, we purchased and canceled approximately $80 million of Eldorado shares under the NCIB. Following our additional investment in AMEX announced in December, our year-end cash balance was $869 million. Before turning the call over to Simon, I'd like to take this opportunity to announce that commercial terms for the Skouries concentrate offtake arrangements have been agreed and contracts are being finalized ahead of execution. These contracts cover approximately 80% of planned copper concentrate production over the next 2 to 3 years at terms significantly better than those assumed in the Skouries 2022 technical study. With that, I'll hand the call over to Simon, who will provide an update on our operations, beginning with Greece. Simon Hille: Thanks, Paul, and good morning, everyone. Let's begin with Slide 9, which highlights the progress at our Skouries copper-gold project. As George outlined, we have adjusted the timing of our Skouries project. However, I want to be very clear, the project continues to make strong progress and execution on the site remains solid. As of the end of 2025, overall construction has reached 90%, and our focus is firmly on delivering safe and high-quality startup. The open pit is operating ahead of plan. Substantial ore stockpiles have been established and grade control drilling is substantially complete from Phase 1, which has confirmed the first 3 years of production. While the timing has shifted modestly, the fundamentals of the project are unchanged, and the team is executing with discipline as we move towards the first production. Turning to Slide 10. Photos here and on the following slides illustrate the advancement of the work underway. Work in the process plant remains focused on mechanical, piping, cable tray and electrical installations in preparation for first ore. As mentioned, recent inspections have identified the need to replace the cyclone feed pump variable speed drive capacitors in the process plant, which experienced moist damage during storage. We have ordered and expect to install temporary replacement equipment in Q2 with permanent equipment in Q3. The prefabricated electrical distribution room for the compressors has been installed with cable and terminations progressing. The reagent areas are advancing in line with the commissioning plan. Moving to Slide 11. Two of the 3 tailings thickeners are mechanically complete with electrical cabling and instrumentation installation underway. The third thickener not required for start-up is in progress in line with the plan. Water testing is complete, piping installation is advancing and the support infrastructure, including pump house and flocculant building is moving forward. Slide 12 focuses on filtered tailings plant, which remains on the critical path with electrical installation and commissioning being the final step. The prefabricated electrical room was installed and electrical work is advancing. We're also making steady progress on the tailings handling infrastructure, including the stacking conveyance system. The accessibility and productivities of the tailings infrastructure have been mildly affected by recent rain fall above the historic levels. However, these are short-term challenges that the team is actively managing. As seen on Slide 13, construction of the crusher building is advancing well. Concrete work is complete. The crusher is mechanically installed, electrical work is underway. Conveyors to the coarse ore stockpile and the process plant are in place. The stockpile dome assembly is progressing. The installation of the prefabricated electrical distribution room was completed and electrical cable installation and terminations are in progress. Moving to Slide 14 and Olympias. Fourth quarter gold production was 18,473 ounces. And all-in sustaining costs were $1,676 per ounce sold. Progress continued on the planned mill 650,000 tonnes per annum expansion during the quarter. All of the major equipment, including the verti-mill, flotation cells, thickener, cyclones and e-room have been delivered and installation has commenced. We expect progressive commissioning and ramp-up in the second half of 2026. Turning to Turkiye on Slide 15. Kisladag production totaled 41,140 ounces with all-in sustaining costs of $1,933 per ounce sold. On the growth initiatives, the long lead procurement for the whole ore agglomeration circuit is underway with installation targeted for 2027. The new secondary crusher has been ordered with delivery expected in the second half of 2026 and the geometallurgical study to assess future screening needs to remain on track for completion in the second half of 2026. On Slide 16, at Efemçukuru, fourth quarter gold production was 14,496 ounces at all-in sustaining costs of $2,536 per ounce sold. Compared to Q3 of 2025, gold production was lower due to lower grade and recovery despite higher mill throughput. And now moving to Lamaque on Slide 17. Lamaque delivered production of 49,307 ounces at all-in sustaining costs of $1,392 per ounce sold for the fourth quarter. During the year, the second Ormaque bulk sample was processed, and this higher-grade ore was treated in a blend with the Triangle ore and performed very well. We look forward to advancing Ormaque into production later this year. And with that, I'll turn the call over to Christian for an overview of what's ahead. Christian Milau: Thanks, Simon, and good morning. Turning to our 2026 guidance and 3-year outlook. Eldorado enters the year from a position of strength. Skouries' exciting value proposition is unchanged. It's a high-quality, long-life asset that will generate strong cash flow for decades. As it advances towards production, Skouries will be transformational, resetting our production profile and cost base well into the next decade. Slide 18 outlines our consolidated 2026 guidance and 3-year growth profile. From our existing portfolio, we expect production to increase by approximately 40% in 2027 versus 2025, supported by a solid base of relatively lower cost operations. The addition of Skouries further accelerates this growth, enhancing scale, margins and long-term cash flow generation. For 2026, we expect total gold production to be between 490,000 and 590,000 ounces with copper production of between 20 million and 40 million pounds. On a consolidated basis, all-in sustaining costs are expected to be between $1,670 and $1,870 on a per ounce of gold sold basis. Growth capital and operations is expected to be between $375 million and $405 million and sustaining capital is expected to be between $140 million and $165 million for the year. As previously announced, we've increased our planned exploration investment for 2026 by 60% compared to 2025. We expect to spend between $75 million and $85 million during the year, focused on resource conversion drilling at Lamaque and Efemçukuru, resource growth and discovery programs in Quebec, Turkiye and Greece. All-in sustaining costs at Skouries are expected to be between negative $100 and plus $200 per ounce of gold on a net of by-product basis. Over the life of the mine of Skouries over the life of mine, Skouries is expected to be a low to negative all-in sustaining cost mine given spot and higher copper prices in the current market and forecast by market commentators. As a result, Skouries will have the potential to transform Eldorado into one of the highest free cash flow yielding companies in the sector for 2027 onwards, with free cash flow yields estimated by some groups of over 20% based on their gold and copper price forecasts. Given we anticipate Skouries' first production in early Q3 2026, commercial production in Q4, we have provided cost guidance for our current operations. Following commercial production at Skouries, we expect to issue updated consolidated cost guidance later in the year. On Slide #19, we provided the mine-by-mine 2026 detailed production guidance. At the Lamaque Complex for 2026, production is expected to be between 185,000 and 200,000 ounces, reflecting the start-up of Ormaque. Our focus remains on advancing Ormaque development and continuing resource conversion drilling at both Triangle and Ormaque. In Turkiye Kisladag, we expect 2026 production of 105,000 to 130,000 ounces. Expected production compared to the previously guided range has been impacted by a high waste stripping year, coupled with longer-than-planned leach cycles and lower grade stacked. The higher metal price environment has opened up a significant opportunity for the Kisladag open pit to allow us to evaluate the opportunity to move from $1,700 to $2,100 pit shell, which is expected to unlock the western area of the pit to support resource expansion. To facilitate this opportunity and assist in resolving ongoing geotechnical challenges at the open pit, we expect to increase waste stripping in 2026 by 6 million to 8 million tonnes. The mine optimization plan is expected to be beneficial in the long term by improved balancing of ore and waste movement and supporting consistent year-over-year performance. At Efemçukuru, we expect production of 70,000 to 80,000 ounces in 2026. Costs are expected to be higher this year due to increased labor, electricity and royalty expenses. Finally, in Greece and Olympias, production is expected to be between 70,000 to 80,000 ounces, reflecting the ramp-up of the 650,000 tonne plant in the second half of the year. Our focus will be on executing the plan, managing feed blends and supporting stable flotation performance. Higher gold production and improved payability terms are expected to support lower unit costs, though quarterly variability will continue due to timing of by-product shipments. With the portfolio we're genuinely excited about and clear path to cash flow inflection, we believe we are well positioned to create long-term sustainable value. And I'll now turn it back to George for concluding remarks. George Burns: Thanks, team. Our 2025 performance reflects the dedication and capability of our employees and contractors across the organization. I want to thank our teams for their ongoing commitment to responsible production, safety, operational excellence and collaboration. As we look ahead to 2026, our focus remains on safely delivering Skouries, strengthening our operating foundation and continuing to create long-term value for our shareholders. Before we conclude, I want to briefly revisit the announcement we made almost 3 weeks ago regarding the combination of Eldorado and Foran. Together, we bring 2 high-quality assets entering into production in 2026, in addition to 4 operating mines that support near-term growth and long-term value creation. The combination enhances free cash flow potential, strengthens our production base, improves our cost profile while maintaining a strong balance sheet to fund growth, advance exploration and return capital. It also adds meaningful copper exposure alongside long-life gold production, creating a more balanced and resilient portfolio. Overall, this creates a compelling platform for growth and operational excellence that will drive sector-leading cash flow per share. We're confident in the opportunities ahead. Thank you for your time today. I'll now turn the call back to the operator for questions from our analysts. Operator: [Operator Instructions] The first question comes from Cosmos Chiu with CIBC. Cosmos Chiu: Maybe my first question is on Kisladag. As you mentioned, in the 3-year outlook, 2026 guidance is lower than what there was before. And I think you explained why part of it, lower grade, higher strip. But how about 2027? I noticed that 2027, your 3-year outlook is also lower than what you had previously disclosed. So the reasons in 2026, are they also sliding into 2027? Simon Hille: Cosmos, this is Simon. Thanks for the question. So yes, as we explained, we are looking to open up the Western area. I think that's going to provide us with a new ore source, and we're quite excited what that could do for us by adding some more mine life into Kisladag. So that's one of the positives coming out of the extra stripping required this year. As we look forward into sort of 2027 and beyond, we are probably setting up the mine to be in that range that we've sort of 150,000 to 160,000 ounces on a steady year-on-year basis. However, there will be focus on making those profitable ounces through cost initiatives and other things. But that's sort of the outlook for right now. We don't see it really spiking in any given year. Cosmos Chiu: So I guess to confirm, it sounds like 2027 numbers that you've given today, 140,000 to 160,000 ounces has incorporated some of the potential impact from an increase from a $1,700 an ounce to a $2,100 an ounce pit shell. Is that what I'm getting? Simon Hille: Yes, I think it's fair to say that. Cosmos Chiu: Okay. And then so in terms of the stripping then, the 6 million to 8 million tonnes of pre-strip in 2026. Is that going to stay high then potentially if you move to a $2,100 an ounce pit shell? I'm just trying to figure out if that's a good sustainable number of tonnage to use to think of continue on a going basis. Simon Hille: Yes, that's a good question. To clarify, we typically move roughly around 20 million tonnes of waste every year. And so that's been driving our -- it's split across growth and sustaining capital. Beyond -- for 2026, what we're flagging is an increase -- an extra increase on top of that of roughly around 6 million to 8 million tonnes. The extent of that moving forward will be, I think, fairly modest. This year is probably where we're trying to open up the area. And the $2,100 shell was, I think, always a part of our long-term plan with the metal prices moving in the direction they have. Cosmos Chiu: Great. And then maybe just another question, switching gears a little bit. George, as you mentioned, it's been almost 3 weeks now since you announced the acquisition of Foran Mining. You've had a chance to talk to a lot of investors and shareholders of both companies. How has the reception been so far? George Burns: Thanks, Cosmos. Yes, we're out explaining to both sets of investors why this transaction is really a 1 plus 1 equals 3 transaction. I think our shareholders are listening to the benefits that flow to both sets of shareholders. In the case of Eldorado, this is a compelling opportunity to have a multi-decade life asset with massive exploration upside. We also, with our balance sheet, know we can lower the cost of capital relative to a development company and then accelerate investment in things like a lead circuit and doubling the capacity of the plant much faster than the Street is assuming. So we're selling the benefits, compelling benefits to our shareholders, and it's going to be up to them and a shareholder vote in the not-too-distant future. So we remain optimistic. Operator: [Operator Instructions] The next question comes from Tanya Jakusconek with Scotiabank. Tanya Jakusconek: Can you hear me? George Burns: Yes. Tanya Jakusconek: I don't know, George, if you want to take this or maybe Simon wants to take this. I just want to circle back to Skouries. With this delay that we've had, does this give us any -- I'm assuming it gives you a little bit more breathing room on the tailings. Maybe just review the tailings and you mentioned weather, Simon. Are we getting drier weather? Does this help us a little bit on the tailings side is what I'm asking, this additional time. George Burns: Yes, it's George. So yes, a couple of things I'd point out. So this 3- to 4-month delay in getting to first concentrate does give us some breathing room in really 2 areas. The plan all along on the plant construction was to get 2 filters up and running and begin the ramp up. With this delay, we're going to be able to get more of that equipment finalized before first concentrate. So we'll have more than 2 filters at start-up, and we'll have a number of other equipment required for ramp-up complete before we start. So that's a positive. And yes, I mean, we've seen heavy rains in the Mediterranean, both in Greece and in Turkey. Some record rainfalls are hitting the area. So it's a nuisance when you're out trying to do earthworks, open pit mining, but these haven't caused any significant delays in the construction. It's just we're being transparent about those issues. So for sure, the delay in start-up will advance all of our earthworks and put us in a better position for a solid ramp-up in the second half. Tanya Jakusconek: Mean you're going to have a very big -- well, I'm going to say big, but you're going to have a nice stockpile ready to feed that mill. And I think Simon mentioned we've done the drilling for 3 years of mining, detailed drilling in the pit. So we've defined for 3 years with a nice stockpile. Is that safe to assume that I'm understanding it correctly? George Burns: You are. We're going to be in a fantastic position to feed the mill. We're at more than 1.5 million tonnes today on the ground stockpiled. And with this 3-month delay, that stockpile is going to grow even further. So the beauty in all this, we're going to have more ore than we're going to process this year. We're going to be able to select the higher grade, more valuable ores to feed the plant. So we're in a great position from a mining perspective, great position from an ore body quality perspective. We've got 3 years of the open pit infill drilled, confirming the grades and recovery. And the underground has been unfolding very positively. We're 900 meters ahead on development. We're going to do 4 test stopes this year rather than 2. And the 2 test stopes that -- one that we've completed mining, the other one is roughly half completed. Fragmentation was excellent. The cavity is holding up. It's increased our confidence to go to larger stopes this year. So the 4 stopes we're going to mine this year around 97,000 tonnes compared to the 2 last year were just over 60,000 tonnes. So we're in a great shape for mining. This delay does allow us to have the plant more ready for a faster ramp-up. And it's unfortunate we had an issue with one of the key pieces of equipment, but I think we're in good shape for a strong year. Tanya Jakusconek: And George, I'm assuming that with these -- with the issues on the cyclone feed pump, all other areas have been checked, like we're not -- checks have been done is the only damage the nothing else be checked? George Burns: Yes. I mean that's a great question. To put it in context for this concentrator, there's over 4,000 pieces of electrical mechanical equipment. There are 891 motors, and there are 190 variable frequency drives. And so yes, all of this stuff has been inspected. Unfortunately, with the cyclone feed pump -- let me back up. All the electrical equipment had been stored since 2017 in warehouses that were constructed in the first phase of construction. I think that's a testament to the original design of this that often doesn't happen at the beginning. So when we went into care and maintenance in 2017, the electrical equipment was stored under cover. What we have found is we put this VFD into the motor control center just days ago. There were some signs of some moisture damage on this particular unit. And as a result, we got the manufacturer involved, opened up the capacitors and found this damage. And we've remarkably been able to find the quickest solution is to repurchase new capacitors. The repairs are going to take longer. And essentially, that's our critical path now to start up. So to answer your question, all of that equipment had been stored other than this one piece. These capacitors were marked cyclone feed pumps on the crating. And we now believe these were stored outside for a while and then later brought into the warehouse. So unfortunately, we were just in the phase of installing these, brought them into the MCC, notice a bit of moisture damage on the outside of the gear and got the manufacturer there to open up this electrical equipment and found the damage. No other equipment had any of those indications and all the additional variable frequency drives have been checked and confirmed to be okay. So we think we're out of the woods on any repeats to this unfortunate issue. Tanya Jakusconek: Yes. It sounds like the manufacturer is working with you, and I think Simon said they've already been ordered, and I think we're expecting them on site soon. George Burns: Yes. So the replacement new capacitors have been ordered. The rebuild of the damaged capacitors will come in Q3. So our best estimate from accelerating the manufacturing and shipment to site is we will be ready to run in 3 to 4 months from our late Q1 original date. Tanya Jakusconek: Okay. And then just maybe just turning to the power line connection. So I'm assuming the subcontractor is there now ready to working away and the critical path there is just getting that approval from the regulators. Is that how I should think about this power line? There's nothing else that needs to be done? George Burns: Yes. I mean we wanted to just point this out being transparent. We've talked all along that the dry stack tailings facility was the critical path. and that the power line and substation were not too far behind it. We did have some slippage in the detailed engineering. And just to describe this part of the infrastructure, it won't be owned by Eldorado. This is being constructed for our project, but it will be owned by the regulatory authority in Greece. And so it involves 11 power transmission poles and associated line and then this main substation. So the engineering took a bit longer. The subcontractor that's constructing it wanted full sign off before they started the work, and we saw some slippage there. But we've mitigated that. And with this delay now on the capacitors, we'll have this energized and ready ahead of time. But we did want to point out that we're not also in control of the inspection. So once the construction is complete, the regulator will come out and inspect all of that infrastructure that will be handed over to them, and they'll make the final determination when it's ready to flip the switches and energize our plant. And we've got temporary generators on site that we can do our commissioning on all areas of the plant with the exception of our grinding mill. So we have to have this power for that final commissioning and then start up. So at this point, it's not the critical path to actually the capacitors. We just wanted to highlight there was a bit of slippage, and we're focused on mitigating that. Tanya Jakusconek: Okay. So just so that I know when is that going to be ready, the power plant? George Burns: We expect the power plant in late Q2 and then shortly after that, the capacitor is up and running for the cyclone feed pumps. Tanya Jakusconek: Okay. Good luck with all of that. I'll be asking again on the Q1 call. George Burns: I'm sure you will. Operator: That's all the questions we have for today. This concludes the question-and-answer session and today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

85天前Insight Analytics约5分钟阅读

IAU.TO 2025 Q4 财报电话会议

Operator: Hello, and thank you for joining us for i-80 Gold's 2025 Fourth Quarter and Full Year Results Conference Call and Webcast. Today's company presenters include Richard Young, President and Chief Executive Officer of i-80 Gold; Paul Chawrun, COO; and Ryan Snow, CFO. Before we continue, please note that today's comments may contain forward-looking statements, which involve risks and uncertainties. Actual results could differ materially. I ask everyone to refer to Slide 2 of the presentation, which is available on i-80 Gold's website to view the cautionary notes regarding the forward-looking statements made on this call and the risk factors related to these statements. Following today's formal presentation, we will open the call to your questions. I will now hand the call over to Richard. Please go ahead. Richard Young: Well, thank you, Joanna, and hello, and thank you for joining today. Starting with Slide 3. In 2025, we made significant progress advancing our development plan and recapitalizing the company's balance sheet towards our goal of creating a mid-tier gold producer. From an operating standpoint, we achieved our 2025 production guidance with consolidated gold output of just under 32,000 ounces that would have been at the higher end of the range had we not had the buildup in inventory at the end of the quarter, and Ryan and Paul will talk about that in a few minutes. Our production does continue to ramp up as Granite Creek ramps up. In parallel, we advanced drilling, technical studies and permitting across our portfolio of projects during the year, keeping us on track towards delivering on key project milestones in our development plan. Drill results, particularly at Granite Creek, were highly encouraging and support our decision to expand the infill and resource expansion programs in 2026. From a development perspective, we began construction of Archimedes, the company's second underground mine. We also capped off the year with the completion of the engineering study for the refurbishment of the Lone Tree process plant, which remains the cornerstone asset in our hub and spoke strategy to process material from our 3 underground mines. The Board has approved the notice to proceed to Hatch engineering for the full $400 million Lone Tree refurbishment. We also executed on a series of recapitalization initiatives and subsequent to year-end, secured a financing package of up to $500 million. The recapitalization is transformational for us as it allows us to advance our development plan unencumbered by the balance sheet. Importantly, the capital that was raised was secured with top-tier financial partners, including Franco-Nevada, National Bank of Canada and Macquarie, who all share our long-term vision for the company and follow extensive due diligence. Their participation is a testament to the quality of our projects, our team and our execution plan. And now I'd like to turn the call over to Paul for a detailed update on that development work. Paul? W. Chawrun: Thank you, and hello, everybody. Turning to Slide 4. Operations and development work progressed well over the quarter with mining at Granite Creek and advancement rates at Archimedes performing better than planned. We continue to increase our bench strength by hiring talented personnel in the key areas essential to execute on our growth plan, such as geology, mining and metallurgical engineering as well as supply chain, community relations and the Lone Tree project owners team. I'm also pleased to report we achieved our safety performance targets, finishing the year with an improved TRIFR of 0.62, including an incident-free fourth quarter. At Granite Creek underground, mining activities continue to ramp up due to reduced water-related impacts to mine operations, adjustments to the mine sequencing, and the delineation of additional high-grade areas through short-term drilling that were not included in the original resource model. As a result, we mined more mineralized material for the fourth quarter and the full year period year-over-year. In the fourth quarter, we mined just over 41,000 tonnes of high-grade mineralized material, including approximately 15,000 tonnes of high-grade oxide material at a grade of 11.19 grams per tonne gold, approximately 26,000 tonnes of high-grade sulfide material at just over 9 grams per tonne gold, plus an additional 19,000 tonnes of incremental low-grade oxide material at just over 3 grams per tonne gold. For the year, we mined approximately 142,000 tonnes of high-grade mineralized material, including just over 70,000 tonnes of oxide mineralized material at over 11 grams per tonne gold, close to 72,000 tonnes of sulfide material at 9.08 grams per tonne gold, plus an additional 73,500 tonnes of incremental low-grade oxide material of just below 3 grams per tonne gold. Total gold production was 3,600 ounces and 23,000 ounces for the quarter and full year period, respectively. And this refers to the gold available for sale at the third-party processing facility, which contributes to the total gold sold of approximately 5,200 ounces and 21,600 ounces, for the quarter and full year period. Due to timing delays with the third-party processing, the sulfide stockpile was higher than expected at an estimated 6,500 ounces of recovered gold. We expect to process this material in the first quarter of 2026. Water inflows remained stable during the quarter. The upgraded pumping system that was commissioned in the third quarter facilitated effective water mitigation in active mining areas. And as a result, we expect to exceed waste development this year as the main decline rate increases. Construction of a second larger water treatment plant commenced in December and is tracking to begin operating by the end of the second quarter of 2026. This plant is designed to facilitate the ultimate discharge of water away from the underground workings as currently the water removed is recirculating back into the system. Overall, I am pleased with the operational improvements at Granite Creek, and this is a credit to the operating team at site. Moving to exploration on Slide 5. We completed the infill drilling program in the South Pacific Zone, along with 7 target tests in December, which included approximately 16,000 meters of core drilling over 46 holes and an additional 6 infill holes to test and confirm the continuity of mineralization. Assay results outlined in the January 20 press release demonstrated a robust high-grade mineralization throughout the South Pacific Zone, suggesting the potential for expansion to the north and at depth. Encouraged by what we are seeing, drilling advanced beyond the current structural boundaries, opening a new untested area to potentially expand the mineralized envelope. As we continue to drill, we are focused on an initial spacing to about 140 feet for the overall deposit and progressively narrow that spacing to increase our understanding as we move closer to planned mining areas. We have since established a preliminary resource estimate to support the Granite Creek underground feasibility study. Due to additional work required on the mine plan, such as optimization of sequencing with the new resource model, incorporation of ongoing productivity improvements based on current performance, and the incorporation of geotechnical engineering work, the feasibility study for Granite Creek underground is now planned for completion in the second quarter. Results from the 2025 drill program will be combined with infill drilling data from 2023 and 2024 to produce an updated mineral resource estimate using 3 years of additional data. A $10 million exploration drill program is planned in 2026 to test high potential targets and to further delineate resources. Overall, we remain encouraged by the longer-term potential at Granite Creek underground. Turning to the Ruby Hill property on Slide 6. Construction of Archimedes commenced in early September. Underground development is advancing ahead of expectations, reaching approximately 680 meters by year-end. Beyond permitting and development, a key focus over the coming months is advancing towards the exploration drift to support continued feasibility level technical work with initial mineralization expected to be intercepted by the third quarter. Infill drilling commenced in the Upper 426 zone in Archimedes during the fourth quarter. A substantial $25 million to $30 million drilling program is planned for Archimedes in 2026, comprised of over 175 holes and over 60,000 meters. This work will form the basis of a feasibility study planned for completion in the first quarter of 2027, which is earlier than indicated in the PEA by approximately 1 year. Moving to the Mineral Point open pit project on Slide 7, which also sits on the Ruby Hill property. Engineering and technical work continues to support permitting and define the timing of a pre-feasibility or feasibility level study. In 2025, approximately 8,600 meters of surface core drilling was completed to support the geotechnical, metallurgical and hydrogeology studies for baseline data to advance permitting and engineering work. A substantial $40 million to $45 million drilling campaign is also planned for Mineral Point in 2026, targeting approximately 131,000 meters plus an additional $5 million for permitting and technical work. Mineral Point currently hosts the company's largest gold and silver mineral resources with the potential to become the company's largest gold producing asset. It currently sits within Phase 3 of development plan. However, we now have the financial flexibility to accelerate the feasibility study and permitting, thanks to the recent financing package. Turning to Slide 8. Cove is an advanced stage exploration project and the company's third plant underground mine. Over the last 2 years, roughly 41,000 meters of infill drilling was completed on 30-meter spacing across the Gap and Helen zones. The results of this work delivered meaningful advances for the Cove project, which significantly strengthened our geological understanding and improved our confidence in continuity and grade. It also improved our understanding of the metallurgical response to optimize feed and gold recovery in the autoclave. The Cove feasibility study is nearly complete. However, additional work is required to revise the mine plan and cutoff grades to the new gold price estimates, and to further evaluate the capital cost reduction and design optimization opportunities with the dewatering program, which has pushed completion into early Q2. In parallel, permit applications are also underway as part of an ongoing EIS process. Moving to Slide 9. At Granite Creek open pit, work to advance the project continues. Technical work has been underway to advance the project towards either a pre-feasibility or feasibility level study and trade-off analyses are being conducted to optimize the project economics. Geotechnical drilling in support of baseline site investigation engineering was deferred in 2025 due to ongoing operating permit updates for Granite Creek underground located on the same property, pushing the start of drilling into 2026, resulting in a time line that is under review. Early-stage permitting activities will continue in 2026, followed by commencement of baseline field studies in 2027 in preparation of an EIS. Turning to Slide 10 for a look at the Lone Tree plant. During the fourth quarter, we completed a Class 3 engineering study for the Lone Tree plant refurbishment, as Richard mentioned. We recently received a positive construction decision from the Board. Lone Tree is a cornerstone asset central to i-80 Gold's hub and spoke mining and processing strategy designed to process high-grade refractory feed from our 3 underground gold projects: Granite Creek, Archimedes, and Cove. The autoclave is designed to process up to 2,268 metric tonnes per day, delivering a total annual throughput of approximately 820,000 metric tonnes, assuming an 85% plant availability. The processing circuit will incorporate an integrated pressure oxidation and carbon-in-leach circuit capable of processing both refractory and non-refractory mineralized material. Work is progressing as planned with Hatch engineering, such as advancing long lead engineering packages, further optimization of the execution plan, operating permit-related engineering and the progression of detailed engineering to support a first gold pour in December of 2027. The submission of the necessary permit applications for the primary environmental permits are on track and are planned to be completed in the first quarter of 2026. The plant is permitted for the existing operational components in use. However, the approval of new and revised permit applications pertaining to the air quality, water pollution, mercury emissions and reclamation management for the new plant design requires updating. Restarting the autoclave will mark a major turning point in advancing the company's development plan by providing increased processing capacity, meaningful improvements to our margins per ounce of gold and translate into stronger free cash flow generation. Slide 11 outlines the company's 2026 guidance. Overall, the 2026 guidance is largely in line with the preliminary economic assessments published in the first quarter of 2025 with the following exceptions. At Granite Creek, as previously disclosed, the impact of groundwater was not reflected in the PEA. Key aspects of the 2026 mine plan, when accounting for the water ingress impacts from 2025 are: an increased development rate compared to the PEA to recover lost development time, higher growth capital due to the additional dewatering infrastructure, and higher recovery rates and increased processing costs associated with the toll milling agreement entered into after the PEA was completed. As a result, for 2026, when compared to the most recent Granite Creek PEA, approximately 20% more material is expected to be mined. Mining, G&A, development and sustaining costs are in line and the infill and step-out drill programs have expanded to the successful outcome of the 2025 program. At Archimedes, tonnes and grade mined and development costs are largely in line with the most recent Archimedes PEA. The exception is production and processing costs related to the new toll milling agreement entered into after the PEA was finalized. And the feasibility study-related costs have been brought forward to 2026 from 2028. The cost to bring forward the Archimedes infill drill program is approximately $10 million higher so that an exploration drift can be constructed and cover the additional cost of drilling longer holes earlier than was planned from the upper levels. For Mineral Point, Technical and permitting work was brought forward from 2028 to 2026, where an overall infill and step-out drilling, technical work and early permitting activities are expected to total approximately $50 million, the costs of which are covered under the new Franco-Nevada royalty. Other permitting, technical work and holding costs are largely in line with the PEAs. And with that, I will now turn over the call to Ryan for the financial review. Ryan Snow: Thank you, Paul. Turning to Slide 12. Gold sales for the year increased to approximately 28,200 ounces compared to 21,500 ounces in the prior year period reflecting the advancements made at Granite Creek, as Paul outlined earlier, slightly offset by a lag in the timing of third-party processing. This lag resulted in over 6,500 ounces of sulfide mineralized material in inventory, which we expect to process in the first quarter. When reconciling tonnes mined, gold produced and gold sold, there are 2 factors to keep in mind. First, there's often a timing difference between mining and production when using a third-party processor, and our agreement allows for up to 120 days for delivered material to be processed. Second, our high-grade oxide material is subject to a 59% payability factor, which impacts gold sold relative to contained ounces produced. We effectively forgo the 41% of contained ounces per ounce sold. Total revenue from gold sales increased to approximately $95 million for the year compared to $50 million in the prior year due to selling approximately 6,700 more ounces at an increased realized price of about $1,000 an ounce despite the inventory buildup referenced earlier. Gross profit for the year improved to $11.5 million compared to a gross loss of $15.7 million in 2024, mainly due to the gross profit from Granite Creek being positive in the second half of 2025. The company reported a net loss of just under $200 million or $0.10 per share, while adjusted loss was $123 million compared to $111 million in the prior year. The roughly $75 million difference between net and adjusted loss was related to noncash fair value revaluation losses, which are mainly attributable to the increase in metals prices and our share price during 2025, and a noncash write-down at Lone Tree for assets that were deemed obsolete under the updated refurbishment estimate released in December. The adjusted net loss was largely due to increased predevelopment evaluation and exploration expenses as development work increased across multiple projects as part of the company's development plan. Also, as a reminder, under U.S. GAAP, which we transitioned to in 2024, predevelopment, evaluation and exploration costs are expensed until we declare mineral reserves. We closed the quarter with a cash balance of approximately $63 million, down from the previous quarter due to a larger-than-normal buildup of finished goods and stockpile inventories at year-end, as well as the continued investment in drilling programs to support the planned technical studies and the development plan, investments in Archimedes and Granite Creek development, along with early-stage activities under the limited notice to proceed at Lone Tree. The year-end balance is in line with our expectations under the recapitalization plan. Moving to Slide 13. I'm very pleased to present the status of our recapitalization plan. We recently announced the culmination of a very competitive process that resulted in a financing package of up to $500 million. This financing package includes a commitment letter with Franco-Nevada for a $250 million royalty, and a gold prepayment facility for up to $250 million with National Bank of Canada and Macquarie Bank. The $250 million Franco (sic) [ Franco-Nevada ] royalty is in exchange for a 1.5% life of mine net smelter return royalty, stepping up to a 3% life of mine net smelter return royalty on January 1, 2031. This royalty will apply to production from all mineral properties in the portfolio. Upon closing, $225 million will be made available to the company, of which $25 million is required to be allocated to the advancement of Mineral Point in 2026. An additional $25 million of the royalty financing is also expected to be made available in 2026 to further the advancement of Mineral Point, following the expenditure of the initial disbursement towards the project. This will allow us to allocate $50 million for resource expansion, infill drilling, technical work and early-stage permitting activities at Mineral Point in the year. The gold prepayment facility with National Bank and Macquarie includes an initial advance of $150 million at closing with the obligation to deliver approximately 40,000 ounces of gold over a 30-month period beginning in January of 2028. It also includes an accordion feature that provides access to an additional $100 million for a 24-month period upon closing of the facility and subject to customary conditions and lender approval. We anticipate executing the accordion feature in the first half of 2027, at which point the number of additional gold ounces to be delivered will be determined. Total ounces to be delivered for the full $250 million gold prepayment facility are expected to represent less than 15% of total gold output over the projected period of January 2028 to June 2030. The company established the facility with National Bank and Macquarie with the goal of transitioning the gold prepay into a corporate revolver to fund the development of Mineral Point following the completion of Phase 1 in the development plan. Moving to Slide 14. Proceeds from the financing package, combined with the previously disclosed equity offerings completed by the company in the second quarter of 2025, represent over $800 million in funding to support i-80 Gold's growth objectives. This assumes the full exercise of warrants related to the May 2025 equity financing over the next 18 months. The company expects the final steps to complete the recapitalization plan targeting an overall amount of $900 million to $1 billion to be completed by the end of the first quarter. The company recently issued a notice of redemption of its existing convertible debentures as part of the recapitalization plan to provide the required security under the financing package. The convertible debentures are expected to be extinguished on March 16. Once complete, the recapitalization is expected to fully fund Phase 1 and Phase 2 of our development plan, which is anticipated to increase annual production to approximately 300,000 to 400,000 ounces of gold from less than 50,000 ounces currently. Finally, I would be remiss if I did not take this opportunity to thank all the internal and external parties that have been involved in this process and led to this great outcome. With that, I'll turn the call back over to Richard. Richard Young: Well, thank you, Ryan. And finally, turning to Slide 15. As we look ahead, we're entering a pivotal period that positions the company to unlock meaningful shareholder value. 15 months ago, we laid out a new development plan. 12 months ago, we filed 5 PEAs that demonstrated the value within that development plan, and then we've spent the last 12 months moving that plan forward, advancing the technical work and completing the recap. As we look forward over the next 12 to 18 months, we will publish feasibility studies for our 3 high-grade underground projects as well as likely a pre-feas for our flagship Mineral Point project and potentially our Granite Creek open pit project. We will commence and be well advanced in the refurbishment of the Lone Tree autoclave, and we will be ramping up Archimedes production, our second underground mine. So the goal of the Board and the management team over the next 12 to 18 months is to move our current valuation from trading at a very significant discount to NAV to something closer to NAV as we continue to execute on the development plan that we laid out 15 months ago. So we appreciate your continued support, and we continue to look forward to updating you as we continue to execute on this development plan. And with that, Joanna, we will open it up to questions. Thank you. Operator: [Operator Instructions] The first question comes from John Tumazos at John Tumazos Very Independent Research. John Tumazos: Maybe the press release was a little bit concise in describing the Lone Tree $400 million plus CapEx to restart the autoclaves. On a very simple level, the autoclaves are fixed steel vessels. And if they sit there idle 10 years, they're not going to rush through. So what are the ancillary things that have to get changed or that became obsolete or the changes in design, I don't think you're going to put oxide material through the autoclave vessel. So maybe there's separate circuits -- some -- please describe all the different changes certain to account for the autoclave project costing so much money. W. Chawrun: Yes, John. So first of all, the autoclave vessel, it needs to be rebricked with -- they actually call that refractory as well. So that's a bit of a cost. The other thing is the CIL circuit itself, the tanks need to be replaced. We need to install some vessels for some of the off gas. The other big cost is the filtration system. So we're going with filtered tails and stacked facilities. So it won't be the conventional slurry. And then the other thing is just upgrading and some of the instrumentation. And then you add that all up with all those components and it comes to $430 million in today's capital environment. John Tumazos: Did you go out to other engineering firms besides Hatch and get alternative proposals? W. Chawrun: This project has been worked on for approximately 4 years, so no. There's a full explanation on our website. I encourage you to take a look at those details. Richard Young: And John, just as a reminder, Hatch actually built this facility back in the '90s, they knew it better than any other group. They are a global leader in autoclave technology, and we're pleased to have the A team on this refurbishment. Operator: [Operator Instructions] The next question comes from Don DeMarco from National Bank. Don DeMarco: So first off, at Mineral Point, I see that some of the predevelopment work has been moved forward from 2028. So by accelerating this work, does it provide the potential to develop or realize value on this project sooner than its current positioning in Phase 3? Richard Young: Don, yes, thank you. Yes. So from our perspective and really even from the time that I joined, it was clear that Mineral Point was the most valuable asset within the portfolio and anything that we could do to accelerate its development would be beneficial to shareholders. So as a result, and with higher gold prices and the recap that we've done, we now have the financial flexibility to advance the drilling and technical work and advance permitting, and we are looking at every option available to us to accelerate that permitting and the ultimate development, likely, we're targeting ahead of the original schedule in the development plan. And just for a reminder to the broader group, based on the PEA, we would expect to average roughly 280,000 ounces of gold equivalent production over a 17-year mine life. at AISC costs of about $1,400 an ounce. Now with this infill and step-out program that Paul mentioned, we do believe that there are opportunities to expand the resource and ultimately, reserve base of this project through the program that's been designed for 2026. Don DeMarco: Okay. Great. Well, we certainly look forward to that, and it's interesting about the expansion opportunity there. My next question then, just looking at the production guidance, I mean, we're seeing higher production year-over-year. But without the details on costs or terms of the toll milling contracts, what's the best way to model these ounces and capture the year-over-year margin upside in a strong gold tape? Richard Young: So I guess a couple of things. So the sulfide toll milling charge is about $275 to $280 per tonne, which is about 3x higher than what ultimately it will be when we put it through our own facility. Don, we're in a bit of a holding spot until the tech report is done. We will have the tech report completed in the second quarter. And with that, you'll have a lot more detail on Granite Creek and sort of the various elements of the cost structure. But until then, our hands are kind of tied, but that news will come out in Q2. And just to remind everyone, we are now a U.S. registrant. So we're not able to disclose the results of feasibility studies until the tech report is filed. And so that's why we'll see the Cove and Granite Creek tech reports in Q2 as we complete those tech reports and publish them. But we'll have a lot more detail on Granite Creek in Q2 as well as Cove and then Archimedes to follow roughly about a year later. Don DeMarco: Okay. Great. Well, we look forward to that. In the interim, we see that the production is higher year-over-year and the gold price is higher year-over-year. Richard Young: Thanks, Don. And just as a reminder, we did generate gross profit at Granite Creek in the second half of the year as we had guided at the outset. And with these higher metal prices, it will generate free cash flow where we expect it to even after development costs, growth capital and the additional infill and step-out drill programs that we've got planned for 2026. Operator: Thank you. We have no further questions at this time. I will turn the call back over to Richard Young for closing comments. Richard Young: Well, I'd like to thank everyone for joining us on this Friday morning. We're excited by the progress that we've made over the last 15 months. And we believe over the next 15 to 18, we're going to be a long way advanced on completing Phase 1 of our development plan, which will take production to 150,000 to 200,000 ounces per year at strong margins and free cash flow, as well as moving forward on Mineral Point and our Granite Creek open pit as part of Phase 2 and 3. So a lot more news to come as we progress through the course of this year. So thank you very much for your time this morning. Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.

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MRVGF 2026 Q2 财报电话会议

Operator: Welcome to Mirvac Group's First Half 2026 Results Briefing. [Operator Instructions] Please be advised that today's conference is being recorded. It's now my pleasure to hand over to Mirvac's CEO and Managing Director, Campbell Hanan. Campbell Hanan: Well, good morning, everyone, and welcome to our half year results call. Joining me is Courtenay Smith; Richard Seddon; Scott Mosely; and Stuart Penklis. I'd like to begin by acknowledging that we present today from Gadigal land, and I'd like to pay my respects to elders past and present. At our full year results in August, we spoke about the momentum that was building across the business. So it's pleasing to present our results today having delivered a strong half year performance and even greater visibility of earnings growth in FY '26 and beyond. What you'll notice in these results is a material pickup in residential sales in both build-to-sell and land lease, like-for-like income growth in all of our asset classes, positive leasing spreads in all of our asset classes, and valuation growth in all of our asset classes. You will also notice that we've made significant inroads in securing future development pipeline opportunities beyond FY '28. And we have continued our strong track record of capital partnering, completing a major 50% joint venture with Mitsubishi Estate at Harbourside, a key objective at the start of the year. We've recapitalized our LIV BTR fund with Australian Retirement Trust, positioning the fund for growth. And we've completed a $430 million capital raise within MWOF. It's been a very busy start to the financial year. You can see the solid progress across all parts of the business with every business unit contributing to the 10% growth in group EBIT. EPS was up 5% and NTA growth has returned, increasing $0.04 to $2.30 per security. It's also pleasing to see headline gearing moderate to 25.8%. We are also executing against our key strategic objectives. Two years ago, we outlined a focus on enhancing the quality and cash flow resilience of our investment portfolio, and we've made excellent progress with our industrial and living EBIT up 15% year-on-year. Our office portfolio allocation has reduced from 65% to 51% today. And importantly, we've almost doubled our exposure to premium-grade assets over the past 6 years to now sit at 60%. Premium grade is the most resilient asset type in office, and this is reflected in our consistently lower vacancy rate. Our repositioned portfolio is now delivering strong operating metrics. As mentioned, each asset class has positive re-leasing spreads, positive like-for-like rent growth and positive valuation growth led by build-to-rent, which illustrates our confidence in the growing capital demand for this asset class. We have a strategic objective to be the leader in the living sector, and we've made excellent progress here. We now have one of the largest operational BTR portfolios in Australia and recent development completions are leasing well. The fund's recapitalization will support future growth with 2 new BTR projects identified. Our growing land lease portfolio secured another 2 sites, bringing the platform to over 7,500 lots, with sales in the first half up 50%. This is becoming an increasingly important part of our strategy and provides future opportunity to accelerate our MPC business. And our creation capability is a key differentiator, and we're unlocking value and improving returns with residential sales up 38%, margins increasing to 22.5% and positive leasing in all of our developments. The execution of these initiatives is providing enhanced visibility of earnings growth in FY '26 and beyond. Our existing investment portfolio continues to grow its earnings contribution with a further $100 million of future NOI currently in production to be realized over the next 3 to 4 years. We also have additional NOI to be realized from our land lease and uncommitted commercial development pipeline. Our committed developments will also drive a $2.3 billion increase in our funds under management across our established growth platforms as they complete, generating new recurring management fee streams, with further fund growth to come from the deployment of recently raised capital across MWOF and further expansion of our LIV BTR fund. Our commercial development pipeline will unlock development profits and development management fees in coming years, along with NTA gains as the projects complete. Our residential growth outlook is supported by a significant step-up in active MPC projects, where we expect to move from 11 communities last year to 16 over the next 12 to 18 months and a step-up in apartment completions on normalized margins. This year, 2 new MPC projects have had their first releases with near sellouts of both. Our recent restocking initiatives support the next wave of value creation opportunities beyond 2028. Sustainability remains important to our business. With 80% of the largest corporate tenants having net zero targets in place, we remain focused on reaching our net zero goals by 2030. This month, we launched our first ever integrated Mirvac brand campaign, which you may have seen at the start of today's webcast. This campaign highlights our amazing brand and celebrates our imagination as our unique competitive advantage. We've been keeping our brand a secret for too long, and this campaign will make sure that we share that story more broadly to raise awareness and enhance value across the group. I also want to call out our recent efforts in learning and development with the continued rollout of our Mirvac Masters program. This is a series of university-style modules across development, asset management and investment management that have been accredited by the University of Sydney. This investment in our people has been recognized as the best learning and development program in Australia. Our employee engagement has returned to top quartile and is an important reflection of our culture and ability to attain and attract talent. With that, I'll now hand over to Courtenay to talk through our financial results. Courtenay Smith: Thank you, Campbell, and good morning, everyone. Today, we're pleased to share financial results that reflect the effective execution of our strategy with increased contributions from every part of the business and a strong balance sheet that positions us well for future growth. Firstly, to the earnings result. We delivered a strong first half with operating profit after tax of $248 million or $0.063 per stapled security, up 5% on the prior half. The investment segment contributed $307 million, up 2%, driven by development completions in living and industrial and improved leasing outcomes in retail. These were partly offset by office asset sales. The funds segment contributed $19 million, up 38%, driven by the completion of 2 further assets in the LIV BTR fund, along with improved asset valuations and increased leasing activity. The development segment contributed $111 million, up 37%. Within this, commercial mixed-use was $27 million with contributions from our committed projects such as 7 Spencer Street and 55 Pitt Street as well as development management fees from Harbourside. Residential contributed $110 million, up 9%, reflecting higher settlement volumes, improved average sale prices, contribution from the sell-down of Harbourside and development management fees from joint venture projects. Net financing costs were $129 million, an increase of $19 million compared to the prior half, primarily due to lower capitalized interest. This was partly offset by a decrease in gross interest expense, we are seeing -- where we are seeing the benefit of reduced debt levels and lower cost of debt. Our statutory profit for the half was $319 million, significantly higher than the prior half and includes $120 million of positive investment revaluations across all sectors. In summary, strong execution over the past 6 months has yielded increased contributions from every part of the business. Turning to the balance sheet. We've continued to actively manage capital, and our balance sheet is in a strong position. Gearing has reduced to 25.8%, well within our target range, and we have maintained strong credit ratings and have interest cover of greater than 3.5x, well above our covenant requirement. Our average cost of debt is 5.3%. And after refinancing $1.3 billion of bank debt at average margins of around 115 basis points this half, we have a further $3 billion of existing long-term debt with average margins of around 180 basis points, representing an opportunity to capture upside as these facilities mature in coming years. Following the creation of the Harbourside partnership with Mitsubishi and the sale of 25 (sic) [ 23 ] Furzer Street now completed, we have clear pathways to fund committed projects and are now focused on future growth opportunities. New opportunities acquired this half have been achieved on capital-efficient terms, ensuring that we maximize returns and make the most effective use of our capital. To support these and other future opportunities, we have multiple sources of funding available to us, providing flexibility as we grow. We have $1 billion of available liquidity with no maturities in the next 12 months. We have a distribution policy of between 60% to 80%, balancing distributions with retained earnings to fund development. And our team has built a strong and consistent track record in active capital management with over $9 billion raised over the last 5 years, $6 billion from capital partners, improving the velocity of our development capital, unlocking value, strengthening returns and generating management fees, and around $3 billion of asset sales, which have reweighted and improved the shape of our investment portfolio. In summary, as a result of active capital management, our balance sheet is in a strong position, and we are set up to support future growth. I'll now hand over to Richard. Richard Seddon: Thank you, Courtenay, and good morning, everyone. We continue to execute our strategy with discipline and focus. We've up-weighted living and logistics through development completions, while sharpening our office exposure through the sale of non-core assets. This has further improved the quality, sustainability and resilience of the portfolio. The outcome is clear, 98% occupancy, 4.4% like-for-like growth and positive valuation movements in every sector. What I'm most excited about is how this positions us for the future. We have clear visibility of growth with further opportunity for rental reversion, $100 million of future income from our committed development pipeline with strong delivery and pre-leasing momentum and a resilient valuation outlook underpinned by robust fundamentals at a time in the cycle where quality and location matter. In office, we've fundamentally repositioned the portfolio for a market recovery that rewards quality. 60% of our office portfolio is now premium grade, up from 34% in 2019, and the benefits are evident in the numbers. Occupancy is strong. Like-for-like growth is positive and successful leasing progress has reduced our forward expiries to just 12% over the next 2.5 years. Market conditions are improving. We're seeing positive net absorption in all major CBDs, double-digit effective rental growth in Sydney and Brisbane and the lowest supply outlook in 30 years, potentially on record. Our committed office developments provide clear visibility of future income and further uplift portfolio quality. In industrial, our strategy to up-weight to the sector through development continues to deliver. NOI is up nearly 80% in the past 7.5 years. Occupier demand has clearly shifted towards quality, and our 100% Sydney focus positions us extremely well as evidenced by strong leasing performance and recent completions at Aspect. Further growth is underpinned by around 17% of under-renting to play for, continued delivery of our secured pipeline with the first stage of SEED, now DA approved and construction set to commence ahead of the Western Sydney Airport opening later this year and structurally low vacancy with constrained supply in Sydney. Industrial remains a long-term growth engine, and our Sydney-focused portfolio is exceptionally well placed. In retail, we continue to benefit from the strength of our urban catchments as highlighted in the operating metrics on this slide. The metric I'm most focused on is driving improved sales productivity through active management of our assets. In fact, of the 34 new partners we've introduced in the past 18 months, we've already seen a 50% improvement in turnover. With resilient trading conditions, extremely tight occupancy and a continued decline in retail floor space per capita, we're confident in the opportunity for further growth. So retail is not just about the footprint, it's about driving productivity and our centers are delivering. Our living exposure continued to expand and perform with EBIT up 15%. Our build-to-rent portfolio of around 2,200 completed apartments is delivering exactly the resilient performance we expected with 6% like-for-like growth and the strongest valuation uplift in the portfolio at nearly 4%. LIV Anura and Albert are leasing up strongly with Anura already at 76%. In land lease, momentum remains very strong. New home settlements were up 21% in the period. Sales are up 50%, comparable EBIT growth is up 50%, and we expect to be selling across 7 new projects over the next 18 months. We've increased total platform sites by 23% since acquisition just over 2 years ago with a further 580 sites secured. So living is performing very well and provides significant runway for further growth through these 2 established market-leading platforms and will continue to be an increasingly important part of our portfolio. I'll now hand to Scott. Scott Mosely: Thanks, Rich. Good morning, everyone. We've had an amazing period of execution in our funds business, which continues to attract quality institutional capital to the platform, which is attracted to our asset creation capability, our deep sector expertise, our alignment model and our strong fiduciary mindset. Our third-party capital has grown to $17 billion with the funds under management component growing by over $1 billion in the 6 months, reflecting our BTR completions and broader valuation growth. Capital demand for our established vehicles across living, office and industrial remains strong, with all 3 vehicles completing equity raisings or asset acquisitions over the last 12 months. All have visible growth opportunities and importantly, have capacity to invest. The recapitalization of our BTR fund with Australian Retirement Trust marks an important milestone, not just for our fund, but for the entire sector. Our LIV BTR fund now has 5 income-producing assets, generating core to core plus inflation-linked low volatility returns. ART's investment reflects the unique quality of our platform and the attractiveness of this living asset class to sophisticated domestic investors. ART is aligned to our 5,000 apartment medium-term target, and we now have 2 new opportunities in exclusive due diligence since closing the recapitalization in December. MWOF's $430 million equity raise from a broad range of investors demonstrates there is capital demand for office portfolios with the highest quality assets in the best locations. The fund is extremely well placed to assess investment opportunities at this point in the cycle, having no redemptions in the queue, no secondary units being marketed, gearing at 26%, a reaffirmed A- credit rating and further inbound equity interest. Over the period, the fund was the #1 performing fund in the MSCI Index and transacted on over 100,000 square meters of leasing deals at greater than 8% spreads. Our Mirvac Industrial venture has grown to $1.7 billion over the last 3 years, and we've got clear visibility for further industrial partnering opportunities now that Aspect Central and SEED Stage 2 are set to introduce capital over the next 12 months. We have embedded FUM growth of approximately $2.3 billion as our development assets reach completion, but that is before we consider on-market opportunities and our replenished development pipeline. So there is clearly momentum in the business with $13.9 billion of high-quality institutional capital coming on to the platform in the last 3.5 years. This ability to continue to attract highly aligned capital not only provides us with diverse funding sources to expedite our development pipeline, but it is also generating recurring management fees and co-investment income across our development, asset management, investments and our funds business. I'll now hand to Stu. Stuart Penklis: Thank you, Scott, and good morning. We've had a strong first half with significant momentum in the development business with sales up 38%, a strong recovery in margins and significant restocking of our pipeline. This momentum gives us clear visibility of earnings and the recovery of returns. The success we've had in restocking our pipeline includes securing 3 major opportunities at the right time in the right locations and in the right structures that will drive the next wave of value creation and growth for Mirvac. These transactions are aligned with our strategy and leverages our core capabilities and are expected to deliver above hurdle returns with future capital partnership potential. At the upcoming new Hunter Street Metro in the heart of Sydney CBD, we expect to deliver approximately 70,000 square meters of premium state-of-the-art office space with an end value of around $3 billion and a yield on cost above 6%. With expected completion in 2034, Hunter Street will deliver into a deeply undersupplied market, positioning us extremely well for the next commercial cycle. At Blackwattle Bay on the site of the former Sydney Fish Market, we expect to deliver approximately 800 apartments in a precinct we know extremely well in close proximity to our successful Harold Park and Harbourside developments with first settlements targeted for 2030. Finally, at Karnup in Western Australia, we expect to deliver approximately 1,500 new homes in partnership with the WA government in one of the fastest-growing catchments in Australia. Turning to commercial and mixed-use. We have good visibility of earnings over the next few years, underpinned by significant progress on our committed projects. Construction costs are stabilizing with stronger competitive tendering and programs returning to normal, creating a more supportive environment for new project commencements. Pre-leasing momentum is also encouraging, particularly given the tightening market conditions. At 55 Pitt Street in Sydney, we have AFLs in place for 40% of the building, including Baker McKenzie, Aon and MinterEllison and discussions on the remaining space are progressing well. Construction is advancing with the new iconic terra-cotta facade installation now well underway. At 7 Spencer Street in Melbourne, construction remains on track with practical completion expected in the half. A new heads of agreement has increased leasing to almost 25%, and we're in advanced discussions that would take pre-leasing towards 60%. At Aspect Industrial Estate in Western Sydney, we completed Aspect North and Aspect South to follow this half. These precincts are now 91% leased. At SEED, adjacent to the new Western Sydney Airport, we've received Stage 1 DA approval with construction to commence in the coming weeks. Across these major projects, including Harbourside, these projects will generate significant and valuable development management fees during construction. Turning to residential. We delivered a strong first half with momentum building across all key metrics. Sales were up 38% year-on-year, supported by particular strong growth in our masterplanned communities with Victoria up 99% and New South Wales up 141%. Leads were up significantly with the December quarter delivering the highest level of inquiry in 4 years, overcoming market sentiment around increasing interest rates. Settlements were up 22% year-on-year, and we're now 90% secured for full year with a notable improvement in gross margins. Our focus on design, quality and investment in upfront amenity continues to differentiate Mirvac and win market share. Our projects are attracting upgraders and downsizers who have built up significant equity, ensuring demand across our portfolio remains resilient through the cycle. We continue to focus on innovation and modern methods of construction and completed our first volumetric prototype prefabricated home at Cobbitty. Capital partnering will remain a key feature of our strategy, helping us unlocking earnings, recycle capital and enhance portfolio returns. A good example of this is our recent JV with Mitsubishi at Harbourside, which unlocked value and created capacity for investment into future opportunities. Our restocking efforts over the past 2 years have been significant with more than 12,000 lots secured in capital-efficient structures and on above hurdle returns. We've made strong progress on rezoning and planning across our residential business, including at Wantirna South in Melbourne, the largest infill housing development in Victoria, which will deliver more than 1,700 built-form homes. At Green Square in Sydney, we have converted proposed commercial to residential with the project expected to deliver over 1,300 homes into this new town center. The underlying market fundamentals remain supportive, including strong population growth, continued undersupply, resilient house price and rental growth expectations and an increasingly supportive state planning process. And it's important to note that we remain uniquely positioned across the full residential spectrum: growth corridors, middle and inner rings with the capability to deliver land, built-form housing and apartments. This is a major competitive advantage in this point in the cycle and allowing us to provide diversity, which allows us to respond to the market swiftly changes in demand. Finally, our restocking success sets us up for a material step change in project activity. Over the next 12 months, we expect to launch 5 new developments, including our trading projects from 11 to 16. This activation is already underway with strong releases at Mulgoa, followed by the near sellout of our first release at Bullsbrook in WA just 2 weeks ago. First sales at Monarch Glen in Queensland are scheduled to take place in just a few weeks' time. We will also see a significant increase in apartment completions heading into FY '27 with 4 projects settling in the year. These are already over 60% presold on average, providing strong visibility of earnings. So with a material step change in sales activity, a recovery in margins and more new project releases to come, we are well placed to deliver continued momentum and growth across our development business. I'll now hand back to Campbell to conclude. Campbell Hanan: Thanks, Stu. As you've heard this morning, Mirvac is in great shape, and we have now a balance sheet that can fund our growth. Our repositioned investment portfolio is well placed to outperform. In an environment of higher bond rates, the quality and location of what we own will become increasingly important for future total returns. We've made great strides in our capital allocation strategy and stand to benefit from organic like-for-like growth and new quality investment income as developments complete. We're seeing improved returns from our development business with a stabilization in costs, higher margins and strong sales volumes across our residential build-to-sell and land lease businesses, providing near-term confidence around earnings growth. Restocking our future development pipeline for FY '28 and beyond has been a key focus area. Securing opportunities at better than hurdle returns and on capital-efficient terms will be important contributors to future earnings. And finally, we continue to attract capital to invest alongside us, improving the capital efficiency of our business and boosting returns through the corresponding fee streams. We're pleased with our strong progress to date and are focused on executing our key objectives in the second half, particularly around residential settlements and capital partnering initiatives. We reaffirm earnings guidance of between $0.128 and $0.13 per stapled security and a distribution of $0.095. I'll now open up for questions. Operator: [Operator Instructions] Our first question comes from Tom Bodor at Jarden. Tom Bodor: I was just interested in your development expectations of $270 million of earnings this year. And just considering that in light of your $3.2 billion of invested capital, that return being below 10%, how should we think about this normalizing? Where could it get to over time as your 0 margin projects roll off? Campbell Hanan: Look, thank you. Thanks for the question, Tom. And yes, without doubt, the development returns in the business have been hurt a little bit by the increased costs that we noticed in the last couple of years, but we're now moving through that, as you've seen, and we're starting to get a much better return on our invested capital. But Stu, did you want to talk to that? Stuart Penklis: I think to Campbell's point, we are seeing improvement in margins across the portfolio, and that's a key focus of the business to continue to improve those returns. We've done some great restocking, as we mentioned, at above hurdle benchmarks. And as those projects start to commence and coupled with the projects in the field, as I mentioned, we're moving from 11 to 16 projects, all of which are performing extremely well. We'll continue to see improvement in the returns from the development business. Tom Bodor: But from a ROIC perspective, I mean, can you get to mid- to high teens? Is that realistic? Stuart Penklis: Yes. Look, as we said, we will -- with the roll-off of those projects that were heavily impacted by COVID over the last few years, we expect to get back to our through-cycle returns. Tom Bodor: And then on the Serenitas minority or sort of JV partners, how do you think about funding the buyout of those partners and the timing of that intention you might have? Campbell Hanan: Look, that's probably a little bit of a hard question to answer because it's obviously not our asset to sell. Yes, we are interested in the opportunity of increasing our exposure to Serenitas. Look, I think as we get our balance sheet in better shape, which has been a key focus for the last 2 years, it starts to open up opportunities. I think as liquidity in office markets and investment property full stop starts to improve, it gives us optionality. So to that extent, we'll just continue to monitor and respond to any opportunity that may present itself at a future time. Operator: The next question comes from Lauren Berry at Morgan Stanley. Lauren Berry: Just another one on land lease. Like you said multiple times how important this segment is to you going forward. I was just wondering if you've given any thought to potentially doing some land lease on balance sheet rather than in the Serenitas venture? Campbell Hanan: Yes. Look, we have. We've got a really great platform in Serenitas as is, and we certainly have lots of future opportunity with our own land bank. And that's things that we'll consider over time as we understand the ownership opportunity. Lauren Berry: Okay. And -- there's obviously been a change in the interest rate environment as reported. Could you please give us a little bit more color on how your January and February sales have been tracking and whether there's any incentives placed across the projects? Campbell Hanan: Look, I might start, and then I'll hand to Stu. Look, I think our inquiry levels were similar in January as they were in December, and they're certainly similar again in February. Look, I just can't stress enough, there is a chronic undersupply of housing in Australia. And that chronic undersupply is going to be there for a while, and there is a lot of pent-up demand that is looking to find a solution to this housing problem. So to a certain extent, one interest rate movement is probably not enough to move the needle. We certainly haven't seen any evidence on the ground. And Stu, in particular, spoke to a recent release where we had 100% sellout in our Bullsbrook first masterplanned release in WA. Stu, did you want to add to that? Stuart Penklis: Yes, Lauren, the only thing that I'd add to that is really sentiment around interest rates going up really occurred in September and October. And as I mentioned in my speech, we've seen just continued momentum across our projects, particularly from a leads perspective, leads are obviously the strongest they've been in 4 years in the December quarter, and that has continued in January and February. I think the resilience of our portfolio, particularly obviously not heavily reliant just on first homebuyers and that focus on upgraders and rightsizes, particularly the contribution coming through from the middle ring and particularly the contribution coming through from New South Wales exposure has just demonstrated, I think, the resilience of the portfolio that we have. Operator: The next question is from David Pobucky of Macquarie. David Pobucky: Strong first half result implies a 49%, 51% oEPS skew across the halves, so a bit better than we had expected. Did anything land in the first half versus your prior expectations of landing in the second half, particularly around CMU? Campbell Hanan: Courtenay, do you want to take that? Courtenay Smith: Thanks, David. Look, I think all parts of the business have performed well, which you can hear from the results. I think resi settlements performed a little better. The NOI uplift like-for-like growth was a little better. So I would say it's across the business, the performance has been strong, which is why we're indicating that all parts of the business is up. David Pobucky: And just the second question on the office portfolio, 275 Kent Street and Westpac's 12-year lease there. If you can provide any update on that, please? Campbell Hanan: Rich, do you want to take that? Richard Seddon: Yes. Well, I think as we mentioned in the previous period, we've been busily leasing up a portion of the skyrise space, which was handed back. We've made great progress on half of that, which has contributed to the improved performance across the NOI line for our office portfolio. Westpac do have an expiry coming up in 2030. And naturally, we'll be progressing discussions on that one as we get closer to that time. Operator: The next question is from Suraj Nebhani at Citi. Suraj Nebhani: Two quick ones. Firstly, on the disposals, you called out $0.5 billion. Where are you looking to sell? And across the portfolio, should we see more potential for disposals? Or is this sort of the last year where we see a lot of disposals coming through? Campbell Hanan: Look, I think so. Thanks for the question, Suraj. I think you'll continue to see sales as part of our longer-term strategy. But ultimately, we've got key strategy objectives in our asset allocation plan. And I'd just ask you to keep referring to that. You'll see that we want to keep trimming office, but certainly not premium grade office. We're probably slightly overweight retail at the moment. We're fast approaching market weight of where we want to be in industrial. So you'll still see a little bit of trimming on the edges. But the most important thing is obviously that we're adding a whole lot of new real estate to the portfolio, that $100 million of NOI we keep referring to is going to be an important ingredient in growing our investment portfolio. And we're focused on growing the investment portfolio contribution. This has been a part of the business that hasn't grown for a number of years. It's been a funding source to ensure that our balance sheet is in good shape. Now that the balance sheet is in good shape, for the first time in a long time, we've got a growth profile in the investment portfolio, which we think is very important. Suraj Nebhani: Perfect. And one for Stuart on two specific developments. Firstly, on 7 Spencer, comfort levels on leasing that up before completion? And what sort of structure is there? Do you have to provide any guarantee? And then secondly, if you can clarify what happened on Green Square with the zoning conversion that you've talked about? Stuart Penklis: Yes, certainly. So I'll start with 7 Spencer Street. As I said, during the period, our commitments have ticked up to 24%, and we've got good line of sight through negotiations at the moment to get us around 60% pre-committed as we complete that building in the second half. We're comfortable with the allowances that we have in the feasibility in terms of the balance of that space. Turning to Green Square. Green Square has obviously been a very successful and long-dated project with multiple stages. But however, more recently, that project has been called in or has qualified for a state government approval process. And essentially, as part of the original master plan, a segment of that site was earmarked for a 45,000 square meter commercial office building. We have been able to navigate through state government a pathway to convert that to residential. And ultimately, the next 2 stages of that project will deliver approximately 1,300 additional apartments to what has already been delivered into the precinct. So a very important and good outcome for Mirvac in terms of being able to pivot to residential and obviously respond to the need for critical housing here in Sydney. Operator: The next question comes from Richard Jones at JPMorgan. Richard Jones: Just in terms of the timing around proposed sell-downs of Aspect Central in Kemps Creek and Stage 2 at Badgerys Creek, do you envisage that will happen in the second half? Campbell Hanan: We're targeting one of those for the second half. And then the other one is likely to drag into FY '27. Richard Jones: Okay. And just in terms of the new BTR opportunities, can you comment on what yield on cost you would expect on putting new money into BTR and I guess, how you, I guess, justify that as the best use of capital? Campbell Hanan: And I might turn to Scott for that, given it's a fund question. Scott Mosely: Yes. Thanks, Richard. Firstly, I'd just say the recapitalization of the fund has allowed us to actually broaden the mandate of that vehicle. Previously, it was purely debt to core, and it's gone through a period of completing 4 developments, which is through, and now we're actually getting stabilized income. But with that new mandate, the vehicle now has the ability to consider not only debt to core, but stabilized income-producing assets as well as fund-throughs. And so the yield on cost will depend whether that's a fund-through deal or a full develop to core opportunity. And right now, we do see some opportunities to participate in fund-through deals where, as you'd expect, that yield on cost is lower, but we think that we can target in the range of 65 to 85 basis points yield on cost spread to core cap rate, which is making commercial sense for those investors. Operator: The next question is from Ben Brayshaw at Barrenjoey. Benjamin Brayshaw: A question for perhaps Stuart. If you could comment, please, on the production outlook for the communities business, just with the 5 new projects coming online that you referenced in the presentation. Just wondering whether that implies that communities can operate at a sustainably higher volume? And could you quantify roughly when that might be reflected in the sales or the settlement rates for communities, please? Stuart Penklis: Yes. Look, I think you're already starting to see the tailwinds of those projects starting to contribute to our sales numbers. Obviously, over the second half of '26, just with our existing projects, we propose to release around 800 additional lots. And then the new launches in projects such as Monarch Glen and Bullsbrook, you'll start to see those also contributing. So it is a significant step change in terms of what the MPC business will be contributing to the overall portfolio from a volumes perspective. And I think importantly, what we've seen in recent times is, as I mentioned earlier, obviously, Queensland and WA continue to perform extremely strongly. We've seen New South Wales and particularly projects such as Mulgoa, Cobbitty and Menangle contribute significantly to the sales numbers. And we've obviously also now seen Victoria start to improve, particularly in the Southeast corridor. And that's reflective of, obviously, some of the comments I made probably at full year last year in terms of the immigration and the significant immigration that's happened over the last 24 to 28 months. And those immigration numbers now starting to contribute to sales sort of as they've settled and started to buy. So we'll continue to see a strong contribution from MPC, both in land, but also in build for housing. Benjamin Brayshaw: And could you just give a high-level update on how the 3 Victorian apartment projects are tracking? Just interested in how confident you are in those being delivered at the target margins for residential? And any feedback on presales over the last 6 months? And finally, just a comment as well on Prince & Parade. It looks like the timing might have been pushed out a little bit. So if you could clarify that as well. Stuart Penklis: No, Prince & Parade, firstly is still on target to complete next year. Albertine will be completing in the next few months, and Trielle will be completing in FY '27. So all those projects have held program, held budget. We have seen a tick up in sales. And I think we've moved from -- across those projects in '27, an uptick from 50% to 60% on average being presold. Inquiry has improved and particularly as we've started to complete the first wave of display apartments, again, very heavily weighted towards owner-occupiers, upgraders, downsizes. So we are seeing an improvement in the Victorian market, albeit it has been a pretty tough environment down there for the last few years, but we certainly feel like we've turned a corner there. Benjamin Brayshaw: I'll just clarify my question around Prince & Parade, the annexures show that the expected settlement is now spread across FY '27 and '28. Hence, my question as to whether it's been deferred. Stuart Penklis: No, no. Sorry, that's probably just the allowance in the settlement tail extending into '28, but the practical completion date hasn't changed. In fact, we're hopeful that we might be able to bring it in a month earlier. Operator: The next question is from James Druce at CLSA. James Druce: Can we just go through how you're seeing the second half this year in terms of residential margin? I think you commented on sort of Richard's project, a question around which commercial development profits will be coming through second half. But just also just comment on the settlement skew and how secured that is. Campbell Hanan: So just on the -- maybe start with settlement skew, 835 settlements in the first half. We've guided to sort of 2,000 to 2,300. So clearly, we've got a skew to the second half. The timing of -- just in terms of sales, kind of just over 90% sold. So really, that comes down to risks around weather or risks around titling, which are risks that exist always. So we're working through those. We've got stock on the ground, which is the last 9-odd percent that we need to sell, which will help us get there. But we're largely through it. We've sold more of those through January and February as well. So that sort of feels okay. Is there anything on the development pipeline that you want to call out, Stu? Stuart Penklis: No. I suppose the point I'd make is that, that remaining sort of 9-odd percent and the projects contributing to that 9% are achieving the required sales rates to hit our target. So we remain comfortable in terms of, obviously, the settlement range that we've provided. And I think the other question that you asked just in terms of earnings from CMU in the second half. And obviously, we spoke about the SEED project, and we also spoke about contributions continuing from 55, 7 Spencer Street and development and construction management fees coming through on Harbourside. James Druce: Okay. And just on the gross margin, how you're seeing that in the second half? Stuart Penklis: In line with what we've stated in the first half. James Druce: Okay. And then just a question for Stuart. How do we think about restocking for the high density or inner ring projects? I mean it still sounds like only really the luxury projects stand up at the moment. Are you seeing any change there? Stuart Penklis: Yes. Look, I think that we've been very focused on unlocking value from not only our existing pipeline. So Green Square is a great example where a rezoning and state government pathway has given us ability to obviously achieve additional yield and through conversion from commercial to residential. So that sort of middle to upper market, we think, continues to be very attractive for our business. Obviously, we continue to see a number of opportunities, particularly as planning progress has been made with state governments and the state government here in New South Wales is obviously very, very focused on the delivery of additional housing. So we're seeing a lot of landowners looking -- coming to Mirvac to look to partner. So that's really great in the sense that there's an abundance of opportunities. We're certainly picking the eyes out of the right opportunities. And to my earlier point, being able to recycle capital out of projects, bring capital partners in to ensure we've got the capacity to be able to pick up these opportunities at the right time in the right location is a key focus of the business. So I think we've obviously had a very successful restocking program over the last few months, and we continue to ensure that we're well positioned to be able to secure that next wave of opportunities in the inner and middle ring. Operator: The next question comes from Cody Shield at UBS. Cody Shield: I don't want to labor the point, but just to be crystal clear around Aspect and SEED, which one of those projects will be slipping into '27 in terms of partnering? Campbell Hanan: Look, it's probably likely that Aspect Central will and SEED Stage 2 is more likely to fall into this year is sort of the target. Stuart Penklis: And I might just add with SEED, we've been able to secure our Stage 1 DA, obviously, ahead of many in the precinct with the M12 opening later this year and the new Western Sydney Airport also opening, we're well positioned, obviously, with earthworks due to commence in the next few weeks. So an exciting time in terms of our opportunity to be able to capitalize on demand in that precinct. Cody Shield: That's great. And then just a small one. There's been a change in the treatment of DevEx for land lease. Could you just walk me through the change there? Campbell Hanan: Yes. Courtenay, do you want to speak to that? Courtenay Smith: Yes. Look, I think the first thing to say is the land lease business is performing really well, as Richard talked about, sales are up. EBIT is up period-on-period. We've had a change in ownership on a like-for-like period. So it went from 47.5% to 40%. And then we have had a change in the allocation of some of the development costs. And the way to think about it is we're allocating some of the civil costs to the development to unlock the value of the home essentially. Longer term, you'll see that value come back in the NTA even from next year. And we've done that because we think that's the most appropriate treatment of those civil's costs to unlock the value of the home. But otherwise, the business is performing well. Richard has talked about the sales, as I said, and we're really happy with the performance of it. Operator: The next question is from Adam Calvetti at Bank of America. Adam Calvetti: Look, just on -- you've moved your -- you had a slide that showed the value creation of profit energy uplift that's been moved and you haven't disclosed where that value that number is. I think it was $540 million for the full year. Any idea of how that's trended or what we can expect? Campbell Hanan: Look, probably part of that movement is timing. So as we finish projects, clearly, the value is created. You see that come through the NTA line, and there'll be more of that this year, particularly as we finish. We stabilize BTR assets, you'll see that start to participate in the income line and certainly Aspect South, which is due for completion shortly. And I think as Stu mentioned, now 91% leased, you'll start to see contributions to both NTA and contributions to income, which really will lead into a slight second half, but predominantly an FY '27 contribution. Adam Calvetti: I mean just looking at the future years, is it still safe to assume that $540 million is intact? Campbell Hanan: It will shift because we're actually starting to work our way through it. And I think the most important thing we're trying to highlight in this set of results is that, that earnings expectation that comes from delivering new projects, we're now actually finishing these projects. And so with that, you'll start to see the development contribution start to diminish because we're actually finishing projects. Hence, the focus for us now on earnings contribution beyond FY '28. We've got a pretty full pipeline up until '28. The focus beyond '28 has been important to us, and we're seeing some really good opportunities, which we've executed on, which we've announced today. Adam Calvetti: Okay. Great. And then just on 7 Spencer Street, I mean, you've got some -- you've done one deal there, and you've got a percentage that's in discussions. How does those incentives levels track versus underwriting? Are they in into any of the development profit that you're expected in the second half and going forward? Campbell Hanan: So Stuart, do you want to take that? But maybe just to start with, we are always updating feasibilities to ensure that they reflect current market conditions. And certainly, there's nothing that we're seeing or dealing which is irrespective of that at this point. But Stuart, do you want to add any further color? Stuart Penklis: Yes. No, it's precisely that. The feasibility reflects where current incentives are at, and we've got adequate allowance to see the letup of that building through. Operator: The next question is from Sholto Maconochie at Millennium Capital. Hello, Sholto, please ask your question. Okay. It seems we can't hear from Sholto. So as there are no further questions, I'll now hand back to Campbell for closing remarks. Campbell Hanan: Well, thank you. Look, thank you to all of you for taking time today to hear our half year results presentation. We look forward to meeting with as many of you as we can over the coming weeks. But thank you for your time.

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HBM.TO 2025 Q4 财报电话会议

Operator: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Hudbay Fourth Quarter 2025 Results Conference Call. [Operator Instructions] I would like to remind everyone that this conference call is being recorded today, February 20, at 11:00 a.m. Eastern Time. I would now like to turn the conference over to Candace Brule, Vice President, Capital Markets and Corporate Affairs. Please go ahead. Candace Brule: Thank you, operator. Good morning, and welcome to Hudbay's Fourth Quarter and Full Year 2025 Results Conference Call. Hudbay's financial results were issued this morning and are available on our website at www.hudbay.com. A corresponding PowerPoint presentation is available in the Investor Events section of our website, and we encourage you to refer to it during this call. Our presenters today are Peter Kukielski, Hudbay's President and Chief Executive Officer; and Eugene Lei, our Chief Financial Officer. Accompanying Peter and Eugene for the Q&A portion of the call will be Andre Lauzon, our Chief Operating Officer. Please note that comments made on today's call may contain forward-looking information, and this information, by its nature, is subject to risks and uncertainties, and as such, actual results may differ materially from the views expressed today. For further information on these risks and uncertainties, please consult the company's relevant filings on SEDAR+ and EDGAR. These documents are also available on our website. As a reminder, all amounts discussed on today's call are in U.S. dollars unless otherwise noted. And now I'll pass the call over to Peter Kukielski. Peter Gerald Kukielski: Thank you, Candace. Good morning, everyone, and thank you for joining us for today's call. 2025 was a transformative year for Hudbay as we achieved the third consecutive year of record financial performance. We delivered record annual revenues of more than $2 billion, record annual adjusted EBITDA of over $1 billion and record annual free cash flow generation of more than $380 million. Our diversified operating platform demonstrated resilience and enabled us to deliver our 11th consecutive year of achieving copper production guidance and fifth consecutive year of achieving gold production guidance. We also outperformed our twice improved consolidated cash cost guidance, demonstrating industry-leading cost performance. These achievements are even more remarkable considering the significant challenges we had to overcome with wildfire evacuations in Manitoba and social unrest in Peru last year. We are delighted to have secured Mitsubishi as a premier long-term partner for our Copper World project in a precedent-setting joint venture transaction. This transaction enables us to unlock significant value in our copper growth pipeline, further solidifies our financial strength and significantly reduces our share of future equity contributions for the development of Copper World. Our prudent strategic financial planning and execution has enabled us to achieve our balance sheet deleveraging goals ahead of schedule and lowered our cost of capital. We now have the financial flexibility to sanction Copper World in 2026, embark on generational investments in our operating portfolio and commence increases in shareholder returns with our first-ever dividend increase as part of our holistic capital allocation framework. This will allow us to continue to deliver attractive growth and maximize long-term risk-adjusted returns for our stakeholders. Slide 4 provides an overview of our fourth quarter operational and financial performance. The fourth quarter underscored our commitment to operational excellence with standout performance in Peru, driven by high-grade Pampacancha ore, record monthly throughput achieved at the New Britannia mill in Manitoba and the successful completion of the SAG mill feed system in British Columbia. We achieved $733 million in record revenues and $386 million in record adjusted EBITDA during the fourth quarter. We produced 33,000 tonnes of copper and 84,000 ounces of gold in the quarter despite an 8-day power outage in Manitoba and lower throughput levels in British Columbia. Our operations in Peru had a strong finish to the year with a final quarter of Pampacancha mining activities. Fourth quarter net earnings were $128 million or $0.32 per share, reflecting strong gross margins as a result of higher metal prices and $25 million received for business interruption insurance from the mandatory wildfire evacuations in Manitoba. After adjusting for the insurance proceeds and other noncash items, fourth quarter adjusted earnings was $0.22 per share. We continue to demonstrate industry-leading cost performance in the fourth quarter with consolidated cash costs of negative $0.63 per pound and consolidated sustaining cash cost of $0.94 per pound. These costs significantly improved compared to the third quarter, primarily as a result of higher copper production and higher gold byproduct credits. Turning to Slide 5. Hudbay's unique diversification in copper and gold, coupled with our relentless commitment to cost control, enables us to maintain industry-leading margins and deliver strong and reliable cash flows. Operating cash flow before change in noncash working capital was $337 million in the quarter, a meaningful increase compared to the third quarter, reflecting higher copper and gold sales volumes from normalized operations after the temporary interruptions and higher metal prices. After accounting for the capital investments to sustain production, we generated $228 million in free cash flow during the quarter, bringing annual free cash flow to $388 million in 2025 and achieving new quarterly and annual record levels. While the majority of revenues continue to be derived from copper, revenue from gold continues to represent a growing portion of total revenues with 41% of gold revenues in the fourth quarter. Our deleveraging efforts continued in the fourth quarter as we repurchased and retired an additional $39 million of senior unsecured notes through open market purchases at a discount to par. We are proud to say that since the end of 2024, we have reduced our long-term debt by $185 million, bringing our total debt levels to $1 billion today. We ended the quarter with total liquidity of $994 million, including $569 million in cash and cash equivalents and undrawn availability of $425 million under our revolving credit facilities. Our net debt-to-EBITDA ratio further improved to 0.4x at the end of December. After year-end, our cash and cash equivalents balance increased to $992 million with the closing of the Copper World joint venture transaction in early January. This increases our adjusted total liquidity to over $1.4 billion and further lowers our net leverage ratio to 0x. This financial transformation demonstrates the benefits of our diversified operating platform, industry-leading costs and prudent balance sheet management. We are extremely well positioned to prudently reinvest in our portfolio of attractive, high-return brownfield and greenfield opportunities to drive production growth and long-term value creation. In Peru, we exceeded the top end of the annual gold production guidance range and achieved the copper production guidance range despite the impact of a temporary operational interruption due to social unrest as shown on Slide 6. Our Peru operations had the strongest quarter of the year in the fourth quarter as we continued to see strong copper and gold grades from Pampacancha, and we processed less ore from low-grade stockpiles compared to the prior quarter. We continue to optimize the mine plan with more ore mined from Pampacancha during the quarter than previously expected, resulting in the accelerated depletion of Pampacancha in late December as opposed to early 2026. The operations produced 25,000 tonnes of copper, 33,000 ounces of gold, 731,000 ounces of silver and 325 tonnes of molybdenum during the quarter. Production of copper, gold and silver increased by 38%, 25% and 27%, respectively, compared to the third quarter due to higher ore milled as the third quarter was impacted by the temporary operational interruption. Mill throughput increased to 7.6 million tonnes in the quarter due to higher mill availability than the third quarter, partially offset by the scheduled semiannual mill maintenance shutdown in the fourth quarter. Milled copper grades increased by 26% compared to the third quarter with higher grades from Pampacancha and less ore processed from stockpiles. Milled gold grades also increased with a strong gold contribution from Pampacancha. Mill recoveries were in line with our metallurgical models based on the ore being processed. Fourth quarter cash costs in Peru were $0.57 per pound of copper, decreasing by 56% compared to the third quarter with the benefit of higher gold byproduct credits, partially offsetting higher profit sharing. Full year cash costs in Peru outperformed the low end of the guidance range and improved by 8% from 2024 due to lower treatment and refining charges and higher by-product credits. Fourth quarter metal sold was higher than the prior quarter as some copper concentrate sales in the third quarter were impacted by ocean swells and were deferred to the fourth quarter. While copper concentrate inventory levels normalized at the end of last year, there were elevated levels of precious metals contained in the inventory concentrate due to a higher portion of Pampacancha production in the second half of the year, resulting in a shift of some precious metal sales from December 2025 to 2026. We continue to advance the installation of pebble crushers in Peru to increase mill throughput rates starting in the second half of 2026, which will allow Constancia to deliver steady annual copper production despite lower grades from the depletion of Pampacancha. These efforts align with the Peru Ministry of Energy and Mines regulatory change to allow mining companies to operate up to 10% above permitted levels. Turning to Slide 7. Our Manitoba operations were previously tracking within the 2025 guidance ranges despite the wildfire impacts. However, as a result of the weather-related power outage in October and the subsequent ramp-up period required to restore full operations, gold and zinc production fell below the low end of the respective ranges. That said, we successfully achieved guidance for copper and silver despite these interruptions. Performance in the fourth quarter demonstrates that our Manitoba operations have normalized following the significant wildfire disruptions. Our Manitoba operations produced 47,000 ounces of gold, 3,000 tonnes of copper, 6,000 tonnes of zinc and 214,000 ounces of silver in the quarter. Full year production in Manitoba was lower than the prior year as a result of production deferrals from the wildfires, the weather-related power outage and associated ramp-up to restore full operations. However, we continue to focus on safety and achieved a 15% reduction in total recordable injury frequency in 2025. At the Lalor mine, the focus was on stabilizing production after resuming operations. Lalor averaged over 4,200 tonnes per operating day in the quarter, strategically prioritizing mining from the gold zones to ensure feed for the New Britannia mill. Gold grades slightly increased compared to the third quarter as we continue to improve ore quality and focus on prioritizing gold zones at Lalor. Consistent with our strategy of allocating more Lalor ore feeds to New Britannia to maximize gold recoveries, the New Britannia mill achieved average throughput of approximately 2,300 tonnes per day in December, reaching a new monthly throughput record. Stall mill continued to focus on process optimization and enhancing gold recovery initiatives, which resulted in achieving over 70% gold recovery from our base metal ore stream. The Stall mill processed significantly less ore in 2025 compared to 2024 in alignment with our strategy to allocate more Lalor ore feed to New Britannia. The 1901 deposit delivered 6,600 tonnes of development ore in 2025 as the project progresses towards full production in 2027. During the year, the team focused on establishing 1901 underground infrastructure and haulage and exploration drifts. Manitoba sales volumes in the fourth quarter reflect a rebuild of inventory levels as operations normalized. Manitoba Gold cash costs in the fourth quarter were $705 per ounce, increasing compared to the third quarter, primarily due to higher overall costs in the quarter as operations normalized. Despite the production headwinds in 2025, full year gold cash costs were $549 per ounce, a 9% improvement from 2024 and outperforming the lower end of the cash cost guidance range. The strong cost performance was supported by the prioritization of high-margin gold production over byproduct zinc production. In British Columbia, we continue to focus on advancing our multi-year optimization plan centered on ramping up mining activities and implementing standardized operating practices as shown on Slide 8. We produced 4,700 tonnes of copper, 4,000 ounces of gold and 57,000 ounces of silver in British Columbia in the fourth quarter. Production was lower compared to the prior quarter, primarily reflecting reduced mill throughput caused by unplanned maintenance on the primary SAG mill. Full year production achieved the guidance range for gold and silver, while copper production fell below the low end of the guidance range because of the impact of the primary SAG mill unplanned maintenance and a higher amount of low-grade stockpiled ore processed throughout the year. Mining activities continue to focus on executing a 3-year accelerated stripping program to unlock higher-grade ore starting in 2027. Total ore mined in the fourth quarter was 2.4 million tonnes, a 32% increase from the third quarter as we optimized the mining sequence and enhanced maintenance practices, which increased mining rates to a targeted 300,000 tonnes per day in December. To sustain this momentum, a new production loader was commissioned in January 2026, and the new shovel is currently scheduled for deployment in March. Mill enhancement initiatives continued in the fourth quarter with the successful completion of the permanent feeder for the second SAG mill in December. The second SAG mill continued to demonstrate positive contributions to overall throughput in the fourth quarter. The mill processed 27% less ore in the fourth quarter compared to the third as a result of unplanned maintenance on the primary SAG mill to address localized damage to the feed and head. Operations were further constrained by elevated clay content in the ore and the planned decrease in feed pile to accommodate the construction and tie-ins for the second SAG expansion project. The team implemented several additional initiatives in 2025 to mitigate further challenges and build long-term mill reliability, including completing crushing circuit chute modifications, installing advanced grinding control instrumentation and a redesigned SAG liner package. Despite throughput constraints, fourth quarter milled copper grades were 18% higher than the third quarter, driven by higher grades in ore mined. Copper recoveries improved to 78% and gold recoveries saw a 7% increase over the third quarter. While the primary SAG mill continues to operate under a reduced load, it is being rigorously monitored ahead of a feed and head replacement in mid-2026. The mill remains on track to achieve its permitted capacity of 50,000 tonnes per day in the second half of 2026. British Columbia cash costs and sustaining cash costs were higher than the prior quarter, largely driven by the ramp-up of mining activities advancing the accelerated stripping program, combined with the impact of lower production and byproduct credits due to the lower mill availability. Despite the headwinds in the second half of 2025, the business unit demonstrated strong cost discipline, enabling the operations to achieve the full year cash cost guidance range. I'm now going to turn it over to Eugene Lei to introduce our capital allocation framework. Eugene? Chi-Yen Lei: Thank you, Peter. Turning to Slide 9. Hudbay has a proven track record of prudently allocating capital to high-return brownfield investments such as New Britannia gold mill refurbishment project and the development of the high-grade Pampacancha satellite deposit. Both these investments have delivered significant free cash flows and contributed to our recent deleveraging efforts. These deleveraging achievements have been part of our financial transformation over the past 3 years. Hudbay has moved from being overleveraged and capital constrained to a preferred position where we can strategically allocate capital across the portfolio to maximize value and generate the highest risk-adjusted returns, creating long-term sustainable value for all our stakeholders. Three years ago, when I became CFO, we put in place our 3 prerequisites plan known as the 3P plan, outlining financial criteria needed to be achieved prior to sanctioning Copper World. We have successfully executed all of the financial elements of the 3P plan and with prudent strategic financial planning over the last few years, we have completed the deleveraging of our balance sheet. We are proud to have the strongest balance sheet in more than a decade and are one of the lowest debt leverage companies in our peer group. Together with the strategic investment by Mitsubishi, Hudbay is very well positioned to both sanction the Copper World project and embark on generational investments in our operating portfolio in 2026. These investments include allocating capital to high-return brownfields projects at our 3 operating mines and advancing our world-class development and exploration pipeline. To provide transparency and continued financial discipline, we have implemented an enhanced capital allocation framework to provide a holistic approach around capital allocation decisions. This includes growth capital reinvestments in the business through near-term brownfields projects, long-term greenfield projects, strategic investments and exploration, while also considering debt repurchases, share buybacks and dividends. Our capital allocation framework is embedded in our annual financial planning cycle. The framework assesses capital allocation opportunities against key elements such as preserving a strong balance sheet, strategic fit for growth and diversification, accretion across key financial metrics, performing a rigorous risk assessment and applying accountable investment governance practices. Consistent with our capital allocation framework and our recent financial transformation, we are now in a position to commence increases in shareholder returns in the form of a quarterly dividend. We are pleased to introduce a new quarterly dividend of $0.01 per share, which represents an annual increase of 100% over our former semi-annual $0.01 dividend. This increases our total annual dividend amount to $0.04 per share. Thanks, and I'll hand it back to Peter for our 2026 strategic objectives. Peter Gerald Kukielski: Thank you, Eugene. Our key company objectives for 2026 are summarized on Slide 10. We continue to focus on operational excellence, advancing organic growth opportunities and prudently allocating capital to deliver attractive high-return growth. At the core, we intend to demonstrate continued operational excellence to enable substantial free cash flow generation while maintaining industry-leading cost performance. We plan to achieve this by investing in high-return brownfield growth opportunities across our operating platform, such as the mill throughput enhancement projects. We plan to prudently invest in our attractive organic growth pipeline to deliver long-term production increases. This includes completing the Copper World definitive feasibility study, progressing the New Ingerbelle permitting and development, advancing studies on our regional satellite properties in Snow Lake, executing our large Snow Lake exploration program to look for new anchor deposits, initiating a pre-feasibility study at Mason, advancing Flin Flon tailings reprocessing project analysis and preparing for Maria Reyna and Caballito exploration to provide significant long-term upside potential in Peru. With a strengthened balance sheet and our first ever dividend increase, we entered the year with unmatched financial flexibility. In 2026, we intend to maintain strong financial discipline by implementing our capital allocation framework to maximize returns. This will be achieved by continuing to reduce total debt, sourcing efficient project level financing for Copper World and evaluating all types of capital redeployment opportunities to generate the highest risk-adjusted returns. Turning to Slide 11. As I mentioned earlier, 2025 represents the 11th consecutive year in which Hudbay achieved its annual consolidated copper production guidance, which includes every year since Constancia declared commercial production. 2025 also represents the fifth consecutive year achieving our annual consolidated gold production guidance since establishing stand-alone gold production guidance after Snow Lake became a primary gold-producing operation. In 2026, consolidated copper production is expected to increase by 5% to 124,000 tonnes using the midpoint of the guidance range. This is driven by higher expected production in British Columbia as a result of mill throughput ramping up to the target 50,000 tonnes per day in the second half of the year, partially offset by the depletion of Pampacancha in December 2025. Consolidated gold production in 2026 is expected to decrease by 9% to 244,500 ounces as a result of the depletion of Pampacancha. However, unstreamed gold production is expected to increase in 2026 with higher gold production in Manitoba as operations normalize following the wildfires, and we continued to achieve strong performance at the New Britannia mill. In Peru, 2026 copper production is expected to be relatively consistent year-over-year at 82,500 tonnes as higher mill throughput is expected to largely offset the grade decline with the depletion of Pampacancha. Peru gold production is expected to decline to 17,500 ounces with the depletion of Pampacancha. The short-term mine plan changes in 2025 to optimize the mine plan during the period of social unrest resulted in reduced stripping activities in 2025, which has caused some grade resequencing in 2026, but we expected higher copper production in Peru in 2027 and 2028. In Manitoba, 2026 gold production is expected to be 200,000 ounces, reflecting a 15% year-over-year increase as the operations normalize after the unprecedented wildfires. We expect to see continued strong mill throughput at New Britannia continue to operate above 2,000 tonnes per day in 2026, far exceeding its original design capacity of 1,500 tonnes per day. In British Columbia, 2026 copper production is expected to be 30,000 tonnes, representing a 26% increase from 2025 production levels. This increase will be driven by the throughput improvements in the second half of the year. We expect to release an updated 3-year production outlook with our annual mineral reserve and resource update in late March. Slide 12 summarizes our cost guidance. 2026 consolidated cash costs are expected to remain at historically low levels within a range of negative $0.30 to negative $0.10 per pound of copper. Cash costs this year will continue to benefit from higher gold production as a byproduct and our continued focus on maintaining strong operating cost control across the business. Sustaining cash cost guidance for 2026 is expected to be within $1.70 to $2.10 per pound of copper, benefiting from higher copper production and higher byproduct credits, offset by higher expected sustaining capital expenditures. In Peru, 2026 copper cash costs are expected to be between $1.70 and $2.10 per pound, reflecting steady unit operating cost performance, offset by lower byproduct credits with the depletion of Pampacancha. Peru cash costs will benefit positively from lower treatment and refining charges and lower electricity rates with a new renewable power contract in effect. In Manitoba, gold cash costs are expected to be between $500 and $800 per ounce in 2026, remaining at industry low levels, driving strong margins at current gold prices. In British Columbia, copper cash costs are expected to decrease in 2026 to a range of $1.50 to $2.50 per pound. The decrease will be driven by higher copper production, higher by-product credits and higher capitalized stripping related to the accelerated stripping activities. Capital expenditures in 2026 include approximately $96 million of capital deferrals from 2025, higher growth capital spending as we reinvest in several high-return growth projects and onetime sustaining capital expenditures. Total sustaining capital expenditures are expected to be $435 million and total growth capital expenditures at the operations are expected to be $140 million, excluding Copper World joint venture spending. The growth capital for Copper World is expected to be $135 million. In Peru, 2026 sustaining capital is expected to be maintained at $140 million, which includes about $20 million of deferrals from last year and $18 million in onetime heavy civil work projects, offset by lower spending on tailings dam raises. Growth capital in Peru of $40 million relates to the installation of 2 pebble crushers to increase mill throughput starting in the second half of 2026 and includes $13 million of capital deferrals from 2025. In Manitoba, sustaining capital expenditures are expected to temporarily increase to $105 million in 2026, including $5 million of deferred capital, $20 million in onetime expenditures related to a project at New Britannia to lower nitrogen levels and $12 million for an accelerated 1-year construction project for a dam raise at our Anderson tailings facility. Underground capitalized development at Lalor is expected to return to normal levels after reduced levels in 2025 from the wildfires. Manitoba growth capital is expected to be $15 million this year related primarily to the development of exploration platforms and haulage drifts at the 1901 deposit. In British Columbia, 2026 sustaining capital expenditures are expected to be $60 million, an increase compared to 2025, including a $5 million onetime expenditure for the replacement of the feed and head of the primary SAG mill as well as $13 million in capital deferrals from 2025. We expect to incur $130 million of capitalized stripping costs in 2026 related to the continued accelerated stripping program. BC growth capital expenditures are expected to increase to $85 million, including $10 million in capital deferrals with the remaining capital related to early works and infrastructure development for New Ingerbelle. As we continue to advance Copper World towards a sanction decision, we expect capital expenditures to be $135 million, excluding post-sanctioning construction costs. This growth capital has been largely funded by the proceeds from the Mitsubishi joint venture received in January 2026 and relates to feasibility study costs and continued derisking until a sanctioning decision. It includes $35 million of capital deferrals from 2025 and approximately $60 million for accelerated long lead items and derisking activities. Post-sanctioned construction costs will be updated at the time of project sanction. Looking at exploration expenditures in 2026, we expect an increase in spending to $60 million as we continue to execute the multi-year extensive geophysics and drilling program in Snow Lake as well as spending allocated to New Ingerbelle inferred resource conversion efforts. As part of our long-term growth pipeline, Slide 13 summarizes the threefold strategy we are executing in Snow Lake as part of the largest exploration program in the company's history in Manitoba. The first objective is to execute near-mine exploration, including underground and surface drilling at Lalor. This past year's significant progress was made with the completion of the initial exploration drift at the 1901 deposit, which saw positive step-out drilling and delivered some zinc development ore to the Stall mill. Underground drilling is planned for 1901 from the new exploration drift to upgrade and expand the mineral reserve and resource estimates. Activities at 1901 over the next 2 years will focus on exploration, definition drilling, ore body access and establishing critical infrastructure for full production in 2027. We also plan to complete underground and surface drilling at Lalor to continue expanding mineral resource and reserve estimates. The second strategic focus area is on testing regional satellite deposits within trucking distance of the Snow Lake processing infrastructure to identify potential additional ore feed to fully utilize the available processing capacity. In 2026, we plan to advance activities at many of our satellite deposits, including Talbot, New Britannia and Rail, testing for both base metal and gold potential. We will touch more on Talbot, a highly prospective target on the next slide. And the third strategic focus area is on exploring our large land package for a new potential anchor deposit to significantly extend the mine life of our Snow Lake operations. In 2026, we will continue the ground electromagnetic survey and extensive airborne geophysics survey. In early January, we announced the signing of an amended option agreement with JOGMEC and Marubeni to expand the Flin Flon exploration partnership for 3 projects in the Flin Flon region, including Cuprus-White Lake, West Arm and North Star. Turning to Slide 14. In July, we commenced an extensive summer drill program at the copper-gold-zinc Talbot deposit focused on expanding the known mineralization at depth. Talbot is located within trucking distance of the Snow Lake processing facilities, making it an ideal deposit to potentially provide supplemental feed to our mills. As part of the initial drilling program in 2025, Hudbay drilled 6 holes to test the continuity of the Talbot deposit at depth with all the holes yielding positive results and 4 of them returning mineralized intercepts with economic potential. The image shows a 3D view of the deep holes drilled at Talbot confirming continuation of the mineralization at depth. As shown in the image on the slide, the drill results indicate that the mineralized footprint of Talbot has doubled. We have commenced the 2026 drilling program in January with 6 drill rigs turning, including 1 rig focused on continuing to expand the footprint of the deposit at depth. An additional hole provided a significant intercept of visible copper mineralization over approximately 20 meters and assays are pending. This year, we plan to progress a PFS and prepare an updated mineral resource estimate utilizing our standard method that has a high reserve conversion rate. Turning to Slide 15. Our Copper World project in Arizona continues to achieve key milestones to progress towards sanctioning later this year. The closing of the strategic joint venture partnership with Mitsubishi validates the attractive long-term value of Copper World as a top-tier copper asset and endorses the strong technical capabilities of Hudbay. Together, we will continue to advance this high-quality copper project and unlock significant value for all of our stakeholders. With the closing of the transaction, Mitsubishi's initial cash inflow of $420 million will be used to fund the remaining feasibility study and pre-sanctioned spending in addition to initial project development costs for Copper World once we sanction. Mitsubishi will also contribute the remaining $180 million within 18 months to complete its initial 30% stake and will continue to fund its pro rata 30% share of future capital contributions. Copper World feasibility activities are underway, and we are on track for the completion of a definitive feasibility study in mid-2026. We have allocated growth capital expenditures in 2026 for accelerated detailed engineering, certain long lead items and other derisking activities, and we continue to expect to make a sanction decision in 2026. We are very well positioned to build one of the next major copper mines in the United States while continuing to maintain a strong balance sheet and reinvesting in other growth opportunities across our portfolio. Before we conclude, I want to take a moment to highlight the New Ingerbelle expansion permits at our Copper Mountain Mine just received and announced. This is a very exciting milestone for the British Columbia team as we expand growth optionality for Copper Mountain. The receipt of these permits is an important step to enhance the copper and gold production profile at Copper Mountain. It secures a longer mine life, preserves more than 800 jobs and ensures continued economic benefits and long-term financial stability for the region. We received the amended Mines Act and Environmental Management Act permits through the coordinated authorizations process managed by the British Columbia Major Mines Office. Throughout the permitting process, we proactively engaged with the local communities and the upper and lower Similkameen Indian band to ensure transparency. We recently finalized refreshed participation agreements with the bands, reinforcing our commitment to strong Indigenous partnerships. The New Ingerbelle permit ensures that we'll be able to advance this BC major project and extend our partnership with the local communities to facilitate additional growth investments at Copper Mountain and further add to our 99 years of successful operations in Canada. Concluding on Slide 16. 2025 demonstrated the benefits of Hudbay's diversified operating base, our unique copper and gold exposure and our operating resilience. I'm extremely proud of the performance we were able to achieve despite the many operational interruptions. Our continued focus on cost control enables us to maintain industry-leading margins and deliver strong and stable cash flows. Once Copper World is in production, we expect our annual copper production to grow by more than 50% from current levels. This will reinforce our position as one of the largest Americas-focused copper producers with a well-balanced and geographically diversified portfolio of assets. Our expected production will be weighted approximately one-third each in Canada, the United States and Peru and further enhanced Hudbay's exposure to copper, representing more than 70% of consolidated production and revenue. I have no doubt that we will continue to see more transformations as we execute on our growth strategy and prudently invest in our world-class pipeline to deliver the highest risk-adjusted returns for our stakeholders. And with that, we're pleased to take your questions. Operator: [Operator Instructions] The first question is from Ralph Profiti with Stifel Financial. Ralph Profiti: Peter and Eugene, this capital allocation framework is coming at a time when we're seeing the biggest spread between actual metal prices and spot metal prices and consensus metal prices. And when you talk a little bit about some of the commodity price scenarios, I'm just wondering how would you characterize your approach versus the past on some of the scenario analysis that you do? And how are you going to balance crowding out opportunities versus metal prices being used versus buy versus build context? I'd like a little bit on that, please. Chi-Yen Lei: Thanks for your question. And I think this is an ideal time to unveil this capital allocation framework because of the volatile markets that you described. So as you know, we have a proven track record of allocating capital to high-return opportunities. That's what netted us the New Brit gold mill and then the Pampacancha investment, and that's achieved 25% IRRs over the past few years and helped us deleverage our balance sheet. Now with Mitsubishi on board, that really essentially helps us fully fund the Copper World project. And so we're going to be able to go into the end of this decade, having delevered the company, funded and built Copper World and now have the opportunity to fund greenfield projects and brownfield high-return projects at each of our operating sites. When we run and to best determine how to allocate that capital, running this process allows us to run various scenarios, use varying prices and even opportunities to finance some of this growth. And so when we use this holistic approach, we are able to balance the growth aspects and prudently fund them, but while also keeping an eye to capital returns. And so we're ramping into the first dividend increase in our company's history. It's nominal, but it's a start. And as you saw last year, when we implemented the NCIB, these options or opportunities are on the board to be compared with reinvestment in our portfolio. So we're going to test these as these opportunities as they come. As you know, we have a very skilled technical services team and our operations are always looking for ways to enhance production and enhance mine life, and we'll weigh those opportunities at varying prices to the balance sheet and have an opportunity to increase returns to shareholders once we've determined the optimal structure. Ralph Profiti: Helpful. I appreciate the descriptive answer. And if I can just switch more to a technical question. Peter, what is Q3 going to look like in British Columbia on the SAG rehabilitation work? What does downtime look like? How does it -- what is tie-in time required? And I'm just wondering what happens to sort of throughput in that scenario in that quarter. Peter Gerald Kukielski: Thanks, I mean, great question. I think that as I mentioned in the comments that the planned replacement of the feed head will be early in the third quarter. So we continue to operate pretty carefully in the interim. But we still expect the operations to stabilize and improve progressively through that period. There will be a project period of, I imagine, several weeks during which we replace that head. But I don't expect there to be anything abnormal that's not provided for in our guidance. But Andre, do you want to perhaps elaborate on it a little bit? Andre Lauzon: Sure, sure. So the team is doing an excellent job. The parts are procured. So we've cast 4 sections, 2 have passed QA/QC, and we have a team over there inspecting there as we speak. Tentatively, as Peter mentioned, it's about a month of work. We'll be able to continue to run our SAG2 at the same time, and the teams are working through the details of that. It's scheduled, like you said at the beginning of Q3, which is probably straddling around July, August. We're looking for opportunities to pull that forward. We don't know exactly what that is right now. It's still they're inspecting, looking at shipping and all of the details of getting that in place. And so as we get to report next quarter, I think we'll definitely have a lot more clarity on the timing of that is like the opportunity of pulling it forward if we're able to do that is obviously ramping up the higher throughput sooner, which will improve our -- what we're forecasting for the year. But right now, it's scheduled on that end. But right now, as it stands, the back end of the year is probably about, call it, 20-ish percent higher than what the front half is of the year on a total metal. So if you want to give that sort of cadence, but the improvement, if we can pull it forward a bit as we know, then that will be a positive to the year. Operator: The next question is from George Eadie with UBS. George Eadie: Can I ask at Manitoba, just clarifying the updated 3-year production guide, that won't include any new drilling, will it? And secondly, just when we -- when exactly in the year will we get the next tech report for Manitoba, potentially bringing in Talbot and some other satellites? Peter Gerald Kukielski: Thanks for the question. So we haven't decided that we're producing a tech report for Manitoba this year. A lot of what we're doing, I mean, the current technical report is still valid in terms of production at Lalor. And our thinking with respect to another revised technical report at some point would be in order to bring in some of the other -- the results of other drilling that we're performing in the region, but it's not determined yet when that would be. Andre, perhaps you could elaborate. Andre Lauzon: Yes, sure. So it's a great question. I'd say is there's so much going on in Manitoba right now. And it's on all fronts. So we've seen some positive success with drilling 17 zone, the high-grade gold down plunge of Lalor. We now know the plunge direction. And so we'll be targeting an exploration drift to do this year to get to that area. The Talbot area is very exciting. There are 6 drills going at site right now. About 5 of them are doing definition drilling to prepare to be able to have that, call it, maiden Hudbay reserve for that. So the teams are working actively on pre-feasibility studies to be able to understand how we're going to mine it, ramp versus shaft, all of those details in optimizing it. And to date, the drilling as indicated, like Peter had mentioned, doubling the footprint of what we know, and it's open in many directions still. So that's also very exciting. The gold, there's a ton of optimization going on right now around New Britannia. We're looking at improving our flash flotation. And what that allows us to do, like although we have a permit at 2,500 tonnes per day, we're seeing some really high copper grades, which is great. And what we have to do is slow down the mill a little bit during when we're seeing those really high grades. And so the teams are looking on optimization there at New Britannia. We have a SART plant coming in at the end of the year, and that's also going to reduce our costs with reduction in cyanide, but also improvements on recoveries. We have some additional things we're looking at Stall. And if I complicate it even more, New Brit mill is sitting on top of New Brit mine. And that mine for close to 20 years, about 1.5 million ounces. And we -- since with the real run-up in gold prices, probably wasn't on our radar for a number of years. And so now we have teams actively looking at putting together a plan is like what do we actually have and what's the potential? And there'll be a lot more to come on New Britannia mine. So that's quite exciting. So why I say all of that is there's so many moving parts on how do you fit all of that into a technical report. And so it's just around how -- what's the timing to do that? And so I think we'll be able to give snippets later this year around what does it starts to look like. But to put all that in, we're very, very confident on sustaining about 185,000 ounces per year profile at a really good all-in sustaining, probably less than $1,200 an ounce long into the future. And I didn't mention as well as we're looking at optimization of cut-off within the mine as well. And that also has the potential to bring low-cost capital good grade ounces that were on the cusp before at $2,000 or so an ounce now at much higher prices. So we're looking at a lot of things. And so hold tight, I guess, is what I'd say is there's going to be some really good stuff coming. Chi-Yen Lei: If I could add with some comments in terms of catalysts, the 3-year guidance will be released along with our reserve and resource update at the end of March, and that will show this extension of this higher gold production at Lalor and Snow Lake that Andre speaks of at 185,000 ounces, well beyond kind of what was contemplated in the technical report. As Peter highlighted, we're looking at ways to daylight what would be the longer-term profile and with all the opportunities that Andre highlighted, we hope by the end of the year that we'll be able to catalyze many of those projects and be able to provide the market with this 5- to 10-year outlook at these new levels, and we think they'll be very value creating for Manitoba and Hudbay. George Eadie: Yes. No, that's super detailed and helpful, guys. Thanks very much. And maybe just one more, if I can sneak in kind of similar, but Mason, like the comments about that in the release, the PFS, like when could that be completed? And will we see the outcomes, I guess? And any updates on a potential partner even there? Peter Gerald Kukielski: Sure. So we're currently starting to work on Mason. We're building the team. We're kicking into pre-feasibility study work. I would expect that we would complete a pre-feasibility study in Mason later on next year. For sure, we would not contemplate partnering Mason at this early stage. But as we progress through the pre-feasibility study, we would look at opportunities to do that based on the work that we do. But partnering is not something that we're contemplating there right now. Andre Lauzon: Yes. It's the right time. It's the right time right now. Eugene mentioned about our capital allocation framework and investing in different opportunities. It was somewhat parked for 2 reasons. One, because our availability of capital to spend on doing that because we have to do geotechnical drilling, hydrology, getting all of the key things to really put a robust pre-feasibility together. And we are waiting for some clarity with the federal government around the placing waste rock and tails on federal land. That has now been resolved. And so with both of those in our back right now is we are ramping up like as what Peter said, and building the team to accelerate that project because it is the next to copper world, like it's the next largest undeveloped copper deposit there in the U.S. It's a great project. Operator: The next question is from Fahad Tariq with Jefferies. Fahad Tariq: Maybe just on Peru, can you let us know what the latest is on the Maria Reyna and Caballito permits and what's happening there? Peter Gerald Kukielski: Yes, absolutely, for sure. It's -- there's been no change to the remaining steps for the drill programs, which includes the government's prior consultation process with the local community. And given the environment in Peru right now, I think this process is likely delayed. Remember that this is an election year coming up. We've had a change in President. So the time lines are quite difficult to predict as we've learned from Pampacancha several years ago. I think that predicting -- although we can't predict the permitting time lines, I think let's get through the elections. We're confident we will get the permit. I just can't tell you when it will be. But I am extremely confident that Maria Reyna and Caballito play a big part in value creation at Peru in the future. But at the moment, I can't provide you with an accurate time line. Fahad Tariq: Okay. I understand. And then maybe just switching gears to Copper World. I know we're still waiting for the feasibility study, but just thoughts around the copper price assumption that you might be using or how we should be thinking about CapEx relative to the $1.3 billion, which is the current estimate? Chi-Yen Lei: I can address the copper price assumption. And as you saw in the PFS, this is a very robust project. It generated close to 20% IRR at $3.75 copper. It is the highest-grade undeveloped copper deposit in the Americas. And as we update the pricing for the feasibility study, we'll be moving toward consensus prices, which is today moved from -- moved in the area of $4.50 to $4.75 per pound of copper. We'll obviously do various pricing scenario analysis around those prices, but I would expect that it would be in that range at this moment. Peter Gerald Kukielski: And on the CapEx side, I would say, recall that the PFS was issued in October of '23, so 2.5 years have passed. So of course, there's going to be a little bit of escalation. There's been some tariffs introduced on key equipment that might be procured from outside the country. So we expect there to be some escalation, but we don't expect it to be material. Andre Lauzon: Yes. And different than the response from Maria Reyna with the government, like this is fully in our control to deliver the feasibility and the team is doing an excellent job. Like we're within 1.5% of our schedule. So we're tracking right now at about 67% out of about 68%. And so the team is doing an excellent job building a world-class feasibility. And so we expect it to come to FID at the times that we had forecast. Chi-Yen Lei: And the collaboration with our JV partner, Mitsubishi has been excellent. We've had our first JV Board meeting. They're on site with all of the decisions and have contributed. And so for those that were worried that this would delay the DFS, it does not, as Andre said, we're right on schedule. Peter Gerald Kukielski: Sorry, I'll just go back to the Maria Reyna and Caballito question. I think I was saying I can't predict when it's going to be. It's going to happen for sure. It's going to happen, but it may not be this year, but it's coming. And what I can say is that our communities and our partners are incredibly eager to get going on it. It's just a process that's got to be followed. And we know how Peru goes, especially during an election year. It's still a great copper destination, will continue to be. So just hold tight it's going to happen. Andre Lauzon: Yes. And we've refreshed the team, too, right? So brand-new minted Vice President down there in South America, very familiar with the area, coming out of some of the challenges that we had through the summer with some of the communities. We refreshed the team for Uchucarcco and Chilloroya. And so those are the people that will carry this through to the final. Operator: The next question is from Orest Wowkodaw with Scotiabank. Orest Wowkodaw: A couple of follow-ups. Your CapEx guidance for this year at Copper World, $135 million, should we anticipate that, that could increase if you FID the project in the second half of the year? Or will that just start in '27? Chi-Yen Lei: The CapEx guidance that we provided of $135 million is basically the feasibility study plus the early works we need to continue to keep schedule for potential first production in early 2029. With the FID, we'll provide sort of the rest of the spend for the year, but I do not expect that to exceed the $420 million that we've already received from Mitsubishi. So if you think about sort of the funding, I would say that we would expect Copper World to be cash flow positive from a Hudbay consolidated perspective this year. The $420 million contribution obviously came in January. We're going to spend about $135 million leading into the FID decision. On FID, the Wheaton payment becomes due, the first $180 million. And so we expect to be in a very good position from a funding perspective. So that's why one of the reasons we carved out the Copper World JV spending from the growth CapEx of the company because it's more than fully funded. Orest Wowkodaw: So that $135 million, that's basically all pre-FID. Chi-Yen Lei: It would be -- it will be all pre-FID, but it's -- some of the spend would have been post FID. So it's basically ensuring that we move the project along as soon as possible, and we have the endorsement with Mitsubishi to proceed in this manner. Orest Wowkodaw: Okay. And then just shifting gears, I just wanted to clarify something you said earlier. Did I hear correct that you're suggesting that you can maintain 185,000 ounces of gold in Manitoba for the next 5 to 10 years? Chi-Yen Lei: That's the goal. And we'll be able to tell you that number for the next 3 years with our 3-year guidance. And the opportunity this year is to pull all of the projects that Andre speaks of and put them in buckets so that we can talk about the long-term production horizon of Snow Lake, which is targeted to be at that level for the next 5 to 10 years. Orest Wowkodaw: Okay. And the end of March then update will just be the 3-year guide, and then we'll have to wait for the rest after. Is that right? Peter Gerald Kukielski: More to come. Operator: The next question is from Emerson [indiscernible] with Goldman Sachs. Unknown Analyst: So I have 2 questions here. First one, just trying to understand, I mean, what is the pecking order of the projects that the company have right now? I mean there are a lot of stuff going on. So Copper World is obviously a priority, but then you have Ingerbelle expansion, 1901 development deposits, Mason project right now. And also -- so just trying to understand here what is the priorities apart from Copper World? And also on Copper World, just trying to understand here if you guys could bring forward the concentrator leach facility that was expected by 2032. Just because, I mean, you have been seeing U.S. administration putting copper as a critical mineral. So I think could make sense, right, to bring that project forward so you can sell copper cathode domestically? And just a final question on Manitoba. Just trying to understand here how could the asset's economics profile change with this ramp-up in production coming from 1901, Talbot, et cetera. So would we still see the same level of all-in cash cost for the asset or that could change in light of this new ore coming from those deposits? Peter Gerald Kukielski: These are great questions, thank you. So in terms of priorities, you're absolutely right. So Copper World is just such a transformational project for our company that it is. So it's a clear priority in terms of the activities that are underway by the U.S. business unit. And of course, it occupies a lot of attention from corporate management, from our Board, et cetera. But it is a U.S. business unit priority and a company priority. That said, as Eugene described in his words about capital allocation, given the company's situation balance sheet-wise, the strength of our balance sheet going into this year, we do have capital available for the lowest risk-adjusted return projects at each business unit, and we want each business unit to push projects forward for consideration in that pecking order. So yes, you spoke about New Ingerbelle. We're super excited to have received the New Ingerbelle permit yesterday. And of course, that will be a priority in British Columbia once the SAG mill 2 and second SAG mill project has been completed fully and ramped up, it will become a priority there. In Peru, of course, the priority is getting the pebble crushing circuit done and then looking forward towards getting permits whereby we could further expand production over there. Manitoba, of course, you've heard about what our priorities there is that we're growing that whole asset up into something pretty amazing. So in terms of your question with respect to the economic profile there, we would target and expect that the economic profile or all-in sustaining costs would remain roughly of the same order of, let's say, $1,200 or so an ounce because we don't have to develop any new infrastructure. Everything is close to infrastructure. And then with your question with respect to Copper World and concentrate leaching and bringing that forward, we certainly would consider bringing it forward, but we don't want to start construction of that facility while we're still building the Copper World mine itself because we don't want to divert the attention of the project team. But it may make sense as we progress through construction that we look at bringing it forward so that we can actually continue to utilize the same team that's actually building the mine out itself. So I would say more to come on that. So Andre, would you -- anything that you would add? Andre Lauzon: I think you characterized it really well. It just feels like a $15 billion company. There's a lot of things going on in all areas and lots of growth going on in each different business unit. And so it's not -- they're all competing for capital. But the way, as Eugene set it up earlier on is we set ourselves up so that we can invest in all of the different areas. We have great projects in each of the different areas. And so it's just a really exciting time. And yes, there's a lot going on. Chi-Yen Lei: Maybe to summarize, Emerson, the budget for 2026 and the guidance for 2026 for growth capital includes funding for all of these projects already. And so they have been -- they've gone through the process. These are the best projects that are in each of the business units, and they're accounted for. So for example, there's $80 million of growth capital for British Columbia allocated to advance New Ingerbelle. For example, there's $40 million of growth capital allocated to Peru for the pebble crusher and $50 million to $60 million of exploration and development work in Manitoba for 1901 and exploration. So we are going to be able to build Copper World and fund advancements and increases in throughput and high-return projects at each of our business units to be able to come out of the decade with not only a new mine, but also refreshed and improved mines at 3 of our existing sites. Operator: The next question is from Craig Hutchison with TD Cowen. Craig Hutchison: I just want to follow back on Eugene's comments and Orest's question on Manitoba. The extension of the production and grade profile for gold for the next 5 to 10 years, is that being driven by resource conversion? Is it more just the exploration step out? Or do you also include some mill throughput expansions there? Andre Lauzon: All of those. All of those. So there's -- we've been drilling and exploring around Lalor mine for the last couple of years, right? And we've been pretty silent on what we've been finding, but we've been getting success. And so part of that is conversion of resource to reserve. Some of it is some new discovery. We talked about the satellites. So Talbot would be considered a satellite. There's a number of other ones in our portfolio. The real unknown is obviously New Britannia mine, right? So the best place to find is right in the shadow of a headframe and like that itself is a company maker. And so if you take all of that and then what you said is around the improvements. So we're challenging recovery. We're up over 70% recovery at Stall. We're looking at it with, like I said, the SART process at New Britannia, which is in our project for the end of the year. Hot tails as we look at the opportunity to get even more from Stall and even precious metal reprocessing from the tailings there. And then the Flin Flon one that someone mentioned earlier on that we didn't talk about, we're into the depths of pre-feas. We're working on and we're in the final stages of solving how to get the precious metals out of the zinc plant residue. And that is like the solution for the back end of the Flin Flon tails and the team is working on a really unique, but it's a process to convert pyrite to pyrrhotite and run it through our autoclaves and then use the solution that we have for the zinc plant. So that's moving along quite well, too. And so yes, no, we have a lot of -- there's a lot of gold to add to our portfolio from new discovery all the way through to getting better at recovering it and bringing new deposits online. So yes, it's an exciting few years ahead of us for sure. Craig Hutchison: Great, guys. And just maybe on New Ingerbelle, now that you guys have the permit in hand. Is that something that could positively impact your production in, say, 2028? Is there much capital to bring that project into play? Andre Lauzon: You're talking New Ingerbelle mine or the mill. Craig Hutchison: New Ingerbelle, the permits. Andre Lauzon: New Ingerbelle, sorry, and still on goal. Peter Gerald Kukielski: You're still in Manitoba. Andre Lauzon: I'm still in Manitoba. So -- yes, new Ingerbelle, yes, absolutely. So we have about 2 years of construction we have to do. It's very straightforward, haul roads, East haul road, West haul road, build the bridge, some ponds to build and then we'll be into it. And what's really neat about it, and we alluded in the press release is it's pretty much if you look at the long term, the copper grade is a little bit lower, but it's very close. But it's almost 60% to 100% higher gold grade. It's a really, really big improvement in grade. And the stripping is like we're running at almost like a 5:1 strip right now, it's about 3x less. And so from a profitability standpoint, not only are we increasing the gold through that increased throughput, but we're going to be spending a lot less on stripping. So it's -- New Ingerbelle is -- will be transformational for Copper Mountain in the 2028 range. Peter Gerald Kukielski: And there's also exploration upside at New Ingerbelle too. So we could... Andre Lauzon: $20 million of drilling going on, and we're exploring at Ingerbelle for upside potential to expand that high-grade gold, copper resource and -- as well as there's some targets on the Copper Mountain side as well, too. So yes. Craig Hutchison: So it sounds like that something could come into 2028 time frame based on the 2-year build. Andre Lauzon: That would be the plan, I would think, is where we'd be, yes. Craig Hutchison: And just one last question for me. Just on costs. It looks like you guys are using pretty conservative metal prices for your C1 calculations. Can you tell us what you're using for your TCRC costs just to get a sense of whether there's some potential upside there from a C1 cost perspective? Chi-Yen Lei: They didn't seem that conservative at the beginning of the year, but they are today. So we're definitely enjoying the benefits of the higher prices. On the TCRC front, we're -- our assumption is 0. So again, we're entering into deals that are lower -- that are below 0. So again, there could be a little bit of upside there. Operator: The next question is from Anita Soni with CIBC World Markets. Anita Soni: Most of them have been asked and answered, but I just want to clarify on BC. With the tie-in in the second half of the year, do you expect there'll be any impact into 2027 from the, I guess, the delay in that tie-in? Andre Lauzon: No, not at all. No, it's scheduled to ramp up, like there's -- like right now, even with the reduced mill capacity, we're seeing upwards sometimes above 40,000 tonnes per day at the current -- with the current restrictions that we placed on it. And so all of our processes are all being prepared right now for that ramp-up once we have that new feed-in shell in place. So we don't anticipate anything that's really problematic. Like -- there's no new feeders, nothing. It's just changing it and running at a heavier loading rate in the mill. So right now, we're being conservative on the bearing pressure in terms of the amount that we actually feed into the mill, but it's literally turning up the dial. And the mine itself has made some really, really great strides to increasing their production rate. So we're seeing averaging around 280,000 tonnes per day, which is unlocking high-grade copper coming in, in the mid part of the year as well, too. Anita Soni: Okay. So then on Jan 1, 2027, what's the throughput rate we should be using? Andre Lauzon: We should be using 50,000 tonnes a day. That's where we anticipate to be. Operator: And our last question is from Martin Pradier with Veritas Investment Research. I'm sorry, Martin, we're unable to hear you. It's a very corrupted line. Are you speaking directly into your microphone? Okay. Unfortunately, I think we're going to have to move on. So I would like to hand the conference back over to Candace Brule for closing remarks. Candace Brule: Thank you, operator. And Martin, please feel free to e-mail us your questions given the technical difficulties there. But thank you, everyone, for joining us today. If you have any further questions, please feel free to contact our Investor Relations team. Thank you and have a great day. Operator: This concludes the conference call for today. You may now disconnect your lines. Thank you for participating and have a pleasant day.

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