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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.
Operator: Good day, and thank you for standing by. Welcome to the Vicor Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jim Schmidt, Chief Financial Officer. Please go ahead. James Schmidt: Thank you. Good afternoon, and welcome to Vicor Corporation's Earnings Call for the Fourth Quarter and Year ended December 31, 2025. I'm Jim Schmidt, Chief Financial Officer. And I'm in Andover with Patrizio Vinciarelli, Chief Executive Officer; Phil Davies, Vice President, Global Sales and Marketing. After the market closed today, we issued a press release summarizing the financial results for the 3 months and year ending December 31. This press release has been posted on the Investor Relations page of our website, www.vicorpower.com. We also filed a Form 8-K today relating to the issuance of this press release. I remind listeners, this conference call is being recorded and is the copyrighted property of Vicor Corporation. I also remind you various remarks we make during this call may constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Except for historical information contained in this call, the matters discussed on this call, including any statements regarding current and planned products, current and potential customers, potential market opportunities, expected events and announcements and our capacity expansion as well as management's expectations for sales growth, spending and profitability are forward-looking statements involving risks and uncertainties. In light of these risks and uncertainties, we can offer no assurance that any forward-looking statement will, in fact, prove to be correct. Actual results may differ materially from those explicitly set forth in or implied by any of our remarks today. The risks and uncertainties we face are discussed in Item 1A of our 2024 Form 10-K, which we filed with the SEC on March 3, 2025. This document is available via the EDGAR system on the SEC's website. Please note the information provided during this conference call is accurate only as of today, Thursday, February 19, 2026. Vicor undertakes no obligation to update any statements, including forward-looking statements made during this call, and you should not rely upon such statements after the conclusion of this call. A webcast replay of today's call will be available shortly on the Investor Relations page of our website. I'll now turn to a review of our Q4 and full year financial performance, after which Phil will review recent market developments and Patrizio, Phil and I will take your questions. In my remarks, I will focus mostly on the sequential quarterly change for P&L and balance sheet items as well as full year-on-year changes and refer you to our press release or our upcoming Form 10-K for additional information. As stated in today's press release, Vicor reported product revenue for the fourth quarter of $92.7 million, up 4.5% from the third quarter total of $88.7 million and up 15.3% from the fourth quarter 2024 total of $80.4 million. Royalty revenue for the fourth quarter totaled $14.5 million, a 33.1% sequential decrease from $21.7 million in the third quarter and a 7.8% decrease from $15.8 million in the fourth quarter of 2024. The sequential decrease in royalty revenue was the result of a catch-up amount that was included in the Q3 results. Product revenues for the year ended December 31, 2025, increased 12.1% to $350.3 million from $312.5 million for the prior year. Royalty revenue for the year ended December 31, 2025, totaled $57.4 million, a 23.2% increase from $46.6 million for the year ended December 31, 2024. Total product revenue and royalty revenue, including a $45 million patent litigation settlement received for the year ended December 31, 2025, increased 26.1% to $452.7 million from $359.1 million for the prior year. Advanced Product revenue, which includes royalty revenue, decreased 4.4% sequentially, which was the result of the catch-up amount of royalty revenue in Q3. Brick Products revenue declined 0.6% in the third quarter. Revenues for Advanced Products for the year ending 2025 increased 26% to $248.6 million from $197.3 million the year before. Revenues for Brick Products for the year ending 2025 decreased 1.6% to $159.1 million from $161.7 million the year before. Shipments to stocking distributors decreased 11.1% sequentially, but increased 5.3% year-over-year. Exports for the fourth quarter increased sequentially as a percentage of total revenue to approximately 49.3% from the prior quarter of 42.8%. On a year-over-year basis, exports increased as a percentage of total revenue to approximately 50.8% from the prior year's 48.2%. For Q4, Advanced Products share of total revenue, including royalty revenue, decreased to 58.4% compared to 59.4% for the third quarter, with product share correspondingly increasing to 48.6% of total revenue. Turning to Q4 gross margin. We recorded a consolidated gross profit margin of 55.4%, approximately 2.1% less than the prior quarter as a result of the royalty catch-up in Q3. For the full year 2025, gross margin rose by 6.1% to 57.3% from 51.2% in the prior year. I'll now turn to Q4 operating expenses. Total operating expense increased 2.7% from the third quarter. For the full year 2025, total operating expense as a percent of revenue and patent litigation settlement decreased to 39.2% from 51.6% in the prior year. The amounts of total equity-based compensation expense for Q4 included in cost of goods, SG&A and R&D was $1.08 million, $2.206 million and $1.153 million, respectively, totaling approximately $4.4 million. For Q4, we recorded operating income of $15.7 million, representing an operating margin of 14.6%. For the full year 2025, operating income totaled $81.8 million or 18.1% of revenue in patent litigation settlement compared to operating loss of $1.3 million or minus 0.4% of revenue in the prior year. Turning to income taxes. We recorded a tax benefit in Q4 of approximately $27.3 million, representing an effective tax rate for the quarter of minus 142% as a result of the tax benefit due to the partial recognition of certain deferred tax assets in the period. The tax benefit for the full year 2025 was approximately $24 million, representing an effective tax rate for the year of minus 25.4%. Net income for Q3 totaled $46.5 million GAAP diluted earnings per share was $1.01 based on a fully diluted share count of 46,297,000. For the full year 2025, net income increased to $118.6 million from $6.1 million in the prior year. In 2025, fully diluted earnings per share increased to $2.61 from $0.14 in the prior year. Turning to our cash flow and balance sheet. Cash and cash equivalents totaled $402.8 million in Q4. Accounts receivable net of reserves totaled $60.7 million at quarter end, with DSOs for trade receivables at 44 days. Inventories net of reserves increased 1% sequentially to $91.3 million. Annualized inventory turns were approximately flat sequentially at 1.96. Operating cash flow totaled approximately $15.7 million for the quarter. Capital expenditures for Q4 totaled $5.5 million. We ended the quarter with a construction in progress balance primarily for manufacturing equipment of approximately $7.8 million, with approximately $6.9 million remaining to be spent. I'll now address bookings and backlog. Q4 book-to-bill improving sequentially, came in well above 1 and with 1-year backlog increasing 15.8% from the prior quarter, closing at $176.9 million. 2026 is a year of great opportunity for Vicor. We are working to deliver on the opportunities. However, given that we cannot predict with certainty the timing or amounts of outcomes relating to our licensing practice, we will not provide quarterly guidance. With that, Phil will provide an overview of recent market developments. And then Patrizio, Phil and I will take your questions. I ask that you limit yourself to one question and a related follow-up so that we can respond to as many as we can in the limited time. If you have more than one topic to address, please get back in the queue. Phil? Philip Davies: Thank you, Jim. At the beginning of 2025, we talked about the year ahead being one of challenges and opportunities. As we look back, 2025 met those expectations with improvements in product bookings and revenues in Q4 and our IP licensing practice becoming a major contributor to our top and bottom lines. As we exited 2025, book-to-bill ratio increased to over 1.2 in Q4 and has continued to increase in Q1. At the start of 2026, we can say that this will be a year of different challenges and greater opportunities. This should result in record bookings, revenues and profitability and significantly higher utilization of our first chip fab. As Patrizio commented in today's press release, United States International Trade Commission has instituted a second investigation into illegal importation of power modules and computing systems, infringing Vicor's IP to nonisolated bus converters. By now, it should be clear that Vicor will methodically and relentlessly enforce its intellectual property to the many inventions it pioneered and that suppliers of infringing systems are putting themselves and their customers at risk, including unlicensed OEMs and hyperscalers. Following the example set by licensed OEMs and hyperscalers, companies with an ethical backbone should do the right thing, avoiding infringement by taking a license to secure their supply chain. Our lead customer for VPD solutions is ramping a Gen 4 factorized power system before transitioning to a Gen 5-based solution with higher current density and performance. This transition is expected to start in the second half of this year, while production of the Gen 4 system will continue to ramp at a steep rate to the end of 2026. Engagement with other Gen 5 VPD customers will be selective as capacity in our existing first chip fab is getting earmarked for strategic customers and additional capacity from our second chip fab may not be available until 2028. Our industrial and aerospace and defense business outlook for 2026 is strong, particularly in the automatic test equipment market, which is seeing substantial growth and projecting high growth to last for the next several years. Given our power density advantage, which is of paramount importance to our customers, I am confident that we can double the revenues in these markets over the next 4 to 6 years, respectively. As we approach high utilization of our first chip fab, we are beginning to engage customers in capacity reservation agreements to secure their supply needs. While in the planning stages of a second chip fab to expand the market opportunity, we are having discussions with candidates for an alternate source of high current density Gen 5 VPD solution. An alternate source will give licensed OEMs and hyperscalers broader access to best-in-class power system technology. In view of these developments, we remain confident in our business strategy of innovation, customer focus and market focus. With that, we'll now take your questions. Operator: Our first question comes from the line of Quinn Bolton of Needham & Company. Quinn Bolton: Congratulations on 2025 and the record outlook for 2026. Patrizio or Phil, I wanted to start with your lead customer. It sounds like you're seeing a pretty strong ramp from that customer. And you mentioned that Andover is getting filled. Can you talk is Andover being filled largely from your lead customer? Or do you have other significant Gen 4, Gen 5 customers that are contributing to that growing utilization in the Andover facility? Patrizio Vinciarelli: It's a combination of demand, increasing demand on a number of fronts, not just hand computing where there is a multiplicity of factors at play with respect to increased demand on capacity, but also in test equipment, as Phil mentioned in his prepared remarks and some of the other end markets. Quinn Bolton: Got it. Okay. And then I guess maybe a follow-up on the IP licensing. In the press release, you talked about seeing record revenue from the IP licensing business this year. Just wanted to clarify, does that include or exclude the $45 million patent litigation settlement that was part of the 2025 revenue stream as we think about 2026? Patrizio Vinciarelli: We see our licensing business expanding. As Jim suggested earlier, the timing of elements contributing to the expansion is somewhat unpredictable. But as we look at the predicament that OEMs and hyperscalers face in terms of potential exclusion orders, we see a major opportunity for us to grow our licensing business considerably. As we have discussed in our last quarterly call, we see that business expanding greatly in the last couple of years. I think what has transpired since then suggests that those are conservative estimates. James Schmidt: And Quinn, just to clarify the number for you, the royalty revenue I quoted in my prepared remarks of $57.4 million in 2025 does not include patent litigation settlement. That's royalty revenue, it was up 23.2% from $46.6 million in 2020. Quinn Bolton: Got it. But just to clarify, Jim, when the comment in the press release about the business, the licensing business will expand, are you looking at the $57.4 million as the 2025 base? Or should we be thinking about that base being $102 million, which would include that $45 million patent settlement as part of the base? Patrizio Vinciarelli: So for one thing, there's going to be more patent settlements. And for another, the one patent settlement from last year in terms of the outlook for licensing business, it doesn't really make a substantial difference with respect to the upside with respect to this part of our business. We expect hundreds of millions of dollars worth of revenues from licensing and the $47 million event last year is in hindsight going to be in the bucket to be sure, but not all that significant. Operator: Our next question comes from the line of John Tanwanteng of CJS Securities. Jonathan Tanwanteng: And also congratulations on a good year. I was wondering if you could give us a little bit more detail on the launch customer for VPT. You mentioned that they were going with the Gen 4 product. Could you talk about the decision that went into that and why they aren't starting with Gen 5 and kind of how that happened? Patrizio Vinciarelli: Well, so the Gen 4 system is mature. It's one that's got a track record of success that is expanding in terms of its opportunity in order to get to the next-generation system, mature design, a mature system. It's not just the power systems, the system as a whole needs to come to fruition. It isn't quite there yet. It will be there soon, and that will lead to the next set of opportunities. But to be clear, with our lead customer, we're seeing a significant share of our capacity being utilized as we get towards the end of this year on the earlier generation system. And the next-generation system will provide an additional layer of use of capacity as we get into next year. Jonathan Tanwanteng: Understood. And then when you start -- sorry, you're considering a new facility. I was just wondering if you're planning to build that yourself or are you still planning to work with partners to do that perhaps in a capital-light fashion. And just wondering what kind of capacity a new facility would have? Patrizio Vinciarelli: So we've made 2 offers on area where we could build a facility. The lead time associated with that though is 1.5 to 2 years when everything is done. We are also looking at existing buildings within 30-mile radius of and over to the North and the West. And we haven't decided yet which of these alternatives we're going to close on. But again, we've had 2 offers. No deal done yet, but I would expect that we're likely to do something on this soon. Operator: And our next question comes from the line of Richard Shannon of Craig-Hallum Capital Group. Richard Shannon: I'll also add my congratulations on a really good last year. My first question is on royalties and licensing here. As you mentioned, there are some questions here in the Q&A about growth in this business. I guess I wanted to triangulate it differently from how you've talked about in the past where you're hoping to get a roughly $300 million revenue stream. I know that's not entirely royalties, maybe some product in there, but talking about $300 million bogey between '24 and '26. And by my numbers, at least that would require a fair amount of growth, like doubling or so of your royalty revenues from '25 to '26. But you didn't talk about it that way this quarter. Can you maybe talk about it in those terms here? Is that a number that we should continue to expect better or worse? Just help us triangulate those things. Patrizio Vinciarelli: Yes. So we have 2 major licensees. We expect to have a lot more and future contribution from those 2 should become quite a bit larger. So I think in one way of looking at it, in high-end computing AI, systems require from the power system perspective, our IP. And to the extent that in order to be able to deploy those systems, a license will become necessary. that defines the opportunity. As you can see, the opportunity far exceeds what we've harnessed thus far. There's a lot more to be captured in years to come. So the $300 million number, which to your point involves contributions from royalties and business, licensees is not a long-term goal. It is a relatively near-term goal, not for this year, to be clear, but as we have said last year in a couple of years' time frame, but we can see going beyond that. Richard Shannon: My follow-on question is on second-gen VPD engagements. You already talked about your lead customer today and in past quarters. But last quarter, you also mentioned engagements that didn't seem to be early stage ones with a hyperscaler and an OEM. And I didn't hear any comments in the prepared remarks, although I was a little bit late. So wondering if you can comment on the progress of those and any other ones you've added to the pipeline. Philip Davies: Yes. So Richard, this is Phil. So maybe I can get a little bit more granular on that. So the next step for us is over the next couple of weeks, we're bringing in our global FAE team that is dedicated to supporting customers in different locations where we have target hyperscalers and OEM chip companies located. So they will be going through, if you like, a boot camp on Gen 5 VPD using the demo boards and tools that central applications group here Andover have developed for the market. And so that's happening in the next couple of weeks. After we get that in place, as we talked about, we're going to be fairly selective in who we're going to be engaging with. It's very important we do that. And so that's the next step after that. So we FAEs are here in the next couple of weeks, and we're on the way. Operator: Our next question comes from the line of Justin Clare of ROTH Capital Partners. Justin Clare: So first, I just wanted to follow up on the potential for capacity expansion here. So given the plan to add a second fab, I was just wondering if you -- how we should think about the ramp in utilization for your existing facility, how we think about that over the next couple of years and kind of what utilization threshold you anticipate reaching that is necessitating the additional fab here? And then just if you could talk about when do you anticipate kind of approaching that optimal utilization for the first fab? Patrizio Vinciarelli: So based on ramps with our customers in different markets with a strong contribution from high-end computing, we see the existing fab being well utilized within a year. And that's obviously prompting the initiative to secure additional capacity, both by bringing up a second fab and by having discussions with potential alternate sources that could provide customers with equivalent solutions using their own capabilities and our technology. In terms of the fabs, as I mentioned earlier, we've started exploring the opportunity of being about with a large piece of real estate, the flexibility to increment capacity in steps. As I remind you, this will be a campus that could support up to 0.5 million square feet of manufacturing space. Just to set things in perspective, the facility is around 300,000. So there would be substantially more in terms of the real estate available for capacity. But also given the learning that we've done, we think we can achieve more capacity per unit of area in our next facility. The thinking of late has evolved though more towards potentially acquiring a building. And to be clear, there's been no decision one way or the other yet. It could go either way. But the benefit of doing it with an existing building is that the time to fruition would be year, 1.5 years shorter. So we might go that way. It would be on the same scale, though, in terms of the increment of capacity that we want to bring about with the second. Justin Clare: Okay. Got it. That's helpful. And then just when you think through this, if you're reaching close to kind of optimal utilization within a year, I think historically, you've talked about your fab being able to support $1 billion in product revenue. So within a year, could you be close to that level where you're getting to a run rate of $1 billion in product revenue? And then just curious on the second fab, how much in CapEx spending you might anticipate in terms of what's required there? Patrizio Vinciarelli: Yes. So to be clear, fleet has a capacity, given the dollars per panel and the number of panels it can process of time to do slightly above $1 billion in revenues. But you wouldn't want to use 100% of the capacity because by definition, that will leave no room for error, right? So an 80% capacity utilization is the kind of number that you want to think of in terms of the test or fundamentally having achieved a very good capacity utilization. Now in terms of the next facility, whether it's by acquiring land, putting up a building and then equipping it with what is necessary in order to bring about that relative incremental capacity. This is in a proposition of the order of $250 million, $300 million, something that Vicor has to finance on its own given our cash position and our balance sheet. Operator: And our next question comes from the line of [ John Dillon of DMB Capital ]. Unknown Analyst: Again, congratulations on a good year. Phil, I wanted to go back to the customers you talked about before in Q3 and Q4. I kind of got the impression that you had design wins and these customers couldn't find alternative ways to power their new AI processors. So I'm wondering, are those customers still working with you? Or they -- have they gone to other customers? Are you going to be able to meet their time schedule for their new products? Patrizio Vinciarelli: They have a need for a VPD solution in particular that has all of the right ways. And the competitive landscape doesn't have that. And that's constrained the market opportunity for VPD to a very limited set of companies that have actually done it while incurring a great deal of pain because of the shortcomings of the power system. So what we bring about with our second-gen VPD and fifth generation modules is a solution that has much higher density and much higher greater level of manufacturing quality in terms of the assembly of the solution. It doesn't require stack as generation VPD does. It's much easier to pool. It's more efficient. It has a number of benefits that manifest themselves in many ways. So as Phil suggested, we're going to be picking those customers that strategically want to be aligned with. We have a great deal of interest. As an example, we were out in the valley just a few weeks ago, in the morning with an automotive customer with a great deal of interest in our VPD capability. We haven't decided yet whether or not we're going to engage in that particular case. We will be in a situation with our existing fab before we get another fab in place of deciding which applications make the most sense. And to say a lead customer is one that we prioritize. There's going to be more in that league in that end market. There's one in particular with tremendous opportunity in terms of volume. That one alone fill 2 fabs. So we are in a privileged position. We have the technology and the capability. We can leverage our opportunity both by selling product and by collecting licensing. We can also do it by bringing about we're pursuing all these opportunities evolve. Unknown Analyst: Got it. So I just want to make sure I understand. So the customers that you mentioned before, they're still on the hook. They're still talking to you. They're still engaged with you. They still can't find an alternative source to power their new AI processors, but it sounds like it just slipped a bit. Patrizio Vinciarelli: Well, I think if you were to ask them, they would all say that they will find a solution, but not the driver exists, right? Nobody will acknowledge that they're out of luck without us. And that's not the real world. That's not what we're suggesting. There's always some way of getting something done. But to be clear, that way of getting it done is problematic in terms of the technical trade-offs and technical challenges, whether it's cooling or manufacturability. And then it may also be very much challenged from the IP perspective. So it's a complex landscape, but... Unknown Analyst: It sounds like it's still a competitive situation then. Patrizio Vinciarelli: Well, it's always beneficial competitive situation. Unknown Analyst: Yes. Got it. So my follow-on question is, are you seeing any AI processor designs with horizontal or horizontal vertical besides your lead customer? Philip Davies: So I think if you look at -- as Patrizio actually said, there's one very, very large company that's using vertical power delivery today in very high volume, and that's increasing year-on-year. In terms of anybody else really in high-volume production, it's with vertical power delivery, [ John ], it's fairly limited right now. They're all trying to get Gen 1 VPD to work in some fashion. But to date, I'm not hearing anybody that's deploying that in volume. They're trying. They're working on it. But I think when we come out with our Gen 5 and launch it and selectively launch it, as we've talked about, we're going to have some winners on our hands. Unknown Analyst: Got it. I saw a picture of a new AI processors coming out that had -- it looked like a gold bar on the top. And that's why I ask about horizontal. I'm wondering if you have any upcoming horizontals or horizontal verticals besides your lead customer because I know they're different. Patrizio Vinciarelli: So I don't think we're going to make comments specifically about that stuff. I think what do you want to say about that? Philip Davies: We do have Gen 4 customers using our gold bars collaterally... Patrizio Vinciarelli: But I don't think the visibility to a gold bar is really what's fundamentally add issue at this point. I think the right way of looking at it is that we have tremendous opportunity, and we have the technology that matches the needs of the marketplace. Again, going back to the earlier question, it's not that if our solution didn't exist, there wouldn't be a solution. But the alternative solution, which is really a common to all the competitors that tend to do pretty much the same thing with relatively slight differences as they look over each other's shoulder to make incremental steps down and over the road. It carries a lot of baggage in a number of respects, technical and when it comes to APD, also IP challenges. Unknown Analyst: And our next question comes from the line of Jon Tanwanteng of CJS Securities. Jonathan Tanwanteng: Earlier, you mentioned that you were taking capacity reservations for your facility. I was wondering what the financials of that look like? Is there an upfront payment? Are there contract terms for minimums or something like that? Just how are you approaching that -- those reservations? Patrizio Vinciarelli: So in terms of revenue recognition, that would happen as shipments take place. Obviously, there's a cash component that would show up in our balance sheet. But there is no acceleration of revenue that comes from the capacity reservation. The revenues get recorded as products ship covered by that reservation. Jonathan Tanwanteng: Okay. Got it. And then can you talk a little bit more about the 800-volt data center opportunity? And if you are seeing any traction there? Or are you seeing any orders ahead of that? And I'm specifically talking about products that are outside the vertical lateral power or the NBMs that you have today? Patrizio Vinciarelli: So we have technology there. there too, Lagos pioneered high-density past conversion from 800 volt and 400 volts for many, many years. We have relevant IP. We have products. We have more products in the pipeline that will come out later this year. Frankly, though, I would say that there is quite a bit of hype about this 800-volt. I think that it's, to some degree, missing the point with respect to what the real issues are. It's a diversion. The reason why generations of GPUs have not been able to meet the expectations with respect to performance having to do with the power system gating the GPU performance not to do with 48 volt or 800 volt they had to do with what goes on at the point of load and the fact that multiphase mainstream type of solutions are handicap. That's where the funnel should be. So obviously, we operating an industry that goes through phases of focus and progress and potential life. Without question, there is value to 800-volt bus. But that value probably if you measure in terms of efficiency, gets measured in a few percent. What gets lost in an inferior type point of solution is 15 or 20 points. So I personally wonder why anybody would worry about capturing a 3% improvement in 100-volt power distribution when they're missing 15% or 20% in the point of load and they can't call or deliver the power they need in order to achieve the level of performance they targeted. But irrespective of how these things evolve, we have the technology, we got the IP, and we're going to make the most of the opportunity. But frankly, I think there's going to be a lot of hype relating to as. And that could lead to problems because if people are focused on the wrong problem, which is not really mature problem, they are going to be solved in the real problems. Operator: Our next question comes from the line of Quinn Bolton of Needham & Company. Quinn Bolton: Patrizio, I guess I just wanted to sort of make sure everybody on the line is sort of thinking about the revenue ramp the same way. You haven't obviously guided revenue for '26, but you've given us sort of 3 kind of guideposts, which are you expect Andover to become or to approach full utilization over the next year. You sort of said full utilization would be around 80%. Otherwise, you don't leave a lot of room for error. -- you said at 100% utilization, the fab would be able to produce $1 billion in revenue. And so when I put all of that together, it sort of sounds like you're pointing revenue could approach an $800 million product revenue could approach an $800 million run rate over the next year, and that would be more than double what you did on a product revenue front in calendar '25. I know you're not giving guidance, but some of those guideposts point to very significant revenue growth. And I just want to make sure to the extent that you think that interpretation of the comments you've made is too aggressive. I just wanted to see if you would correct any of those thoughts or if that's the right way to be thinking about sort of the data points you've suggested. Patrizio Vinciarelli: I think your analysis is on point. Obviously, key to that is run rate, as you think from revenues for this year, '26. So we see the demand getting to a run rate that would utilize 80% or so of the capacity in facility. Another way of taking this is that we see this year as being one of major increase in product revenue, well above the rate of last year and at a level that we haven't enjoyed for quite some time. And that's pretty much baked in at this point based on bookings that we received and additional bookings we expect to come our way as the year progresses. Operator: And our next question comes from the line of Richard Shannon of Craig-Hallum Capital Group. Richard Shannon: Let me ask a couple of follow-on questions here. My first one is on licensing here. Patrizio, following up on an answer to one of the prior questions here, you mentioned about having a couple or specifically 2 licensees so far. As we think about growing the licensing revenue stream this year, and if you can comment beyond that, that would be great in terms of kind of your general expectations. But how do we think about adding to the customer list here versus number of licensees or licenses per licensee or other dynamics that help us think about this? And I guess, specifically, if you could address if things went well for you, what's the kind of number of major licensees would you have? I don't know if this is 3 or 5 or 8, but if you can just characterize that in any way, that would be helpful. Patrizio Vinciarelli: In the high-end computing AI market, I think in terms of substantial licensees, it would be half a dozen. So 3x as many as we currently have in that market. minor ones on top of that. And by the way, the focus has been and the actions of the ITC thus far have been focused on high-end computing, but there's infusion going on in other markets as well. So there's a lot of opportunity, not just for the NBM technology, but for other technology that pioneer... Richard Shannon: Okay. My follow-on question is wondering if there's any way that you can help us think about -- specifically about your second-gen VPD technology, how do we think about content per XPU? And I'm going to offer a couple of ways maybe to think about this. I know you're not going to quantify in any specific way, but I think a lot of us who cover this name for a while have a decent idea of what that content looked like a few years ago in your last really high volume or potential high-volume win that you had in point of load. But also since that time, the level of power and the level of current in leading XPUs, particularly getting to reticle limit, are increasing a lot here. So do we think about the kind of the content opportunity now as kind of being proportional to power current? And how do we think -- how would you have somebody think about what that might look like on a per unit basis? Patrizio Vinciarelli: So as I look back at a power system for GPUs a number of years ago, that was in one way of looking at it, about $100 million per year type of opportunity rising. We are locking into an opportunity that will double that. And to Phil's earlier point, there is a hyperscaler with an opportunity that could be another. I don't know if that answers your question. Richard Shannon: Mine was really more on content per XPU, but the way you characterized it is also helpful. But any ways you might think about it on a per XPU basis would be helpful, too. Patrizio Vinciarelli: Yes. So Phil, do you want to take that? Philip Davies: Yes. I think, Richard, to your point, it really depends on the current that XPU, the number of rails, that type of thing. So I think that the opportunity for us will be somewhere between $200 to $400 per XPU. But very much depends on, right? So... Patrizio Vinciarelli: Take that with a grain of salt. Richard Shannon: Understood. That's getting us a half order magnitude is very helpful. Patrizio Vinciarelli: So Richard, just clarify, it's about like a 2,000 amp up to a 4,000 amp type of product. Operator: Our next question comes from the line of A. Hicks of Ainsley Capital Management. Alan Hicks: I just wanted to confirm it's $1 billion capacity now. Patrizio Vinciarelli: I think we lost part of your question. I think the question was you wanted confirmation of the $1 billion capacity of Fab 1. Was that the question? Alan Hicks: Yes. Yes, just for Advanced Products, nothing else. Patrizio Vinciarelli: Yes. We are very confident that we can generate upwards of $1 billion worth of revenues out of. Alan Hicks: Okay. Because I'm looking at what your sales were for just for Advanced Products, not -- without royalties for the year was around $200 million. Is that for 2025? James Schmidt: Yes. Alan Hicks: Okay. So you're saying within a year or so, you could be at $800 million in Advanced Products? Patrizio Vinciarelli: As suggested in an earlier question and confirmed by me, that would be a run rate. Alan Hicks: Okay. And then on the bricks, the original bricks fab, could that be converted in the future to Advanced Products? Philip Davies: So no, the bricks much older products. They've got a very stable, if you like, customer base. So some of those customers are moving to advanced products, and we've had quite a bit of success of that in recent years in some higher volume end markets, but aerospace and defense and some very broad-based industrial, they like the bricks. They're going to stay with the bricks. So the brick piece will be fairly stable over the next few years. I believe... Patrizio Vinciarelli: Bricks don't really play a role with respect to capacity utilization. They become -- percent business, they become essentially. Alan Hicks: Okay. But you're also adding capacity to this first fab. Is that correct also? James Schmidt: Yes, we are. Yes. So that's right. We're adding capacity incrementally to the existing footprint. Alan Hicks: Okay. And then did you say you're in discussions with a partner to have them produce products themselves? Patrizio Vinciarelli: Yes. So we are having discussions. So we -- this may take some time because it's an important decision selection. But we have customers that want us to have an Altair source. We see the benefit of an Altair source in terms of expanding the market opportunity. If you just look at AI, there is so much of a market opportunity that frankly, there is no way that Vicor alone could do it even with the second and third fab. So we need to, in effect, look at making the most out of the opportunity as opposed to limiting the scope of the opportunity by wanting to do it. Alan Hicks: Then I was just kind of curious, how many panels can you produce in a day out of the factory you have now? Patrizio Vinciarelli: I'm not going to quantify that for competitive reasons. I will just say that in terms of the revenue opportunity of the fab, Fab 1 is slightly above $1 billion a year. Operator: Our next question comes from the line of [ John Dillon of DMB Capital ]. Unknown Analyst: I'll make this quick because I know we're up against the time line. First of all, Patrizio, thank you for answering Quinn's question. That was one of my follow-up questions also, and I appreciate that answer. My another one is just a quick one. We're halfway through the quarter, and I'm just wondering how bookings are looking so far this quarter. Philip Davies: I mentioned in my prepared remarks, [ John ], that the book-to-bill was 1.2 in Q4, and we're above that already in Q1. Operator: This concludes the question-and-answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Operator: Good morning, ladies and gentlemen. Welcome to the Dream Office REIT Q4 2025 Conference Call for Friday, February 20, 2026. During this call, management of Dream Office REIT may make statements containing forward-looking information within the meaning of applicable securities legislation. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream Office REIT's control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. Additional information about these assumptions and risks and uncertainties is contained in Dream Office REIT's filings with security regulators, including its latest annual information form and MD&A. These filings are also available on Dream Office REIT's website at www.dreamofficereit.ca. [Operator Instructions] Your host for today will be Mr. Michael Cooper, Chair and CEO of Dream Office REIT. Mr. Cooper, please go ahead. Michael J. Cooper: Thank you. Welcome, everybody, to our fourth quarter conference call. Today, as always, we have Jay Jiang, our CFO, but Kingsley Foris, our Director of Asset Management; and Derrick Lau, Senior Vice President of Portfolio Management, will be participating in the call. And maybe for some comments later questions, we've got the original Gord with us as it's been quite an interesting time. I guess in August conference call, I was saying that I think that we're starting to see some real evidence that the market had changed, and if it continues for a number of quarters, it could make a difference. And in the 2 quarters that have followed, we really have seen a difference in what's happening in the market. I was speaking to a guy who runs a large company, at least hundreds of thousands of square feet in the fourth quarter and he mentioned that normally, they would go to the Board, but because of timing and the concern that they were losing opportunities to rent large pieces of space, they moved ahead on the deal without going to the Board. So I think a lot of the big pieces of space has been full. Yesterday, I saw an article that CIBC SQUARE is 100% leased for both buildings. So the big buildings are full. And we definitely are seeing a waterfall. We're pleased that we hit the numbers we had hoped for, for the year in terms of committed occupancy, but we did a little bit better. We're seeing some significant tenants. I think Kingsley will walk through how we want to hit our numbers with some specific spaces we think we can lease. So I'd say that we clearly are seeing a change in the office environment. We would expect that we'll see increased occupancy over time, but measured, it takes a while, and that takes a while for the tenants to take place. But we're clearly in a much better spot than we've been in, and it's a great celebration for March of 2026, that's been 6 years since COVID took place. When the federal government orders or people back to start in May or June, it will be over 6 years since some of those buildings have been used. I have no idea what they're going to find, whether they've been properly taken care of. And I think that we're going to see governments as a new -- new to the market in terms of like the federal government really hasn't leased any space in 6 years. And I think we're going to start to see more action from the federal government and the Ontario government. So it's shaping up pretty good, and we also started to see that the leasing is sort of water falling down from the top buildings to the type of good buildings we have in good markets. So with that, I'm going to turn it over to Derrick. Siu-Ming Lau: Thank you, Michael, and good morning. In Q4 2025, we saw encouraging signs across the Canadian office sector with national vacancy decreasing by 40 basis points to 18%. The decrease was led by Toronto, which realized 1 million square feet of positive absorption and overall vacancy decreasing by 120 basis points to 15.9%. With much of the absorption occurring in Class A buildings, tighter conditions are expected to have a trickle-down effect into remaining office spaces. We are also seeing a decrease in sublease space, which returned to 2017 levels. This reflects increasing return to office mandates and a decrease in corporate space optimization efforts. In 2025, Dream Office delivered its strongest leasing year since before the pandemic. We completed approximately 830,000 square feet of leasing with Toronto accounted for roughly 85% of that volume. Activity accelerated through the year with new lease economics outperforming our internal budget. We ended the year with downtown Toronto committed occupancy at 87.4% and in-place occupancy at 79.4%. The bulk of the spread is scheduled to commence in 2026. In other markets, we completed 130,000 square feet of leasing, largely comprised of renewables, which is in line with our recent historical pace. Committed occupancy decreased by 340 basis points this quarter to 72.1%. This largely reflects the sale of Kansas City asset. Excluding this, committed occupancy would have been largely flat quarter-over-quarter. Moving to specific projects. At 606-4th Street in Calgary, our conversion from office to residential is progressing well with project timelines and costs in line with expectations. We continue to target first occupancy in the third quarter of 2027. In downtown Toronto, we completed the redevelopment at 67 Richmond. We are pleased to announce that we have secured a 32,000 square foot lease, which represents the entire remaining vacancy. The leases to a high-quality TAM has raised nearly USD 3 billion in capital. Base rents are starting at $35 per square foot, an increase to nearly $48 over the 10-year term. The economic lease commencement will occur in stages starting in June 2026 and the remainder in December. For 2026, we are targeting committed occupancy in downtown Toronto to be in the 88% to 89% range by year-end and in-place occupancy to range between 82% and 85%. Based on this, leasing momentum, we are targeting comparative NOI growth for downtown Toronto of 2% to 5% for 2026. Compared with NOI growth for the total portfolio, inclusive of our other markets is expected to be approximately 1% to 3%. We had good leasing results in 2025. Looking ahead, if we were to continue this momentum and achieve average in-place occupancy of 90% in the downtown Toronto portfolio, this would generate incremental NOI of approximately $15 million to $20 million, all else being equal. This would bring downtown Toronto comparative NOI to $95 million to $100 million, including 67 Richmond. Our leasing priorities include 74 Victoria, 30 Adelaide and our Bay Street assets, where we have seen good leasing at our mall suites. At 74 Victoria, we are seeing increased traction. This follows the recent renovation of 2-model suite floors with several tours and a recent broker event that was well attended. Overall, we have made good leasing progress in 2025, and we are encouraged by the recent improvement in office fundamentals. This includes return to office mandates and broader market activity in the back half of the year. As the sector continues to rebound, our team has stayed focused on proactive leasing, disciplined risk management and maintaining high-quality assets. That focus has translated into results, including at Adelaide Place. With AAA vacancy below 4%, we are seeing the impact of our efforts at our highest quality assets, and we are starting to see this in our Bay Street collection. We have delivered steady gains to committed occupancy in downtown Toronto and stability in our other markets. While we recognize that the sector remains challenging, we are well positioned to actively manage these risks through 2026. I will now turn the call over to Kingsley, who will provide some more deal color and what we're seeing on the ground. Kingsley Foris: Thanks a lot, Derrick, and good morning, everyone. I hope you're all keeping well. As Derrick noted, 2025 was a strong year of leasing for Dream Office. We completed 830,000 square feet of transactions across 140 deals nationally. Toronto represented the majority of that activity with 700,000 square feet across 115 deals. This was comprised of 390,000 square feet of new leases and 310,000 square feet of renewals. Overall, deal economics in Toronto were consistent with our internal budgets with a weighted average NER of $20 per square foot. Importantly, we saw a meaningful improvement in these NERs as the year progressed. For some additional context on this point, NERs increased more than 10% year-over-year, up from $22 in the second half of 2024 to $25 in the second half of 2025. With net rents largely in line with budget, the outperformance was driven by longer lease terms on new deals, which reduced our annualized leasing costs. The weighted average lease term on new deals in 2025 was 9 years compared to our standard underwriting assumption of 5 years. Turning to other markets. We completed 130,000 square feet of leasing, including 30,000 square feet of new leases and 100,000 square feet of renewals. This is broadly in line with the 3-year average of approximately 135,000 square feet annually in other markets. New lease economics and other markets outperformed expectations. We achieved NERs of approximately $13 per square foot compared to a low single-digit budget. Renewal economics were in line with budget at approximately $10 per square foot. On our Q3 2025 call, we guided to 86.5% committed occupancy in Toronto. The strong leasing completed in Q4, we're pleased to report that we exceeded that target by 90 basis points achieving 87.4% committed occupancy at year-end 2025. This growth was driven by positive absorption on key assets, including our Bay Street properties, which are nearly 85% committed, in Adelaide Place, which is above 95% committed. To provide some additional context on leasing velocity, over the past 3 years, we've done approximately 550,000 square feet of transactions annually in Toronto. With 700,000 square feet completed in 2025, we exceeded that average by nearly 30% despite having fewer assets in the portfolio. These volumes are what drove the 360 basis point growth on committed occupancy year-over-year in Toronto. Looking ahead, I'd like to highlight what's working well in the portfolio and what we're focused on in 2026. A significant portion of our leasing on vacant space has been driven by our model suite program. To date, we've delivered 120,000 square feet of model suites across the portfolio. And of that, we've leased 110,000 square feet or 90%. Importantly, these deals have closed within 6 months of delivery. This has materially reduced the downtime we typically face on these spaces. In Q2 2026, we'll deliver an additional 30,000 square feet of model suites, of which approximately 40% are already pre-leased. We'll continue rolling this program through the Bay Street portfolio to further drive occupancy gains. One of our key priorities in 2026 is leasing 74 Victoria. It represents a disproportionate share of our portfolio vacancy. As a reminder, the government partially vacated the building in 2024, reducing occupancy from 100% to approximately 45%. Since then, we've completed 50,000 square feet of leasing with 100,000 square feet remaining to be filled. The 50,000 square feet that we completed is in model suite condition, and it looks great. We're using this as a marketing tool for the asset, and it's been very well received by the brokerage community. As Derrick noted, we're targeting committed occupancy of 88% to 89% for Toronto by year-end 2026. To achieve this, we need to lease 150,000 square feet of vacant space and secure a retention ratio of 57%. For the vacant leasing, we're targeting 50,000 square feet at 74 Victoria, 40,000 square feet at 30 Adelaide, 40,000 square feet on Bay Street and 20,000 square feet at Adelaide Place. With regards to our retention, we have already secured 50% on our 2026 expiries, so we feel very good about our 57% target. I also want to speak to some expectations on in-place occupancy for the year. We currently have more than 200,000 square feet of contractual commitments scheduled to commence on vacant space throughout 2026. As a result, we expect a meaningful increase in in-place occupancy reaching 82% to 85% by Q4 2026. Given the majority of these deals commence between Q2 and Q4, we do expect a modest dip in Toronto in-place occupancy in Q1 2026. This is from lease expiries at the start of the year that we did not renew. However, occupancy will recover into the low 80% range by the end of Q2 2026 and will continue to trend upward through the balance of the year. In closing, we remain confident in our ability to build on the momentum from 2025 and further stabilize the portfolio in 2026. I'd like to thank the team for their continued hard work. And with that, I'll turn it over to Jay to walk through the financials. Jay Jiang: Thank you, Derrick and Kingsley, and good morning, everyone. Today, I will provide an overview of our fourth quarter financial performance to close off the year and also provide our outlook and guidance for 2026. Now that we have had several consecutive quarters of improvement in leasing, we are confident that we will see increasing occupancy and NOI, and we will continue to have ample liquidity. For the fourth quarter of 2025, our diluted funds from operations was $0.56. Our full year 2025 FFO per unit reached $2.46, which is just above our guidance range of $2.40 to $2.45 per unit on our August and November conference calls. We also delivered full year same-property net operating income growth of 0.5%, which is on the lower end of our guidance of flat to low single-digit growth. The REIT achieved several notable key financial objectives this year. We successfully addressed all of our $741 million of debt maturities in 2025, which represents 60% of our total debt stack. We also successfully extended our $375 million revolving credit facility until September of 2028. In 2026, we have already addressed $140 million of the $166 million of maturing mortgages. We have minimal refinancing risk in 2026 and are in the process of finalizing all of our renewals. As part of our refinancing initiatives, we were able to increase our liquidity, including cash and undrawn revolving credit facilities from $69.3 million in Q3 to $97.6 million at the end of the year. Last month, we closed the sale of our remaining office building in the United States near Kansas City for approximately CAD 9.6 million, which further improved liquidity. Prior to the sole tenant vacancy in November of 2025, the building generated NOI of approximately $4.5 million. By selling the asset, we have eliminated potential holding losses of $1.5 million per year for empty building, but the sale will reduce our 2026 NOI by $4.5 million. Our year-end net asset value per unit was $49.92, utilizing a weighted average cap rate of 6.3% on our total income portfolio. Relative to last quarter, NAV declined $1.75 or 3.4% as a result of appraisal valuation cap rate increasing 15 basis points, which resulted in $41 million of fair value decrease. We have also not capitalized maintenance capital into our portfolio to reflect a more conservative view of building values. We externally appraised $344 million or 17% of our total portfolio in Q4, which brings up the total appraisal percentage for the year to 31%. We observed that CBRE investment cap rates are improving, and Q4 Toronto office cap rates compressed 13 basis points quarter-over-quarter to a midpoint of 6.6% and we are encouraged to see office buildings trade in Toronto as investors reenter the market. Looking ahead, we are projecting 2026 FFO per unit of $2.25 to $2.30 per unit, which represents a decline of approximately 7.5% or approximately $3.5 million at the midpoint on a year-over-year basis. To explain the variances in a simplified manner and in rounded numbers, we are projecting approximately $7.5 million of positive variances versus 2025, consisting of the following: $3 million of positive comparative property net operating income, $3 million of higher straight-line rent as we will have more tenants take control of their space for fixturing in preparation for the rent commencement date, $1 million of interest expense savings from lower debt balance, offset by higher weighted average interest rate, $0.5 million from G&A savings as we continue to reduce costs and operate more efficiently. The total above is offset by roughly $11 million of negative variances consisting of $4.5 million of reduction in income from our assets sold in Kansas City, $1.5 million of reduction in income from our 606-4th Street building in Calgary as a result of moving out the tenants to commence the construction of the office to residential conversion, $3 million of partial period income recognized in 2025 from previously sold assets in 2025, including 438 University, $5.6 million of Dream Industrial REIT units and our vendor take-back mortgage in Calgary that will no longer be earned in 2026. And lastly, $1.5 million of other items, including lease termination and other income, which were earned in 2025, but we do not forecast in our 2026 FFO. In our model, we assume no acquisitions or disposition of assets. We also assume we maintain our dollar per unit of distributions. Overall, we want to highlight that the key metric we are focused on is the increase in comparative property NOI as that will be the main driver of value improvement for the business. Our net total debt to net total assets was 54.2% and net total debt-to-EBITDA on a trailing 12-month period was 11.6x. The leverage is higher than what we will want longer term and we expect debt-to-EBITDA to improve meaningfully as we increase occupancy and income. Our focus is to aim to achieve 90% occupancy and in-place across downtown Toronto within 2 years. At that point, we estimate that the portfolio will be able to generate $95 million to $100 million in Toronto stabilized annually or an increase of $15 million to $20 million for the EBITDA. At that occupancy, we estimate that the REIT will be able to generate approximately $3 per unit in annualized FFO and improve debt-to-EBITDA to mid-10x. We believe our business is well positioned to improve income and debt metrics quickly if the office market continues to improve. We look forward to providing more updates on our progress over the course of the year. Thank you for listening, and the team is now happy to answer any questions. Michael J. Cooper: Just before we do that, the one area we haven't talked about that I think is really fascinating is that we're seeing more trades of office properties. And there's some large ones that have been completed in Vancouver and in Toronto. There's other deals going on that aren't public yet. But what's different about the last 6 months is the last couple of years, most of the trades have been from an owner who is an investor in office buildings to a user like George Brown College or the Ontario government. But these -- all of these transactions are investors buying office buildings to generate an office return. And we've done some work on what would be the assumptions in order to justify the prices that they're trading at. And it's actually quite illuminating where it looks as if new investors are using as an assumption for the longer term, 95% occupancy. And here looking at leasing costs about halfway between where they were in 2019 and where they are now. And that's very encouraging. So we're starting to have a decent market for trading office properties. And if the purchases are right, it would be very bullish for the values of Dream Offices we're using much higher cost for leasing and much lower occupancy. So here's hoping. Anyway, now we'd be happy to answer questions. Operator: [Operator Instructions] Your first question comes from Sam Damiani with TD Cowen. Sam Damiani: Thank you very much for the comprehensive presentation and outlook, much appreciated. Michael, just with the disposition or the transaction market more active, prices firming up, bid-ask spreads obviously narrowing. You talked about getting to 90% in-place occupancy downtown Toronto gets you to 10.5x EBITDA. Does that -- like are you more motivated to think about disposing assets to improve the balance sheet today? And is there something -- should we expect some activity within the next year or 2? Michael J. Cooper: I don't think so. I mean, we've been in our other market section, I could see us selling assets. We sold -- I mean I think we sold about 75% of the total assets we owned in 2016. So at this point, I don't see us selling a lot of assets. I was really making the reference for -- we're getting some real clarity in the private markets because for literally 5 years, we don't know other than the stock market, how to value stuff. So that was the point of what I was saying. But we'll see what happens over the time being, but we don't -- I figured the stock. NAV could be much higher than it is now and we continue to see trades and then see the leasing that we're expected to come through. So that's the exciting part. And if that's the case, we're actually going to get the -- and I think this is Jay was alluding to -- yes. We have quite a bit of vacancy. If we lease that up, if we increase our NOI, our debt-to-EBITDA will come down just because we'll be in the 90s. So I think that will get us to a good spot. Sam Damiani: Okay. And my other question, Kingsley, thank you very much for the detailed comments there. Just on your outlook for 2026 included some in-place occupancy targets. I just wanted to clarify, was that for downtown Toronto or the total portfolio? Kingsley Foris: The 82% to 85% is for downtown Toronto. Operator: The next question comes from Mario Saric with Scotiabank. Mario Saric: I'd echo the gratitude for the comprehensive overview on the '26 outlook. It takes care of a lot of the questions. Just a couple of side questions. On the -- for [indiscernible] on the 82% to 85% in-place expectation for Toronto, what are some of the factors that bridge the gap between 82% to 85%. Kingsley Foris: Really, at the end of the day, it's either we beat our retention ratio or we absorb more new leases. We feel really good about our retention. As I mentioned, we're currently at 50% and to hit that target, we need to reach 57%. We have a clear direction there. So I would say the renewals are the best way to surpass that. Mario Saric: Okay. And then maybe a more general question for Michael. There's been a lot of discussion over AI disruption in the marketplace in recent months. More recently, it's been focused on software companies, but the discussion, I'd say, has also put a spotlight on potential pressure on office occupancy over time if it means less people in buildings, which has impacted office REIT sentiment in North America. It is an open-ended question, but I just wanted to hear your thoughts on the subject of perhaps how you think REIT is positioned in that regard. Michael J. Cooper: You know what I've been actually fascinated by what's happening in AI. It feels like in the last month, there has been tremendous progress. And I think what they're doing is they're going from I mean, they're developing learning models. I think they're continuing to develop and make advancements, but I think what the real excitement is, we're getting into applications to do things. And I think that's really, really important because otherwise, it's kind of a toy. So will it replace most of the accounting? Probably. But I think -- I've been reading a lot about it. And I read an article that talked about seen versus unseen implications of new technology and what I was saying was that generally, what's initially seen is negative because most new technology, by definition, is an advancement. And the unseen is sort of the improvements. And there's a story about a guy who discovered the loom in like 1,450, 600 years ago. And back then, he was in England. You had to get the Queen's consent to get a patent and she refused because people are going to lose their jobs. Well, a few years later, they got it a patent. They started using a loom, and the U.K. became the leading textile manufacturer for the whole world. So I think that while it's easy to identify jobs that may be eliminated, what's harder is to say, well, what's going to happen when things get easier and how are we going to advance in terms of how we run our businesses. So I think it's overdone in terms of that everybody is going to be unemployed and become [indiscernible] or something like that. I don't see anything like that. I think what's going to happen is a lot of people are going to be able to elevate their contributions and a lot of the menial work will be done, and I think we're going to see big increases in productivity. And I don't know if we're going to have more people or less people, but I think the impending doom is about the 7,000th time I've heard about impending doom in just the last 10 years, and it's kind of not as bad as people say, in my opinion. But I kept it general if that helps. Mario Saric: I know that's interesting. My last question just pertains to kind of the residential density under Dream Office's portfolio, which albeit the residential market isn't that great today, but eventually, that will turn or that will change. How should we think about the REIT opportunity and capability set to maybe extract that value, not necessarily in '26, but over the next 2 to 3 years. Michael J. Cooper: It's a great question. We're very active on 250 Dundas. And between the programs that the federal government and the city come up with, that could be a go. There's a lot of work to get everything lined up, but we can see that starting within the next 24 months. When you look at our site of Birchmount in Edlington. Good news is, I understand the LRT is now functioning. That's a big improvement. We've got our zoning, but the actual site plan is taken about 7 years, and nobody can build anything yet. Well, what happens is in Scarborough, the rents are low, it's going to take a lot of work. So that one will definitely be delayed. And then we think about something like we looked at 30 Adelaide, which is on 1.5 acres. It's got 400,000 square feet of density. If we tore the building down, we could probably do 1.2 million square foot development. That value is -- that opportunity is still here. It's just that the numbers don't work. So it's kind of like a -- it's just something for the future. We wouldn't include that in any way when we talk about values or cash flow or anything, but it's -- when the market turns, maybe there will be an opportunity there. Operator: Your next question comes from [ Roger Lafontaine ] with United Capital Partners. Unknown Analyst: Michael, congratulations on an amazing quarter. I had a couple of questions, and this is just kind of a follow-up of your answers. When you say that the market is improving in Toronto for office liquidity, I was wondering if you could touch base if Dream office is receiving inbound queries and whether they would perhaps resemble the kind you received with, say, Alexandria REIT a few years ago, if it's [ something ] and that if you're seeing improved market liquidity in other markets, too, for Dream Office. Michael J. Cooper: Yes. No, great questions. Firstly, we are getting inbounds and they're not interesting at this point to get more liquidity and have a smaller company. We're already really small. So it is interesting. And you get inbounds -- sorry, for a lot of years, we didn't get any. Now we're getting some. They're not necessarily real. But I think 70 -- I'm not sure of this, but I thought 70 York was sold based on an inbound to the owner. So they do -- they can turn it into meaningful deals. But we haven't been focused on selling any of our key assets. In Calgary, we're converting 1 of the office buildings into a residential building, and that's really quite exciting. It's not a very big building. But it's exciting. That leaves with 2 in Calgary. I think they certainly can't think those are marketable, but that's our head office for all of Dream's business in Western Canada. We got a building in Saskatoon, another one in Regina, if we got good offers, that would be great. Sussex Centre is one that's kind of like if somebody had a better idea, that would be great. But as far as the core downtown buildings, we're pretty happy with that. We want to keep them. Is that a complete answer? Unknown Analyst: Yes, thank you very much for that answer. And I was wondering because Morguard Corporation, for example, they sold a big office yesterday. They reveal that and it looks like it was the government. And I was wondering, is the office market coming back for those kind of buildings because Dream Office has got a lot nicer buildings than that, in my opinion, that are situated in Toronto. So I thought that was encouraging. And I was wondering if you would be able to touch base on whether the federal government mandate is impacting the market liquidity in a good way for Dream Office in those other markets. That was a great answer. Michael J. Cooper: You seem like a very kind person. I appreciate that. I think the Morguard building was by the [ Province ], and we sold 438 University in province. The Province has been pretty active using this opportunity to actually buy offices for their people. I'm curious how much appetite the Province has for space, but we are getting in our conversations with them, and they've been a big tenant of ours over the years. It looks like they may be a bit expansive. The real wildcard is the federal government. I mean it is inconceivable. The buildings haven't been used for 6 years. People haven't been in the office for 6 years. From what I understand, there's going to be a lot of work required to figure out who's going to go where. And I think it may be surprising that in Ottawa and Toronto and other places, they're going to want either more space or to upgrade their space. So they could be a serious player in the market. So a lot of these things put together are pretty positive. Operator: Your next question comes from Matt Kornack with National Bank Capital Markets. Matt Kornack: Can you just give us a sense as to the nature of the type of tenants that you're seeing taking space in downtown Toronto and how that's changed? It sounds like you're hopeful that the government will come back. But who are you seeing right now in terms of incremental demand? Gordon Wadley: Good question, Matt. It's Gord Wadley. We're seeing a lot of tour traffic from government's agencies as well to contractors that are affiliated with the government. We've got a couple of live paper right now on a couple of big vacancies with 1 quasi-Crown corp as well. So to Michael's point, a lot of groups that do work with the government are starting to spin off and look for space, especially in core markets. So the tour velocity around there has picked up. We're also starting to see some rebound on tech as well. We're seeing some tech tenants, especially on our Bay Street assets. We're starting to see some tenants coming through there that are in the tech sector. Michael J. Cooper: Yes. Not really related to that, but we did do a deal with the tech company recently. And I think it's probably public, but when we lease -- we want to look at the company's financials and see if they're going to be able to pay us rent over a long period of time. And we got comfortable with it, but we did talk about it. And then prior to them moving in, but after they sign the lease, they raised $1 billion at a $36 billion valuation. So tell you how good we are at our job. But it really is a mix of types of tenants. Gordon Wadley: And you know what's precipitating on the tech tenants, Matt, is the sublet availability has dried up. And there's been a ton of sublet absorption. So we're starting to see tenants that are trying to scale that have typically gone to the sublet market for a bit of a discount on their space now have to come for direct space. And that's really helped us in our smaller pockets that are kind of sub-7,500 square feet. And it's also helped us on the renewal side as well, too. We've been able to do a little bit better on an effective basis on our renewal deals this past quarter and looking forward in large part because there's just such a decline in sublet availability. So a lot less for these tenants on renewal to try to leverage. Matt Kornack: Okay. Interesting. On the forecast, you've done most of the work for us, which is nice, but I'm going to ask you to maybe do a tiny bit more. I think you had around -- yes, maybe. I just need to get '26 right. I think you had around $23 million of net rental income prior period tax refund. There's 700,000 or so for the property held for sale. So you go down to presumably somewhere in the $22.5 million range. How does it ramp up from there to kind of the end of the year on a dollar as opposed to occupancy. Gordon Wadley: Fair question, Matt. I think the easiest way to follow based on the conference call is Kingsley gave some guidance on occupancy and we would say that in Q2 and Q4 is where the movements go up. So for Q1, it might trend down a little bit to go up by probably $1 million in Q2. And then Q4, you have another pickup of about $1 million or so. Operator: Your next question comes from Tal Woolley with CIBC. Tal Woolley: Just on the model suites, what's the -- like rough construction cost per square foot to set those up. Kingsley Foris: So generally, we spend about $100 to $120 on a full model suite. We do have efficiencies on a lot of the units that we do. We're between $80 and $90, and that's all inclusive with furniture. Tal Woolley: And does that change like sort of the structure of the leases, like in terms of the incentives like he is more rent free versus TIs? Is that sort of the trade? Kingsley Foris: I wouldn't say like when we lease these spaces, look, we don't put additional money into them, right? Because they're fully built and ready to go. So there's no additional cost going into those units. Generally, we'll be able to get a bit higher rents on the model suites. The big kicker for us is it really reduces the downtime that we face on leasing those spaces, especially in Bay Street. Michael J. Cooper: I also think that it makes it a little bit easier maybe to have a shorter term to have a good tenant come in because you already spent the money rather than spending the money for a specific tenant. These are pretty generic. We think we can lease them. So it's fine to do 5 years and they'll probably renew and if they don't renew, we'll get somebody else. Tal Woolley: Got it. Just -- obviously, like when all the brokerages sort of came out this year, very constructive views on office in general and that things are turning around. I would say the one thing I didn't kind of notice across the board was just not a particularly strong view on rent growth. And I'm wondering, like is it just a matter of time where we need to get to a certain occupancy level before you really think rent growth can accelerate? Or is there sort of a house view just on how you think rents evolve? Michael J. Cooper: So what's happened over the last 6 years is that the rents have basically maintained the same level. And the way landlords have gotten deal done is they've increased the tenant inducements. And I think that what we're seeing is a tempered reduction in inducement. So we've already seen continuous reduction in tenant inducements and it results in some significant increases in net effective rents. So we're seeing net effective rents going up. But I think what we'll see is when we get down to under 90 -- when the market gets to like 10% vacant or less, we might start to see the face rents move. But the real action is in the inducements and getting the net effect rents up. Tal Woolley: Okay. And then, Jay, just yields are bouncing around. I'm wondering if you sort of have a rough estimate of where you think your marginal refinancing cost is right now? Jay Jiang: Yes, sure. So simple 5-year mortgage financing is probably GLC plus about 200 basis points. On our revolver, it's a bit lower. So I would model probably 4.5. Tal Woolley: Got it. Okay. And then Dream Industrial had a nice run here. Just wondering if -- I know you probably don't have any immediate plans for that kind of liquidity, but you did sort of mention wanting to get leverage lower. What are sort of the thoughts about keeping the holding -- the Dream Industrial holding at Dream Office for 2026? Michael J. Cooper: We keep it in a red box, and it says break in case of emergency. No, seriously, the returns on it are really quite good. And if we sold it and took cash and paid down debt, it's really dilutive. We have a high degree of conviction for the industrial units. And we figured we wouldn't sell them unless we needed them. Tal Woolley: Got it. Okay. And then just lastly, in your conversation just about moving towards 90% in-place occupancy, I believe that was within 2 years. Is what you were saying? Michael J. Cooper: Yes. Tal Woolley: Okay. So that would sort of take that, you worked down to kind of like a $3 FFO per share, that would sort of be like a 2028 kind of phenomenon in that range if everything goes according to plan. Michael J. Cooper: So we're talking about in-place now. So first, you have to do the leases. So we've done a ton of leasing, but our in-place isn't high enough. That's going to increase if we have reasonable renewals. And the plan is to lease some vacancy as well so we can see it move up. If we end the year at a higher occupancy level, that will be great for '27. So you're absolutely right, '26 and '27, if we do the leasing in those years, we really get the benefit in '28 from the leasing in '27. Operator: Your next question comes from Pammi Bir with RBC Capital Markets. Pammi Bir: Just when you look at the demand in the market, do you see -- and all the pipeline you see from a leasing standpoint, do you see this as sort of a multiyear recovery process? Or is the visibility maybe just more so good for the next 12 months, but maybe a little less so when you think about 2027, just maybe given where the economy is at this point? Gordon Wadley: Yes. Great question, Pammi. And it's Gord again. So I think it is going to be a bit of a multiyear process. We were talking earlier, I've been in this sector for about 20 years. And just seeing the past quarter was kind of the first real green shoot that we've been anticipating. When you see just under 1.5 million square feet of net absorption in the core where we have the bulk of our holdings, that gives us a lot of optimism going forward. But yes, I think it's going to be a multiyear process. And we just got to continue to keep -- we've seen our space and hitting our retention targets. Michael J. Cooper: I mean I know that for our company, and I suspect for all the other office companies. For years, they've been saying the tours are really good, but people are slow to make decisions. And like literally, we heard the same thing for years. And what I was referring to earlier is we're now seeing people saying, "I need to grab the space that's available." So that's -- I mean, I think we're going to find that in some of our bigger spots in 74 Victoria and at Adelaide Place and at 30 Adelaide. I wouldn't be surprised if those ones are fully booked in the not-too-distant future. We're seeing improvements in the Bay Street collection. But I think what we tried to say is if we can be up 1.5% a year, that would be good, maybe 2, maybe 1, but it will add up. So the key thing is just the psychology has changed dramatically. And hopefully, that will continue through this year and next, at least. Siu-Ming Lau: Yes. One thing to keep an eye on to, Pammi, is just contiguous pockets of square feet over 50,000. And that's reducing at a pretty quick pace even though we're saying the recovery may take a little bit more time, the absorption on those large pockets in the sector -- have been reducing quick, and that's really going to help us on a property like 74 Victoria, where we've been taking in more inbounds than usual. Pammi Bir: Got it. Yes. And I guess if you look at maybe what you're projecting for your portfolio, let's say, in the next couple of years, or even maybe just as we think about just the next 12 months, do you see the pace of recovery in occupancy maybe. Do you expect to sort of outpace what the market is doing or kind of just track kind of in line with the broader office markets in Toronto? Siu-Ming Lau: We've been tracking largely in line with the broader office markets. We've always been probably about 150 to 200 basis points better, but we anticipate we're going to track largely in line. What's really going to help us, Kingsley did a great job touching on it earlier, is just getting the absorption at 74 Victoria, and given the denominator of our space, it's going to make a big difference. And I just want to toss it over to Kingsley. He's got some more insight. He's been very active on that asset. Kingsley Foris: Yes, like 74 Victoria is obviously a huge focus for us in 2026. We had an event there last week. We have the top 2 floors in model suite conditions, so that's about 50,000 square feet. Our leasing team hosted an event there last week to showcase to The Street, what that space looked like. We had over 70 brokers come, which for us is an incredible turnout to an event like that. So we're really excited about 74 Victoria, we're hosting a lot of tours there, and we're eager to get it leased up. Pammi Bir: That's great. Last one. Some very good color in terms of the demand sources and some of your retention expectations. In that though, are there any maybe larger nonrenewals that you're aware of taking place or that will hit in 2026. And I guess the last part of that is, what segments of maybe the tenant base are you maybe still nervous about? Siu-Ming Lau: Just to be honest with you, the team has done a good job getting in front of our renewals. We've got a pretty strong retention ratio that we're tracking for this year. There isn't 1 specific tenant or sector that we're nervous about right now, Pammi, for the balance of 2026. And if we're looking at just kind of the landscape of tenancies, I actually feel like everybody is doing a little bit better. Michael touched on the government. We're seeing the most inbounds from the province and the feds, but even like the professional service firms and the tech firms we're dealing with, we're finding -- they're making decisions a little bit quicker, and they all feel a little bit more optimistic about their business. Michael J. Cooper: And specifically, like in November, U.S. bank left our building in Kansas City, and we knew that was coming. And the year before, we knew the federal government was leaving 74 Victoria. I'm not aware of anything like that -- and I think that's what your question is. We're not aware of a building going empty because the tenant isn't interested anymore. I think we've got quite a diverse group of tenants. None of them are too big. And as an example, with IFDS, they reduced their space by half. We replaced them and we're no longer sort of vulnerable to what happens when their lease comes up. So I think we've done a lot of that over the last couple of years. So we've had a few of those before. We don't see anything similar in the next few years. Operator: The next question comes from Matteo Sepac with Cormark. Matteo Sepac: Just asking a couple of questions on behalf of Sai. So firstly, while we initially saw a spike in demand for large floor spaces and Class A assets in downtown, are you guys seeing that demand trickle down? Michael J. Cooper: Yes. Kingsley, you want to talk about that? Kingsley Foris: Yes. For sure. So like we look at the absorption we had last year. Really, a lot of the movement started at Adelaide Place. Derrick mentioned AAA vacancy sub-4% in the market. Adelaide Place was one of our first buildings to really benefit from that. Committed occupancy at Adelaide Place last year moved from 85% to north of 97%. So while it's over 6 years there, it's essentially a stabilized asset. The next tranche we saw was Bay Street. So our Bay Street assets last year went from 76% to 84%. So we're definitely seeing the demand move portfolio. Matteo Sepac: Great. Great. And then secondly, so in the quarter, renewal spreads were down roughly 15%. Was that more specific to a particular lease? And then how are leasing spreads trending on the 2026 commencements? Kingsley Foris: It is specific to an individual lease. So in Q4, Dream took 2 floors from 30 Adelaide moved over to 74 Victoria. We were in 40,000 square feet at 30 Adelaide, that will be closer to 55 at 74 Vic. So we took an additional 15,000 square feet but the rent we're charging on that space remain the same as it was at 30 Adelaide, 74 Vic is just a bit of a lower rent building than 30 Adelaide is. Siu-Ming Lau: We also did that deal to be clear because 30 Adelaide is arguably one of our best buildings with Adelaide Place. We've got a tremendous amount of inbounds. We've done a great job backfilling vacancy when we get vacancy in this building and we're actually trading paper on the balance of the space that we'll be moving out of. So it just made more sense for us to plug vacancy. Michael J. Cooper: Kingsley, are you getting interest? Are you on 74 Victoria? Kingsley Foris: We are. Yes. For sure. We're speaking to a lot of tenants at 74 Vic and 30 Adelaide. Matteo Sepac: Okay. And then finally, just -- I know there was some commentary already about NERs. Can you provide some additional color on how they've trended, I guess, relative to prior years? Kingsley Foris: Yes. So we look at NERs. We looked at it year-over-year, '24 versus '25. If you look at the second half of '24 versus the second half of '25, NERs are up from $22 to $25 in Toronto. So it's a 10% increase year-over-year. As I mentioned, a lot of that is because we're getting longer WALTs on our deals, which is allowing us to annualize those leasing costs over a longer period. Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Cooper for any closing remarks. Michael J. Cooper: Yes. I don't have much left to say, but thank you for participating in today's call, and feel free to reach out to any of us if you have further questions. Thank you. Operator: This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
Operator: Greetings, ladies and gentlemen. Welcome to the Vesta Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. It is now my pleasure to introduce your host, Fernanda Bettinger, Investor Relations Officer. Please go ahead. Fernanda Bettinger: Good morning, everyone, and welcome to our review of the fourth quarter 2025 earnings results. Presenting today with me is Lorenzo Dominique Berho, Chief Executive Officer; and Juan Sottil, our Chief Financial Officer. The earnings release detailing our fourth quarter 2025 results was released yesterday after market closed and is available on Vesta's IR website, along with our supplemental package. It's important to note that on today's call, management remarks and answers to your questions may contain forward-looking statements. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ. For more information on these risk factors, please review our public filings. Vesta assumes no obligation to update any forward-looking statements in the future. Additionally, note that all figures were prepared in accordance with IFRS, which differs in certain significant respects from U.S. GAAP. All information should be read in conjunction with and is qualified in its entirety by reference to our financial statements, including the notes thereto and are stated in U.S. dollars, unless otherwise noted. I'll now turn the call over to Lorenzo Berho. Lorenzo Dominique Berho Carranza: Good morning, everyone, and thank you for joining us. 2025 was a year of disciplined execution and strategic positioning for Vesta. We strengthened our platform advance, Route 2030 on schedule and made decisive decisions, which enabled Vesta to capture what we believe will be a powerful demand cycle beginning in 2026 and accelerating into 2027. Early in the year, uncertainty slowed decision-making, but we stayed focused on operational discipline. During the year, our conviction to opportunistically deepen Vesta's presence in Mexico's most dynamic markets, specifically Mexico City, Guadalajara and Monterrey has proven decisive. The strategic steps we implemented throughout 2025 have materially strengthened Vesta's portfolio and positioned us to outperform. Throughout this transition, our focus did not change. We remain disciplined in capital allocation, selective in development and stay close to our clients while adapting with agility to capture unique opportunities as market conditions evolve. This defines Vesta, long-term strategic clarity with the operational flexibility required to perform across cycles. We're not building for 1 quarter. We're building for the long term. And in 2025, we set our sights on the next cycle with improved visibility by the end of 2025. We're seeing momentum return, particularly in the second half when leasing activity accelerated. We saw roughly 1.4 million square feet in new leasing during the second half of the year compared to 0.5 million square feet during the first semester. This reinforces our view that the market has likely reached a turning point. Vesta also delivered solid financial results for the full year 2025, which Juan will touch upon in more detail. We exceeded guidance with rental revenues increasing 11.8% to reach $274 million, while adjusted full year 2025 NOI margin reached 94.8% and adjusted EBITDA margin reached 84.4%. Vesta FFO totaled $174.9 million in 2025, a 9.2% year-on-year increase. Let me share an overview of leasing and portfolio fundamentals in 2025. As I noted, leasing activity strengthened substantially in the second half of the year. Full year leasing activity reached 6.9 million square feet with a weighted average lease term of 7 years, which includes 1.9 million square feet in new leases and $5.0 million in lease renewals, representing the highest level of renewals recorded over the last 3 years. During 2025, renewals and re-leasing activity reached 5.4 million square feet with a trailing 12-month weighted average leasing spread of 10.8%. Importantly, manufacturing returned with conviction in 2025. 86% of Vesta's new leases were manufacturing-related with electronics leading this activity. I have commented previously that Mexico has overtaken China as the largest exporter of electrical and electronic equipment to the United States. And we are seeing that reflected directly in our leasing pipeline. This represents a notable shift from prior years when e-commerce was the dominant driver. Today, we're benefiting from dual engines of demand, the resilient logistics and e-commerce space, combined with a powerful resurgence in advanced manufacturing. AI-driven infrastructure is becoming an important structural demand driver for Vesta. Data center expansions in the U.S. has translated into real manufacturing demand for related peripheral equipment. This includes producers of HVAC systems, racking, tabling and microchip-related assembly. Guadalajara continues to benefit from these structural trends with sustained demand from global manufacturing tenants. Existing clients, including Foxconn, are actively expanding their footprint, reinforcing the market strategic importance within our portfolio. From a development standpoint, we invested approximately $330 million in projects during the year on a cash flow basis. These investments are directly aligned with our Route 2030 strategy and our focus on high conviction markets where we see sustained absorption. Turning to our fourth quarter results. Leasing activity reached 1.9 million square feet, including 770,000 square feet of new leases with both existing and new Vesta tenants across the electronics, aerospace and automotive sectors, reflecting the improving market dynamics I discussed. Lease renewals totaled 1.2 million square feet with a weighted average lease term of approximately 5 years. Total portfolio occupancy stood at 89.7% at quarter end, while stabilized and same-store occupancy reached 93.6% and 95%, respectively. We began construction on 2 new buildings during the quarter, one inventory building in Guadalajara and one build-to-suit in Queretaro. We ended the quarter with 800,000 square feet under construction with an estimated investment of approximately $60 million and an expected yield on cost of 9.9%. Let me walk you through leasing momentum and share insight on market dynamics across our regions. Occupancy moderated in certain submarkets due to normal tenant rotation and isolated shutdowns during the year. This is not a structural shift. It's part of the normal rotation of tenants in a dynamic market. Vacancy levels remain healthy, and we're already seeing strong backfill activity, including assets with multiple bidders. The Monterrey market continues to stand out with leasing momentum building in this high demand market, and we expect a continued increase during 2026. Vesta Park Apodaca, which was completed in the third quarter of this year, is now in active marketing. Three state-of-the-art buildings are drawing strong interest, particularly from advanced manufacturing and logistics tenants. And as a related update, the Vesta Park Apodaca Building 8 was awarded first place in the GRI Global Awards 2025 Industrial & Logistics Project of the Year category. The award is considered one of the global real estate industry's highest distinctions, recognizing the most visionary projects and companies worldwide for excellence in design, sustainability, innovation and contribution to the urban environment. Also in Monterrey, infrastructure is scheduled to begin in the first half of 2026 on the 330 acres we acquired in the high-demand Airport Highway corridor as announced in October. Ciudad Juarez reached what we described last quarter as an inflection point. Activity has strengthened, interest from electronics and supply chain integration tenants is robust. This market experienced the cyclical adjustments throughout 2025 that I described, but the fundamentals remain intact. Tijuana has stabilized, and we are seeing constructive tenant dialogue, including notable leasing activity with global companies during the fourth quarter. It's important to mention we continue seeing rents increasing across our markets, supported by disciplined supply. Guadalajara remains a structural leader for Vesta, and we are seeing a growing number of high-tech electronics companies seeking large-scale projects. Many are leveraging the strong ecosystem that has developed in the region, including specialized talent, established supply chains and existing industry clusters. This continued momentum reinforces Guadalajara's position as the leading technology and advanced manufacturing hub in Mexico, often referred to as the Silicon Valley of Mexico. Guadalajara also benefits from the manufacturing support data centers and AI demand, which I have described. Mexico City continues to benefit from its scale, consumption base and logistics importance. We're actively engaged in discussions with major players, particularly in the logistics sector. Our project in the Vesta Park Punta Norte ramp up to become the largest cross-docking operation in Latin America of all e-commerce players in the region. Turning to capital allocation. In 2025, we secured strategic land positions at attractive terms during periods of market uncertainty in 2025. These acquisitions will support the next 4 years of Route 2030 execution. We are 2 years into our 6-year Route 2030 plan and are ahead of schedule in terms of capital deployment. That said, Vesta's growth will continue to be prudent and measured. As always, our development pace in 2026 will be calibrated carefully to demand and absorption levels in each market. We're clearly optimistic, but we remain disciplined. Protecting long-term returns is not negotiable. Our balance sheet remains strong, liquidity is solid and leverage metrics are trending as expected. In closing, 2025 marked a transition year. While the environment required patience early on, the broader macro backdrop is increasingly constructive as we look toward a renewed acceleration in demand. Mexico's fundamentals remain compelling. According to preliminary data from INEGI, exports grew 7.6% year-over-year to approximately $664.8 billion, marking a second consecutive year in which trade served as a key engine of economic growth. Meanwhile, imports also reached record levels, rising 4.4% to over $664 billion. These figures underscore the scale, depth and resilience of Mexico's integration within North American supply chains. Despite uncertainty, this integration into North American trade flows supports sustained export momentum into the U.S., validating Mexico's role as a strategic manufacturing and logistics hub. Top-tier global companies continue to view Mexico as a critical platform for serving North American demand. Foreign direct investment and exports reached record levels in 2025, while cumulative foreign direct investment inflows through the third quarter running 10.9% above full year 2024, reinforcing the structural drivers of growth that underpin Mexico in general and Vesta's market in particular. Setting our Route 2030 strategy in 2024 and executing with precision in 2025 has been fundamental to positioning Vesta for 2026 and beyond. We're beginning to see the benefits of those decisions translate into stronger fundamentals, and we are confident that this momentum will continue to drive growth, underpinned by structural tailwinds, reinforcing our confidence in the long-term opportunity ahead. Our optimism is grounded in discipline. Even in the context of high occupancy and solid demand, we remain rigorous in how we allocate capital and underwrite new developments. We are closely monitoring supply pipelines and vacancy trends in each of our core markets, ensuring that growth remains balanced and value accretive. With that, let me pass the conversation to Juan. Juan Felipe Sottil Achuttegui: Thank you, Lorenzo. Good day, everyone. Vesta closed the year with very solid financial results, as Lorenzo noted. Our total rental income increased to $283.2 million, while rental revenues reached $273.6 million, an 11.8% year-on-year increase and exceeding the upper end of our full year revenue guidance of 10% to 11%. Adjusted NOI margin exceeded our revised guidance of 94.5%, reaching 94.8%, while adjusted EBITDA margin was in line with our guidance at 84.4%. Vesta's FFO ended 2025 at $174.9 million, a 9.2% increase compared to $160.1 million in 2024. Now let me walk you through our fourth quarter results. Starting with our top line, total revenues were up 17.2% year-over-year, reaching $76.4 million, primarily driven by rental income from new leases and inflationary adjustments across our rental portfolio. As for our current mix, 89.9% of our fourth quarter 2025 rental revenues were denominated in U.S. dollars, up from 88.7% in the fourth quarter 2024. Turning to profitability. Adjusted net operating income increased 17.2% to $69.4 million. Our adjusted NOI margin remained strong at 94.6%, up 88 basis points from the prior year, reflecting higher revenue growth with stable cost. Adjusted EBITDA totaled $61.1 million, an 18.2% increase year-over-year with a margin expansion of 155 basis points to 83.3%, driven by a lower proportion of administrative expenses relative to revenue during the fourth quarter 2025. Vesta FFO excluding current tax was $39.3 million compared to $41.1 million in the fourth quarter 2024. The decrease was primarily due to higher interest expense in the fourth quarter of 2025 compared to the same period of 2024. We closed the quarter with pretax income of $98.5 million compared to $81.2 million in 2024. This increase was primarily due to higher gains on revaluation of investment properties as well as a positive variance in exchange gains and higher interest income. This was partially offset by higher interest expense, reflecting the increase in debt balance during the period. Turning to our capital structure and balance sheet. We ended the year with $337 million in cash and cash equivalents and total debt of $1.28 billion. Net debt-to-EBITDA was 4.4x, and our loan-to-value ratio was 28.1%. Subsequent to quarter's end on February, we prepaid the remaining Metlife III facility of $118 million. This repayment leaves us with no secured debt, enhancing our financial flexibility and completing our transition to a fully unsecured capital structure. In terms of capital allocation, during 2025, we strengthened our land reserves, positioning us well to capture future development opportunity, as Lauren discussed. Looking ahead, we will maintain our disciplined investment approach, deploying capital selectively in markets where we see strong demand fundamentals. Our share repurchase program also remains a key pillar of our capital allocation strategy. We will continue to execute opportunistically as we have done successfully in the past with the objective of maximizing long-term shareholder value. Moreover, consistent with our balanced capital allocation approach on January 15, 2026, we paid a cash dividend for the fourth quarter of $0.38 per ordinary share. Finally, I would like to discuss the outlook for the year. We are expecting to increase rental revenues between 10% to 11% year-on-year, while we expect to achieve 93.5% adjusted NOI margin and 83% adjusted EBITDA margin for the full year 2026. This concludes our fourth quarter 2025 review. Operator, could you please open the floor for questions. Operator: [Operator Instructions] Your first question comes from the line of Juan Ponce of Bradesco BBI. Juan Ponce: It was interesting to see that 86% of 2025 leases were manufacturing related, which seems to be imperative. So in a scenario where the USMCA review does not reach an agreement in 2026 and transitions into annual reviews, how resilient is your current development pipeline under that environment? And specifically, how confident are you in leasing ongoing projects in Guadalajara and Queretaro if trade visibility becomes more limited? Lorenzo Dominique Berho Carranza: Juan, thank you very much for being on today's call. Well, we have experienced uncertainty regarding trade for the last years. And that has been not only seen in industries like -- in markets -- in industry like ours, but also other corporates, in other industries and even in other regions of the world are facing similar challenges, whereas the manufacturing footprint -- the global manufacturing footprint is adjusting and adapting. We believe that Mexico has invested for many years, maybe since NAFTA to establish a more integrated supply chain in North America together with U.S., Canada. But in the end, I think that, that will continue thriving on top of whatever negotiations might take place regarding revisions of the USMCA, different scenarios. I think it's more about the strong supplier base that Mexico has actually very -- for different manufacturing industries and how important and how well linked it is to the U.S. Guadalajara is an excellent example of how the electronics sector has evolved, has been growing rapidly, and it's actually a good signal how the global manufacturing footprint for electronics is moving. And I think for that reason, we are very optimistic. That's why we started new buildings. We have a strong pipeline building up in Guadalajara. And eventually, actually, we have acquired more land for future projects. So we're very optimistic. We think these are long-term investments. Many of these global companies continue to have strong bets on Mexico. And for that reason, we see a positive trend. Very similar to Queretaro where actually we have seen, in this case, the auto sector very active in renewals and also very active in looking for new space, pipeline building up. Aerospace sector, a similar case where many European companies have established long-term operations. We just expanded another operation with the Safran Group out of France. And this is another important case and good signal how committed global companies are to Mexico. Maybe just on the lease-up stage, we're confident that there's a stronger pipeline. We have available space that has been currently -- recently developed in Monterrey, for example, where we have -- where we developed the last buildings of the Apodaca project and pipeline is building up well in different industries, logistics, e-commerce, manufacturing. So I'm pretty sure that 2026 is going to be a very successful year and leasing will continue the same trend that we have seen, particularly in the last half of 2025. Operator: Next question comes from the line of Andre Mazini. André Mazini: Two questions. The first one on leasing in recently completed development projects. How much was executed in the quarter and in the year? And how much is baked into 2026? So another way of asking, what's the occupancy of the stuff to deliver in 2025 you expect in 2026? Maybe that's another way of asking that. And the second one is about the huge land bank acquisition in Monterrey. Almost no land there last quarter. Now it's the biggest single region, right, in which you guys have land. Is that land all paid in cash? Is it paid in cash and land swaps as well in which the landowners end up having a portion of the project? So how is kind of the payment, the consideration there for this huge land bank acquisition that you guys had in Monterrey? And congrats for that acquisition. Lorenzo Dominique Berho Carranza: [Foreign Language] Andre, and thank you very much for being on the call. I will start with your second question. Yes, last quarter, we were able to buy after a long negotiation, a strategic land parcel. This is in Apodaca corridor right next to the airport. The initial phase is 330 acres. So this matches perfectly to our long-term strategy in what we -- in the largest industrial market in Mexico where we will continue to grow. We will have -- the most part of the capital deployment towards 2030 will be Monterrey, and this is going to be a cornerstone project for the 2030 Route. The Apodaca corridor has been fantastic for companies in the e-commerce sector. It's a great logistic corridor, but also manufacturing continues to expand in the area. The area has good access to the main corridors towards the U.S., good access to the city. It actually has a good infrastructure in terms of energy, which is very helpful. And maybe just -- the only thing we can say about the transaction is that the payment was not done all at once. We got seller financing, which is helpful for a development project and for the whole -- for the development process. And eventually, we also have conditions to extend the land for a second phase. So we're very excited, and we will be more than happy to welcome you soon when we kick off the construction of this new site. Regarding your first question on leasing, well, current -- remember that our main focus is stabilized portfolio occupancy, which currently stands at 93.8%, I believe, a little bit lower than 95%. Definitely, the occupancy number is a little bit lower than before. We were coming from record high numbers. But what we feel confident is that most of our buildings are actually brand new, and we have seen that demand interest coming from outstanding companies. So we're very happy that the buildings are there and the demand is coming along. So I'm pretty sure that Queretaro and Monterrey will be very successful projects, and we're confident that this will lease up well throughout 2026. Remember that another important thing is that we grow with existing clients. So we're in close contact with them in order to be able to grow with them. So hopefully, we can continue expanding our relationships. But more importantly is that we will continue with the discipline of having outstanding companies. strong credit rating companies, long-term leases, well balanced between e-commerce, logistics, manufacturing sectors. So that discipline will prevail. And hopefully, we can start getting some good results soon. Thank you, Andre. Operator: Question comes from the line of Jorel Guilloty of Goldman Sachs. Wilfredo Jorel Guilloty: I have 2. So first one on your guidance. I just wanted to get a sense of what the occupancy expectations are embedded in this guidance. And also if it envisions any more development launches going forward? And then the second question, I'm sorry if you answered this earlier, I wanted to get a sense of the income tax expense for the quarter. It was around $36 million or so if I remember correctly. I wanted to understand what drove this and what we should expect tax-wise going forward? Juan Felipe Sottil Achuttegui: Sure. Let me answer the second one briefly. It is related to the appreciation of the peso. As you know, that generates some significant profit from our debt, which is incurred in dollars, and that accounts for most of the income tax impact that we saw on the income statement. As the peso stabilizes, starting with a very low peso-dollar exchange rate closed at the end of the year, I think that will be eliminated in 2026. As for the first question? Lorenzo Dominique Berho Carranza: Sure. We don't give any guidance on occupancy numbers, Jorel. However, if you see the trend on the occupancy towards the last quarter's years and having an understanding on the lease-up activity, we definitely think that even that it's a lower number, we are confident that, that number will somehow pick up throughout the year. We think it's a healthy number and understanding that we're a development company, we have a strong stabilized portfolio that generates important income. But also we have anticipated with good buildings on a spec basis that I'm pretty sure that we will continue to lease up throughout the year and that occupancy will improve. We have been in cycles like this one, and we have outperformed and benefited from anticipating through -- on the development front. So we're confident that being proactive on the asset management part is going to help us. Secondly, we think even that last year was started as a slower leasing activity, we have seen rents actually have increased in the year, some markets more than others. However, all of them with positive trends. So as long as we continue to see demand excelling throughout 2026, and we see that rents continue to be increasing, I think that we will benefit from that and take advantage and eventually be able to have better occupancy, better rental revenue and also have a positive impact in our -- eventually net asset value from having good tenants inside of our buildings. Wilfredo Jorel Guilloty: And a quick follow-up on the guidance, does it envision more launches, more developments going forward? Or is it just envisioning your company as it is today? Lorenzo Dominique Berho Carranza: That's a good point, Jorel, regarding development. Well, again, without the guidance, we don't give guidance specific on CapEx as well as development and other numbers. But what we can say is that we prepare -- we presented the 2030 Route in 2024, which we have been executing successfully. We -- 2025 was very important to secure land as the one I mentioned in Monterrey, but also in Mexico City, but also in Guadalajara and in other markets. So that land has to be still developed. We think that as long as we continue to see in a disciplined way, more demand in certain markets and where we can start leasing up, we will definitely like to start construction soon. So 2025 -- 2026 will be a year where we will start construction on the land that we have acquired and follow through our 2030 Route. And hopefully, we can be able to develop build-to-suit, spec buildings and eventually be able to replicate the success that we have had in Vesta Park projects such as the ones in Guadalajara, in Apodaca, Tijuana, Ciudad Juarez, Mexico City. So it's another cycle. We're entering a different stage. We're optimistic on 2026 and 2027. For that reason, I think that CapEx will continue to be important as well as development starts. Operator: Your next question comes from the line of Enrique Cantu of GBM. Enrique Cantu Garza: Congrats on the results. I just have one question on your revenue growth guidance. What are the main drivers behind that outlook? Is it primarily additional GLA from developments, rent increases or higher occupancy from leasing vacant space? Juan Felipe Sottil Achuttegui: Look, the guidance -- as you know, guidance, we make the guidance very carefully. We are assuming taking into account the buildings that we leased up until December that will begin paying rent on the -- beginning in the first months of 2026 as well as the stabilization of the buildings that we have unoccupied where we have a strong pipeline, and I think there were significant tenants coming up on -- starting on the first quarter. So taking that into account, we feel confident to give you the guidance that we give you now. I think that 2026 is a promising year. I think that we have a strong pipeline. I think that we're well advanced in talking to potential clients, and we are very optimistic indeed. Enrique Cantu Garza: Perfect. Lorenzo Dominique Berho Carranza: I would add that we have also been able to renew leases and get mark-to-market rents that has been on the existing portfolio that has been -- we have been very successful. So the existing portfolio is not only the mark-to-market on renewals, but also year-over-year. Remember that our leases are indexed to inflation. So the combination of existing leases at each anniversary indexed to inflation plus mark-to-market on certain contracts, plus our ability to lease up vacant building together with new development, all combined is part of how we forecast revenue growth and therefore, guidance. Operator: Your next question comes from line of Gordon Lee. Gordon Lee: A question a little bit more on the operating side, Lorenzo. I was wondering, if you look at some of the northern markets, right, thinking of Tijuana, Ciudad Juarez, Monterrey, it's -- I've been surprised, I think it's been remarkable how stable rents have been even as vacancy numbers have increased for the market as a whole. I was wondering what do you attribute that to? And do you see any risk of that changing for the worse in the quarters to come? Lorenzo Dominique Berho Carranza: Can you repeat the question, please just -- I think you broke up a bit. Gordon Lee: Okay. No, I was just -- my question was, if you look at some -- if you look at Monterrey, Ciudad Juarez, what I think has been really interesting is market rents have stayed pretty stable even with rising vacancies. So I was wondering what do you attribute that to and whether you see a risk to that going forward? Lorenzo Dominique Berho Carranza: That's -- okay. I got it. Thank you, Gordon. That's a good question. So we believe that what we experienced last year was a little bit somehow unexpected where we saw a slowdown at the beginning of the year. And you might remember January, U.S. President taking office, liberation date and the high uncertainty that we experienced made a lot of companies not making any decisions and not making any -- not leasing any space. Normally, in an environment where you have a slower demand, normally, you could see a reduction in rents. However, in this case, there was the market was just stout. So there was not even a need to reduce rents by any of our competitors. So for that reason, what we think is that demand started coming up back, and it was not a matter of supply and demand. It was just a matter that there were no leases at the beginning. And suddenly, when they came back, we think that vacancy is actually not that high. And that's why we continue to see that replacement costs of several buildings continue to be high and returns have to be expected. Developers have been disciplined and the vacancy and occupancy and vacancies among most of the markets are at healthy numbers, even that they are somehow higher than before, but we were at record low levels -- but if you look at a longer period of time, we are still in a good numbers. Going forward, I think that we will start to see more demand. We think that rents -- I don't see a major risk regarding rents, frankly. I think that rents will hold up well or maybe even increase. But in the end, I think that over the long term, we think that rents are still competitive. Companies are in Mexico for its competitive advantage, particularly on manufacturing. And in terms of logistics, these are cities that continue growing. Consumer habits are still changing and more consumers are adapting to e-commerce to logistics, more demand. So we're very optimistic and positive on most of the markets. So we don't see any potential risks on rents. Operator: Your next question comes from the line of Pablo Ricalde of Itau. Pablo Ricalde Martinez: I have a question on the development pipeline. So we finally see you like coming back into the build-to-suit projects with the Safran building. So maybe going forward, how should we think about the development pipeline of mix between build-to-suit and spec-to-suit building? Lorenzo Dominique Berho Carranza: Great. Thank you, Pablo. So we will continue to see build-to-suits and spec buildings well balanced. We -- I think that what is more important is that now that we believe we are hitting a pivotal moment where we will continue to see more demand. We will continue our strategy on spec buildings. It has paid off well to have spec buildings and then turn them into somehow build-to-suit, we call them spec-to-suit because we're able to pre-lease the buildings and in the meantime, make final adjustments for the tenants. But importantly is that we are able to kick off or to start the buildings in advance and anticipate to potential demand. However, we currently have some buildings in the market. So we have -- we want to have discipline. So as long as we continue to see demand and leasing coming up, I'm pretty sure that we will start with some other spec buildings. And build-to-suits, we are constantly looking for them. We recently closed an expansion with Safran. That's a good example. So I think that being close to our clients, close in the markets with the real estate community and broker community, I think that we're going to be able to continue to do both, particularly because the land acquisitions that we recently did is so well located that I'm sure that there's going to be many companies that would like to establish their operations in high-quality parks with great infrastructure with access to energy. And I think that will be a huge benefit for companies going forward. This year will be very important to focus on the development execution, particularly to get all the infrastructure and organization of the land that we acquired in place and try to get ready so that when demand and projects continue to kick in, we have a -- we're already a step forward and take advantage of those opportunities. And I think that's what makes Vesta different. We are an institutional portfolio manager, asset manager of industrial assets, but also we like to take advantage and capture the growth opportunities on the development front where we can continue to see returns at 10% or even higher return on cost and that vis-a-vis acquisition cap rates in the 6% range are -- we think that there's a lot of spread that we can capture on the development front on new buildings. And I think that's a huge benefit for companies wanting to establish operations in Mexico. Operator: Our next question comes from Pablo Monsivais of Barclays. Pablo Monsivais: Just a question on Aguascalientes. There's been some news that Nissan is planning to sell the COMPAS plant in Aguascalientes. And since you have big operations there and a considerable land bank, what's your take in this? And that divestment could impact a little bit the dynamics in that region or probably not if the taker is a company that is growing? Just want to pick your brain on that news flow. Lorenzo Dominique Berho Carranza: Thank you, Pablo, for being on the call, and thank you for your question. Yes, there's a lot of speculation on what might happen with that particular COMPASS plant. I think that whatever happens, it's going to be very positive for the sector, particularly because it's a -- that plant, it's, I would say, brand new or state-of-the-art. It was developed together between Mercedes-Benz and Nissan. So it has a combination on German technology and Japanese innovation. So I think it was a fantastic project, which for whatever reason, didn't work out. However, I think that, that's why it has a lot of interest from different players. So again, without getting too much into the speculation, we think that Aguascalientes is a fantastic city where companies have been successful. And I think that understanding that Mexico continues to be an attractive manufacturing front, I think that definitely somebody will benefit from that plant. And actually, we think that eventually that will bring new suppliers from a new company and Vesta will continue to be there. I think that for Vesta, Aguascalientes is becoming every time a less relevant market. However, we think -- we believe in long-term relationships. We have good relationships with several suppliers in the auto industry. And for that reason, we think that there could be some good upside to the new plant -- or I'm sorry, to a potential buyer of the new plant. Pablo Monsivais: Okay. And if I can squeeze another question there. Just want to understand, it is my understanding that your guidance for 2026 has a slightly lower margin versus 2025. What's the reason for that? Juan Felipe Sottil Achuttegui: Pablo, this is Juan Sottil. As you know, the peso-dollar exchange rate is -- well, it's a little bit punitive to the company given the fact that we sell everything in dollars and all of our expenses mostly are in pesos, basically our employee cost. So it's going to be a difficult year. It's a year where we will continue a very strong discipline on cost control. We're very successful doing that last year. And we will continue to focus on cost control and being very mindful of the operation needs in terms of people and the location of those people. So it is a challenging year in terms of operating costs, but we will keep the discipline. Operator: Next question comes from the line of Abraham Fuentes of Santander. Abraham Fuentes Salinas: So I wonder if -- are you considering any asset recycling during 2026? And the second 1 will be what could we expect in terms of dividends also for this year. Juan Felipe Sottil Achuttegui: This is Juan Sottil again. Thank you for the question. Look, asset recycle is something that we will continue to do. It is an opportunity that we will garner in our portfolio. We'll keep on the lookout. We scope our portfolio. We believe that we are in the best regions in Mexico. We believe that we have very successful buildings. But we also believe that recycling older buildings or buildings that have accrued a good stabilization status they represent an opportunity to sell them. There's other players that like to buy those type of stabilized assets, and we will take advantage of that. So we will be on the lookout to sell buildings. That's an integral part of our development plan, of our growth plan, and we will be on the lookout. Regarding dividends, dividend is a part of our compensation to shareholders. We believe in total relative -- in total return. Total return implies our effort to grow the company so that the market recognizes that in terms of appreciation of the stock price. And dividends are just an integral part of that total return. We will continue to pay dividends. We will continue to grow judiciously the dividend flow for the incoming year. You will see our dividend policy as soon as we have our shareholder meeting in the next month or so. So that's very much. I think you should consider. Lorenzo Dominique Berho Carranza: If I may add, I think it's consistency on what we have done in the past, and that consistency will continue to be there going forward for dividends as well as for asset recycling. Operator: Your next question comes from the line of David Soto of Scotiabank. David Soto Soto: Just 2 quick ones. The first is related to your vacant buildings. Could you provide more detail about the marketing efforts and the current status of ongoing negotiations of those buildings? And what kind of tenants are interested on such assets? And the second question is related to your leasing spreads. During 2025, you reported double-digit leasing spreads. Is it reasonable to assume that this could be maintained during 2026 and which regions could have this double-digit leasing spreads? Lorenzo Dominique Berho Carranza: Thank you, David, for your question. Maybe on the second one, I think that definitely, we will continue to see the upward trend on the leasing spreads, particularly because this is a bit of a -- it will continue to be an opportunity in the upcoming years as some of the leases continue to hit their maturities, and that's when we have the ability to catch up. So that's something that has happened last year, will continue this year and maybe even the upcoming years as long as some of these long-term leases that were done some years ago hit their maturity stages. And we think that, that's a great opportunity to -- and we've been very, very active on that front. And then on your second question -- on your first question regarding vacant buildings, well, we are very confident that the pipeline is building up. We are very happy with the projects that we have developed. Just as mentioned before, just to give you an example, we have been getting awards on the Vesta Park Apodaca project, particularly in one building, Building 8, we got awarded the GRI Global Award of Industrial & Logistics Project of the Year. And I think that competing with other countries, with other developers across the globe, this is a very, very nice recognition and award. And so we do our best to develop the best projects. And I think that eventually will turn out into having a higher benefit with companies that want to be in the best projects in the most dynamic markets. The buildings that we develop on top of the certain specifications on design, sustainability, innovation, these are very flexible buildings. So we can accommodate e-commerce clients as well as logistics as well as light manufacturing. So I think that strategy on spec buildings will be very helpful where we can be competitive in terms of cost in markets where we can have good access to labor, where we can have good infrastructure. So we -- for that reason, we are confident that the vacant buildings we have today are great buildings that will be leased up eventually. Operator: Question comes from the line of Felipe Barragan. Unknown Analyst: So it's been a year -- a little over a year now that Claudia is in office. She announced an infrastructure program a few weeks ago. So I just want to get your sense if there's -- I mean comparing two years ago to where we're at today, what strides have you guys seen that are tangible on sort of getting permitting, electricity and whatnot for developments? Lorenzo Dominique Berho Carranza: Great. Thank you for your question. We -- frankly, I think that there has been a lot of very proactiveness towards our industry and our business coming from the Claudia Sheinbaum administration. As you know, Claudia Sheinbaum has been the only President or the first President to include industrial parks as part of a long-term infrastructure plan. She has considered 100 projects to be developed. Well, many of those are actually Vesta's projects. And we have been having great access to some of their economic development councils as well as corresponding secretaries to have the best permitting and licensing and support in order to make these projects work. I think that she has a very good understanding on the opportunity that Mexico has to develop together with the private sector, good industrial infrastructure that creates better jobs, better paid jobs, which is very important for her as for the welfare and in terms of support for the people. So in the end, I think that there's a strong alignment, there's good support. And I think that for them having companies that are institutional and well organized like Vesta is also a good recognition to our sector. Through the Mexican Association of Industrial Parks which I happen to be at the Board, and I was previously a President, we have also a very close contact and very good access to the government agencies so that the presidency is successful, the country is successful and we developers contribute a lot to that success. Operator: Your next question comes from the line of [indiscernible] of GBM. Unknown Analyst: Congratulations on your results. I just have one question. How are you thinking about the pace of developments in 2026, given the current occupancy levels and broader market uncertainty? Lorenzo Dominique Berho Carranza: Thank you for your question, Pablo. Well, I think that Vesta will continue monitoring the markets and defining where we can start projects. I think a good example for that is Guadalajara, where we recently started 2 spec buildings end of last year. The reason of that being that we have leased up our existing buildings. We see -- we continue to see strong demand, and we want to anticipate to that particular demand. So we have -- in order to how do we -- the way we monitor it is through the real estate community, the broker community as well as our existing clients. So I think that, that same example will be used for the rest of the market. We think that there are some good success stories in Juarez, in Tijuana, where we were able to lease up the second half of last year. That's going to be helpful in order to eventually start new buildings. And the same for Monterrey. Well, Monterrey, we did that large acquisition on the Apodaca on the new land next to the airport in the Apodaca corridor. So we will kick start with the infrastructure. And eventually, when we see leasing -- some closings on the leasing front on the current project, we will pick up with new projects. So we are definitely going to be more active than 2025, but we would like to continue being cautious and disciplined and in line to whatever we see a potential demand and not being oversupplying the market. And actually, as you know, development front and development cycles are long. I think that being able to acquire land last year and this year focus on infrastructure and some new buildings will put us in a great spot for 2027 to start generating income on those projects. And eventually, our main focus will continue to be the 2030 Route. So we're optimistic. We see the market positively, and we think we have the capabilities to pick up some good development projects throughout the year. Operator: Your next question comes from the line of Federico [indiscernible]. Unknown Analyst: Congrats for the results. Two questions in particular. For [indiscernible] in capital allocation, you used the buyback last year. I assume that you will cancel that this year and extend the maturity of the debt, et cetera. But thinking in the long-term strategic book of 2030, what do you find in terms of acquisition of land development, et cetera, et cetera, not on consolidated basis, is thinking more in regional basis. That are the 2 questions. Sorry, and the last one, Juan, what is the Mexican peso that are using for the budget and the guidance for this year? Juan Felipe Sottil Achuttegui: Well, look, the Mexican peso is surprisingly strong. So we made our forecast at MXN 17.50, but we have been -- that has been proving a little bit too short. Again, the theme of the year in terms of the administration is cost control. And we will be keen on continuing to do that as the peso is very strong compared to the previous years. Now in terms of capital allocation, look, I think that we have acquired about 90% of the land that the plan requires. So I don't think that this year, we will -- I mean, there's always opportunistic acquisitions. Mexico is one an important market where we will continue to look for important land. But the bulk of the land we have, this is a year of, as Lorenzo has said, infrastructure investments. These great plots of land need to be made shovel-ready, and we are prepared to do that. We have to be ready for the upcoming demand, which we can see on our pipeline. So capital allocation will be mostly focused on making the land shovel-ready, opportunistic investments in land in places like Mexico City. And as I said before, if there's opportunities to sell part of the portfolio, we will. So that's just keeping Vesta running as a smooth company and taking every opportunity to provide good results that the market will recognize. Unknown Analyst: Congrats again for the results. Juan Felipe Sottil Achuttegui: Thank you. Operator: There are no further questions. I'd now like to turn the call back over to Mr. Berho for his concluding remarks. Please go ahead, sir. Lorenzo Dominique Berho Carranza: Thank you, everyone, for joining us today. As we look ahead, we are confident in the opportunity and equally confident in our ability to execute with prudence across cycles. If the next strong economic phase accelerates into 2027, as we believe it will, Vesta is uniquely positioned to capture that growth responsibly and at scale as supply has moderated and pipeline conversations point to improving visibility over the next 12 to 24 months. Thank you all, and have a nice day. Operator: Thank you for attending today's call. You may now disconnect. Goodbye.
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.
Operator: Good morning, ladies and gentlemen, and welcome to the SECURE Waste Infrastructure Corp. 2025 Q4 and Annual Conference Call. [Operator Instructions] This call is being recorded on Friday, February 20, 2026. And I would now like to turn the conference over to Mr. Chad Magus. Thank you. Please go ahead. Chad Magus: Thank you, and good morning to everyone who is listening to the call. Welcome to SECURE Waste Infrastructure Corp.'s Conference Call to discuss our Fourth Quarter and Full Year 2025 Results. I'm Chad Magus, Chief Financial Officer. And joining me on the call today are Allen Gransch, our President and Chief Executive Officer; and Corey Higham, our Chief Operating Officer. During the call, we will make forward-looking statements related to future performance and refer to certain non-GAAP financial measures that do not have standardized meanings under IFRS and may not be comparable to similar measures disclosed by other companies. Forward-looking statements reflect management's current expectations and are based on assumptions that we believe are reasonable. However, actual results may differ materially due to a number of risks and uncertainties. Please refer to our press release, management's discussion and analysis and annual financial statements for the year ended December 31, 2025, all available on SEDAR+ for a discussion of these risks and for definitions and reconciliations of non-GAAP measures. Today, we'll review our financial and operational results for the 3 and 12 months ended December 31, 2025, and provide our outlook for 2026. I will now turn the call over to Allen. Allen Gransch: Thanks, Chad. Good morning, and thank you for joining today's call. 2025 was a year that clearly demonstrated the resilience, durability and quality of SECURE Waste Management and energy infrastructure business. Despite lower commodity prices, reduced industry activity and significant volatility across several end markets, we delivered full year adjusted EBITDA of $501 million, representing 5% growth year-over-year on a pro forma basis. Just as importantly, we generated strong discretionary free cash flow and continue to execute on our disciplined capital allocation strategy. At a high level, our performance in 2025 reflects 3 core strengths of our business model. First, the majority of our earnings are driven by reoccurring infrastructure-backed volumes. Approximately 80% of our adjusted EBITDA is tied to ongoing production and industrial activity with only about 20% linked to drilling and completion activity. That mix provides stability across cycles and limits our exposure to short-term swings in upstream activity. Second, we operate long-life permitted assets, permitted assets with high barriers to entry. Our facilities are difficult to replicate, capital intensive and require unique operating capabilities. Additionally, many of our assets are embedded in our customers' operations. Overall, these factors provide us with strong competitive advantage and support consistent utilization and pricing over time. Third, we remain highly disciplined in how we allocate capital. We invest where customers need capacity, where returns are attractive and where projects are supported by long-term contracts or clear demand and market signals. Turning to the fourth quarter specifically. We delivered adjusted EBITDA of $135 million, up 15% year-over-year and up 24% on a per share basis. This performance reflects contributions from assets placed in service during the year, disciplined pricing across key service lines and continued optimization across our network and the benefit of share repurchases. For the full year, we returned $373 million to shareholders through dividends and share buybacks. In total, we repurchased nearly 19 million shares at an average price below $15, representing approximately 8% of our outstanding shares. From a growth and investment standpoint, 2025 was an important year. We deployed $138 million of organic growth capital above our original plan of $75 million as customer demand accelerated and project scopes expanded. These investments were primarily directed toward produced water infrastructure in the Montney as well as an industrial waste processing and continued optimization of our metal recycling business. A key milestone during the year was the commissioning of our first 2 fully contracted produced water disposal facilities in the Montney region with the second facility expected to come online in March. These are long-cycle infrastructure assets supported by strong counterparties and long-term agreements, and they will contribute meaningful to earnings going forward. In metal recycling, 2025 was a difficult year due to the implementation of a 50% tariff by the U.S. on finished steel, which significantly reduced domestic demand in Canada. In response, we repositioned over 90% of our scrap volumes into the U.S. markets. This required building new customer relationships, expanding rail capacity and working through inventory and transportation constraints. While this transition created near-term headwinds, the strategy is now largely in place and positions the business well for improved performance in 2026 as logistic improvements take effect and inventory levels normalize throughout the first half of the year. Before turning the call over to Chad, I want to emphasize that our outlook for 2026 is grounded in what we see and control. While macro conditions remain volatile, our guidance is supported by contracted projects, infrastructure-backed cash flows and assets that are already built or nearing completion. With that, I'll turn it back over to Chad to walk through the financial results and an important accounting update. Chad Magus: Thanks, Allen. I'll start with a brief review of our financial performance for the fourth quarter and full year. For the fourth quarter, revenue was $372 million, up 10% year-over-year. Adjusted EBITDA was $135 million, with margins remaining strong and consistent with our infrastructure-driven model. Funds flow from operations was $118 million and discretionary free cash flow was $84 million, supporting continued investment, dividends and share repurchases. For the full year, adjusted EBITDA was $501 million, funds flow from operations was $378 million and discretionary free cash flow was $273 million. While discretionary free cash flow declined modestly year-over-year, this was primarily due to higher interest expense and cash taxes, and we continue to deliver industry-leading conversion of over 50%. Our balance sheet remains very strong. We ended the year with total debt to adjusted EBITDA of 2.1x or 1.8x, excluding leases. During the fourth quarter, we also refinanced a portion of our debt with the issuance of $300 million of senior unsecured notes due in 2032, further extending our maturity profile and enhancing financial flexibility. Turning now to the voluntary accounting policy change we implemented in the fourth quarter related to the presentation of our oil purchase and resale activities and certain commodity-related derivative instruments. Under the updated policy, we now present realized and unrealized gains and losses from physically settled commodity contracts and related derivatives on a net basis within revenue rather than presenting gross proceeds and offsetting costs. We believe this change better reflects the economic substance of these activities. It also provides financial statement users with a clearer view of SECURE's underlying infrastructure-driven earnings and improve the transparency and comparability of our reported results relative to our peers. Importantly, there is no impact to net income, adjusted EBITDA, cash flow or the statement of financial position for any period. The change affects only the presentation of revenue and cost of sales and prior periods have been restated for comparability. Finally, in relation to this restatement and as part of our improving transparency and alignment with our business model, we intend to pursue changes to our industry classification with S&P and MSCI to better reflect our positioning as a waste infrastructure business. With that, I'll turn it over to Corey to review our operational performance. Corey Higham: Thanks, Chad. Operationally, our teams delivered consistent and reliable performance across our 80 location infrastructure network in the fourth quarter and throughout 2025 despite a challenging operating environment. Safety and environmental stewardship remain foundational to how we operate. In 2025, we continue to advance our safety performance metrics, invest in environmental controls across our facilities and strengthen engagement within the communities in which we operate. Sustainability remains embedded in our daily operations and long-term strategic planning. Across the waste management network in 2025, we disposed approximately 95,000 barrels per day of produced water, processed approximately 38,000 barrels per day of liquid waste, recovered roughly 1 million barrels of oil from waste streams and safely disposed of approximately 3.2 million tons of solid waste. In our Energy Infrastructure segment, we handle over 133,000 barrels per day of crude oil across 13 terminals and 3 gathering pipelines. These figures reinforce the scale and critical nature of our platform and the repeatable infrastructure-backed cash flows that underpin our results. Across our waste management network, produced water volumes remained stable, reflecting ongoing production activity. Waste processing, oil recovery and landfill volumes did see some year-over-year declines, primarily due to reduced exploration activities and lower discretionary spending by our customers. As Allen mentioned, approximately 20% of our business is tied to energy exploration. When WTI oil prices move into the high 50s and low 60s range, we typically see producers become more cautious, slowing discretionary work and pacing activity. That dynamic was evident in 2025 and contributed to volume declines in certain service lines. Importantly, these declines are partially offset by pricing actions, operational efficiencies and contributions from the new capacity brought online during the year. In Energy Infrastructure, pipeline and terminalling volumes increased modestly, supported by the Clearwater terminal expansion and the introduction of emulsion treating capabilities. These assets continue to operate under long-term agreements and provide stable fee-based cash flows. From a capital standpoint, we ended the year with a strong portfolio of projects either commissioned or nearing completion. As we think about volumes across the network, it's helpful to consider the broader production backdrop. Western Canadian energy production is expected to grow approximately 2% annually through 2030 and will be enabled by significant investments into LNG projects, petrochemical industry expansions, AI data center build-outs and baseline energy demand growth. Given the commodity price environment that existed in 2025 and is forecasted into 2026, we believe this is baseline activity and volume for our operating areas due to production profiles and declines in the basin. This gives us a great deal of confidence in the stability of our business, but also emphasizes the future volume growth within our infrastructure as a result of the significant energy investments being made in Western Canada. This growth underscores the importance of network density, pricing discipline and safe operations. We will continue to optimize performance facility by facility, align capacity with customer demand and support growth activity -- support growth where activity is strongest, while maintaining cost discipline and operational consistency across the system. Our capital deployment continues to be selective and customer-driven, where demand exceeds current capacity, we will continue to invest and ensure reliability and long-term efficiency. These projects are all are aligned with customer activity and in many cases, supported by commercial agreements that provide visibility into future volumes. With that, I'll turn the call back to Allen for closing remarks. Allen Gransch: Thanks, Corey. To wrap up, 2025 reinforced why SECURE is different. We are a waste infrastructure business built around long-life assets, reoccurring volumes and disciplined execution. Even in a volatile macro environment, we delivered stable earnings, strong cash flow and meaningful shareholder returns. Looking ahead to 2026, we are entering a year with solid momentum supported by structural production growth and the densification of our infrastructure network. Canadian crude oil supply is anticipated to increase on average approximately 2.5% per year to 2030 and regulatory-driven reclamation and abandonment programs continue to support reoccurring industrial and landfill volumes regardless of short-term commodity volatility. Additionally, managing significant produced water volumes is a material operational and cost consideration for producers. As water handling remains complex, regulated and capital intensive, we continue to see a structural shift towards outsourcing, supporting long-term demand for third-party disposal infrastructure. Within the macro backdrop, our strategy remains disciplined, deploy capital where production is growing, where we can continue to support our customers and where returns exceed our hurdle rates. Several growth projects advanced in 2025, we will continue to contribute to 2026 results. Metal recycling performance is expected to improve as the logistics normalize, and our core waste network continues to benefit from stable production and industrial activity. For 2026, we are providing adjusted EBITDA guidance of $520 million to $550 million. While macro conditions remain uncertain, our guidance is supported by contracted infrastructure, reoccurring production back volumes and assets already built or nearing completion. From a quarterly cadence perspective, we expect the first quarter to be broadly consistent with the fourth quarter of 2025, reflecting similar macro conditions and activity levels. As the year progresses, we anticipate incremental improvement relative to prior year quarters, driven by contributions from projects commissioned in late 2025 and early '26 as well as improving performance in metal recycling as logistics continue to normalize. Our capital allocation priorities for 2026 include investing in high-return infrastructure-backed growth projects. We anticipate spending $75 million in organic growth projects, and we believe we can continue to build on that amount during 2026, including completion of our previously announced projects, incremental water disposal capacity at 2 existing facilities in the Montney region and optimization projects and equipment at various facilities, including the investment of a pre-shredding infrastructure for the Edmonton metal recycling facility to enhance throughput and reduce downtime on the mega shredder. We will also continue to evaluate tuck-in acquisition opportunities that complement our existing business. All of our investing activities, whether organic growth or M&A, will continue to strengthen our core business and create long-term value. Growing our dividend by 5% to $0.42 per share annualized beginning with the second quarter of 2026 in April. This increase reflects our confidence in the durability of our cash flows and the strength of our balance sheet while preserving significant financial flexibility to execute on our capital allocation priorities and continuing to grow the dividend over time. Preserving financial flexibility to pursue high-return organic projects and strategic acquisitions in a disciplined and selective manner, focusing on high-quality assets that are strategically aligned, accretive to cash flow and offering clear integration and synergy potential while continuing to opportunistically buy back shares where we see a meaningful dislocation in our share price. Since renewing our NCIB in December, we have repurchased 1.1 million shares at a weighted average price of $17.10. With the portfolio simplification largely complete and our positioning as a waste infrastructure company firmly established, 2026 will be about execution, consistency and incremental growth. I want to thank our employees for their hard work and commitment throughout a demanding year and our shareholders for their continued support. That concludes our prepared remarks. Operator, we're now happy to take questions. Operator: [Operator Instructions] Your first question comes from the line of Konark Gupta from Scotiabank. Konark Gupta: Maybe the first one on the commodity price. I think there's a clear evidence of commodity price volatility not having a similar impact on your fundamentals. But the volumes, we saw some impact on the waste processing side, as you mentioned. Would you say the impact from those commodity prices be relatively similar on EBITDA as well compared to the volumes or would be less? Allen Gransch: Yes. So when we think about the volumes in 2025, we -- when you have a lower commodity price, specifically with WTI being off 14% throughout the year, you generally see our customers slow down in their activity. And that's not a surprise to us. I mean we do have a portion that is centered around the exploration activity. And so when they slow down, they're going to have less discretionary spending, they're going to do less exploration, and they're going to be focused solely on optimizing their infrastructure. And so we saw that on a pro forma basis, we saw that on our landfill volumes specifically tied to that, and we also saw that in our waste processing volumes. But it's really consistent to what we expected would happen with that -- what I would consider the trough of the cycle. When you look at breakevens for not only the Canadian basin, but in the U.S., I mean, you're in the 50s, mid-50s. And so when you get a high $50 WTI price, low $60, you can imagine that they're optimizing what they currently are producing. And so when I think about EBITDA and where EBITDA kind of changed year-over-year, I mean, it's reflective of the pricing increases we did in Q4 of 2024, and we saw that contribute in 2025. And then we came out with some price increases in Q4 this year as well, which will contribute to EBITDA growth in 2025 -- 2026. So yes, so I think generally, and I'll maybe pass it over to Corey to give you a little bit more intel on the volumes, but that's generally what we saw in '25 and kind of what we're seeing here as we start 2026. Corey Higham: Yes, Konark, volumes in '25 reflected everything Allen just mentioned around lower exploration activities, a decrease in discretionary spend, but that production-based volumes, which is really the backbone of our network remains pretty stable. Specific to produced water volumes at about 95,000 barrels per day in the quarter, it truly reflects the resilient of the production-based volumes in our network. And when you do get into that mid-50s, you're starting to lose some of those services. But that's exactly what we would expect in that 20% of the EBITDA that is tied to exploration-linked services. So these volumes that had -- that we saw in the $50 WTI environment, we see these as close to baseline volumes. So it just gives us a lot of confidence in the stability of the business as we look forward. Konark Gupta: And on the metal recycling side, I mean, it sounds like, I mean, your additional railcars helped you reach or broaden the reach to the U.S. market. I think I heard 90% of the volumes are now going to the U.S. In 2026, as things probably stabilize from an inventory perspective, do you see some sort of balance into the Canadian market? Or you're still kind of waiting for clarity given the tariff situation here? Corey Higham: Yes, Konark, it's Corey again. I would characterize the back half of 2025 as performing through some volatility. As you mentioned, we shipped 90% of our volume to Canadian-based mills up until middle of 2024. We had to pivot pretty quickly to find new markets. And through Q3 into Q4, we shipped all of that volume or 90% of the volume into U.S. markets and the investments that we made in the railcars through 2025, and we took on an additional 50 railcars in Q4 has helped to normalize our logistics and help us work through the inventory that had built in the back half. So we see that inventory that was built sort of get back to normal levels by the end of the second half -- beginning of the -- end of the first half of 2026. And this improvement is a combination of both just normalized throughput and better operating efficiencies. But we don't really have any sort of clear expectations when Canadian mills are going to get it back up and running. It really depends on Canadian steel manufacturing and Federal Government projects. So we're pretty comfortable with the railcar movements from logistics into the U.S. mills, and we're obviously keeping our finger on the pulse of all the developments in that market. Konark Gupta: That's great. And last one for me before I turn over. On the CapEx side, I think you guys pulled forward some CapEx in December on the 2 produced water facilities you're building. Any sense as to what led you to do that? I mean, was it more required based on demand? Or was just the timing of the activity levels, et cetera? And then are you waiting for any incremental growth CapEx subject to green lighting by any of your customers? Allen Gransch: It's Allen here. Yes. So let's start with 2025. And I think we came out last year when we put out our guidance, we announced that our capital program was $75 million, and it would grow. I would say that similar situation exists for 2026. As you progress through the year, you're talking with your customers, you're working through your engineering and your scoping. And so it does take time for that to come to fruition. But we have a lot of projects in the hopper that we continue to work through this quarter and through the rest of the year. So you'll see updates every quarter as these projects get closer to what we call sanctioned and get Board approval on, we will announce. When I think about what we wanted to spend, obviously, we raised our $75 million in 2025 to $125 mimillion and that was primarily consisted of these 2 new water disposal facilities, one -- both of them in the Montney. One of them came online in Q4. The other one is going to come online here very shortly. There's very little capital we've spent on that project here in 2026. We also have Redwater Phase 1 and Phase 2, and we decided to do it all as one tranche. But I would characterize it as the Phase 1 is now completed now and part of our capital program here in 2026 is completing that Phase 2 for that has industrial facility, which will come online in Q2. And then we bought some railcars and equipment. And so the pre-investment, this $13 million that we invested in December, it was primarily access to equipment. Things are tied up long term. And if you can get access to equipment to be able to access and drill these disposal wells. So we drilled 2 disposal wells in December, got access. We were planning on doing it in Q1. So it helps advance getting those wells drilled already. And so there will be a pipeline and basically some other infrastructure and equipment required to tie all that in, and we'll provide more clarity throughout 2026 as we get there. But essentially, I think we very successful $125 million capital deployment, very contract-backed. And then as we think about the program here for 2026, we got 2 expansions. And then we've invested in some pre-shred equipment. So this would go in front of the mega shredder in Edmonton. And the purpose of that is just to run through some of the scrap material in advance of it hitting in the mega shredder. And we want to make sure whatever goes into the shredder has already been processed to a certain point where it doesn't require the shredder to have any sort of downtime or maintenance because of a large piece or because of certain components that might make their way in. So we're pretty excited about the growth opportunities. I said the hopper is quite large here for us as we think about 2026 and more to come on that as we progress through the year. Operator: And your next question comes from the line of Steven Hansen from Raymond James. Steven Hansen: I know it's not disclosed specifically, but can you give us like really rough magnitudes in terms of how big of a hit the metals business took in '25 on an EBITDA basis? Like was it down 10%, 20%? Just want to get a rough flavor of magnitude as we think about the recovery. Allen Gransch: Yes. So on the metals business, I think there's a couple of things that we work through. We were obviously repositioning some of our, what we call hub and spoke. So we were moving some of our metal -- scrap metal from some of our yards directly into Edmonton to utilize the mega shredder. So we had some synergies that we were working on in integration. At the same time, we had to balance that with some railcars that we needed to move that product into the U.S. And so I would say roughly 10% to 15% would have been impacted by not only what we saw in Q3 and partly into Q2 as well. But really, we were building inventory and then you've got this transition time that takes you from your cycle time of what you can get your inventory processed and through into the U.S. just over 30 days. And as we've said in the past, we don't like taking commodity risk. We want to process our inventory and ship it out on a 30-day basis. And so that's what Corey and his team are going to work on here through 2026. We're in a slower period for metals in the winter months as spring hits and you start to see more scrap metal roll into the yards. We want to make sure we've got our logistics balance and at the same time, monitor the Canadian market to see whether or not these mills are going to get operational again, and there will be some opportunities for us there. But I would say that would be my rough estimate of the magnitude. So we'll get some of that back here into 2026, which is great. Steven Hansen: That's great color. I appreciate that. As it happens, copper and some of these other metals have rallied quite nicely in the meantime. So perhaps there's some benefit there. Just wanted to circle back to Konark's earlier question around the volume side. And it's more just that recognizing you've already given some pretty good color so far. But how have you seen the pattern shift, if at all, as we started into '26 here, crude is not at 50 anymore. So I'm just trying to get a sense if you're starting to see that recovery in activity take place? Or is it probably more of maybe a second or third quarter type benefit? Corey Higham: Yes. I think if we could see sustained mid-$60 WTI, we'll see some slow improvement. But right now, we're a month into 2026. There hasn't been a whole lot of change from the activity levels that we saw in Q4. Operator: And your next question comes from the line of Arthur Nagorny from RBC Capital Markets. Arthur Nagorny: Maybe just starting with the 2026 adjusted EBITDA guide. Can you maybe give us some perspective on what your assumptions might look like between the high and the low end of the range? Chad Magus: Arthur, it's Chad here. Yes, it's a similar range size to last year. And when we take a look at the macro and all of our different service lines of what can change, obviously, what we've seen in the past and that we are still, I'd say, have a little uncertainty around it is just metals operations and what happens there with tariffs and how we've been able to acquire more railcars and the logistics around that. And even if we could acquire more railcars, that can help improve that number. Obviously, field activity is the biggest impact especially with new drilling and completion activities that can have an impact. Obviously, we saw that decline in 2025. So that obviously can swing the ultimate range of what we come in at. Allen Gransch: Yes. I mean, so right now, we're at the midpoint. And I think all signs are pointing to very similar first half 2026 to the back half of 2025. So you're going to have that kind of being consistent. I do think a lot of our customers, they came out with their budgets in December and a lot of them are calling for 3% to 5% growth. And a lot of them have planned out what they wanted to do in Q1 and Q2. So even though you've seen the uptick in the commodity doesn't really change what they planned on doing. I think that's more of a back half story. So I think depending on where we see that going, they can make changes and shifts in what they want to do in Q3 and Q4. That's primarily you get out of spring breakup and they can start to get access to some of these locations, and we'll see activity pick up. And that's our expectation. And so you'll see us go above that midpoint when that activity level starts to percolate. And so we'll have more clarity on that as we get through Q1 and get into how does the spring-like conditions look like. But that would be your upside scenario just on activity levels in the back half of 2026. Arthur Nagorny: All right. That's helpful. And then I believe you mentioned you took some price in the back half of last year. Have you completed your pricing discussions already for 2026? And if so, can you give us an idea of kind of what that looks like across the business lines? Allen Gransch: Yes. We have had multiple discussions with our customers. I mean when you look at inflation in Canada, it was up over 3%. A lot of our price increases [ on Q1 ], you want to cover your inflationary costs, but also we want to make sure that we're cognizant of where our customers are at. And so it was a bit of a balanced approach, I would say, in Q4, and we were selective on certain service lines where we felt like we needed to increase prices more significantly. And it was a lot of detailed conversations with our customers, but we did manage to get that done in Q4. We don't plan on doing anything in the near term here. I think all those discussions have been settled. For us, right now, our primary focus is on operations, getting this facility commissioned here in the next couple of weeks in the Montney and then obviously turning our attention to some other growth projects and some tuck-in M&A. I think I've talked about M&A in the past just on -- there's a few more metal recycling locations we're looking at. And so that might come to fruition here in 2026 if we can get to the appropriate valuations. We also have some other complementary businesses that I think would fit well into SECURE's network. And so we're looking at those as well. And so you'll see a balance of our focus on some of the growth capital, but also on some of this tuck-in M&A that we think could be very complementary to 2026 and 2027. Arthur Nagorny: Got it. And then maybe on the metals recycling business, you mentioned the kind of inventory that you're working through given the disruption from last year. And just wondering kind of, I guess, where you're at with that? And maybe as a follow-up, I think near the end of the year, the Canadian government announced some measures to support the Canadian market. So just wondering if you're seeing any improvements in the [ Nomesta ] market yet and maybe how you're thinking about your go-forward positioning given some of these changes? Corey Higham: Yes. A couple of questions there. The first one would be really around how do we -- how we're working through our inventory. As I mentioned previously, I think we'll get through back to normal inventory levels and inventory turns by the midpoint of this year. So everything is going to plan. With respect to what are we seeing in the Canadian markets, we haven't seen much demand pull into the Canadian mills as of yet. There has been small orders here and there. But I think what we've done in our business with the railcar infrastructure, when and if there are buy signals from Canadian mills, we are well positioned to ship to Canadian mills as well as the U.S. mills. So now we have a lot of outlets for our scrap. So we feel very comfortable where we're at today, Arthur. Arthur Nagorny: All right. And then last question for me. Just curious how the Specialty Chemicals business did in Q4, if you can give some perspective on maybe volume or pricing or revenue, sorry. Allen Gransch: Yes. I mean on the specialty chem side, we're continually seeing more of our production chemistry being really a useful tool, specifically on the paraffins on the wax side of things. And so we've got quite a few programs now where we're assisting some of our customers with taking some of that wax out of their production streams. And so we saw a continuation of that in Q4. That's a pattern that we do have that we're quite happy to promote with our customers. Activity levels, I would say, Q3 over Q4 were relatively similar on the fluids and the equipment side. There wasn't really much of a change. I think it was really just as expected of what our customers wanted to do in the last quarter. But I would say we got the benefit on the production chemistry side and that side continues to perform very, very well as we roll out some of the new initiatives we have on not only the paraffin side, but there's also some on emulsion breakers and scale, and that seems to be going very, very well. I don't know, Chad, do you want to add? Chad Magus: Yes. Just looking at kind of year-over-year, again, I think similar to what Allen said, just probably up a couple of percent Q4 versus Q4 of the prior year. Allen Gransch: I think you would have also noticed as well, we had disclosed this lawsuit that we have with CES. And really, we're at the point now where it's gone through the federal courts and the Supreme Court recently concluded that we own this patent. And we put into our disclosure the potential claim of $100 million, and that's really based off of -- this goes back to 2018 and really the sale that relates directly -- the sale of fluids that relate directly to this patent as well as did you get the work because of that patent. And so the $100 million claim, I think that's something we're going to pursue here over the next couple of years. And it's really going to go back to how -- what will the courts do in terms of the timing of when that patent was concluded at SECURE's as well as are we including just the sale of the patent or also other fluid sales that are included in that. So that $100 million will be determined by the courts in some future manner, but that's also ongoing. Operator: And your next question comes from the line of John Gibson from BMO Capital Markets. John Gibson: Just in terms of the growth CapEx for '26, how much of it will be focused on your energy end markets versus more of the metals recycling or conventional waste businesses? And is this mix materially different than last year? Allen Gransch: No. The mix will be relatively similar. I think it's primarily weighted to our waste management business. On the metal side, we're calling it around the $10 million level. We've got the pre-shred and some equipment and then we've been leasing some railcars. But primarily, it's related to waste expansion at our facilities. When you look at certain areas like the Montney, it's busier. We haven't spent a lot on expansion capital here over the last few years. A lot of the capital we've directed more in closer to production within a specific customer. And so this is now looking at some of our facilities where we're getting to the point where it's almost a bottleneck and we need to expand to allow more volumes to come in. And so you see a little bit more of expansion capital in 2026 just because we're at that point in certain facilities that will need that required capital. John Gibson: Got it. Just in regards to your move to ship steel products to the U.S., what is the incremental cost on doing so? And I guess you mentioned the business was impacted by roughly 15%. Just wondering how much of this you can recapture with these improved logistics if volumes are similar? Chad Magus: John, there is obviously an incremental cost. It's just moving it further by rail. However, we've been able to recoup some of that by getting a better price by just having a bigger market to ship it to. So I think when you net those 2, there's maybe been a percent margin erosion, but we're continuing to work with markets to try to improve that. What was the second part of the question? John Gibson: No, that's great. That answers it. I appreciate it, and I'll turn it back. Operator: And your next question comes from the line of Maxim Sytchev from National Bank Capital. Maxim Sytchev: I had one quick follow-up on metals recycling, if I can. There was some speculation that perhaps some of the tariffs will be rolled back and administration sort of walked that down. But in case of the were to happen, can you maybe walk through how much of a tailwind that could be for the overall business right now that you have fully built out the capacity in the U.S. and Canada, obviously, on the metal side of things? Allen Gransch: Yes, I think we've been monitoring what's been happening in the U.S., and we've got a lot of relationships with a lot of the mills and we figured out the turnaround times and logistics for our railcars. And so if the Canadian market remains challenged, that's really giving us a competitive advantage over our competitors here in Western Canada. A lot of them don't have railcars, which we do. And so the fact that we're already 90% gives us that competitive edge. And from our standpoint, when we factor in the additional transportation cost to obviously get the scrap further down into the U.S. market, we have to reduce the price that we're willing to pay across the scale because we want to maintain our margin spread. And so from our perspective, at some point, that will turn where you're going to see that inventory that we may have paid a lower value for being realized in the Canadian market. And so all of a sudden, that shipping cost is going to go down, and you're going to realize some of that. And I think that's kind of what you're driving at. Difficult to predict. I mean it's just been -- we haven't seemed to make any ground on where we're going to go with the tariffs here in the U.S. And so our focus is really about getting the scrap in, getting it processed efficiently and turning it around into the U.S. I mean this whole electric arc furnace change has been substantial. The demand for scrap, we've seen it pick up. And I think Steve made the comment just on the commodities on copper on the nonferrous side is very strong. And I think even on the ferrous side, we're just seeing more and more demand for it from our perspective. And so I think the market is getting very, very robust, which is really, really good. And I think there will be a moment in time here as things play out where I think some of the things will be on the benefit of our side as we think about inventory levels and how activity is going to progress throughout 2026. Operator: And your last question comes from the line of Konark Gupta from Scotiabank. Konark Gupta: Just a few follow-ups. On the tuck-ins, I just wanted to clarify, the EBITDA guidance, the range does not embed any of the tuck-ins that you might do this year, right? Allen Gransch: That's correct. Yes. No, it does not embed any tuck-ins at this point. And that's something that -- because you never really know if you can get to a definitive agreement and get everything tied up to the way you want. So as that progresses and as we get potential opportunities coming across our desk, that's when we'll start thinking about, okay, what is this going to contribute to '26. So we -- I guess, long story short, we'll provide guidance when the acquisitions happen and what that means for 2026. Konark Gupta: Okay. Great. And on the cash flow side, I don't think I heard too much today. So just like in terms of any outlook for ranges, et cetera. I mean your EBITDA at the midpoint is up $35 million, I think, and CapEx -- total CapEx is down about $65 million. So that's $100 million together. I mean, should we simply add that $100 million to the cash flow? Or should we consider any other factors this year, like taxes, et cetera? Chad Magus: Yes. I mean there's not -- I would say the remaining items will be relatively in line with what we saw in 2025. I think, obviously, cash interest will change a little bit depending on our leverage ratio. And then cash taxes, we're still kind of in a transition year in 2025. So it will be slightly higher as a percent, if you look at it, I guess, on adjusted EBITDA, slightly higher next -- in 2026. But still probably not above that $60 million mark for the full year. And then when we just look at the conversion ratio, we're still going to come out higher than 50% discretionary free cash flow conversion from adjusted EBITDA. Konark Gupta: That's helpful. And last one, on the GICS, I heard you guys talked about the S&P and MSCI discussions. I mean with the accounting change, I mean, that reduces a substantial portion of your sort of commodity revenue, right? And what would be some of the GICS options that might be available to you? I mean I know you cannot choose, but what you might qualify for D&O at this point? Chad Magus: Yes. Thanks, Konark. Yes, good question in the past, we can make certain recommendations, but obviously, they ultimately decide. But definitely, it should result in a change. Next steps will be all of our information will be updated. I definitely think they will change it. I don't know how long it will take to change it. But I mean, more of an industrial type [ GICS ] code, there is when you look at all the different waste peers, there is a number of different ones. They're not all exactly the same. But we think any of those would be more relevant than where we are today. Allen Gransch: I think, too, I mean, this accounting change will be very helpful for investors and shareholders. I think when you go on Bloomberg and you're looking at our financials, you're now looking at all of the margins are where they need to be, and we've got the highest margins out of all of our waste peers. We've got the highest discretionary free cash flow per share, return on capital. We've increased the dividend as well. Just showing that you come out of a trough year like 2025, and we've got the conviction to not only push up the dividend, we've been buying back stock, just showing that the value of the business is -- there's more to go. And when we compare to some of our waste peers and you look at some of these key metrics, we stack up very, very well. So we're pretty excited. We're happy that we came off of 2025 and here we go in 2026. So that's a lot. Operator: That ends our question-and-answer session. I will now hand the call back to Allen Gransch for any closing remarks. Allen Gransch: Well, thank you for your time today and your continued support of SECURE. We look forward to talking with you again at the end of April with our Q1 results. Operator: This concludes today's call. Thank you for participating. You may all disconnect.
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.
Operator: Greetings, and welcome to the AMH Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Nick Fromm, Vice President of Investor Relations. Thank you, Nick. You may begin. Nicholas Fromm: Good morning, and thank you for joining us for our Fourth Quarter 2025 Earnings Conference call. With me today are Bryan Smith, Chief Executive Officer; Chris Lau, Chief Financial Officer; and Lincoln Palmer, Chief Operating Officer. Please be advised that this call may include forward-looking statements. All statements other than statements of historical fact included in this conference call are forward-looking statements that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected in these statements. These risks and other factors that could adversely affect our business and future results are described in our press releases and in our filings with the SEC. All forward-looking statements speak only as of today, February 20, 2026. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. A reconciliation of GAAP to non-GAAP financial measures is included in our earnings press release and supplemental information package. As a note, our operating and financial results, including GAAP and non-GAAP measures, are fully detailed in our earnings release and supplemental information package. You can find these documents as well as SEC reports and the audio webcast replay of this conference call on our website at www.amh.com. With that, I will turn the call over to our CEO, Bryan Smith. Bryan Smith: Welcome, everyone, and thank you for joining us today. After our team delivered a solid quarter 2025, the new year is off to a busy start. Before we dive into our results and outlook, I would like to address the executive order the administration issued last month, showing its focus on housing affordability and the role that single-family rentals play. We appreciate the attention to this critical issue and continue to emphasize that AMH is part of the solution. Alongside our industry peers and partners, we are actively engaged with government and business leaders in Washington and around the country. These meetings have been encouraging as we continue to work with policymakers on the challenges of affordability, which will require sustained investment and collaboration across both the public and private sectors. Millions of Americans call single-family rentals home. In fact, consistently since 1965, roughly 1/3 of households in the United States are renters. This includes first responders, educators and health care providers who rely on this option to live in the communities they serve. Our homes provide access to the same desirable neighborhoods at a fraction of the estimated monthly cost of homeownership. Further, a single-family rental home often represents an important step in a family's journey towards homeownership. Our surveys show that buying a home is the #1 reason residents move out of our portfolio. Over the course of 2025, we estimate over 5,000 households or approximately 30% of all move-outs left their AMH home to purchase a house. Our strategy has always been centered around providing quality housing and an exceptional resident experience. In our early years, we achieved this by renovating homes and revitalizing neighborhoods across the country. During that time, housing starts slowed dramatically, causing shortages in many of our markets. In 2017, we made the strategic decision focused on ground-up development to meet the growing demand for single-family rentals. Since then, our in-house development program has added over 14,000 newly built homes across the country. For the past few years, AMH has not been materially active buying homes on the MLS, instead, we've been an active seller. In 2025 alone, we sold over 1,800 homes to individual homeowners. In 2026, we expect similar activity. Proceeds from these dispositions continue to provide the necessary capital for our development program. In 2026, we plan to deliver around 1,900 newly constructed homes across the portfolio. And the foundation for our future growth remains centered around adding homes through our in-house development program. Now let's turn to our fourth quarter and full year results. In 2025, we delivered $1.87 of core FFO per share, representing year-over-year growth of 5.4%. Our consistent results not only demonstrate our commitment to operational excellence within the same home portfolio, but also underscores our approach to maximizing value across all areas of the business. Operationally, our teams did a great job navigating a challenging environment in the tail end of 2025, which included seasonal demand moderation and stubborn supply. This put downward pressure on rate and occupancy heading into the beginning of 2026. For the month of January, new, renewal and blended spreads were minus 1%, 3.5% and 2.4%, respectively, while same-home average occupied days was 95%. Throughout the first quarter, our focus will continue to be on occupancy with our outlook for 2026, contemplating a flatter seasonal curve or rate growth occupancy than we would normally expect. Chris will cover guidance in more detail later in the call. As we look ahead, it is clear that there is a growing need for more high-quality housing in America. AMH with its well-located homes, outstanding resident service and new home development program is committed to doing its part. Thank you to the team for your hard work last year and your continued commitment to excellence. With that, I'll turn the call over to Chris. Christopher Lau: Thanks, Bryan, and good morning, everyone. As usual, I'll cover three areas in my comments today. First, a brief review of our year-end results, second, an update on our balance sheet and recent capital markets activity. And third, I'll close with an overview of our 2026 guidance and capital plan. Beginning with our operating results, we closed out 2025 with solid execution, generating quarterly net income attributable to common shareholders of $123.8 million or $0.33 per diluted share and $0.47 of quarterly core FFO per share in unit, representing 4.1% year-over-year growth. And for full year 2025, we generated net income attributable to common shareholders of $439 million or $1.18 per diluted share and $1.87 of core FFO per share in unit, representing 5.4% year-over-year growth, once again leading the residential sector. From an investment standpoint, during the quarter, we delivered 490 total homes from our AMH Development program. This brings our full year deliveries to over 2,300 homes contributing much needed newly constructed housing stock to 14 markets across the country. On the disposition front, we had another active quarter selling 646 properties, generating roughly $190 million of net proceeds. For the full year, we sold 1,827 properties for total net proceeds of approximately $570 million at an average disposition cap rate in the high 3%. As a reminder, our disposition properties are regularly sold to individual homeowners and provide us with a highly attractive form of capital to reinvest back into our AMH Development program. Next, I'd like to turn to our balance sheet and recent capital activity. At the end of the year, our net debt, including preferred shares to adjusted EBITDA was 5.2x, our $1.25 billion revolving credit facility had a $360 million balance, and we had approximately $110 million of cash available on the balance sheet. During the fourth quarter of 2025 and January of '26, we fully utilized our remaining $265 million share repurchase authorization and repurchased a total of 8.4 million common shares representing approximately 2% of total share units outstanding. These shares were repurchased at an attractive price of $31.65 per share representing an attractive capital deployment opportunity complementing the long-term value created by our AMH Development program. Next, I'd like to share an overview of our initial 2026 guidance. For the full year, we expect core FFO per share unit of $1.89 to $1.95, which at the midpoint represents year-over-year growth of 2.7% and for the same home portfolio. At the midpoint, our expectations contemplate core revenues growth of 2.25%, which reflects average monthly realized rent growth and the 2.5% area and a 25 basis point year-over-year occupancy headwind as we expect 2026 average occupied days in the high 95% area. Additionally, our outlook contemplates core property operating expense growth of 2.75% driven by property tax growth in the 3% area, representing another year of below average growth and mid 2% growth on all other expenses, driven by another successful insurance renewal campaign and our continued commitment to efficiently managing controllable expenses. Putting together, our same-home revenue and expense growth expectations, we expect 2026 same-home core NOI growth of 2% at the midpoint. From an investment standpoint, given the current capital market conditions, we have strategically moderated our development plan activities such that we expect to deploy approximately $750 million of total capital, including joint ventures, adding approximately 1,900 new to constructed AMH development homes to our wholly-owned and joint venture portfolios. Specifically, for our wholly-owned portfolio, we expect to invest approximately $550 million of AMH capital, consisting of 1,400 homes added from our development program that we plan to fund entirely to recycled capital from our disposition program. Additionally, our full year outlook only contemplates the $115 million of share repurchases that were already executed in January. While the stock price continues to represent an attractive capital deployment opportunity, given the recent attention on our industry and ongoing capital market uncertainty, we plan to take a patient approach to the timing of any additional repurchases. However, as we continue to monitor the market. As mentioned in yesterday's release, our Board recently approved a new $500 million share repurchase authorization. Additionally, keep in mind that our balance sheet has a couple of hundred million dollars of opportunistic capital capacity given the strategic sizing of this year's development activities. And before we open the call to your questions, I wanted to close with a few final thoughts. 2025 was another great example of the power of the AMH platform, as we delivered another year of residential sector-leading core FFO growth. As we head into 2026, we remain committed to the AMH strategy, which has demonstrated our ability to create differentiated value for our residents, local communities, team members and shareholders. And with that, we'll open the call to your questions. Operator? Operator: We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Eric Wolfe with Citibank. Eric Wolfe: Can you just talk about why you're expecting a flatter occupancy and rent growth curve than you normally expect? And I guess, specifically what that means for your blended rate growth expectation? And then I guess, lastly, on the occupancy, you said that you're expecting it to be flatter this year as well. But if I look at your fourth quarter, you're down like 30 basis points year-over-year. And I think that's what you're expecting through the full year of 2026. So I guess why -- I guess it seems to me like you're expecting something more sort of seasonal like you saw in 2025. So just help us work through both those elements. Lincoln Palmer: Yes. Thanks, Eric. This is Lincoln. As we come into 2025 or 2026, excuse me, we're seeing the start of leasing season that we would normally see, maybe slightly delayed from where it was in previous years. We also -- as we talked at Dallas NAREIT, we had expected to build a little bit of occupancy coming into the end of 2025 and kind of start the year in a position of strength. Despite some price action, we came in a couple of hundred houses behind just to put some context behind where we sit today. So starting the year, we're highly focused on kind of building occupancy throughout leasing season, supported by some price action and then expect a flatter kind of peak of that occupancy and then holding more into the back of the year. And specifically to your question about fourth quarter and typical trends there, we expect that hold in the back half to be supported by not only the flat new lease rate growth that you're seeing now, but a favorable expiration curve again for 2026. Christopher Lau: Yes. And then Eric, it's Chris. Just to make sure I kind of understand some of the numbers behind what Lincoln was talking about. On the full year context, we're thinking about new leases and about the flattish area for full year '26 renewals kind of consistently in the plus or minus 3% area on the full year. That then comes to our full year blended spread expectation in the low 2s. And as you heard us talking about in guidance view around occupancy being in the high 95s, which, to Lincoln's point, the focus right now is on occupancy through the first quarter, building a bit into the middle of the year. And then the objective is to hold and flatten that curve into the back part of the year. Operator: Our next question comes from Jamie Feldman with Wells Fargo. James Feldman: I appreciate the thoughts on the seasonal curve. Maybe just as you thought about giving your guidance for the year, I mean, there's a lot of moving pieces out there on the political front, on the demand side, on the supply side, where would you say there's the most variability to your numbers? And maybe talk us through the high end, the low end of the range and what gets you to either end across the key line items. Bryan Smith: Thanks, Jamie. The other thing that we're looking at this year is we've contemplated the building blocks of the guide is just the environment that we start the year end. Normally, as we kick off the season, the 200, 300 house pickup that we're looking for probably isn't that big of the list. The challenges in the current environment is that supply across all aspects of residential, different housing types seems to be stubbornly elevated. We see that in multifamily. We see that on the first sale side with some of the [indiscernible] rent conversions and then some BTR that's sticky in some of the markets. Again, it's highly -- it's highly market-dependent. And we have markets where supply just is not an issue overall, but some of those markets that we've talked about before that took those high levels of deliveries that outpaced absorption over the last couple of years. Continue to struggle to work through that. On the demand side, we're seeing great demand for AMH products still. The traffic this year is not outside of normal year-over-year fluctuation. But again, set against that backdrop of higher supply levels, it just seems like our prospects have more choice in the marketplace. And that's leading to some slightly extended lease-up times, but any dislocation in those supplies, we view as being temporary related to those suppliers, just in the long-term outlook for demand for AMH homes hasn't changed in most of our markets. Operator: Our next question comes from the line of Steve Sakwa with Evercore ISI. Steve Sakwa: Just wanted to focus a little bit on the development pipeline. I mean it sounds like you're slowing deliveries a little bit and being a little bit more cautious, I guess, certainly given the capital markets environment. But like where are you seeing development yields for the product you're starting today based on today's rents and today's cost? What can you get? And I guess, how do you weigh deploying capital there against the buybacks? I know you're being probably a little bit cautious given the political environment, but sort of how do you weigh those two things today? Bryan Smith: Steve, this is Bryan. Thanks for the question. I'll start with what the pipeline looks like kind of round out how we completed 2025 as well. As we talked about last year or in November, the -- going in delivery development yields and active projects was slightly lower than the 5.5% we thought, we'd get hit at the beginning of the year, really indicative of just general rent pressures across all of residential. So we ended last year somewhere in the 5.3% area ongoing in yields. And we're expecting similar yields in 2026 for the 1,900 homes that we're planning to deliver. Highly dependent on rent movement, but in the current environment, similar to 2025 is what our outlook is. And those are the ones that are in play right now or soon to be actively started. Christopher Lau: And then, Steve, Chris here, just from a capital perspective, I think the key to all of this is appropriate sizing of capital. Everyone saw that we made a pretty quick pivot in terms of sizing of capital towards the end of 2025. And you can see that we pivoted further heading into 2026 sizing the on-balance sheet portion of development capital deployment to essentially be match funded with disposition proceeds for this year. On top of sizing to the development program, that then frees up incremental capital capacity for buybacks that can function as a nice complement to the development program and the long-term value creation there. You saw that we were active on that already, repurchasing in about 2% of shares and units outstanding towards the end of '25 and beginning of '26, and we have capacity on the balance sheet for about a couple of hundred million dollars of incremental opportunistic capital deployment. But as I mentioned in prepared remarks, and [indiscernible] actually mentioned in your question, there's a lot of different moving pieces out there right now. And so we're going to make sure that we remain prudent and if we be patient in terms of how quickly we're moving on additional repurchases at this point. Operator: Our next question comes from the line of Haendel St. Juste with Mizuho Securities. Haendel St. Juste: Maybe some color on OpEx. You outlined expectation for tax, I think going to be up 3%, 4 to 5 -- sort of the 4% to 5% long-term average we've seen. Is there anything unique worth highlighting? Do you think this is a sustainable level near term? And maybe some color on turnover, what you're expecting in your recent insurance renewals. Christopher Lau: Sure, Haendel, Chris here. Yes, look, on property taxes, overall, I think it's probably helpful to point out the fact that 2025 actually ended up being one of our lowest property tax growth years in company history, down in the 2.5% area. And as we move into 2026, we're expecting another year of what I would call moderate property tax growth in the plus or minus 3% area. A touch above 25%, but still well below long-term average, long-term average for us is 4% to 5%. Recall one of the things that drove our property tax growth of 2.5% last year is that it was actually one of our best years ever in terms of appealed outcomes. And at least at the start of '26, probably not totally prudent to expect that we'll have two record back-to-back years on appeals. But nonetheless, 3% is something that I would still call very much in the maybe cooperative areas, the right characterization. And in terms of other components of expense growth for this year, our outlook also contemplates about a double-digit decrease in year-over-year insurance costs. That is based off of our successful renewal campaign that becomes effective at the end of this month. And then for remaining expenses, controllables in particular, we are expecting growth in, call this, 3-ish area or so that I think represents another year of tight expense controls. Operator: Our next question comes from the line of Jeff Spector with Bank of America. Jeffrey Spector: Great. If you could talk a little bit more about the supply pressure you saw in '25, what surprised you, would be a little bit more specific in terms of markets. And how that may impact your strategy going forward on markets? Again, Midwest continues to outperform. Do you want to try to lean in more there? given the pressure you're seeing, let's say, in the Sunbelt and your thoughts on that supply pressure in '26. Lincoln Palmer: Thanks, Jeff. This is Lincoln again. When I look at the individual markets, you can see the performance of most of those in the fourth quarter in the supplemental. If you just walk down across, you can see the footprints of the supply impact in those numbers. And again, I would just anchor back to the idea that the build in inventory and the standing accumulation of availability across all of the different product types is the result of those deliveries heavily outpacing in some markets. The absorption. I think all of us are relieved to see the starts and deliveries have slowed. Those are on the downswing, but we also understand that there is still some of the outstanding inventory that needs to be consumed. When I look across those markets, those that are heavily impacted, and they're impacted for different reasons. San Antonio, as an example, took heavy deliveries of multifamily. And so there's a lot of standing inventory there, and you can see that in the results. Phoenix is probably one of the epicenters for build-to-rent. And there's still some, albeit different product than ours, but still some levels of inventory on the build-to-rent side there. And then Las Vegas is one where we've probably seen a little bit more of for sale to for rent conversions and more competition from traditional landlords. So when it comes to the Midwest, we talked about this quite a bit. The underlying fundamentals there are still strong. We don't anticipate those changing in the short term. They did not take some of those high levels of deliveries of different types of product over the years. So there's still supply constrained to some extent, still relatively affordable, still a great place to live. And in the short term, that's not going to change. So we're watching the markets carefully and committed to most of them for the long term. Operator: Our next question comes from the line of David Segall with Green Street. David Segall: Recognizing that you're going to take a more patient approach to additional buybacks this year. Would you need additional sales activity dispositions in order to fund any additional buybacks? And I recall that you had 20,000 homes that were released from collateral from being securitized, it's collateral last year. Would we see that as a source of additional funding this year? Christopher Lau: Sure. David, Chris here. We're thinking about sizing of buybacks in general. I think one of the most important things to remember is the importance of balance in our approach, right, where we are balancing the importance of keeping the development program in motion, which is mission-critical, especially for long-term value creation. We're balancing that with maintaining our commitment to the balance sheet and targeted leverage levels, balanced with a, what I would call, a robust, but also responsible level of dispositions. . And so as we think about incremental buybacks from here, as I mentioned in prepared remarks, today and over the course of the year, there is, I would call it, a couple of hundred million dollars of incremental capital capacity already on the balance sheet in the form of leverage capacity. And then beyond that would be the opportunity to recycle additional capital through the disposition program. You are exactly correct in that we are of the view that there's a pretty good healthy runway of disposition opportunity ahead of us, especially given the fact that we recently freed up 20,000 homes that were previously encumbered by our securitizations that were paid off over the last couple of years. But the natural governor there, like we've talked about plenty of times, is just how quickly those homes that are being identified out of those previously collateralized homes can actually be sold. And the governor there is the fact that we are selling homes in our disposition program ultimately to home buyers via the MLS and to sell a home to a home buyer via the MLS it needs to be vacant as we all know. And as we also know, 95% of the portfolio is not vacant. We take our responsibility as a housing provider, extremely serious and we will never take housing away from an existing resident to sell a home, which means we need to let leases roll, tenants moved out, and then we can prep the home for sale, which creates a little bit of a governor in terms of how many homes can actually be sold in one given year. Operator: Our next question comes from the line of Buck Horne with Raymond James. Buck Horne: I was curious if you could comment a little bit about the news from the White House last night about potentially capping the single-family or the investor band at about 100 homes per organization. So if that's a much lower cap than previously contemplated, just going through a thought exercise of how do you think that plays out in the industry? Does that potentially force a lot of subscale operators to either pull rental inventory out of the market or sell inventory quickly. What do you think those other smaller tier operators are going to do if that type of cap is in place? Bryan Smith: Buck, this is Bryan. Thanks for your question. There's obviously been a lot of attention on this issue this year. We've been actively engaged with policymakers at the state, local and Federal level. If you go back to the executive order, there was -- the first part was defining the size and definition of institutional investor, which was -- the treasury was tasked with 30 days. And I think the 30 days is up today. So whether that ends up being a 100 or some other number remains to be seen. There's a lot still moving in the definitions and just on how this is all going to ultimately shake out. But as you know, we've been investing heavily into our government affairs efforts for years. Active engagement allows us to be at the center of a lot of these discussions and really get our message across that we are a key part of the housing solution, especially as we're addressing the supply shortage with our in-house development program. And the mechanics of how it affects smaller operators versus larger build-to-rent versus, versus scattered side are still unclear. But the good news is from these meetings, there's a clear understanding that supply has not kept up with demand and supply solutions are continuing to be sought. The other key piece that we're as an industry with our partners are trying to make sure realizes the importance of single-family rentals in the full housing ecosystem. So those are the types of messages that we're working on, as I mentioned in my prepared remarks, but how it shakes out still remains to be seen. Operator: Our next question comes from the line of Brad Heffern with RBC Capital Markets. Brad Heffern: Yes. Obviously, I appreciate all the color on the supply impacts. When do you think we're going to be in a more normal environment just from a supply-demand balance standpoint? . Lincoln Palmer: Brad, this is Lincoln. I appreciate that question. I think it's one that's been asked quite a bit over the last year or two. It's really going to depend on how quickly we can consume through -- as a housing industry we consume through that standing inventory. That's going to depend on demand. Like I mentioned before, the demand is still there for our product, but it's going to take some time to work through the inventory. So I'm not ready to call that yet. I think we don't have a view necessarily on when that's going to turn around. What I will tell you is we have better data and insight into that than we ever have. And we're watching it extremely closely, and we're ready to adjust as soon as we see some leading indicators that tell us that it's improving. Operator: Our next question comes from the line of Jesse Lederman with Zelman. Jesse Lederman: When you spoke in late October, you noted your internal dashboards were indicating some inflection point in seasonal leasing activity. But it looks like in November versus December, occupancy was lower sequentially and that's continued here in January. So what changed over the subsequent few months relative to your expectations in October? And if you could just talk through the renewal rent growth falling roughly that 70 basis points [ sequentially ] into January. That would be great as well. Bryan Smith: Yes. Thanks, Jesse. Yes, fourth quarter was a little bit of a tough time from a visibility standpoint. We did start to see some moderation as we saw across the housing landscape in general, I think -- there were some fits and starts, where we saw in November as an example, we started to see a pickup in activity. As we talked through that, our expectation was that we would build occupancy through the end of the year, and again, come into the first of the year like we normally do it in a good occupancy position, that wasn't sustained. We adjusted our pricing strategy and some other things that led to that slightly negative new lease rate growth in the fourth quarter, but it didn't quite turn out the way that we thought it would. So -- we're pulling out all the stops at the first of the year here to support occupancy. Our goal is again to build through peak season and focus highly on making sure that we have occupied homes. That is supported by the new lease rate growth that you've seen, but -- to your other question, a slight moderation in renewals, just recognizing the fact that we -- the components of building that occupancy or new leasing and retention inside the portfolio. So we wanted to support the retention a little bit. We're setting those renewal rates out well in advance. So those went out for January and February, right about that same time, we were contemplating some of those other changes in the marketplace. So overall, I think we're in the right place on the renewals as well, slight moderation, but full year around the 3% area should go to where we need to be on the occupancy. Operator: Our next question comes from the line of Michael Goldsmith with UBS. Michael Goldsmith: Can you talk a little bit about pricing trends at the build to rent versus the scatter site product? And are you offering concessions at either or both of those segments in your portfolio? Bryan Smith: Michael, this is Bryan. Thanks for the question. Pricing trends, it's interesting. We talked -- or I talked earlier in the call about where the 2025 yields settled is really a function of the rate environment. But if you were to compare our community leasing with scattered site. We've seen pretty favorable demand for our communities. We've been leasing them up without concessions, no concessions on the scattered site and really no concessions on the lease-up of the new development communities as they're being delivered. It's really interesting, too, because as we talked about in the past, these are homes that are being delivered into active construction sites, and we're still supporting good rent without having to do a lot on the concession side. And to kind of add on to a little bit of what Lincoln has been talking about with supply and demand, when that supply pressure starts to be alleviated and hopefully, in the near term, we're going to see the benefit on our new development product. It's a superior product. The rents at a premium. There's a lot of demand for it and the pricing power will return there, and you'll see yields migrate north on our development new deliveries as well. Operator: Our next question comes from the line of Jade Rahmani with KBW. Jason Sabshon: This is Jason Sabshon on for Jade. So homebuilders have leaned in or rate buydowns and incentives lately. Can you comment on the supply-demand balance in key Sunbelt markets and whether you're seeing that aggressiveness from builders drive any increase in move-outs to buy. Bryan Smith: Yes. Thanks for the question, Jason. Again, it's the for-sale markets, one portion of the supply that we watched very carefully. Our moved out to buy has remained pretty steady in the high 20s to 30% area. So we haven't seen a major shift. There are some anecdotes in some of the markets about incentives outside of rate buydowns. As an example, some of the the builders in our Florida markets got pretty aggressive, and we're willing to buy out some of our leases for our residents who were interested in buying homes. We're watching that very carefully. It's happening on the fringe, again, not affecting the overall trend. And then, of course, I think everybody is also interested in how many of the those for-sale homes are coming back into the portfolio or into the overall inventory. And we're watching that carefully as well. So not a huge impact so far, just small anecdotes of builders trying to respond to do their part to give some market share. Operator: Our next question comes from the line of [ Jason Wayne ] with Barclays. Unknown Analyst: Thanks for the question. Looking at the development pipeline, you have some lots in some markets outside of the Sunbelt, like the Midwest and in the West Coast -- just wondering where the delivery this year located and where you'd have the preference for starting new developments. . Bryan Smith: Yes, thank you. This is Bryan. In our development program in the Midwest, it's focused on Columbus. And if you look at our supplemental, you can see what the lot pipeline is behind that. We really like the Columbus market. We really like a number of the markets in the Carolinas. Seattle has been strong as well. So you can see the pipeline there, and we're looking forward to delivering really good product into those high-demand markets. And then some of the other markets where we have a significant development presence, we feel very good about those markets over the long term, but there may be some short-term pressures referring more towards the lot pipeline that we have in places like Arizona and Las Vegas. Operator: Our next question comes from the line of Eric Wolfe with Citibank. Eric Wolfe: Thanks for taking the follow-up. Looking at the changes in your same-store pool, your third quarter occupancy was 95%, like as reported last quarter, and now it's 96.4%. So there's a similar like a 50 basis point change based on what you sold. I guess what is the reason for that? I mean is it -- are you selling more vacant homes than normal? Why was there such a sort of jump in the occupancy based on the new same-store pool? Because obviously, it creates a little bit of a more difficult comp for you. Christopher Lau: Eric, Chris here. Essentially, what you're seeing is the result of smart asset management decisions where we are identifying some of the outlier and/or underperforming properties through our asset management process for disposition. And so over time, as we are identifying those underperformers, they're moving their way into the disposition program and ultimately being sold. Obviously, that has an upward improving lift to the remainder of the same-store pool. There's always a little bit of movement from one quarter to the next usually not terribly large, but it's a function of making smart asset management decisions at the unit level. Eric Wolfe: Okay. And then last question. You normally have a pretty good idea, not perfect, but good idea of sort of what forward occupancy looks like and I know it can miss based on various factors. But I guess, as you look at things 30, 60 days out based on your revenue management system, are you seeing that typical lift in occupancy that you normally see at this time of year, especially since you've throttled baked down a bit. Just curious if you can give us a perspective on sort of where you expect to go over the next couple of months? Lincoln Palmer: Yes. Thanks. This is Lincoln again. As I mentioned before, a little bit slower start to the leasing season than we would have preferred. However, we are seeing the normal trend in activity that's moving upwards. So again, with the focus on building occupancy, we'd expect to move into the 96s of the peak of season and then again, hold some of that into the back of the year. So -- over the next couple of months, we would expect if we execute well, that we'll see the occupancy goal. Operator: Our next question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets. Austin Wurschmidt: Great. Beyond the supply challenge markets that you've discussed, is the moderation you're assuming in guidance around lease rate growth or that flatter seasonal curve that you described. Is it broad-based? Are you seeing it more pronounced than either the Sunbelt or Midwest markets? And then on top of that, just curious how much that's playing into your development decisions. Lincoln Palmer: Maybe I'll just give some commentary on the overall market and then Bryan or Chris want to comment on the development they can. Yes. Look, again, I think that what we're seeing is the effect of broad-based supply across all housing types. It is very market specific, and I wouldn't want to point to one factor that would look like it's affecting all of our markets, especially equally. Like I said earlier, we have many markets that are not supply pressure at all. Take a Seattle and Salt Lake City as an example, where not only they have not had heavy deliveries over the last couple of years, but they're also significantly geographically constrained. It's difficult to build inventory into those markets. So it's not equal across all of them, and we evaluate each of them individually. Christopher Lau: Yes. And then Austin, Chris here. On your -- the second part of your question around development. Look, the development program sizing is a function of relative returns, yields coming out of the development program compared to capital market conditions and cost of capital currently. As Bryan was talking about, right now, one of the larger drivers to the current yield profile is market rent growth. The other side of the equation in terms of construction. The teams have done a fantastic job controlling costs throughout the development program. I forget if we mentioned this data already. But if you look at the hard vertical construction costs to develop a home in 2026, they're essentially flat to even modestly down 2020 -- sorry, 2025 compared to 2024, which is fantastic, right? But ultimately, sizing in the development program is a function of relative returns and yields compared to capital market conditions and cost of capital and alternative uses of that capital and freeing up some extra capacity for repurchases like you've already seen us be active on. Operator: Our next question comes from the line of Buck Horne with Raymond James. Buck Horne: Thanks for the followup. Appreciate the time. Wanted to talk about the dispositions that were executed in not only the fourth quarter just year-to-date? Just thinking through the -- what you've been able to sell with the, it looks like net proceeds were just a shade under $300,000 per house. Most of your markets median resale prices are probably closer to $400,000, how would you characterize kind of the tier of the dispositions that you're selling? Are these houses typically lower quartile or the middle of the road? Or are they fairly representative of the value of the homes in the portfolio? How should investors think about that? Bryan Smith: Yes. Thanks, Buck. This is Bryan. The typical property that we're disposing of that we're selling really is a noncore asset. And in many cases, it's maybe not the location that we want or there are other characteristics that, that just make it have a different growth profile to the rest of the assets. So I think it's fair to say that this average sales price would be lower for that cohort than the rest of our -- of our homes, especially the new homes that we're delivering on the development side, which are superior quality and location. But the #1 reason for disposition for us is location. A lot of it is the fact that we finally getting access to homes that we acquired via consolidation in the past, many of which were subsequently securitized. So we're getting access to some product that might be a little bit -- maybe a lower level than what's typical across our portfolio. Operator: Our next question comes from the line of Brad Heffern with RBC Capital Markets. Brad Heffern: Thanks for taking the followup. Chris, just given all the political noise, do you have an elevated level of advocacy costs or anything like that, that are in G&A and that are having an impact on the guide? . Christopher Lau: Yes. Good question. I appreciate you asking. As everyone knows, we started investing into our own government affairs teams, department, resources and initiatives years ago at this point. And so there's already just a structural component of our cost structure represented by government affairs and advocacy-related costs. . Again, we're expecting to incur those in 2026. Each year, those dollars and resources are directed a little bit differently. Obviously, this year, those will be directed towards the current matter at hand. The right way to think about it is a little bit under $0.01 or so is what just regularly run through our numbers each year. And then as we progress throughout the course of this year to the extent that those numbers change, we need more or what not difficult to crystal ball that at this point. But to the extent that those numbers change, we will make sure that we call them out separately. So everyone can clearly understand those dollars separate and apart from the run rate cost structure of the business. Operator: Our next question comes from the line of Steve Sakwa with Evercore ISI. Steve Sakwa: I just wanted to follow up on the dispositions. What constraints, I guess, outside of tax issues that you have around dispositions, meaning you want certain size of homes or certain scale in the market. So to what extent are your dispositions limited by you wanting to have a good footprint in each market as you think about kind of the disconnect between kind of the sales values and kind of where the stocks trading. Christopher Lau: Yes, Steve, Chris here. I can start that one. Look, there's a number of different perspectives that we need to think about dispositions through tax planning is definitely one of them. The other piece, like I was talking about earlier is just the natural timing governor in terms of how many homes can be sold in any one given year. . Considering how much collateral has been freed up from our securitizations like we were talking about. We are of the view that there's a pretty good runway of disposition candidates ahead of us. But the natural governor there will be the sheer volume of those that can be sold in any one given year, given the fact that we need to let leases roll, residents moved out, then homes can go into the market. At that point, they move quickly. But obviously, leases need to roll first. That's the main governor in consideration. We're thinking about the amount of volume that can be done in any one given year. Bryan Smith: Steve, this is Bryan. Further to your question on market sizing, our operating platform has proven to be very efficient at different sizes. What we're doing is we're looking at these houses at an individual level and finding the ones that are noncore, have different growth prospects than then we could find on the development program as an example. We're able to strategically prune these houses and then reinvest them in areas with better long-term growth. Operator: There are no further questions. I'd like to pass the call back over to management for any closing remarks. Bryan Smith: I'd like to thank everyone for your time today. We appreciate the continued interest in AMH and look forward to speaking with you next quarter. Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Operator: Good day, and thank you for standing by. Welcome to the Casella Waste Systems, Inc. Fourth Quarter 2025 Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Brian Butler, Vice President of Investor Relations. Please go ahead. Brian Butler: Thank you, Marvin. Good morning, and thank you for joining us on the call. Today, we'll be discussing our fourth quarter and full year 2025 results, which were released yesterday afternoon. This morning, I'm joined with Ned Coletta, President and Chief Executive Officer of Casella Waste Systems; Brad Helgeson, our Chief Financial Officer; and Sean Steves, our Senior Vice President and Chief Operating Officer. After a review of these results, and an update on the company's activities and business environment, we'll be happy to take your questions. But first, please note that various remarks we may make about the company's future expectations, plans and prospects constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section on our most recent Form 10-K which is on file with the SEC. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views on any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to today, February 20, 2026. Also during this call, we'll be referring to non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures to the extent that they are available without unreasonable effort, are included in our press release filed on Form 8-K with the SEC. And with that, I'll now turn it over to Ned Coletta to begin our discussion. Ned Coletta: Thanks, Brian. Good morning from Rutland, Vermont. As my first earnings call as CEO, I want to begin by saying how honored I am to lead this exceptional team into the next chapter of Casella's growth. I'm energized by the opportunities ahead and confident in our ability to continue building long-term value for our shareholders, customers, and employees. We closed the fourth quarter with performance that reflects sustained organic growth, meaningful operating improvement, and continued strategic momentum across the business. For the full year 2025, revenues increased 18%, Adjusted EBITDA increased 17%, and adjusted free cash flow increased 14%. This marks our fifth consecutive year of double-digit growth across each of these three metrics, a testament to the durability of our business model and the strength of our strategic plan. Importantly, Adjusted EBITDA margins, excluding acquisitions, expanded 55 basis points year-over-year. Margin improvement was driven by disciplined collection pricing, higher landfill volumes, operational efficiencies, and synergy realization from prior acquisitions. We completed 9 acquisitions in 2025, representing over $115 million in annualized revenues. We started 2026 strong, and on January 1, we closed the Mountain State Waste acquisition, which adds approximately another $30 million in annualized revenues and expands our Mid-Atlantic segment into the West Virginia market. Our balance sheet remains a strategic advantage for us. We finished the year at 2.3x levered, with over $700 million in liquidity to fund future growth. Our acquisition pipeline remains robust, with opportunities to further densify within our existing footprint and growth options to selectively expand into geographically adjacent markets that align with our strategic plan. Now, looking at our 2025 segment performance. In our solid waste collection and disposal operations, revenues increased 20.3%, driven by disciplined organic growth and another strong year of acquisitions. Base collection and disposal margins, excluding acquisition impacts, increased 170 basis points year-over-year as we generated a positive price to cost spread, continued acquisition integration efforts, drove higher landfill volumes, mainly through internalization, and generated cost savings through operational optimization initiatives. In the second half of 2025, vehicle deliveries improved as expected, and we received 40 automated trucks that were delayed earlier in the year. We expect these vehicles, along with the associated labor efficiencies and route optimization, to generate more than $5 million of savings in 2026. Our team did a great job in the second half of 2025, advancing the key acquisition, integration, and system conversion initiatives in our Mid-Atlantic region. We have substantially completed the migration of customers from acquired billing systems to the integrated Casella Lead to Cash System, and we expect the remaining migration work to be completed by the end of the first quarter or very early in the second quarter. Once completed, we can start the real exciting work of rolling out additional automated trucks, consolidating routes, and optimizing pricing and profitability. We continue to make permitting progress on our expansion efforts at our Hakes and Hyland landfills in New York, with the Hakes permit expected in the next couple of quarters and the Hyland permit expected within the year. We are working to more than double the annual permit at Hyland from 460,000 tons a year to 1,000,000 tons, and we would also add close to 60 years of capacity at current run rate. At the Hakes C&D landfill, we're permitting a 10+ year expansion. These expansions are important with the expected closures in New York over the next several years, including the expected closure of the Ontario County landfill at the end of 2028. The McKean Landfill Rail Upgrade Project remains on track for completion in the second quarter of 2026. This will allow us to offload municipal solid waste, contaminated soils, and C&D materials from gondolas at the landfill. Our resource solutions segment also delivered a strong year, with revenues up 9.1% and segment adjusted EBITDA up 9.6%. This reflects strong national accounts performance and operational efficiencies from the upgraded Willimantic Recycling Facility. While current recycled commodity prices are trading at roughly 20% below 10-year averages, our effective risk management programs pass much of this commodity volatility back to our customers through the floating, processing, and SRA fees. These tried and true programs are effectively offsetting about 80% of all commodity downside risk, helping us to generate consistent returns on our recycling business in all market cycles. Pivoting to 2026, we exited the year with strong momentum and a solid setup for this year. Our frontline team has done an amazing job this winter, providing solid customer service through one of the coldest and snowiest winters we've experienced in over a decade. Despite these operational headwinds from the bad winter weather, we remain very confident in our outlook, driven by sustained pricing strength, continued self-help cost initiatives, automation benefits, and a very attractive acquisition pipeline over $500 million of annualized revenues. We're focused on both densification and strategic expansion opportunities. Our team is laser-focused on improving safety and employee engagement in 2026. We've added several key new safety and HR leaders to the organization. We're focused on process improvements, and we're investing in key systems such as AI-enabled onboard truck technology. With that, I'll turn it over to Brad to provide additional details on the fourth quarter performance and financial results. Bradford Helgeson: Thanks, Ned. Good morning, everyone. Revenues in the fourth quarter were $469.1 million, up $41.6 million, or 9.7% year-over-year, with $23.1 million from acquisitions, including rollover, and $18.5 million from same-store growth, or 4.3%. Solid waste revenues were up 9.9% year-over-year, with price up 4.4% and volume down 1.1%. Within solid waste, price in the collection line of business was up 4.6% in the quarter, led by 5.3% price in frontload commercial, and volume was down slightly at 0.3%, with modestly positive volume in frontload and residential, but weakness in roll-off, down 5.2%. Price in the disposal line of business was up 4.1% and third-party volume down 4.5% year-over-year. However, this stated volume decline is misleading for a couple of reasons. First, results at the landfills were steady, with same-store price up 2.5% and total tons up 1.7%, including nearly 10% growth in internalized volumes. Our reported numbers only refer to third-party volumes. Second, the decline was also largely driven by the transfer station and transportation businesses, with little net impacts to EBITDA. The important point here is that the landfill business is healthy, and we're confident heading into next year, as I'll discuss in a few minutes. Resource Solutions revenues were up 9.1% year-over-year, with recycling and other processing revenue down 1.4%, impacted by lower commodity prices, and national accounts up 15.6%. Within Resource Solutions processing operations, our average recycled commodity revenue per ton was down 27% year-over-year, with softer markets across the board and most commodities selling below 5-year averages. Notwithstanding market pressures, our contract structures share this risk with our customers by adjusting tip fees in down markets, so the net impact of lower commodity prices on our revenue was less than $1 million. Processing volume in revenue terms was up 12%, driven by higher volumes at the Willimantic Recycling Facility, which was down for its upgrade in the fourth quarter last year. Within national accounts revenue, price was up 3% and volume up 9%. Adjusted EBITDA was $107 million in the quarter, up $12 million or 12.7% year-over-year, with $3.3 million of contribution from acquisitions, including rollover and 9% organic growth. Adjusted EBITDA margin was 22.8% in the quarter, up approximately 60 basis points year-over-year. Bridging the year-over-year change in adjusted EBITDA margin, new acquisitions contributing at lower initial EBITDA margins than our overall business, diluted margins by 40 basis points in the quarter. The base business, excluding new acquisitions completed in the past 12 months, expanded margins on a same-store basis by 100 basis points, driven by the collection business across our footprint, including the Mid-Atlantic. Recall the privately held businesses that we acquire typically operate at lower margins, which can create short-term margin dilution. As we integrate these businesses, capture synergies, and apply our operating model, they become margin expansion opportunities over time, creating a regenerative benefit as we continue to execute our acquisition strategy. Cost of operations were $313.8 million in the quarter, up $27.2 million year-over-year, with $17.4 million of the increase from acquisitions and $9.8 million in the base business. Excluding acquisitions, costs of operations were down 60 basis points as a percentage of revenue on a same-store basis. General and administrative costs were $55.9 million in the quarter, up $3.7 million year-over-year. As a percentage of revenue, G&A was down 30 basis points year-over-year, reflecting increased IT spend, but also favorable incentive comp accrual adjustments. From a G&A standpoint, 2026 will be a pivotal year as we lay the groundwork with better systems and process for becoming more efficient in our back office and generating better scale as we continue to grow. Our goal is to begin to benefit EBITDA margins with lower G&A as a percentage of revenue in 2027, and for this to become a consistent tailwind to margins for years beyond that. Depreciation and amortization costs were up $13.3 million year-over-year, with $4.2 million resulting from the recent acquisition activity, including the amortization of acquired intangibles. You'll note that we isolated a charge on our income statement and adjusted the EBITDA reconciliation this quarter for the accrual of closure costs at our Hawk Ridge Organics facility in Maine. With the ban on land application of organics in Maine, it made economic sense for us to close this facility and redirect the material primarily to our landfills. We anticipate approximately $3 million of additional costs related to the closure of the site in 2026, which will not impact adjusted EBITDA. Adjusted net income was $18.9 million in the quarter, or $0.30 per diluted share, down $3.4 million, or $0.05 per share. GAAP net income was down $7.4 million in the quarter. Net cash provided by operating activities was $329.8 million in 2025, up $48.4 million or 17% year-over-year, largely driven by EBITDA growth. CSO was essentially flat from September and last year at 36 days. Adjusted free cash flow was $179.9 million in 2025, up 14% year-over-year. Capital expenditures were $245.1 million, up $41.8 million year-over-year, including $66 million of upfront investment in recent acquisitions. As of December 31, we had $1.17 billion of debt and $124 million of cash. Our consolidated net leverage ratio for purposes of our bank covenants was 2.34x, and our $700 million revolver remained undrawn. Our liquidity and leverage profile will enable us to be opportunistic in continuing to execute on our growth strategy and robust acquisition pipeline. As laid out in our press release yesterday, we announced financial guidance for 2026. This guidance included revenue in the range of $1.97 billion to $1.99 billion, or 8% growth at the midpoint. Adjusted EBITDA in the range of $455 million to $465 million, or 9% growth at the midpoint, and adjusted free cash flow in the range of $195 million to $205 million, or 11% growth at the midpoint. All of this is consistent with our preliminary outlook, as communicated on our third quarter conference call in October. Our guidance ranges reflect acquisitions completed to date, including Mountain State Waste, which closed on January 1, and assume a stable economic environment for the balance of the year. While we expect to continue to be acquisitive this year, our guidance does not reflect any further acquisition activity. On the top line, our guidance includes approximately $60 million from acquisitions, or 3% growth, which includes rollover and the Mountain State Waste, and approximately 4.5% organic growth at the midpoint. In the solid waste business, we're planning pricing of approximately 5%, which we aim to cover and stay ahead of inflation. As a reminder, we retain pricing flexibility across approximately two-thirds of our collection revenue, so we are well positioned to respond to changing conditions, if necessary, as the year progresses. Solid waste volumes are expected to be approximately flat plus or minus, with continued churn in our collection book of business reflected in that estimate, particularly as we integrate new acquisitions. Bridging 2025 adjusted EBITDA to our guidance, $10 million to $15 million is from acquisitions, and approximately $25 million or 6% is base business organic growth at the midpoint. Our adjusted EBITDA guidance range implies approximately flat margins to 40 basis points of margin improvement in 2026, which is largely the base business. This improvement is expected to be driven by strong, consistent pricing, benefits from integration and synergy realization with our acquisitions in the Mid-Atlantic region, ongoing operating improvements in our collection business, and higher overall landfill volumes year-over-year. These drivers are expected to be partially offset by the closure of our Hawk Ridge Organics facility and lower volumes at our North Country landfill in New Hampshire, as we ramp down volume ahead of anticipated closure at the end of next year. We expect adjusted free cash flow to grow at approximately 11% at the midpoint of guidance, driven by adjusted EBITDA growth and reflecting capital expenditures of approximately $260 million, which includes approximately $65 million of upfront spend in connection with recent acquisitions, and a small remaining investment to complete rail access capability at the McKean landfill. With that, I'll turn it back over to Ned for some closing comments. Ned Coletta: We're turning over to the operator right now for questions. Thank you. Operator: [Operator Instructions]. And our first question comes from the line of Tyler Brown of Raymond James. Patrick Brown: Ned, congrats on everything. But I want to kind of start just to ask you a really big picture question. So -- can you just help us shape a little bit about your vision for Casella, say, over the next 5 years? I mean do you want to speed up, slow down M&A? Are you looking to do bigger deals, smaller deals? Are you really focused on self-help? I'm going to leave it pretty open ended, but just, what's your message to shareholders and employees about your vision for Casella? Ned Coletta: Yes. Thanks, Tyler, for throwing a hard ball for the first question. I appreciate that. So not a lot changes in many ways. So John and I, as you know, have had an amazing partnership for many years and much of the strategy of the company, we've shaped together with senior team. So there's not a right turn coming in and no one should expect that. We're focused on the same building blocks that have created a lot of value for shareholders over many years. This year, myself, I'm focused on a few different things, making sure our workforce is safe and engaged, and we're really continuing our investment in our safety staff, our processes, technology there. We're also focused on upping our game from an HR standpoint and as we've grown dramatically, making sure that are all of our employees really understand our culture, what makes us special and why we're such a great company to work for and how to support each other. We're also focused on internal communications and just making sure that we all know each other, and we have great ways to communicate up and down the organization as we've grown. And the last point kind of gets to what you're talking about. For many years, we've had excellent strategic plans as a company and it's really directed a lot of our success for the long term. But just really making sure our employees live in both the daily work they need to get done and also looking to the future and looking over the next 3 to 5 years into strategy and into key programs from a self-help standpoint or our growth initiatives and just ensuring we have alignment up and down our management team in those areas. So as I started with, no major right turn, we're going to be focused on the same major building blocks driving incremental value through our landfills through additional permit capacity and cost reductions, better utilization, additional profitability, our collection line of business, pricing, automation, optimization, driving value through our Resource Solutions business as we've done very, very well over time. And then the growth initiatives, both on acquisitions and development, our pipeline is very, very good right now. We've got a lot of great opportunities for '26. I think it will be a nice solid year for us on the acquisition growth side. So overall, much of the same, but a lot of excitement in the company right now. We exited the year in a great spot and a lot of smiles around and people working very hard. Patrick Brown: Excellent. Okay. That was fantastic. And then you gave some good color on the Mid-Atlantic. It sounds like the new system. It is going to be fully rolled out by, call it, Q2. It sounds like the new trucks are landing, but is it right that you're only baking in about $5 million of synergies into the guide? Ned Coletta: Yes, we're probably a touch conservative. We have completed almost all of the systems integration work. There's a little bit left to be done. It'll be done kind of early here in the first quarter. No risk around it. It's just migrating from the legacy customer billing portal into our in-suite portal, and that will be completed and will allow us to start to collapse routes, gain synergies on the street, get more of those automated trucks out and gain some real efficiencies in the back office. But we're being a touch conservative for a few reasons. One, we got to get this work done. It's not all going to show up this year, but we're also doubling up on many costs as well. We're running multiple systems at the same point in time. We're investing both CapEx dollars, but also operating dollars in a lot of this transition and migration work that's running through our income statement. So there's more to come here. As we've said, this is a multiyear opportunity and will be a positive tailwind for a couple of years. Patrick Brown: Right. So it's probably operational opportunity routing, et cetera. But then longer term, there's some opportunity to surgically price. Is that right? And any thoughts about what that could mean? Ned Coletta: Yes. I mean, certainly, when we have all the businesses running on the same system, we'll have a much better ability to assess customer profitability, route profitability and price accordingly and they're doing the rest of the business. So that will be a big opportunity going forward. I think it would be a little premature for us to put a dollar number on that, but you can imagine what that opportunity could be. And then going forward kind of beyond this initial wave of synergies, facility consolidations, long-term route consolidation opportunities as we continue to fill in densifying that market with tuck-ins. There's a long list of opportunities that will extend far beyond 2026. Patrick Brown: Okay. So '27 sounds good on that front. But Brad, you also made an interesting comment about G&A leverage starting in '27. I mean I know you guys run a couple of hundred basis points higher than maybe peers. But can you talk about what are we talking about quantum wise from a G&A leverage perspective, '27, '28, '29, I mean however you guys want to frame that? Ned Coletta: Yes. I mean we run a little over 12%. The industry benchmark with our admittedly much larger peers, is closer to 10%. So that's the long-term goal. That's sort of our North Star. I think the first step for us over the next, call it, 3 to 5 years, will be to get -- go from 12% down to below 11% and then keep the trade enrolling. But we have a number of opportunities and projects that we have lined up in different areas this year to start to get some benefits in the numbers in 2027. As I said, '26 is sort of a pivotal year for laying a lot of groundwork for what we're going to be able to realize going forward. Operator: Our next question comes from the line of Tami Zakaria of JPMorgan. Tami Zakaria: I wanted to follow up on that volume comment you made. Just from a modeling perspective, could you provide some color on volume growth as we see the 4 quarters this year? Ned Coletta: Yes. I'll turn it over to Brad in a second, but I wanted to make -- Brad mentioned this in his prepared comments, but I want to double down on it. Stats are as good as the stat is. So like if you look at our volume stat in the fourth quarter, especially on the landfills, it looks a little weak. But it only looks at third-party bonds. It doesn't look at overall volumes coming into our landfills. And as Brad said, with very strong remixing at our landfills from third-party customers to intercompany customers. So our tons were actually up 1.7%, while our volume stat was down. So that statistic doesn't tell the full story because it just look at third-party revenues. And if you look at that rolling into this year, Brad, and take that as a backdrop, we actually had a pretty good volume quarter in the fourth quarter. It might not have showed up in the stat on the third-party side. Bradford Helgeson: Yes. looking ahead to 2026, we do expect landfill third-party volumes to be a positive for growth. So, you know, I think what you saw here this year was a little bit of a blip as we shifted really to emphasize more internalization where we could. On the collection side, just to give kind of the full volume picture, you know, we're looking at flat growth-ish. We're hoping to bend the curve and start to grow the business organically via volume. As we've acquired so heavily in the last few years, there's been a churn that's been ongoing and, you know, volume on the collection side has been a net negative. And as we've, you know, like everybody else, prioritized price and making sure we have appropriate margins and returns from our customers. But we think we have an ability to grow this business in our markets, particularly in Mid-Atlantic, as we get our feet under us there, going forward. Tami Zakaria: Understood. That's very helpful. And one more question -- follow-up question on the G&A comments you made. I think you said this year is a pivotal year that would pave the way for a multiyear cost improvement. The goal is to get to for like the industry average 10%-ish. Is there a way to frame how you get there? Do we see some accelerated basis point improvement next couple of years and then it's sort of eases into a 10% range? Any way to sort of frame the opportunity here? Bradford Helgeson: Let me maybe frame it at sort of a high level. You know, our back-office processes at Casella are very, very manual intensive, and don't offer us much scale as we continue to grow. So we grow the business, we have to add more people. You know, as we improve the technology, the utilization technology, and the tools available to the team, consolidating our billing system, which we've talked about a lot, we're putting in a new maintenance system as we speak. We're getting ramping up utilization of our procurement system. So there are many things kind of below the surface that we're working on, that will, you know, when we come out of 2026, it's not going to be magically, you know, on January 1, 2027. But the process we're going through is to end up where we're much more scalable, and we can really grow, or rather, shrink that percentage of revenue as we grow. Ned Coletta: And it's even a little more pointed than that, where you know, many of these programs started, you know, in early 2025, and both in 2025 and 2026, we've had doubled up costs because in some certain cases, we're running multiple systems at the same time. We have additional staffing during these transitions. So there's definitely not just the efficiencies that Brad's talking about, but there are just some redundant costs in the business right now as we're making this technology transformation. But like many things, very well thought out, not that there aren't areas of large technology risk, as we talked about before, which is upgrading tried and true systems we've had before and improving integrations and really gaining efficiencies. Operator: Our next question comes from the line of Adam Bubes of Goldman Sachs. Adam Bubes: You talked about the volume performance, including some more internalization, rather than taking in the third-party tons. You know, I think understand the benefits of internalization, all else equal. But can you just talk about the decision to make that trade-off, the economics for substituting external volumes for internal volumes? And then longer term, how do you balance the opportunity to drive internalization with the need for backup capacity in the Northeast? Ned Coletta: Yes. Over the last couple of years, we're running a little bit short on landfill volumes at some of our key sites, especially through New York State. Typically, you want to run a landfill, say, 85% to 95% full in a year, and we're a bit short to that. In 2025, a lot of our effort shifted to getting the transportation lanes in place, the equipment in place, integrating acquisitions, getting those tons into our landfill sites. And as we exited 2025, we got a lot of that work done. And it was exciting because it gives more stability to the business. If we can control more of the tons through vertical integration, it creates more stable, lasting value over time. But we also were filling up our site, so as we were making some of those moves, we had to, you know, exit some third-party tons from our landfills, hence a little bit of that negative third-party stat. But overall, we had more tons coming into our landfill sites in a really nice mix improvement as well. So that's something, we're in a pretty good spot right now, '26 will not see a shift like that, where we're remixing again. We'll be focused very much on quality of revenue at the landfills and driving higher returns and moving up the average price point. Adam Bubes: Great. And then I know it's still early, but hoping to get your initial thoughts on where the internal and external tons at your Ontario landfill could head post-2028, and any cost implications that we should keep in mind during that process? Ned Coletta: Yes. So, this is something we're still mapping out, and we'll get more information to shareholders, but this has been a known closure point for us for a couple of years. So we've been building up to this, what we feel good about our balance sheet accruals and the glide rate getting to that endpoint. We don't expect, you know, charges or something like that. We expect all of these costs to be accrued for appropriately leading up to that closure. The site's taking in about 850,000 tons a year of waste as we currently speak. As we've been talking about for several quarters, we've been actively working on an expansion at our Hyland landfill in New York for close to 5 years, if you can believe that, and we're very close to the end of that process, and we'll be going from 460,000 tons to 1 million tons a year. So quite a few of those tons from Ontario will move over to Hyland, and the highest quality revenue tons will move over. We've also been in the early stages of some other expansion work that could help with some of those additional tons in the market, where we may shed some of those tons as well. But as we're mapping this through, we'd like to be in a situation where our quality of revenue improves, our returns improve, and we don't see any sort of major step down from an EBITDA standpoint at the end of 2028, coming into 2029. Bradford Helgeson: Yes. Ned, just to add on to that, I mean, Ned referred to returns. I mean, Ontario has been a great disposal outlet for us and our customers for a number of years. It's, on a volume basis, our current volume basis, our largest site, but it's also a very, very expensive site to run from a cash flow perspective, and from a EBIT and net income perspective. So, you know, as we reblend that over time, move some volume to Hyland, move it to some other places, yes, and then coming through that, we may end up with a -- or not may, we expect to end up with a much better cash flow and earnings profile from those tons. Operator: Our next question comes from the line of Trevor Romeo of William Blair. Trevor Romeo: A couple for me here. I guess first one is on M&A and kind of your outlook here. I think if you look back at the last few years, you kind of added double-digit percentages to revenue from M&A. I think you're coming into this year with maybe a little bit less than the past few years. So just in terms of what's in your pipeline now, you know, are there any bigger deals out there? Do you see opportunity to get toward those kind of double-digit M&A contributions this year? Or you think it'd be more likely it'd be a little bit less than the elevated levels the past few years where you stand today? Ned Coletta: Yes. Great question. We have had several very strong years. 2023, 2024 were above average years. We were well above $300 million of acquired revenues in 2023. 2024, around $250 million of acquired revenues. And this last year, around $115 million-ish or so. Mountain State Waste, we thought, was going to land in December and ended up landing in January, so that would have brought us, you know, a little closer to $150 million. But where we sit today, our pipeline is really good in the advanced stage. We've got a number of high-quality companies we've been working with for a period of time, several of which are a little bit larger. And we would hope to kind of crest that 150 level, $150 million of revenues in 2026, and hopefully, you know, maybe get above $200 million if the pipeline continues to develop. But from our vantage point, it comes down to quality and strategic fit. You know, you never talk about the deals you don't land, and there are several of those in 2025 that we did a lot of work on, and they just didn't work out for either, you know, compliance reasons or pricing or whatever it might be. And, you know, as a management team, John and I have said this for a lot of years, we're not just buying companies to buy them. We're buying them to make money and to make returns and to advance our business model, and we stay true to that. So from you know, having the discipline to be able to walk away, it's something we've always maintained, and that's why we don't guide acquisitions. You know, you don't want to get in that position where you feel like you have to do something that's not the right value adder. So from our vantage point, we're sitting in a really good spot right now. Our team, our acquisition team, the broader management team has been working hard. John Casella, in his role, stepping into Executive Chairman, is spending a lot of time working on sourcing, acquisitions and continuing to build the pipeline, which is amazing for our team that he can continue to do that. So we're excited about the year and excited about, you know, the glide rate into '27. Bradford Helgeson: Yes. And just Trevor, from a modeling perspective, and I think you alluded to this in your question, a light rollover number coming into this year because, number one, at $115 million plus or minus of annualized revenue acquired last year. This is a relatively light year for us compared to what's kind of become our run rate. But also, it was front-end loaded. So we actually saw most of that acquisition revenue in 2025. So very little about $30 million rolling over into 2026. Trevor Romeo: Yes. All right. I appreciate that. It's good to hear that there's still opportunities out there, and good to hear that, John's still active, in the market for sure. Then real quick, just kind of had a question on, on, the guide. I think, Brad, you mentioned the Hawk Ridge facility closure, some of those, tons being redirected to your, to your landfills. Does that kind of capture all the economics, or are you expecting kind of a downward impact there on the scale and the North Country mix that you mentioned, too? You can just help us size and that impact factor there. Ned Coletta: Yes. You're breaking up a little bit, so let me know if I missed something here. But you know, the Hawk Ridge, it was a relatively -- is a relatively small facility, so we'll see some headwind from that in 2026, and that's baked into our guidance. But you know, net of moving some of those materials to our landfills, I'd say it won't be significant. North Country, from a margin and dollar standpoint, will be more significant. Yes, that probably represents a headwind of 20 basis points to our EBITDA margin, you know, as we ramp down that volume, planning for the end of that facility's life in 2027. Operator: Our next question comes from the line of Jim Schumm of TD Cowen. James Schumm: So I just wanted to make sure I have the Mid-Atlantic story down correctly. So it sounded like Ned said in the prepared remarks that you have a $5 million benefit for the new automated trucks in 2026. And so I'm assuming, or maybe this is incorrect, but is that $5 million benefit that's from, like, a labor reduction of the, you know, removing bodies off the back of the trucks? That's you're not assuming any, like, operational benefit from routes and stuff, right? So you've got $5 million that you know about, and then you complete your migration in the next coming days, and then that gives you the opportunity to look at and see what sort of size, what the next opportunity is, which you have not baked in any of that into your 2026 guidance. Is that correct? Bradford Helgeson: So I'd describe it a little bit differently, and Sean Steves is sitting here, so he can keep me honest. But there's a couple components. One is, as you said, getting the automated side load trucks on the street, replacing reload trucks and the immediate productivity and labor savings that come from that. But it's also combining routes. So once we can combine systems, we can eliminate routes for businesses that are operating today in the same market, overlapping each other. So the way I think I described it last quarter was, you know, the $5 million includes that initial list of as soon as we flip the switch on the system, we're going to go after these routes in this market and these number of routes in that market. That's just the tip of the iceberg, I think, is the point we're trying to make over time, as we'll be able to get more routing opportunities, facility consolidations, and of course, it's regenerative, you know, as we continue to acquire in the market. Ned Coletta: And just hitting that one step further, Brad, Almost all of the G&A of back office savings already eaten up in the year by redundant systems, by the investment we're making. So the savings are coming, but there -- in the year, we've got that doubled up cost as we're doing this work in the marketplace. So then that's why it starts to show up more in late '26 into '27. James Schumm: Okay. I just -- because my understanding was you've got these 2 systems. And I think you guys said in the past that you could be running like 2 trucks basically in the same neighborhood, but you're not really sure because you don't have the visibility on it because you're on 2 different systems. So if that's the case, then operationally, you wouldn't be able to remove -- necessarily remove those duplicate or redundant routes yet. Am I not thinking about that the right way? Ned Coletta: You're close. It's -- so as we've acquired businesses, we left many of them in the Mid-Atlantic on their own, we call it order-to-cash system. So from taking orders from customers through dispatching, routing the trucks and billing and collecting cash, they're on different systems. We're almost completed moving all of those businesses onto the upgraded Casella system, so all of that work will be done in the same system. When they're on different systems, you couldn't start to collapse customers' routes because they're running through different order systems, dispatch, routing systems. Now, they're on the same platform. We've got one or two more steps that need to be made in the first quarter, and then that allows us to have all those customers in the same database. We start to reestablish routes, optimize, consolidate trucks. At the same time, automated trucks are arriving, which allow us to gain more efficiencies. So all of that works together to the $5 million number. It will be bigger over time as we get rid of those redundant G&A costs in the year, and we also get the next legs of this strategy. James Schumm: Okay. And I would assume that, given the work that you had in the redundant systems, that from an M&A standpoint in the Mid-Atlantic, I would have thought that perhaps you slowed down the M&A in the Mid-Atlantic just because you kind of had your hands full. Is that fair? Do you now ramp up M&A when you have these sort of systems sorted out? Is that fair? Ned Coletta: Yes. We hit the brakes a touch. That is fair. We've done another 10 acquisitions in the Mid-Atlantic since we brought on the GFL platform two years ago. So we have continued to build density. We've got a great slide in our investor deck that shows, you know, those additional acquisitions we've done over the last two years in the market. But you're right. You know, the gold standard is we acquire a business, either within the first month or the first two months, it comes onto our integrated systems. We start to collapse routes, we get costs out, and we generate synergies faster. We were not in that mode the last few years, and so we've got some built-up, you know, opportunity now. For a little bit, it was an overhang. Now it's great opportunity. We still have that work to be done, and we'll gain those synergies. As you said, as new acquisitions come in, they'll come on to the modern Casella system within the first couple of months, and we'll be able to drive synergy value faster. Operator: Our next question comes from the line of Benjamin Moore of Jefferies. Stephanie Benjamin Moore: I wanted to circle back on the Mid-Atlantic opportunity, particularly as it relates to pricing. You touched on this a little bit earlier with the question, but I wanted to get a sense of how you view the overall pricing opportunity in the Mid-Atlantic. I think there's a couple of dynamics, a couple of, I guess, aspects to it. So there's, you know, certainly having the systems in place, which you noted, allowing for dynamic pricing. But also, can you talk a little bit about maybe how the pricing in that region compares to other regions, and then also talk about timing? You know, is this something that you know, you have to effectively do at the start of the year? Can you make these changes, you know, maybe as 2026 progresses, or is this more of a 2027 opportunity? Just kind of wanted to, to drill down on that opportunity a little bit more. Bradford Helgeson: Yes. Maybe I'll start off filling in some of the numbers and then, I'll hand it to Ned to talk about the strategy going forward. But, overall pricing across lines of business, we were about 3% in the Middle Atlantic, this year. So we've got some pricing, of course, but, we weren't in a position to price as aggressively, for lack of a better word, where it's warranted, because we couldn't really figure out exactly where it was warranted. So if you just do that math, you know, 3% versus our -- the rest of our business, which is north of 5, blending down to the high 4s in the fourth quarter, you know, you can kind of, you know, pencil out the theoretical opportunity. How that plays out, of course, will depend on some factors in the market and what we find out. Timing-wise, you know, I think that work will really begin, you know, call it mid-year, you know, after we're done with the integrations onto the one system, and can really dig into, you know, the pricing analytics. But, you know, beyond that, it's as I think I mentioned earlier, it's certainly premature to put a dollar number on it. But Ned, any thoughts? Ned Coletta: Yes. This is one of the main reasons why it's important to be on our system, besides the routing. You know, we've got great tools we've developed over the years to understand customer-by-customer profitability and returns. And we want to make sure if we're gonna put assets to work, either part of the capacity of a truck or dumpsters or whatever it may be, that we're making an adequate return for that work. And, as the Mid-Atlantic business is built and, until all of these customers are onto the integrated Casella systems, we have not had a perfect view of profitability and returns of those customers, as we said. So we've been doing, you know, some work, of course, to understand where we need to drive price and why, and how to stay in front of inflation. But it's not done to the same rigor that we've been doing historically across our book of business in ensuring we have the right quality of revenue. So all of those great practices and how we run our business day-to-day, and how we generate solid margins and returns through our collection line of business, all those tools will be brought to bear in that marketplace this year into the future. And let's face it, it's about a 20% EBITDA margin business today. And generally, our hauling businesses as a company are north of 30%. So, you know, there's a lot of opportunity there. I don't think we can say we map it out exactly this much per year, but we know the opportunity is there to improve quality of revenue, to improve efficiency on the street, to have integrations of routes, integrations of business units. There's a lot there, and we look at it as this amazing opportunity. It's a tailwind for us right now. We have these tools, we know how to get this work done, and now let's go get it done. Operator: Our next question comes from the line of Shlomo Rosenbaum of Stifel. Shlomo Rosenbaum: Could you just to start, can you talk a little bit -- you've had really good national accounts revenue growth over the last couple of quarters. Can you talk a little bit more about that and, you know, what might be driving that? Ned Coletta: Yes. It comes from a couple different buckets. It really has been a strong point for us, and there are several different, you know, avenues that we're growing that business. One is more just traditional multi-site retail, maybe broker work, and that's a little bit less exciting. We definitely look for quality of revenue, and we look for opportunities to have overlaps to our hauling businesses, where that might be the channel of growth into our integrated collection business. But probably the more exciting part is our industrial business. We are at higher margin, we're delivering differentiated services, and we've been growing very, very fast into that segment. So both of them are areas of growth, but I think from our vantage point, if we can get the vertical integration and the revenues are recognized through the national accounts group into our integrated hauling landfill business, that's amazing. We try to under index just pure brokered work that we're not servicing, and then that industrial service work, that's where, you know, our sales efforts, our ability to drive value from an operating standpoint, that's where we really shine. And, you know, we've had many years in a row of 10% plus growth, and we continue to drive a lot of value for our customers and our shareholders in that segment. Bradford Helgeson: One comment about it is, you know, people who are new to Casella sometimes ask, you know, why, they're comparing our margins to some of our larger competitors. Why is there a differential? This is part of the answer. Our national accounts business, which is a nice growth engine, which is obviously little to no capital investment, so a great returning business. It does have a lower EBITDA margin profile because it's functionally a brokerage business. So that's kind of a factor where we make a decision to, okay, this probably just is downward pressure on our margins on a comparative basis, but it's a great business and it fits within our broader business, as Ned described. Ned Coletta: Yes. I just read in the numbers. Our industrial business grew about 17% in the year. So this is more value-added services, higher margin. So that's the larger growth engine in national accounts and where we've been driving more sales and operating focus. Shlomo Rosenbaum: Okay, great. Thanks for the color. And then, is there a way to dimensionalize the impact of weather in the first quarter? Because, you know, there's obviously been a significant impact, and you guys are more concentrated in where we have had more of the kind of severe weather. Ned Coletta: Yes, it's funny. We, you know, we learned a long time ago, try not to make a lot of excuses about the weather. Let's face it, our -- the men and women who work for Casella, they're out there in the cold, the rain, the snow, the ice, every day, taking care of our customers and working very, very hard. However, we did take a look because we've been living this for the last couple of months, and it has been cold, it has been snowy, and, Brian Butler ran some stats for us, and the snowfall across our markets is up 10% versus 10-year averages, but the temperatures are 20% below 10-year averages, and it has been cold. Our team has just done such an amazing job. I mean, being out there at 4:00 in the morning, servicing stops with negative 20-degree temperatures is not easy on our people. It's not easy on productivity. It's not easy on equipment. It's just been -- from a safety standpoint, our safety stats are some of the best we've had in a decade, and the team is just doing such a great job. They're buckling down, paying attention, really being focused, being deliberative in their work and trying not to have injuries or accidents. So, you know, hats off to the entire team because you're right, this has not been an easy start to the year. But as we sit around, look at our numbers, look at our stats, look at, you know, our productivity in the business, we're doing pretty good, given this backdrop and, you know, it didn't cause us to change our view on the year and we're probably a touch behind in January where we want to be. But given those challenges, you know, you look at it, you get a big blizzard or a big snowstorm, economic activity just falls off. You have less roll-off pulls, you have less tons into the landfills, you have less consumption, less people go to work, and then the productivity is a bit tougher as well. So it has been a bit of a headwind, but, you know, we're from Vermont. We're used to it, and, you know, we've brought a lot of those safety practices across, you know, our new markets, and we're trying to make sure, you know, as we operate in the snow and ice in other markets, we do the same things we've done well for 50 years. Shlomo Rosenbaum: Okay. Then I just want to make sure I understand your commentary on the Ontario closure. Are you communicating that because of the actions you're taking, you don't expect to have an EBITDA impact going from '28 to '29? Like, you might see a revenue impact, but given the mix of what you're doing, you're trying to kind of structure it so that you won't have an EBITDA impact. Am I understanding that right? Bradford Helgeson: Sort of. So we're -- as Ned mentioned, we're developing a plan to try and smooth it to the extent that we can in a way that makes sense operationally and, and with our reported financial results. I would say, though, that it is much less an EBITDA issue, as it is a, landfill amortization, EBIT, and cash flow issue. On those lines, on that basis, Ontario is extremely, expensive to run, much more expensive than any of our other sites. So what you may have is if you think about steady revenue or steady EBITDA, or maybe up, maybe down, we'll figure that out, but the underlying earnings and cash flow of that EBITDA will be much, much better. Shlomo Rosenbaum: Okay. And then finally, is there any update on what's going on with New Hampshire's amended House Bill 707? Is there, is there any -- has anything changed over the last couple of months on that? Ned Coletta: Yes. New Hampshire is a very complex situation for us today. As you know, we've been working for several years now to develop the new Granite State Landfill in Dalton. Our efforts are strong there. We continue to fight on two fronts from a legal standpoint, challenges, where our permit was denied for dormancy, and we filed appeals for that, where we don't think that's accurate, and we'll continue to fight. We think there's a lot of value to be created at the Granite State Landfill, and we feel like our legal standing is strong, and we'll continue to work to move that permit forward. One of the areas that John Casella has been heading up for a few years and continues to make a lot of progress is on 707, as you mentioned, and really looking at getting local control amended, where we can advance permitting at our existing North Country landfill. There was a settlement agreement years ago, which does not allow us to expand the landfill beyond its current footprint. However, we own many acres around this landfill. We could have a very efficient -- capital-efficient, good expansion into those areas, and it would make a ton of sense for us, our shareholders, the citizens of New Hampshire, to develop that capacity over time. It would be much needed for New Hampshire and let's face it, the Northeast, over the next 20 years to expand that site. So, you know, it's one of the quirks where there's a little bit too much local politics around expanding good, quality, existing sites, and that's the work we've been doing with the legislature. And frankly, you know, the good senators and representatives of New Hampshire have been working to fix because they look at a site like North Country, and they say, "You know, this is something that we should have the experts in the environmental agencies working on versus being governed by local politics." We need to look at capacity like that and really think through the long-term benefits to society. And it's very hard to replicate this. So where we sit today, as I said earlier, something John's had, is a big passion project of his, and it's another area he's continuing to help the team and looking to advance that. Not a lot more to say right now, other than, we're excited. We hope that bill does advance, and it allows us to create additional airspace at North Country. If it doesn't, as I said earlier, we continue to push hard on the Granite State site, and we're also developing some transfer capacity at the state. We're working on a rail transfer station. We're looking at other ways to move waste around the state of New Hampshire to meet the ongoing needs of our customers over time. But it's a complex situation and something we're very much focused on, having a good outcome for shareholders. Operator: [Operator Instructions] Our next question comes from the line of Bill Grippin of Barclays. William Grippin: Great. I just wanted to come back first to some of the comments you made on sort of your M&A outlook. And I think you mentioned, you know, there could be a couple larger opportunities coming about. Are those opportunities that have come about as a result of your sort of expanded Mid-Atlantic footprint, or are these kind of within the Northeast? And then, along those lines, you know, how do you think about your ability to internalize tons as you continue to grow and acquire in the Mid-Atlantic region? Ned Coletta: Thanks, Will. So it's a little early to get into the details on a few of these opportunities we're looking at until they mature a bit more. But we're working both in, you know, the legacy markets in the Northeast and down into Mid-Atlantic as well. And, you know, we really like opportunities that are $50 million of revenues or $100 million of revenues. We find them to be, great complements to our existing business and, you know, right size to integrate effectively, and we're hopeful to close a few deals in that size this year. So it's a little hard to get ahead, but hopefully, some more exciting information here as we step into the year on that front, Will. William Grippin: Yes. Understood. Appreciate that. And then, just to follow up on landfill pricing, I think you mentioned same-store price was up around 2.5%, and I think last quarter, if I remember, it was, you know, around 3%. That -- I guess in my sort of mental framework, that, that feels light, just given, you know, some of the capacity constraints we continue to talk about in the Northeast. Could you talk about maybe some of the underpinnings of, of that, you know, kind of 2.5% to 3% same-store landfill price? And, and maybe just looking out, you know, several years, how do you think that, that could trend? Ned Coletta: Yes. We've come off an interesting period in the Northeast. I mean, while in the long term, the market is supply constrained, and we'll continue to see sites closing. Over the last couple of years, we've seen a few new rail moves open up out of the Northeast, out of the broader New York, New Jersey markets, which have moved some tons around in the marketplace. We have not directly lost customers, but there have been some decent amount of volumes that flowed out of the Northeast, which has put a little bit of a lid on pricing over the last two years. As I said earlier in my commentary, we're running pretty much full right now, or as full as we want to be. So we're back to the point for the first time, I think, in 2 years, where quality of revenue, driving returns is a big, big focus of our team. We're running fuller because we've done a great job getting internalization to our landfills, getting those transportation lanes opened up. But now it's time, as you said, to start to advance pricing again and focus on quality of revenue. And you know, it's everyone's looking out 10 years and saying: Where is this market gonna be? And you can't just, you know, build a transfer station or advance the strategy in 12 months time. These take a long time. So as some of these new opportunities opened up over the last couple of years, we did see a little bit of an ebb in the market. Now we're back to a position I feel like we've been in for the last decade, where, let's focus on quality of revenue. Operator: I'm showing more further questions at this time. I would now like to turn it back to Ned Coletta, for closing remarks. Ned Coletta: Thank you very much. In closing, I want to reiterate how proud I am of the team and how excited I am to lead Casella into our next 50 years of growth and achievement. We've built a company defined by disciplined execution, thoughtful growth, long-term value creation, all grounded in our mission of safe, sustainable waste services. Thank you for joining us today. We look forward to speaking with you next quarter as we continue delivering on our mission. Thank you. Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Operator: Good morning, and welcome to Trican Well Service Fourth Quarter 2025 Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to Brad Fedora, President and Chief Executive Officer. Thank you. Please go ahead. Bradley P. Fedora: Thanks, Rud. Thank you, everybody, for joining us, and good morning. First, Scott, our CFO, will give an overview of quarterly results, and then I'll provide some comments with respect to the quarter, current operating conditions and the outlook over the next few quarters, and then we'll take some calls. There's a few members of our executive team in the room today, so we should be able to answer any questions that come up. And I'll now turn the call over to Scott. Scott Matson: Thanks, Brad. So before we begin, I'd like to remind everyone that this conference call may contain forward-looking statements and other information based on current expectations or results for the company. Certain material factors or assumptions that were applied in drawing conclusions or making projections are reflected in the forward-looking information section of our MD&A for Q4 of 2025. A number of business risks and uncertainties could cause actual results to differ materially from these forward-looking statements and our financial outlook. Please refer to our 2025 Annual Information Form for the year ended December 31, 2025, for a more complete description of business risks and uncertainties facing Trican. This document is available both on our website and on SEDAR. During this call, we will refer to several common industry terms and use certain non-GAAP measures, which are more fully described in our Q4 2025 MD&A. Our quarterly results were released after the close of market on Wednesday evening and are available both on SEDAR and our website. So with that, a brief summary of our quarterly results. And my comments will draw comparisons to the fourth quarter of last year, and I'll provide some commentary about our current activity levels and expectations going forward. Trican's results for the quarter compared to last year's Q4 were generally stronger as overall operating activity came in a bit higher despite a challenging commodity price environment exiting the year. Our results for Q4 of 2025 also incorporate a full quarter of Iron Horse results following the closing of the acquisition in Q3 of 2025. Oil pricing was challenged as we came through the second half of 2025 and had a significant impact on Q4. Oil-focused customers delayed and in some cases, shelved projects in response to deteriorating economics, significantly impacting the Iron Horse division during the quarter. But overall, our revenues for the quarter were $322.7 million compared to the $275.5 million we generated in Q4 of 2024. Adjusted EBITDA for the quarter was $73.4 million or 23% of revenues, compared to adjusted EBITDA of $55.6 million or 20% of revenues generated in Q4 of 2024. Adjusted EBITDAS for the quarter came in at $75.3 million or 23% of revenues, up from the $58.6 million or 21% of revenues in Q4 of last year. To arrive at EBITDAS, we add back the effects of cash-settled share-based compensation to recognize in the quarter to more clearly show the results of our operations and remove some of the mark-to-market impact of the movements in our share price between reporting dates. On a consolidated basis, we generated positive earnings of $31.9 million in the quarter, which translates to $0.15 per share, both on a basic and a fully diluted basis. We generated free cash flow of $46.6 million during the quarter, and our definition of free cash flow is essentially EBITDAS less nondiscretionary cash expenditures, which includes maintenance capital, interest, current taxes and cash settled stock-based compensation. You can see more details on this in the non-GAAP measures section of our MD&A. CapEx for the quarter totaled $15.1 million, split between maintenance capital of about $12.8 million and upgrade capital of $2.8 million. Our upgrade capital was dedicated mainly to the electrification of our fourth set of ancillary frac support equipment and ongoing investments to maintain the productive capability of our active equipment. From a balance sheet perspective, we exited the quarter with positive noncash working capital of $179.2 million. At December 31, we had debt of $79.9 million, net debt of $79.9 million, comprised of loans and borrowings of $92.4 million, which was offset by cash of $12.5 million. Our debt at December 31 was primarily related to the acquisition of Iron Horse and our normal working capital and investing activities during the quarter. This translates into just under 1/3 of a turn of leverage using our trailing 12-month EBITDAS figure and a portion of this is already unwound, and we expect our net debt position to trend downward as we move through 2026. With respect to our return of capital strategy, we repurchased and canceled 1.4 million shares under our NCIB program in the fourth quarter. On an annual basis, in 2025, we repurchased and canceled 12.1 million shares at a weighted average of about $4.35 per share, representing 6.4% of the shares outstanding at the beginning of the year. Subsequent to Q4 of 2025, we've repurchased and canceled about 300,000 shares, and we continue to be active in our buyback program when market prices are at levels that provide for a favorable investment opportunity. As noted in our press release, the Board of Directors approved a dividend of $0.055 per share, reflecting approximately $11.5 million in aggregate to shareholders. The distribution is scheduled to be made on March 31, 2026, to shareholders of record as of the close of business on March 13, 2026. And I would note that these dividends are designated as eligible dividends for Canadian tax purposes. So with that, I'll turn things back to Brad. Bradley P. Fedora: Okay. Thanks. I think overall, Q4 went really well and pretty much as expected. We've worked hard in the last few years to try to create a customer list that has allowed us to be fairly level loaded throughout the year with maybe the exception of a little bit of Q2, but it seems to be working. Our quarters all now seem to be quite similar in volumes, and that's a great advantage from a staffing and an equipment allocation perspective as you can rightsize the business for the entire year, you're not just staffing for the peaks and then absorbing the costs during the valleys. So I think all of that has gone really well for us. I mean, as usual, it seems like in Q4 lately, we did experience some pricing pressure. Just some of our competitors are less busy than we are, and they're trying to fill their board. We generally just sort of get through that. Of course, we don't live in a vacuum, but most of our customers are all very long-term relationships, and we seem to get through a lot of that. Obviously, we have much improved natural gas prices compared to the last 18 months. So that has helped. I mean it's been a very warm winter in Western Canada. And I think we've done a really good job of sort of fighting our way through that. We had very much spring-like conditions for the bulk of February and lots of January. So it's been a little bit choppy, but I would say we're having a good quarter, and we always factor that into our forecasting. And so I think Q1 will be very much in line with consensus. I don't think there'll be any big surprises there, even though we did have some tough weather to deal with. Our customers are still very focused on technology and efficiency. I think we've done a really good job with this. Particularly, they want to burn natural gas in place of diesel anytime they can just due to the cost savings and the lower emissions. And so our pumping assets, in particular, and our electric equipment, that's [indiscernible] leading the industry with that regard. We're very fortunate to have a customer list that is focused on technology and does recognize the investments that we've made. And so we're working together to make sure that as their programs develop and evolve, we're making sure that we keep up from an asset and a technology perspective so that we can look at the long term together and say, what is this industry going to look like in 5 years and make sure that we're on the forefront of those changes. I would say even with the Iron Horse acquisition, most of our work is natural gas. We're probably 70% natural gas and 30% oil projects. So we're happy that natural gas has got back to more reasonable levels. Obviously, oil in the last week or so above $65 or even [indiscernible] very helpful to the Iron Horse division, and that should make for a sort of a much more robust year this year than last year. So we're kind of crossing our fingers that oil prices hang in there. We have seen a lot of the BC work slowdown but it's been more than picked up by the Duvernay work that we've been doing. So we're not really experiencing any changes there. In many ways, the Duvernay work is right in the backyard of a few of our operating bases. So happy to be in that play. And I'd say, in general, all 4 of our divisions being Trican frac, Iron Horse frac, Cement and Coil are all working really well. And I'll maybe just touch on all 4 of those divisions. So the Trican frac, which is the deep fracking, the big pads in Northwest Alberta, Northeast BC. Again, going very well. We've spent the last few years really differentiating our service offering with natural gas pumping assets and electric ancillary equipment on location. We're the only company in the basin that provides a full suite of electric assets on location, and it's been very well received. We've just put into the field our fourth set of ancillary equipment, which includes like blender and chem blending, things like that. So the sand belts, et cetera. So we basically cannot keep up with demand on those electric assets. When you combine the electric equipment with our Tier 4 equipment and in the future, 100% natural gas equipment, you'll have basically almost full displacement of diesel on location. So again, very well received. Without a doubt, we would be viewed as the technical leader in this industry with respect to [indiscernible]. We're still seeing wells get longer using more sand per well. I think this -- in 2025, I think we pumped about 8.5 million tonnes of sand as an industry. And there's lots of analysts that are forecasting that, that's going to grow to over 12 million tonnes per year by 2030. So that's, without a doubt, a trend that we're making sure we capitalize on. And the flip side of that, though, is we are seeing more customer supplied sand, which is fine. Our customers are looking to save money wherever they can, that's okay. We'll try to replace some of that margin with our greatly expanded logistics business. We've really focused in the last few years of building up our logistics because you're dealing with these kinds of sand volumes, and again, I've used some of these analogies before. We've got 50 to 100 railcars of sand being pumped into a well over a period that might only be 48 hours long. And so you're having a B train of sand show up every 12 to 15 minutes on locations. Getting that logistics part right is a huge driver and efficiency for our customer and profitability for us. So we've done a fantastic job of building out our logistics business. We're not able to actually build it as fast as we would like it just due to availability of drivers. But we will continue to expand that. We're a leader in sand logistics in Western Canada, and I don't see that changing anytime soon. And just to put this into perspective, we were on a Duvernay well not too long ago, where over a 24-hour period, delivering sand with our trucking fleet, I think we drove over 60,000 kilometers in a 24-hour period, which is 1.5x around the world. So it helps put that in perspective just how important logistics are, especially in a compressed time frame like we're dealing with. So kudos to our logistics team, and we'll continue to highlight that and showcase that to our customers to help continue our differentiation. We have received now our first 100% natural gas Cat, what are called 3520 natural gas high-rate frac pumpers. The testing of that equipment is going very well. It will be deployed into the field in the second quarter. We expect to have a full suite of a 10-pumper frac spread available and operating by early fall. And what this enables us to do is have less pumps on location, less people, pump 100% natural gas instead of a combination of natural gas and diesel. So for our customers, it means lower fuel prices, lower emissions. And for us, I think these new assets will be a little bit better at dealing with a variety of field gas. So we should have more efficient operations on that -- in that respect as well. So really looking forward to that. And when you combine those assets with our electric ancillary equipment, we'll have basically 100% natural gas operation. As well later in the year, we will be receiving our first natural gas semi-trucks. So what pulls the big tractor units that pull the sand around. And we will slowly but surely evolve our trucking fleet to run on natural gas. We're a little ahead of our time with respect to the fueling stations that are available throughout Western Canada. So we are going to be working with our customers in conjunction with them to make sure that there are fueling stations in all the places we need. But really looking forward to this. Again, lower fuel prices should be lower R&M. And just generally, it's nice to see that we are -- we as a service provider are burning the natural gas that our customers are producing every day. So we're working with them in conjunction to really build out a rounded industry. On the Iron Horse frac side, which is sort of on the oilier coil fracking. Really happy with the acquisition. The integration is going really well. I would say we're very pleasantly surprised with the synergies that we've been able to extract. And with respect to things like fuel, chemical sand, we hadn't really built a lot of that into our acquisition, but I think that is working better than we had hoped or certainly better than we had planned on. Obviously, we're a little disappointed with oil prices post the acquisition. Field work volumes came down. That's okay. Oil prices have firmed up here, and I expect that they'll be getting up to a level that we were sort of banking on last year. But the acquisition has gone very well. They're the #1 provider in that part of the world, which is sort of Eastern Alberta, Saskatchewan, into Central Alberta. They provided us with [indiscernible] previously, we had almost 0 market share. We'll use their relationships to grow our Cementing business in that part of the world as well. So very happy with that acquisition. On the Cementing side, Cementing division continues to perform extremely well, very high market share in plays like the Montney and the Duvernay. We have expanded recently into the SAGD market in the Christina Lake area. That's gone very well. We expect that we will be able to grow that sort of area fairly significantly over the next 18 months. I think in Q4, our revenue and jobs were up 33% in Q4 over 2025 versus 2024. So that division continues to perform very well. We're adding AI technology to things like our bulk plant to reduce blending errors, increasing blend qualities for our customers. So even though we've been active in that business for a long [indiscernible] we're taking advantage of technology anywhere we can to make that division perform even better. We actually will have what we will call like a hybrid cementing unit soon, too, where it's partially electronic or electric. So getting rid of a lot of the hydraulics that you can have trouble with in [indiscernible]. So I would say slowly, but surely, that division will evolve into sort of an electric style equipment just much like our natural gas or our fracturing assets. On the Coil side, the buildup of the Coil business is going very well. We have reorganized our management team about a year ago or so. And now that division is getting the attention that it always needed. A great portfolio of customers. We have all the top operators in the basin. We set horizontal and depth records last year. Those -- our performance field has allowed us to add Montney and Duvernay customers. We have lots -- we have a wide variety of oil strings. So I would say that division build-out is going very well, and it's now sort of financially performing more consistent with the other 3 divisions as well. So I think that will slowly surely just grow in size and scale, which [indiscernible]. On the long-term outlook perspective, we're still incredibly bullish about Western Canada. When we look at the plays here like the Montney and the Duvernay in the context of North America, this is the place to be. I think the key with being a service provider in these plays is you've got to be constantly pushing and evolving your -- the technology offering that you have and making sure that as these plays get developed, we become more and more efficient. And we are seen as sort of the technical leader in the pumping space, which certainly we have been. You're going to have ups and downs based on the gas price, et cetera. But certainly, when you view what's happening on the LNG side, getting up to full capacity this year with more LNG to come, we think there's going to be like a foundation of gas pricing in Canada for the next years and beyond. And certainly, we are very happy with the position that we've built up in place in Northwest Alberta, Northeast BC, which will be fueling LNG. So it's a great place to be. We're not looking to change any of that. In fact, if anything, we're looking for acquisitions going on, not even with just consolidation [indiscernible] Iron Horse, but other service lines as well, just because we think Western Canada will be a great place to be operating for the next 5 years and beyond. And where do we see sort of revenue growth come from? It's obviously the well count will increase as the gas price solidifies and grows. We're seeing increasing sand volumes going into each of these wells, which just means more time on location for us. We're seeing our Logistics division expand. And when we look at the Coil and Cement divisions, we think both of those divisions can continue to acquire market share in all of the plays in Western Canada. So again, we are very optimistic about the next 5 years. Just back to the return on capital that Scott had touched on, we generate -- we continue to generate significant free cash flow. And we expect that we'll maintain a conservative balance sheet. We've always subscribed to a diversified return of capital strategy, meaning a combination of dividends and NCIB. The NCIB volumes will go up and down with the opportunities in the context of the other opportunities. We very much view our NCIB as M&A. But I would expect that over the next few years, we will allocate probably around 50% of our free cash flow to shareholder returns, whether it's in the form of dividends or NCIB. And just we'll always be looking in the context of the market to see what else is available. We're not afraid to use our bank lines. We do hold a conservative balance sheet, but that's to make sure that we have the capacity when we need it. So we're not afraid to use our bank lines if we find an attractive investment or even organic growth opportunities like we did with Iron Horse. We're always looking for the best possible returns for our shareholders, and we'll allocate capital accordingly. We are starting to see, I would say, more growth opportunities than we've seen in prior years. And we'll just be very diligent and disciplined when we're looking at acquisitions and good things take time. So we won't get over our skis. We'll just be very analytical, and we'll see if we can get something interesting done in the next few years. So I just want to stop there, given it's year-end, I just want to say a thank you to our customers and our employees. And as I think everybody knows, Trican is committed to improving its workplace safety and creating an environment for our employees. We operate a very complicated business with large capital requirements. We're in the field 24 hours a day with logistics and engineering support, running specialized equipment in very remote operating areas under what are fairly extreme conditions. Our employees make our field execution look easy. And I can assure you, it is not. So thanks to our customers. Thanks to all our employees for their dedication to Trican and the Iron Horse division, which is now part of the Trican family. And I just want to say thanks to everybody as we can't do it without all the great staff that we have. So I'll stop there, operator, and we'll turn the call back for questions. Operator: [Operator Instructions] Our first question comes from Aaron MacNeil from TD Cowen. Aaron MacNeil: First question, you may not want to get into specific customers, but ARC recently removed Attachie Phase 2 from its 5-year plan and has withdrawn its broader Attachie-related guidance. Have you seen any direct impact of this yet? And how are you thinking about it in the context of overall basin demand for pressure pumping on a go-forward basis? Bradley P. Fedora: Projects are always being added and subtracted. We're not fussed by that. I mean there's nothing wrong with certain people like ARC sitting back every once in a while and saying, "Hey, can we do this a little differently? Can we do this a little bit better?" I mean maybe they should have used the dust to frac their wells. So -- but we're not too fuss. We're not too fuss by stuff like that. You're going to see that from time to time. It's an active basin. It's a technical basin. It's -- there's not -- that's healthy. Aaron MacNeil: Fair enough. But safe to say you didn't have any exposure to that directly? Bradley P. Fedora: No. We do work for them. There's no such -- we don't operate in a vacuum, like when things like that happen, assets get freed up. But no, I mean, we're still very bullish on Northwest Alberta and Northeast BC. Aaron MacNeil: Fair enough. Can you say a bit more about wet sand? How prevalent is it today? How prevalent do you think it will be in the future? And what the potential impact might be on your sand infrastructure assets and logistics businesses? Bradley P. Fedora: Yes. Like what Aaron is asking about is there's recently a few companies have been trialing wet sand in Western Canada. And what that means is just using a lower grade, but closer source of sand that generally comes more almost from a gravel bit than a frac sand mine. So it's not sorted. It's not dried, questionable consistency and quality, but it's close, which means it's cheap. Because by the time frac sand gets to location, probably 70-plus percent of the total cost of that sand is just the transportation of it. And so any time you get the opportunity to use a sand source that's very close to the project area, there's a big opportunity for transportation savings. Now you're -- what you're saving in transportation, you're giving up in sand size, consistency and quality. But [indiscernible] they did it in the U.S. I think we're having a look at it in Canada because it does have -- frac sand today is dried, because it does have water and it makes it a little tricky to operate in the winter. But we're -- the customers are going to trial it. It still needs to get from A to B. And so our logistics group is still going to be very much active in that. We don't really hold any other fixed assets from a logistics [indiscernible] I think any time the industry has the opportunity to cut costs, which will undoubtedly result in more wells being drilled, I think that's a good thing. But it will be a while yet before the wet sand sort of opportunity gets [indiscernible] very limited volumes at this point. It has been just a handful have been trialed with inconsistent results, frankly. Operator: Our next question comes from John Gibson from BMO Capital Markets. John Gibson: Just on pricing, you talked about it coming off in Q4 and to start of the year. As we think about the improved commodity backdrop and maybe a pickup in gas-related drilling, how do you expect pricing to go up or down as '26 progresses? Bradley P. Fedora: I think it is going to be fairly level here for a while with, I would say, an upside bias just with improving commodity prices [indiscernible] hard to say when, but... John Gibson: Does it differ per region? Or does it kind of rise and fall across the basin fairly evenly? Bradley P. Fedora: I would say it differs with definitely -- there's two very distinct -- there's natural gas and then there's oil with our Trican frac division versus our Iron Horse frac division, they're in two very different commodities, right? So you definitely can have sort of opposing forces going on at any given time. So we definitely would look at the two commodities distinctly there for those two divisions. John Gibson: Got it. In terms of the new fleet, will this be additive to your current horsepower? Or is it going to replace some older equipment? Bradley P. Fedora: No, we certainly hope it will be additive. When we were ordering this and just talking with our customers about what their plans were for the next 5 years, we don't see any reason why this won't be additive. But you may never get the timing exact, but certainly, we ordered this with the intention that it is fleet. John Gibson: Okay. And then last one for me. I'm not sure if you know the answer to this, but just given your last mile logistics moves over the past few years, along with some of your peers, can you estimate how much capacity you've added to the basin in terms of pumping capacity that was maybe previously constrained? Bradley P. Fedora: So what you're asking is, with improved logistics, how much pumping capacity increase does that result in? John Gibson: Yes. It seems like the last few years, one of the constraints was last mile logistics, and you and your peers have been working on this for quite a while. So I'm just wondering if and when things turn a little bit, what is the incremental sand you could pump or that sort of stuff that was previously constraint? Bradley P. Fedora: I couldn't tell you the answer to that off the top of my head. I would say this, though, I think the sand volumes are going to grow faster than our ability to add logistics assets. The sand volumes have grown from 4 million tonnes a year to 8 million tonnes a year in the last, say, 4, 5 years. And I would doubt that the logistics fleet has doubled. There's a long lead time on tractors and trailers and getting experienced drivers that can drive in the conditions that we're asking versus like long-haul drivers. My guess is we'll be fighting to keep up with the growth in sand volumes. Operator: Our next question comes from Colby Sasso from Daniel Energy Partners. Colby Sasso: I just wanted to ask, with exports from LNG Canada beginning in 2025 and further LNG exports anticipated in 2026, how does Trican expect these developments to influence the industry? And additionally, how is the company approaching the opportunities created by this emerging market? Bradley P. Fedora: Okay. That's a big question. Certainly, LNG, we -- remember when we produce 19 Bcf a day in Canada, when LNG Canada [indiscernible] train, I guess, you call it, is just under 2 Bcf a day. So we -- 10% of Canadian production is now getting exported. And as other LNG assets get added, I think you just -- you put a floor in your natural gas pricing because you're not just selling into the North American market anymore. A lot of the other things we don't talk enough about, too, is our customers have very sophisticated marketing [indiscernible] where they're selling gas, not just to Canadian LNG, but actually into U.S. LNG and other sales point around the U.S. So we're not just relying on a Canadian gas price anymore. So it should be a foundation of activity going forward that we've never had previously. And so what are we doing? I think I talked about that in the call, which is we're building the most technically advanced fleet, and we're continuing to reinvest our capital into the Canadian marketplace to ensure we're the #1 service provider as this industry unfolds in the next few years. So I think we'll be a direct recipient and our customers will be direct beneficiaries of the capital that we've invested. Operator: Our last question comes from Tim Monachello from ATB Cormark. Tim Monachello: I'll try to keep it short here. In terms of the commodity price rally that we've seen in oil and the Iron Horse outlook, it sounded like at least during the Q3 conference call that Q1 was going to be a pretty busy quarter for Iron Horse, and then you'll hit some typical seasonal slowdown. So I guess the reduced sort of outlook for the year, at least the Q3 was coming from the back half. So with commodity prices in that north of $65 range, do you think you can get back to that $80 million mark was sort of initially contemplated when the acquisition was done? Bradley P. Fedora: Yes, maybe not this year. Weather in Q1 actually probably affects them more than us, just given the wonky weather we had. So they're having a good Q1, don't get me wrong. But if we -- certainly, if oil holds into at these levels, we'll get back there. Exactly when? I don't know. But the workload is very elastic to oil pricing in that part of the world. So yes, we're still really happy with that acquisition. Tim Monachello: Do you get any sense from customers on, I guess, a changing mood or sentiment around what they're going to do in the back half yet? Or is that too early to call here... Bradley P. Fedora: Yes. The sense we get is, especially here at the $65 level, oil holds in here, that will -- there will be a direct drilling response to that. You need to have it for more than a couple of days, obviously [indiscernible] but certainly, when you talk to customers, they've got lots of what ifs built into their budgets, right? And budgets go up just as easily as budgets go down. So if we hold in at the $65 level, we would expect them to have a busy second half. Tim Monachello: Okay. Got it. And then second question, it sounds like you're building or deploying some new natural gas equipment in other ancillary service lines like in the trucking and Cementing business. Can you talk a little bit about, I guess, the capital outlay that's going to be required over the next couple of years to, I guess, integrate all of that equipment? And I guess, to what degree do you expect to replace equipment that's not natural gas or upgrade current equipment? Scott Matson: Yes. Tim, if we kind of look at 2026 on its own, about half of our capital program is what we would call expansion. So our $120 million split it in half, roughly $60 million of that is expansion. And the bulk of that, about $40 million of it is related to our natural gas fleet. So that's kind of a ballpark number you would need to think about if we go forward, maybe one of those fleets per year would be the maximum we could possibly do just from a timing and the logistics and a build perspective. But we're certainly not in a -- we're not in a massive rebuild CapEx cycle. As we pick away at things like natural gas tractors and the logistics side, those are small bites as we go through. And then even thinking about the stuff that Brad was talking about around the Cementing assets, those are fairly small bites as well. So I don't see this as the start of a massive CapEx cycle. We're going to pick away on it. And the biggest chunk by far would be kind of looking at that natural gas frac fleet. Tim Monachello: Got it. And the one cementing unit, I guess, it's going to be natural gas. Is that an upgrade? Or is that like a new unit? Bradley P. Fedora: It's an upgrade. And so it wouldn't be full natural gas tractor and stuff. It's -- a certain part of it will be -- will basically be electric, yes. And so it's called a hybrid unit. We're looking at fully electric, what we would call fully electric units. And what happens is you've got the electric -- these big electric drilling rigs on location. And so we sort of basically for lack of a better way to [indiscernible] when we get there. And so you're -- electrical generation equipment like frac because, of course, that just wouldn't be practical. Your cement jobs don't last that long. So as the rest of the industry sort of generates -- is generating electricity via natural gas on location that allows us to sort of evolve and build out assets that can work in conjunction with them on location. Operator: And we have no further questions. I'd like to turn the call back over to Brad Fedora for closing remarks. Bradley P. Fedora: Okay. Thank you, everyone. We appreciate your time and your attention to our call. If there's anything else you'd like to ask, please just call us. We'll be in the office all day today. Thanks again. Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: Good afternoon, ladies and gentlemen, and welcome to the Boardwalk Real Estate Investment Trust Fourth Quarter 2025 Earnings Call. [Operator Instructions] This call is being recorded today, Friday, February 20, 2026. I would now like to turn the conference over to our first speaker today, Eric Bowers, Vice President of Finance and Investor Relations. Please go ahead. John Bowers: Thank you, John, and welcome to the Boardwalk REIT 2025 Fourth Quarter Results Conference Call. With me here today are Sam Kolias, Chief Executive Officer; James Ha, President; Gregg Tinling, our Chief Financial Officer; Samantha Kolias-Gunn, Senior VP of Corporate Development and Governance; and Samantha Adams, our Senior VP of Investments. We would like to acknowledge on behalf of Boardwalk, the treaties and traditional territories across our operations and express gratitude and respect for the land we are gathered on today, and we now know as Canada. We respect indigenous peoples and communities as the original stewards of this land. We come with respect for this land that we are on today for all the people who have and continue to reside here and the rich diversity of First Nations, Inuit, and Métis peoples. Before we get to our results, please note that this call is being broadly distributed by way of webcast. If you have not already done so, please visit us at bwalk.com/investors, where you will find a link to today's presentation as well as PDF files of the Trust's financial statements, MD&A and annual report. Starting on Slide 2, we would like to remind our listeners that certain statements in this call and presentation may be considered forward-looking statements. Although the expectations set forth in such statements are based on reasonable assumptions, Boardwalk's future operation and its actual performance may differ materially from those in any forward-looking statements. Additional information that could cause actual results to differ materially from these statements are detailed in Boardwalk's publicly filed documents. I would like to now turn the call over to Sam Kolias. Sam Kolias: Thank you, Eric. Starting on Slide 4, welcome, everyone, to our Boardwalk Family Forever and to our year-end 2025 results. Redefining BFF, Boardwalk Family Forever is at the top of our organizational chart. Family is everything. Affordable multifamily communities have always been an essential product and service. Together with our residents, our associates, investors, partners, capital environment, community, we are all essential and interconnected family members with our true north where love always lives. Together, we go far. Our leaders put our team first and our team puts our resident members first. Guided by the golden rule, we have a peak performing customer service culture that creates exceptional results as we continue to see on our next Slide 5. Our continued impressive performance with GAAP and non-GAAP measures increasing from the same quarter last year, same-property rental revenue increased 5.8% and same-property net operating income increased 9%. Our operating margin increased by 190 basis points to 66.4% as well as our funds from operation per unit increasing by 11.2%. I would like to now pass it over to Samantha Kolias-Gunn. Samantha Kolias-Gunn: Thank you so much, Sam. We are extremely grateful for our team, our Boardwalk families perseverance, performance and continued commitment to our purpose, bringing our resident family members home to love always. Continuing on to Slide 6, our operational stability and commitment to affordable housing. Rental market fundamentals in our core markets are balanced. Demand continues for more affordable housing despite supply deliveries focused on higher-end luxury products to justify high construction costs. We are so grateful for our partnership with CMHC and our federal government that have implemented effective public policy to build more supply that has resulted in a balancing of the rental markets across Canada, providing more affordability to all Canadians. We are well positioned to deliver on our commitment to provide much-needed affordable housing in a more competitive environment with our experienced peak performing team, exceptional product quality from the $1 billion invested since 2017 in rebrand and repositioning efforts and dedication to our Boardwalk family as responsible community providers. Our self-regulation provides us with continued steady results as we remain flexible with our rental rates, producing greater stability in occupancy, margins, NOI and reputation paired with our strong financial foundation, minimum distribution policy, resulting in maximum reinvestment and free cash flow, strategic repositioning, unparalleled customer service and on our foundation of strong family values, we remain in a position to deliver solid performance. This is what sets us apart, bringing new home to where love always lives. Boardwalk strives to be the first choice in multifamily apartment communities to work, invest and call home with our Boardwalk Family Forever. Moving on to Slide 7. Our strategic rebranding enhances our resident member experience and exceptional quality at an affordable price, keeping our occupancy high at 97.6%. Per rentals.ca data, our average occupied rents of $15.90 per 2-bedroom apartment are attractive, especially relative to the Canadian average of $22.45. Moving on to Slide 8. Alberta continues to see positive population growth with small relative amounts of nonpermanent residents. Affordability continues to drive positive population and leading economic growth in our core markets, Alberta and Saskatchewan, reflected in our appendix. Quebec has delivered exceptional results, further evidencing the strong demand for affordable housing. Ontario remains stable. We are strategically in all the right places at the right time. Please refer to our appendix for more data on the resilience of the Alberta economy and renewed Alberta advantage. We would like to now pass the call on to Gregg Tinling, who will provide us with an overview of our quarter results, strong balance sheet, fair value and ESG. Gregg? Gregg Tinling: Thank you, Samantha. Beginning on Slide 9, occupancy remains strong, supported by continued growth in occupied rent. While vacancy loss increased, the trust effectively reduced leasing incentives, which contributed to the higher rental revenue reported in Q4 2025 compared to the same period last year. These results reflect the success of our strategic initiatives aimed at maximizing free cash flow and diversifying our product offering, delivering meaningful financial performance. Of note, the decrease in rental revenue shown for Q3 2025 as compared to the second quarter is due to properties that were sold -- that were previously included in the same property portfolio as reported in Q2 2025. Slide 10 provides an overview of leasing spreads for new and renewed leases under our self-regulated resident-friendly centric model. This approach continues to drive strong retention and referrals while keeping turnover and operating expenses low. On a year-over-year basis, leasing spreads have moderated, reflecting a more balanced supply-demand environment. Increased supply in select portfolio markets, particularly at the higher price points has led to greater competition and vacancy. Q4 2025 reflected a return to typical seasonality, coupled with reduced migration activity, this led to softer traffic, prompting us to concentrate on our priority of sustaining strong occupancy levels. Our strategic flexibility with new rental rates enabled us to preserve elevated occupancy while maintaining solid operating margins and net operating income. We remain focused on maintaining high occupancy and maximizing resident retention. This strategy reinforces our commitment to providing affordable resident-friendly housing in our core markets while also reducing costs and steadying operational performance, delivering long-term value for all stakeholders. Slide 11 shows sequential quarterly rental revenue growth, including 0% growth in Q4 2025 compared to the previous quarter. The change over each quarter is a reflection of Boardwalk's strategy, striving toward balancing the optimum level of market rents, rental incentives and occupancy rates in order to achieve its NOI optimization strategy. Turning to Slide 12. Same property net operating income increased by 7.3% in Q4 2025 compared to the same quarter last year. Supported by revenue growth of 4.5%, Alberta, the Trust's largest region, contributed meaningfully to this performance with a 4.4% increase in rental revenue, driven by stronger in-place occupied rents and reduced leasing incentives. Total rental expenses declined by 0.6% year-over-year, primarily due to lower utility costs with the removal of the federal carbon tax, alongside reductions in property taxes and insurance premiums. Slide 13 highlights administration costs and deferred unit-based compensation. Overall, total administration costs for the year increased 2.4% compared to 2024, mainly due to inflationary wage adjustments at the onset of the year. Deferred unit-based compensation decreased 11.7% year-over-year due to an $850,000 onetime true-up adjustment in the prior year to recognize unvested deferred units that would automatically vest if the participants who are eligible were to depart from Boardwalk. Slide 14 outlines Boardwalk's mortgage maturity schedule. The Trust's debt portfolio is well staggered with approximately 96% of the mortgage balance carrying NHA insurance through the Canada Mortgage and Housing Corporation. This insurance remains in place for the full amortization period and backed by the Government of Canada, enables access to financing at rates below conventional mortgage levels with a current estimated 5-year and 10-year CMHC rate of 3.45% and 4%, respectively. Although current interest rates are above the Trust's maturing rates over the next few years, the trust maturity curve remains staggered, reducing the renewal amount in any particular year. Lastly, the Trust has an interest coverage of 3.08 in the current quarter. In 2025, the Trust renewed $403 million at an average interest rate of 3.72% and with an average term of 6 years. In addition, the Trust made mortgage principal repayments totaling $79 million during the year. To date, of the $832 million of 2026 mortgages maturing, we have renewed or forward locked $228 million at an average rate of 3.72% and an average term of approximately 8 years. Combined with our cash on hand as well as our unused credit facilities, we are well positioned with strong liquidity available. Current underwriting criteria in our most recent submissions to CMHC and our lenders has remained in line with our historically conservative estimates. Please refer to Slide 49, which summarizes our 2025 mortgage program completed and Slide 50 for additional details on our 2026 mortgage program. Slide 15 illustrates the Trust's estimated fair value of its investment properties, excluding adjustments for IFRS 16. As of December 31, 2025, the fair value of investment properties totaled $8.7 billion compared to $8.2 billion as of December 31, 2024. The increase in overall fair value is the result of new acquisitions during the year and increases from rental rate growth while being slightly offset by dispositions of noncore assets and increase in cap rates in select markets, along with an upward adjustment for vacancy assumptions in Calgary to reflect a more balanced market. Current estimated fair value of approximately $247,000 per apartment door remains below replacement cost. In consultation with our external appraisers, the cap rates used in determining Q4 2025 fair value increased from Q4 2024 and Q3 2025, as cap rates were increased in Ontario, Victoria as well as the Trust's secondary markets in Alberta. The increase in cap rates were in response to either increased pressure on market rents or to reflect slightly higher risk fundamentals. As it does every quarter, the Trust will continue to review completed asset sales, transactions and market reports to determine if adjustments to cap rates are necessary. Most recent published cap rate reports suggest that the cap rates being utilized by the Trust for calculating fair value are within their estimated ranges. Slide 16 highlights our ESG initiatives. We'd like to highlight our 2025 GRESB score of 72, which represents a 7.5% increase compared to the prior year. Using a disciplined capital allocation approach, we are focused on reducing emissions through reduced utilities consumption and therefore, reducing utilities costs while always promoting social and governance initiatives. We encourage our stakeholders to view our 2024 ESG report available on the Trust's website. I would like to now turn the call over to Samantha Adams to highlight our capital allocation initiatives. Samantha Adams: Thank you, Gregg. 2025 was a year of tactical, disciplined capital recycling and allocation. As we move into 2026, we are maintaining this approach and continue to focus on our value-add repositioning initiatives, targeted dispositions of our noncore communities and unit repurchase program under the NCIB. Slide 17 illustrates how the reinvestment of our free cash flow back into our communities significantly increases the value proposition for our resident family members by upgrading common areas and adding meaningful amenities to enhance our overall experience. These renovations in turn help us strengthen market share in a more balanced market, boost retention and improve occupancy, ultimately enhancing our NOI and operating margins. In 2025, we completed the repositioning of 20 communities and since 2017, have undertaken renovations across the majority of our portfolio. Our strategy is to continue with our renovation program and have 16 projects planned for 2026. Slide 18 demonstrates the ongoing disconnect between our unit price and the value of our portfolio. Our NCIB continues to be a key capital allocation tool, helping to drive our compounded FFO per unit growth by over 12% per year since 2021. Over the past year, we invested $57.3 million into our unit repurchase program at an average price of $63.81. We have remained active with our buyback strategy. And to date in 2026, we have tactically deployed $18 million under the NCIB at a weighted average price of $67.63. This investment in our units and our platform remains the most accretive use of our capital today at implied yields exceeding 6%. Slides 19 and 20 present a summary of the acquisitions and dispositions successfully completed or recently announced. In 2025, we acquired $551 million in new properties located in Montreal, Calgary, Regina and Saskatoon at an average cap rate of 5%, representing our lifestyle and community brands. We also completed the sale of $241 million of noncore properties in Quebec City and Edmonton. And subsequent to year-end, we have completed or announced the sale of an additional $84 million of noncore properties. Two are located in Montreal and 3 are located in Edmonton. Our dispositions were sold at an average cap rate of approximately 5% and represent an average vintage of 1982. These successful dispositions completed at pricing in line with our fair value have enabled us to strategically redeploy capital towards the strongest risk-adjusted opportunities as summarized on Slide 21. And today, we anticipate remaining active under the NCIB and continuing the disposition program of our noncore properties at levels comparable to or exceeding 2025. I would now like to turn the call over to James Ha to discuss our track record of creating value and our updated 2026 guidance. James Ha: Thank you, Samantha, and thank you to our entire Boardwalk team for your service and commitment to our resident members, which has resulted in the strong 2025 results our team is sharing today. Our focus on investing in and delivering the best quality and affordable communities is why our residents make Boardwalk their first choice as the place to call home and reward our team with continued high occupancy and high retention rates. Slide 22 introduces our 2026 outlook as we build off our base of accretion-focused capital allocation and strong operating platform that provides resident-friendly affordability, product value and value in our communities. With the housing market that is more balanced, we continue to see that the demand for affordable housing remains resilient, and our outlook for the upcoming year is positive. 2026, we are anticipating same-property NOI growth of between 1.5% and 4.5% and FFO per unit of between $4.65 and $4.90. Please note that this forward-looking guidance does not include any potential asset dispositions, and we will be regularly updating and refining our outlook in the quarters to come. On Slide 23, we are pleased to announce an 11% increase to our regular monthly distribution equating to $1.80 per trust unit on an annualized basis beginning in March. Since 2021, our distribution has increased at a compounded annual growth rate of over 10%, while still retaining an industry high proportion of our cash flow to reinvest and compound growth. Our formula has extended our FFO per unit track record. And in 2025, we have more than doubled our FFO per unit in just 8 years. On Slide 24, this FFO growth, along with our approach to maximum cash flow retention has improved our leverage metrics to provide Boardwalk with one of the strongest and most flexible balance sheets. By retaining and recycling our own cash flow, we are able to grow while also consistently improve our leverage metrics, which provides the Trust with significant flexibility and liquidity to take advantage of opportunities that arise. One of these opportunities is shown on Slides 25 and 26, which highlights the exceptional value that our trust units represent. Our current trading price equates to less than $200,000 per apartment door at a mid-6% cap rate on a forward basis. Both metrics are exceptional when considering our product quality, locations, spread to financing costs and consistent cash flow growth as shared in our outlook. Recent private market transactions continue to be supportive of our estimated net asset value of $247,000 per door or $96 per trust unit. With the value our trust units represent, we are currently prioritizing investing in our own assets and platform through our normal course issuer bid with a planned minimum investment of $100 million to take advantage of this very attractive pricing and valuation in our own high-value platform. In closing, our team continues to be focused on delivering the best quality and value in housing to our resident members. Our unique operating platform and experienced team continues to demonstrate our ability to create value for all our stakeholders as we consistently deliver leading organic and FFO per unit growth that is increasing our free cash flow and operating margins. We would like to thank our resident members, our team, our partners and all our stakeholders for an exceptional 2025. We are looking forward to continuing our track record of growth into 2026, providing communities that our resident members are proud to call home. We'd now like to open up the line for questions. Operator: [Operator Instructions] Our first question comes from the line of Dean Wilkinson from CIBC. Dean Wilkinson: Maybe just high level, the news last night, probably not a surprise to anybody. But can we just sort of get your thoughts on what you think a referendum could mean just for population growth, demand, things like that? I know the outcomes could be varied and very hard to peg, but just how are you thinking about that? Sam Kolias: Thank you, Dean. It's Sam. And it's hard to see very many lineups and crowds just anecdotally on referendum. And I'm not too sure which referendum because there was a number of referendum questions yesterday, and then there's also the referendum on separation. And the good news over the summer, there was a lot of crowds on the petition for Canada and to keep Canada together. And personally, I saw a lot of people, and we saw the most sign-ups on keeping Alberta in Canada, more signatures than we've ever received. So that's what we're looking at, and we're not really aware and the friends that we have are for Alberta in Canada. I don't really know very many personally. It's best that we stay together. That's a good public policy. And the referendum that we just got yesterday with immigration, on that immigration or referendum question, we agree with the best case examples on public policy that are premier noted during our Harper administration. And the positive migration, the economic growth that came with it and the very sustainable immigration policy that we did have during the Harper administration where a lot of folks that we need to build more schools help us with our hospital, health care teachers, all the trades that we continue to need. That has been proven public policy that our premier is pointing out that is for everybody's benefit and what our premier is championing for that, by the way, we are champions of sustainable population growth that we need. And so that's our thoughts on the 2 referendum questions. Dean Wilkinson: Yes. I guess it's an issue that you wouldn't have to talk about it if everyone didn't want to be there. So it's a positive, I suppose. Maybe on a little more of an esoteric note. Sam, you've kind of embraced technology in the past. You've made technology platform investments. AI has been -- is kind of rolling through the market as this disruptive force over the past couple of weeks. How are you guys thinking about what AI could do for the business and perhaps how that could help managing multifamily as we go forward? Because I would imagine it's not a disruptor, but perhaps more of an enabler. Sam Kolias: Correct. It's Sam again, Dean. And we use our tools and technology to increase our productivity, to decrease our costs, to increase our resident member experience. And we've seen some positive time-reducing benefits from the tools that we've developed. We've also seen and we've all experienced the challenges with AI and anybody on this call that's tried to deal with a chatbot alone shares our collective frustrations with just AI. So it's absolutely clear that the choice is essential and human intelligence is still superior to artificial intelligence. And together, we have to use artificial intelligence as a tool and recognize that and always provide the choice for our resident members to channels that quickly allow access to either one of our amazing personal service associates, managers versus a chat box that for some tasks are acceptable and simple. So I guess it's more us as a tool, our productivity. The information, the reports that we see, the dashboards, very, very helpful to see the data that we continue to use and harvest to make the best decisions for our productivity and our resident member experience. Dean Wilkinson: Great. You and I are both big fans of human intelligence. Operator: Your next question comes from the line of Fred Blondeau from Green Street. Frederic Blondeau: I'll keep the subject of referendums for the [indiscernible]. A question for James here. Just looking at your SPNOI guidance. I was wondering if you could give us a sense of the main assumptions on each end of the spectrum because it looks a bit wide on our end. James Ha: Sure, Fred. It's James. Let me start and the team feel that we're missing anything. But when we look at same-property NOI, the approximate breakdowns are revenue between about 2.5% and 4%. And then on the operating expense side, generally between 2% to 4%. Frederic Blondeau: Got it. And would you say you see greater risks on the demand side for '26 or more on the supply side or a mix of both? James Ha: It's certainly a mix of both, Fred. We, for the first time in a long time, are seeing a much more balanced housing market across Canada. And where is that coming from? Well, that's coming from the additional supply that we as Canadians needed in the housing market. As you know, most of that supply that's being -- that has been delivered and is being delivered is primarily at the upper end of the rental market because of the cost of construction. And so we do see the upper end of the rental market continuing to be competitive. Where we are seeing strength and resilience, though, is affordable housing. And fortunately, with our portfolio average rent of below $1,600, we think the majority of our portfolio is going to continue to see the benefits of that. And so through the winter months on the demand side, as Gregg talked about in his prepared remarks, we did slower traffic this winter, kind of the return to seasonality. We had cold weather pretty well across the country and we saw that reflected in terms of traffic. With February now and as we get into the spring rental season, we have seen that pick up. And so February so far, so good. In the first 19 days of February, we're almost 90% covered of our turnover, which is a great sign. And so we are seeing the early signs today of what could be a good return to spring rental season. Operator: Your next question comes from the line of Brad Sturges from Raymond James. Bradley Sturges: Just to maybe expand on that line of questioning that Fred had there. Just I guess -- and I appreciate the chart you gave on leasing spreads to date. Just in terms of what's occurred in January and February, can you give a sense of the type of turnover you're seeing? I know that the focus is more on retention, but is there a little bit more specific breakdown you can give in terms of the breakdown of the suites turning either by affordability price point or other metrics? James Ha: Brad, we don't have the exact stats to be able to deliver them right now. However, we have looked at the type of turnover that we're getting, and we're seeing primarily at the upper end. Again, as we talked about, what we're seeing is that our more affordable product, the availability of that remains very close to 0. We've shared this story before. If anybody was looking to move to Alberta and Saskatchewan and you needed to move here for March 1 and your budget was $1,500, I would say, hey, we're going to have to do some work to find you that apartment. If you came to Alberta or Saskatchewan and your budget was $2,200, there's availability at that price point. And so as a result of that, because there is more availability, more choice at that upper end, that's where you are seeing more velocity and movement from a resident standpoint. But we did add on that leasing spreads graph, our volume and number of leases completed in each month. And so as we can see there, the winter months are slower. We remain focused on retention. And as we talked about with the pickup so far with what we're seeing in February, we do anticipate an improvement in those new leasing spreads. Bradley Sturges: Right. That's helpful. I guess, can you comment also in terms of like incentives have been trending down to the end of the year? Like how are you using incentives, I guess, within Q1? And then how would you expect that to trend over the rest of the year? James Ha: Yes, fairly sporadically. I mean our team always has the ability -- our leasing team always has the ability to use what we call pocket incentives. But our approach has really just been to adjust market rents when needed. Obviously, through the winter months, our strategy and approach was to maintain our high occupancy. And so we remain really flexible with those incentives. I think going forward, as we move into the spring rental months or pardon me, the spring rental season, we'll adjust market rents up or down accordingly depending on how the leasing season goes. The outlook for incentives, though, our team has done a remarkable job, a phenomenal job in terms of bringing those down. Going forward, we'll likely just focus on what that net rents number is and make those adjustments to face rents as appropriate. Bradley Sturges: And just last question on the revenue guidance there, the 2.5% to 4%. Could you break that down just by renewal spreads, new leasing and what you're expecting for occupancy? James Ha: Yes. Occupancy, our strategy is always to maintain high occupancy. And so we're very happy with our occupancy levels today of almost 98%. We'd love to see that creep a little bit higher. But practically speaking, the 97% to 98% mark is a good mark to have and a target that we have built into our forecast. Renewal spreads, again, we've been quite consistent there. As we look forward, our team and our retention teams are already negotiating renewals into April and May, and we're seeing very consistent results. And then on the new leasing spread side, again, as we get into the spring rental season, we would be looking for those to improve. And that only happens because we are going into the spring rental season with 98% occupancy or very close to 98% occupancy. And so when I look at the cadence there, we expect renewals to remain consistent and then an improvement from what you saw in December and January for new leasing spreads as we move into the spring. Operator: Your next question comes from the line of Golden Nguyen-Halfyard from TD Securities. Golden Nguyen-Halfyard: Just to add on to the same-property NOI question from earlier. What do you think are some of the drivers that would put you guys on the top end of the range versus the bottom end of the guidance you guys provided? James Ha: Yes. Great question, Golden. It's James again. Certainly, a strong spring rental season would allow for that. Again, we see continued strong demand for the more affordable product. I think if we can see a strong influx of demand in our markets during spring/summer, that could set us up well to hit the upper end of that revenue range that we talked about earlier. In addition to our team is always focused in on our controllable costs. As we know, our team has been -- has performed very well on that each year over the last several years. And on the controllable side, we have initiatives that we're driving that -- we're aiming to improve on those as well. And so if we can get some wins on those, that could potentially help us move towards that upper end. On the noncontrollable side, property taxes is a big one that Gregg and team and we flagged last November. We are forecasting a slightly elevated property tax increase this year. And again, we're active on assessments, appeals and working with our city counselors at the municipal level to see if we can bring those property taxes to more sustainable levels going forward. And so each of those components, Golden, are inputs into that, and we'll be working very hard on our side to outperform, as always, our forecast here. Golden Nguyen-Halfyard: Great. Maybe one more from my end, just on capital recycling. You've made good progress last year. Maybe if you could talk a bit about how you're feeling about the disposition environment for 2026. And maybe add a bit on the acquisition market and what you're seeing today and maybe the pace you can expect to see for 2026. Samantha Adams: Golden, it's Samantha Adam speaking. Yes, we foresee a similar program as we rolled out in 2025 and 2026 in terms of the dispositions. So we suspect levels will be similar or exceeding 2025. And then in terms of the acquisitions, we're not active today on the acquisition front. It's been relatively quiet, I would say, over the last couple of months. But we're always open to opportunities. But as of today, we're not actively pursuing anything. James Ha: It's hard to compete with our stock buyback right now and the opportunity that we have with the exceptional value our stock represents the 6.5% cap rate on a forward basis that we're trading at, our stock looks like a great place to be recycling capital into, Golden. Operator: Your next question comes from the line of Sairam Srinivas from ATB Capital Markets. Sairam Srinivas: Just probably looking at your comment on new leasing spreads, James. When you look at tenants moving out in the last couple of months now, are you seeing many of them compete with these newer assets? And when you are looking at your new leasing spread coming down, what are these competing assets like over there? James Ha: Yes. I mean there is more availability in the marketplace that upper end with deliveries. And again, this is across the country. We saw -- because of the lower traffic in December, January, pretty well across the country, we saw lower volumes and lower guest cards, lower traffic, which, again, to maintain our high occupancy, there was great deals that we had provided residents that moved in during those months. But the new competition for the most part, we're seeing at our more expensive product within our portfolio. That's where we're seeing the most competition. In our more affordable product, again, that's where it remains fairly resilient, and we continue to see strong demand and strong occupancies and spreads there. I don't know if that answers your question? Sairam Srinivas: It does, it does. And I'm just thinking from the perspective of the higher-end units in the market right now coming down, competing because -- and thanks to incentives, I guess. Are you actually seeing a lot of these competing units being incentivized by the supply coming in? James Ha: Yes. On a net rent basis, I mean, you see incentives in the marketplace. I mean all you have to do is go to RentFaster or Apartments.ca, and you can see 1 month, 2 months being offered in those newer products that are getting delivered. Again, this is pretty well what we're seeing across the country. Good news in Alberta, Saskatchewan specifically, we are seeing with the increased traffic with the spring rental season and some of those buildings are pulling back. Even ourselves included, if I think of our 45 railroad community in Brampton, we've had to provide some strong incentives and strong discount offerings over the winter months to obtain our full occupancy status that we have there. But getting to that full occupancy status allows us [indiscernible] then pullback on those discounts. And so you're starting to see that in the new builds that have gone through absorption. But it's really dynamic and fluid though, Sai. I would say, again, we anticipate that upper end, that north of $2,000 price point to continue to remain competitive. Sam Kolias: Sorry, it's Sam. And Slide 46 on move-outs is pretty descriptive of what we're seeing. So Q-over-Q, we're seeing a drop in turnover. And one of the reasons for moving out, which we're really pleased about is the reason for cost. That's going down, as you can see, from 271 in Q4 move-outs because of cost down to 191 due to cost. So the affordability is key, and we're seeing higher wages, inflation in wage pressure, settlements increase and [indiscernible] updated the average wage as much higher, too. And our rents just aren't going up as fast anymore across the country. And so that affordability, that balance we're seeing in the marketplace is very healthy because an affordable housing market and especially affordable rental housing market is mission-critical to a solid economy. Operator: Your next question comes from the line of Mike Markidis from BMO. Michael Markidis: I guess, so you clarified that on the dispositions, you expect to be as active, if not more active this year. And then it sounds like you're going to lean more into the NCIB with proceeds this year. What's changed? Because last year, you guys bought over $500 million and just looking at the stock chart, like on a range-bound basis, your stock was kind of at a similar level. So what makes it more attractive today than last year? James Ha: Mike, it's James. I mean, for one, our earnings are about 10% higher already versus this time last year, and we continue to see growth, as you can see in our guidance for 2026. And so the yield on that continues to be higher. In addition to, I think from an acquisition standpoint, as Samantha had talked about, we're looking for opportunities. We're always going to be open for opportunities, but we're also looking for those best deals as well. And so as of right now, as Samantha had shared, we haven't found that one yet. And with our cash flow model, we have capital and liquidity to invest every single day. And so right now, with what we're seeing, stock buyback looks like a great place to be allocating capital and proceeds from dispositions. Michael Markidis: Okay. And just a follow-up on that. You guys obviously did a great job bringing down your leverage from in excess of 13x to the current level of around 10. Is that sort of considered to be the new normal going forward for Boardwalk, absent material change in your cost of equity? Just how are you guys thinking about that? James Ha: Mike, it's James. The new normal for Boardwalk, which is declining debt-to-EBITDA is going to be the new normal, but at 10, that's not our goal. We continue to strive to reduce that debt to EBITDA. And again, that naturally is going to happen because of our cash flow model -- cash flow retention model and cash flow growth model for that matter. And so when you put those 2 together, we organically will continue to reduce that debt to EBITDA and look forward to continuing to execute on that. Michael Markidis: Okay. And then just last one for me. You've guys been able to push your turnover down. It keeps trending lower. You've got good visibility into the spring leasing season. So from now, I guess, is there anything to suggest that turnover will continue to grind lower? It's going to stay stable or in the spring will we start to see that tick back up? James Ha: Yes, we'd like it to be lower, Mike, because as we know, in Alberta and Saskatchewan, specifically, our team does a great job with our retention and balancing that turnover with spreads and costs. As we look into the spring season, historically, you generally see a little bit of a higher turnover in the spring and summer months, which I would expect that. But overall, on a trend basis year-over-year, we would aim to continue to lower that turnover on a year-over-year basis. Operator: Your next question comes from the line of Kyle Stanley from Desjardins. Kyle Stanley: Just kind of sticking with the commentary around spring leasing. Can you quantify maybe the uptick in demand you're seeing so far into the spring and how that may compare versus what you saw last year? And is there anything else driving it other than seasonality? Just trying to really understand the confidence in really seeing the demand pick back up. James Ha: We were looking at our guest cards, which is traffic. And when we look at guest cards so far in the first 19 days of February versus the first 19 days this time last year, we're about bang on -- and so that compares when we're looking at our guest cards for December and January, we were down about 20% year-over-year. And so we have seen that pick up. We've asked our teams on the ground. Is this -- how does this feel team? Is it more immigration? Is it pent-up demand? And from our team's perspective, so far, again, this is just what we're hearing from the ground is a little bit of both. When we look at our phone inquiries, we still continue to see a lot of 416, 905, 604 area codes calling into our sites. Certainly, weather plays a part of this, Kyle. We had cold winters across the country in December. And so there is -- that plays into that seasonality. But so far, so good. With what we're seeing in the first 19 days of February, again, I quoted earlier how much of our turnover has already been leased up. With what we're seeing right now, we do see some increased traffic and velocity heading into the spring. And again, our confidence on this comes from starting at close to 98% occupancy. And so we're not having to fill up at the same time. We really like being full heading into this busier season. Kyle Stanley: Right. Okay. No, that's helpful and kind of brings me to my next question, I guess, your ability to not have to fill up while also leasing, does that give you confidence that the negative 5% new leasing spread, does that trend closer to flat as we get into the stronger months? Or do you expect new leasing spreads to maybe stay in the negative range for the bulk of the year? James Ha: We are seeing improvement on it right now as we speak. Again, that's in the first 18 days of February. And I'm quoting 18 because our data does lag a day or so. But let's not forget that 75% of our deal flow comes from retention and renewals. And so you see the renewal spreads there. They remain positive. Again, we're negotiating 2, 3 months in advance already, and we're seeing consistent results there. And so retention is key in our markets. And so far, so good on that front as well, Kyle. Kyle Stanley: Okay. I appreciate that. And just one last one, just on your kind of higher level outlook for market rent. I mean it seems like most of the focus today is on the timing for positive rent inflection. I just love your thoughts on when do you see that occurring? Is it a late '26 event? Or do you think that gets pushed into '27? Just love your high-level thoughts. James Ha: Yes. High level thoughts, again, it's James here, Kyle. High level, I think it depends on price point and it depends on product type. And so again, as we talked about, we see the upper end of the rental market. So again, north of $2,000 a month remaining very competitive. Where there may be opportunity to see continued improvement in market rents, though remains in the more affordable product. And so communities where market rents are $1,400, $1,500, $1,600 where affordability is so high, that's where we can see some market rent adjustments upwards. And you see that even in our own portfolio, Kyle, if you look and segment by market, you can see that our more affordable markets are seeing market rent increases. In our more expensive markets and expensive product, that's where you've seen us adjust market rents. We see that trend continuing for 2026. Operator: Your next question comes from the line of Mario Saric from Scotiabank. Mario Saric: I just wanted to clarify, James, your comment on the expectation for consistent renewal spreads would consistent essentially be defined as kind of 3% to 4%, which is what you did in Q4? James Ha: Yes. Similar -- if we look at Slide 10 there, portfolio-wide tracking in the 3% to 4% range. We are looking for that to remain consistent through the spring. Mario Saric: Got it. And where would you say -- like if you compare, let's say, your sub $2,000 per month portfolio relative to market, given you adopted the gradual or the restrained rent increases over time, where would you characterize your kind of mark-to-market for your -- how much lower are you than peers in terms of your in-place rent today in the affordable portfolio? James Ha: Our market rents are fairly dynamic, and we're pricing those all the time. And so I know we get this question regularly, but in non-price controlled markets, I mean, it is quite fluid. And so as we head into the spring rental season -- sorry, let me start with -- as of December, we feel that, that mark-to-market, I think you can find it on Slide 47, is fairly accurate for that point in time. So again, December 31. And keep in mind that mark-to-market doesn't come from just new leasing. It also comes from renewals as well. And so as we head into the spring rental season, I think with the traffic we're seeing, again, in our more affordable product, as we talked about earlier, we see occupied rents continuing to increase, but we also see market rents continuing to increase in that more affordable product. And so to quantify it, Mario, I think that slide does a pretty good job of it at that point in time. If I had to guess what that's going to look like for March 31, I think you're going to see occupied rent increase because the majority of our portfolio remains in that affordable bucket. And I think you see market rents increase a little bit in that more affordable segment, which again represents the majority of our portfolio. Mario Saric: Okay. Okay. And then just switching from my last question. Within the guidance, you mentioned there's no dispositions included to the extent that you were to kind of hit your target on dispositions for the year based on, I guess, the in-place debt profile, if you were to hit your target and redeploy the proceeds into your NCIB, would that be FFO accretive or kind of neutral or dilutive in your view? James Ha: Mario, it's James. It would be accretive subject to timing. And so that math is simple, right? I mean it's -- you can see it even with this Montreal disposition proceeds from January, where we're selling noncore communities that under a 5 cap, we're turning around and buying back stock at 6.5%. That maths subject to timing, of course. And so our note on the disposition side is really just going to be subject to how quickly we can redeploy proceeds, which as more dispositions come through in the year, we'll provide an outlook and a view on that when that time comes. Mario Saric: Okay. I was just thinking more along the lines of an FFO yield without kind of understanding what the debt profile of the potentially disposed assets could be, but it sounds like it would also be accretive from that perspective. James Ha: Yes. On a levered basis, FFO yield is a metric that we look at as well, Mario. And of course, it depends on the assets that we're disposing of and what that leverage profile looks like, which is very unique from a community to community. But yes, you pin it bang on our view in terms of disposing noncore assets, that FFO yield and the alternate place where we can redeploy that capital is a huge consideration on our part as well. And yes, Mario, sorry, our expectation is that recycling is accretive. Operator: Your next question comes from the line of Matt Kornack from National Bank Financial. Matt Kornack: Just going back to the Montreal disposition; a, was there a mortgage in place on those 2 properties? And if so, kind of where were the interest rates? And then that product hold probably a little bit more challenging to manage, but it is affordable presumably. So how do you make the differentiation between what affordable you want to own versus what you're disposing of at this point? Samantha Adams: Matt, it's Samantha Adams speaking. Yes, the debt on the 2 Montreal assets was about just under $23 million at a rate of just under 4%. I think it was about 3.9%. Matt Kornack: And just in terms of, yes, just how you think about -- I mean, that product, I looked at it's got some rents sub $1,000 granted. That may not be affordable necessarily for the tenant types that would occupy those properties. But how do you kind of look at affordability and what you want to keep asset-wise versus what is noncore from a disposition standpoint? Samantha Adams: Okay. Got it. Affordability sort of involves every decision we make on the acquisition side and on the disposition side. We are all about providing affordable homes to our resident family members. But in terms of decisions, whether or not we dispose of a property, affordability would play a part of it, but it also stems from other factors. There may be capital requirements. The building may no longer allow our incredible experienced team to amend or renovate the property to deliver the type of experience we want to deliver to our resident members. And it also provides a really cost-effective source of cash flow for us, so which we can then redeploy into whether it's our NCIB or ultimately back into new acquisitions. It is a really, really strong use of source of cash flow for us. Matt Kornack: Okay. That makes sense. You mentioned, I think, that a portion of your growth is going to come from renewal rates in Quebec. They've been elevated for the last 2 years. The new rent control regime there, I think, favors kind of investment in the properties. Presumably, you're already investing. So is it just the ability to capture a percentage of that CapEx that you're spending in the properties that you think you'll get that excess renewal increases? James Ha: We do, Matt. We see a continuation of that for [ 2026 ]. Our team has invested in our Quebec portfolio. We continue to, and we were very happy to see the acknowledgment for those capital improvements and to keep communities affordable in Quebec. And so we do expect elevated adjustments for our Quebec portfolio relative to the [indiscernible] guideline. Matt Kornack: Okay. And then on Calgary, I know you gave a broader view as to how you see things evolving. But for that market, in particular, it seems like it's more supply, again, like the population growth is pretty good in Calgary, but it seems to be a more difficult or competitive jurisdiction at this point. What do you think the time horizon is for kind of supply absorption and as an improvement in that market from a market rent standpoint? James Ha: Matt, Calgary has benefited and continues to benefit from population growth for all the reasons that we've talked about at length over the past many years. We've invested heavily in our portfolio and our average rents in Calgary as a result of those is $1,900. It's very close to that mark that we were talking about earlier. And so we are in that competitive segment within our own portfolio. We are seeing continued supply deliveries from communities that went under construction 2, 3 years ago. But as we're seeing in other parts of the country, economics matter and development -- peak development economics have come and gone. And so we would anticipate the under construction numbers and the number of projects that are starting to start to taper. But here in Calgary, because we have population growth, we do need that new supply. And fortunately, again, in Calgary, we are seeing a pretty good balance. We continue to see strong retention within our Calgary portfolio. We continue to prioritize that occupancy. I would anticipate we are starting to lap those -- that period of time where we saw more balance in Calgary. And so we are -- we could see some stabilization in terms of where those market rents are. But again, that's all going to be subject to what does the immigration profile look like? What are we doing with immigration across Canada? We still think Alberta is going to win relative to other places because of the low taxes, the affordable housing, all the things, again, we've talked about in the past. But again, are we going to see more permanent residents in the country? Are we going to see more nonpermanent residents in the country? And that will help define not just for Calgary, but frankly, across the country, what rental rates are going to look like in the short to medium term. Matt Kornack: Yes. Makes sense. And then last operational one for me. You've done exceptionally well on NOI margins. I think you've troughed at 51% in 2017 on a trailing basis. You're up to 65%. That's ahead of where you would have been kind of pre-oil correction. Is -- it's sounds like your costs and your revenues are going to track each other, but do you think that's done in terms of margin expansion? Is there a structural ceiling? Or is there a little bit more to push on the margin front at this point? James Ha: Definitely more to push, Matt. I mean it's a goal that we've communicated to all of our stakeholders that margin improvement is a big one for us. We still see a path through it. I know we gave ranges for that. But our team is doing a good job on controlling what we can control in addition to on some of our expense items like utilities, as an example, we have, as we talked about in the past, started to shift that consumption -- or pardon me, that expense to our residents who are actually the ones consuming that. And so that's helping keep rents low. It's helping us improve our operating margins. And it's helping us reduce overall consumptions within our portfolio, which is a win-win-win scenario. And so as we look forward, Matt, I think we're just getting started on the margins. We are aiming and building strategies and approaches to continue to improve that going forward. Matt Kornack: Just as an update, we didn't hear any cheers on the call. So I just wanted to let you know as proud Alberta Canadians with Team Canada pulled out the win in hockey. Samantha Kolias-Gunn: And congratulations to Team Canada. Operator: There are no further questions at this time. I will now turn the call back to Sam Kolias, Chief Executive Officer. Please continue. Sam Kolias: Thank you, John. As always, if there are any further questions or comments, please do not hesitate to contact us. With gratitude, we'd like to thank our entire team that puts the extra in ordinary day in and day out. Our team is truly extraordinary. Thank you, loyal family residents, CMHC, our lenders, partners and, of course, our unitholders from far and wide and local. It really is all about our BFF, our Boardwalk Family Forever, whose huge shoulders we stand. And as leaders, we continue to do everything we can to support continued growth and extraordinary. We can't thank our extraordinary team and great leaders enough. We are pleased with our improving results on a foundation of exceptional value, service and experience we continue to provide our resident family members, our investors and all our stakeholders. We conclude home is where our heart is, our heart is where our family is and our family is where love always lives. Our occupied rent average, $1,590. Our love always, priceless. Welcome home to love always. Our future is Boardwalk Family Forever. What can be more important when choosing where to call home? Well, we heard from Matt, maybe a Canada men's gold medal, but maybe not more important, but it's really high up there. And again, congratulations to our Canadian men's hockey team for winning gold. God bless us, and now more than ever, grant us all peace, our greatest prize of all. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: Welcome to the Cofinimmo Full Year 2025 Results Conference Call. [Operator Instructions]. I will now hand the conference over to your host Jean-Pierre Hanin, CEO of Cofinimmo. Please, sir, go ahead. Jean-Pierre Hanin: Thank you, Marja, and good morning to everybody. Thank you for joining us for the presentation of Cofinimmo's results for the full year 2025. I'm joined by some of my colleagues, Jean Kotarakos, CFO; Sebastien Berden, COO; and Sophie Grulois, General Counsel and Secretary General. As usual, we'll keep the presentation focused, and we look forward to your questions at the end. I will start with a brief update on the contemplated combination with Aedifica through a public exchange offer that we addressed in our several press release available on our website and published between the 1st of May '25 and the 29th of January 2026. On the 3rd of June 2025, Aedifica and Cofinimmo reached an agreement to unite and create Europe's leading healthcare REIT. The combination of both companies will be realized through a voluntary and conditional exchange offer for all Cofinimmo shares launched by Aedifica. After approval of the Aedifica shareholders in July 2025, the Dutch and German competition authorities also granted their approval. On the 21st of January '26, we were informed that the Belgian Competition Authority granted clearance for the proposed combination, subject to the commitment offered by Aedifica to dispose of healthcare assets located in Belgium over several years with a total value of EUR 300 million. On the 29th of January, the offer prospectus of Aedifica and the response memorandum of Cofinimmo were approved by the FSMA. Subsequently, the initial exchange offer for acceptance by the public was launched on the 30th of January 2026. This offer is currently ongoing, as you all know, and will be closed on the 2nd of March of this year with the announcement of the results in the following days. Beyond this brief update, you will understand that today's discussion will focus on Cofinimmo's stand-alone performance and outlook. Let's begin with the key highlights from the year on Slide 3. Despite a volatile macro environment, 2025 has been a year of strong operational and financial performance for Cofinimmo, which leads to results higher than the outlook. Those good results arise from an excellent operational performance, a gross rental income of EUR 355 million, up nearly 3% like-for-like, a high occupancy rate of 98.4% and long residential length of 13 years on average. The solid financial foundation on which Cofinimmo was built also explained those good results. For example, a very low average cost of debt of 1.5%, one of the lowest level for REITs in Europe and a low debt-to-asset ratio of 42.8%, reflecting disciplined portfolio management. Sustainability has remained a core focus through the year. I'll come back on that later. The net result from core activities, EPRA earnings, rose by 0.7% to EUR 246 million, above guidance. The net result -- group share reached EUR 213 million, up EUR 150 million year-on-year. Healthcare real estate market, up 77% of our EUR 6.1 billion portfolio. The Office segment has largely been recentered on the best area of the Brussels Central Business District. I will comment on our investment and divestment 2025 and on the outlook '26 later in the presentation. All those elements allowed the Board to confirm a gross dividend of EUR 5.20 per share for 2025, payable in 2026. Our company profile and strategy are already well known by all of you, so I suggest to go directly to Slide #8, which also reflects something you know quite well, which is the evolution of over time of a different segment until 2025. Let's move on Slide 10. So last year, we achieved gross investment of EUR 111 million, essentially linked to the execution of development projects in healthcare. We also continued on the right bar chart, our asset rotation mainly in healthcare, ending 2025 with EUR 82 million of divestment. Divestments were all made in line with the latest fair value. Those of distribution network assets were even done above fair value. Slide 11 summarizes for you the active portfolio rotation. Since 2019, we have transformed what was still dominantly a Belgian office player into a leading European healthcare REIT. Over 20 years, the group completed EUR 4.6 billion net investment in healthcare with a clear acceleration since 2018 and a slowdown since 2022. Over the same period, we managed to realize net divestment amounting to almost EUR 1 billion in offices. Slide 12 illustrates the solid portfolio growth since 2018. You can witness our investment pace and the expansion path in healthcare real estate despite change in market conditions. This results in a portfolio growth of 7% on average per year. Over the same period, thanks to our proactive management, we kept our debt-to-asset ratio at an adequate level as shown on the right-hand chart. The outlook for the end of 2025 was around 43%, and we managed to close the year in the lower end of this outlook at 42.8%. On Slide 13, I'd like to comment on the Cofinimmo's share performance on the stock market. Since our last call in July, we gained approximately EUR 700 million in market cap, which associate now between EUR 3.5 billion and EUR 3.6 billion. After several difficult years, European healthcare real estate, in general, performed well on the stock market during the 2025 financial year, and this was even more true for Cofinimmo in particular. Three distinct periods can be identified. Firstly, the adjustment to the 2025 dividend outlook payable in '26 announced in February '25, and that was well received by the market. The share price rose 8% between the close of the trading on the 20th of February and that on the 2nd of April '25 in the context of a boost M&A activity in the U.K. Secondly, the share price also performed well after President Trump announced Liberation Day, climbing 30% between the close of trading on the 2nd of April and the 29th of April '25. It was due to the fact that healthcare real estate is not directly affected by tariffs. Thirdly, the share price accelerated from 30th of April onward, stabilizing at a level reflecting the proposed combination with Aedifica through a public exchange offer. After a new acceleration in the last weeks of the year, the share price reached EUR 79.2 on the last day of 2025, up 18% since the end of April. The total gross returns for shareholders just amount to 45% cumulatively over 2025 and even more than 82% until the 18th of February of this year. Going to sustainability, I'm on Slide 15 to 19, you see that, as usual, sustainability is at the core of our strategy and embedded in all operations. Let me give you some recent examples. Cofinimmo improved its ranking in the Europe's Climate Leaders list issued by the Financial Times, now at the fourth place among 39 European real estate companies. In 2025, we achieved 10 new BREEAM certifications across healthcare and office assets. Two days ago, another good news, we were included in the S&P Global Sustainability Yearbook 2025. We renewed our Great Place to Work certification in Belgium and Germany and the scope of our ISO 14001 certification was extended to Spain, and we received the EPRA Sustainability Gold Award for the 12th consecutive year. I'm on Slide 17 now. As a reminder, our Thirty to the Cube project designed in agreement with science-based targets foresees a 30% reduction in energy intensity of our portfolio by 2030. At the end of 2025, the energy intensity has already been reduced by 26% since 2017. You have, as usual, on Slide 18 and 19, the list of sustainability benchmarks and awards show that our efforts have positioned us as a very credible player in the industry. Now let's turn to the property portfolio. I'm on Slide 21 where you see that our property portfolio maintains a very high occupancy rate of 90.4% at the end of 2025. On the same slide, you see the top 10 list of our tenants. Our tenant base is diversified with the top 10 tenants accounting for 62% of contractual rents. Moving to Slide 22. The overall weighted average residual terms remain quite long at 13 years and even at 14 years for healthcare. Lease maturities are well spread over segments and geographies. On the next slide, we see that over 2025, gross rental yield at 100% occupancy stands at 5.9%, with net yield at 5.6%. Overall, our average net yields are closer to 6% than to 5%. Also, yields are stable across segment, reflecting disciplined asset management and resilient demand. Sebastien Berden, CEO, will now provide insight into our segment. Sébastien Berden: Thank you, Jean-Pierre, and good morning to all of you. Since 2018, we consolidated our position within the healthcare sector in Europe. And I'm sure you remember, we achieved this through geographic expansion, but also by diversifying in the different types of healthcare buildings. As illustrated on this slide, our portfolio spans 9 countries and includes 8 different types of healthcare assets. Next to nursing home, which still form the majority of our assets. We own acute care and rehab clinics as well as primary care and facilities for disabled people to mention only a few. Moving to Slide 26. This is an overview of our portfolio. The fair value amounts to EUR 4.7 billion and represents 77% of Cofinimmo's overall portfolio. After some selective divestments, we own now 304 assets, representing more than 30,000 beds and supplying 1.9 million square meters to many clients. On Slide 27, we present a little update of the statistics on underlying occupancy that soon became a habit in the market. And the trend in the evolution of underlying occupancy is good. You'll recall that in '23 and '24, we saw a continued improvement in occupancy rates in most countries, while now the same trend continued as the average occupancy in our portfolio stands at 93% in December '25, up 1% from last year. I'm sure you also remember that we compiled the statistics from our observations during visits, and we will reconfirm this figure within a couple of months when we also receive the reports from all our tenants for all our assets, likely somewhere in June or July. On Slide 28, we also like to remind you of the many projects and buildings under construction we managed in '25. And although the list is long, we actually reduced it with 5 projects that were completed in 2025. These were projects in Spain, Belgium and the Netherlands we had in our rolling pipeline in months and are very happy to have now been delivered. And maybe I'd like to draw your attention this time also on a series of investments we did in nursing homes and care facilities for disabled people in Finland. We are very happy with this as we strongly believe in the Finnish market and could agree on a gross rental initial yield of approximately 7%. And as you know, when Cofinimmo invests, Cofinimmo also divests, and this is a summary on our divestments in Slide 29. These were primarily all the nursing homes in France and a series of smaller assets and medical office buildings in the Netherlands. We disposed them in the context of our asset rotation program that we set up since a couple of months now. Let's now move to the Pubstone portfolio and move to Slide 32. This slide is a quick reminder of the portfolio that represents 800 pubs and restaurants for a fair value of EUR 500 million. Slide 33 reports on the activity of the Pubstone team. Well, the activity was one of active divestment in 2025 with a disposed volume of approximately EUR 9 million at excellent conditions since all disposals were sold at prices above fair value. Worth mentioning also is a disposal in our PPP portfolio for a police office near Antwerp. Finally, I'm also asked to provide you with a short update on our office portfolio and propose we move to Slide 35. This portfolio represents a fair value of EUR 925 million with 25 properties supplying 250,000 square meters to many clients. Slide 36 reports on the activity of the Office team and their excellent work and performance again in '25. The team worked further on the optimalization of this portfolio, keeping almost 3/4 of the square meters within the European district of the CBD. This segment where we can observe the highest average rents and where the prime rent was observed. And then finally, on Slide 37, we report on one of our milestones in '25 in this portfolio. It is a reminder of the renovation of an office building in Mechelen City between Brussels and Antwerp, offering 15,000 square meter lease and leased to the Flemish community for 18 years. I will now pass the floor to Jean Kotarakos, our CFO, who will delve within the financial specifics of our company. Jean Kotarakos: Thank you, Sebastien. Good morning to all. We can go to Slide 39. Here, we observed that our overall portfolio has experienced a like-for-like rental increase of almost 3%, primarily fueled by indexation and new leases. Besides this, the minus 1.1% year-on-year change you can see in gross rental income is mainly due to changes in the scope. We can move to Slide 40, where we see a 0.7% growth of the EPRA earnings compared to 2024 at EUR 246 million, which is higher than the outlook. Please note that this figure excludes nonrecurring effects arising from the proposed combination with Aedifica over the year and the divestment of a finance lease receivable in Q3, which partially offset each other and represent a net expense of EUR 1.4 million recorded as a result of the portfolio below EPRA earnings. The EPRA EPS reached EUR 6.45, which again is higher than the outlook. On Slide 41, we present the IFRS -- net result, sorry, which stands at EUR 213 million at the end of '25 or EUR 6.61 per share. The increase of EUR 150 million compared to '24 is due to the increase in the net result from core activities of EUR 2 million, combined with the net effect of the changes in the fair value of hedging instruments and investment properties, which are both mainly noncash items between the end of '24 and the end of '25. The net result group share per share at the end of December '25 takes into account the issuance of shares in '24 as illustrated by the increased denominator, which increased from 37.5 million to more than 38 million rounded. Drilling down into the portfolio result, we see a figure of minus EUR 23 million compared to minus EUR 152 million at the end of '24. This encompasses the following key elements. The gain or losses on disposal of investment properties and other nonfinancial assets amount to plus EUR 4 million, so it's a gain at the end of '25 compared to minus EUR 16 million at the end of '24. The item changes in the fair value of investment properties is positive at the end of December '25, plus EUR 2 million compared to minus EUR 123 million at the end of '24. Without the initial effect from the changes in the scope, the changes in the fair value of investment properties during the first quarter of '25 were positive, putting an end to 9 consecutive quarters of decrease, and they remain stable in the second, third and fourth quarters. In total, this change was plus 0.1% for the '25 financial year and is mainly due to, firstly, a change of plus 0.1% in the real estate which arises firstly from a negative change in France, mainly due to the increase in registration fees following the Finance Act implemented on the 1st of April by certain local authorities as well as downward revision to inflation forecast in that country. And secondly, a positive change in the Netherlands derives from the combined effect of indexations and the increase in estimated rental value reflecting, sorry, an increase in operators' public financing. All this is combined with a minus 0.8% change in the Office segment, representing only 15% of the consolidated portfolio and partially offset by a change of plus 1.8% in the property of distribution networks. Turning to Slide 42 and looking at the balance sheet. We observed that our total assets are valued at approximately EUR 6.4 billion. Investment properties at fair value represent nearly 95% of this figure. Those assets are financed by roughly EUR 3.5 billion in equity and less than EUR 3 billion in liabilities. The Slide 43 offers an analysis of the evolution of the debt-to-asset ratio from 42.6% at the end of '24 to 42.8% at the end of '25. This stability can be attributed to several factors. First, the dividend '24 paid to our shareholders last May has led to an increase of 3.7%, which was offset by the cash flow produced during the full year '25, generating a decrease of 3.8%, while the net investment of '25 had a global effect of a mere 0.2% positive. On Slide 44, you can see that the EPRA NAV -- sorry, that the NAV is somewhere between EUR 92 and EUR 101 per share, depending on the concept you like most. I will comment on the evolution of the IFRS NAV between '24, where it stood at EUR 92.84 per share versus EUR 92.2 per share at the end of December '25. This very limited decrease of EUR 0.6 per share has 2 drivers. The payment of the dividend '24 in May '25, which still amounted to EUR 6.20 per share, partially offset by the net result for '25 being EUR 5.61 per share as seen on the previous slide. Let's now move to the financial resources at our disposal. In '25, there was no equity raise as there was no optional dividend. I'm on Slide 47. Our S&P credit rating to BBB with a stable outlook was confirmed in March '25 with the report being published in April. It's also worth mentioning that S&P improved its outlook early June '25 following the press release related to the proposed combination with Aedifica and reiterated this outlook early November '25. This means that the combined entity rating could improve by 1 notch after completion of the combination. Cofinimmo continued to proactively manage its financial maturities, as you can see on Slide 48. In this context, Cofinimmo signed new long-term credit lines for EUR 185 million and extended a cumulative amount of EUR 494 million for 1 year. Slide 49 reminds you that Cofinimmo holds EUR 2.6 billion in sustainable financing, comprising various instruments, including a sustainable commercial paper program. We can go to the next slide. And on this slide, Slide 50, we show further the breakdown of the long-term committed financing instruments split between bonds and similar instruments which represent almost 1/3 of the total and bank facilities representing more than 2/3 of the total. This includes a headroom of more than EUR 1 billion of available credit lines after the deduction of the backup of the commercial paper program. The second chart shows the breakdown of the drawn financial debt. Going now on to Slide 51. Due to the passage of time and the weight of the 2 benchmark bonds of EUR 500 million each in our maturity table, the average debt maturity after it remains stable at 4 years in '23 and '24 stands now at 3 years at end of '25. The average cost of debt is still very low at 1.5%, which is one of the lowest across the European REIT landscape and in line with the outlook. On the medium term, we anticipate a gradual increase year-on-year to reach around 2.3% in '28 when the first benchmark bond will mature. Looking at the maturity table on Slide 52, we can see that the operations recently carried out provided that the long-term financial commitments for 2026 are now reduced to EUR 267 million versus EUR 781 million at the beginning of '25 and EUR 695 million at the end of the third quarter '25. Most of the credit lines maturing in '26, representing EUR 207 million out of the mentioned EUR 267 million will not be refinanced earlier since they have been concluded at attractive conditions. And finally, Slide 53 reminds us the high hedging ratio foreseen for the coming years. I will now hand over to Jean-Pierre, who will give you an update on the '26 outlook. Jean-Pierre Hanin: Thank you, Jean. Thank you for this financial overview. On Slide 55, you will find the breakdown of net investment estimate for 2026. Turning first to the investment column on the left on the slide. We are considering at this stage gross investment for a total of EUR 310 million for 2026 splitted between committed development project, files under DD or being contemplated, other healthcare investment and limited CapEx for offices and distribution networks. Secondly, on the divestment aspect on the right side of the slide, we foresee a total of EUR 110 million, the lion's share of it, 5 already done under due dil and EUR 6 million of other potential divestment file. With this projection, net investment would reach around EUR 200 million at the end of 2026. I will end this presentation with an update on the outlook for this year on a stand-alone basis. Cofinimmo expects, barring major unforeseen event, to achieve a net result from core activities group share per share, which is equivalent to EPRA EPS of EUR 6.35 per share for the 2026 financial year, leaving aside the nonrecurring effect arising from the proposed combination with Aedifica. The debt-to-asset ratio as at the end of '26 would then amount to around 44% compared to 42.8% at the end of last year. We appreciate your attention. We all know that the mindset are more in the direction of the future deal with Aedifica, for which all the team of Cofinimmo are very supportive and already working on it. But of course, we are, as usual, at your disposal for any questions you might have. Thank you. Operator: [Operator Instructions] Our first question comes from the line of Charles Boissier at UBS. Charles Boissier: Two questions from my side. So first on healthcare tenants and second on Offices. On healthcare tenants, I think back in 2024, the write-downs amounted to EUR 0.5 million. And now you have mentioned some write-down on receivables, termination payments in the order of EUR 6 million offsetting each other. So it's 12x more than 2024. So I just wanted to know about the context behind these write-downs and how much annualized rent does it correspond to? And to what extent this is also in the 2026 guidance as well? Jean-Pierre Hanin: Thank you, Charles. First, on the numbers, Jean? Jean Kotarakos: Yes, Charles, I would like just to precise 2 things. The amount offset each other, in fact, so we have a write-down indeed of EUR 6 million on receivable and then indemnities of EUR 6 million, which is a positive amount. Jean-Pierre Hanin: So it's not an add-on. It's minus -- so -- but anyway, it's -- your second question about the context. So as you know, the global context for operators is seriously improving with some variation regarding the speed depending on the size of the operator on the geography, as also known and reflected in the press, including in the last quarter of '25 and the beginning of this year. Some of them are still finalizing the restructuring of their balance sheet. And I would say, for some of these operators linked to activities that have nothing to do with healthcare, which means that healthcare assets are very sound, and this is still the view that we have for all assets. And basically, this write-downs have been indeed taken, but they might lead to credits in future periods. And that's basically the position we have preferred to take, especially in view of the coming deal for the future. So this is basically the end of, for some of the operators, some difficult periods. Some of them tackle problem at the beginning. Those who had problem outside of the healthcare started to restructure their balance sheet a bit later. But basically, nothing very worrying. As far as Armonia is concerned, you are also reading the press. We have an agreement with them in agreed form, not yet signed, but it's -- as we speak, it could be in the [indiscernible] could be received as we speak. So basically, this is the situation. As far as Offices is concerned, I guess that your question is about the evolution of the occupancy ratio. Again, the Office portfolio with much more tenants is leaving, you have sometimes up, sometimes down, depending at the time where you take the picture. So we have also some divestment again, is it just the portfolio leaving. It's not reflecting a structural deterioration or anything else, but just the portfolio going through its normal life, I would say. And you know that we have seriously upgraded the quality. So now for buyers to buy everything, I think -- not only the upgrade of the quality, but also the refocus on the CBD all assets that make it even as a whole, an attractive portfolio. Charles Boissier: And so if I hear you, then based on your leasing conversation, you wouldn't necessarily expect 2026 occupancy in offices to significantly deteriorate from here? Jean-Pierre Hanin: From what I know today, no. And the CBD remains the best area in Brussels. So -- especially, we are in the best part in the Leopold District, as you know. And today, there is no sign that this would deteriorate. I'm telling you this because we all have in mind what happened a few weeks ago with -- there has been some headwinds some years ago with the -- basically working from home. And then since 2 months, some people saying, with AI, the occupancy will go down. But in all markets, the Brussels market has always been qualified by some international investors as a bit more boring because more resilient, but resilience is also very positive, and we don't see anything related to that coming as we speak. Operator: Our next question comes from the line of Vivien Maquet at Degroof Petercam. Vivien Maquet: A couple of questions on my end. If I may start with the first one on the divestment target. Could you maybe share how much of this EUR 110 million relates to offices because I think that most of it is now under due diligence or has been completed. So I think that you have a good, I would say, idea on the share of Offices. Could you share it? Jean-Pierre Hanin: Yes. Well, as we are only in February, as every year, the allocation between Healthcare and Offices that we have in mind in February might be quite different when we land at the end of the year, especially, as you know, that as far as Offices is concerned, everything is for sale. So to tell you that in EUR 110 million, there is 50% of Offices and DPN, which is more or less what we have in mind. Of course, the Offices divestment could be much more significant. So the guidance about allocation has to be taken with a bit of caution, especially when we are in February. I think around September, then the allocation becomes a bit more relevant. Vivien Maquet: I understand. But if it's on due diligence, I mean, you have -- how much is Offices under due diligence there? Jean-Pierre Hanin: Under due dil, let me give you... Jean Kotarakos: Yes. You have Offices in due dil. Jean-Pierre Hanin: I prefer not to give you the amount because we are talking of, I would say, not small assets. And if I give you an amount where we are still negotiating, we still don't want to basically leak information about how much we have in our accounts compared to the discussion we had. Vivien Maquet: Understand. Then maybe another question on the first disposal you have completed to this date. Was there the nursing home in Brussels. I understand you cannot disclose information on the price, but just wanted to understand a bit the rationale behind it because last year, you mostly sold none in Belgium and here you are selling in Brussels. Was that... Jean-Pierre Hanin: No. We have completed an asset rotation plan based on several criteria, real estate criteria, commercial criteria and then climate and energy intensity. And asset rotation is part of any core business as all business. And we also like to have asset rotation within the healthcare portfolio. And if you look at our track record in the past, it's consistent. So it's nothing more than executed a sound and well studied asset rotation plan. You should not see anything more than that. Vivien Maquet: Okay. And then one last question on Europe, the others. Could you share your view on where we stand for the healthcare in Germany? How do you see the market? Do you see it as bottoming out? And do you see increasing opportunity for you, thanks to increased profitability of the tenants to commit to new projects there? Do you believe it's the right time to look at that market? Jean-Pierre Hanin: Yes, I think you have to make a distinction between standing assets and development project. For development project, given the position of certain developer and so on, operators are thinking again about it and are studying it, but it might still take some months before you see a large portfolio of new assets being constructed. But again, depending on the geographies, we all know that South of Europe is quite dynamic. The U.K. is quite dynamic as well. So I think the overall climate is positive. Certain operators are looking again at growing, not necessarily by owning their real estate, but by looking at consolidation. So clearly, the atmosphere is more positive and more dynamic, especially with the, I would say, sharp need for infrastructure that has been highlighted during the COVID period. So we all know that there is a structural lack of infrastructure, which may differ from one country to the other, which made it a necessity in many of the geographies in Europe. Operator: Our next question comes from the line of Veronique Meertens at Kempen. Veronique Meertens: For me, some questions around the guidance. Maybe as a follow-up on Charles' question. So do I understand correctly that for '26, you do not expect further issues on delayed rental payments from some of these operators? And secondly, on the guidance, could you give some additional color on you being a net investor? Obviously, there's still some CapEx for the pipeline, but what is included in your guidance in terms of the other investments that you pencil in and how big of a share do they have in the rental growth for '26? Jean-Pierre Hanin: Thank you, Veronique. First, on the guidance, remember, last year, the guidance was EUR 620 million, and we ended up with EUR 645 million. And you know us that's basically the way we usually approach things. So the EUR 645 million includes already many of the expectations we have regarding certain operators. So for those situations that are known to us, that's already included in the budget '26 based on the discussion we continue to have. About the investment, well, I think it will depend also about the future combination and how it will be played. You know that basically, we are confined to financing our investment with debt only. And we also want to have our LTV under control. And of course, the coordination with Aedifica is and will be even more important. So there are opportunities on the market. I think that also has been highlighted by Stephan in many occasions. But of course, '26 is a bit of a special year for Cofinimmo in terms of ability to basically harvest as long as the 2 companies have not been completely unified. Veronique Meertens: Of course. No, I understand. But maybe then on those discussions with some of these operators that are struggling, can you elaborate on -- are those discussions around rent levels? Are those discussions around maybe changing to a different operator? Or what are you actually discussing with them? Jean-Pierre Hanin: It's basically not about changing operators. It's understanding to what extent problems outside of healthcare are impacting the healthcare operation. Why? And what are they planned since the healthcare operations are sound, what are they planned to basically solve this issue. It's not related to healthcare. So it's not about ourself finding new operators because the operators or certain houses are in distress. So we are a responsible partner, but there must be a responsible also group. And it's more finding a win-win than any dramatic move (to be continued). Veronique Meertens: Okay. So indeed, so it's not per se worries about the actual rent cover ratios of those specific assets? Jean-Pierre Hanin: No, no, because we -- there has been a discussion, as you know, with [indiscernible] and all landlords in Belgium showed a certain we'd say -- I would say, flexibility to basically ensure the future. And this spirit try to be maintained when they are, I would say, a discussion with operators. Operator: Our next question comes from the line of Steven Boumans at ABN AMRO ODDO BHF. Steven Boumans: So first one is on the -- what is the EUR 12 million loss share in the result of associated companies and joint ventures. Could you give a quick background and especially tell us what we can expect for this line item for '26, please. Jean Kotarakos: Steven, the loss in the associate is mainly strike in the press release. comes from some amount that we had to take regarding the development project in Germany. So it's -- we have published the loss of EUR 8 million in the press release. Steven Boumans: Yes. And is that issue fully gone? So nothing to expect in this line item for '26. Jean Kotarakos: It's a one-off for this year. And normally, we are on the safe side for [indiscernible]. Steven Boumans: Okay, clear. And then maybe on the healthcare investment markets for the potential investments that you see. Could you provide some background on the yields you are seeing? And do you expect to transact those investments and how that compares to, let's say, 6 months or 12 months ago? Jean-Pierre Hanin: Well, I would say 6 and 12 months ago, you had not many transactions. So the few transactions that has been done at that time in terms of yield you could dispute whether they were representative because there has been some, I would say, a very attractive portfolio that has been sold some more. So it's very challenging to say, okay, yields have evolved compared to 12 months ago. I think that what is well appreciated is that the time where money was free with very low interest rate is over. This has been basically translated into the valuation of the various players. So which means that today, you start to see yields that basically reflect this new interest environment, which we believe is there to stay and not to go back to "good old days." We know that there are certain owners that are still dreaming that this come back. The liquidity is coming progressively because you don't have a lot of [indiscernible] seller. If you look at, I think, the larger seller of healthcare assets during the last 2 years has been [indiscernible] and you see the very impressive amount of divestments they have done with them as operators, which in the mind of certain people raise still a question mark, and they have done it at still a good yield. So for me, it's not necessarily that much a big evolution of yield. It's just that basically the dreamer of going back to the 0 interest rate environments are basically almost disappearing. And today, you see here that make more sense concurring this environment that we have today. And corresponding liquidity, more liquidity compared to, I would say, the last 2 years. Steven Boumans: Okay. Clear. And to be [indiscernible] expect from what you see today that the yields on your book value reflect what of the deals that you expect to happen in '26, too. Jean-Pierre Hanin: Yes, I think regarding the valuation, we are comfortable with what is happening today, yes. Operator: [Operator Instructions] Our next question comes from the line of Frederic Renard at Kepler. Frederic Renard: Just a follow-up on the office Polo. I just wanted to know a bit what is the percentage of leasing coming for renegotiation this year? How much have you been able to achieve and at which level of rent? Jean-Pierre Hanin: We need to follow up on that because I don't have the information front of me, there is not a wall of refinancing. And usually, we secure the big chunk, but it should be very marginal. But we will follow up on that with [indiscernible] Frederic to give you more headline on this. Frederic Renard: All right. And then maybe follow-up -- all right. Understood. Maybe just a follow up on the [indiscernible] discussion you mentioned that you were referring to. Just you mentioned that you had a good discussion, but do I understand that actually, you had a discussion already on your facilities and that you actually considered some rent relief. Should I understand that. Jean-Pierre Hanin: Well, basically, there has been -- [indiscernible] has done bilateral discussion with all the vast majority, I would say, of the land lot in Belgium. And the basically focus was to have equal treatment for all of the Belgian landlord. So that was basically the rule of thumb for all this discussion. And to the extent that they were valid argument, the various Belgian landlords have shown temporary flexibility given the global relationship, but also based on recovery plan and measure to be taken by the operators themselves. So basically, the discussion were quite similar in order to ensure equal treatment. Frederic Renard: Okay. And on [indiscernible], remind me, you have also some exposure in Spain, right? Jean-Pierre Hanin: The exposure is very minimal in Spain, but I'm even not. It's -- let me -- now it's in France that we have 2 assets with [indiscernible]. And 2 in Italy, not in Spain. So you are going to a granulometry so I need to verify my note given the asset rotation, but 2 assets in Italy and 2 assets in France. Frederic Renard: And there, the discussion... Jean-Pierre Hanin: The discussion was [indiscernible] period, not [indiscernible]. Operator: Our last question comes from the line of Lynn Hautekeete at KBC. Lynn Hautekeete: I have a follow-up on the healthcare campus in North [indiscernible]. So I'm trying to reconcile the movement on your balance sheet and the cash flows. So on Page 11 in your footnotes. You say that you had EUR 40 million investments in the fourth quarter of EUR 125 million, and that is the net result or a net amount of EUR 56 million and EUR 70 million coming from changes in participations. I'm just wondering that EUR 17 million, what exactly is that figure? Is it CapEx that was supposed to be spent and then did not go out because you sold the participation? Jean Kotarakos: Lynn, I think it's a very detailed question. I can discuss that after the call, if you want. You can reconcile [indiscernible]. Jean-Pierre Hanin: We will give you a full reconciliation, yes, nothing to hide. Because it's -- technically, there are various steps. So it's -- we will give you detail on that. Lynn Hautekeete: Yes, perfect. It's not an easy one. And then maybe second question is on the CapEx of the offices. I was just wondering, is that yielding CapEx? Or is it just part of refurbishments? Jean-Pierre Hanin: Refurbishments, yes. Mostly refurbishments. Lynn Hautekeete: Okay. And then maybe a third one, a quick 1 is on the headroom that you have on your facilities. So that's around EUR 1 billion, and you're not going to replace EUR 270 million of it. Is it possible that, that headroom goes down even further in the future because right now, it's quite expensive to keep the EUR 1 billion. Jean-Pierre Hanin: The future is the combination with Aedifica. So I think we are all waiting that it becomes really to benefit from the combined combination. And you know that the combination will have a positive impact on the cost of capital, including on the abilities basically of our financing and what S&P also has said. So we don't do reasoning on a stand-alone basis for the future, but more on the combined and the news will be good in this respect. Operator: There are no further questions at this time, so I turn the conference back to the speakers for any closing remarks. Jean-Pierre Hanin: Thank you. Well, as usual, I will tell you that we are at your disposal. I think we are all looking at March 2 in our agenda. But in the meantime, if any questions regarding the past, don't hesitate. We have well noticed 2 follow-up that we will do regarding the question that we have raised to date. And of course, we will follow up on that. But if anybody has any other questions, always pleased to answer them. And you know us, you know how to contact and we will follow up. Thank you for your attention, and thank you also for those years of dialogue. This is not the end of the story. There is an exciting operation insight and for sure, the future leader of Europe in healthcare, they will be interesting times. Thank you, and we'll be in touch.
Operator: Good morning, and welcome to Fairfax's 2025 Fourth Quarter Results Conference Call. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. Your host for today's call is Peter Clarke with opening remarks from Derek Bulas. Derek, please begin. Derek Bulas: Good morning, and welcome to our call to discuss Fairfax's 2025 year-end results. This call may include forward-looking statements. Actual results may differ perhaps materially from those contained in such forward-looking statements as a result of a variety of uncertainties and risk factors, the most foreseeable of which are set out under risk factors in our base shelf prospectus, which has been filed with Canadian securities regulators and is available on SEDAR+. Fairfax disclaims any intention or obligation to update or revise any forward-looking statements, except as required by applicable securities laws. I'll now turn the call over to our President and COO, Peter Clarke. Peter Clarke: Thank you, Derek. Good morning, and welcome to Fairfax's 2025 Fourth Quarter and Year-End Conference Call. I plan to give you some highlights and then pass the call to Wade Burton, our President and Chief Investment Officer of Hamblin Watsa to comment on investments; and Amy Sherk, our Chief Financial Officer, to provide some additional financial details. 2025 was the best year in our history. We earned $4.8 billion after taxes, the most ever, with record underwriting income of $1.8 billion and record interest and dividend income of $2.6 billion. We also had strong contributions from investments in associates, our noninsurance consolidated investments and net gains on investments. Operating income from our insurance and reinsurance operations on an undiscounted basis and before risk margin was again very strong at $4.6 billion. We have many sources of income, and they all performed very well this year. Our book value per share increased 20.5% adjusted for our $15 dividend to $1,260, up from $1,060 at December 31, 2024, an increase of approximately $200 per share. Last year, we purchased for cancellation just over 1 million shares at an average cost of $1,615 per share. At December 31, 2025, there were 20.9 million shares outstanding. And in the first 6 weeks of 2026, we purchased a further 131,000 shares at an average cost of $1,685 per share. Our insurance and reinsurance companies are in great shape, writing over $33 billion of premium worldwide. We continue to benefit from our scale and diversification through our decentralized insurance operations supported by the deep expertise and long tenure of our presidents and the leadership teams across our insurance and reinsurance businesses. As we have said before, we can see our consolidated operating income for the next number of years at $5 billion, of course, no guarantees, and this consists of $1.5 billion of underwriting profit, interest and dividend income of $2.5 billion and $1 billion income from our associates and noninsurance consolidated income. On February 17, 2026, it was announced Kennedy Wilson entered into a definitive merger agreement pursuant to which they will be acquired in an all-cash transaction by a consortium led by Bill McMorrow, Chairman and Chief Executive Officer of Kennedy Wilson; certain other senior executives and together with Fairfax. Under the merger agreement, the consortium will acquire all outstanding shares of Kennedy Wilson not already owned by members of the consortium for $10.90 per share in cash. The per share purchase price represents a 46% premium to Kennedy Wilson's unaffective share price as of November 4, 2025. The last trading day prior to Kennedy Wilson receiving and publicly disclosing the consortium's proposal. Fairfax has committed to provide the consortium with funding up to an aggregate amount of $1.65 billion, which is the amount necessary to fund the cash purchase price and the redemption of certain preferred shares and other expenses. Bill McMorrow will have effective control and will continue to lead and have ultimate responsibility for the company while Fairfax will have a majority economic interest in the company. The transaction is subject to customary closing conditions, including shareholder approvals and is expected to close in the second quarter of 2026. I will now give you some additional detail on the components of our net earnings for the year. Our investment return for 2025 was outstanding with a return of 9.3%, driven by very stable interest and dividend income and associate earnings and a very strong year on net gains on our equity investments. Consolidated interest and dividend income of $2.6 billion was up $62 million year-over-year, benefiting from a growing investment portfolio offset by lower interest rates and decreased dividend income, primarily from a one-off dividend from Digit Insurance from its IPO in 2024. Net gains on investments of $3.2 billion for the year, we're one of the highest ever in our history, driven by gains on our equity exposures of $3 billion, unrealized gains on our bond portfolio of $385 million, primarily from U.S. treasuries due to the decrease in interest rates during the year, offset by foreign exchange losses of $440 million, much of which was offset by foreign currency translation gains recorded in other comprehensive income. Net gains of $3 billion on our equity and equity-related holdings were driven by realized gains and unrealized mark-to-market gains on investments with our major contributors being our Fairfax TRS, Orla Mining, a position we sold about half of our common shares or 1/4 of our interest including convertibles and warrants in the fourth quarter. Also, contributing with CIB Bank and Metlen Energy. We have always said, and please remember, our net gains or losses on investments only makes sense over the long-term and will fluctuate from quarter-to-quarter or for that matter, year-to-year. More on investments from Wade. As mentioned in previous quarters, our book value per share of $1,260 does not include unrealized gains or losses in our equity accounted investments and our consolidated investments, which are not mark-to-market. At the end of the year, the fair value of these securities is in excess of carrying value by $3.1 billion, an unrealized gain position or $150 per share on a pretax basis. This increased from $1.5 billion or $68 per share last year. In 2025, changes in discount rates resulted in a pretax loss of $59 million, with net gains on bonds of $385 million offset by a loss on net reserves of $444 million. This compares to a pretax loss of $530 million in 2024 with bond losses of $731 million offset by a benefit of $201 million on net reserves. Our insurance and reinsurance businesses wrote $33.3 billion of gross premium in 2025, an all-time high, up 2.3% or $750 million versus 2024. Our North American Insurance segment increased gross premiums by $468 million in 2025 or 5.3%. Crum & Forster had growth of 9.5%, driven by its accident and health business and surplus in specialty lines. Zenith premiums were up 6.5% year-over-year due to positive rate in workers' compensation business, primarily in California, its complementary P&C business and new business in its large account segment. Northbridge's premiums were down 2.6% in Canadian dollars with planned reductions in its personal lines business and in transportation. Their customer retentions continue to remain strong, benefiting from strong customer service. Our global insurer and reinsurer segment, gross premium was up 2.4%, with gross premiums of $17.6 billion in 2025, up $412 million year-over-year. Brit's gross premium was up 3.8% for the year primarily from Brit Re and growth in high-margin classes, including property, financial lines and marine business. On a net basis, Brit's premium was up 4.2% and retaining a greater share of profitable business. Allied World was up 3.3% for the year with gross premiums of $7.4 billion, with each of their operating segments growing with the reinsurance segment up 6.5%, its global markets up 4.7% and North American insurance was up 1%. Odyssey Group's premiums were flat in 2025 with gross written premium of $6.3 billion. Its insurance business was down 4.8% principally from targeted decreases at Hudson in its crop and financial lines of business, while reinsurance was up 3.9%, mainly property business, in the United States, including reinstatement premiums from the California wildfires. Ki, their premium was up 3.8%, primarily on property lines, offset by open market businesses. And our international insurance and reinsurance operations gross premium $6.4 billion in 2025 versus $6.5 billion in 2024. The decline was primarily from Gulf Insurance due to the decrease in health insurance business in its operations in Kuwait. Excluding Gulf Insurance, our international operations premiums were up almost 8%. Fairfax Asia, led by Singapore Re, Colonnade in Eastern Europe, Bryte Insurance in South Africa, our Ukrainian companies, ARX and Universalna and Polish Re all had double-digit growth in the year. A very nice diversified platform that is growing profitably. Our international operations write a significant amount of premium at $6.4 billion. This is bigger than the whole of Fairfax only 15 years ago. We continue to be excited about the prospects for our international operations, and we expect it will be a significant source of growth over time, driven by excellent management teams that are more and more collaborating among themselves and leveraging the strength of Fairfax. On the underwriting front, we had a very strong end to the year with a fourth quarter combined ratio of 88.6% producing an underwriting profit of $753 million. Focusing on the full year, our combined ratio was 93.0% on an undiscounted basis, producing record underwriting profit of $1.8 billion. The combined ratio included catastrophe losses of $1.2 billion, adding 4.8 combined ratio points, primarily from the California wildfires in the first quarter of 2025, Hurricane Melissa in the fourth quarter and other attritional losses. This compares to a combined ratio of 92.7%, underwriting profit of just under $1.8 billion and catastrophe losses up 4.5 points in 2024. As our premium base has expanded and with the benefits of diversification, we expect to be able to absorb significant catastrophe losses within our underlying underwriting profit. For the full year 2025, our global insurers and reinsurers posted a combined ratio of 92.1%, led by Allied World with a combined ratio of 89.3% and an underwriting profit for Allied of $546 million, the largest underwriting profit among all our companies. Odyssey Group had another solid year, producing a combined ratio of 93.8% with underwriting income of $375 million. These results include 11 points of catastrophe losses, primarily from the California wildfire losses in the first quarter of 2025. Of all our company's Odyssey felt the effects of catastrophe losses the most this year, not unexpected. Brit continues to produce excellent results with $183 million of underwriting profit and a third year in a row of sub-95 combined ratio at 92.7%. Ki had a combined ratio of 95.7% with an underwriting profit of $33 million in its first full year reporting as a separate company from Brit. These results were affected by separation costs of 4.4 combined ratio points excluding these nonrecurring costs, the combined ratio would have been in the low 90s, an excellent year for Ki. Our North American insurers had a combined ratio of 93.8% in 2025, very similar to its combined ratio in 2024. Northbridge had the lowest combined ratio of all our major companies with an 88.7% and underwriting income of $238 million. Crum & Forster continues to grow profitably with a combined ratio of 94.8% and an all-time record underwriting profit for them at $236 million. Zenith, our workers' compensation specialist had a combined ratio of 102% managing multiple years of price decreases in that line of business, although now trending in the right direction. Our international operations delivered a combined ratio of 94.7% for the year. Fairfax Asia led the way with a combined ratio of 90.3%, led by Singapore Re, offset by elevated combined ratios at Fairfirst in Srilanka that were affected by Cyclone Ditwah late in the year and Falcon Thailand who suffered 2 major catastrophes in the year. Our operations in South America had an excellent year at 94.5% combined with all its operations producing underwriting profit led by Southbridge in Chile and Fairfax Brazil. Colonnade who write business across Eastern Europe had a great year with underwriting profit of $23 million, more than double the previous year and Polish Re had an excellent year with record underwriting profit and a combined ratio of 94.5%. Bryte in South Africa, for the second year in a row, posted a combined ratio below 95% at 92.2%. Eurolife's non-life operations in Greece had a small underwriting profit at 100.5%, reflecting a very competitive environment, especially in its motor business. And finally, Gulf insurance was back to underwriting profitability in 2025 with a combined ratio of 96.5% and underwriting profit of $53 million. Our international operations diversified across the globe wrote $6.4 billion of gross premium and produced $219 million of underwriting profit. This is a 5x increase over the last 5 years. You can see why we are very excited about our international operations. For the year, our insurance and reinsurance companies recorded favorable reserve development of $752 million or a benefit of 2.9 points on our combined ratio. This is compared to $594 million or the benefit of 2.4 points in 2024. This is the 19th consecutive year our insurance and reinsurance operations have had favorable reserve development, amounting over that time period cumulatively to $6.9 billion. We have a strong reserving philosophy and are focused on setting our ongoing reserves at conservative levels, especially on long tail lines of business. Offsetting this, our runoff operations strengthened reserves by $298 million as part of their annual actuarial reserve process. The strengthening related primarily to latent liabilities due to the continued increases in litigation activity. Through our decentralized operations, our insurance and reinsurance companies continue to thrive writing close to $33 billion in gross premium, producing record underwriting profit and as we've said before, led by our exceptional management team. Our companies are positioned very well to continue capitalizing on their opportunities in their respective markets in 2026. I will now pass the call to Wade Burton, our President and Chief Investment Officer of Hamblin Watsa to comment on our investment. Wade Burton: Thank you, Peter. Good morning. Our investment portfolios ended the quarter at USD 74.9 billion. Of the $74.9 billion, $50 billion was invested in fixed income and $24.9 billion stocks, investment in associates, LPs and preferreds. The $50 billion in fixed income is earning a very nice yield of 5% despite being very short duration and mostly invested in government bonds. We're playing it safe with spreads at lows and uncertainty around inflation numbers, yet earning good money while we do that. We're keeping a close eye on inflation, treasury actions, fed funds rate, GDP growth and corporate profitability, both in the U.S. and globally. If there's one thing our fixed income group has proven is that it has the ability to act quickly when the time is right. It's really a core competitive advantage throughout our investment group. When we feel the time is right, we will act. For now, we're playing it safe in fixed income. All of our top holdings on the $24.9 billion of equity and equity-like investments had good years in 2025. Eurobank, Atlas, Recipe, Fairfax India, Metlen, Sleep Country, EXCO peak achievements are all in great shape, all earning their cost of capital and all beautifully run by people we like and trust. These top holdings are a very large percentage of our equity and equity-like investments and they're making our jobs easy. We've added a new stock to our portfolios. The company is called Under Armour, headed and run by Kevin Plank. Kevin, as a youth was a college level football player and saw an opportunity to make better athletic wear for under equipment. He started Under Armour in his garage in 1996. By 2001, revenues were $50 million, 2005, they were $280 million and in 2017, the company reached $5 billion in sales, profits every year through 2017. 2017 through 2025 were what we would call the lean years. restructuring charges, new CEOs, lawsuits increased SKUs, lower product prices and lower margins. The stock went from as high as in the $50s to as low as in the $4s. Kevin stepped down as CEO in 2020; and finally, took back the role of CEO in 2024. He is refocusing the company on product development, marketing and brand development and reducing SKUs. This is exactly the right plan for the long run. costly and lumpy, and the stock market sometimes doesn't have the patience for that. We can see that they have the balance sheet, the focus and the discipline to turn the company around. And at Fairfax, we focus on the long run. So the lumpiness creates an opportunity for us to take advantage of. With a founder, we are so excited to have running this business. Lastly, you will have seen post year-end 2025 we are taking our long-time partner, Kennedy Wilson Private, buying out minority shareholders at $10.90 a share. Three points on this. One, we have had a long-standing and very profitable relationship with Bill McMorrow, Matt Windisch and the team at Kennedy Wilson from mortgages to LP investments to investments in their shares. Two, Kennedy Wilson has world-class capabilities underwriting real estate. Having this capability in-house at Fairfax has a huge long-term benefit for Fairfax shareholders. Three, the cultural fit between Kennedy Wilson and Fairfax is outstanding. Over the last 16 years, we developed a deep-seated friendship built on respect and openness and striving for excellence, all while treating people well. Overall, 2025 was an outstanding year on the investment side and we are in great shape to weather any coming storms and to take advantage of opportunities. And with that, I will pass it to Amy Sherk, our CFO. Amy Sherk: Thank you, Wade. I'll begin my comments by discussing our noninsurance company results in the fourth quarter and full year of 2025. Noninsurance companies reported an operating income of $101 million in the fourth quarter of 2025 compared to $150 million in the fourth quarter of 2024. Operating income of the noninsurance companies increased to $397 million in the full year of 2025 from $241 million in 2024 despite a primarily noncash impairment charge recorded at Boat Rocker Media of $109 million in 2025 before the company deconsolidated Boat Rocker on August 1. The increase in operating income in 2025 primarily reflected the acquisition of Sleep Country on October 1, 2024, and the consolidation of Peak Achievement on December 20, 2024, which recorded operating income of $92 million and $103 million, respectively, in the full year of 2025. Looking at our share of profit from investments in associates in the first -- in the fourth quarter and full year of 2025, we continue to report strong consolidated share of profit of associates of $252 million in the fourth quarter of 2025 principally related to share of profit of $123 million from Eurobank, $70 million from Poseidon and $34 million from EXCO Resources. In the full year of 2025, consolidated share of profit of associates was $816 million, principally reflecting share of profit of $474 million from Eurobank, $287 million from Poseidon, $55 million from Go Digit and $53 million from EXCO Resources, partially offset by share loss of $65 million from Waterous Fund 3 and $45 million from Fairfax India's investment in Sanmar Chemicals. The decreased share of profit of associates of $816 million in 2025 compared to $956 million in 2024, primarily reflected the company's consolidation of Peak Achievement on December 20, 2024, and its sale of Sigma on March 28, 2025. Peak Achievement and Sigma contributed $57 million and $34 million, respectively, to our share of profit of associates in the full year of 2024. A few comments on our transactions for the quarter. Pursuant to the company's previously announced proposed sale of its Eurolife Life operations to Eurobank, at December 31, 2025, the company had classified assets of $3.4 billion and liabilities of $3.6 billion related to Eurolife Life operations as held for sale in our consolidated balance sheet. The current estimated pretax gain on closing is approximately $350 million. Prior to closing, the company will purchase certain investments held by the Eurolife Life operations which will affect the game ultimately realized on the sale. The proposed transactions are subject to entry into definitive agreements and customary closing conditions and are expected to close in the second quarter of 2026. Subsequent to December 31, 2025, on February 5, 2026, AGT filed an amended and restated preliminary prospectus with Canadian Securities regulatory authorities for a proposed CAD 460 million initial public offering and secondary offering of its common shares of $425 million as a treasury issuance and $35 million in the secondary sale with an expected price range between CAD 26 and CAD 30 per common share. Both Fairfax and AGT's CEO are not selling any common shares in the offering. Subsequent to AGT's initial public offering, the company expects to have directly or indirectly an equity interest in AGT of approximately 51% to 53%. A few words on our IFRS 17 results. The company's consolidated statement of earnings in the fourth quarter and full year of 2025 were also impacted by changes in interest rates and specifically the effects it had on discounting on prior year net losses on claims and our fixed income portfolio. Net earnings of $1.2 billion and $4.8 billion in the fourth quarter and full year of 2025 included a net benefit of only $9 million and a net loss of $59 million, reflecting the effects of changes in interest rates during the quarter and for the full year of 2025. The net benefit in the fourth quarter comprised of a net benefit on insurance contracts and reinsurance contracts held of $42 million and net losses on bonds of $34 million. The net loss for the full year was comprised of a net loss on insurance contracts and reinsurance contracts held of $444 million and net gains on bonds of $385 million. Comparatively, net earnings of $1.2 billion and $3.9 billion in the fourth quarter and full year of 2024 included net losses of $438 million and $530 million, respectively, reflecting the changes -- the effects of changes in interest rates. The net losses in the fourth quarter and full year of 2024 comprised of net losses on bonds of $1.1 billion and $731 million, partially offset by the net benefits of insurance contracts and reinsurance contracts held of $613 million and $201 million, respectively. When you compare the year-over-year change in interest rates on a pretax basis for the quarter and year, the changes resulted in an approximate $446 million and $471 million positive movement in our pretax earnings. This demonstrates our general expectation that our interest rate risk is now partially mitigated. I will close with a few comments on our financial condition. Maintaining an emphasis on financial soundness at December 31, 2025, the company held $2.7 billion of cash and investments at the holding company, had access to our $2 billion unsecured revolving credit facility, an additional $2.2 billion at fair value of investments in associates and consolidated noninsurance companies owned by the holding company. Holding company cash and investments support the company's decentralized structure and enable the company to deploy capital efficiently to its insurance and reinsurance companies. At December 31, 2025, the excess of fair value over carrying value of investments in noninsurance associates and market-traded consolidated noninsurance subsidiaries was $3.1 billion compared to $1.5 billion at December 31, 2024, with $1.4 billion of that increase related to an increase in the publicly traded market price of Eurobank. The pretax excess of $3.1 billion is not reflected in the company's book value per basic share, but is regularly reviewed by management as an indicator of investment performance. The company's total debt to total capital ratio, excluding noninsurance companies, increased to 26.2% at December 31, 2025, compared to 24.8% at December 31, 2024. This primarily reflected increased total debt and redemption of the company's Series E, F, G, H and M preferred shares, partially offset by increased common shareholders' equity. On the redemption of our Canadian dollar-denominated preferred shares in 2025, we recognized a gain of $187 million in equity on the favorable foreign exchange movement. Common shareholders' equity increased by approximately $3.3 billion to $26.3 billion at December 31, up from $23 billion at December 31, 2024, primarily reflecting net earnings attributable to shareholders of Fairfax of $4.8 billion and other comprehensive income of $425 million, primarily related to unrealized foreign currency translation gains net of hedges, as a result of the strengthening of foreign currencies against the U.S. dollar, partially offset by purchases of just over 1 million subordinate voting shares for cancellation for a cash consideration of $1.6 billion or $1,614.69 per share. And payments of common and preferred share dividends totaling $368 million. Subsequent to December 31, 2025, the company has purchased another 130,573 of its subordinate voting shares for cancellation at an aggregate cost of $220 million or $1,684.70 per share. In closing, book value per basic share was $1,260 at December 31, 2025, compared to $1,060 at December 31, 2024, representing an increase per basic share in the full year of 2025 at 20.5% adjusted for our $15 per common share dividend paid in the first quarter. That concludes my remarks, and I will now turn the call back to Peter. Peter Clarke: Thank you, Amy. We are now happy to take any questions that you might have. Denise? Operator: [Operator Instructions] Our first question comes from Stephen Boland with Raymond James. Stephen Boland: Just maybe discussion around some of the premium declines we saw Q4 over Q4 softness, competition within certain business lines? And is there any difference between what you're seeing in North America and the global insurers? Peter Clarke: Sure. Thanks, Stephen. In the fourth quarter, we continue to see softening rates across our companies and that's making it a little more challenging to grow. But as we said in the past, all our companies are focused on underwriting profit and discipline. We have no incentives to grow the top line throughout the group. But we do benefit greatly from our diversified operations by geography and by product. And the wide variety of the markets and segments of our -- that our companies participate in allow us to grow in more attractive areas while curtailing activity and more and less attractive ones. This is a significant strength for us. At a high level, we saw price increases in the low single-digit level with higher price increases in the casualty lines and declines in property, D&O and cyber. The property catastrophe business, especially on the reinsurance side, we are seeing the most pressure on pricing, but again, that's coming from very strong margins. In Canada, in Northbridge, we've seen pricing up about 2% in the year. You may know, we -- the personal lines are probably up closer to 9%, 10%, but that's not a big part of our business. Crum & Forster is about 5.5%. Odyssey with more of their premium coming from the reinsurance side, it's flat to 2% -- and then in Lloyd's, we're seeing probably the most pricing pressure at Brit and Ki pricing is down about 5%. And then Allied World, they're about flat or up 1%. On the international side, it varies across the group. But in a lot of those markets, the pricing tends to be a little less cyclical than in the North American market. But one thing, though, when our pricing -- when pricing levels aren't there, premium isn't growing. This frees up capital for us, and then capital allocation becomes very important. Historically, we have allocated capital very well, and we continue to have many attractive opportunities to deploy it. This includes buying back our own stock, as we've said before, buying minority interest in our own companies or investing as we have been in very good companies, our associates and our noninsurance consolidated companies like a Sleep Country or a Peak. So -- we think we have a lot of great opportunity. As I said, the market, we still see softening. But within Fairfax, we have many different sources of earnings, and we can benefit from that. Operator: Next question comes from Tom MacKinnon with BMO Capital Markets. Tom MacKinnon: I asked this question maybe a little over a year ago, but sort of the tax rate outlook going forward. And the answer I got was between '22 and '25. Now in 2024, it was 24%, but in 2025, it was 18%. So I'll ask the question again about a tax rate outlook going forward and why the -- why was 2025 different than sort of that outlook you provided a little more than a year ago. And what is your outlook for it going forward? Peter Clarke: Yes, there's a lot of activity on the tax side and our tax people in Canada and the United States have been extremely busy you might have known as the Pillar Two tax that has been coming through. And in Canada, we have the EFILE taxes. But Amy, do you want to comment a little bit more on the specifics. Amy Sherk: Sure. Thanks, Peter, and thanks for the question, Tom. We would continue to give the advice that was given last year, which is an appropriate range for our effective tax rate every year going forward. This year, we had something going through that were unique. One of them would be that we had some significant unrealized mark-to-market gains in India. And those gains attract the capital gains rate that is significantly lower than the 26.5% statutory rate here in Canada. So that was a big driver. There has also been a lot of action by domestic governments in terms of introducing their own minimum tax rate. And with that come some tax impact here in Canada when we look at our global minimum tax or Pillar Two tax. So those were really the big drivers this year that lowered our tax rate. But I think the advice provided last year still remains to be true. Peter Clarke: Thanks, Amy. Yes. As you know, Tom, we're right across the world. So it really depends where our earnings come from, and that can affect the ultimate tax rate that we pay. Next question please. Operator: That comes from Bart Dziarski with RBC Capital Markets. Bart Dziarski: Great. And my question, I guess. So your underwriting income for the year was about $1.8 billion. That's 2 years in a row now of $1.8 billion. I know you've got the 1.5-plus guidance. So just how are you thinking about that guidance going forward? I heard your commentary around the softening pricing but we're also seeing your earnings through the cat losses and you've got favorable releases. So putting it all together, I just wanted to your outlook there on the underwriting income guide. Peter Clarke: Sure. Yes. No, we're still -- we still target $1.5 billion of underwriting profit. That's what we're looking for. You're right. In the last 2 years, it's been a little higher than that 1 point -- a little less than $1.8 billion in 2024, a little more than $1.8 billion in 2025. But generally speaking, the cat losses have also been relatively benign or as expected. We haven't had any major catastrophes. With that said, with our premium base the way it is, we are able to absorb significant amount of catastrophes now versus, if you look 10, 15 years ago. But we're just trying to be conservative. We think our reserves are extremely strong. We just came through a hard market. And as I said in my opening remarks, we've had 19 years of favorable reserve development. I think that we have a great process in place for setting our reserves throughout the group. It's all done at the local levels with oversight at the Fairfax holding company and good process in place. So I think the $1.5 billion is a good point. Next question please. Operator: The next question comes from Jaeme Gloyn with National Bank Capital Markets. Jaeme Gloyn: Just wanted to go back to the premium growth discussion and maybe get a little bit more nuance on 2 particular business lines. So one would be the Odyssey Group down in the fourth quarter, 10%. And then the offset would be Crum & Forster, up 27% in the fourth quarter on gross premiums written. Can you sort of dig into those 2? Is this a little bit more as to what was driving some of those results either new business or on nonrenewed accounts, something like that, that could be driving some more outsized performance than just price. Peter Clarke: Sure. And I think when you look at it, if you look at our premium volume by quarter, typically, Jaeme, the fourth quarter is by far the lowest. The first quarter is usually the highest when we write most of our business. So you're coming off a smaller base. So we don't put a lot of -- we don't look a lot on a quarter-to-quarter basis. But for Crum & Forster, premium was up, and it's really on their specialty lines of business, which are less price-sensitive. And in Crum, it's really the A&H division there -- they've been growing. They've -- through Gary McGeddy, they have an outstanding specialty there, and they've been growing not only in the United States, but taking their A&H business internationally. So that's a big driver there. On Odyssey, it would probably -- it's more on the reinsurance side. Again, it's a fourth quarter, not a kind of business is written. It's more 1/1. And so any fluctuations there make the percentage change little emphasize. So I would say those are the 2 main things. Next question, please. Operator: That comes from Daniel Baldini with Oberon Asset Management. Daniel Baldini: Thanks for the wonderful results. So with that said, my question is there any end in sight to these losses from the runoff business? You've disclosed them separately for, I believe, the last 10 years. And when I add them up, it comes to almost $1.6 billion. Now I understand that there are reserves associated with this business, and they produce investment gains. But I can't imagine that when you sort of entered into these deals, you expected losses of this magnitude. So a little bit of color there would be great. Peter Clarke: Sure. Good question. A lot of these liabilities, we inherited through acquisitions back in the late '90s, early 2000s. And they're really latent liabilities. There are asbestos environmental pollution claims. And we have a specialized team that we've segregated these claims, and they're focused on it. We would -- I would say, personally, they're best-in-class. They've been managing these liabilities for a long time. But they're very difficult claims. And as -- in the United States, it's very litigious, and there is continuing, especially on the asbestos front, some of these claims are 30, 40 years old, and we're -- we look at them every year. Typically, you can't use general actuarial techniques to come up with the reserves. So it's a matter of reacting to what happens. Operator: Please stand by. The conference will continue in just 1 moment. We did have a technical issue. Peter Clarke: Hi, Denise. Operator: Yes, sir, you may continue. Thank you. Peter Clarke: Sorry about that. We had a small disconnection, but we're ready to take more questions. Next question please. Operator: The next question comes from David Erb with Merrion Investment Management. David Erb: You have -- Fairfax has roughly $1 billion investment in Fairfax India at current pricing, I believe. And within Fairfax India, roughly half the portfolio is the airport investment BIAL. There's been a little bit of discussion historically about taking BIAL getting in a public listing. And I'm just curious if you could provide an update on that progress. Peter Clarke: Sure. No. I think that's more of a Fairfax India question. But yes, the Bangalore Airport is a significant investment for Fairfax India. And one, obviously, we're very excited about I know they are in the process of having conversations with the regulators and -- but there's not a lot more that I can say on the IPO process. Thank you, though, for the question and next question please. Operator: Next question is from Tom MacKinnon with BMO Capital Markets. Tom MacKinnon: Yes. With respect to the Eurolife transaction, $3.4 billion in assets, I assume then are not part of your general fund anymore. Do I have that correct? And where would we see -- presumably, you're making investments, interest and dividend income on those assets? So where would we see the -- would there be a decline in interest and dividend income going forward with respect to losing those $3.4 billion in assets? And where would that be? Would that be in your interest in dividend income? Or would that be in your -- I'm just trying to figure out what line would that be in your life and runoff business. Where would that show up? Peter Clarke: So the majority of that would be in our life and runoff business. The P&C business is remaining with us. So that's going to continue. And Tom, we're going to get approximately $950 million for the Life business. And eventually, we'll deploy that and that will create earnings off that as well. But generally speaking, yes, it's the interest and dividend income will come off the life and runoff segment. Amy, anything to add? Amy Sherk: The only thing I would add is that held-for-sale accounting means that we just have one line on our balance sheet for the held for sale assets in one line for the held-for-sale liabilities. And we continue to mark-to-market those investments and record any income earned on those investments until the transaction is closed. Peter Clarke: Thank you, Amy, and thank you, Tom. Next question please. Operator: Next question comes from Jaeme Gloyn with National Bank Capital Markets. Jaeme Gloyn: Just wanted to go back to the capital deployment and you mentioned you had capital freed up here with the stock market. So buybacks have been fairly active over Q4 and now year-to-date. So maybe talk through how you're looking at buybacks in the next few months here through 2026. The timing of that minority interest and you can just refresh that? And what does the total return swap, how does that factor into your capital deployment plans? Peter Clarke: Sure. Well, I guess, like I said, with the premiums flattening off, it does produce -- it can produce excess capital at our insurance operations that would produce more dividends up to the holding company. First and foremost, our financial strength that we always said is that's our #1 key, and that's to have significant cash in the holding company. We don't want any long-term -- any debt maturities for the foreseeable future and then our line of credit. So financial strength is #1. Number 2 is, like you said, we've been buying back our own stock at these prices, we think we're pleased to do that. We always look at what the intrinsic value is, and that factors into our capital allocation decision-making. On the Fairfax TRS, we've always said that, that's an investment. We continue to believe it's a very good investment. So we continue to hold that. And buying back Allied and Odyssey, I think, again, both companies, we know very well. They're both performing exceptionally well. So we'd like to do that over time as well. And so those are really the things we're looking at today, always subject to change, of course, Jaeme. But thank you. And next question please. Operator: The next question comes from Bart Dziarski with RBC Capital Markets. Bart Dziarski: Maybe a question for Wade on the investment book. So we're seeing quite a dislocation in markets today. And so are you thinking about maybe shifting some of the positions, taking advantage and being opportunistic in this environment? I'd love to get some color on that. Wade Burton: I guess I would say we have a very robust skilled investment team, and we're constantly looking at all securities. We underwrite for 15%. And as you say, I mean, you're talking about the software and AI, but we're working very hard. And anytime we uncover any opportunities, we will act. So that's what I'd say. We're watching it all very closely, as you can imagine. Peter Clarke: Thank you, Bart. Next question please. Operator: Next question comes from [ Dio Kerathalas ] with a private investor. Unknown Attendee: How are you balancing share repurchases versus holding company liquidity? And what valuation trigger would make you significantly more aggressive on buybacks? Peter Clarke: That's a difficult question. Again, we always -- we discussed it internally all the time. We have many options, right, that with excess capital, with excess dividends coming up. And all I really can say at these prices today, we continue to buy back our stock. We did a significant amount last year. And -- but going forward, things change, and we just -- we are constantly evaluating that and very difficult to put a number on it. But thank you for your question. And we'll take one more question, please. Operator: And the final question does come from Benjamin Graham Sanderson, he's an individual investor. Unknown Attendee: New shareholders still getting aligned with the way you guys think loving it so far. You guys seem like risk of masters and I'm very much enjoying reading back your history and current actions going forward. Question is a very broad one. What currently are the biggest systemic risk you see to the Fairfax system and both in insurance and investments, how are you approaching that to mitigate them? And specifically, how does that relate to the Kennedy Wilson partnership? How does that partnership derisk the system, if at all? Peter Clarke: No. Thank you very much. Yes. No, I think there's -- there's 2 things in this business, and it's the -- we have the insurance operations. And what we've built over the last 40 years, I think is quite substantial, very difficult to replicate. We have essentially 25 separate insurance companies writing $33 billion across the globe. And but -- and some of the best insurance professionals running these companies, on average, our CEOs and Presidents have almost 20 years' experience and that includes last year, we had a succession of 5 separate CEOs that went seamlessly. We always concerned on the insurance side, on the catastrophe exposure, which we monitor constantly and of course, reserves. And again, we have a very strong track record on the reserving side. On the investment side, we've had a long-term track record there. I think the investment philosophy of value investing serves us very well with protection on the downside and that's been a significant strength over time. On Kennedy-Wilson, we're just -- we have a 12-year or 16-year I guess, relationship with Kennedy-Wilson. They've effectively managed our real estate and mortgage business over that time period and has provided us with outstanding returns. And we don't have that capability, at least that size and scale in-house. So we're very excited of what they bring to the table and looking very forward to working with them going forward. So thank you for your question. And if there's no more questions, I'll pass it back to Denise. Operator: That does conclude today's conference call. We appreciate all of you dialing in for this call. Have a wonderful day and weekend. You may disconnect. Thank you. Peter Clarke: Thanks.
Operator: Good morning. Welcome to Megacable's Fourth Quarter 2025 Earnings Conference Call. With us this morning, we have Mr. Enrique Yamuni, CEO; Mr. Raymundo Fernandez, Deputy CEO; and Mr. Luis Zetter, CFO. Let me remind you that the information discussed at today's earnings call may include forward-looking statements on the company's future financial performance and prospects, which are subject to risks and uncertainties. Megacable undertakes no obligation to update or revise any forward-looking statements. I will now turn the call over to Mr. Enrique Yamuni. Sir, you may begin. Enrique Robles: Good morning, everyone, and thank you for joining us today. As we close our 2025, we remain focused on our long-term strategy, expanding and modernizing our network by migrating our base towards fiber, strengthening our value proposition through quality service and competitive pricing, and most importantly, transitioning from a phase of high investment in construction to a period of consolidation, efficiency and stronger cash flow generation. Beyond the numbers, our execution is showing up in places that matter most. We continue to gain share, grow ahead of the market and reinforce Megacable's position as one of the most reliable telecom operations in Mexico while delivering continued revenue growth, margin expansion and a very strong balance sheet. A major driver of our performance over the past quarters has been the scale and pace of our network deployment. When we announced this expansion, it was an ambitious commitment. Today, the results speak for themselves. We successfully took our footprint beyond 19 million homes passed. This milestone matters because it marks the beginning of an intensified consolidation phase, where we will increasingly capture the returns from the footprint we have already deployed. Operationally, we keep solid momentum across both our expansion territories and our legacy footprint. Broadband remains the engine of our portfolio, and we once again closed the quarter within the 100,000 to 150,000 quarterly net adds range we have consistently communicated over the last 2 years. At the same time, we saw a sequentially lower churn, while our ARPU reached one of its highest levels, reflecting the effectiveness of our bundling strategy in driving retention and growth. In parallel, we continue strengthening our fiber footprint, reaching 84% of our subscribers served through fiber technology at the end of the quarter. With this level of penetration, we are firmly positioned as a fiber-based company, with limited legacy technologies remaining only in transition areas. This positions us to deliver superior service quality, higher bandwidth capabilities and a scalable operating platform to meet growing demand for high-speed connectivity. These results were delivered in a market that remains price-sensitive and closely tied to macro conditions, particularly across lower and middle income households. Even so, we continue to compete effectively by combining service quality, competitive pricing and a portfolio that meets evolving customer needs. From a financial perspective, the operational momentum continued to translate into solid top line growth and improving profitability. As you will hear from Luis, the mass market segment again delivered strong performance broadly consistent with what we have seen through the year. While the corporate segment remains softer, resulting in higher single-digit consolidated revenue growth. Profitability also improved, reflecting operating efficiencies and the continued maturation of newer territories. On capital allocation, we closed the year fully aligned with this discipline we're committed to at the start of 2025. CapEx intensity finished below the target we set for the year, representing a meaningful step down versus prior years. This confirms the shift we have been executing from heavy investment towards a more normalized and efficient investment profile. As a result, cash flow generation continued to strengthen, and it remains one of the most important near-term objectives. We are closing the year with a very solid cash flow profile, supported by improving profitability and lower capital intensity. Looking ahead, we are increasingly confident in our ability to convert earnings into sustainable cash generation as we move through to 2026. On the balance sheet, our focus remains on preserving flexibility and maintaining one of the strongest leverage profiles in the industry. This quarter, net debt and leverage ratio continued to trend favorably, and we expect this to remain the case in the coming quarters as profitability improves and CapEx continues to normalize. This reinforces the strength and prudence of our capital structure and supports our long-term strategy without compromising financial stability. The quarter's key message is clear. We are seeing the benefits of the investment made over the last 4 years, not only in subscriber growth and profitability, but also in our ability to deliver what we said we would deliver and more: that track record is important because it builds confidence [ what comes next ]. As we move into 2026, our priorities are clear: consolidate growth in the territories we built, keep advancing our fiber strategy, drive operational efficiency, and above all, maximize free cash flow generation while maintaining our investment-grade profile and executing with the same consistency that has defined this cycle. With that, I will now pass the call over to Raymundo for operational remarks. Please, Raymundo, go ahead. Raymundo Pendones: Thanks, Enrique, and good morning, everyone. During the fourth quarter, our operating efforts remain focused on consolidating both the expansion of our footprint and the ongoing evolution of our network. These initiatives continue to support improvements in service quality and operational efficiency while reinforcing our ability to compete effectively across markets, prioritizing value creation and sustainable subscriber growth. Within this framework, by the end of this quarter, our network infrastructure reached more than 108,000 kilometers, representing 7% annual growth and enabling coverage of 19.2 million homes, a 10% increase year-over-year. Together with the continued migration of legacy infrastructure, these efforts have resulted in 84% of our footprint being served by fiber to the home as of the end of the quarter compared to 75% in fourth quarter 2024. With this level of penetration, Megacable is firmly positioned as a predominantly fiber-based operator, with only a limited portion of its network relying on legacy technologies. Starting with our subscriber base. During fourth quarter 2025, we added 107,000 unique subscribers sequentially, ending the quarter with more than 5.9 million unique subscribers, reflecting continued traction across both our expansion and organic territories. Breaking down the mass segment services, Internet remained the main growth driver. By quarter end, Internet subscribers reached 5.8 million, up 9% year-over-year, or 494,000 net additions. Sequentially, we delivered 133,000 net additions in the quarter, maintaining a clear growth trend and staying in line with our expected range. In Telephony, we ended fourth quarter 2025 with 5.1 million subscribers, up 8% year-over-year, representing 372,000 net additions. Sequentially, we added 56,000 subscribers, in line with the role of Telephony within our bundled value proposition to enhance the overall customer offering. In the same line, our MVNO base reached 679,000 lines at quarter end, representing an annual increase of 23%. We added 39,000 lines sequentially and 125,000 year-over-year, continuing the growth trend we have observed since first quarter 2023 while maintaining the focus on postpaid services. In our Video content segment, we closed the quarter with 4 million unique subscribers comprised of 3.9 million traditional video users and 151,000 apps only users. Both of these services accounted for nearly 2 million active streaming app subscriptions at quarter end, up 99% year-over-year or 990,000 net additions, reflecting subscribers' preference to complement their video service with more than 1 digital app. This consolidated period reflects our strategy to further evolve the content segment into the combination of traditional pay-TV with a more digital integrated offering, increasingly aligned with changing consumption preferences. The continued expansion of our subscriber base translates into an increase in RGUs, which reached nearly 15 million, representing an 8% year-over-year growth. As anticipated, the churn rate declined sequentially this quarter across the 3 mass segment services, reaching 2% for Internet, 2.3% for Video and 2.6% for Telephony. Regarding ARPU, it is important to mention that starting this quarter, we report ARPU based on Internet subscribers, allowing comparison with the rest of the industry. Under this methodology, broadband ARPU stood at MXN 439.8 in this period, while ARPU per unique subscriber was MXN 426.3, one of the highest levels since second quarter 2022, mainly reflecting the price increases implemented during the year. Turning briefly to the corporate segment. Results remained soft during the quarter and continued market caution. While we did some sequential improvement, year-over-year performance remained under pressure, mainly in the corporate and carrier segment. However, we continue to focus on execution, prioritizing service quality, operational efficiency and a disciplined commercial approach. Going forward, as Enrique outlined, our priorities remain consistent: consolidate the expansion and modernization projects already deployed, continue deepening penetration in newer territories, provide the highest quality service to our subscribers and drive cash generation. In parallel, we will maintain a disciplined commercial approach, mindful of the challenges inherent in a highly competitive market and a slower economic growth. Thank you for your attention. I will now turn the call over to Luis for the financial review. Luis Zetter Zermeno: Thank you, Raymundo. Good morning, everyone. Before I begin, I would like to emphasize that all comparisons to 2024 numbers are made against the 2024 audited figures presented on April 29 of 2025. With that context in mind, throughout the year, the disciplined execution of our strategy focused on consolidating new territories and continuing to drive efficiencies across our legacy operations translated into solid revenue growth, healthy profitability and further progress in the soft landing of our investment cycle. In this sense, total revenues reached MXN 9.2 billion during the quarter, an 8% increase year-over-year, driven by robust performance in our mass segment, where revenues grew 10% year-over-year and continued to be our own main source of revenue. This double-digit growth more than offset a 3% contraction in Corporate Telecom segment revenues. Similarly, 2025, total revenues reached MXN 35.4 billion, representing an 8% increase over 2024, following a 10% year-over-year growth in the mass segment, supported by the combined effect of an expanding subscriber base and continued ARPU improvement. Before moving to cost and profitability, I would like to clarify that fourth quarter 2024 figures include specific extraordinary accounting adjustments made during the audit process, particularly the cancellation of account receivables with ALTAN, which increased the cost and SG&A base in that period, consequently affecting positively, EBITDA and net income comparisons made. Now turning to quarterly cost of services and SG&A. This amounted to MXN 2.5 billion and MXN 2.7 billion, respectively, increasing 6% and 1% year-over-year, remaining below revenue growth. For 2025, costs reached MXN 9.6 billion, reflecting a 5% rise compared to 2024, while SG&A totaled MXN 9.9 billion, representing 6% year-over-year growth. These results are mainly attributable to the expansion of our network footprint and higher labor costs, which were partially offset by efficiency gains as newer territories continue to mature. Excluding the receivables write-off effect, total cost and SG&A for the quarter continued to grow at slower pace than revenues, reaffirming the strength and operating discipline of our business. EBITDA totaled MXN 4.5 billion in the quarter, increasing 15% year-over-year with a margin of 44%, favorably compared to 41.3% in the same period of last year, supported by continued efficiency improvements, mainly in new territories. It is important to note that although the EBITDA margin in this quarter is the lowest of the year, this aligns with historical seasonal patterns, as the fourth quarter traditionally records the lowest margin. Following this performance for 2025, EBITDA grew 11% year-over-year, reaching MXN 15.9 billion with a margin of 45%, up 120 basis points compared to the previous year. Excluding the one-off impact of SG&A, quarterly EBITDA increased 8% year-over-year, while full year EBITDA rose 9%. Net income for the quarter was MXN 721 million, increasing 15% sequentially and 74% year-over-year. Likewise, 2025 net income amounted to MXN 2.8 billion, representing 20% growth versus 2024. Our results reflect the strength of our operating performance and an improvement net comprehensive financial results. Quarterly net income, excluding the ALTAN write-off, increased by 33%, while full year growth reached 18%. As we have already mentioned, profitability will strengthen further as depreciation continues to stabilize and the newly integrated regions mature. Turning to the balance sheet. Net debt ended the year at MXN 21.5 billion, decreasing both sequentially and annually. Together with solid EBITDA generation, this contributed to the net debt-to-EBITDA ratio decreasing from 1.45x in third quarter of 2025 and 1.50x in fourth quarter 2024 to 1.35x in this period. Similarly, our interest coverage ratio stands at remaining at healthy levels and providing the flexibility to meet obligations while continuing to execute our long-term strategy with discipline and consistency. As a result, we maintained one of the strongest leverage profiles in the sector, alongside a well-balanced mature structure. CapEx for 2025 remained consistent with our full year investment guidance, closing at MXN 9.1 billion, decreasing from MXN 10.3 billion in 2024, representing 25.9% of total revenue, in line with our objective of 26%. Likewise, CapEx to revenue ratio for the quarter declined from 29.2% in fourth quarter of 2024 to 28.2% in fourth quarter of 2025. This clearly reflects a deceleration versus 2024 levels and reinforces the company transition to a lower investment intensity phase. As the consolidation of investment begins to reflect -- be reflected in the results, cash generation driven from EBITDA minus CapEx, interest and taxes and leases showed strong performance. It rose from MXN 1.75 billion in 2024 to MXN 4.68 billion in 2025, representing 1.6x increase. This progress confirms the effectiveness of the strategy focused on the company's ability to generate sustainable value. Looking ahead to 2026, we will continue balancing profitable growth with discipline and prudent capital allocation. Our priorities remain focused on delivering positive free cash flow, preserving our investment-grade credit profile and further advancing the moderation of recent investment across both expansion and legacy markets while maintaining a lower investment intensity profile. In summary, we closed the year with solid profitability, strong EBITDA performance and improved leverage, all while meeting our CapEx targets. This strengthened operational and financial position will allow us to face future challenges from a solid foundation and generate long-term value for our shareholders. Thank you for your trust. I will now open the floor for questions. Operator: [Operator Instructions] Our first question comes from the line of Marcelo Santos of JPMorgan. Marcelo Santos: I have two questions. The first is like -- about CapEx outlook. So you were below your guidance, a guidance that I must say that was revised down a few times. So what is the outlook for the next couple of years? Could you provide us some color? Should this go down a bit more? Or should it stay at this level? So that's the first question. And the second question is, you made it very clear, generating a lot of cash. That cash is increasing. What is the use of cash? Because I think you are now generating more than the minimum dividend. So what is the decision -- what to do with this cash? Raymundo Pendones: Luis? Luis Zetter Zermeno: Okay. With the CapEx outlook -- Marcelo, thanks for the question, and welcome to the call. And we have been consistently delivering -- and it's consistent with the message that we have established that we are going to be reducing the CapEx to revenues ratio, and that will continue for the future years. Yes, there are some factors that may impact the speed of the reduction, like the -- or the shortage of some chipsets and memories that will impact somehow, the reduction of the ratio. But we are positive on the same outlook. We will continue to have a CapEx for 2026, we estimate between 24% and 26% and going lower than that on 2027. Unknown Executive: Okay. Unknown Executive: No, there was another question. Unknown Executive: Second question. Cash generation. Luis Zetter Zermeno: Cash generation, we have been established generating cash. We have to take in consideration that we have, in 2027, due debt that we have to define with the Board if we are going to reduce the debt or we are going to do something else with the cash generation. We are still analyzing the position, and we will define in the short term, what the strategy should be. But this is a great trouble to have, to define what to do with the cash generation instead of dealing with other type of situations. Operator: Okay. The next question comes from the line of Phani Kanumuri from HSBC. Phani Kumar Kanumuri: My first question is that, as you stated, the market is becoming more competitive and the consumer is weaker. So what is the strategy for your side going forward to maintain the 100,000 to 150,000 net adds? And the second question is that if you look at your net adds, the broadband net adds were higher than the unique net adds this quarter. And I was just trying to understand like, why is that the case? And then why have you shifted your ARPU definition to broadband net adds rather than -- based on broadband net adds rather than unique net adds? Raymundo Pendones: Sure, Phani. Well, our strategy remains focused in both expansion and organic territories. We have a great network. We put investment on the network and the product. We have a great XView product that we are integrating with different apps. So our strategy is to have the much more efficient price placed on the products that we provide to our subscribers, increase bandwidth, as we did in January. We're increasing bandwidth to our subscribers, and we are providing better apps and products to them so they can get in our company, the best service and the best quality. That has, with an aggressive price, proven to drive the growth of this company so far. It is good to mention that we have growth both in organic and expansion or in organic territories. It's not only coming from the new territories we have. So we're not going to move away from what we are doing right, and this is our strategy to have. Regarding the unique and the broadband, that was -- we have a great growth in broadband on that part, that some of them comes with double or triple play. And some of our unique subscribers that is lower on this part is because we are adding broadband to people that have video and video to people to have broadband, in that sense. So we are gaining more RGUs than what we have in unique subscriber. It was a unique position of this quarter. We expect to have very close growth in organic and broadband -- sorry, in unique and broadband subscribers in the future to come. So that will be the answer. Phani Kumar Kanumuri: Yes. And maybe, I mean, just a follow-up on the question. So you had now changing the definition of ARPU based on broadband subscribers rather than unique subscribers. Maybe, what is the logic behind that move? Raymundo Pendones: Yes, we're trying to be more clear to everybody because unique subscriber, it might be confusing, as you are having the question. Sometimes we have much more triple-play service, sometimes double. And sometimes we do campaigns for broadband compared to existing subscribers. The main comparison ARPU in the market is broadband subscribers, which is the majority of the connected homes that we have in the industry. And that's why we are trying to make a much more clear comparison on ARPU regarding other industry players. Operator: Next question comes from Valeria Miranda from [ Jeremi ]. Unknown Analyst: I have two questions, if I may. The first one is regarding the corporate segment. It has been decreasing for the past quarters, given the change in the commercial strategy you mentioned previously. But when do you expect revenue to normalize? And how much would this impact EBITDA? And my second question is given the increased EBITDA and free cash flow generation, coupled with declining net leverage, can we expect an increased payout in relation to EBITDA versus previous years? Raymundo Pendones: Thank you, Valeria. Regarding the corporate segment, yes, we had a tough year, as we say. But that tough year has good positive signs also for us. We changed the way that we commercialize some of the products. So now we have a much more contribution on the profitability of that segment. We were selling a lot of infrastructure on a cash basis. And now the market drives us towards more managed services that recognizes income on time on the future or in a period of time. So we posted a decrease in revenue with a higher margin in that case. And going forward, we expect that to normalize. We pretend to have a much more better year than what we have, trying to recover the levels of what we have in 2024 for that segment. As you know, we integrate and try to migrate the strategy of a connectivity company called Metrocarrier to a much more solution IT infrastructure company called ho1a Innovacion. We are maturing that product, and that's going to the market approach. And we expect 2026 to recover levels as I was saying that. The other one, I don't know, Luis, if you had it? That was right in the third one? Regarding decrease of... Luis Zetter Zermeno: I couldn't get the second one. Raymundo Pendones: Yes, I was trying to finish the first one. Unknown Analyst: Yes. Raymundo Pendones: Can you repeat the second one, please? Unknown Analyst: Yes. Can you hear me? Raymundo Pendones: Yes. Unknown Analyst: Yes. Given the increased EBITDA and free cash flow generation, coupled with the declining net leverage, if we can expect an increased dividend payout in relation to EBITDA versus previous years? Luis Zetter Zermeno: Well, as I mentioned in the previous question, additional generation of cash flow, which is still not defined, where it will go. What is -- our expectation is that it, for sure, will not reduce the dividend payout that has been given by the company. But it's still a definition from the Board. So we expect at least the same approach from previous years. And still to be defined, what the outcome or the use of the additional cash flow will be. Raymundo Pendones: That's the happy problem you were mentioning. Luis Zetter Zermeno: That's a happy problem. Raymundo Pendones: We have always been, Valeria, a very conservative company in that case. We're not -- we don't expect to change our dividend policy that we have right now on that, but we haven't provided a clear idea of what we're going to do in the future with excess of cash. We will talk to the Board on that case and do what's the best for the company and provide a solid balance sheet for whatever it might come in the future, whether to repay, whether to increase dividends or whether to do something else with that. So far, we maintain the same conservative approach that we have in the past. Unknown Analyst: Perfect. Enrique Robles: I would not discard the possibility of increasing our dividend. Because if we don't use -- if we don't find a better use for the cash, we don't see why we shouldn't -- we would not increase the dividend. Not as a consistent or as a change in our policy, but if we don't have a better use for the money, I don't think that the Board would not consider that. I think that the -- it's not -- talking to experts, it's not a good idea to maybe get the company to 0 debt. I don't know if that answers your question. Operator: And the next question comes from Ernesto Gonzalez from Morgan Stanley. Ernesto Gonzalez: It's just on how you're seeing competitive dynamics evolving in Mexico, especially if you could go into what you're seeing in legacy territories and in new territories? It would be great. Raymundo Pendones: Sure, Ernesto. As you all know, we have a very competitive market here in Mexico, and we've been having that for quite some time already. Our strategy is very simple, keep the most efficient company in terms of price approach to cost and EBITDA while being innovative and having the great technology. That's why we put -- almost 85% of the network is already FTTH so we can increase the speeds whenever the market requires that. And we continue to invest in the network so we can increase speeds even if we go above the competition. But it is not only about speed, it's also about the complement of the broadband with other services that we call content -- video content services. That's why when we talk about video, we don't talk only about traditional pay-TV video, but we are adding apps. We normally provide to our subscribers, a combination of apps that makes it very attractive to have content from us. And that's why we have so many RGUs coming from video. As we stand on that, over 2 million apps are already spread among all the subscribers of Megacable. So at the end, we do a combination of great service, good quality, good pricing. We continue to have the best price in the market while we have the best margin in all. And we're not moving to that. It's a very tight execution, and that's where we continue to focus. At the same time, we expect 2026 to make us a slight recovery for the corporate segment. And we will be focused on trying to increase the growth of that unit towards more IT solutions services and not only connectivity. Those are part of the studies that we have internally. Now talking about competition, well, everybody has different positions. Telmex has approached the non-increase of rates that is very similar to what we have right now. And we do compete with them in terms of providing, as I said, more products that we do have. That's how we managed to increase ARPUs slightly, but increase ARPUs while penetrating the market because we were able to sell more bandwidth and products to our existing subscribers. And at the end, when you compare to the other 2 competitors, they all have different particularities. Totalplay has a high ARPU in that part and some financial constraints on that part that make us be more aggressive and flexible towards that company in particular. And then Izzi continues to maintain their HFC approach with some of the -- with their subscribers. So it's going to cost them more to increase bandwidth compared to what we have right now. So we know what competition is tough on that part, but we know what our advantage is to all of them. Even compared to other technologies like broadband, like mobile, fixed mobile that is not done in this market because of -- not capacity from the mobile services and satellite, which is target -- as well as other parts of the world is targeted at a much more higher price and aimed to rural areas and not urban, okay? That's pretty much my vision of the competitive dynamics here in Mexico. Operator: And the next question comes from Lucca Brendim of Bank of America. Lucca Brendim: I have two on my side. The first one, if you could comment a little bit on what do you expect in terms of EBITDA margin going forward, if we should continue to see a similar pace of increase for next year compared to what happened in 2025 versus 2024? And how high do you think margins can go in the long term? And then a second question. Regarding the new regulator in Mexico, have you already seen any difference or something that has impacted the company that we should be aware about with the new regulator? Enrique Robles: About the new regulator -- let me talk about the new regulator. I think the new regulator is taking a very good approach. I think that it's a good surprise for us. We think that they are very much aware of the competitive scenario or landscape in Mexico. And they -- I think they will be a good player, let's put it out this way, in the market. They will -- they are very conscious, I think, and do a good diagnosis of what's needed to get a much better competitive landscape in the market. And the other question was... Luis Zetter Zermeno: EBITDA margins and the expectation for the future. As we have seen, the organic territories has sustained, on a very good levels. Not at the 50% that we had in the past, but 48% to 49%, and is very consistent. And we are also increasing the EBITDA margins on the expansion territories. So our expectation is that the margin overall is going to continue expanding. And we foresee around 50 basis points, which is consistent with the latest years' growth, 50 basis points expansion per year and reaching 47% to 48% by 2028, more or less. Operator: And the next question comes from Pablo Ricalde from Itau. Pablo Ricalde Martinez: I have one question on your pricing strategy for 2026. When do you expect to raise prices? I remember last year, you did the one in March, April, if I'm not mistaken. Just trying to check when do you expect to raise prices this year? Raymundo Pendones: Sure, Pablo. We have 1 price increase already in January that we did. But the way that we do price increases is divided among all the different segments of our subscriber base. Let me explain to you. When you have new subscribers, the price increase comes when the promotional price finish. When you have all subscribers, it comes once a year. Or when you have subscribers that has been having an upgrade or downgrade in the service, the price increase will come when that operator downgrade finish. So it is tough to say what time of the year, but the first that we have was in January, and we may have another one to another subscriber base by the third quarter of this year. Operator: Now we come for another question from Andres Ortiz from BTG. Andres Ortiz: I would like to double tap on the competitive environment. I recently saw that your basic plan now offers 200 megs. I believe you are competing more in speed now, right? So the speed offerings have increased materially over past years. So I just want to understand what's your view on that? And what competition are you seeing? Are they following you? Is it more difficult today to increase ARPU through this view? Or what should we think that? And I will have another question after that. Raymundo Pendones: Thank you for the question, Andres. I will expand on the first explanation I did about the competitive. Yes, we increased speeds to 200 megs. We have a brand-new network. It doesn't require from us, additional CapEx than what we have before. All our network can be upgraded to different speeds, still to our subscribers without requiring that. But it's not only bandwidth, what we are providing to subscribers. As I said, we are increasing the content proposition in terms of apps and trying to maintain the proportion of double to triple play packages. That means video over broadband and telephony. We're one of the highest provider of video in the market. But all of that at a very affordable price that can help us penetrate the market. We do not decrease ARPUs more significantly because we continue to grow from the expansion territories. And when you have a large base of subscribers coming from promotional or promotion prices, they have a lower ARPU. That's why Luis was explaining that we expect also as expansion continues to grow in the future, margins to come to the levels that what we have. Not the 50%, but levels of 47% to 48% in total in the 2 or 3 years to come. That might resume the competitive landscape that we have on the bandwidth. Also remain that our technology, it can be upgraded, not from what we have right now in GPON, XG-PON that we have and we can do in areas, strategic areas where we require for high-end customers. So we're very, very, very strong for the future in terms of bandwidth. And that will also help us to compete with other technologies, whether it's wireless or satellite, in the future to come. Fiber is still the name of the game for broadband, and that's part of our strategy. That's a strong part of our strategy. Andres Ortiz: My follow-up will be exactly on margins. You mentioned that over the long term, 47%, 48% makes sense. That will be for the cable operations, right, not the consolidated business? Luis Zetter Zermeno: No, it will be for the whole company. Raymundo Pendones: It's for the whole company. Operator: Thank you, Andres. At this moment, we don't have more questions in the line, but we have one question from [ David Simon ] from [ Alpha Sydney ]. Can you please discuss the stand-alone streaming app economics and the strategic value to the firm of this offer? Raymundo Pendones: Sure, David. Well, as of today, we try to keep the streaming app strategy tied to our XView platform. We believe it's the best proposition for the subscriber and the best for the organization. So if somebody wants to have a big offer or a good offer on streaming, they have to be part of our XView platform so far. We have some markets and some customers that we can provide to them, single apps to the broadband subscriber. But as of today, we are trying to keep all tied and just provide a single proposition. Whether you want broadband, you have 200 megs. Whether you want broadband with content on that part, you get the best of the XView pay-TV platform, call it that way, plus streaming that is included on that price. And that's the strategy we have so far. Operator: And we have a follow-up from David. Luis, could you explain the expected deferred tax dynamic as CapEx begins to normalize over the next few years? Luis Zetter Zermeno: Sure. Yes, we benefited on the tax levels from the deferred taxes. And we expect a consistent slight reduction over the next few years as he mentions that CapEx is normalizing. So we expect a slight reduction over time. Operator: Okay. We have no more questions. So I'll now pass the call over to Mr. Yamuni for final remarks. Enrique Robles: Okay. Thank you very much. And as always, it's a pleasure to discuss our results with you. Please contact our Investor Relations department if you have any questions or concerns regarding the company. Please -- my -- our -- we're grateful for you -- with you for being in this conference and in the future conference and your interest in the company. As always, we will put our best effort to deliver great results to our shareholders and great results for the communities where we serve. Thank you very much, and have a great weekend. Unknown Executive: Thank you, all.
Operator: Good afternoon, ladies and gentlemen, and welcome to the AngloGold Ashanti Q4 2025 Earnings Release. [Operator Instructions] Please note that this event is being recorded. I will now hand you over to Mr. Stewart Bailey. Please go ahead, sir. Stewart Bailey: Thanks, Judith, and welcome, everybody, to our full year and Q4 results call. As always, Alberto and Gillian will walk through the presentation but you do have other members of our senior leadership team that will be on hand for the Q&A afterwards as needed. I direct you all to the safe harbor statement at the beginning of the presentation, which has got important information regarding forward-looking statements. Without any further ado, I'll hand over to Alberto. Alberto Calderon: Thank you, Stewart, and welcome, everyone. Let's start, as always, with safety. We achieved our lowest ever lowest total recordable injury frequency rate at 0.97, 0.97 injuries per million hours worked. This was the first of a number of records set last year and by far the most important. It is another key milestone on our safety journey, again, outperforming by far the ICMM member average. Our main aim remains to ensure complacency doesn't creep in that we never stop learning from our mistakes and that we are diligent in applying these lessons. This morning, I heard a podcast on our results on AI. They did a great job but one thing that caught my attention, they talked about safety but then they did tie it to the next part of the presentation. Such low levels of safety lead to operational excellence. It means you have more planned maintenance. It means your processing plants are working like they should. You could never achieve the level of operating excellence without operation, the safety statistics that we have. So it is for us our highest priority but it also leads the way to operational excellence. I'm proud to report a strong set of numbers for Q4 and the full year. We set new records in cash flow, earnings and dividend declaration. In the final quarter, we generated free cash flow of more than $1 billion. That's the most ever and more than 3x what we generated in the same quarter last year. As a result, we've declared $875 million to shareholders as a dividend in Q4 alone. What we can control, we continue to control very well. That's clear, especially when you look at our managed operations with higher contribution from Sukari, Obuasi, Siguiri, Geita and Cerro Vanguardia. It's worth highlighting that we also produced 3.7 million ounces of silver at CVSA in Argentina. On the other side of the ledger, we saw lower production from Iduapriem and Sunrise Dam. Obuasi delivered a steady on-plan performance with improvements in recoveries and tonnes treated. Total costs for managed operations were only up 5% on year. This is the fourth year in a row where our cash costs are lower than inflation and royalties. So basically, we have had in real terms, flat cash costs since 2021, the only company in the sector to have been able to achieve that. Cash flow of almost $3 billion was up 204% year-on-year. Adjusted EBITDA grew 129% and headline earnings were up 186%. The balance sheet is in excellent shape. Even after record dividend payments, we were able to turn $567 million of net debt at the end of 2024 to $879 million of net cash at the end of 2025. We have ample liquidity and no material near short-term maturities. We've been clear that shareholders who have patient -- who have been patient through the commodity cycle must see direct benefit from this improved performance. That requires the guardrails of a clear capital allocation framework and a competitive dividend policy. As a reminder, we are 1 year into our new dividend policy. It provides for a set of quarterly payout of $0.125 per share or around $63 million. It also provides for an annual true-up payment, bringing the payout to 50% of free cash flow. In Q2, we took the decision to make an additional payment of $350 million. That takes our Q4 dividend to $875 million and our total payout for 2025 to almost $2 billion. That approach takes us to a net cash zero at the end of 2025. It speaks to the strength of the cash flows from our business and to our confidence in the outlook as we pay out substantially all of the cash we generate this year. I want to emphasize this point because that's always in the questions, what are you going to do? Are you going to be to net cash positive? And I think this is a statement of our confidence in the future but the fact that we bring net cash to 0 at the end of '25. We will see what happens this year. We will see what we do at the end of the next year. But I think that we have set significant precedents in terms of how we deal with quarterly dividends. And I think this is another milestone for us. With Obuasi continued to ramp up our Tier 1 assets now account for more than 70% of production and 80% of reserves. The 2025 results reflect the first full year consolidation of Sukari's operation with a significant impact on both our financial and operating performance. At the same time, our Tier 2 assets continue to deliver strong results with margins well ahead of where our Tier 1 mines were a year ago. A healthy margin and exceptional cash flow leverage are visible across the portfolio, reflecting an active management approach. Completion of the Serra Grande sale on December 1, 2025, will ensure we can further sharpen our focus on the core business. At Obuasi, we delivered what we said we would, producing 266,000 ounces, up 20% year-on-year. The result was supported by our investment in ventilation, material handling and better equipment availability that we're working hard to sustain. It also showed meaningful progress on our technical proof of concept. Underhand drift and fill is working in the high-grade zones and lateral development, which is key to underhand drift and fill is advancing. We were up actually 34% between Q1 of 2025 and Q4 of 2025 in lateral development. And that sets us in a very good stage for our forecast guidance for 2026. We aim to grow production again in 2026 to over 300,000 ounces alongside a commensurate increase in cash flow contribution. Just on the side, this Obuasi produced about $1,300 of free cash flow per ounce in 2025, which was double, for example, what Kibali, our non-managed operation produced in 2025. It's quite a turn of events from what was happening 4 years ago. Sukari is a Tier 1 operation by every measure, record delivery, strong margins and exceptional operational stability. It also has a world-class operating team that has shown itself to be hungry to improve the asset and to benefit from being part of a larger business. They are thriving in a more competitive and supportive environment. 2025 was a record for Sukari, delivering its best ever production and enormous cash flow. In fact, when you look at the net acquisition cost for Centamin after stripping out the sale proceeds for ABC and Doropo, and the cash on the balance sheet, we generated almost 1/3 of the purchase in our first year as owners and the best is yet to come. The integration is fully complete. The full asset potential team has completed its first pass. We have identified a raft of opportunities to increase value from almost every perspective. We see opportunities, the most significant expanding the underground from 1.2 million tonnes moved to 2.3 million on higher grade ore. We just need to develop a new portal and expand the fleet, and we will talk about this in another asset, the impact of the most important idea that wasn't covered in the full asset potential. But there were others, a small heap leach project, improved efficiencies and better recoveries in the plan, just to name a few. From a geological perspective, the ore body is still open with potential to add ounces, and we will be increasing our budget for exploration -- brownfield exploration during 2026. Essentially, there's opportunity wherever we look. While we generated record cash flow, we are aggressively drilling to secure tomorrow. It is worth remembering that we have the industry's top exploration team. They continue to deliver exceptional exploration results across our portfolio, replacing depletion and upgrading resource confidence. This slide breaks down our mineral reserve numbers. We had another very strong return from our brownfield exploration program across a range of assets. We added 10 million new ounces of reserves, more than 3x our depletion. And yes, Nevada added 4.9 million with the first time reserve from Arthur but it wasn't the only one. We also showed a good spread from our operating assets, about 2 more million after depletion with net additions at Geita, Obuasi, Iduapriem, Cuiaba and Kibali. At Geita, which has been a particular focus for us, most of the 1.3 million ounces are in the open pit. Mining is a long-term game, and it's important to zoom out to look at the returns over time. Over the past few years, we've added almost 23 million ounces at an average cost of about $47 an ounce. That value is hard to beat. The holy grail for any gold company is a Tier 1 discovery in a low-risk jurisdiction with long life and strong growth potential. Our Arthur Gold project is just that. What started only a few years ago as an ambitious exploration thesis in the BT district has now evolved into one of the largest and most significant greenfield gold discoveries of this century in the U.S. Today, it transitions from a discovery into a major high-return project. The first-time mineral reserve of 4.9 million ounces is just the top of the iceberg given the much bigger resource in the project area. I probably remind everyone that we complemented our original land position with 3 acquisitions that were very timely from Corvus, Coeur and Augusta, and that really allowed us to consolidate what is probably the most important discovery and land position in Nevada in decades. Let's take a step back and look at the project. Arthur is a fully consolidated district scale opportunity comprising the Merlin and Silicon deposits. It's a large-scale continuous gold system. It features broadly disseminated mineralization alongside high-grade vein system with thickness reaching about 150 meters. The mineralized footprint is extensive, measuring approximately 2.7 kilometers by 1.3 kilometers. The deposit, which is largely oxide is highly amenable to both mining methods and conventional processing. We see a clear geological connection between Merlin and Silicon. There is significant room for continued mineral resource expansion to the west of Merlin and down deep and to the north at Silicon. In fact, Merlin remains completely open to the west and south, and we have a drilling program underway to support further resource exploration. The study envisages a conventional oxide gold mill with carbon and leach. It features a 3-stage crushing circuit with high-pressure grinding roll along with a heap leach circuit for lower grade material. It is as simple as it gets. No autoclaves, no double refractory ore and so many of the others that is common in Nevada. So I'm sorry to say it's just a very simple project. This will be a conventional open pit operation using large-scale equipment. The fleet will include electric rope shovels with 60 cubic meter buckets and ultra-class haul trucks. Our pit phasing is designed to target higher value near surface material early in the mine life to accelerate payback. The width of the ore zones and simple pit geometry will allow for wide mining benches and highly efficient, straightforward mining layouts. Let's look at some of the main highlights of the study, noting that a lot more detail will be available on March 26 when we release our technical report summary. We start with the initial probable mineral reserve of 4.9 million ounces for Merlin, calculated at $1,950 an ounce. That's 88 million tonnes at 1.75 grams per tonne. We expect to produce roughly 4.5 million ounces over an initial 9-year life of mine. Average production is around 0.5 million ounces, though with this edging up towards 800,000 ounces in the early years. We estimate cash cost of around $780 an ounce, all-in sustaining at $950 an ounce. Initial project capital is estimated to be around $3.6 billion, noting that normal margin of error for a PFS stage study. Even using only the initial reserves and at long-term prices, which allows us to make an economic case and to move ahead with permitting, returns at this stage are well north of 20%. Obviously, as we will see in the next slides, the total returns of the project will be much, much higher. When you factor in spot prices, okay, well, obviously, the returns are higher. When you consider the full resource potential, they're higher again. This project has, by almost any measure, the potential to be a defining asset for us and for Southern Nevada because the Merlin reserve is mainly oxide, it avoids the technical complexity and the risk of refractory processing. Crucially, feasibility level environment, hydrological and community baseline studies are already underway. This would be a highly competitive asset even with only the initial reserve and mine life. But while the 4.9 million of reserve is impressive on its own, there's an additional 6.5 million of mineral reserves at Merlin, and we are actively exploring the potential conversion in additional reserves. Actually, we plan for this year to target an additional 1.4 million ounces in line with the online drilling program and then significantly more in the years ahead, both from our defined resource base and from the ongoing exploration campaign in the area, which remains incredibly prospective. And by the way, all of these bubble charts that you see, we wouldn't envision at this stage additional CapEx required. We are essentially drawing from our current record cash flows to invest in a marquee asset to anchor our portfolio well into the 2050s. With that, I will hand over to Gillian to walk through our record financial results and how our robust balance sheet supports this growth. Gillian Doran: Thank you, Alberto. Strong cash conversion was a feature in 2025, ensuring the stronger gold price translated to record free cash flow of $2.9 billion, almost 3x the $956 million generated in 2024. This increase underscores both our improved quality of earnings and stronger operating leverage where the business is converting the better price and operating performance into cash at a significantly higher rate. It also reflects a sustained deliberate focus on cost discipline, working capital management, capital allocation, reinforcing our ability to generate cash through the cycle. In 2025, our cost profile remained under pressure. The tailwind offered by lower energy prices with oil down around 14% year-on-year was offset by realized inflation across our operating footprint. The standout feature of the year, of course, was the step change in gold price, which averaged $3,468 an ounce, a 45% surge over the 2024 average. This change represents a fundamental upward shift from the $1,800 to $2,400 an ounce range we've seen over the last number of years. Production increased 16% year-on-year to 3.1 million ounces in 2025, reflecting solid execution across our core assets. Managed operations were up 19% to 2.8 million ounces, driven mainly by the addition of Sukari and a 20% increase from Obuasi. Geita, CVSA and Siguiri also contributed, and this was partially offset by Iduapriem, Sunrise Dam and the removal of MSG from the portfolio. Cash costs from our managed operations were 5% higher at $1,252 an ounce, mainly due to higher royalties and inflation, both market-driven factors outside of our control. Nonetheless, costs were well contained through disciplined cost management, the benefit from Sukari and the continued delivery of full asset potential initiatives. ASIC for managed operations rose 5% to $1,751 an ounce, reflecting planned reinvestment in sustaining capital, partially offset by higher gold sales. 2025 was a record year, delivering a step change in performance and translating operational execution into record cash generation. Earnings and free cash flow more than doubled, reflecting the 16% increase in production and a 45% increase in gold price. Adjusted EBITDA was up 129% to $6.3 billion and basic earnings of $2.6 billion were up from $1 billion in 2024. We saw a 143% increase in net cash from operating activities to $4.8 billion, even after accounting for higher taxes, flowing from increased profitability. And as previously mentioned, free cash flow was up almost 3x to $2.9 billion, even after funding all CapEx and distributions to our JV partners. Our balance sheet was -- has been well and truly transformed. We entered 2026 with almost $1 billion in net cash, a big turnaround from the $567 million of net debt a year earlier. Our focus is unchanged, maintain discipline, drive operational improvements, maximize cash conversion and ensure high-quality returns through the cycle. Let's have a quick look at our guidance scorecard for 2025. This performance demonstrates the consistency and discipline of our operating model across our 10 assets. We again delivered within guidance on the 2 core benchmarks of reliability, gold production and sustaining capital. While AISC and total cash costs were marginally above the guided range, the variance was driven by higher royalties linked to higher gold price. We successfully managed controllable inputs, maintaining operational delivery and protecting our competitive position despite industry-wide headwinds. Message is straightforward. We delivered on our commitments, stayed disciplined on capital and further strengthened the resilience of our business. We are clear about isolating the controllable elements of our cost base. This transparency allows us to drive better cost performance. In 2025, cash costs were 7% higher at $1,242 an ounce. That increase was driven mainly by market factors outside of our direct control. Inflation, higher gold price-linked royalties, fuel and exchange rates collectively added around $86 an ounce or 7% to that cost base. In addition, the $12 an ounce added by the plant stoppage during Q3 at Siguiri was partially offset by better productivity at Tropicana following the 2024 rainfall event. Our managed operations worked really hard to improve the controllable areas of their cost base. Disciplined execution, operational excellence and the full asset potential program helped to deliver a roughly 1% productivity benefit. This was achieved through higher throughput, better utilization and stronger operating routines. Volumes from Sukari provided another positive tailwind. We remained focused on converting a higher gold price into free cash flow. And in 2025, we did exactly that. We see in the green bars, the price uplift of $3 billion and the higher gold sales volumes of $1 billion. This was primarily from Sukari's inclusion and strong cash flows from Kibali and the ongoing focus on managing our working capital. The result is clear when you look at the improvements in free cash flows. This came despite higher operating costs driven by a combination of higher volumes, inflation royalties, some higher contractor rates and also higher taxes from higher profits. In addition, capital spend stepped up as planned, driven by Sukari's inclusion in the portfolio. Dividends paid to noncontrolling interests were also $517 million higher year-on-year, again, a feature of Sukari's full year inclusion. The net of these factors was a record free cash flow of $2.9 billion in 2025. In 2025, we generated cash flows from operating activities of $4.9 billion. This cash enabled us to reinvest in the business, strengthen the balance sheet, meet obligations to our JV partners and return value to our shareholders. We invested in sustaining capital of $1.1 billion and $459 million in future growth opportunities. $588 million was returned to our noncontrolling joint venture partners and $953 million was used to strengthen the balance sheet as we moved into a net cash position. As Alberto mentioned, we declared an interim dividend of $875 million or USD 1.73 per share for the Q4 2025 period. This payout comprises 50% of free cash flow and an additional amount of $350 million, providing additional direct returns to shareholders and highlighting the continued confidence in the outlook for our operating performance and free cash flow generation in 2026. This takes the total dividends for 2025 to a record $1.8 billion or USD 3.57 per share. At year-end, we had $4.4 billion in liquidity, comprising of $2.9 billion of cash and cash equivalents and the balance of undrawn facilities in our bank accounts. This balance sheet strength has been achieved while investing in safe, stable production, confidently driving projects through our growth pipeline and providing record returns to shareholders. Let me now take you through our 2026 outlook, which is anchored in a portfolio that is performing, supported by a clear operating plan and disciplined value-led investment. For 2026, we are guiding group gold production of between 2.8 million ounces to 3.17 million ounces. Total cash costs for managed operations are estimated to be between $1,335 an ounce to $1,455 an ounce. This reflects a realistic view of the operating and macroeconomic environment with the increase for next year comprising around half in royalties and half from expected inflation and foreign currency exchange movements. The guidance comes in a year characterized by higher material movement across both underground and open pit operations. At the same time, we're investing to further strengthen the business and to unlock value. Sustaining capital for the group is guided at $1 billion to $1.14 billion. Our continued enhancements of and investments in the Sukari operations are anticipated to maintain the sustaining capital expenditure at our managed operations broadly in line with 2025 levels. This is deliberate and value accretive, supporting reliability, improving operational flexibility and advancing full asset potential program initiatives that are expected to drive productivity gains late from late '26 into '27. We are guiding group nonsustaining capital of $785 million to $835 million. In 2026, the key areas are Nevada, additional waste stripping at Sukari and tailings storage facilities at Obuasi and Siguiri, all focused on safeguarding the operating base, creating the flexibility to unlock future production and manage our risks responsibly. Looking into 2027, the continued ramp-up at Obuasi underpins the uplift in production ounces, while unit costs remained flat in real terms, reflecting the benefits of our cost leadership and productivity programs. We are not relying on the gold price to carry performance. We are building structural competitiveness. Capital allocation remains disciplined. We expect sustaining capital to remain broadly consistent with 2025 and 2026 to support safe, stable operations while nonsustaining capital increases as we begin the construction of the North Bullfrog project. This is exactly how we allocate capital, protect and sustain the base, then invest selectively in the highest return growth opportunities, phased prudently, executed rigorously and aligned to long-term value creation. Overall, this guidance reflects a business with strong operational momentum, clear investment priority and continued commitment to cash generation, competitiveness and disciplined growth. I will now pass back to Alberto to dive deeper on our 2026 focus. Alberto Calderon: Thank you, Gillian. 2026 is about disciplined execution. In a strong gold price environment, discipline matters more, not less. Our focus is simple: Protect margins; allocate capital rigorously; and strengthen the portfolio. We remain focused on cost discipline and operational excellence across the portfolio. Through full asset potential, we are systematically looking for ways to offset inflationary pressures and royalty increases, particularly labor, energy and consumables. We are increasing the production contribution for our Tier 1 assets, which structurally lower our cost base and improves margin resilience. Active portfolio management remains core. We've been active in this area, and we'll continue to optimize capital allocation towards assets that generate superior risk-adjusted returns. Sustaining capital is about protecting safety, reliability and asset longevity. We are appropriately capitalizing our assets to ensure safe, stable and sustainable operations. We continue to invest in mineral reserve development to increase operational flexibility, particularly in complex ore bodies. Reserve replacement remains fundamental, sustained reserve growth underpins long-term value creation. Growth capital is focused on high-quality, long-life projects, particularly in Nevada. These projects enhance jurisdictional quality and portfolio resilience. We are creating flexibility for life extension and brownfield growth across the portfolio by building new tailings and opening land to extend our mining operations. We are prioritizing short-cycle, high-return organic projects that strengthen free cash flow generation. Operational excellence alone is not enough. Social and regulatory stability are equally critical. We remain deeply committed to our host communities and governments where we're providing real-time benefit from the higher gold price through taxes, royalties and meaningful participation in the value chain. In this slide, we highlight an emerging picture of low-risk, capital-efficient and very high-return opportunities in our current operation footprint. It underscores what I've said repeatedly that the best opportunities for us lie within the capital we're deploying today is funding low-risk, high-return projects at our current mines. These options have the potential to add between 10% and 15% of our current production profile during the next 3 years. We'll talk much more about this in detail in the second half of the year. As previously mentioned, at Geita, we're advancing a project to lift throughput in the mill and increase production by around 20%. At Sukari, the capital we're spending on accelerated waste stripping and fleet upgrades will underpin a potentially significant mining expansion, coupled with processing improvements like a new gravity circuit and absorption tank to boost recoveries. This will provide a healthy step-up in production. We are seeing similar organic growth across the rest of the portfolio. At Siguiri, we're evaluating the potential to combine some of our existing dormant pits in Block 1 with the ramp-up of production from Block 3 to bring this asset with its exceptional geology into the Tier 1 category. And at Cuiaba, accessing the high-grade Viana ore body is a relatively straightforward opportunity to appreciably improve production. This is what disciplined capital allocation looks like, taking part of our record free cash flow and reinvest in low-risk, high-return opportunities that will optimize the value we can deliver from our world-class ore bodies. All of these growth projects will have a project management office and a VP growth dedicated to these organic projects for the next 3 years. We are prefunding the health and expansion of these assets today, ensuring they remain highly profitable cash generators well into the 2030s. We made steady progress narrowing the rating gap relative to our North American peers. This hasn't been about addressing a single issue, but rather a comprehensive plan over a number of years to strengthen every aspect of the business. Our fundamentals are robust. The portfolio is performing and the outlook is bright. We're delivering on our commitments, achieving consistent operational improvements, enhancing returns and positioning the company for sustainable growth. And importantly, the higher gold price has flowed on to the bottom line. This has generated the highest free cash flow yields in the industry or one of the highest. As you assess our valuation metrics, we believe AngloGold Ashanti represents a compelling investment proposition, as you can see clearly in the graph. Strong cash generation, disciplined shareholder-focused capital allocation, market-leading yield and a valuation that offers clear upside potential. With that, I'll take your questions. Operator: [Operator Instructions] Our first question from the line comes from Adrian Hammond of SBG Securities. Adrian Hammond: I have a few questions. I'll list them in order. Firstly, the payout ratio is obviously welcome, certainly exceeded your current base policy by margin. Given where gold prices are, I get the sense that higher payouts are of the order of the day. But it's -- the question is where does this stop? Because at spot prices, you're going to generate significant amounts of money that you may not have a use for. So should gold prices stay where they are, what should we be modeling in terms of payouts? Is 60% sort of the new benchmark for yourselves at spot? Or should we expect even higher payouts? Secondly, on Slide 28, the organic growth options, I wonder if you can unpick that a bit more clearly. Just to confirm, you're saying 10% growth on your base, so 300,000 ounces. And then correct me if I'm wrong, 100,000 from Geita, I assume that's from 2028, 100,000 from Sukari, when do you expect that? And then, I guess, the balance for Cuiaba and Siguiri? Alberto Calderon: Thank you, Adrian. As always, very good questions, and I probably can answer half of them. So look, the payout ratio, it is one step at a time. We've done it. We -- this is just an indication of how we think about things but I don't want to get ahead of myself. Again, we don't know the gold price where it's going to be. So this is just a commitment that if we have very gold prices, we will do something and we will explain what we're doing with it. So in the end, this is more symbolic. The 300 additional million was just, okay, we're going to get down to net zero at the end of '25. And yes, we'll see what happens. As you know, in -- we have several options in how to deal with capital. So we'll be considering them and you will know of it. What we won't do is tell you every quarter what we're doing with the money. But I don't want to anticipate if the spot at this stage, I would just leave it there. On organic growth, we struggle a bit with saying because we were significantly increasing investment in growth capital. So we wanted to say that. But really, we will come with a very detailed of, as I said, asset by asset. And it's going to be those 4 plus Obuasi. The 10% to 15%, I would calculate it over the 3 million ounces. So yes, that's between 300,000 and 450,000 ounces by the third year. So we will give you lots of detail in this year, I think in the August, that's what we're planning. But we're very excited by this. And as I said, it's going to be Obuasi, it's going to be Sukari. It's going to be Geita, it's going to be Siguiri and it's going to be Cuiaba, relatively low sort of investments. You take Sukari, for example, which is a wonderful job that they did. We're increasing underground sort of movements from 1.2 million to 2.3 million higher grade ore. And hence, we're just planning on this to build an additional platform and obviously, additional mining equipment but we could do it through the same processing plant. And it has an impact of about 100,000 ounces. So I'll give you much more detail as we go through the year. But this is probably the most exciting project we have for 2026. Operator: The next question comes from Josh Wolfson of RBC. Joshua Wolfson: I noted this year, obviously, very positive initial reserve declaration, resources overall stayed stable. With some of the disclosures earlier on the call about reserve conversion of an additional 1.4 million ounces, how are you thinking about further expansion? How are you allocating exploration spending according to that? Alberto Calderon: Okay. Well, I'll answer something, and then we have Marcelo Godoy on the call and I'll ask you to help me. But look, there's always a trade-off. You don't want to go too far advance again on resource. We already have resource for the next 30 years or something like that. So there's always a goldilocks point. And the same with reserves, you needed to find a limit and say, okay, this is where we're going to start. But it's obvious when you see the chart that when we talk about 9 years, it's not going to happen like that. We're going to obviously go very quick. We're going to head to about 800,000 ounces in the second or third year of production. And by then, we will be bringing other ore bodies into reserves and all of that. We do plan to add between 1 million and 1.4 million ounces in 2026. But Marcelo? What else? Marcelo Godoy: Yes. Thanks, Alberto. One thing, when you think about Arthur, you should be thinking about the 12 million tons per year project. And that's what came out of the pre-feasibility study as an optimal size for the project. So any additional addition to the project, you should be using the additional life of mine in your models because that's what the project is really about is continuing increasing the life of the project but continuing to produce 12 million tons per annum. And obviously, there are constraints that made us arrive to that number. As you can see, we have lots of resources to produce at that production rate for multiple decades. and exploration keeps just on giving. And every time we drill, we find more resources, which from -- our focus now is to get the project going and as soon as possible. And that's what the exploration team is focused on. Joshua Wolfson: Got it. And then a question on, I guess, the 2027 guidance. I noticed the company included or disclosed the capital associated with North Bullfrog in 2026. I'm wondering for the 2027 numbers, what's the proportion of capital at North Bullfrog? And then what's the company assuming in terms of the Ghanaian royalty outlook? Is there a change incorporated? Or is it the existing rate? Alberto Calderon: So we're incorporating in North Bullfrog, I think, about $14 million for 2026. I'll get -- Gillian will help me with the rest. We haven't incorporated anything on the Ghanaian royalty. Again, we're having constructive conversations with the government. But at this stage, we will be premature. So Gillian? Gillian Doran: Yes. So thanks, Josh. '27 million North Bullfrog is $320 million, and then we've got about $90 million for Arthur Gold in the guidance as well. Joshua Wolfson: Great. And if I can tuck in one more. Just on the topic of M&A. On the disposition side of things, is CVSA still something that's under consideration? Maybe how are you thinking about that with significantly higher silver prices today? And then on the acquisition side, what's the current thinking? Alberto Calderon: Thank you. Look, CVSA, it wasn't a secret that we were trying to have a sale process. But with gold prices between we started the process and then 6 months later, like everything had changed and silver, everything had changed. And so it just didn't make any sense for anybody nor for the buyer nor for us. The value of the asset, what's going to produce the cash flow in the next 3 years is extraordinary. I have to say the guys over there, it's an extraordinarily good team. There's a standard joke that they're so far away from corporate that they produce -- they're even better because nobody bothers them. So they are very, very good. And they have extended the mine life. We haven't declared it. So I know but they even managed to extend into the 2030. So we're happy owners with them. They do a very good job. And yes, the silver price and gold price for the next time has changed our vision. So we're happy to keep it at this stage. By the way, the government has done an extraordinary job. That was also the issue in the past that we couldn't get the cash flows. Now it's like we're getting the cash flows out, looks like a developed country. Hopefully, Mile will stay there for a while. And then on M&A, what you just heard us on our organic growth. It's -- we have such good opportunities. Obviously, the B team always looks at things but I've said it in the past, it's hard to pay a premium and still add value. Our criteria is always the same, add value, net asset value to the company. And so yes, they still do the job but I would say 99.9% of the company is focused on that organic growth. Operator: The next question comes from Patrick Jones of JPMorgan. Patrick Jones: I appreciate your comments earlier around the predictability of the dividend policy. But obviously, as I said, there's no buybacks this time, but it did make an appearance again in the shareholder return slide. So I guess my question is, what constitutes the comment you gave was around you will consider buybacks and the supportive market conditions there on the slide and what we're going to get the Board to shift its thinking from dividends to buybacks. Alberto Calderon: Okay. Look, we this is something that we reassess. It's part of the book of buybacks, dividends, debt reduction. So this is part of the book. And we always contemplated at this stage, in this case, it was like we have a very good dividend. It's the most generous dividend policy. We're very flattered that several of our colleagues have -- competitors have copied it exactly. So that's a sign of flattery. But at this stage, we're happy where we are. So we'll just take it, as I said, one step at a time. It didn't make any sense for $300 million to do a buyback. So it was clearly a supplementary dividend. We will take it one step at a time, and we will be explaining what we do with the cash in every quarter. Patrick Jones: And maybe just a follow-up question then on Arthur. Obviously, it's shaping up to be an incredibly impressive project. But can you talk through what's kind of the eventual permitting and development timelines, the first output, particularly in light of the comments around North Bullfrog CapEx coming up? Alberto Calderon: So the permitting for Arthur, it's always -- a lot of it is under our control. What we can say is we will seek this FAST Track 41 process, there is incredible support, both from the national government and from the state government. So we have made with the NPO a lot of good progress. And -- but we don't want to give you timelines because it's always so many things out of our control. But we're quite encouraged, as I said, by the support. Marcelo, anything you can add, please? Marcelo Godoy: Yes. Look, we do -- I mean, we don't have exact times at the moment, but what we can tell you is that we want to have the rod before the end of this decade, and we will be producing in the beginning of the next decade. So that's the rough time lines we have at the moment, capitalizing on this fast track process for the NEPA process. Operator: The next question comes from Tanya Jakusconek of Scotiabank. Tanya Jakusconek: Just wanted to start, Gillian, with you, if I could. Just to make sure I understand. So this dividend still the base of $0.125 and the top-up up to 50% of cash flow. Is that now still going to be done quarterly? Or is that top-up still going to happen at the end of the year? It's just we had it quarterly before, and I'm just confused when this top-up happens. Alberto Calderon: So I'll start on that one. Just -- look, the policy is that we pay at the end of the year because the spot price was so high last year. Well, those were the decisions to just say, okay, well, there's a lot of cash accumulated and let's do it by quarter. So I would assume if the spot price stays where it is, probably the Board will consider that again. But the policy is still that we only pay the 50% at the end. So we will take it quarter-by-quarter, Tanya. Tanya Jakusconek: Okay. Fair enough. And just coming back, if I could, to Gillian again on the capital, still on the guidance, you mentioned some big project capital. I guess Nevada, I think, Siguiri, Obuasi. Can you just go through the growth capital, the big chunk for '26 and '27? Gillian Doran: Yes, sure. I think -- so I think it's easier to maybe cover '27 first, given I've already talked about the Nevada element. So there's just over 400 between North Bullfrog and Arthur. We then always have the sort of need to continue to invest in tailings facilities. That takes up an amount across the portfolio. So we've got tailings management at Kibali, Siguiri, Obuasi, Iduapriem, Geita. So absolutely across the portfolio. And then there's some other capitalized open pit waste at Sukari that you're aware of. We talked about it last year. There's a sort of a 3-year stripping campaign for Sukari. I think then if you think about, what does that look like for '26, we have lower than that spend for Nevada, of course, just given where the project phase is. And then you've got the same stripping campaign at Sukari and some investment in tailings and relocation. I think one thing to just mention on that sort of spend, particularly in 2026, it really is required to unlock that reserve growth and the volumes that Alberto spoke about a little earlier on. So maintaining safe tailings facilities and making sure we are relocating communities, et cetera, to be able to unlock that value is a sort of a focus for '26 and beyond. Alberto Calderon: I'd just add quickly. There's $70 million on growth on Kibali, which I think is welcome. I think they're finally facing the gut of facts, and it's good that they're investing in the growth of Kibali. So that is significant. And then yes, the rough numbers in my memory is like $120 million for all these tailings in different projects. It's about $45 million on Cuiaba. That's for the growth project that we talked about before. Nevada is about $145 million. So there, you're up on that would explain a lot of the growth. Tanya Jakusconek: Yes. Okay. Great. And I'm going to have my next question come to Arthur, if I could. And I don't know who would want the maybe Alberto or you Marcelo, may be one of you can just walk us through what you can control, which is the next steps are drilling, then maybe when the feasibility study is coming out. And then obviously, your -- when do you expect to hand in your EIA so that we can understand what you can control. And over this period, Marcelo, do you think we can move the overall resource to 20 million ounces from close to 16 million? Alberto Calderon: Marcelo will help us with this, but just we can't pinpoint. We don't want to commit on timing because it's not in our control. But the rest, I think Marcelo can help you. Marcelo Godoy: Yes. Look, we are going to start the feasibility study in Q2 of this year. So that's where we plan to do that. And the federal permitting is something that we are going to be starting in Q1 2027. That's -- we have control over those dates. Now the end of those process is something that we don't necessarily have control. That's why Alberto is not giving more information on that. Tanya Jakusconek: Yes. No, no, that's fair enough. I mean you control your feasibility study, you control your drilling. I'm just trying to understand what you control, what the time line that you have in place and when you submit the EIA. Marcelo Godoy: Yes. The feasibility study starting in Q2 2026, we intend to be finalizing that in Q4 2027. It's a normal timeline for a feasibility study of that size. Tanya Jakusconek: And then you would hand in your EIA at the end of 2027 as well? Marcelo Godoy: Well, the EIA you can start at the beginning of 2027 because it depends on the mine plan of operations, which is right now under development. So yes, we should be able to start that process in Q1 2027. Tanya Jakusconek: Okay. And anything on the resource drilling over this period? Marcelo Godoy: Look, I think at the end of the day, we want to convert as much as possible, Tanya, and 20 million would be great. But what we need to do now is just to get through the processing because we already have excellent grade and tonnage planning for the first 10 years of the mine. So everything that comes after that, we know it's there, but it's not our highest priority right now. Tanya Jakusconek: No, I appreciate it, Marcelo. Just as a geologist, I look at the sections and the plan view and there's a lot more gold. When are we going to get it? I guess one has to dream. Second -- my last question is actually for Alberto, if I could. Alberto, in sort of your exploration and M&A outlook, we noticed that you keep investing in juniors. Your latest one was in Thesis Gold here in Canada. Maybe talk a little bit about how you're viewing that sort of approach to part of your M&A focus. Alberto Calderon: Well, we have -- fortunately, we have Terry here who leads all of that. So I'll let Terry help us. Terry Briggs: Thank you for picking up the investment in Thesis. We're really excited to work with Ewan and the team there as they advance the Lawyers-Ranch Project. But really, it's quite simple. We take a multipronged approach to growth. Alberto laid out a lot of the organic opportunities within our brownfield sites. We also have greenfields exploration, which led to the Arthur deposit, which is getting a lot of discussion. And we take strategic stakes in interesting projects as well as Alberto said, we continue to assess inorganic opportunities, too. So it's just another tool in our ability to maintain that we can have the most optimal portfolio going into the future. Operator: Our next question comes from Rene Hochreiter of NOAH Capital. Rene Hochreiter: Well done, very good results. Just a quick question. What was the reason for the negative geological model conversion at Geita? And is it likely to be a problem in the future? Alberto Calderon: It was still a negative improvement. Again, I lost our COO because he's taking a plane. So we'll get back to you on that one, but it was still a net improvement. We improved 1.3 million ounces of net addition. Stewart Bailey: And we'll come back to you on the specific answer. Operator: Our next question comes from Joseph Reagor of ROTH Capital Partners. Joseph Reagor: Most of mine have been answered, but just wanted to touch on Arthur. There's been some local opposition from a water standpoint in Nevada projects lately. Do you guys think that, that might have any impact on the decisions you make there? Or is it something you think you can easily mitigate by time of going into production? Alberto Calderon: Look, there's been very constructive discussions that we've had. And actually, from the original project that we had in North, we reformulated significantly, and we have much less use of water. So we've heard and we've dealt with it, there's -- the whole project -- and Marcelo, again, I'll ask him again but there's all sorts of designs to minimize the use of water. But we're quite comfortable at this stage that we're going to be able to deal with all of these issues. But Marcelo... Marcelo Godoy: Look, it is a desert, and we know that water is always going to be an issue but we have been managing. We have a multi-tier process to manage those risks related to water in the project. And we -- as Alberto said, we have very constructive relationship and collaboration right now with the NGOs to get to a common understanding of the water situation in the region. We have very sophisticated hydrogeological models for the region, and we believe that we will be able to overcome those issues. Operator: Thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session. I will now hand back for closing remarks. Alberto Calderon: Well, thank you again, as always, for accompanying us. Look, we may become a little bit boring. We are predictable. We want to meet guidance. We keep with full asset potential. We don't have a program of the month every year. We'll keep doing that. For us, it's about safe, stable, consistent operations. And now we have a very exciting organic growth project that we'll be sharing with you. And yes, that's about it. We're just going to continue to do what we have been doing for the past years. So thank you all again. Operator: Thank you, sir. Ladies and gentlemen, that concludes this afternoon's event. Thank you for joining us, and you may now disconnect your lines.
Operator: Good morning. Welcome to Megacable's Fourth Quarter 2025 Earnings Conference Call. With us this morning, we have Mr. Enrique Yamuni, CEO; Mr. Raymundo Fernandez, Deputy CEO; and Mr. Luis Zetter, CFO. Let me remind you that the information discussed at today's earnings call may include forward-looking statements on the company's future financial performance and prospects, which are subject to risks and uncertainties. Megacable undertakes no obligation to update or revise any forward-looking statements. I will now turn the call over to Mr. Enrique Yamuni. Sir, you may begin. Enrique Robles: Good morning, everyone, and thank you for joining us today. As we close our 2025, we remain focused on our long-term strategy, expanding and modernizing our network by migrating our base towards fiber, strengthening our value proposition through quality service and competitive pricing, and most importantly, transitioning from a phase of high investment in construction to a period of consolidation, efficiency and stronger cash flow generation. Beyond the numbers, our execution is showing up in places that matter most. We continue to gain share, grow ahead of the market and reinforce Megacable's position as one of the most reliable telecom operations in Mexico while delivering continued revenue growth, margin expansion and a very strong balance sheet. A major driver of our performance over the past quarters has been the scale and pace of our network deployment. When we announced this expansion, it was an ambitious commitment. Today, the results speak for themselves. We successfully took our footprint beyond 19 million homes passed. This milestone matters because it marks the beginning of an intensified consolidation phase, where we will increasingly capture the returns from the footprint we have already deployed. Operationally, we keep solid momentum across both our expansion territories and our legacy footprint. Broadband remains the engine of our portfolio, and we once again closed the quarter within the 100,000 to 150,000 quarterly net adds range we have consistently communicated over the last 2 years. At the same time, we saw a sequentially lower churn, while our ARPU reached one of its highest levels, reflecting the effectiveness of our bundling strategy in driving retention and growth. In parallel, we continue strengthening our fiber footprint, reaching 84% of our subscribers served through fiber technology at the end of the quarter. With this level of penetration, we are firmly positioned as a fiber-based company, with limited legacy technologies remaining only in transition areas. This positions us to deliver superior service quality, higher bandwidth capabilities and a scalable operating platform to meet growing demand for high-speed connectivity. These results were delivered in a market that remains price-sensitive and closely tied to macro conditions, particularly across lower and middle income households. Even so, we continue to compete effectively by combining service quality, competitive pricing and a portfolio that meets evolving customer needs. From a financial perspective, the operational momentum continued to translate into solid top line growth and improving profitability. As you will hear from Luis, the mass market segment again delivered strong performance broadly consistent with what we have seen through the year. While the corporate segment remains softer, resulting in higher single-digit consolidated revenue growth. Profitability also improved, reflecting operating efficiencies and the continued maturation of newer territories. On capital allocation, we closed the year fully aligned with this discipline we're committed to at the start of 2025. CapEx intensity finished below the target we set for the year, representing a meaningful step down versus prior years. This confirms the shift we have been executing from heavy investment towards a more normalized and efficient investment profile. As a result, cash flow generation continued to strengthen, and it remains one of the most important near-term objectives. We are closing the year with a very solid cash flow profile, supported by improving profitability and lower capital intensity. Looking ahead, we are increasingly confident in our ability to convert earnings into sustainable cash generation as we move through to 2026. On the balance sheet, our focus remains on preserving flexibility and maintaining one of the strongest leverage profiles in the industry. This quarter, net debt and leverage ratio continued to trend favorably, and we expect this to remain the case in the coming quarters as profitability improves and CapEx continues to normalize. This reinforces the strength and prudence of our capital structure and supports our long-term strategy without compromising financial stability. The quarter's key message is clear. We are seeing the benefits of the investment made over the last 4 years, not only in subscriber growth and profitability, but also in our ability to deliver what we said we would deliver and more: that track record is important because it builds confidence [ what comes next ]. As we move into 2026, our priorities are clear: consolidate growth in the territories we built, keep advancing our fiber strategy, drive operational efficiency, and above all, maximize free cash flow generation while maintaining our investment-grade profile and executing with the same consistency that has defined this cycle. With that, I will now pass the call over to Raymundo for operational remarks. Please, Raymundo, go ahead. Raymundo Pendones: Thanks, Enrique, and good morning, everyone. During the fourth quarter, our operating efforts remain focused on consolidating both the expansion of our footprint and the ongoing evolution of our network. These initiatives continue to support improvements in service quality and operational efficiency while reinforcing our ability to compete effectively across markets, prioritizing value creation and sustainable subscriber growth. Within this framework, by the end of this quarter, our network infrastructure reached more than 108,000 kilometers, representing 7% annual growth and enabling coverage of 19.2 million homes, a 10% increase year-over-year. Together with the continued migration of legacy infrastructure, these efforts have resulted in 84% of our footprint being served by fiber to the home as of the end of the quarter compared to 75% in fourth quarter 2024. With this level of penetration, Megacable is firmly positioned as a predominantly fiber-based operator, with only a limited portion of its network relying on legacy technologies. Starting with our subscriber base. During fourth quarter 2025, we added 107,000 unique subscribers sequentially, ending the quarter with more than 5.9 million unique subscribers, reflecting continued traction across both our expansion and organic territories. Breaking down the mass segment services, Internet remained the main growth driver. By quarter end, Internet subscribers reached 5.8 million, up 9% year-over-year, or 494,000 net additions. Sequentially, we delivered 133,000 net additions in the quarter, maintaining a clear growth trend and staying in line with our expected range. In Telephony, we ended fourth quarter 2025 with 5.1 million subscribers, up 8% year-over-year, representing 372,000 net additions. Sequentially, we added 56,000 subscribers, in line with the role of Telephony within our bundled value proposition to enhance the overall customer offering. In the same line, our MVNO base reached 679,000 lines at quarter end, representing an annual increase of 23%. We added 39,000 lines sequentially and 125,000 year-over-year, continuing the growth trend we have observed since first quarter 2023 while maintaining the focus on postpaid services. In our Video content segment, we closed the quarter with 4 million unique subscribers comprised of 3.9 million traditional video users and 151,000 apps only users. Both of these services accounted for nearly 2 million active streaming app subscriptions at quarter end, up 99% year-over-year or 990,000 net additions, reflecting subscribers' preference to complement their video service with more than 1 digital app. This consolidated period reflects our strategy to further evolve the content segment into the combination of traditional pay-TV with a more digital integrated offering, increasingly aligned with changing consumption preferences. The continued expansion of our subscriber base translates into an increase in RGUs, which reached nearly 15 million, representing an 8% year-over-year growth. As anticipated, the churn rate declined sequentially this quarter across the 3 mass segment services, reaching 2% for Internet, 2.3% for Video and 2.6% for Telephony. Regarding ARPU, it is important to mention that starting this quarter, we report ARPU based on Internet subscribers, allowing comparison with the rest of the industry. Under this methodology, broadband ARPU stood at MXN 439.8 in this period, while ARPU per unique subscriber was MXN 426.3, one of the highest levels since second quarter 2022, mainly reflecting the price increases implemented during the year. Turning briefly to the corporate segment. Results remained soft during the quarter and continued market caution. While we did some sequential improvement, year-over-year performance remained under pressure, mainly in the corporate and carrier segment. However, we continue to focus on execution, prioritizing service quality, operational efficiency and a disciplined commercial approach. Going forward, as Enrique outlined, our priorities remain consistent: consolidate the expansion and modernization projects already deployed, continue deepening penetration in newer territories, provide the highest quality service to our subscribers and drive cash generation. In parallel, we will maintain a disciplined commercial approach, mindful of the challenges inherent in a highly competitive market and a slower economic growth. Thank you for your attention. I will now turn the call over to Luis for the financial review. Luis Zetter Zermeno: Thank you, Raymundo. Good morning, everyone. Before I begin, I would like to emphasize that all comparisons to 2024 numbers are made against the 2024 audited figures presented on April 29 of 2025. With that context in mind, throughout the year, the disciplined execution of our strategy focused on consolidating new territories and continuing to drive efficiencies across our legacy operations translated into solid revenue growth, healthy profitability and further progress in the soft landing of our investment cycle. In this sense, total revenues reached MXN 9.2 billion during the quarter, an 8% increase year-over-year, driven by robust performance in our mass segment, where revenues grew 10% year-over-year and continued to be our own main source of revenue. This double-digit growth more than offset a 3% contraction in Corporate Telecom segment revenues. Similarly, 2025, total revenues reached MXN 35.4 billion, representing an 8% increase over 2024, following a 10% year-over-year growth in the mass segment, supported by the combined effect of an expanding subscriber base and continued ARPU improvement. Before moving to cost and profitability, I would like to clarify that fourth quarter 2024 figures include specific extraordinary accounting adjustments made during the audit process, particularly the cancellation of account receivables with ALTAN, which increased the cost and SG&A base in that period, consequently affecting positively, EBITDA and net income comparisons made. Now turning to quarterly cost of services and SG&A. This amounted to MXN 2.5 billion and MXN 2.7 billion, respectively, increasing 6% and 1% year-over-year, remaining below revenue growth. For 2025, costs reached MXN 9.6 billion, reflecting a 5% rise compared to 2024, while SG&A totaled MXN 9.9 billion, representing 6% year-over-year growth. These results are mainly attributable to the expansion of our network footprint and higher labor costs, which were partially offset by efficiency gains as newer territories continue to mature. Excluding the receivables write-off effect, total cost and SG&A for the quarter continued to grow at slower pace than revenues, reaffirming the strength and operating discipline of our business. EBITDA totaled MXN 4.5 billion in the quarter, increasing 15% year-over-year with a margin of 44%, favorably compared to 41.3% in the same period of last year, supported by continued efficiency improvements, mainly in new territories. It is important to note that although the EBITDA margin in this quarter is the lowest of the year, this aligns with historical seasonal patterns, as the fourth quarter traditionally records the lowest margin. Following this performance for 2025, EBITDA grew 11% year-over-year, reaching MXN 15.9 billion with a margin of 45%, up 120 basis points compared to the previous year. Excluding the one-off impact of SG&A, quarterly EBITDA increased 8% year-over-year, while full year EBITDA rose 9%. Net income for the quarter was MXN 721 million, increasing 15% sequentially and 74% year-over-year. Likewise, 2025 net income amounted to MXN 2.8 billion, representing 20% growth versus 2024. Our results reflect the strength of our operating performance and an improvement net comprehensive financial results. Quarterly net income, excluding the ALTAN write-off, increased by 33%, while full year growth reached 18%. As we have already mentioned, profitability will strengthen further as depreciation continues to stabilize and the newly integrated regions mature. Turning to the balance sheet. Net debt ended the year at MXN 21.5 billion, decreasing both sequentially and annually. Together with solid EBITDA generation, this contributed to the net debt-to-EBITDA ratio decreasing from 1.45x in third quarter of 2025 and 1.50x in fourth quarter 2024 to 1.35x in this period. Similarly, our interest coverage ratio stands at remaining at healthy levels and providing the flexibility to meet obligations while continuing to execute our long-term strategy with discipline and consistency. As a result, we maintained one of the strongest leverage profiles in the sector, alongside a well-balanced mature structure. CapEx for 2025 remained consistent with our full year investment guidance, closing at MXN 9.1 billion, decreasing from MXN 10.3 billion in 2024, representing 25.9% of total revenue, in line with our objective of 26%. Likewise, CapEx to revenue ratio for the quarter declined from 29.2% in fourth quarter of 2024 to 28.2% in fourth quarter of 2025. This clearly reflects a deceleration versus 2024 levels and reinforces the company transition to a lower investment intensity phase. As the consolidation of investment begins to reflect -- be reflected in the results, cash generation driven from EBITDA minus CapEx, interest and taxes and leases showed strong performance. It rose from MXN 1.75 billion in 2024 to MXN 4.68 billion in 2025, representing 1.6x increase. This progress confirms the effectiveness of the strategy focused on the company's ability to generate sustainable value. Looking ahead to 2026, we will continue balancing profitable growth with discipline and prudent capital allocation. Our priorities remain focused on delivering positive free cash flow, preserving our investment-grade credit profile and further advancing the moderation of recent investment across both expansion and legacy markets while maintaining a lower investment intensity profile. In summary, we closed the year with solid profitability, strong EBITDA performance and improved leverage, all while meeting our CapEx targets. This strengthened operational and financial position will allow us to face future challenges from a solid foundation and generate long-term value for our shareholders. Thank you for your trust. I will now open the floor for questions. Operator: [Operator Instructions] Our first question comes from the line of Marcelo Santos of JPMorgan. Marcelo Santos: I have two questions. The first is like -- about CapEx outlook. So you were below your guidance, a guidance that I must say that was revised down a few times. So what is the outlook for the next couple of years? Could you provide us some color? Should this go down a bit more? Or should it stay at this level? So that's the first question. And the second question is, you made it very clear, generating a lot of cash. That cash is increasing. What is the use of cash? Because I think you are now generating more than the minimum dividend. So what is the decision -- what to do with this cash? Raymundo Pendones: Luis? Luis Zetter Zermeno: Okay. With the CapEx outlook -- Marcelo, thanks for the question, and welcome to the call. And we have been consistently delivering -- and it's consistent with the message that we have established that we are going to be reducing the CapEx to revenues ratio, and that will continue for the future years. Yes, there are some factors that may impact the speed of the reduction, like the -- or the shortage of some chipsets and memories that will impact somehow, the reduction of the ratio. But we are positive on the same outlook. We will continue to have a CapEx for 2026, we estimate between 24% and 26% and going lower than that on 2027. Unknown Executive: Okay. Unknown Executive: No, there was another question. Unknown Executive: Second question. Cash generation. Luis Zetter Zermeno: Cash generation, we have been established generating cash. We have to take in consideration that we have, in 2027, due debt that we have to define with the Board if we are going to reduce the debt or we are going to do something else with the cash generation. We are still analyzing the position, and we will define in the short term, what the strategy should be. But this is a great trouble to have, to define what to do with the cash generation instead of dealing with other type of situations. Operator: Okay. The next question comes from the line of Phani Kanumuri from HSBC. Phani Kumar Kanumuri: My first question is that, as you stated, the market is becoming more competitive and the consumer is weaker. So what is the strategy for your side going forward to maintain the 100,000 to 150,000 net adds? And the second question is that if you look at your net adds, the broadband net adds were higher than the unique net adds this quarter. And I was just trying to understand like, why is that the case? And then why have you shifted your ARPU definition to broadband net adds rather than -- based on broadband net adds rather than unique net adds? Raymundo Pendones: Sure, Phani. Well, our strategy remains focused in both expansion and organic territories. We have a great network. We put investment on the network and the product. We have a great XView product that we are integrating with different apps. So our strategy is to have the much more efficient price placed on the products that we provide to our subscribers, increase bandwidth, as we did in January. We're increasing bandwidth to our subscribers, and we are providing better apps and products to them so they can get in our company, the best service and the best quality. That has, with an aggressive price, proven to drive the growth of this company so far. It is good to mention that we have growth both in organic and expansion or in organic territories. It's not only coming from the new territories we have. So we're not going to move away from what we are doing right, and this is our strategy to have. Regarding the unique and the broadband, that was -- we have a great growth in broadband on that part, that some of them comes with double or triple play. And some of our unique subscribers that is lower on this part is because we are adding broadband to people that have video and video to people to have broadband, in that sense. So we are gaining more RGUs than what we have in unique subscriber. It was a unique position of this quarter. We expect to have very close growth in organic and broadband -- sorry, in unique and broadband subscribers in the future to come. So that will be the answer. Phani Kumar Kanumuri: Yes. And maybe, I mean, just a follow-up on the question. So you had now changing the definition of ARPU based on broadband subscribers rather than unique subscribers. Maybe, what is the logic behind that move? Raymundo Pendones: Yes, we're trying to be more clear to everybody because unique subscriber, it might be confusing, as you are having the question. Sometimes we have much more triple-play service, sometimes double. And sometimes we do campaigns for broadband compared to existing subscribers. The main comparison ARPU in the market is broadband subscribers, which is the majority of the connected homes that we have in the industry. And that's why we are trying to make a much more clear comparison on ARPU regarding other industry players. Operator: Next question comes from Valeria Miranda from [ Jeremi ]. Unknown Analyst: I have two questions, if I may. The first one is regarding the corporate segment. It has been decreasing for the past quarters, given the change in the commercial strategy you mentioned previously. But when do you expect revenue to normalize? And how much would this impact EBITDA? And my second question is given the increased EBITDA and free cash flow generation, coupled with declining net leverage, can we expect an increased payout in relation to EBITDA versus previous years? Raymundo Pendones: Thank you, Valeria. Regarding the corporate segment, yes, we had a tough year, as we say. But that tough year has good positive signs also for us. We changed the way that we commercialize some of the products. So now we have a much more contribution on the profitability of that segment. We were selling a lot of infrastructure on a cash basis. And now the market drives us towards more managed services that recognizes income on time on the future or in a period of time. So we posted a decrease in revenue with a higher margin in that case. And going forward, we expect that to normalize. We pretend to have a much more better year than what we have, trying to recover the levels of what we have in 2024 for that segment. As you know, we integrate and try to migrate the strategy of a connectivity company called Metrocarrier to a much more solution IT infrastructure company called ho1a Innovacion. We are maturing that product, and that's going to the market approach. And we expect 2026 to recover levels as I was saying that. The other one, I don't know, Luis, if you had it? That was right in the third one? Regarding decrease of... Luis Zetter Zermeno: I couldn't get the second one. Raymundo Pendones: Yes, I was trying to finish the first one. Unknown Analyst: Yes. Raymundo Pendones: Can you repeat the second one, please? Unknown Analyst: Yes. Can you hear me? Raymundo Pendones: Yes. Unknown Analyst: Yes. Given the increased EBITDA and free cash flow generation, coupled with the declining net leverage, if we can expect an increased dividend payout in relation to EBITDA versus previous years? Luis Zetter Zermeno: Well, as I mentioned in the previous question, additional generation of cash flow, which is still not defined, where it will go. What is -- our expectation is that it, for sure, will not reduce the dividend payout that has been given by the company. But it's still a definition from the Board. So we expect at least the same approach from previous years. And still to be defined, what the outcome or the use of the additional cash flow will be. Raymundo Pendones: That's the happy problem you were mentioning. Luis Zetter Zermeno: That's a happy problem. Raymundo Pendones: We have always been, Valeria, a very conservative company in that case. We're not -- we don't expect to change our dividend policy that we have right now on that, but we haven't provided a clear idea of what we're going to do in the future with excess of cash. We will talk to the Board on that case and do what's the best for the company and provide a solid balance sheet for whatever it might come in the future, whether to repay, whether to increase dividends or whether to do something else with that. So far, we maintain the same conservative approach that we have in the past. Unknown Analyst: Perfect. Enrique Robles: I would not discard the possibility of increasing our dividend. Because if we don't use -- if we don't find a better use for the cash, we don't see why we shouldn't -- we would not increase the dividend. Not as a consistent or as a change in our policy, but if we don't have a better use for the money, I don't think that the Board would not consider that. I think that the -- it's not -- talking to experts, it's not a good idea to maybe get the company to 0 debt. I don't know if that answers your question. Operator: And the next question comes from Ernesto Gonzalez from Morgan Stanley. Ernesto Gonzalez: It's just on how you're seeing competitive dynamics evolving in Mexico, especially if you could go into what you're seeing in legacy territories and in new territories? It would be great. Raymundo Pendones: Sure, Ernesto. As you all know, we have a very competitive market here in Mexico, and we've been having that for quite some time already. Our strategy is very simple, keep the most efficient company in terms of price approach to cost and EBITDA while being innovative and having the great technology. That's why we put -- almost 85% of the network is already FTTH so we can increase the speeds whenever the market requires that. And we continue to invest in the network so we can increase speeds even if we go above the competition. But it is not only about speed, it's also about the complement of the broadband with other services that we call content -- video content services. That's why when we talk about video, we don't talk only about traditional pay-TV video, but we are adding apps. We normally provide to our subscribers, a combination of apps that makes it very attractive to have content from us. And that's why we have so many RGUs coming from video. As we stand on that, over 2 million apps are already spread among all the subscribers of Megacable. So at the end, we do a combination of great service, good quality, good pricing. We continue to have the best price in the market while we have the best margin in all. And we're not moving to that. It's a very tight execution, and that's where we continue to focus. At the same time, we expect 2026 to make us a slight recovery for the corporate segment. And we will be focused on trying to increase the growth of that unit towards more IT solutions services and not only connectivity. Those are part of the studies that we have internally. Now talking about competition, well, everybody has different positions. Telmex has approached the non-increase of rates that is very similar to what we have right now. And we do compete with them in terms of providing, as I said, more products that we do have. That's how we managed to increase ARPUs slightly, but increase ARPUs while penetrating the market because we were able to sell more bandwidth and products to our existing subscribers. And at the end, when you compare to the other 2 competitors, they all have different particularities. Totalplay has a high ARPU in that part and some financial constraints on that part that make us be more aggressive and flexible towards that company in particular. And then Izzi continues to maintain their HFC approach with some of the -- with their subscribers. So it's going to cost them more to increase bandwidth compared to what we have right now. So we know what competition is tough on that part, but we know what our advantage is to all of them. Even compared to other technologies like broadband, like mobile, fixed mobile that is not done in this market because of -- not capacity from the mobile services and satellite, which is target -- as well as other parts of the world is targeted at a much more higher price and aimed to rural areas and not urban, okay? That's pretty much my vision of the competitive dynamics here in Mexico. Operator: And the next question comes from Lucca Brendim of Bank of America. Lucca Brendim: I have two on my side. The first one, if you could comment a little bit on what do you expect in terms of EBITDA margin going forward, if we should continue to see a similar pace of increase for next year compared to what happened in 2025 versus 2024? And how high do you think margins can go in the long term? And then a second question. Regarding the new regulator in Mexico, have you already seen any difference or something that has impacted the company that we should be aware about with the new regulator? Enrique Robles: About the new regulator -- let me talk about the new regulator. I think the new regulator is taking a very good approach. I think that it's a good surprise for us. We think that they are very much aware of the competitive scenario or landscape in Mexico. And they -- I think they will be a good player, let's put it out this way, in the market. They will -- they are very conscious, I think, and do a good diagnosis of what's needed to get a much better competitive landscape in the market. And the other question was... Luis Zetter Zermeno: EBITDA margins and the expectation for the future. As we have seen, the organic territories has sustained, on a very good levels. Not at the 50% that we had in the past, but 48% to 49%, and is very consistent. And we are also increasing the EBITDA margins on the expansion territories. So our expectation is that the margin overall is going to continue expanding. And we foresee around 50 basis points, which is consistent with the latest years' growth, 50 basis points expansion per year and reaching 47% to 48% by 2028, more or less. Operator: And the next question comes from Pablo Ricalde from Itau. Pablo Ricalde Martinez: I have one question on your pricing strategy for 2026. When do you expect to raise prices? I remember last year, you did the one in March, April, if I'm not mistaken. Just trying to check when do you expect to raise prices this year? Raymundo Pendones: Sure, Pablo. We have 1 price increase already in January that we did. But the way that we do price increases is divided among all the different segments of our subscriber base. Let me explain to you. When you have new subscribers, the price increase comes when the promotional price finish. When you have all subscribers, it comes once a year. Or when you have subscribers that has been having an upgrade or downgrade in the service, the price increase will come when that operator downgrade finish. So it is tough to say what time of the year, but the first that we have was in January, and we may have another one to another subscriber base by the third quarter of this year. Operator: Now we come for another question from Andres Ortiz from BTG. Andres Ortiz: I would like to double tap on the competitive environment. I recently saw that your basic plan now offers 200 megs. I believe you are competing more in speed now, right? So the speed offerings have increased materially over past years. So I just want to understand what's your view on that? And what competition are you seeing? Are they following you? Is it more difficult today to increase ARPU through this view? Or what should we think that? And I will have another question after that. Raymundo Pendones: Thank you for the question, Andres. I will expand on the first explanation I did about the competitive. Yes, we increased speeds to 200 megs. We have a brand-new network. It doesn't require from us, additional CapEx than what we have before. All our network can be upgraded to different speeds, still to our subscribers without requiring that. But it's not only bandwidth, what we are providing to subscribers. As I said, we are increasing the content proposition in terms of apps and trying to maintain the proportion of double to triple play packages. That means video over broadband and telephony. We're one of the highest provider of video in the market. But all of that at a very affordable price that can help us penetrate the market. We do not decrease ARPUs more significantly because we continue to grow from the expansion territories. And when you have a large base of subscribers coming from promotional or promotion prices, they have a lower ARPU. That's why Luis was explaining that we expect also as expansion continues to grow in the future, margins to come to the levels that what we have. Not the 50%, but levels of 47% to 48% in total in the 2 or 3 years to come. That might resume the competitive landscape that we have on the bandwidth. Also remain that our technology, it can be upgraded, not from what we have right now in GPON, XG-PON that we have and we can do in areas, strategic areas where we require for high-end customers. So we're very, very, very strong for the future in terms of bandwidth. And that will also help us to compete with other technologies, whether it's wireless or satellite, in the future to come. Fiber is still the name of the game for broadband, and that's part of our strategy. That's a strong part of our strategy. Andres Ortiz: My follow-up will be exactly on margins. You mentioned that over the long term, 47%, 48% makes sense. That will be for the cable operations, right, not the consolidated business? Luis Zetter Zermeno: No, it will be for the whole company. Raymundo Pendones: It's for the whole company. Operator: Thank you, Andres. At this moment, we don't have more questions in the line, but we have one question from [ David Simon ] from [ Alpha Sydney ]. Can you please discuss the stand-alone streaming app economics and the strategic value to the firm of this offer? Raymundo Pendones: Sure, David. Well, as of today, we try to keep the streaming app strategy tied to our XView platform. We believe it's the best proposition for the subscriber and the best for the organization. So if somebody wants to have a big offer or a good offer on streaming, they have to be part of our XView platform so far. We have some markets and some customers that we can provide to them, single apps to the broadband subscriber. But as of today, we are trying to keep all tied and just provide a single proposition. Whether you want broadband, you have 200 megs. Whether you want broadband with content on that part, you get the best of the XView pay-TV platform, call it that way, plus streaming that is included on that price. And that's the strategy we have so far. Operator: And we have a follow-up from David. Luis, could you explain the expected deferred tax dynamic as CapEx begins to normalize over the next few years? Luis Zetter Zermeno: Sure. Yes, we benefited on the tax levels from the deferred taxes. And we expect a consistent slight reduction over the next few years as he mentions that CapEx is normalizing. So we expect a slight reduction over time. Operator: Okay. We have no more questions. So I'll now pass the call over to Mr. Yamuni for final remarks. Enrique Robles: Okay. Thank you very much. And as always, it's a pleasure to discuss our results with you. Please contact our Investor Relations department if you have any questions or concerns regarding the company. Please -- my -- our -- we're grateful for you -- with you for being in this conference and in the future conference and your interest in the company. As always, we will put our best effort to deliver great results to our shareholders and great results for the communities where we serve. Thank you very much, and have a great weekend. Unknown Executive: Thank you, all.
Thomas Hasler: Excellent. Good morning, and a warm welcome for all here in the room, visible and also a warm welcome to the invisible that are virtually joining our media and investor conference. I think the short video has brought everything to the point, and I will go and bring more, let's say, details into it, but it has been very well, let's say, aggregated here. But before I start, I would also like to share my sincere gratitude with our 33,000 employees. Many of them are also following this call here, and it is really amazing to see how committed and engaged our employees have supported the company with the many initiatives globally in 2025. And it is also, let's say, the source of the strength of the company in delivering in tough times also outstanding results, shaping for the future with the support of our employees. That's what makes me feel proud to be at the top of the company, but representing 33,000 employees. Now let's look at the agenda, which will follow the sequence of sharing some of the highlights here of '25 from my side, but also then give some flavor to the strategy execution. And then very interesting, how are we doing on the business implementation, key elements which are driving growth into here as well as into the coming years, also supported then by the regional manager, Christoph, Mike and Philippe, which then will also give us a bit of flavor on what's going on in the regions. Before then, Adrian is going to make a deep dive into the financials of '25, then followed by the outlook for '26 as well as then the Q&A session at the end of the session. But I think before I go into the highlights, I would like to emphasize here the strong foundation that Sika is built on and is able to also then outperform the markets, increase profitability in the future. And I think most prominent, Sika is the undisputed leader in the chemical construction market by far. This gives us a leading edge access to big project, access across the channels as the brand stands for top performance, top value and is recognized as a clear benchmark. And wherever in a challenging environment where complexity is increasing, Sika is the first source to go to, to help the specifiers, to help the architects, to contractors to overcome those challenges because they can count on us, us providing value-add innovation to overcome the pain points of the industry. This, of course, is what we bring to the market. Inside, it is this innovation drive, constantly challenging status quo, always look what is out in the market challenging our customers, our contractors, applicators and see how we can remedy those pains with intelligent innovative solutions, helping them to overcome those complexities. This is a key element which we also see represented in the appreciation of our customers when we look at the Net Promoter Score that Sika has, clearly ahead of anybody else in the market. At the same time, talking about the market, construction market is a market that has a lot of influential elements in there. The higher the confidence in the future, the more investments flow naturally into construction. We are facing a period of a lot of uncertainty. Therefore, let's say, markets are hesitant to invest, not all of the markets, but some of the markets definitely, and it is dampening, let's say, the construction activity short term. It's a cycle that we see that is influencing, let's say, the markets overall, but this is also an opportunity, a down cycle is an opportunity. And we took this last year, and we installed an efficiency program, a productivity program, providing our organization a leaner and a more agile structure and also investing into digitalization as a key driver of future differentiation potential in the market with a clear aspiration to be in our market, the digital leader. Just like we are the innovation leader, market leader, we drive for digital leadership. And this we took in, in '25, and we will see also how nicely it will generate the potential for us to outperform the market and also to generate margins increase. The organic growth traditionally ongoing is paired with our bolt-on M&A strategy. We have a fantastic track record over the past 15 -- 10, 15 years with many, many bolt-ons. And we will show later on a bit the flavor of how accretive and how strong the integration power of Sika is. This can be anywhere on the planet. This can be a mature market. This can be an emerging market. We have here clearly also established the skill set to spot the most attractive prospects and then engage clearly based on KPIs that are oriented towards return generation and synergy generation and accelerating growth and, the best one, for transactions. And then when we close, we instantly step in and drive then the integration and the synergy and the expansion of the business via cross-selling, via channel activation and leveraging our global portfolio. So this is the foundation. This is why we are very optimistic and very confident about our ability to outperform the markets as we have also stipulated in our midterm strategy by 3% to 6% in local currency. Now talking shortly and briefly about the markets and here starting probably with where exactly probably a year ago, we were guiding before the tariff, let's say, uncertainty was revealed and which had massive impact on the North American but also ripple effects across the globe with uncertainty related to tariffs going up and down. This has been a sentiment that has stayed for '25, which then also triggers into lack of consumer confidence further increasing in China. As you can see, almost 50% of the residential market reduction within 2 years, very much also here linked to the uncertainty of the global markets, which has also then triggered our reaction to the Chinese business. And towards the end of the year, as if not needed, another element that came with the longest U.S. government shutdown that again was hindering projects to start, waiting for permits, waiting for approvals, which was, again, an element that was unforeseeable. But it is what it is. Overall, we conclude last year's, for us, relevant market had a roughly decline of 2.5% given all these elements. Nevertheless, that's where we come into our performance. And here, our outperformance of the market, with a 0.6% growth in local currency is a demonstration that even under severe, let's say, weather condition, the company can deliver. Also, on the operating EBITDA, if we take in consideration also the steps we took with the Fast Forward program, only a slight decline in the operating margins, while we, of course, see negative leverage with a low organic or negative organic growth rate. Very obvious here also visible, the strength of the Swiss francs has been, once again, let's say, a translation effect. But of course, when we look at the reported numbers, it is quite heavy with 5.4% FX implication in 2025. I talked already a little bit about the actions we took. The market is soft, it is muted. But at the same time, this is the time. This is the time for strong companies to act, to prepare. Because every cycle comes to an end. And we took the decision in the second half last year to shape the company not only in China, where we have been rebasing the business, but globally to say this is the opportunity. This is the time where we can and must take proactive steps, making a leaner, more agile organization, also investing into our operational footprint in automation and efficiency to be able then also to kickstart when the cycle turns up and take advantage of ready-to-roll organization. We paired it also with investments on the digital front as the digital journey can be accelerated, and we took the decision here to fast forward our digital journey with clear elements that we will show later on also in transforming our business more digital and aspiring for a digital leadership in the industry. And all these investments come with a fantastic return, less than 2-year payback and up to 100% return on the individual investments. Now when we look into the regions and here, if we look at the outperformance of the markets, 2.2% in local currency was the growth in EMEA. In EMEA, very clearly, we have pockets of growth like the Middle East, Africa, Central Asia. We have parts of Europe that showed improvements towards the end of the year, Eastern Europe, the parts of Southern Europe as well. So here, momentum that has built up and is then also demonstrating our outperformance in EMEA. The Americas, our second largest region, as well had a strong start into the year. So January was fantastic. February, until about the time of the month as now. While still going in the same direction. We had good momentum coming from '24, building up momentum. Unfortunately, that was then softened over the course of the year, and there is also still a prevailing sentiment in the Americas. But in the Americas, we also have great pockets of growth, like the tech investments. The investments in data center is booming, is, let's say, increasing the commercial construction spend quite tremendously, while other commercial constructions are lagging. So the data center boom and our strong position as a forerunner and as a peace of mind provider to the owners, the hyperscalers give us here a leading edge. And just to give that a bit in perspective, we have been participating in over 4,000 data centers globally so far and let alone 400 last year, thereof 230 in the Americas. So this is a pocket of growth of substantial contribution. Besides that, Latin America, the markets are more resilient, just like other emerging markets have demonstrated here more resilience to the global uncertainties, which brings me over to Asia Pacific. Asia Pacific reported a minus 5.2% in local currency. If we take the China construction market out of the perspective, it would have been a growth of 2.9% in local currency. And here, as I mentioned before, very much driven by strong momentum in Southeast Asia, in India that is partially offsetting the weaknesses in China. Now when we talk about outperformance, outperformance of the market, a market that has been roughly 2.5% down, we compare us to the peers. We have established this peer comparison for quite a while. And as you can see here on the left-hand side, if we take in all the relevant peers and their activities in the construction chemical market, we are outperforming our peers by roughly 2%. In '25, we don't have yet the full set of numbers. So this is still work in progress and will probably also then shift a little bit as Q4 was not only for Sika, a challenging quarter, it was also for our peers a challenging quarter. But more relevant, none of our peers that are in this list here is really active in China. So when we take, let's say, the comparable geographical spread of the peers and us, then on the right-hand side, you can see the outperformance consistently being almost close to 3% to the peers, which are, in our expectation, also slightly above the market trends. Now some of the highlights which we are particularly proud of is the increase of our gross margin, our material margin increased to 54.9%. This is a testimonial to the strength in value selling. This is the value that we bring through our innovation into the market. We are recognized as a value provider, and the return of our customers by utilizing our products, our innovation is speaking for themselves and is driving this material margin progression in '25. But as you can see also coming from '23 to '25, steadily increasing our material margin. I think a particular strength of the company is the strong cash generation also in light of, let's say, lower EBIT in absolute numbers, driven by the onetime effect of Fast Forward as well as the strong currency. But when we look then what the company constantly delivers in the last 3 years, solid double-digit returns in cash, which is almost CHF 1.4 billion that we can then redeploy into investing into our business, giving it back to our shareholders as well as investing into bolt-on acquisitions. So that's underlying, I think, an element of we are also capturing going forward. Another highlight we have not talked so much about, but our aspiration to be leaders in the industry is not only on financial targets oriented. It is also our employee safety. In '21, we launched a program. We set the high mark and say we want to be a leader on safety for our employees. And as you can see, this is a journey. This is a journey which gradually improves. And in the meantime, we have reached clearly above industry average standard, but we are not stopping. We want to make Sika the safest workplace in the industry, and we are investing heavily together with our employees to create this safety culture, which is progressing very nicely. It makes me very proud that our employees are supporting this journey as this is not dictated by top-down. This is ground-up supported. And this is also when we look into what it means behind, let's say, the numbers, it means a safer and more, let's say, streamlined and more process-oriented and more, let's say, transparent organization, which leaves less up to chances. And that's, of course, also a value driver for other stakeholders as this is a part of getting transparency and getting efficiency throughout the organization. Talking about the nonfinancial metrics, I think we can be proud. We are constantly delivering on our nonfinancial commitments. On the greenhouse gas emission reduction, Scope 1 and 2, the ones that we heavily influence, the water discharge reduced by 3%, waste disposal by 5.7% and as mentioned, 14% on the safety side. These are all value-accretive elements, which are transferring into efficiency, into tangible also financial benefits for the company and its shareholders. Talking about the other element, the organic element, very important, reinvesting into the organization, reinvesting into safety and so on. It's the bolt-on acquisition strategy. We have been able to sign 7 and close 6 of the transactions in '25. I think here, most remarkable also, as you can see, 2 of them in the Middle East. This is a booming area. This is a double-digit growth area where these 2 acquisitions are spot on, not only bolt-on, they are spot on to market demands that are also expected to continue to grow in the near future. We also made a bold move in Scandinavia transaction, giving us here on the mortar side, a very strong footprint. And as you may recall, we have a very strong adhesives and sealants footprint in distribution in Scandinavia. We are combining these 2 strengths and also aspire to be the undisputed leader in distribution with our strong brands in Scandinavia. Here also a very clear value and growth-driven acquisition, with the others then also supporting mature markets like in Singapore or HPS in North America. We invest in our own capabilities, our factories. Here, some of them are expansions into demand-driven geographies like in South America, too, like North Africa, Morocco, a booming economy, also here, covering more space in that country. Kazakhstan, as I mentioned, Central Asia, a booming area, but then also in China. And here, maybe I would like to elaborate. Suzhou is our main site. It's our headquarters close to Shanghai. We have opened the factory for adhesives and sealants for the automotive and industrial manufacturing business. We have great success. The plant opened in the second half last year, and we are gaining share with the Chinese OEMs so that we are already now considering a further expansion of the capacity as we see. With this fully automated, with this state-of-the-art, we are having good traction with the Chinese OEMs, bringing them top-level global innovation into their manufacturing processes. And it's just an example of our constant investment also in upgrading our operations, our footprint and gain more efficiency and productivity. Now let me quickly look in the last 6 weeks. I mean, here, the year just has started, but I think it's remarkable how the year started because in the first 6 weeks, we have opened already 5 new additional plants. And that's just mentioned before, very much demand driven. We have a very strong concrete market in the Southeast of the U.S. So Florida is a booming area. We put the most modern plant down for admixture with fully automated capabilities in the plant near Orlando. We then also expand in Latin America, in Colombia and in Argentina, which is a constant growth platform for us. Bangladesh in Southeast Asia as well as in Africa, with a new plant near the Victoria Lake, 800 kilometers away from our headquarter, also covering this strong growing market there in the East African market. And then, very exciting. I think we reported that just lately, the acquisition of Akkim in Turkey. Turkey is a powerhouse. It's an engineering powerhouse. It's a powerhouse that is very influential in the Middle East and Central Asia. This company has a fantastic footprint, has also a foot into Romania, so in the Eastern European market. And we are very happy that we are now able then soon to build on that platform, bringing our expertise, our technologies from the construction chemical side together with the sealant and adhesives into the core markets of the Akkim and in reverse also bringing the Akkim products into the Sika world, into Europe, into other parts of the world as they perfectly fit our portfolio for distribution. And as mentioned before, the seventh transaction of last year, closed end of January. So Finja was a fast-track acquisition, signing early December, closing end of January. And it's a sizable, excellent platform, which we are utilizing now also to drive above-market growth in Scandinavia and utilizing this to leverage our synergies into the market. Maybe a short segue into the adhesives business. We haven't talked that much about the adhesives business, but it is underlying representing about 30% of our business. It is relevant or mission-critical in all our markets. It's in all channels, has a very predominant position. It's an enabler. It's a typical enabler to move from traditional bonding techniques to techniques that enable multi-material structures that enable also smart decarbonized buildings. So it is a key element on the journey of all these industries, and it comes with very attractive innovation-driven features where we have here a clear leading edge, providing here state-of-the-art innovation like the Curing-by-Design that is enabling our customers to advance their design and their construction and manufacturing processes. In the adhesives field, it's all about the brand. If you go from DIY over to the big box, if you go into the professional, it is all driven by a few core brands, and Sika is a core brand on the adhesive side. Sikaflex is standing as a synonym for bonding in many market segments. And so that's the leverage potential which then also enables us to take full advantage in all segments and channels. Now quickly on the strategy execution. I don't need to go deeply into. You have seen this. It is a reconfirmation from our side to our midterm targets, gaining and outgrow market share in a profitable way. That's, in short, the message as a takeaway also on the financial as well as on the nonfinancial, very clear and transparent journey towards '28 that we have always communicated. Now in the background, we have a strong position. As I said, we are undisputed market leader with 12% market share in a CHF 100 billion market potential industry. And it is highly fragmented, which means the winner can take it all if you act like. And that's what we do. We take market share out of the position of strength. And when you look into the different target markets, the 8 target markets, you see a lot of differentiation, but there's the one common theme across all of them, this value-add product focus. In all these target markets, when you talk to contractors, when you talk to owners, when you talk to specifiers, architects, you will hear this common theme, Sika is clearly leading through value, providing exceptional value to the construction to the manufacturing industry. That's what we stand for. That's what we are leveraging. That's our innovation drive. We're also very well balanced when we look across the different markets, coming from the infrastructure side, the commercial construction, residential construction and then also the manufacturing industry, the automotive and the industry segment, where we have a good share in the global business. Also, when we look at the new construction and refurbish, mature markets are more leaning on the refurb side, emerging markets more on the new. But also emerging markets like China, for instance, are moving very clearly into becoming more and more also refurbishment or renovation market. These are all elements that we balance very well and where we have the competencies to also bring this to the local market situation and bring those competencies to the 102 countries that we have worldwide. The market penetration, the outgrowth of the market, this picture you have seen before. I talked a lot about the leverage potential that the company has that we are utilizing the cross-selling, cross-selling in simple terms, these projects have multiple needs of solution from waterproofing, from bonding, from sealing. It is here the clear aspiration to make us the one-stop shop for our contractor, for the applicator and leverage our great recognition in the market. The multichannel approach, I mentioned it before. It goes from the direct business all the way to the e-commerce business where the brand is super relevant, where, let's say, the specific solution for specific customer is super relevant. We cover it all, and we benefit here also to leverage that across all these channels. Go where the money is. In very simple terms, it is a call for action for the local organization. Don't come back and tell us what is not going so well. Look for the pockets of growth, look for the activities that are still going strong and invest there. And here, data centers has an absolutely clear outstanding element, which is happening everywhere, as a go-to, but it is also infrastructure spend is much less influenced by market downturns. Infrastructure spend is a way also to take advantage of the resilience of the infrastructure, spend time there. This is the call for action for our local organization. Don't explain. Drive business where you have pockets of growth and utilize the group-wide expertise to drive this. Key geographies, it's Europe, North America, China, always in focus, always, of course, key decisive markets for us to be very close to and demonstrate our leadership in these leading geographies. And innovation above everything, I repeat myself, innovation at the core for reason being driving value, driving market share gains and ultimately outperforming market situations, whatever they are. I like this slide very much. We put this together in a simple term to demonstrate. Innovation is not coming just by saying so, it requires strong commitment and investment. And we are constantly investing into our R&D in our 16 global technology center, which then also are influencing the 100-plus local -- very local R&D facilities, 1,800 chemists, more than 5% of our employees are working on the innovation path and spending substantial money on innovation, CHF 280 million, our annual R&D spend. This is the investment. What then comes out is innovation, is patents, is unique approaches, which then are converted into solutions, which generate value for our customers, are protected by IP, but are then recognized ultimately when we look at what our innovation power is delivering, it's delivering -- it delivers 3 to 5 percentage point higher gross margin. It represents almost 1/4 of the products with less than 5 years in the market. This is then also showing the power of innovation in our markets. An excellent example of this is an innovation that we brought just before COVID to the market. It's novel. It's a patent-protected waterproofing membrane, which can be used pre and post applied, to do basement waterproofing in a way that you have absolute peace of mind and don't need to fear any water leakages. This is picking up pace, with a 27% CAGR. It is a highly specified solution. So it takes some time until it spreads, but it spreads very quickly, especially in the Middle East. And I have here the picture of the Al Maktoum International Airport that is under construction in Dubai. This is a huge project, almost 3 million square meters of waterproofing membranes are utilized. We are the sole supplier. We are here also adding another landmark construction building to the success story of the SikaProof A+ membrane system. Also data centers, I can't talk enough about data centers. We love the owners because the owners love us. They love that Sika gives them peace of mind, that they get the highest reliable performing solutions so that they can execute inside the shell by not having to care about the shell itself or disruption from the roof, from the walls, from the floors. That's why we have been very early the preferred choice as we stand for this reputation. The roofing as a particularly important part, has further advanced. We bring a self-healing membrane to the roof, which means that the roof membrane can also absorb and correct impacts from nature. Hail, for instance, is here a painful disruptive element, but also just the UV sunlight in Arizona is quite different than here in Switzerland. So these are elements that are super vital. On the other hand, the fibers on the concrete floor, these are taking out carbon emission quite heavily as we can replace steel. We also have lower maintenance costs. We have higher robustness of concrete floors with fibers, and it is very appealing to data center owners to advance here and also contribute to decarbonize their buildings. Coming back to M&A, bolt-on M&A, I think we have indicated at the last time also how accretive bolt-on M&As are. And as you can see here, we look at the pre-synergies EBITDA multiple at the time when we kick off the integration. And then within the third year of the integration, we achieved a 4x lower EBITDA multiple. So an improvement that builds on our possibility to accelerate growth, top line growth, cost synergies, cross-selling synergies and ultimately, then also drive the EBITDA growth of the acquired company. This is, in our view, a superior way to provide capital returns, and we are lining up more to come in the near future. Akkim, just one perfect example of one that soon is going into the implementation mode. The big one, MBCC. We like to talk about the big one as it has generated tremendous synergy across the organization. Last year, our second -- let's say, full year after the closing, we generated CHF 182 million. And when you look back when we signed the deal, we had CHF 160 million to CHF 180 million for the full third year as synergy commitment. And we have raised it twice now. And as you can see, at the moment, we are already above the original third year synergy level, and we have increased the synergies by 25% over the last 2 years, which is a testimonial for faster integration and also higher synergy gains on the cost side as well as on the revenue side. Now business implementation. Looking into some key elements, and I come back to the data center because it's not only, let's say, the roof and the floor, there are many more elements, mission-critical to data centers. As you can see, the flooring solution, the precast, many of them are precast solution where we are with the precast, where we are then also with the joint sealants that are very important to make sure that there is no interference. The concrete itself, the admixtures, the fibers, fire protection, super relevant in data centers. That's why also the roofing systems are preferring our PVCs over other technologies as best-in-class fire protection solutions. And as mentioned, we have a reference list of more than 4,000 completed data centers worldwide. And here, a fast pace with 400 last year in execution, 230 alone in the Americas and more to come. And you will hear more then also from my colleagues from the region. This is a clear focal point for us to also outperform the markets in general. Not to forget infrastructure. Infrastructure, megacities are suffering of lack of infrastructures in emerging markets, as we can see here, we have here Brazil as a good example, but you find it in Santiago, you find it in Southeast Asia, everywhere, there are infrastructure construction ongoing. The same happens also in mature markets here, the example from Munich, from the S-Bahn station in Munich, the deepest S-Bahn Station in Germany. Also in Auckland, this is ongoing. And these are high-profile jobs where, again, the reputation and the possibility of Sika to be the, let's say, one source for many solutions make us a premier supplier to those big projects, and it's also, as I mentioned before, an area where there is constantly flowing money as the need for infrastructure upgrade or new infrastructure is endless and growing. Another important part there are, let's say, the infrastructure in regards to ports. We see that the globalization, as we have experienced, is questioned and more and more ports are built for more regionalized or, let's say, for a new supply chain setup. Here, a good example from Vietnam. Vietnam is one of the, let's say, countries that is benefiting from moving out of China into, let's say, a more neutral territory. So here, a lot of construction ongoing. And when you look also what's going to happen in the near future in regards to the port infrastructure, again, very, very, let's say, high-end construction. Here, we talk about exposure to seawater, exposure to heavy-duty traffic. This is again a field where Sika has a leading edge and is very involved and taking benefit of those momentum. One that we have talked a lot when we talked about the China expansion of the retail journey. It is still ongoing in China. We will hear that later on. But it has made its way into Southeast Asia. When you look at the chart here, where we were in 2003, we had roughly 80,000 point of sales in Southeast Asia. We had 90,000 points of sales in China when we took over Parex in 2019. China is now at 280,000 point of sales. But I want to talk about our journey in Southeast Asia, which is already now at somewhere around 170,000 point of sales, and we are rapidly expanding our point of sales across Southeast Asia. And as you can see, it comes with results. It comes with double-digit growth in that segment, and we expect here a good mid-teen growth also for the years ahead of us. And it is not only an Asian topic. You will hear it is also spilling over into other emerging markets in EMEA or in the Americas. But let's now have the regions give us a bit of flavor of their growth initiatives. And Christoph, if you would like to kick it off with the largest region, EMEA. Christoph Ganz: So thank you, Thomas, and good morning, everyone. So I think giving a reliable outlook for EMEA for this year is a bit like crystal ball reading in these volatile times. Nevertheless, our main first and foremost target remains. We want to outperform our markets. We want to do better than our competitors. This is what we measure basically every quarter. And here, I would say we don't have to hide ourselves, although, of course, we're used to different growth rates than the 2% that you have seen. So looking into this year, I would say, for Europe, we will see, but I don't think we will see big, big improvement. Markets -- most markets will remain challenging, although there are some pretty good positive recovery signs, mainly in Eastern Europe, I must say. So we had a very strong second half last year in Eastern Europe. So a lot of money from the European Union flowing east, going into infrastructure mainly. And here, I must say, I believe that we will see a continuation of this. Also for the Nordics, we expect recovery. We see this already. And here, we're very well positioned with the recent acquisitions that we've done, the mortar companies in Sweden and in Denmark. I think here, we have -- we built here a pretty strong position also in comparison to our competitors. And also France, I think France comes out of 2 to 3 years of really soft markets, kind of recession also, and we have been suffering there as well. And we see signs of recovering. We also believe that '26 will be a better market because there's quite a backlog of residential housing. People have to live. And there is not -- there are not enough houses and apartments there. So we will see this -- the French market already improving here. Germany, I must say, we've been pretty positive. Actually, we heard about this EUR 500 billion that the Germans want to invest into infrastructure. We haven't seen so much of this yet. So quite some delays, a lot of discussions, bureaucracy, et cetera. We will see when this comes. We're ready. We're there. This is our second largest market after France in Europe. We will definitely see continued growth in Middle East and Africa. You've seen it from Thomas. These are double-digit growth markets. And it's -- of course, it's a big pleasure to see how we're doing there. And I think Sika has very strong position in these markets in all of these countries. So where there is investment, we're there. We're having factories, we're having strong organizations. You've seen the Maktoum Airport on Thomas slide. I mean, this is probably our largest purchase order we have received so far from that region, and it's just the beginning. So overall, we remain humble. I think it's probably the best strategy these days, although we want to do better than all the EMEA markets for sure, but we believe in a gradual improvement over the year with definitely a stronger second half than the first half. Talking about growth initiatives, how we want to do that. And this is just a selection, but I would say it's some of the key focuses that we have. Sure, infrastructure, this continues. Also in Europe, I must say, there is money. Sometimes I'm wondering, I think European Union flows faster into Eastern Europe than it flows into Germany and France. Bureaucracy here is not really helping, but there are incredible projects going on. I was just in touch with our Romanian friends yesterday, a lot of road repairs, bridge repairs, and these are big businesses for us in Sika. There is investment into energy everywhere, not just in the Middle East, also in Europe, nuclear plants that are being built, and these are all mega projects for us. Airports, you've seen all the projects. And I would like to mention here also defense. I cannot speak too loud about this, but there is the billions of euros going into defense, mainly in the East, also in the Nordics, the infrastructure project roads, hangars for planes being built. And here, Sika is very, very well positioned. So we're selling, for example, our epoxy flooring systems into these hangars that are being built for all these fighter jets that a lot of companies are buying. And then a bit of a new topic for us, residential, linked to commercial, there several really large real estate developments happening in the EMEA region. One we have listed here on the picture. It's called Ellinikon. This is a Greek investment, actually. It's a Greek investment company on the old premises of the Athens Airport. This is EUR 8 billion investment. And Sika has already started to deliver several million of euros, and this will take a few years. It's like a bit like an espresso machine. Once you're in, they continue buying from you, and it's -- we have a very strong position. We're clear #1 in Greece and full range, and we just -- luckily enough, we're just investing in a new -- in an expansion of our plant in Athens. So we will have a lot of capacity now to go after this one project. There are other residential developments like in Ras El Hekma in Egypt at the Mediterranean actually, this is a $35 billion investment from a UAE company. And it's a city, same like Ellinikon, with houses, with offices, marinas, roads. I mean this is just paradise, of course, for us in Sika. We have dedicated people that work only on these projects and try to penetrate these projects to the maximum. Data centers, you heard it already several times. So right now, in region EMEA alone, we are actively working on 106 data center projects. Each of them gives us sales CHF 2 million to CHF 3 million, some even a bit more. Sika is very well positioned here. These days, everybody talks about data centers. We were -- I would say we were the first company in the U.S. when the data center boom really started. Now it's coming over to Europe, even Africa. Interesting enough, they're building data centers in Morocco, for example. And here, we have all these references. And of course, this helps us to make sure we get -- we participate in these projects wherever they're being built. Pharma, also independent of the economies, the 30, 3-0 big pharma projects happening in EMEA right now, also in the Middle East. And these are always mega projects for us. And then, of course, food and beverage, also independent of economies and how they're doing, beer companies investing, my famous fish farms, everybody is always making fun of me, but this is a lot of money here for us. A lot of fish farms being built all over Europe actually, and each project has several million of sales potential for us. And last but not least, retail distribution. Retail actually is doing, has been doing well. Whether there is a crisis or no crisis, people are investing into their homes to cheer them up themselves. And here, our strategy is to transform our professional products into let's say, more consumer products. And I added here one really fun picture from a pilot, which we were doing actually a pop-up truck store. We put the truck during 1 week in front of, I think, 3 or 4 do-it-yourself stores in France, only one product. It's actually a cleaning product for your algae and moss on your terraces. They get green always during winter. You buy this product and fantastic. By the way, we sell it also in Switzerland. So you can clean your terrace, EUR 1 million sales in 8 days. We couldn't believe it. And of course, now this has encouraged us to further scale this up and do this kind of pop-up truck stores also in other countries. So all in all, our job is to grow and not to be depressed or pessimistic or so. Markets are what they are. It's our job to be optimistic and to beat markets, to beat our competitors. We have it all. We have the range. We have very good people. And that's why I remain positive also for 2026. Handing over to Americas, I think. Mike Campion: Okay. Thank you, Christoph. Well, it's always great to follow Christoph. We get the excitement going and moving already early in the room. So good morning. It's now my pleasure to discuss the forecast for 2026 in region Americas. So as you know, we saw a very challenging market environment across the Americas in 2025, where markets were really constrained. And this was by economic, by regulatory and trade policy uncertainty. And we say uncertainty. I believe I heard the word uncertainty more from our customers and partners in the last 12 months than I heard in the rest of my life combined. But from tariffs right down the line, we had these difficulties. This uncertainty will certainly continue in the U.S. and I'd say, to a lesser degree in Mexico in the first half of 2026, while Canada and the rest of Latin America will be slightly more positive to start the year. We've seen excellent growth really throughout Latin America with the exception of Mexico. And Canada was very strong in '25 and really starting the year incredibly strong in 2026, also led by some really nice infrastructure projects and continuing to expand their market position in trade. We expect the U.S. market and Mexico to also improve in the second half of the year as our backlog of projects start to get released. Now our markets in '25 and now again in 2026 are largely driven by our continued success in mega projects. Now when you say mega projects, we classify these projects as those projects with a value exceeding USD 1 billion. So while we saw quite a soft demand overall in our baseline business really throughout the region, these projects continue strongly and allow us to continue growth. So we've really -- Thomas mentioned go where the money is. So we saw very quickly that our baseline business was not delivering as it should. Now we continue to gain market share. We didn't lose any customers, and we actually sold effectively there. But to really continue that growth platform, we needed new outlets. And these mega projects offered that opportunity. So in fact, in the U.S., mega projects increased by more than 45% from 2024 to 2025. And this project velocity is actually increasing now, and it's showing in our project backlogs for 2026. And it's everything from onshoring commercial and industrial production, and we see this a lot in the U.S. and in Mexico to massive infrastructure projects going on throughout the region. And we saw this also in Latin America, where previously there was not a lot of infrastructure development. When we see some geopolitical changes happening in many countries in Latin America, we start to see this shift where money -- more and more money flows now into private construction, but also into infrastructure development within these countries. And it really allows us to get into these big projects and continue a nice growth story. So you see here some really excellent projects we're able to deliver in 2025. And these projects will continue to deliver growth in these segments in 2026. So here, we see the data centers. And like the others, I can tell you, I also really love data centers. I love everything about them. And they were really one of the things, the key drivers to sustain the business and I would say the overall construction industry in the Americas in 2025. I expect that to continue strongly in 2026. So we all know these data center investments, it was and will continue to be a key construction sector driver. So across the Americas, we delivered I think as you heard already, 230 new data centers in 2025. So this fantastic order velocity is actually increasing into 2026. So we started the year going full out in our data center investment with new innovations and allow -- Thomas showed a bit of the innovation that we do here. It allows us to bring more value to each and every project. So while these are already mega projects, our dollar take per project continues to increase each year. And as we bring new innovative solutions, it's all about speed, it's all about technology. And if there's a good solution, they're very open to these innovative solutions that then allow us to increase the sales and bring value to the project. So in the middle here, you see the Jacksonville Jaguars Stadium, which is currently undergoing this massive refurbishment. This will take this to really a world-class venue. There's a bit of a competition in many of these countries. We see it in the U.S., we see it in Mexico that every stadium has to be a bit better than the last one and always pushing for that customer experience. And now we see with our innovative solutions for every application from concrete flooring and roofing to engineered joints and sealants. In the past, we would have really celebrated winning a USD 1 million type of stadium project, and we get very excited about that. Nowadays, with this full line of innovative solutions across the buying sector within these segments -- and again, we have special teams dedicated to the specification of these projects, even some custom solutions for engineered joints. With these new innovations, we're allowed to take the same projects that we used to get $1 million, now we exceed $10 million plus. So the dollar take per stadium really takes off. And our vertical market approach unlocks these opportunities for growth. We get in early, we specify and then we work on the job site with the contractors, and there's always custom adaptions while you're on the site that allows us to, again, draw more revenue there. And this goes -- we always talk about the big ones, Jacksonville Jaguars, Buffalo Bills, the Raiders, Stadium Azteca in Mexico. So there's always been -- and then many in Brazil, but there's many of these big stadiums. But it's not just the pro stadiums we're looking at. It's the professional stadiums right down to the local sports arenas. And all of these need solutions. And when you really get into the same sector, you'd be surprised how many stadiums are around the world. Then we talked about, here, at the bottom, you see the infrastructure. Our infrastructure business really continues to bring growth everywhere across the Americas. And again, we see this more and more shift as infrastructure development becomes a key priority, certainly in Latin America, but also now in the U.S. and in Canada. As funding projects continue throughout 2026, we see this nice development of the funding in many of these countries. So we expect a very robust infrastructure business in 2026 as well. Here in this picture, you see the TBM tunnel project in Santiago, Chile. This is 3 separate metro lines running under the city, where we have a full array of projects -- products on these projects. We also have additional metro lines running in Lima, Peru. We have one in Bogota, Colombia and Sao Paulo, Brazil and a huge project now in Toronto. So these big metros deliver huge sales, and they go on for years. So once you're into these bigs, you have a long-term supply of your portfolio into these projects, but also it continues to generate more and more business because when you're on site with the contractors, there's always new opportunities for innovation. And then finally, our automotive team, we secured a record volume of new business awards. This ensures really a continued increase of our market penetration and innovation launches. So to really capture the additional content per vehicle. So while the market is really sluggish, the build rates are sluggish in the market, as long as we continue to capture more content per vehicle and find ways to enter these platforms, we can continue a nice market there. The soft vehicle production environment really overshadows a bit the robust opportunity pipeline as OEMs reset their propulsion system strategies, leading to a long-term growth effect. So while we will continue to win new business and increase our market share across the region, even as the baseline business will be constrained by continuing uncertainty in the first half, we're really looking forward to a renewed vigor in the market in the second half, and I am confident that our outstanding Americas team is ready for the challenge and already running full speed into the year 2026. Okay. So that's for the Americas. I'll turn it over to my friend, Philippe. Philippe Jost: All right. Okay. Thanks, Mike. So back to -- now to Asia Pacific. If you look at Asia Pacific, we see very 2 different trends. On the one hand side, we see China. China is still depressed. The construction industry is decreasing compared to previous years. This is mainly driven by a weakened residential sector. We see here continued decrease in house prices and consumer confidence suffering from that point of view. We don't see any short-term trend reversal, there has to be kind of people saving less and investing in residential again for us to see this trend reverse. On the positive side, we see some investments in infrastructure. We saw the launch of the 15th Five-Year Plan by the Chinese Government. looking at, for example, urban renewal, was one of the pillars that they want to invest in. This means that all the infrastructure that was built in the past years is up for refurbishment. It's investments in transportation and refurbishment of bridges and tunnels. It's also wastewater treatment and water infrastructure is specifically heightened there. So upside on the infrastructure side, but still looking at a depressed residential market. Then this is countered by a very dynamic market in India and Southeast Asia. We had a very strong year in 2025 in those markets and see here continued opportunities for us to grow. One of the opportunities was already mentioned by Thomas, also by Christoph is that there is the distribution retail market. Here, we had 170,000 point of sales that we were supplying at the end of last year, 50,000 of which were opened alone last year. So this is a very accelerating area for us. Using IT systems to track those point of sales, using IT systems to be in touch with more than 7 million end users via WhatsApp or WeChat in China to see their buying patterns, to see how we can activate them buying products from us. So this is a continuing trend that we will push in this year, also in the coming years, also entering new markets such as Bangladesh or places like that to profit from the know-how that we've learned first in China and then in Southeast Asia. The other area of growth opportunities for us is industrial construction. We see many companies derisking their supply chains, building factories in Southeast Asia. It is manufacturing factories. This also then leads to port infrastructure, like Thomas showed in his slide, but also food and beverage, data centers, of course, here the legwork done by our U.S. colleagues where many of the Googles of this world, they open and build new data centers and specifically in Malaysia, Thailand, where we were able to supply our products as well into those projects. Large transportation infrastructure. If you look at the mega cities, of the 20th largest cities in the world, 15 are in Asia Pacific. This means congestions. If you're driven through Mumbai or other places, you spend a lot of time stuck in traffic. So these cities are investing in bridges, in tunnels, in subway systems, in water infrastructure, wastewater treatment plants to cope with the growing city around them. And this is happening in India. It's happening in Southeast Asia, in China in many of those places. So we see a lot of airports, tunnels, subway systems being built in cities like that. The growing refurbishment trend, I mentioned already in China, is an area where we can profit from. as this infrastructure has been built 20 years ago. And we see in the long term or in the medium term even the share of new build versus refurbishment projects going towards the area of refurbishment, where traditionally Sika has more products to sell than in a new construction of a bridge. Then the other point I'd like to highlight is the automotive and industry part. Here, the focus on Asian OEMs, whether Chinese, we mentioned the opening of the new factory or the domestication of some of the production in our Suzhou factory, but also Korean and Japanese OEMs. Here, we also see the highest growth rates were in Southeast Asia and India. This is then local OEMs like Vinfast, for example, in Vietnam, but also Chinese and Japanese producers opening their factories in those markets and us being able to have the experience with them in their home market, being one in the pole position to supply the products also in these new factories that these companies are building in those markets. So with that, positive outlook for Asia Pacific, with the asterisk that a big question mark still of how the residential market in China will evaluate, but we have quite some confidence that at some point, this trend will revert. Don't ask me for a specific date because I won't be able to give you that at this point in time. But nevertheless, I hand now back to Thomas -- or Adrian, sorry. Adrian Widmer: Thank you. I'll go first. Well, thanks to my colleagues here and also a warm welcome to everybody here in the room and the ones following online. I will now dive a bit deeper into the financial result. And I would say we have delivered quite a respectable set of numbers against near-term cyclical headwinds as we have seen. The result demonstrates here a consistently high cash generation and also how Sika is well progressed in executing its efficiency program as part of Fast Forward. Here are, again, some of the highlights, CHF 11.2 billion in sales. 0.6% growth in local currency. A decline in Swiss francs, minus 4.8% on quite adverse foreign exchange effects. A further strong expansion of the material margin, to 54.9%, up 50 basis points. An EBITDA of CHF 2.065 billion, or 18.4% on a reported basis, impacted by Fast Forward onetime cost and some operational deleverage caused by revenue weakness, particularly in the second half and particularly in China. Excluding Fast Forward costs, of CHF 86 million, EBITDA was CHF 2.15 billion and the margin 19.2%, only slightly below the previous year at 19.3%. Reported EBIT, CHF 1.49 billion, 13.3% of net sales. Also here, impact of Fast forward, including here some impairment charges and CHF 108 million included. As well as net profit, CHF 1.045 billion, 9.3% of net sales, also here impacted by Fast Forward. Very positively, a continued strong cash generation with an operating free cash flow of CHF 1.36 billion or 12.1% actually, a slight increase here in the strong net sales ratio that we already had in 2024. Fast Forward cost measures, well on track with related onetime costs all recognized in 2025. Our Fast Forward program delivers a strong return on investment. with cash payback cost of less than 2 years and is expected to already generate CHF 80 million of benefits in 2025. And then lastly, here on the dividend side, the Board of Directors again proposes an attractive dividend with an increase of 2.8% to CHF 3.70 per share. Let me now talk about some of the individual elements in a bit more detail, starting again on the top line. Local currency growth of 0.6% breaks down into 1 percentage point of acquisition growth, while organic growth was slightly negative on group level, minus 0.4% for the year related to soft markets mentioned, particularly China and particularly Q4. Acquisition growth was mostly related to the 6 transactions we completed in '25 and contributed this 1%. Foreign exchange impact, as mentioned, significantly negative, -5.4% or a translation of more than CHF 600 million to a reported growth of -4.8% in Swiss francs. Quickly on the regions, Thomas talked about it. If we look at sales growth in region in EMEA and Americas, quite solid 2.2% sales growth across both regions also with organic growth in both regions, while the U.S. saw a negative trend in the second half of 2025, which was also partially attributable to a lengthy government shutdown. Negative growth in Asia Pacific was driven by a significant decline in the China construction business without -- here China construction growth rate would have been at quite a similar level of the 2 other regions and also notably here, foreign exchange impact, the most negative in the Americas, driven obviously by the weak U.S. dollar. Now the development in China in the construction business, which actually declined by 18%, also had an impact on overall group. If you exclude here China again on group level, we would have actually grown organically 1.2% versus the 0.4% on group level reported. Now turning to the P&L and moving down here from the sales line. In full year '25, as mentioned, we have delivered an expansion of the material margin with gross result expanding by 40 basis points to 54.9%. Overall, positive cost price spread was driven by our focus on delivering innovative value-add solutions and also modestly falling input cost here helped by our structural procurement initiatives. The deflationary environment in China was compensated by positive price contribution elsewhere. The dilution effect of M&A was actually minute less than 10 basis points. Reported operating costs, this includes personnel costs as well as other operating expenses fell by 1.4%. Within these costs, Sika recognized CHF 68 million of fast forward onetime costs. Normalizing for this, operating cost decrease was -3%, continued solid MBCC-related synergies as well as efficiency measures were offset by underlying cost inflation and some operating deleverage, particularly in Q4. On the personnel cost, specifically, which increased by 1.7%. Here, the impact of Fast Forward-related severance cost was CHF 57 million. Without those onetime costs, personnel costs would have decreased by 1%. Synergies as well as operational efficiency measures were not quite sufficient to negate underlying wage inflation of close to 3.5% across the group. Q4, in particular, saw higher health benefit and pension costs as well as negative accrual phasing impact versus previous year. Underlying organic net personnel cost increase was 1.7% on a local currency basis. Other operating expenses decreased strongly by 4.6%, excluding Fast forward onetime cost of CHF 11 million cost decline was actually faster than the rate of revenue decline at minus 5.2%. Operational efficiency initiatives and synergy delivery were the driver, while Q4 comparison was negatively affected by an insurance payment and also some R&D credits in previous year Q4. As a result, reported EBITDA decreased by 9% to CHF 2,065 million or the mentioned 18.4%, again, normalizing for Fast forward, 19.2%. In looking here at the EBITDA bridge in '25, starting on the left-hand side with 2024, 19.3 ratio. We delivered an organic material margin improvement of 50 basis points, driven by new product innovation as well as structural cost efficiencies. M&A synergies coming from MBCC contributed 40 basis points. We saw the overall comparison number in terms of synergies compared to prior acquisition. The incremental contribution in '25 was CHF 57 million. And in total, as Thomas mentioned, already exceeded original guidance of overall synergies. On the other hand, foreign exchange, including some hyperinflation effects as well as the impact from a negative fixed cost leverage reduced margins by 20 and 70 basis points, respectively. And the aforementioned Fast Forward cost had a negative impact of 70 basis points to arrive at the reported EBITDA figure. Now if we look at the bridge here and exclude China, overall, the underlying EBITDA margin would have increased to 19.7%. So a clear improvement material margin by 70 basis points, while the negative leverage reduces here to minus 40 from minus 70. But it is, however, important also to highlight that the China construction business remains a profitable business with clearly double-digit EBITDA percentage numbers. Turning back to the P&L, looking at depreciation and amortization expense, which grew by 2.9% or CHF 16 million. Also here, we have a fast forward impact of roughly CHF 22 million and slightly higher intangible amortization relating to bolt-on acquisitions. But organically, depreciation and amortization expense grew largely in line with sales. This is also the expectation going forward for 2026. As a result, EBIT was impacted here over proportionately with a decrease of minus 12.9%. Excluding Fast Forward, it was CHF 1.601 billion. If we look below EBIT, net interest and financial expense decreased by CHF 30 million compared to the same period last year. The decrease is largely related to lower debt and also the scheduled replacement of a Eurobond with Swiss bond financing. Also here, expectation going forward for interest cost to continue to slightly decrease. A word to the group tax rate here, an increase to 22.9%. Previous year had a favorable onetime effect on the deferred tax position relating to legal restructuring. Going forward, we also expect about a 23% tax rate overall. Quickly turning to the balance sheet, which reduced in size in '25. This was driven mainly by 2 factors. Firstly, the continued appreciation of the Swiss franc, particularly versus the U.S. dollar with approximately CHF 900 million of translation impact. Secondly, and in spite of a higher cash position, here lower current assets, particularly related to disciplined working capital management. Balance sheet total fell by 5.2%. The decrease in intangible assets is strongly attributable to foreign exchange as well and shifts within the liabilities is largely related to financing and definancing activities where we repaid a bond tranche and refinanced twice during '25 with multiple tranches in the market. Shareholder equity reduced by 5.4%, also here translation driven, whereas the equity ratio remained at 44%. ROCE impacted here by Fast Forward costs as well as well as currency-related EBIT impact decreased to 12.3%. Now turning to cash flow, quite a strong development, as mentioned, CHF 1.36 billion with a strong second half performance, given our focus here, particularly on working capital management, 100% conversion of here profit before tax into cash. Main contributors, as mentioned, net working capital management and providing roughly CHF 70 million of cash versus here a consumption of CHF 160 million last year. Modestly higher CapEx and slightly higher cash taxes accounted for the difference. And looking at the ratio, again, a small increase on already a sizable level to 12.1%. On the leverage, here, while net debt reduced by CHF 300 million, 2025 net debt EBITDA leverage increased slightly. If you exclude Fast Forward at the same ratio of last year. We have a strong investment-grade rating and expect another strong free cash flow performance in '26. This strong cash generation also affords us with some optionality as part of our capital allocation policy, which is focused on high long-term value creation for our shareholders. First priority is supporting organic growth and drive profitability through high-return investment, but also highly value-accretive bolt-on acquisitions where we can demonstrate superior returns through cost synergies and revenue and cash acceleration. We have here a very well-proven playbook to deliver synergies. We will continue to reward our shareholders with a progressive dividend policy, as you have seen which allows for efficient capital management and steady increasing returns to shareholders. And we will consider share buybacks opportunistically where we have excess cash flow available after other uses, which also includes further deleveraging. The focus is simple, create here the most value possible from these cash flows. And therefore, we will always weigh here which route can deliver the greatest return to our shareholders. Briefly again, on the dividend here, as proposed, a dividend increase of 10 Rappen here proposed by our Board of Directors, an increase of 2.8%, 50% of the proposed payout will come out of retained earnings, 50% out of capital contribution reserves. Then lastly, before we turn to the broader outlook for '26, a brief recap here of Fast Forward, which is a very strong return on investment and payback of less than 2 years and is well underway. It will drive a leaner cost structure with benefits of CHF 80 million to CHF 110 million by 2028 coming from this activity for which onetime cost of CHF 108 million, including CHF 86 million within EBITDA have all been recognized in '25. And the investment part in accelerated rollout of digital platforms, technology, AI and particularly also leveraging our global data pool will accelerate innovation growth and enhance customer value. Investments will amount to CHF 120 million to CHF 150 million over the next 3 years and drive benefits of CHF 70 million to CHF 90 million in combination, this is CHF 150 million to CHF 200 million annual benefit by 2028, whereof about CHF 80 million are expected to materialize in 2026 already. With this, we'll come to the outlook for '26, handing back to Thomas. Thomas Hasler: Thank you, Adrian. And brief one slide, outlook for '26. We talked a lot about all the efforts we have put in place. We are confident that we can deliver on the outperformance of the market, 3% to 6%. We have gauged this with the market condition as we call them muted still in the first half of the year for sure, that leads a local currency growth of 1% to 4%. At the same time, increasing our EBITDA margin into the range of 19.5% to 19% to 20%. This is our commitment, our confidence for 2026. At the same time, we reconfirm our strategic target of the Strategy '28 for sustainable profitable growth for the company. And with that, we would now opening the Q&A, and I hand over to Dominik so that our virtual participants have a chance to be lined up for questions. Dominik Slappnig: Thank you, Thomas. Probably questions -- are there any questions? Alessandro Foletti, probably if you want to start here right in front. Alessandro Foletti: I would like to dive a little bit deeper if you want in the market outlook for this year. Your 1% to 4% guidance implies a decline of the market. You mentioned that in your press release, so would it be possible to go a little bit more in detail along the lines of what you have shown on your Slide 23, where you showed 20% of the business is residential, 30% infrastructure, 35% commercial, 15% automotive. Maybe what do you see in those 4 segments by geography, if possible? Thomas Hasler: Yes. I think it's a good segue by looking at the 4 segments. And if I start on the residential side, residential is, let's say, is globally challenged, but the biggest impact still will be seen in the rebasing of our residential business in China. So you have heard it also from Christoph and also to some part from Mike, the residential business is, let's say, in other parts outside of China, also, let's say, not booming, but it is kind of also leveling, eventually even showing signs to come back like in France, when we look at the permit level, it seems that there is some movement, but nothing exciting. So the residential out of the 4 segments, certainly the one especially also impacted by China being the most challenged. When you go over to the infrastructure, I think here, there is a good momentum. This is high in demand. They are big projects. There's a lot of renovation money is still flowing. Now independent of the German complexity and release of money, I think here, it's a fair bet that this segment will provide local currency growth above the others, probably even organic positive growth as there are a lot of activities in this segment. Similar to the automotive and industry sector, the industry is not really booming. I think we have to expect that also the China production build rates will reduce. Heavy incentives have been running out on the e-mobility. But when we look at the total markets, we expect probably slight declines in Europe and in North America when it comes to build rates, but the very strong new book sales and the incremental activity, as I mentioned, also in China makes us confident that this segment will also similar to infrastructure contribute. On the commercial section, here, I mean, we have the big outlier that's the data center. That's a key contributor that is offsetting many other segments of the commercial construction, but not all of them. There, it's probably to say this is somewhere in between the residential and the other 2 segments. In this regards, we see still some hesitation to put down big investments still driven by uncertainties on where to place factory. The money, the projects, as I always mentioned, is actually available. The projects are ready, but I think we still haven't yet enough clarity on how the new supply chain setup will look like given the changes that occur currently. So this is probably the area where we have some mixed impact. Alessandro Foletti: Just one follow-up, then I pass on the mic. On China, you mentioned, I think, in the slide that the market was down 45%. And then I think, Adrian, you said you were down 18%. Is that correct? Thomas Hasler: Yes, 45% is just -- within 2 years, we talk here about the new build, the new consumed, not the empty apartment, we talk about the apartment space that has been occupied by new owners that has reduced by 45% with an acceleration in the second -- in '25. So in '25 on itself, it's roughly 20%, 25% decline. Alessandro Foletti: Of the relevant residential market in China, only residential. Thomas Hasler: Yes. Alessandro Foletti: And you were down 18%. Thomas Hasler: Yes. Alessandro Foletti: And of this 18%, how much is self-induced by reducing prices and reducing point of sales, et cetera? Thomas Hasler: Yes. We rebased our business focusing on margin protection, on quality, and that is part of the 18% decline. Dominik Slappnig: Thank you. And next question goes just to the neighbor here, Yannik Ryf of Zurcher. Yannik Ryf: The first question is about data centers. You mentioned it a couple of times in your slides. I mean, how large is your exposure right now there? How much of total revenue? What do you think -- how large you can get? So that is the first question. And the second question is more towards capital allocation. I mean, under which circumstances would you consider a share buyback? I mean, if you look today at your share price, do you think you will generate higher returns with those bolt-on acquisitions than doing a share buyback? Thomas Hasler: Okay. I'll take the first question as data center contribution to the group is quite significant. It has increased from a low single digit to a mid-single-digit contribution in the Americas is even reaching almost a double-digit contribution. It is a momentum that we want to take advantage of as we see that this boom in data center will probably last another couple of years and will probably then also be followed by a boom for energy infrastructure, which is foreseeable as a follow-up to this massive capacity that is built globally that the consumed energy needs to be kind of available and deployed close to those data centers. Adrian Widmer: I guess on -- here the capital allocation and the share buyback specifically, I mean, I sort of laid out here the elements and also the priority. And if you do look and we look at this really from a return perspective on the bolt-ons, we can clearly demonstrate here that strong returns actually superior here even at this level, but this is a constant reevaluation we do because at the end of the day, it is driven by sort of the most effective use of capital. Dominik Slappnig: There is a question from Remo Rosenau, Helvetische Bank. Remo Rosenau: On your guidance of 1% to 4% growth in local currencies, which includes acquisitions. The acquisition contribution will most likely be higher this year than last year. You made 2 quite relatively larger deals in January and one is not closed yet, but still it's almost CHF 300 million. You have spillovers from last year's 7 acquisitions. So the acquisition effect could well be around 3% in '26. So this 1% to 4% then translate into an organic growth of minus 2% to plus 1%, which seems not very high. Adrian Widmer: Maybe here quickly on the sort of the M&A contribution here, and you mentioned the transactions. I mean the one in Turkey is unlikely to close before the third quarter. So I would say sort of currently in that sense, in the bag, if you assume closing at that point is roughly 1.5%. There is not that much spillover. But of course, that is the element that we have currently here on going. Remo Rosenau: Okay. So in your calculations, you have 1.5%. Okay. Fair enough. Then the impairment, I think CHF 21.8 million was in the fourth quarter due to Fast Forward. In the full year, it was almost CHF 30 million, however, it's not a big number, but what is the difference then? Adrian Widmer: It's just not related to the program. That is the only difference. It's smaller machinery impairments in other places. Remo Rosenau: Okay. And then on this peer comparison you did in order to demonstrate that you made -- that you are doing better than your peers. Do you have a list which peers you have taken there because it was not in the presentation? Thomas Hasler: We do have the list. This is the list that is in the annual report. These are the [indiscernible] peers. And out of those roughly 25, we selected the ones that are closest to our business. So it's roughly 10 out of them are in our peer comparison. It is also important that we have, let's say, reported figures that are related to our business. So this is a selection of 10. Remo Rosenau: And the big group is available in the annual report. Thomas Hasler: But this is -- I mean, this is part of the total list. Dominik Slappnig: Next question goes back here on this side again to Patrick Rafaisz from UBS. Patrick Rafaisz: Two or three questions. The first one would be on the guidance, right? You already described that H1 will be challenging then hopefully a more dynamic H2. Just wondering how would you define then the organic outlook for H1 and Q1? I'm trying to understand how much catch-up you need in the second half to get to the range. Thomas Hasler: It's a fair point. I mean we expect that given also the elements from the prior year where we had a strong start in the Americas, especially in the U.S., where we had also, let's say, the rebasing in China not yet taken place. So our assumption is that we are going to see organic negative growth in the first half, more pronounced probably in Q1 than in Q2. But that's then going to turn into positive in Q3 and Q4 given also -- the comp base will be different -- quite different in the second half. Patrick Rafaisz: That's very helpful. And then also on the guidance and targets, I think a sensible move to abandon the 20% that was originally formulated, right, putting it into a range. But still, right, if we maintain the midterm plan with the 20% to 23%, is this just pushed out by 1 year? Because I remember in November, we discussed that the Fast Forward program was being implemented in order to safeguard the 20%, right, in the absence of operating leverage. So -- but probably negative leverage was worse. China on top, right, deteriorated. But yes, can you update us on the time line for the 20%? Thomas Hasler: I think you got it. I mean in Q4, with the events in Q4, we had a more pronounced negative leverage than anticipated, which we also have to consider since the market has fundamentally not turned over new year so that we are here also safely advised to consider still, let's say, some negative operating leverage, even though we have, I think, means in the pocket that are able to offset some of that, but not all of that. That's why we also look at the range from 19.5% to 20% as being a range that is incorporating still some negative leverage, which would -- if you go to the upper side of the guidance, of course, reduce and bring us close to the 20%. And looking further out, I think this momentum of generating efficiency and generate synergies across the organization, structural savings will continue. And we also expect that this negative leverage that we still anticipate for '26 will also reduce or even turn into a positive in the years to come. So the likelihood, our commitment to the range in the midterm is strong. Patrick Rafaisz: So -- but the way I read this is that you remain committed to '28, but you wouldn't say today already that '27 will be a 20% for sure. Thomas Hasler: It is too early. I can't say what the markets are going to do. I think we have learned the lessons lately announcements about what happens in the Middle East. This is just another year where a lot of confusion comes around. And I can't say how '27 will turn out. Indications I get from my visit to China is that probably '27 could be a turning point in the residential market in China could. I think also when I look at all the activities that are lined up, there could be a tremendous uptick. We see this as a cycle, a short-term cycle. But how long this cycle lasts is really something we have to be cautious in making here predictions and statements. Our outperformance of the market, that's to me the substantial element that we need to focus on and then be a bit more hesitant in making here guidance for the global economical evolution. Patrick Rafaisz: And a very quick one on the one-offs. Maybe I missed it in the annual report, but did you provide a distribution across the regions or the segments of the CHF 86 million? Adrian Widmer: We didn't provide details here in the annual report. In terms of the one-off, it's roughly CHF 30 million each in EMEA and the Americas, CHF 15 million to CHF 20 million in Asia Pacific and on corporate level between CHF 5 million and CHF 10 million. Dominik Slappnig: Thank you, Patrick. And then let's move to the vertical attendancy. We have here Ben Rada Martin from Goldman Sachs, who will basically start with the first question. Benjamin Rada Martin: My first was just on APAC margins. The margin of the region dropped from 21% 2024 to 18% 2025. I guess post the program changes, is it right to think that there's a path for that -- the region to return back to 20% EBITDA margins? And my second would just be on working capital. Great to see some success there in improvements in 2025 back down to 18% of sales. Is there scope for further improvements there? Or is that the right level of efficiency when we think about working capital? Adrian Widmer: Yes. Happy to take the 2 questions here. Yes, on the margin, there is a path. Obviously, we talked about the impact on China also fast forward well progressing, also refocusing here on the business. And obviously, China is having an impact here, but also making progress in other markets. That's the clear ambition on Asia Pacific margins. On working capital, yes, I do believe there is more scope also here structurally in terms of efficiency on, let's say, the warehousing, the supply chain side, a continued focus here on receivable collection and management, but also structurally working on the payables, I would say, sort of a stepwise further improvement is clearly targeted. Dominik Slappnig: Perfect. And the next one -- the next question goes to Arnaud Lehmann from Bank of America. Arnaud Lehmann: I hope you can hear me. It's Arnaud here. I have 3 questions, if I may. Firstly, on China, it peaked at 11% of sales. I think it's going to be about 9% of sales now. Do you have a level after restructuring how it could look like in terms of contribution? Is it going to be 5%, 6% of sales once you conclude your restructuring and considering the ongoing pressure in the market? That's my first question. My second question is on the price cost outlook. We're seeing some raw materials related to oil and naphtha recovering this year. Are you planning some price increases to offset that? And lastly, you highlighted adhesives as a particular area of interest. Obviously, you've announced the Akkim acquisition. Do you plan to do more acquisitions in the adhesive space? Thomas Hasler: Okay. Thank you, Arnaud. I take the first and the third question. And talking about China, of course, naturally, with the action taken, our roughly 10%, 11% contribution from China short term will be reduced to 9%, 8%. Please also consider that in China, we have the growing automotive industry business helping to offset. So I don't anticipate a decline further down, but it will be a high single-digit contribution. And once also then the residential market is returning to growth, probably still be somewhere at the same level as before. So here, the China contribution is for us very relevant. Our China business in China is healthy, is profitable. And it is also the base for us to expand with the Chinese players outside of China. And here, not only the automotive manufacturers that are building factories around the globe, but also the Chinese main contractor that go abroad and that become main contractor on large projects in Southeast Asia, Middle East, Africa. And just as an implication, this Abu Dhabi airport is in the hands of a Chinese main contractor. And you need access to the main contractor. And if you are not with them in China, you are at a strategic disadvantage as you don't have the relation to the decision-makers. Of course, you need a local presence in UAE to capture on those. But so the China, let's say, aspect is for us of long-term strategic relevance to have a good representation and of course, also grow with the Chinese player as they take more share of the global economy going forward, similar to what we have seen in the '90s, '80s, the Japanese, the Koreans, this is just following the nature of the most competitive players in the market. And then your last question... Adrian Widmer: Sealing and bonding acquisition? Thomas Hasler: Sealing and bonding acquisition, yes. I mean this -- of course, we like the Adhesive segment, and we highlighted it, but it is one aspect of many that we consider. And as I outlined, our selection process for the prospects and then ultimately advancing has many more aspects in there. And if we have a choice, then we certainly provide preferences. But in this regards, this has been a fantastic prospect that is now coming to realization. It is not a signal that the next 5 transactions will be in adhesives and sealants. We look where we do have the best return, where we have the best opportunities to make those bolt-ons accretive and value enhancing. And therefore, we don't exclude any of our technologies nor any of the target markets. Adrian Widmer: Maybe then on the question as to price/cost spread. I mean, on the input cost here, I mean, you mentioned oil price, but of course, it's also quite volatile. Typically, our base case is rather flattish development, but particularly also given geopolitical events can have an impact here also in regards to, let's say, capacity and utilization. But broadly speaking, at least for the next few months. That would be our expectation. As to pricing, we will continue to value sell. We will, of course, also continue to manage input cost increases. In China, we have seen quite a deflationary environment in '25. It's probably going to stay a bit longer, not the same magnitude, but expecting here some price impact in other parts of the world. So slightly positive all in all for '26. Dominik Slappnig: Okay. Two more questions from vertical attendance. This is Pujarini Ghosh, first one from Bernstein. And then we come back and have a final round of questions here for the room. Pujarini Ghosh: So I have a few. So could you provide an update on your Fast Forward program? How has it been progressing in the first few months? So basically in terms of the headcount reduction, the capacity optimization in China? And then also how are you progressing on the digital investments and the benefits that we were expecting for 2026. So my second question is on the margin guidance. And could you potentially talk through the puts and takes for going from the 18.4% margin in 2025 to the guidance of 19.5% to 20% in 2026? And my last question is on the material margin. So you always maintained it in a very close range of 54% to 55%, but it has been steadily increasing. So how should we think about the progress in future? Thomas Hasler: Okay. Thank you. I'll answer the first question, the Fast Forward question. Of course, this is a program that is not over in a couple of weeks. It has many elements to it. We are in the middle of the cost implementation -- cost-saving implementation, especially with a strong focus on China, also in consolidating the footprint in China. This is all considered into our '25, let's say, cost accrual, the execution, also the closing and transfer of capacity is something that needs to be well managed and is taking place now in the first few months of this year. So this is progressing. Front-loaded activities and again, in China has been the fundamental, let's say, change in the approach to the market. We have implemented a more agile, a more granular sales approach. We have reduced from 7 layers to 4 layers in making sure that we capture the opportunities in the various provinces, cities with smaller sales team that are also with smart incentives guided away from the former, let's say, top line growth incentives that have been very successful during many years. So here, these things have been implemented. These things are active as we speak, but the more structural elements by the nature of it takes more time. Also outside of China, the elements where also headcount reduction have been included require time to transfer responsibility, but also to respect the legal requirements in regards to union contracts and notice period. So this is still ongoing in the first month of the year, but will then cease and be completed in Q2 of '26. Adrian Widmer: Good. Then specifically on your sort of margin -- or margin bridge question. Yes, clearly, in '25, I mean, Fast Forward the onetime cost, CHF 86 million in EBITDA did have here an impact. So the starting point will be rather at 19.2%. It will also mean that we have here a structurally lower cost base. So we're expecting about 60, 70 basis points of contribution in '26 from Fast Forward. We'll have a smaller incremental element still coming from MBCC acquisition. The synergies, 20 to 30 basis points. The new bolt-ons should be sort of rather insignificant in terms of the dilution. In terms of material margin, and this is a bit connected to your last question here. As I was referring to the underlying input cost development and here, a slightly incremental pricing impact also here, a slight potential to increase, although we're sitting here, as you commented, at the upper end of sort of the broad guidance range, but this is not obviously carved in stone. And then last, we have the leverage piece. And here, this is clearly related to the top line fixed cost leverage. If we're at the lower end of the sales guidance, 1%, this will most likely mean sort of a similar type of negative leverage as in '25 as opposed to the upper range where clearly, this would be lower and be commensurate with closer to 20% overall EBITDA. Dominik Slappnig: Okay. Thank you very much. So let's come back. I see there is one last question that we have from virtual. This is Vitushan from Baader Bank. Please come up with your question. Vitushan Vijayakumar: It is clear that the U.S. shut for [indiscernible] '25, notably in the fourth quarter. So however, according to what I understood, most of the projects have been postponed and canceled. Thereby, I was wondering if you have further information on this. I mean this is clear that if the projects have been postponed, there is a big chance for them to materialize in the future. So I wanted to know if you have any further visibility on those, please? Thomas Hasler: Okay. I think that's a fair question. And to be clear, I mean, the government shutdown hasn't put those projects at risk or changed the mind of the owners. It has delayed the implementation of the projects. And therefore, fundamentally, these projects are going into execution just with a certain delay because also after the shutdown until this backlog is then reestablished, it takes a bit of time. But it's not that these activities due to the shutdown would have been, let's say, now canceled. Dominik Slappnig: So excellent. Thank you very much. So before I give it back to Thomas, let's do a last round here in the audience and the question goes out here on this hand side, please. First one. Tsitsi Griffiths: I'm Tsitsi Griffiths from Federated Hermes. I have 2 questions. You talked a lot about digital transformation and innovation, but there wasn't a lot of talk about how you're using AI or leveraging -- we're seeing increased opportunities for using artificial intelligence. So could you expand on that and talk about how you see that affecting your position in innovation and digital transformation. The second question relates to the confirmed targets for sustainability, and it was great to see the performance on your Scope 1 and 2 emissions as well as your water disposal. We've seen quite a few companies in this sector cite a lot of challenges, including high energy prices, unfavorable public policy. We've also seen just general reduction in investment. So it would be good for you to expand on if these factors have weighed in, in your reconfirmation of your sustainability targets, especially in particular to your climate targets as well. Thomas Hasler: Good. I think we are going to communicate over the course of the year much more on our digital transformation as this is the investment part of the Fast forward that makes us most excited at this structurally changing, let's say, our competitive ability in the market. Most pronounced and most advanced is our ability to work on the innovation side. We have our 16 global technology centers, which in the past used to make their experiments stand-alone and shared outcome, shared fantastic innovation in forms of product formulations. With AI enhanced tool, we have now the possibility to actually select every single data point of an experiment and put it into the data lake so that every, let's say, effect on experiment level can be utilized for then other experiments and shortening the development cycle, at the same time, also catching effects, which may on the original purpose of an experiment not have been a target, but could be a target in another prospect. So this availability that everything that in the 1,800 chemists go on when they every day make tests and verify, they have a clear target on what they want to achieve. But this system, this centralized system is now collecting all the data that are constantly generated and then they can be, let's say, utilized for different purposes for saying, okay, I need this effect. I have a substrate. I need to bond to this substrate and where shall I start? And this can then trigger into this massive information that is available to say here have been experiments and you can dial in and you can shortcut massively development time and enhance also the scientists with, let's say, initial staff basis where they otherwise would start at scratch and try to compare through the traditional way in looking into products and innovation that have been established. This is very tangible. This is ramping up. We have here a very strong, let's say, innovation culture in the traditional R&D enhanced with data scientists that are kind of pairing themselves with the, let's say, the nature scientists, and this is having great traction. And we will come back on that as this is constantly evolving. But this is one of the 3 major transformative elements. The others are on supply chain excellence, ease of doing business, being able to bring the customer the value instantly where needed and shortcutting traditional ways of having inventory through several steps rather bringing it to where it is consumed, which is the construction side at a given time at a given slot and allowing so also that efficiency for our customers is increasing, net working capital is decreasing. These are things on the supply chain, on the automation of our process inside and towards the customer. And ultimately, the sales excellence, so the interaction with our customer, also having much more, let's say, outside in, inside out information to also bring more leads and possibilities to our customer by having all this, let's say, access into the market data and also show the relevance where they probably have the best possibility together with us to win business for them. So it is an incremental sales aspect instead of waiting for the customer to come to us actually also utilizing our capabilities to bring business to the customer. And these are elements that we are working on. This is in the making. It requires a strong foundation, a strong harmonized database that we also have part of our investments going into establishing the lake, which then becomes then for the machines and for the tools that we want to utilize then the base. But it is fantastic. We have a market-leading position across the globe, across the technology, across all the segments. We have the strongest inside data lake at hand, and we want to utilize that. And then empower that with external information, which makes it unique towards the market, the value we can provide to our stakeholders, not only contractors, but also architects, specifiers still living in an ever-growing complexity world, and this is decomplexizing the world for them. Tsitsi Griffiths: And then just a bit on the challenges around your sustainability targets. Thomas Hasler: Here, I think it's a fundamental difference between us as we are not energy heavy. We are not, let's say, upstream. We are not on the heavy side. Our own energy consumption, as you have seen, we can steer that quite nicely. Our Scope 3 challenge is a challenge that we actively address with our suppliers as this is the input there. We have it in our hands also to extend the life of our products and therefore, also improve the Scope 3, which is also, of course, the value for the customer. The longer it lasts, the better, the less renovation, the less running cost, a very strong aspect in the ROI evaluation of our customer. And therefore, for us, whatever you see eventually happening at other companies that are scaling back for us actually it's full steam in because it is accretive, it's performance enhancing, and it is also very relevant for our customers. Dominik Slappnig: Okay. Last question, I'll be conscious of our time goes to Martin Flueckiger from Kepler Cheuvreux. Martin Flueckiger: I've got 3 actually. First one is on data centers. You've been -- Thomas has been raving about data center growth. And I was just wondering whether you could put your money where your mouth is and basically reveal what kind of growth you've seen in data centers in the U.S. in 2025 organically? And what kind of outlook you're foreseeing in this market for 2026? That's my first question. Then my second question is on -- I guess that's for Adrian. It's on the margin bridge again. Just wondering at current spot rates, what kind of headwind from FX do you expect for 2026? I'm not asking you to predict currency movements, just on current spot rates, what you're seeing there and what kind of nonmaterial cost inflation you think is a reasonable assumption for this year? And then my final question is on your statement with regards to expected market decline in 2026. Just curious about how you define that market. Are you talking about global construction output growth or decline? Are you talking about construction chemicals? And if it is the latter, are you talking about the global market as such? Or do you sales weight it according to your own exposures? Thomas Hasler: Okay. I take the data center question. As you say, I'm excited it is a strong contributor on the commercial segment, not only in the U.S. but across the board. It has a strong double-digit increase over the years consistently, and we expect also in '26 that this will double-digit grow on that side. That's in particular on the roofing side, on the flooring side, waterproofing side, sealant side, all these aspects play here. So this is one of the, let's say, growth engines of our U.S. business. It's very significant. And therefore, it's also creeping up in relevance of the total share of our U.S. business. Adrian Widmer: Then on your crystal ball question here in terms of exchange rates, of course, and you said it, it's difficult to predict. But let's say, at current prevailing rates, we're basically looking at sort of around 3% to 4% negative foreign exchange impact as a best guess. But of course, this is quite volatile. In terms of overall inflation, the overall expectation would be to come down to let's say, below the 3%. Obviously, on the wage side, we had a bit more than 3% still in '25. But here, I would assume there is going to be rather a bit of a reduction. So probably around 2.5% in terms of overall inflation. On, let's say, your market question, and this here, obviously, we are operating in many different markets in many different segments. It is what we would consider sort of our addressable market, not specifically sales weighted, although there is a China element in and it's really looking at sort of the most relevant indicators, which may also vary sort of across here the business. So it's an estimation overall, which we're seeing here and which this number is based on. Martin Flueckiger: Okay. But just to clarify, my question regarding FX and nonmaterial cost inflation headwinds were not related to impact on sales growth. I was just wondering, based on the chart that you've shown in your presentation for the EBITDA bridge, whether you could put those bps down to those 2 drivers roughly? Adrian Widmer: And here, we -- I was showing it's roughly sort of a 20 basis points of additional impact. It was more on the OpEx side, actually not so much on the raw material with the expectation of FX to be not quite as severe. I would also see here that this is rather smaller, if any. I mean, we have overall quite a strong natural hedge in terms of cost base being where we sell. So from an effect on top of translation, I would rather see this as a minor impact for '26. Dominik Slappnig: Okay. Thank you very much for all of your questions. And with this, I'm heading back to Thomas for a final remark. Thomas Hasler: Good. Thank you very much. I hope you enjoyed the last 2.5 hours and the insights that we provided the granularity and question answered. We are very confident about '26. We don't want to talk so much about the markets as we cannot influence. We can influence many things, but not the market and not the FX. We took decisive actions last year to enable us to outperform the markets also going forward significantly our peers. We like the comparison. We are competitive, but we also see that our organization is moving ahead and gaining market share as a key element also the name of the game in 2026, driven by innovation, driven by incremental value for our customers, for the stakeholders, taking pain out of their let's say, daily life. That's where we are best in. And at the same time, making sure that we are also benefiting and also our shareholders are benefiting by increased margins as we grow our business in the market. With that, I close our session here, but I would like to invite for all those that are here present and to join us for a quick small lunch, and we can continue to chat. And for those that are virtual, I thank you for participating, and I wish you a nice weekend and see you sometime somewhere in the near future. Thank you.
Francois Michel: Hello, everyone, and thank you for being here today with us in Paris and also online. I'm, of course, very pleased to meet you all for the first time, and I look forward to having many more interactions with you and with the financial community at large. Today, here with Thierry Hochoa, who is GTT CFO, we will be presenting our financial results for 2025. And Karim Chapot, who is our Senior VP for Technology, will also come on stage to talk about our technologies. Karim has been in GTT for nearly 3 decades. The other members of the Executive Committee are here with us today, and we are all available at the end of this presentation to answer any questions you may have. So the agenda for today is the usual one. I will start by sharing the 2025 key highlights. Then together with Karim, we will give you an update on our technologies and solutions and our innovation strategy. I will then walk you through the market update. Thierry will cover our 2025 financial performance, and I will conclude this presentation with the usual guidance and some key takeaways before opening the floor to your questions. So to start -- I will start with a couple of personal and very important comments on how I see GTT. GTT is a unique company by many, many aspects. And I find it after a couple of weeks in my role, very impressive, even more impressive than what I thought it was. We have a unique technology and expertise which sits at the core of the LNG global value chain. Our expertise is unmatched, and it relies on a very long, very long solid track record of 60 years. There is, of course, in the company, a large number of talents of very competent staff experts and a good combination of IP and skills. It's not only formal IP, it's a lot of skills in the trade. And all of this makes it a very strong basis to create value, which -- in a sustainable fashion, which the company has done successfully in the past and which I can assure you will continue in a very solid, very sustainable manner in the future. I wanted to make this point is something that I do believe fundamentally. That's also why I joined this company. And it is also a belief that is shared amongst our staff and employees. So it's the core DNA of the company. Now key figures. So I'm also very proud to announce that 2025 has been a historical year for GTT. You have seen the release. We have seen a very significant increase both in revenue and in EBITDA, reaching record high levels for the third consecutive year. Our revenue has increased to EUR 803 million or plus 25% year-on-year. Our EBITDA has increased to EUR 542 million, which is plus 40% year-on-year. Our net result has also increased markedly to EUR 414 million. And this has led the Board to propose a dividend of EUR 8.94 per share, which is in line with GTT's constant commitment since the IPO. We continue to provide also a good visibility on the activity of the company. At the end of '25, the order book of GTT is solid. It stands at EUR 1.6 billion. Now regarding the key highlights, and this slide is very important in the presentation. And I start with the core business, which is the membrane containment solutions. The year 2025 was extremely positive in many aspects, but it was singular also. Why? Because the first part of the year, and you see this clearly in the chart -- on the chart on the right, was impacted by very important geopolitical tensions, notably between the U.S. and China. Of course, the discussions on tariffs weighted a lot on the decisions from shipowners to place new orders. And so we saw a moderate order intake well until Q3 and even with a through in Q2, only LNGC was ordered in Q2. It is temporary, but it is as it is. And so what is positive at the end is that the momentum picked up in Q4. You see we have registered 18 LNGC orders in Q4 alone, which is almost as much as the 19 that we have had during the first 9 months of the year. And I can assure you that the momentum continues in '26. We are seeing a very high level of activity of commercial activity. Since the beginning of the year, we have announced 14 LNGC orders since January so far in '26, and we expect many, many more to come quickly. So this temporary slowdown, in fact, is counterbalanced for us by a very high level of activity that has picked up after the end of Q3. And this dynamic is quite similar, was quite similar for FIDs. If you look at the FIDs for new liquefaction trains, in fact, we saw a somewhat moderate start of the year overall and a clear acceleration in the second part in the second half of the year. We could have put the chart here. And overall, '25 was a record year for the decisions to -- final investment decisions for LNG trains with a record level of 84 million tonnes per annum, of which 62 million in the U.S.A. alone. We estimate that these FIDs announced last year will translate into additional needs for new LNGC vessels, representing roughly 150 additional vessels. And so of course, as a consequence, we are confident about the fact that the our order entry -- the level of activity or commercial activity, the order entry will be dynamic, will be good in the quarters to come, but also in the medium term. Second important points for 2025, it is the year when our marine and digital activities, and this is how we call them today, reached a critical mass. We expanded our digital solutions with the acquisition of Danelec. This activity now brings together digital solutions and services dedicated to what we did before, which is services mostly to the LNGC market, but also right now with -- to the wider maritime fleet serving 17,000 vessels. And we now have a very robust platform, a critical mass of people of skills and a large installed base of products, which have reached the market. It may sounds a very simple, but for a medium-sized company, the size of GTT, having an addition of almost 200 highly competent, highly expert people coming in the digital area will allow us to accelerate massively in this area versus what we had been able to do in the previous years. So with this, we are very well equipped to create value in the digital area, marine and digital area, but also for our core LNGC market, and I will come back to it. The third type of activities that we have, and we single out what we call advanced technologies, what I call advanced technologies. Which are the type of activities that are breakthrough in nature and with a very, very high level of technical content. As you know, GTT is a technology company. We need a couple of activities, which are really ahead of the curve, extremely innovative and where we can take perhaps sometimes together with partners, some limited risk to really push the boundaries in terms of technological innovation. Our venture arm, GTT Strategic Ventures had an active year last year. We added 2 new participations, novoMOF, so Metal-Organic Frameworks, but also CorPower. And we also increased our stake in bound4blue to support its industrial developments. Our advanced engineering and modeling consulting team, which is called OS, which has been part of GTT since 2020, continued the development of its modeling solutions and a very active year for AI, in particular, for the maritime applications, but also for other types of applications. And as you know, we have actively taken the decision to focus, I would say, Elogen on the development of its core stack to take into account the slowdown on the [ hydrogen ] market and also focus [ hydrogen ] on what GTT is the best at, which is developing the core technology. So all of this well done in the year. Now let's turn into our technologies and solutions before looking at our market. First, a couple of comments on our innovation strategy. As I was saying, technology and innovation are at the very core of the DNA of GTT. Again, that's the reason I joined because it sets this company completely apart versus traditional company. We have a huge number of experts at the top level in the world in our field. We have more than 3,600 active patents, and we filed again last year, 68 patents, which is slightly upward versus '24. And our innovation strategy is, of course, built by the teams. It's built around the level of expertise that they have, but it's built -- it follows a very simple, I would say, step-by-step disciplined approach, which I will try to summarize as such for the core business. First, we work to improve the efficiency of our containment systems, not only through breakthrough innovations and sometimes we communicate on the breakthrough innovations such as NEXT1, which is a fantastic system, but also with a very sustainable gradual approach to upgrading our existing systems. We have -- our systems, Mark III and NO96 are improved, I would say, almost every quarter with new designs, with new add-ons, with new solutions that allow them to perform better for customers. And this is what makes our innovation strategy so specific. Second, we also invest beyond our own internal systems to improve the overall performance of the LNGC tankers. For instance, we released the design of a new LNGC architecture with 3 tanks and a capacity of 200,000 cubic meters. That means lower boil-off rate, lower operating costs, lower CapEx for the owners. And all of this creates a lot of value for the industry. This comes from us. The third way, and this is an area where you will see an acceleration in the coming years because it's an area where we can invest in a value-creating fashion in a very solid manner, thanks to our newly acquired digital platform. We, of course, have a lot of know-how and a lot of technologies to support the ship operations, especially the LNGC operations through their lifetime. Because we provide technical assistance at various steps of the ship's life because we know how to prevent sloshing because we give day-to-day advice to optimize maintenance or to, for instance, perform alternative survey scheduling. So this is an area where we create value through innovation and that will accelerate. Now to give you more details or better illustrations than I can about those technologies, let me hand over the floor to Karim Chapot, who will present you our solutions. Karim Chapot: Thank you, Francois. Hello, everyone. Thank you for joining us today. I'm very pleased to give you more details and share what made GTC so distinctive. As Francois said, we regularly improve our technology. So we have our standard product, NO96 [ SmartFeed ] and there are regular updates to improve the thermal performance, to improve the reliability of the technology to fit for needs of our clients, and that's something that we did for years. But we are also developing new technologies, upgrade technologies. And this next one product is really our future product. It's really -- it's fantastic products, as said by Francois, which is an upgraded thermal performance, fantastic reliability. And we have the best product today with this next one. And we are also developing new solutions, and that's really where the membrane shine. It's the ability to cover new needs. And for example, for ammonia and low carbon fuel, membrane is fully adapted. And that's really what matters for us for the future. We have a solution. We have upgrades to cover new future needs for fuels. All that will be transformed in the future because we have -- we are coming in a new area, I would say, it's an area of data, and this is made possible with Danelec. And through technology, we improve data collection, and that's really new now. We have access to a lot of information. And based on this information, we are in position to better understand what's happening on shipping operation. So to answer to very specific questions that where it was not possible in the past. So you have -- nowadays, you need to understand that you have several sensors on the ship. This sensor, we have access to the data. And through the data, we are in position to provide very detailed answers. And let's give an example of this kind of question that we have regularly from our clients. Imagine that, for example, in the United States, we have Shell gas with very high level of nitrogen. This is typical of what we have. And this generates a lot of issues for the clients. When you have a very high level of nitrogen, it means that the cargo is very cold. It means that you have a risk of boiler freight, very high level of boiler freight at the beginning of the voyage. You have issues regarding, I would say, the thermal efficiency of your fuel, which means risk of clocking on the propulsion, et cetera, et cetera, mixing of cargoes. This is really where GTT is very strong. It is understanding also operations. So it's not only the containment, but understanding the operation and how we can answer in a very precise manner to our clients on a day-to-day operation and provide the best answers for them to improve their operation. And that's where we would like to focus today our efforts and provide value to our customers. This is here just one example, but we have many, many examples coming every day where we could provide answers and industrialize our answers. So through the combination of expertise and data, we can improve today and tomorrow all these digital platforms based on the know-how that we have gathered all along the year, based on this data and the understanding of the limit of the technology, we can provide real-time monitoring and answer to all their potential need. And I would say, improve the overall value chain from the terminals from the liquefaction terminal to the regasification terminal. So we started already when you look at the maintenance, what we call the ASP alternative survey plan based on all this data and knowing exactly what happened on the ship in operation, we are in a position to really improve the operation of the ship. And instead of opening the tank every 5 years, we propose to the client to open the tank to every 7.5 years. So we increase the time duration between the opening of the tank. And this generates, of course, an optimization of the OpEx of the -- for the owner. And so that's a great solution that is today had a lot of success. So our objective is clear. We want to reinforce our technical leadership by providing these high-value services. This is possible because we have very, very good relation with all the shipowners. We have I would say, very good relation with all the value chain, with all the stakeholders, the charterers. And by having this very strong link, we are in a position to fully understand their needs and to fulfill those needs. And that's really where we would like to dig into. So with this proximity and combined with decades of operational experience and having a deep know-how of experience, it's enabled us to offer relevant solution and innovation and not just be focused on the tanks. So thank you. And now I hand back to Francois. Francois Michel: Thank you, Karim. Now let's look at the market dynamics. My take on this is very simple, I would say. The LNG carrier demand will be very, very good, very strong in the future for very tangible, very concrete reasons. First, there is a growing need for energy and natural gas, in particular, which is a flexible energy will grow and it's also complementary to renewables. Second, to transport this gas -- there is a growing trend to liquefy it for obvious geographic reasons, I would say, but also because it provides greater flexibility and security, both for the producers and for the consumers. And third, and I will dive into this because it's important in our 10-year forecast. The LNG carrier fleet is aging, and this will drive a need for new vessels. So let's take those topics in turn. First, if we start with the traditional energy forecast, as I was saying, and you see it on the chart, what is interesting for us to see is that, of course, the renewable energy is growing, but it is growing in tandem with the growth coming from natural gas. And we view natural gas as slowly, gradually step-by-step in a solid fashion, increasing its share in the overall energy mix, reaching 26% by 2035. Second, as I was saying, natural gas can be consumed locally or exported, but for geographic reasons as well as geopolitical reasons, really core geopolitical reasons, you will see less and less pipelines and more and more liquefactions to provide greater flexibility and greater safety or security of supply to the consumers. The results of this is that the LNG demand will grow in a steady fashion at about 4.5% in the coming years, which is higher than the gas trade, which is higher than the gas demand and of course, higher than the global energy demand growth in volume of slightly below 1%. And this is exactly what you see in all the major forecast from Wood Mackenzie, from BP, from Shell, and they are all pointing towards a sustained growth in demand for LNG well into 2040 and most likely way beyond. It is also worth noting that the IEA has recently reintroduced its current policy scenario this year and also upgraded its stated policy scenario. Second, it's also important to note that all of those forecasts have been revised upward recently. So we see in a consistent manner, a very, let's say, solid growth in demand for the next decades in LNG. And as you can see on the right, with the various projects that have reached FIDs in '25, we now expect the supply to be approximately enough to cover the demand into 2035 or so. But of course, more liquefaction capabilities will be needed to meet the demand from 2030 -- 2035 onwards. One comment on what we call the shipping intensity. The shipping intensity is the number of ships that are needed to transport 1 million tonne per annum of natural gas per year. What you see on this chart is that the fastest-growing producer of LNG is the U.S.A. The fastest-growing consumer of LNG is Asia and the longest route is the U.S.A. to Asia. If we add to that the fact that the Panama Canal is congested, you will see overall an upward movement in the LNG intensity over time for -- again, here also for very concrete, very basic reasons. Now if we look in details at -- if we zoom in on the FIDs, as I mentioned before, 2025 was absolutely a record year in number of FIDs. We have a total number of 84 million tonnes per annum of FIDs, including 62 million in the U.S.A. And I try to compare this with the figures from the past. The average for the past few years was between 20 and 25 a year. So very, very -- more than 3x the average of the previous years. And just this single year, not yet translated into additional LNGCs orders really for real, will represent an additional need of 150 vessels. So it's a very positive point in terms of outlook. What is also interesting is that additional projects, more than those ones will be needed to serve the LNG demands that we have seen on the charts before and that some of those projects are well advanced in terms of SPAs. In fact, we have counted more than 50 million tonnes per annum of pre-FID SPAs, so SPAs that have not been included in signed firm FIDs yet. And this is -- this bodes very well, in fact, for the activity level of future FIDs. We have also put on this slide the number of projects, the list of projects which could take FID in '26 and '27. Of course, it's always very difficult to point to which project exactly will take FID when, but that gives you an idea of the material reality of this trend. The third driver for the LNGC demand, which I wanted to underline is the fleet replacement. And here, we need robust statistics. The LNG carrier fleet is aging. And in the next 10 years, more than 300 vessels will be more than 20 years old and of which a bit more than 200 will be more than 25 years old. And interestingly, by the way, you will see on the next slides that's when ships are being scrapped today, they are being scrapped at 25 years old. So there is a turning point in the value of the ship at about this age. And as you can see on this middle chart, less than half of the fleet today is running on the latest types of engines, which are far more efficient than the older ones. So I would say, regardless, our view, our basic view is that regardless of additional incentives such as the EU ETS, which will, of course, put some additional pressure to decarbonize this full industry and which will further increase gradually over the years to come. But I would say, regardless of this, we are convinced that simple economics will put pressure on the fleet to scrap more and more vessels and to replace them with new ones. And we are already seeing this happening because, as you know, and this is what you see on the left chart, we have seen last year a record number of scraps and conversion. The total number of ships being scrapped or converted has reached an all-time high of 19 ships. All of these factors combined will lead us to review upward our long-term estimates for LNGCs over the next 10 years, which we know put here, hence, the plus-plus after the 450. It's a little bit early for me. I've not met all customers. So it's a little bit early for me to give you very specific figures on that. But let's say, all the indications we have, markets indications we have for the moment point to a solid upward revision of this figure. So we see a very solid level of activity in our sectors for fundamental reasons. The rest of the activity is good. We see it as solid, and we have not made any revisions. Now if I turn to another market for us, which is LNG as a fuel. As you know, LNG as a fuel -- the LNG as a fuel market continues to be booming. And in fact, it has reached more than 150 units, both in '24 and in '25, and I believe that it will stay at a very high level. In fact, for fundamental reasons, when you talk to ship owners or the shipyards, LNG is winning the battle of the fuel compared with methanol or compared with oil, and this is clearly a fundamental trend. Second, what is also positive is that we are convinced that membrane type solutions and our solutions are the right ones for many of those LNG tanks. Not for all, but for many of them, if not for the majority. So a very significant share. Now of course, because this market has increased very fast, we need to make sure that we bring the membrane type solutions in a way that answers to the shipyards needs and to their level of expertise in how to handle membrane type solutions as fast. And it's also true that in the very short run, using a Type C tank is easier for a shipyard. So we will be working on that. We have a strong expertise. We have delivered a lot of systems, and we have come with a very strong action plan on this, which is summarized at the bottom here, but where I'm involved myself. First, of course, we invest and we will continue to do so in R&D to make sure that membrane type solutions keep improving. We have come up with new systems in '24 with the recycle with the [indiscernible] technology, and we just got an AiP for GTT Cubiq in -- do a couple of weeks ago. So you will see more and more innovation to have better membrane systems. But second, which is even more important to me, we will be working together with partners very close to the shipyards that are building the ships so that's we bring our membrane type solutions in a very, let's say, easy to do business with pre-industrialized fashion so that the shipyards can almost bring them plug and play in their own processes. And here, I see a potential, very concrete potential creation of value leveraging on our expertise. Especially for the shipyards that have not been used to using membranes for LNGC, which I think this is the hurdle today for the growth in our solutions. Now third market for us is marine and digital solutions. And as you know, we had already been developing a number of solutions historically in GTT, building on our own internal forces, building on advanced modeling and engineering capabilities, the OS team in particular, and also some acquisitions, Ascenz Marorka, and BPS. Everything changed in scale and in nature. And I insist on the fact that everything -- I mean, everything gained a critical mass last year in '25 because we [ know ] have a critical mass of solutions of staff and also on the number of ships that we serve. We [indiscernible] we have systems installed on 17,000 ships, which changes everything. The second point, which is very important and which I will underline is that we are not purely in hardware, and we are not purely in software here. We have the right mix, the right balance on the hardware and software solutions. And my view of this is -- and this is one of the reasons why we wanted to call this activity marine and digital is that it's not purely a software venture. It's very solid, robust systems at the core of the ship's operations, mixing hardware and software. With this, it brings us a very solid base to do 2 things. First of all, to accelerate the development of the marine and digital activity led by Casper Jensen. And we will keep developing on this. And I can tell you, I'm very confident about the synergies that we have announced so far, not only on cost, but also and more importantly, the sales synergies that will result from this. So the integration is running very well. We are confident, and we are solid there. Second, we will leverage this platform to create new services, really tangible concrete value-creating services for the LNGC fleet where we can mix this digital expertise and the expertise that we have in the membrane, in the containment systems and in the molecule handling, I would say. So let me hand over the floor now to Thierry for the financial overview, and then I'll be back for the '26 guidance and takeaways. Thierry Hochoa: Thank you, Francois. Good morning, everyone. Now moving on to the financial part of the presentation, and let's start with the order book. We can say the order intake has been more moderate than in 2025 than in previous years with 45 new orders in 2025 for the core business and 19 new orders for [ LNGs ] fuel, sorry. As mentioned by Francois earlier, part of the orders has been delayed from 2025 to 2026 and due to geopolitical uncertainties, but our backlog remains very solid with 280 units, 88 units at the end of December for the core business and 48 units for LNG as fuel. Moreover, the beginning of this year give us positive signals and confidence with the future or for the future because we have already been booked or notified of 14 orders of LNG and [indiscernible] carriers as of today. What does it mean 288 units in terms of consumptions and flows for the core business and in terms of revenues. This means EUR 1.6 billion in revenues already secured. This means strong visibility for GTT in the years to come with EUR 609 million in revenues in 2026, and for the core business alone. This means EUR 542 million in revenues for 2027. Now moving on to our revenue. Total revenue amounted to EUR 803 million in 2025, up plus 25% compared to last year, mainly driven by new builds and higher numbers of constructions under construction in 2025, mainly driven by services activities as well, which are almost stable at EUR 23 million, thanks to development of our certification activities and -- but less pre-engineering studies, mainly driven by Marine and Digital Solutions increasing their revenues by 131% compared to last year at around EUR 36 million and including Danelec activities, which generated EUR 6 million in 2025 in 5 months. And finally, revenue generated by electrolysers activities at EUR 4.6 million, reflecting our desire to mainly focus on our technology and on a few profitable projects. Let's continue with the other main aggregates of the P&L, in particularly the EBITDA and EBIT. You can see the impressive increase, respectively, by plus 40% for the EBITDA and 26% for both -- sorry, for EBIT compared to last year. This is mainly explained by the increase in revenue from GTT's activity -- main activity. This is explained by the absence of significant delays in ship construction schedules and this is explained by a strong and close monitoring of our costs. As a consequence, the EBITDA margins amounted or amount to 67% in 2025 compared to 60% last year. Net income also increased by 90% compared to last year, including the [ outsourcing ] cost of Elogen. Two additional comments on this slide. The first one regarding investments. Our investments increased mainly linked to the acquisition of Danelec for EUR 194 million in 2025 and the new minority stakes within the framework of GTT Ventures Capital. And regarding our cash position at EUR 347 million at the end of 2025, if we consider our first loan taken out for the acquisition of Danelec, the net cash position reached EUR 237 million at the end of 2025. So thanks to our strong activity and robust financial figures, the dividends distributed will represent 80% of the consolidated net income as announced in our guidance last year in the same place. This represents EUR 8.94 up -- per share, up 90% compared to last year. I will now hand to Francois to -- for the 2026 outlook and the conclusion. Francois Michel: Thank you, Thierry. So regarding the '26 outlook, so what we see is that we see '26 revenues ranging between EUR 740 million and EUR 780 million, still marking the second best year for GTT and following a record 2025. As we explained, there is a gradual end of the 2022 order peak, which was the very, very abnormal peak with 162 LNGC ordered in a single year and a somewhat moderate start of the '25 level. They have a mechanical impact temporarily, I would say, on the level of activity in '26. but it's not a level that will stay on -- it's not an effect that will stay on forever. So it's very temporary in terms of, I would say, slowdown. Second, our EBITDA level is expected in between EUR 490 million and EUR 530 million, very solid level, which I am sure you have noticed implies a very high level of EBITDA margin, and we will maintain a very strict cost discipline and execution control discipline to secure this level, I can assure you. The third point where we will be absolutely disciplined is dividend policy. We will maintain our dividend policy, which has been the core of our promise to investors over the past years and since the IPO. So that sums it up for the '26 outlook. Now before opening the floor to your questions, let me summarize or give you a few takeaways. So '25 is absolutely a record year for GTT. It shows that's the group has the right strategy, a fantastic, very unique positioning at the core of the LNG value chain, the capacity to execute on this positioning, the teams that are needed to secure this execution hence that also the discipline and the policy to execute it up to, of course, the dividend policies. So it also means that the staff have done a great job, and I would like to thank all of the teams for having delivered such a fantastic performance. Of course, we have been helped by a very good market, in particular in '25, but it will continue doing so in the future. Secondly, '25 is also a very good year for us when it comes to looking not at the past, but in the future because the record high level of FIDs that we have seen and that are solid and firm will translate into additional needs of 150 ships just for one single year. Third, at the end of '25, we still have a very solid order book at EUR 1.6 billion, which gives us a lot of -- of course, a lot of robustness in our forecast for the coming years. We are also -- '25 has also been the year that when we have built a real marine and digital activity, which we will leverage to create more value in this field, in this sector, but also for the core business of containment systems because it allows us to do a lot of activities through the lives of the ships for LNGCs, which we could not do before. So it will be -- it will allow us to create a lot more value. And third, I can tell you that when I look at what lies ahead, of course, we will continue to leverage our very strong expertise, the model of GTT, which is technology expertise based in the LNG and in, I would say, in the LNG world, but mixing it with advanced know-how and the good skills in data and digital will create a lot of value for all stakeholders, for a lot for our customers, but of course, a lot also for our shareholders. Now thank you for your attention. I hope the presentation was clear. And we and together with the management group here and Thierry, in particular, we are happy to answer to your questions. Jean-Luc Romain: I have a question about your technologies and the adoption of your new technologies. You mentioned GTT NEXT1 is a fantastic technology and Mark III and NO96 are continuously improved. What would convince the shipyards or the shipowner to move from continuously improved NO96 or Mark III to the NEXT1 technology. Same question for Cubiq. Francois Michel: I will -- thank you for your question. I will let Karim Chapot answer on the particular technologies and then perhaps give you some complement on the marketing strategy. Karim Chapot: Yes. Regarding -- that's true that NO and Mark have a fantastic legacy and had a lot of success and both clients and shipyards love this technology. But it's clear that the next one has a major advantage. It's first the level of reliability that is much higher than Mark III and NO. And also something that is special is the ability to be enhanced. This NEXT1 technology is designed for the future, is designed to, in fact, be really efficient in a world where we are -- we have a huge tension on the CO2 price and the requirement from the client to be at a very, very low boil of freight. And we are selling a solution at 0.07, but they are strong options and optionality on the design to be further improved, and that's really where the next one shine. So today, of course, the shipyards are looking at it. They are developing all this industrial scheme. We are working with them. We are supporting them. We are marketing the solution to the owners. And we see some very influent owners really interested by this optionality. For sure, as soon as the IMO and I would say, the LNG -- the [indiscernible] start to be important on the cost of CO2. It will go gradually, then the next one will really shine based on its characteristic, based on this thermal capabilities in improvement, based on its design, which this optionality are rather limited, I would say, for Mark III and NO96. Regarding the over solution, the Cubiq solution, the Cubiq solution is a solution that has the advantage of first reducing the cost. So we have removed the chamfers. So we have a solution that is fully optimized CapEx-wise. And this was promoted to the shipyard, and I can tell you they are really interested. They are interested because it offers really an optimum in the volume occupation for the ship. So you really, for example, for a different type of ship, you really have further volume that you can promote. So for example -- well, for different kind of applications. So the design is such that you optimize the volume, but you also reduce significantly the cost. And so that's an optimum. And we worked on the liquid motion side to reduce the sloshing load and improve the cost of the insulation. So by having all this improvement, we are in position to deliver a very good product for LNG as fuel application. And today, we see real interest for major shipyards. Unknown Executive: Can you please give some detail about the LNG global shipping market? What's the part of EU in the shipping market? And what could happen if the Russian gas come back to EU? It may happen. That's my first question. Second question is everything seems to run perfectly. So what is your worst nightmare. Francois Michel: So thank you for your question. Your first question was the LNG market dynamic for the EU and Russia, right? Okay. Thank you for your questions. So first of all, there will not be -- the way we anticipate is even if there is, let's say, a ceasefire or end of the war, then there will still be sanctions and there will be no additional orders or no activities until sanctions are lifted for the Russian projects. So no, if at some point in the future, the sanctions are lifted, we expect some Russian projects, Arctic LNG 2, for instance, to be able to reopen exports, including to the EU, and that would require additional ships, which will generate activity for us. That's the way we see it. So it's possibility to sell more. For the moment, it's totally close, and we are just monitoring the situation. Second -- your second question is everything runs perfectly. Yes, GTT is, I would say, it's an impressive machine. So I will not say the opposite. But of course, I see many things where I believe we can accelerate and create even more value and very concrete things building on what I have seen in the past. I will give you some very concrete grounded examples. One is, of course, leveraging what we have as a platform for digital applications to develop -- to be better in terms of service and maintenance and high value-added services for the LNGC market as a whole is something that -- I think it's a first win for us. Second, working better for the LFS and for the onshore market, understanding better the supply chain constraints, very close to the shipyards and the manufacturing constraints is also something where I think we can remove this bottleneck and increase our market share and the penetration of our solutions for those concrete applications. Then there is -- there are long-term very operational topics where that I will describe over time in the next couple of months, where I think the company can be even stronger on its core business and what has been done in the past. So I see a lot -- I'm very optimistic. I think I see even more potential for additional value creation and acceleration than what I thought before joining, to be frank. Henri Patricot: I have 2 questions. The first one, I know you said it's still early, but I wanted to come back to the 450++ and wondering how much is plus, plus worth? Are we taking 25, 50, 100 more orders? And what's giving you this increased confidence around this long-term outlook? And then secondly, on digital, you referenced the potential for synergies and growth. Just wondering, how do you expect that to translate into digital revenue growth this year and beyond? Francois Michel: Thank you for your questions. I did hesitate a lot on the wording of the 450++ because I knew it would trigger some questions. But I wanted to give you a deep indication on the fact that I am convinced that this number can be revised upwards. This number is the combination is the cumulative of 3 things. It's the amount of ships that still need to be delivered for existing projects that have reached FIDs. It's the amount of ships that will be needed for new FIDs, and this is where we have the highest uncertainty. And it's the amount of ships in the coming decade that will need to be scrapped. And there, we see a solid 200 to 225 ships being scrapped and that will need to be replaced for the various reasons that I explained before. So we had communicated before on the fact that the number would be slightly up versus 450. I see it significantly upward versus 450. That's the first thing. So significantly up, not just a handful, okay? Now let me turn to Thierry for the specific question on digital. Thierry Hochoa: Okay. Just regarding the digital activities, you know that we do not provide any guidance per [ BU ] -- but I can tell you that the growth of the digital will be significant first because we are going to integrate for 100% of Danelec and for the full year of 2026. That's a mechanic approach. And regarding the organic growth for the digital activities, we expect to deliver the synergies that we discussed last year. And we have a strong dynamic regarding the combination of hardware and software. And you know that regarding this acquisition, we do not have any common clients. And it's very easy, I guess, to combine these 2 activities and to develop common figures and common growth for the digital activities. But we do not disclose any figures per [ BU ]. Jean-Francois Granjon: Three questions from my side. The first one, regarding the expectation, we see an acceleration of new orders in the second half of last year and the case for the beginning of this year. Do you estimate that this should have a positive impact not on 2026, but on 2027 growth for the top line and for the earnings? The second question concerns the digital business. We see a strong improvement for the gross margin, 77% versus 48% previously. So can you explain what's happened? And do you consider this sustainable to see such a level of gross margin? And the last question regarding Elogen. We saw a strong cut for the losses last year. What do you expect for 2026 and above. Francois Michel: Thank you for your 3 questions. I will take number one and number three, and Thierry, you can -- Chap you can take the one on margin of digital. So one is the very positive dynamic that we see in order entry today, can it already have an impact as of '27? Yes. Yes, it definitely can. The extent for that is still unknown. But today, the average time between an order, a firm order and steel cutting is about 14 months. So I would say, in between 12 and 18 months. So it can have an impact or the beginning of an impact in '27. This is also the reason why the early '25 loss of moderate intake had an impact on our sales this year. So we are still in the period where what we are recording right now and what has been recorded in a very positive manner last year can be integrated in '27, Yes, of course. Jean-Francois Granjon: Francois, you expect some new growth for the top line in '27 versus '26? Francois Michel: It's too early to discuss, but it will have an impact. I mean if the level of orders stay at the level that we see today, of course, it will have a impact. The third -- your third question was regarding Elogen. The decision to focus Elogen on the core technology development was absolutely the right one, given the market and given also the fact that there is still a lot to do to further improve the products to make it really the best stack or the most efficient stack in, I would say, at least in the Western world. So we are there. We are very solid in terms of technology. We have limited the losses of Elogen to just a couple of million euros a year, which is a very reasonable result. And this is what we have for today. So we keep -- we will be running on a handful of projects, not more than that, small-sized projects to keep developing the technology. We will not take long, large exposures to large projects. We don't need that in the current market conditions, and we will progress from there. Thierry, you want to say a word on the [ margin ]. Thierry Hochoa: Thank you, Jean-Francois, for your question and to underline the impressive increase in gross margin for the digital activities. As I've already discussed last year regarding this activity to increase and to have profitable activity, we need to have a leadership position in this area, definitely. And in '25, we increased our price and mainly for Ascenz Marorka. So that's why we have this level of gross margin today. And we will continue in that way because today, thanks to Danelec, we have a leading position in specific areas, and we will continue to increase our price if we have this capacity and the possibility regarding these elements and the clients. Francois Michel: I think also Danelec brings us -- Danelec is a very structured company combining hardware and software. So it has an approach to value in this digital world, which is very grounded, very solid. The Ascenz Marorka know-how is extremely, I would say, engineering driven. And so mixing the best of both, which is a lot of technology from Ascenz Marorka and Danelec very solid P&L driven is a good way to create value, and this is what we are already seeing in the figures. Unknown Executive: We have a couple of questions from analysts online. So we will take them. And afterwards, we can take some few questions from the room again. Operator: The first question is from Matt Smith of Bank of America. Matthew Smith: My first question was around the record FID activity that we've seen for LNG projects in '25. So I agree that, that really underscores a big pickup in order intake for yourself versus the 2025 results. I guess I just wanted to ask how quickly you felt that those orders need to flow through. Is that the sort of next 12 months? Or is it the next 3 years? What is your sense on timing there? That would be the first question. And the second one, much broader. We talked to geopolitical uncertainties, a very broad term sort of impact in 2025 orders. Could you sort of zoom into some of the more specifics as it relates to LNG trade and whether some of those uncertainties we look to have a bit more clarity on today, please? Francois Michel: Thank you. Thank you. So thank you for the 2 clear questions. We are already seeing very active discussions regarding the potential orders after the projects that reached FIDs last year. So very concrete, very -- our teams are involved in many of those discussions as we speak. So we expect those orders to come for some of them quite quickly and for others, I would say, within the next 18 months or so. So that's the best estimate I can give you today. But not -- it's not 3 or 4 years, I would say, within the next 18 months, perhaps 24 months for some projects, but not longer than that. So that should give us a good level of order. Perhaps there can be some slippage, but best feeling that I have today from looking at the company. Again, I'm new, but that's my best assessment. Second to your question on geopolitical tensions. Of course, there can be -- there could be a surge in tensions between the U.S. and China. What we have seen so far, however, is that if you look at the direct impact of the trade discussions or the tough trade discussions between the U.S. and China on the LNGC market, there have been very limited -- the LNGC market has been excluded from the tariff discussions on the port duties between the U.S. and China. And even if it were revived in one way or another, it would leave enough time for the market to adjust or to reroute the ships. Perhaps -- the one factor that could create some [ deformation ] is, of course, if there were some additional intense pressure for a lot of players in the industry not to use Chinese shipyards as there was last year. I mean, if you look at the number of orders on 2 Chinese shipyards, it was very limited last year. And then fortunately, it came back up this year with 6 new orders. That could create some bottlenecks in the supply chain in Korea. But I would see the risk being there. But again, Korean yards have capacity. They have spare capacity today as we speak. They have also the capacity to allocate capacity resources from non-LNGC market to the LNGC market. So we are not seeing a bottleneck as we speak. Operator: [Operator Instructions] The next question is from Richard Dawson of Berenberg. Richard Dawson: Two from my side. Firstly, implied EBITDA margin guidance is very resilient for 2026 despite the potential reduction in the core business. So interested just to understand what's supporting that margin, and given we could see some operating leverage reduce as core revenue falls and also the digital service business ramps up, which I believe is somewhat dilutive to group margins. That's the first question. And then secondly, maybe a bit of a broader topic, but there was some news in January that India is exploring options to construct some LNG vessels domestically. Have you had any early discussions with those Indian shipyards about using GTT's technology? And how quickly do you think any increase in shipyard slots could come online? Francois Michel: Thank you for your clear questions. Let me start. India is a country I know very well. And yes, we have had early discussions with Indian shipyards. Now how fast can India enter into the LNGC market, we will see. But if it is the case and when it is the case, we will be there and well positioned. That is clear. And this is an area that we are working actively on. Second, in particular, in tandem in particular, good coordination with Korean yards, to be frank. Second, regarding your question on EBITDA, and I will let Thierry answer this one, but I can tell you the discipline on costs in GTT is strong, and I will clearly make sure it remains very strong. Thierry Hochoa: Yes. We are very confident to deliver this EBITDA margin in 2026 because we have this cost discipline definitely. And I remind you that we have a flexible cost in our P&L. And definitely, when we have less activities, we can react very quickly regarding and to adjust our P&L. So that's why we are very confident because if we have less activities in 2025 in terms of orders, our different directions and department, so we'll adjust definitely their charge to take into account these less activities. So that's why we are very confident regarding this guidance and the EBITDA margin that we need to deliver in 2026. Francois Michel: And yes, at this level of activity, we are very, very, very far from a position where it would start to be difficult for us to adjust our cost base. Operator: The next question is from Guilherme Levy of Morgan Stanley. Guilherme Levy: Francois, I wish you all the best in the new position. I have 2 questions, please. The first one, you alluded in the press release to a potential of cross-selling from your digital services business of EUR 25 million to EUR 30 million by 2030. I was wondering if you can provide us more color around the progress to 2030. And then secondly, just thinking about your currently very strong net cash position. I was wondering if you could put more of that cash to work in the near term how are you thinking about M&A? And also, just curious about dividends. But of course, you reiterated your dividend policy. And in a year with slightly lower EBITDA, that will ultimately mean that your dividends could decline next year. Would you be keen to keep dividends flat for longer using your net cash position? Francois Michel: Thank you for your questions. I think your question on cross-selling for digital raises a broader question regarding how efficient we are to generate synergies between Danelec and BPS and Ascenz Marorka. But so let me give the floor to [indiscernible] for the broader question on how well we are executing the synergies. And then perhaps, Thierry, you can comment on the actual levels of the synergies and also the question on cash generation. Unknown Executive: Thank you, Francois. On the broader side of the equation, clearly, when the announcement was made by GTT to acquire Danelec, it was mentioned that we, in combination, the Ascenz Marorka, Danelec and BPS would be on board around about 17,000 vessels. Not all those vessels carry all our solutions and all our services. The vast majority of those vessels carry either VDR or shaft power meter. And those 2 hardware propositions are actually a way in for us to try to sell other services. But we actually, in the cross-selling activities, and I think Thierry can probably comment on the actual numbers, I can comment on the activities. We go about this in a very structured way. So we have mapped all those 17,000 vessels down to IMO numbers with unique products and services. And then we basically reach out to all of them to see whether we can add more within our own digital domain. And as part of those 17,000 vessels, there are also some LNG core vessels that we should be able to sell more to. So a lot of activities around that. And clearly, also one of the biggest activities is to try to streamline our offering and not do duplicate offering into the market. We want to streamline the offering around performance, around voice optimization and not have more than one solution to our customers. Francois Michel: Thank you, [ Kasper ]. Thierry Hochoa: Yes. Regarding the figures of revenue synergies, we have an estimation around EUR 25 million, EUR 30 million for these 2 activities. And the rationale is the fact that with Danelec, we have 15,000 vessels and Ascenz Marorka, we have 2,000 vessels. And the combination of the software that we have in Ascenz Marorka, our current affiliate and to impose this solution to the vessels of Danelec can deliver these synergies around EUR 25 million, EUR 30 million. That's the combination of 2 and based on this 15,000 equipped vessels of Danelec or from Danelec. Francois Michel: Do you want to take the question on the cash. Thierry Hochoa: Can you remind me your question, sorry, regarding your cash generation? I'm sorry. Guilherme Levy: On the cash generation, I was just wondering what could we have in mind in terms of uses for your net cash position at the moment? Just thinking about dividends, your willingness to keep dividends flat even though you have reiterated your dividend policy of 80% of net income for the next year? And also if there is any sort of inorganic growth opportunity that you have identified for the near term? Thierry Hochoa: Okay. Thank you for your question. And yes, I think the first element and first topic for the cash allocation is the dividends. We have a strong dividend policy, 80% of our net consolidated results and we will continue and confirm that we will use our cash for that. The second element is organic growth. You know that we have ambition for our technology for next one. That's an example. But for the other technologies that we are working on it to protect our core business. And we will continue investing our R&D around 10% of our revenue in average, and we will continue that way. And if tomorrow, we have opportunities in M&A, especially in digital because once again, we need to have a leadership position to have the pricing power and to be more profitable with this activity, we will continue in that way as well. Operator: The next question is from Kevin Roger of Kepler Cheuvreux. Kevin Roger: First of all, welcome on board, all the best for the new position at GTT. And I'm very sorry for that, but I will have maybe not a nice one for you, and it's around Elogen. For us, it's quite difficult to make the difference between the technologies available on the market. You come from a player that has also an electrolyser of technology. So I was wondering if you can share a bit with us your take on what is different for Elogen compared to the Street in terms of value to the market, technology, et cetera. That would be the first one. And the second one is just maybe as a kind of second derivative from the one with the cash, but you have generated a lot of cash in 2025. You have already offset in a sense the acquisition of Danelec. So why don't you offset the provision on Elogen for the dividend payments, keeping the 80% of the net results, which include a EUR 15 million provision roughly on Elogen. So just maybe also to understand why you do not offset that for the shareholders on the dividend payments, please? Francois Michel: Thank you for your warm welcome. And I'm very happy to take your questions. First on Elogen. So Elogen is a specialist in high-performance PEM applications with, I would say, medium-scale electrolyzers, which are very -- at a very high level of performance for small-scale applications. The market to produce [ hydrogen ] is, in fact, very broad, it ranges from projects of a couple of hundreds of kilowatts to sometimes up to 1 gigawatt of projects. For some projects in India, it's 650 twice to 650 megawatts for a single project. Elogen is not playing in this market. Elogen targets and has the right technology to target projects up to a couple of megawatts. And those projects are coming at a reasonable pace. They will be -- they will come more and more as the overall hydrogen supply chain matures, which is why we should not accelerate too much in this field because we should not be ahead of the market. We need to be ready when the market develops gradually. And during the time that the market matures, we keep investing to have the best technology to sell those, I would say, intermediate size and small-sized projects. Elogen has very good products for this kind of applications. But of course, this market is, for the moment, relatively slow. And so we want to go at the pace that is required by the market. And we want also to keep a technological -- an edge over the technology. And I think something that GTT has done very, very well. If you look at what happens on the Elogen market is that you have some PEM players who have targeted very, very large projects and build up enormous capacities. GTT has not done so. We are focused on the right scale of the projects to keep investing in a prudent, in a cautious manner on developing its technology for the right projects. I think it's quite successful as an approach. The second is what about the cash and the dividend policy? I can tell you, GTT will maintain its dividend policy, which has been the core of the value for the company and for the shareholders since the beginning. Here, I see no value -- no reason to make an exception, but perhaps Thierry, you can comment. Thierry Hochoa: Yes. Thank you, Kevin, for your question. And this provision, EUR 45 million for Elogen. We can say that we consider this EUR 45 million for the provision to be operational costs, and that results in a cash outflow such as the construction of the gigafactory. So we consider that operational cost, and it's part of our operational results. So that's why we consider that's not necessary to retreat this element regarding the dividends. And second aspect, Kevin, we consider that a yield of nearly 5% remains satisfactory yield, I guess, Kevin. Operator: The final question from the online question this is from Jamie Franklin of Jefferies. Jamie Franklin: My questions have actually been answered. Thank you so I will hand it over. Francois Michel: Thank you. Any more questions from the room? Okay. So I would like again to thank you all for attending this presentation, both in Paris and online. We will have a lot of, let's say, opportunities to interact. Please call us any time. We're happy to take your questions and to interact and also to take your advice guidance on how we can improve further. Thank you.
Thomas Hasler: Excellent. Good morning, and a warm welcome for all here in the room, visible and also a warm welcome to the invisible that are virtually joining our media and investor conference. I think the short video has brought everything to the point, and I will go and bring more, let's say, details into it, but it has been very well, let's say, aggregated here. But before I start, I would also like to share my sincere gratitude with our 33,000 employees. Many of them are also following this call here, and it is really amazing to see how committed and engaged our employees have supported the company with the many initiatives globally in 2025. And it is also, let's say, the source of the strength of the company in delivering in tough times also outstanding results, shaping for the future with the support of our employees. That's what makes me feel proud to be at the top of the company, but representing 33,000 employees. Now let's look at the agenda, which will follow the sequence of sharing some of the highlights here of '25 from my side, but also then give some flavor to the strategy execution. And then very interesting, how are we doing on the business implementation, key elements which are driving growth into here as well as into the coming years, also supported then by the regional manager, Christoph, Mike and Philippe, which then will also give us a bit of flavor on what's going on in the regions. Before then, Adrian is going to make a deep dive into the financials of '25, then followed by the outlook for '26 as well as then the Q&A session at the end of the session. But I think before I go into the highlights, I would like to emphasize here the strong foundation that Sika is built on and is able to also then outperform the markets, increase profitability in the future. And I think most prominent, Sika is the undisputed leader in the chemical construction market by far. This gives us a leading edge access to big project, access across the channels as the brand stands for top performance, top value and is recognized as a clear benchmark. And wherever in a challenging environment where complexity is increasing, Sika is the first source to go to, to help the specifiers, to help the architects, to contractors to overcome those challenges because they can count on us, us providing value-add innovation to overcome the pain points of the industry. This, of course, is what we bring to the market. Inside, it is this innovation drive, constantly challenging status quo, always look what is out in the market challenging our customers, our contractors, applicators and see how we can remedy those pains with intelligent innovative solutions, helping them to overcome those complexities. This is a key element which we also see represented in the appreciation of our customers when we look at the Net Promoter Score that Sika has, clearly ahead of anybody else in the market. At the same time, talking about the market, construction market is a market that has a lot of influential elements in there. The higher the confidence in the future, the more investments flow naturally into construction. We are facing a period of a lot of uncertainty. Therefore, let's say, markets are hesitant to invest, not all of the markets, but some of the markets definitely, and it is dampening, let's say, the construction activity short term. It's a cycle that we see that is influencing, let's say, the markets overall, but this is also an opportunity, a down cycle is an opportunity. And we took this last year, and we installed an efficiency program, a productivity program, providing our organization a leaner and a more agile structure and also investing into digitalization as a key driver of future differentiation potential in the market with a clear aspiration to be in our market, the digital leader. Just like we are the innovation leader, market leader, we drive for digital leadership. And this we took in, in '25, and we will see also how nicely it will generate the potential for us to outperform the market and also to generate margins increase. The organic growth traditionally ongoing is paired with our bolt-on M&A strategy. We have a fantastic track record over the past 15 -- 10, 15 years with many, many bolt-ons. And we will show later on a bit the flavor of how accretive and how strong the integration power of Sika is. This can be anywhere on the planet. This can be a mature market. This can be an emerging market. We have here clearly also established the skill set to spot the most attractive prospects and then engage clearly based on KPIs that are oriented towards return generation and synergy generation and accelerating growth and, the best one, for transactions. And then when we close, we instantly step in and drive then the integration and the synergy and the expansion of the business via cross-selling, via channel activation and leveraging our global portfolio. So this is the foundation. This is why we are very optimistic and very confident about our ability to outperform the markets as we have also stipulated in our midterm strategy by 3% to 6% in local currency. Now talking shortly and briefly about the markets and here starting probably with where exactly probably a year ago, we were guiding before the tariff, let's say, uncertainty was revealed and which had massive impact on the North American but also ripple effects across the globe with uncertainty related to tariffs going up and down. This has been a sentiment that has stayed for '25, which then also triggers into lack of consumer confidence further increasing in China. As you can see, almost 50% of the residential market reduction within 2 years, very much also here linked to the uncertainty of the global markets, which has also then triggered our reaction to the Chinese business. And towards the end of the year, as if not needed, another element that came with the longest U.S. government shutdown that again was hindering projects to start, waiting for permits, waiting for approvals, which was, again, an element that was unforeseeable. But it is what it is. Overall, we conclude last year's, for us, relevant market had a roughly decline of 2.5% given all these elements. Nevertheless, that's where we come into our performance. And here, our outperformance of the market, with a 0.6% growth in local currency is a demonstration that even under severe, let's say, weather condition, the company can deliver. Also, on the operating EBITDA, if we take in consideration also the steps we took with the Fast Forward program, only a slight decline in the operating margins, while we, of course, see negative leverage with a low organic or negative organic growth rate. Very obvious here also visible, the strength of the Swiss francs has been, once again, let's say, a translation effect. But of course, when we look at the reported numbers, it is quite heavy with 5.4% FX implication in 2025. I talked already a little bit about the actions we took. The market is soft, it is muted. But at the same time, this is the time. This is the time for strong companies to act, to prepare. Because every cycle comes to an end. And we took the decision in the second half last year to shape the company not only in China, where we have been rebasing the business, but globally to say this is the opportunity. This is the time where we can and must take proactive steps, making a leaner, more agile organization, also investing into our operational footprint in automation and efficiency to be able then also to kickstart when the cycle turns up and take advantage of ready-to-roll organization. We paired it also with investments on the digital front as the digital journey can be accelerated, and we took the decision here to fast forward our digital journey with clear elements that we will show later on also in transforming our business more digital and aspiring for a digital leadership in the industry. And all these investments come with a fantastic return, less than 2-year payback and up to 100% return on the individual investments. Now when we look into the regions and here, if we look at the outperformance of the markets, 2.2% in local currency was the growth in EMEA. In EMEA, very clearly, we have pockets of growth like the Middle East, Africa, Central Asia. We have parts of Europe that showed improvements towards the end of the year, Eastern Europe, the parts of Southern Europe as well. So here, momentum that has built up and is then also demonstrating our outperformance in EMEA. The Americas, our second largest region, as well had a strong start into the year. So January was fantastic. February, until about the time of the month as now. While still going in the same direction. We had good momentum coming from '24, building up momentum. Unfortunately, that was then softened over the course of the year, and there is also still a prevailing sentiment in the Americas. But in the Americas, we also have great pockets of growth, like the tech investments. The investments in data center is booming, is, let's say, increasing the commercial construction spend quite tremendously, while other commercial constructions are lagging. So the data center boom and our strong position as a forerunner and as a peace of mind provider to the owners, the hyperscalers give us here a leading edge. And just to give that a bit in perspective, we have been participating in over 4,000 data centers globally so far and let alone 400 last year, thereof 230 in the Americas. So this is a pocket of growth of substantial contribution. Besides that, Latin America, the markets are more resilient, just like other emerging markets have demonstrated here more resilience to the global uncertainties, which brings me over to Asia Pacific. Asia Pacific reported a minus 5.2% in local currency. If we take the China construction market out of the perspective, it would have been a growth of 2.9% in local currency. And here, as I mentioned before, very much driven by strong momentum in Southeast Asia, in India that is partially offsetting the weaknesses in China. Now when we talk about outperformance, outperformance of the market, a market that has been roughly 2.5% down, we compare us to the peers. We have established this peer comparison for quite a while. And as you can see here on the left-hand side, if we take in all the relevant peers and their activities in the construction chemical market, we are outperforming our peers by roughly 2%. In '25, we don't have yet the full set of numbers. So this is still work in progress and will probably also then shift a little bit as Q4 was not only for Sika, a challenging quarter, it was also for our peers a challenging quarter. But more relevant, none of our peers that are in this list here is really active in China. So when we take, let's say, the comparable geographical spread of the peers and us, then on the right-hand side, you can see the outperformance consistently being almost close to 3% to the peers, which are, in our expectation, also slightly above the market trends. Now some of the highlights which we are particularly proud of is the increase of our gross margin, our material margin increased to 54.9%. This is a testimonial to the strength in value selling. This is the value that we bring through our innovation into the market. We are recognized as a value provider, and the return of our customers by utilizing our products, our innovation is speaking for themselves and is driving this material margin progression in '25. But as you can see also coming from '23 to '25, steadily increasing our material margin. I think a particular strength of the company is the strong cash generation also in light of, let's say, lower EBIT in absolute numbers, driven by the onetime effect of Fast Forward as well as the strong currency. But when we look then what the company constantly delivers in the last 3 years, solid double-digit returns in cash, which is almost CHF 1.4 billion that we can then redeploy into investing into our business, giving it back to our shareholders as well as investing into bolt-on acquisitions. So that's underlying, I think, an element of we are also capturing going forward. Another highlight we have not talked so much about, but our aspiration to be leaders in the industry is not only on financial targets oriented. It is also our employee safety. In '21, we launched a program. We set the high mark and say we want to be a leader on safety for our employees. And as you can see, this is a journey. This is a journey which gradually improves. And in the meantime, we have reached clearly above industry average standard, but we are not stopping. We want to make Sika the safest workplace in the industry, and we are investing heavily together with our employees to create this safety culture, which is progressing very nicely. It makes me very proud that our employees are supporting this journey as this is not dictated by top-down. This is ground-up supported. And this is also when we look into what it means behind, let's say, the numbers, it means a safer and more, let's say, streamlined and more process-oriented and more, let's say, transparent organization, which leaves less up to chances. And that's, of course, also a value driver for other stakeholders as this is a part of getting transparency and getting efficiency throughout the organization. Talking about the nonfinancial metrics, I think we can be proud. We are constantly delivering on our nonfinancial commitments. On the greenhouse gas emission reduction, Scope 1 and 2, the ones that we heavily influence, the water discharge reduced by 3%, waste disposal by 5.7% and as mentioned, 14% on the safety side. These are all value-accretive elements, which are transferring into efficiency, into tangible also financial benefits for the company and its shareholders. Talking about the other element, the organic element, very important, reinvesting into the organization, reinvesting into safety and so on. It's the bolt-on acquisition strategy. We have been able to sign 7 and close 6 of the transactions in '25. I think here, most remarkable also, as you can see, 2 of them in the Middle East. This is a booming area. This is a double-digit growth area where these 2 acquisitions are spot on, not only bolt-on, they are spot on to market demands that are also expected to continue to grow in the near future. We also made a bold move in Scandinavia transaction, giving us here on the mortar side, a very strong footprint. And as you may recall, we have a very strong adhesives and sealants footprint in distribution in Scandinavia. We are combining these 2 strengths and also aspire to be the undisputed leader in distribution with our strong brands in Scandinavia. Here also a very clear value and growth-driven acquisition, with the others then also supporting mature markets like in Singapore or HPS in North America. We invest in our own capabilities, our factories. Here, some of them are expansions into demand-driven geographies like in South America, too, like North Africa, Morocco, a booming economy, also here, covering more space in that country. Kazakhstan, as I mentioned, Central Asia, a booming area, but then also in China. And here, maybe I would like to elaborate. Suzhou is our main site. It's our headquarters close to Shanghai. We have opened the factory for adhesives and sealants for the automotive and industrial manufacturing business. We have great success. The plant opened in the second half last year, and we are gaining share with the Chinese OEMs so that we are already now considering a further expansion of the capacity as we see. With this fully automated, with this state-of-the-art, we are having good traction with the Chinese OEMs, bringing them top-level global innovation into their manufacturing processes. And it's just an example of our constant investment also in upgrading our operations, our footprint and gain more efficiency and productivity. Now let me quickly look in the last 6 weeks. I mean, here, the year just has started, but I think it's remarkable how the year started because in the first 6 weeks, we have opened already 5 new additional plants. And that's just mentioned before, very much demand driven. We have a very strong concrete market in the Southeast of the U.S. So Florida is a booming area. We put the most modern plant down for admixture with fully automated capabilities in the plant near Orlando. We then also expand in Latin America, in Colombia and in Argentina, which is a constant growth platform for us. Bangladesh in Southeast Asia as well as in Africa, with a new plant near the Victoria Lake, 800 kilometers away from our headquarter, also covering this strong growing market there in the East African market. And then, very exciting. I think we reported that just lately, the acquisition of Akkim in Turkey. Turkey is a powerhouse. It's an engineering powerhouse. It's a powerhouse that is very influential in the Middle East and Central Asia. This company has a fantastic footprint, has also a foot into Romania, so in the Eastern European market. And we are very happy that we are now able then soon to build on that platform, bringing our expertise, our technologies from the construction chemical side together with the sealant and adhesives into the core markets of the Akkim and in reverse also bringing the Akkim products into the Sika world, into Europe, into other parts of the world as they perfectly fit our portfolio for distribution. And as mentioned before, the seventh transaction of last year, closed end of January. So Finja was a fast-track acquisition, signing early December, closing end of January. And it's a sizable, excellent platform, which we are utilizing now also to drive above-market growth in Scandinavia and utilizing this to leverage our synergies into the market. Maybe a short segue into the adhesives business. We haven't talked that much about the adhesives business, but it is underlying representing about 30% of our business. It is relevant or mission-critical in all our markets. It's in all channels, has a very predominant position. It's an enabler. It's a typical enabler to move from traditional bonding techniques to techniques that enable multi-material structures that enable also smart decarbonized buildings. So it is a key element on the journey of all these industries, and it comes with very attractive innovation-driven features where we have here a clear leading edge, providing here state-of-the-art innovation like the Curing-by-Design that is enabling our customers to advance their design and their construction and manufacturing processes. In the adhesives field, it's all about the brand. If you go from DIY over to the big box, if you go into the professional, it is all driven by a few core brands, and Sika is a core brand on the adhesive side. Sikaflex is standing as a synonym for bonding in many market segments. And so that's the leverage potential which then also enables us to take full advantage in all segments and channels. Now quickly on the strategy execution. I don't need to go deeply into. You have seen this. It is a reconfirmation from our side to our midterm targets, gaining and outgrow market share in a profitable way. That's, in short, the message as a takeaway also on the financial as well as on the nonfinancial, very clear and transparent journey towards '28 that we have always communicated. Now in the background, we have a strong position. As I said, we are undisputed market leader with 12% market share in a CHF 100 billion market potential industry. And it is highly fragmented, which means the winner can take it all if you act like. And that's what we do. We take market share out of the position of strength. And when you look into the different target markets, the 8 target markets, you see a lot of differentiation, but there's the one common theme across all of them, this value-add product focus. In all these target markets, when you talk to contractors, when you talk to owners, when you talk to specifiers, architects, you will hear this common theme, Sika is clearly leading through value, providing exceptional value to the construction to the manufacturing industry. That's what we stand for. That's what we are leveraging. That's our innovation drive. We're also very well balanced when we look across the different markets, coming from the infrastructure side, the commercial construction, residential construction and then also the manufacturing industry, the automotive and the industry segment, where we have a good share in the global business. Also, when we look at the new construction and refurbish, mature markets are more leaning on the refurb side, emerging markets more on the new. But also emerging markets like China, for instance, are moving very clearly into becoming more and more also refurbishment or renovation market. These are all elements that we balance very well and where we have the competencies to also bring this to the local market situation and bring those competencies to the 102 countries that we have worldwide. The market penetration, the outgrowth of the market, this picture you have seen before. I talked a lot about the leverage potential that the company has that we are utilizing the cross-selling, cross-selling in simple terms, these projects have multiple needs of solution from waterproofing, from bonding, from sealing. It is here the clear aspiration to make us the one-stop shop for our contractor, for the applicator and leverage our great recognition in the market. The multichannel approach, I mentioned it before. It goes from the direct business all the way to the e-commerce business where the brand is super relevant, where, let's say, the specific solution for specific customer is super relevant. We cover it all, and we benefit here also to leverage that across all these channels. Go where the money is. In very simple terms, it is a call for action for the local organization. Don't come back and tell us what is not going so well. Look for the pockets of growth, look for the activities that are still going strong and invest there. And here, data centers has an absolutely clear outstanding element, which is happening everywhere, as a go-to, but it is also infrastructure spend is much less influenced by market downturns. Infrastructure spend is a way also to take advantage of the resilience of the infrastructure, spend time there. This is the call for action for our local organization. Don't explain. Drive business where you have pockets of growth and utilize the group-wide expertise to drive this. Key geographies, it's Europe, North America, China, always in focus, always, of course, key decisive markets for us to be very close to and demonstrate our leadership in these leading geographies. And innovation above everything, I repeat myself, innovation at the core for reason being driving value, driving market share gains and ultimately outperforming market situations, whatever they are. I like this slide very much. We put this together in a simple term to demonstrate. Innovation is not coming just by saying so, it requires strong commitment and investment. And we are constantly investing into our R&D in our 16 global technology center, which then also are influencing the 100-plus local -- very local R&D facilities, 1,800 chemists, more than 5% of our employees are working on the innovation path and spending substantial money on innovation, CHF 280 million, our annual R&D spend. This is the investment. What then comes out is innovation, is patents, is unique approaches, which then are converted into solutions, which generate value for our customers, are protected by IP, but are then recognized ultimately when we look at what our innovation power is delivering, it's delivering -- it delivers 3 to 5 percentage point higher gross margin. It represents almost 1/4 of the products with less than 5 years in the market. This is then also showing the power of innovation in our markets. An excellent example of this is an innovation that we brought just before COVID to the market. It's novel. It's a patent-protected waterproofing membrane, which can be used pre and post applied, to do basement waterproofing in a way that you have absolute peace of mind and don't need to fear any water leakages. This is picking up pace, with a 27% CAGR. It is a highly specified solution. So it takes some time until it spreads, but it spreads very quickly, especially in the Middle East. And I have here the picture of the Al Maktoum International Airport that is under construction in Dubai. This is a huge project, almost 3 million square meters of waterproofing membranes are utilized. We are the sole supplier. We are here also adding another landmark construction building to the success story of the SikaProof A+ membrane system. Also data centers, I can't talk enough about data centers. We love the owners because the owners love us. They love that Sika gives them peace of mind, that they get the highest reliable performing solutions so that they can execute inside the shell by not having to care about the shell itself or disruption from the roof, from the walls, from the floors. That's why we have been very early the preferred choice as we stand for this reputation. The roofing as a particularly important part, has further advanced. We bring a self-healing membrane to the roof, which means that the roof membrane can also absorb and correct impacts from nature. Hail, for instance, is here a painful disruptive element, but also just the UV sunlight in Arizona is quite different than here in Switzerland. So these are elements that are super vital. On the other hand, the fibers on the concrete floor, these are taking out carbon emission quite heavily as we can replace steel. We also have lower maintenance costs. We have higher robustness of concrete floors with fibers, and it is very appealing to data center owners to advance here and also contribute to decarbonize their buildings. Coming back to M&A, bolt-on M&A, I think we have indicated at the last time also how accretive bolt-on M&As are. And as you can see here, we look at the pre-synergies EBITDA multiple at the time when we kick off the integration. And then within the third year of the integration, we achieved a 4x lower EBITDA multiple. So an improvement that builds on our possibility to accelerate growth, top line growth, cost synergies, cross-selling synergies and ultimately, then also drive the EBITDA growth of the acquired company. This is, in our view, a superior way to provide capital returns, and we are lining up more to come in the near future. Akkim, just one perfect example of one that soon is going into the implementation mode. The big one, MBCC. We like to talk about the big one as it has generated tremendous synergy across the organization. Last year, our second -- let's say, full year after the closing, we generated CHF 182 million. And when you look back when we signed the deal, we had CHF 160 million to CHF 180 million for the full third year as synergy commitment. And we have raised it twice now. And as you can see, at the moment, we are already above the original third year synergy level, and we have increased the synergies by 25% over the last 2 years, which is a testimonial for faster integration and also higher synergy gains on the cost side as well as on the revenue side. Now business implementation. Looking into some key elements, and I come back to the data center because it's not only, let's say, the roof and the floor, there are many more elements, mission-critical to data centers. As you can see, the flooring solution, the precast, many of them are precast solution where we are with the precast, where we are then also with the joint sealants that are very important to make sure that there is no interference. The concrete itself, the admixtures, the fibers, fire protection, super relevant in data centers. That's why also the roofing systems are preferring our PVCs over other technologies as best-in-class fire protection solutions. And as mentioned, we have a reference list of more than 4,000 completed data centers worldwide. And here, a fast pace with 400 last year in execution, 230 alone in the Americas and more to come. And you will hear more then also from my colleagues from the region. This is a clear focal point for us to also outperform the markets in general. Not to forget infrastructure. Infrastructure, megacities are suffering of lack of infrastructures in emerging markets, as we can see here, we have here Brazil as a good example, but you find it in Santiago, you find it in Southeast Asia, everywhere, there are infrastructure construction ongoing. The same happens also in mature markets here, the example from Munich, from the S-Bahn station in Munich, the deepest S-Bahn Station in Germany. Also in Auckland, this is ongoing. And these are high-profile jobs where, again, the reputation and the possibility of Sika to be the, let's say, one source for many solutions make us a premier supplier to those big projects, and it's also, as I mentioned before, an area where there is constantly flowing money as the need for infrastructure upgrade or new infrastructure is endless and growing. Another important part there are, let's say, the infrastructure in regards to ports. We see that the globalization, as we have experienced, is questioned and more and more ports are built for more regionalized or, let's say, for a new supply chain setup. Here, a good example from Vietnam. Vietnam is one of the, let's say, countries that is benefiting from moving out of China into, let's say, a more neutral territory. So here, a lot of construction ongoing. And when you look also what's going to happen in the near future in regards to the port infrastructure, again, very, very, let's say, high-end construction. Here, we talk about exposure to seawater, exposure to heavy-duty traffic. This is again a field where Sika has a leading edge and is very involved and taking benefit of those momentum. One that we have talked a lot when we talked about the China expansion of the retail journey. It is still ongoing in China. We will hear that later on. But it has made its way into Southeast Asia. When you look at the chart here, where we were in 2003, we had roughly 80,000 point of sales in Southeast Asia. We had 90,000 points of sales in China when we took over Parex in 2019. China is now at 280,000 point of sales. But I want to talk about our journey in Southeast Asia, which is already now at somewhere around 170,000 point of sales, and we are rapidly expanding our point of sales across Southeast Asia. And as you can see, it comes with results. It comes with double-digit growth in that segment, and we expect here a good mid-teen growth also for the years ahead of us. And it is not only an Asian topic. You will hear it is also spilling over into other emerging markets in EMEA or in the Americas. But let's now have the regions give us a bit of flavor of their growth initiatives. And Christoph, if you would like to kick it off with the largest region, EMEA. Christoph Ganz: So thank you, Thomas, and good morning, everyone. So I think giving a reliable outlook for EMEA for this year is a bit like crystal ball reading in these volatile times. Nevertheless, our main first and foremost target remains. We want to outperform our markets. We want to do better than our competitors. This is what we measure basically every quarter. And here, I would say we don't have to hide ourselves, although, of course, we're used to different growth rates than the 2% that you have seen. So looking into this year, I would say, for Europe, we will see, but I don't think we will see big, big improvement. Markets -- most markets will remain challenging, although there are some pretty good positive recovery signs, mainly in Eastern Europe, I must say. So we had a very strong second half last year in Eastern Europe. So a lot of money from the European Union flowing east, going into infrastructure mainly. And here, I must say, I believe that we will see a continuation of this. Also for the Nordics, we expect recovery. We see this already. And here, we're very well positioned with the recent acquisitions that we've done, the mortar companies in Sweden and in Denmark. I think here, we have -- we built here a pretty strong position also in comparison to our competitors. And also France, I think France comes out of 2 to 3 years of really soft markets, kind of recession also, and we have been suffering there as well. And we see signs of recovering. We also believe that '26 will be a better market because there's quite a backlog of residential housing. People have to live. And there is not -- there are not enough houses and apartments there. So we will see this -- the French market already improving here. Germany, I must say, we've been pretty positive. Actually, we heard about this EUR 500 billion that the Germans want to invest into infrastructure. We haven't seen so much of this yet. So quite some delays, a lot of discussions, bureaucracy, et cetera. We will see when this comes. We're ready. We're there. This is our second largest market after France in Europe. We will definitely see continued growth in Middle East and Africa. You've seen it from Thomas. These are double-digit growth markets. And it's -- of course, it's a big pleasure to see how we're doing there. And I think Sika has very strong position in these markets in all of these countries. So where there is investment, we're there. We're having factories, we're having strong organizations. You've seen the Maktoum Airport on Thomas slide. I mean, this is probably our largest purchase order we have received so far from that region, and it's just the beginning. So overall, we remain humble. I think it's probably the best strategy these days, although we want to do better than all the EMEA markets for sure, but we believe in a gradual improvement over the year with definitely a stronger second half than the first half. Talking about growth initiatives, how we want to do that. And this is just a selection, but I would say it's some of the key focuses that we have. Sure, infrastructure, this continues. Also in Europe, I must say, there is money. Sometimes I'm wondering, I think European Union flows faster into Eastern Europe than it flows into Germany and France. Bureaucracy here is not really helping, but there are incredible projects going on. I was just in touch with our Romanian friends yesterday, a lot of road repairs, bridge repairs, and these are big businesses for us in Sika. There is investment into energy everywhere, not just in the Middle East, also in Europe, nuclear plants that are being built, and these are all mega projects for us. Airports, you've seen all the projects. And I would like to mention here also defense. I cannot speak too loud about this, but there is the billions of euros going into defense, mainly in the East, also in the Nordics, the infrastructure project roads, hangars for planes being built. And here, Sika is very, very well positioned. So we're selling, for example, our epoxy flooring systems into these hangars that are being built for all these fighter jets that a lot of companies are buying. And then a bit of a new topic for us, residential, linked to commercial, there several really large real estate developments happening in the EMEA region. One we have listed here on the picture. It's called Ellinikon. This is a Greek investment, actually. It's a Greek investment company on the old premises of the Athens Airport. This is EUR 8 billion investment. And Sika has already started to deliver several million of euros, and this will take a few years. It's like a bit like an espresso machine. Once you're in, they continue buying from you, and it's -- we have a very strong position. We're clear #1 in Greece and full range, and we just -- luckily enough, we're just investing in a new -- in an expansion of our plant in Athens. So we will have a lot of capacity now to go after this one project. There are other residential developments like in Ras El Hekma in Egypt at the Mediterranean actually, this is a $35 billion investment from a UAE company. And it's a city, same like Ellinikon, with houses, with offices, marinas, roads. I mean this is just paradise, of course, for us in Sika. We have dedicated people that work only on these projects and try to penetrate these projects to the maximum. Data centers, you heard it already several times. So right now, in region EMEA alone, we are actively working on 106 data center projects. Each of them gives us sales CHF 2 million to CHF 3 million, some even a bit more. Sika is very well positioned here. These days, everybody talks about data centers. We were -- I would say we were the first company in the U.S. when the data center boom really started. Now it's coming over to Europe, even Africa. Interesting enough, they're building data centers in Morocco, for example. And here, we have all these references. And of course, this helps us to make sure we get -- we participate in these projects wherever they're being built. Pharma, also independent of the economies, the 30, 3-0 big pharma projects happening in EMEA right now, also in the Middle East. And these are always mega projects for us. And then, of course, food and beverage, also independent of economies and how they're doing, beer companies investing, my famous fish farms, everybody is always making fun of me, but this is a lot of money here for us. A lot of fish farms being built all over Europe actually, and each project has several million of sales potential for us. And last but not least, retail distribution. Retail actually is doing, has been doing well. Whether there is a crisis or no crisis, people are investing into their homes to cheer them up themselves. And here, our strategy is to transform our professional products into let's say, more consumer products. And I added here one really fun picture from a pilot, which we were doing actually a pop-up truck store. We put the truck during 1 week in front of, I think, 3 or 4 do-it-yourself stores in France, only one product. It's actually a cleaning product for your algae and moss on your terraces. They get green always during winter. You buy this product and fantastic. By the way, we sell it also in Switzerland. So you can clean your terrace, EUR 1 million sales in 8 days. We couldn't believe it. And of course, now this has encouraged us to further scale this up and do this kind of pop-up truck stores also in other countries. So all in all, our job is to grow and not to be depressed or pessimistic or so. Markets are what they are. It's our job to be optimistic and to beat markets, to beat our competitors. We have it all. We have the range. We have very good people. And that's why I remain positive also for 2026. Handing over to Americas, I think. Mike Campion: Okay. Thank you, Christoph. Well, it's always great to follow Christoph. We get the excitement going and moving already early in the room. So good morning. It's now my pleasure to discuss the forecast for 2026 in region Americas. So as you know, we saw a very challenging market environment across the Americas in 2025, where markets were really constrained. And this was by economic, by regulatory and trade policy uncertainty. And we say uncertainty. I believe I heard the word uncertainty more from our customers and partners in the last 12 months than I heard in the rest of my life combined. But from tariffs right down the line, we had these difficulties. This uncertainty will certainly continue in the U.S. and I'd say, to a lesser degree in Mexico in the first half of 2026, while Canada and the rest of Latin America will be slightly more positive to start the year. We've seen excellent growth really throughout Latin America with the exception of Mexico. And Canada was very strong in '25 and really starting the year incredibly strong in 2026, also led by some really nice infrastructure projects and continuing to expand their market position in trade. We expect the U.S. market and Mexico to also improve in the second half of the year as our backlog of projects start to get released. Now our markets in '25 and now again in 2026 are largely driven by our continued success in mega projects. Now when you say mega projects, we classify these projects as those projects with a value exceeding USD 1 billion. So while we saw quite a soft demand overall in our baseline business really throughout the region, these projects continue strongly and allow us to continue growth. So we've really -- Thomas mentioned go where the money is. So we saw very quickly that our baseline business was not delivering as it should. Now we continue to gain market share. We didn't lose any customers, and we actually sold effectively there. But to really continue that growth platform, we needed new outlets. And these mega projects offered that opportunity. So in fact, in the U.S., mega projects increased by more than 45% from 2024 to 2025. And this project velocity is actually increasing now, and it's showing in our project backlogs for 2026. And it's everything from onshoring commercial and industrial production, and we see this a lot in the U.S. and in Mexico to massive infrastructure projects going on throughout the region. And we saw this also in Latin America, where previously there was not a lot of infrastructure development. When we see some geopolitical changes happening in many countries in Latin America, we start to see this shift where money -- more and more money flows now into private construction, but also into infrastructure development within these countries. And it really allows us to get into these big projects and continue a nice growth story. So you see here some really excellent projects we're able to deliver in 2025. And these projects will continue to deliver growth in these segments in 2026. So here, we see the data centers. And like the others, I can tell you, I also really love data centers. I love everything about them. And they were really one of the things, the key drivers to sustain the business and I would say the overall construction industry in the Americas in 2025. I expect that to continue strongly in 2026. So we all know these data center investments, it was and will continue to be a key construction sector driver. So across the Americas, we delivered I think as you heard already, 230 new data centers in 2025. So this fantastic order velocity is actually increasing into 2026. So we started the year going full out in our data center investment with new innovations and allow -- Thomas showed a bit of the innovation that we do here. It allows us to bring more value to each and every project. So while these are already mega projects, our dollar take per project continues to increase each year. And as we bring new innovative solutions, it's all about speed, it's all about technology. And if there's a good solution, they're very open to these innovative solutions that then allow us to increase the sales and bring value to the project. So in the middle here, you see the Jacksonville Jaguars Stadium, which is currently undergoing this massive refurbishment. This will take this to really a world-class venue. There's a bit of a competition in many of these countries. We see it in the U.S., we see it in Mexico that every stadium has to be a bit better than the last one and always pushing for that customer experience. And now we see with our innovative solutions for every application from concrete flooring and roofing to engineered joints and sealants. In the past, we would have really celebrated winning a USD 1 million type of stadium project, and we get very excited about that. Nowadays, with this full line of innovative solutions across the buying sector within these segments -- and again, we have special teams dedicated to the specification of these projects, even some custom solutions for engineered joints. With these new innovations, we're allowed to take the same projects that we used to get $1 million, now we exceed $10 million plus. So the dollar take per stadium really takes off. And our vertical market approach unlocks these opportunities for growth. We get in early, we specify and then we work on the job site with the contractors, and there's always custom adaptions while you're on the site that allows us to, again, draw more revenue there. And this goes -- we always talk about the big ones, Jacksonville Jaguars, Buffalo Bills, the Raiders, Stadium Azteca in Mexico. So there's always been -- and then many in Brazil, but there's many of these big stadiums. But it's not just the pro stadiums we're looking at. It's the professional stadiums right down to the local sports arenas. And all of these need solutions. And when you really get into the same sector, you'd be surprised how many stadiums are around the world. Then we talked about, here, at the bottom, you see the infrastructure. Our infrastructure business really continues to bring growth everywhere across the Americas. And again, we see this more and more shift as infrastructure development becomes a key priority, certainly in Latin America, but also now in the U.S. and in Canada. As funding projects continue throughout 2026, we see this nice development of the funding in many of these countries. So we expect a very robust infrastructure business in 2026 as well. Here in this picture, you see the TBM tunnel project in Santiago, Chile. This is 3 separate metro lines running under the city, where we have a full array of projects -- products on these projects. We also have additional metro lines running in Lima, Peru. We have one in Bogota, Colombia and Sao Paulo, Brazil and a huge project now in Toronto. So these big metros deliver huge sales, and they go on for years. So once you're into these bigs, you have a long-term supply of your portfolio into these projects, but also it continues to generate more and more business because when you're on site with the contractors, there's always new opportunities for innovation. And then finally, our automotive team, we secured a record volume of new business awards. This ensures really a continued increase of our market penetration and innovation launches. So to really capture the additional content per vehicle. So while the market is really sluggish, the build rates are sluggish in the market, as long as we continue to capture more content per vehicle and find ways to enter these platforms, we can continue a nice market there. The soft vehicle production environment really overshadows a bit the robust opportunity pipeline as OEMs reset their propulsion system strategies, leading to a long-term growth effect. So while we will continue to win new business and increase our market share across the region, even as the baseline business will be constrained by continuing uncertainty in the first half, we're really looking forward to a renewed vigor in the market in the second half, and I am confident that our outstanding Americas team is ready for the challenge and already running full speed into the year 2026. Okay. So that's for the Americas. I'll turn it over to my friend, Philippe. Philippe Jost: All right. Okay. Thanks, Mike. So back to -- now to Asia Pacific. If you look at Asia Pacific, we see very 2 different trends. On the one hand side, we see China. China is still depressed. The construction industry is decreasing compared to previous years. This is mainly driven by a weakened residential sector. We see here continued decrease in house prices and consumer confidence suffering from that point of view. We don't see any short-term trend reversal, there has to be kind of people saving less and investing in residential again for us to see this trend reverse. On the positive side, we see some investments in infrastructure. We saw the launch of the 15th Five-Year Plan by the Chinese Government. looking at, for example, urban renewal, was one of the pillars that they want to invest in. This means that all the infrastructure that was built in the past years is up for refurbishment. It's investments in transportation and refurbishment of bridges and tunnels. It's also wastewater treatment and water infrastructure is specifically heightened there. So upside on the infrastructure side, but still looking at a depressed residential market. Then this is countered by a very dynamic market in India and Southeast Asia. We had a very strong year in 2025 in those markets and see here continued opportunities for us to grow. One of the opportunities was already mentioned by Thomas, also by Christoph is that there is the distribution retail market. Here, we had 170,000 point of sales that we were supplying at the end of last year, 50,000 of which were opened alone last year. So this is a very accelerating area for us. Using IT systems to track those point of sales, using IT systems to be in touch with more than 7 million end users via WhatsApp or WeChat in China to see their buying patterns, to see how we can activate them buying products from us. So this is a continuing trend that we will push in this year, also in the coming years, also entering new markets such as Bangladesh or places like that to profit from the know-how that we've learned first in China and then in Southeast Asia. The other area of growth opportunities for us is industrial construction. We see many companies derisking their supply chains, building factories in Southeast Asia. It is manufacturing factories. This also then leads to port infrastructure, like Thomas showed in his slide, but also food and beverage, data centers, of course, here the legwork done by our U.S. colleagues where many of the Googles of this world, they open and build new data centers and specifically in Malaysia, Thailand, where we were able to supply our products as well into those projects. Large transportation infrastructure. If you look at the mega cities, of the 20th largest cities in the world, 15 are in Asia Pacific. This means congestions. If you're driven through Mumbai or other places, you spend a lot of time stuck in traffic. So these cities are investing in bridges, in tunnels, in subway systems, in water infrastructure, wastewater treatment plants to cope with the growing city around them. And this is happening in India. It's happening in Southeast Asia, in China in many of those places. So we see a lot of airports, tunnels, subway systems being built in cities like that. The growing refurbishment trend, I mentioned already in China, is an area where we can profit from. as this infrastructure has been built 20 years ago. And we see in the long term or in the medium term even the share of new build versus refurbishment projects going towards the area of refurbishment, where traditionally Sika has more products to sell than in a new construction of a bridge. Then the other point I'd like to highlight is the automotive and industry part. Here, the focus on Asian OEMs, whether Chinese, we mentioned the opening of the new factory or the domestication of some of the production in our Suzhou factory, but also Korean and Japanese OEMs. Here, we also see the highest growth rates were in Southeast Asia and India. This is then local OEMs like Vinfast, for example, in Vietnam, but also Chinese and Japanese producers opening their factories in those markets and us being able to have the experience with them in their home market, being one in the pole position to supply the products also in these new factories that these companies are building in those markets. So with that, positive outlook for Asia Pacific, with the asterisk that a big question mark still of how the residential market in China will evaluate, but we have quite some confidence that at some point, this trend will revert. Don't ask me for a specific date because I won't be able to give you that at this point in time. But nevertheless, I hand now back to Thomas -- or Adrian, sorry. Adrian Widmer: Thank you. I'll go first. Well, thanks to my colleagues here and also a warm welcome to everybody here in the room and the ones following online. I will now dive a bit deeper into the financial result. And I would say we have delivered quite a respectable set of numbers against near-term cyclical headwinds as we have seen. The result demonstrates here a consistently high cash generation and also how Sika is well progressed in executing its efficiency program as part of Fast Forward. Here are, again, some of the highlights, CHF 11.2 billion in sales. 0.6% growth in local currency. A decline in Swiss francs, minus 4.8% on quite adverse foreign exchange effects. A further strong expansion of the material margin, to 54.9%, up 50 basis points. An EBITDA of CHF 2.065 billion, or 18.4% on a reported basis, impacted by Fast Forward onetime cost and some operational deleverage caused by revenue weakness, particularly in the second half and particularly in China. Excluding Fast Forward costs, of CHF 86 million, EBITDA was CHF 2.15 billion and the margin 19.2%, only slightly below the previous year at 19.3%. Reported EBIT, CHF 1.49 billion, 13.3% of net sales. Also here, impact of Fast forward, including here some impairment charges and CHF 108 million included. As well as net profit, CHF 1.045 billion, 9.3% of net sales, also here impacted by Fast Forward. Very positively, a continued strong cash generation with an operating free cash flow of CHF 1.36 billion or 12.1% actually, a slight increase here in the strong net sales ratio that we already had in 2024. Fast Forward cost measures, well on track with related onetime costs all recognized in 2025. Our Fast Forward program delivers a strong return on investment. with cash payback cost of less than 2 years and is expected to already generate CHF 80 million of benefits in 2025. And then lastly, here on the dividend side, the Board of Directors again proposes an attractive dividend with an increase of 2.8% to CHF 3.70 per share. Let me now talk about some of the individual elements in a bit more detail, starting again on the top line. Local currency growth of 0.6% breaks down into 1 percentage point of acquisition growth, while organic growth was slightly negative on group level, minus 0.4% for the year related to soft markets mentioned, particularly China and particularly Q4. Acquisition growth was mostly related to the 6 transactions we completed in '25 and contributed this 1%. Foreign exchange impact, as mentioned, significantly negative, -5.4% or a translation of more than CHF 600 million to a reported growth of -4.8% in Swiss francs. Quickly on the regions, Thomas talked about it. If we look at sales growth in region in EMEA and Americas, quite solid 2.2% sales growth across both regions also with organic growth in both regions, while the U.S. saw a negative trend in the second half of 2025, which was also partially attributable to a lengthy government shutdown. Negative growth in Asia Pacific was driven by a significant decline in the China construction business without -- here China construction growth rate would have been at quite a similar level of the 2 other regions and also notably here, foreign exchange impact, the most negative in the Americas, driven obviously by the weak U.S. dollar. Now the development in China in the construction business, which actually declined by 18%, also had an impact on overall group. If you exclude here China again on group level, we would have actually grown organically 1.2% versus the 0.4% on group level reported. Now turning to the P&L and moving down here from the sales line. In full year '25, as mentioned, we have delivered an expansion of the material margin with gross result expanding by 40 basis points to 54.9%. Overall, positive cost price spread was driven by our focus on delivering innovative value-add solutions and also modestly falling input cost here helped by our structural procurement initiatives. The deflationary environment in China was compensated by positive price contribution elsewhere. The dilution effect of M&A was actually minute less than 10 basis points. Reported operating costs, this includes personnel costs as well as other operating expenses fell by 1.4%. Within these costs, Sika recognized CHF 68 million of fast forward onetime costs. Normalizing for this, operating cost decrease was -3%, continued solid MBCC-related synergies as well as efficiency measures were offset by underlying cost inflation and some operating deleverage, particularly in Q4. On the personnel cost, specifically, which increased by 1.7%. Here, the impact of Fast Forward-related severance cost was CHF 57 million. Without those onetime costs, personnel costs would have decreased by 1%. Synergies as well as operational efficiency measures were not quite sufficient to negate underlying wage inflation of close to 3.5% across the group. Q4, in particular, saw higher health benefit and pension costs as well as negative accrual phasing impact versus previous year. Underlying organic net personnel cost increase was 1.7% on a local currency basis. Other operating expenses decreased strongly by 4.6%, excluding Fast forward onetime cost of CHF 11 million cost decline was actually faster than the rate of revenue decline at minus 5.2%. Operational efficiency initiatives and synergy delivery were the driver, while Q4 comparison was negatively affected by an insurance payment and also some R&D credits in previous year Q4. As a result, reported EBITDA decreased by 9% to CHF 2,065 million or the mentioned 18.4%, again, normalizing for Fast forward, 19.2%. In looking here at the EBITDA bridge in '25, starting on the left-hand side with 2024, 19.3 ratio. We delivered an organic material margin improvement of 50 basis points, driven by new product innovation as well as structural cost efficiencies. M&A synergies coming from MBCC contributed 40 basis points. We saw the overall comparison number in terms of synergies compared to prior acquisition. The incremental contribution in '25 was CHF 57 million. And in total, as Thomas mentioned, already exceeded original guidance of overall synergies. On the other hand, foreign exchange, including some hyperinflation effects as well as the impact from a negative fixed cost leverage reduced margins by 20 and 70 basis points, respectively. And the aforementioned Fast Forward cost had a negative impact of 70 basis points to arrive at the reported EBITDA figure. Now if we look at the bridge here and exclude China, overall, the underlying EBITDA margin would have increased to 19.7%. So a clear improvement material margin by 70 basis points, while the negative leverage reduces here to minus 40 from minus 70. But it is, however, important also to highlight that the China construction business remains a profitable business with clearly double-digit EBITDA percentage numbers. Turning back to the P&L, looking at depreciation and amortization expense, which grew by 2.9% or CHF 16 million. Also here, we have a fast forward impact of roughly CHF 22 million and slightly higher intangible amortization relating to bolt-on acquisitions. But organically, depreciation and amortization expense grew largely in line with sales. This is also the expectation going forward for 2026. As a result, EBIT was impacted here over proportionately with a decrease of minus 12.9%. Excluding Fast Forward, it was CHF 1.601 billion. If we look below EBIT, net interest and financial expense decreased by CHF 30 million compared to the same period last year. The decrease is largely related to lower debt and also the scheduled replacement of a Eurobond with Swiss bond financing. Also here, expectation going forward for interest cost to continue to slightly decrease. A word to the group tax rate here, an increase to 22.9%. Previous year had a favorable onetime effect on the deferred tax position relating to legal restructuring. Going forward, we also expect about a 23% tax rate overall. Quickly turning to the balance sheet, which reduced in size in '25. This was driven mainly by 2 factors. Firstly, the continued appreciation of the Swiss franc, particularly versus the U.S. dollar with approximately CHF 900 million of translation impact. Secondly, and in spite of a higher cash position, here lower current assets, particularly related to disciplined working capital management. Balance sheet total fell by 5.2%. The decrease in intangible assets is strongly attributable to foreign exchange as well and shifts within the liabilities is largely related to financing and definancing activities where we repaid a bond tranche and refinanced twice during '25 with multiple tranches in the market. Shareholder equity reduced by 5.4%, also here translation driven, whereas the equity ratio remained at 44%. ROCE impacted here by Fast Forward costs as well as well as currency-related EBIT impact decreased to 12.3%. Now turning to cash flow, quite a strong development, as mentioned, CHF 1.36 billion with a strong second half performance, given our focus here, particularly on working capital management, 100% conversion of here profit before tax into cash. Main contributors, as mentioned, net working capital management and providing roughly CHF 70 million of cash versus here a consumption of CHF 160 million last year. Modestly higher CapEx and slightly higher cash taxes accounted for the difference. And looking at the ratio, again, a small increase on already a sizable level to 12.1%. On the leverage, here, while net debt reduced by CHF 300 million, 2025 net debt EBITDA leverage increased slightly. If you exclude Fast Forward at the same ratio of last year. We have a strong investment-grade rating and expect another strong free cash flow performance in '26. This strong cash generation also affords us with some optionality as part of our capital allocation policy, which is focused on high long-term value creation for our shareholders. First priority is supporting organic growth and drive profitability through high-return investment, but also highly value-accretive bolt-on acquisitions where we can demonstrate superior returns through cost synergies and revenue and cash acceleration. We have here a very well-proven playbook to deliver synergies. We will continue to reward our shareholders with a progressive dividend policy, as you have seen which allows for efficient capital management and steady increasing returns to shareholders. And we will consider share buybacks opportunistically where we have excess cash flow available after other uses, which also includes further deleveraging. The focus is simple, create here the most value possible from these cash flows. And therefore, we will always weigh here which route can deliver the greatest return to our shareholders. Briefly again, on the dividend here, as proposed, a dividend increase of 10 Rappen here proposed by our Board of Directors, an increase of 2.8%, 50% of the proposed payout will come out of retained earnings, 50% out of capital contribution reserves. Then lastly, before we turn to the broader outlook for '26, a brief recap here of Fast Forward, which is a very strong return on investment and payback of less than 2 years and is well underway. It will drive a leaner cost structure with benefits of CHF 80 million to CHF 110 million by 2028 coming from this activity for which onetime cost of CHF 108 million, including CHF 86 million within EBITDA have all been recognized in '25. And the investment part in accelerated rollout of digital platforms, technology, AI and particularly also leveraging our global data pool will accelerate innovation growth and enhance customer value. Investments will amount to CHF 120 million to CHF 150 million over the next 3 years and drive benefits of CHF 70 million to CHF 90 million in combination, this is CHF 150 million to CHF 200 million annual benefit by 2028, whereof about CHF 80 million are expected to materialize in 2026 already. With this, we'll come to the outlook for '26, handing back to Thomas. Thomas Hasler: Thank you, Adrian. And brief one slide, outlook for '26. We talked a lot about all the efforts we have put in place. We are confident that we can deliver on the outperformance of the market, 3% to 6%. We have gauged this with the market condition as we call them muted still in the first half of the year for sure, that leads a local currency growth of 1% to 4%. At the same time, increasing our EBITDA margin into the range of 19.5% to 19% to 20%. This is our commitment, our confidence for 2026. At the same time, we reconfirm our strategic target of the Strategy '28 for sustainable profitable growth for the company. And with that, we would now opening the Q&A, and I hand over to Dominik so that our virtual participants have a chance to be lined up for questions. Dominik Slappnig: Thank you, Thomas. Probably questions -- are there any questions? Alessandro Foletti, probably if you want to start here right in front. Alessandro Foletti: I would like to dive a little bit deeper if you want in the market outlook for this year. Your 1% to 4% guidance implies a decline of the market. You mentioned that in your press release, so would it be possible to go a little bit more in detail along the lines of what you have shown on your Slide 23, where you showed 20% of the business is residential, 30% infrastructure, 35% commercial, 15% automotive. Maybe what do you see in those 4 segments by geography, if possible? Thomas Hasler: Yes. I think it's a good segue by looking at the 4 segments. And if I start on the residential side, residential is, let's say, is globally challenged, but the biggest impact still will be seen in the rebasing of our residential business in China. So you have heard it also from Christoph and also to some part from Mike, the residential business is, let's say, in other parts outside of China, also, let's say, not booming, but it is kind of also leveling, eventually even showing signs to come back like in France, when we look at the permit level, it seems that there is some movement, but nothing exciting. So the residential out of the 4 segments, certainly the one especially also impacted by China being the most challenged. When you go over to the infrastructure, I think here, there is a good momentum. This is high in demand. They are big projects. There's a lot of renovation money is still flowing. Now independent of the German complexity and release of money, I think here, it's a fair bet that this segment will provide local currency growth above the others, probably even organic positive growth as there are a lot of activities in this segment. Similar to the automotive and industry sector, the industry is not really booming. I think we have to expect that also the China production build rates will reduce. Heavy incentives have been running out on the e-mobility. But when we look at the total markets, we expect probably slight declines in Europe and in North America when it comes to build rates, but the very strong new book sales and the incremental activity, as I mentioned, also in China makes us confident that this segment will also similar to infrastructure contribute. On the commercial section, here, I mean, we have the big outlier that's the data center. That's a key contributor that is offsetting many other segments of the commercial construction, but not all of them. There, it's probably to say this is somewhere in between the residential and the other 2 segments. In this regards, we see still some hesitation to put down big investments still driven by uncertainties on where to place factory. The money, the projects, as I always mentioned, is actually available. The projects are ready, but I think we still haven't yet enough clarity on how the new supply chain setup will look like given the changes that occur currently. So this is probably the area where we have some mixed impact. Alessandro Foletti: Just one follow-up, then I pass on the mic. On China, you mentioned, I think, in the slide that the market was down 45%. And then I think, Adrian, you said you were down 18%. Is that correct? Thomas Hasler: Yes, 45% is just -- within 2 years, we talk here about the new build, the new consumed, not the empty apartment, we talk about the apartment space that has been occupied by new owners that has reduced by 45% with an acceleration in the second -- in '25. So in '25 on itself, it's roughly 20%, 25% decline. Alessandro Foletti: Of the relevant residential market in China, only residential. Thomas Hasler: Yes. Alessandro Foletti: And you were down 18%. Thomas Hasler: Yes. Alessandro Foletti: And of this 18%, how much is self-induced by reducing prices and reducing point of sales, et cetera? Thomas Hasler: Yes. We rebased our business focusing on margin protection, on quality, and that is part of the 18% decline. Dominik Slappnig: Thank you. And next question goes just to the neighbor here, Yannik Ryf of Zurcher. Yannik Ryf: The first question is about data centers. You mentioned it a couple of times in your slides. I mean, how large is your exposure right now there? How much of total revenue? What do you think -- how large you can get? So that is the first question. And the second question is more towards capital allocation. I mean, under which circumstances would you consider a share buyback? I mean, if you look today at your share price, do you think you will generate higher returns with those bolt-on acquisitions than doing a share buyback? Thomas Hasler: Okay. I'll take the first question as data center contribution to the group is quite significant. It has increased from a low single digit to a mid-single-digit contribution in the Americas is even reaching almost a double-digit contribution. It is a momentum that we want to take advantage of as we see that this boom in data center will probably last another couple of years and will probably then also be followed by a boom for energy infrastructure, which is foreseeable as a follow-up to this massive capacity that is built globally that the consumed energy needs to be kind of available and deployed close to those data centers. Adrian Widmer: I guess on -- here the capital allocation and the share buyback specifically, I mean, I sort of laid out here the elements and also the priority. And if you do look and we look at this really from a return perspective on the bolt-ons, we can clearly demonstrate here that strong returns actually superior here even at this level, but this is a constant reevaluation we do because at the end of the day, it is driven by sort of the most effective use of capital. Dominik Slappnig: There is a question from Remo Rosenau, Helvetische Bank. Remo Rosenau: On your guidance of 1% to 4% growth in local currencies, which includes acquisitions. The acquisition contribution will most likely be higher this year than last year. You made 2 quite relatively larger deals in January and one is not closed yet, but still it's almost CHF 300 million. You have spillovers from last year's 7 acquisitions. So the acquisition effect could well be around 3% in '26. So this 1% to 4% then translate into an organic growth of minus 2% to plus 1%, which seems not very high. Adrian Widmer: Maybe here quickly on the sort of the M&A contribution here, and you mentioned the transactions. I mean the one in Turkey is unlikely to close before the third quarter. So I would say sort of currently in that sense, in the bag, if you assume closing at that point is roughly 1.5%. There is not that much spillover. But of course, that is the element that we have currently here on going. Remo Rosenau: Okay. So in your calculations, you have 1.5%. Okay. Fair enough. Then the impairment, I think CHF 21.8 million was in the fourth quarter due to Fast Forward. In the full year, it was almost CHF 30 million, however, it's not a big number, but what is the difference then? Adrian Widmer: It's just not related to the program. That is the only difference. It's smaller machinery impairments in other places. Remo Rosenau: Okay. And then on this peer comparison you did in order to demonstrate that you made -- that you are doing better than your peers. Do you have a list which peers you have taken there because it was not in the presentation? Thomas Hasler: We do have the list. This is the list that is in the annual report. These are the [indiscernible] peers. And out of those roughly 25, we selected the ones that are closest to our business. So it's roughly 10 out of them are in our peer comparison. It is also important that we have, let's say, reported figures that are related to our business. So this is a selection of 10. Remo Rosenau: And the big group is available in the annual report. Thomas Hasler: But this is -- I mean, this is part of the total list. Dominik Slappnig: Next question goes back here on this side again to Patrick Rafaisz from UBS. Patrick Rafaisz: Two or three questions. The first one would be on the guidance, right? You already described that H1 will be challenging then hopefully a more dynamic H2. Just wondering how would you define then the organic outlook for H1 and Q1? I'm trying to understand how much catch-up you need in the second half to get to the range. Thomas Hasler: It's a fair point. I mean we expect that given also the elements from the prior year where we had a strong start in the Americas, especially in the U.S., where we had also, let's say, the rebasing in China not yet taken place. So our assumption is that we are going to see organic negative growth in the first half, more pronounced probably in Q1 than in Q2. But that's then going to turn into positive in Q3 and Q4 given also -- the comp base will be different -- quite different in the second half. Patrick Rafaisz: That's very helpful. And then also on the guidance and targets, I think a sensible move to abandon the 20% that was originally formulated, right, putting it into a range. But still, right, if we maintain the midterm plan with the 20% to 23%, is this just pushed out by 1 year? Because I remember in November, we discussed that the Fast Forward program was being implemented in order to safeguard the 20%, right, in the absence of operating leverage. So -- but probably negative leverage was worse. China on top, right, deteriorated. But yes, can you update us on the time line for the 20%? Thomas Hasler: I think you got it. I mean in Q4, with the events in Q4, we had a more pronounced negative leverage than anticipated, which we also have to consider since the market has fundamentally not turned over new year so that we are here also safely advised to consider still, let's say, some negative operating leverage, even though we have, I think, means in the pocket that are able to offset some of that, but not all of that. That's why we also look at the range from 19.5% to 20% as being a range that is incorporating still some negative leverage, which would -- if you go to the upper side of the guidance, of course, reduce and bring us close to the 20%. And looking further out, I think this momentum of generating efficiency and generate synergies across the organization, structural savings will continue. And we also expect that this negative leverage that we still anticipate for '26 will also reduce or even turn into a positive in the years to come. So the likelihood, our commitment to the range in the midterm is strong. Patrick Rafaisz: So -- but the way I read this is that you remain committed to '28, but you wouldn't say today already that '27 will be a 20% for sure. Thomas Hasler: It is too early. I can't say what the markets are going to do. I think we have learned the lessons lately announcements about what happens in the Middle East. This is just another year where a lot of confusion comes around. And I can't say how '27 will turn out. Indications I get from my visit to China is that probably '27 could be a turning point in the residential market in China could. I think also when I look at all the activities that are lined up, there could be a tremendous uptick. We see this as a cycle, a short-term cycle. But how long this cycle lasts is really something we have to be cautious in making here predictions and statements. Our outperformance of the market, that's to me the substantial element that we need to focus on and then be a bit more hesitant in making here guidance for the global economical evolution. Patrick Rafaisz: And a very quick one on the one-offs. Maybe I missed it in the annual report, but did you provide a distribution across the regions or the segments of the CHF 86 million? Adrian Widmer: We didn't provide details here in the annual report. In terms of the one-off, it's roughly CHF 30 million each in EMEA and the Americas, CHF 15 million to CHF 20 million in Asia Pacific and on corporate level between CHF 5 million and CHF 10 million. Dominik Slappnig: Thank you, Patrick. And then let's move to the vertical attendancy. We have here Ben Rada Martin from Goldman Sachs, who will basically start with the first question. Benjamin Rada Martin: My first was just on APAC margins. The margin of the region dropped from 21% 2024 to 18% 2025. I guess post the program changes, is it right to think that there's a path for that -- the region to return back to 20% EBITDA margins? And my second would just be on working capital. Great to see some success there in improvements in 2025 back down to 18% of sales. Is there scope for further improvements there? Or is that the right level of efficiency when we think about working capital? Adrian Widmer: Yes. Happy to take the 2 questions here. Yes, on the margin, there is a path. Obviously, we talked about the impact on China also fast forward well progressing, also refocusing here on the business. And obviously, China is having an impact here, but also making progress in other markets. That's the clear ambition on Asia Pacific margins. On working capital, yes, I do believe there is more scope also here structurally in terms of efficiency on, let's say, the warehousing, the supply chain side, a continued focus here on receivable collection and management, but also structurally working on the payables, I would say, sort of a stepwise further improvement is clearly targeted. Dominik Slappnig: Perfect. And the next one -- the next question goes to Arnaud Lehmann from Bank of America. Arnaud Lehmann: I hope you can hear me. It's Arnaud here. I have 3 questions, if I may. Firstly, on China, it peaked at 11% of sales. I think it's going to be about 9% of sales now. Do you have a level after restructuring how it could look like in terms of contribution? Is it going to be 5%, 6% of sales once you conclude your restructuring and considering the ongoing pressure in the market? That's my first question. My second question is on the price cost outlook. We're seeing some raw materials related to oil and naphtha recovering this year. Are you planning some price increases to offset that? And lastly, you highlighted adhesives as a particular area of interest. Obviously, you've announced the Akkim acquisition. Do you plan to do more acquisitions in the adhesive space? Thomas Hasler: Okay. Thank you, Arnaud. I take the first and the third question. And talking about China, of course, naturally, with the action taken, our roughly 10%, 11% contribution from China short term will be reduced to 9%, 8%. Please also consider that in China, we have the growing automotive industry business helping to offset. So I don't anticipate a decline further down, but it will be a high single-digit contribution. And once also then the residential market is returning to growth, probably still be somewhere at the same level as before. So here, the China contribution is for us very relevant. Our China business in China is healthy, is profitable. And it is also the base for us to expand with the Chinese players outside of China. And here, not only the automotive manufacturers that are building factories around the globe, but also the Chinese main contractor that go abroad and that become main contractor on large projects in Southeast Asia, Middle East, Africa. And just as an implication, this Abu Dhabi airport is in the hands of a Chinese main contractor. And you need access to the main contractor. And if you are not with them in China, you are at a strategic disadvantage as you don't have the relation to the decision-makers. Of course, you need a local presence in UAE to capture on those. But so the China, let's say, aspect is for us of long-term strategic relevance to have a good representation and of course, also grow with the Chinese player as they take more share of the global economy going forward, similar to what we have seen in the '90s, '80s, the Japanese, the Koreans, this is just following the nature of the most competitive players in the market. And then your last question... Adrian Widmer: Sealing and bonding acquisition? Thomas Hasler: Sealing and bonding acquisition, yes. I mean this -- of course, we like the Adhesive segment, and we highlighted it, but it is one aspect of many that we consider. And as I outlined, our selection process for the prospects and then ultimately advancing has many more aspects in there. And if we have a choice, then we certainly provide preferences. But in this regards, this has been a fantastic prospect that is now coming to realization. It is not a signal that the next 5 transactions will be in adhesives and sealants. We look where we do have the best return, where we have the best opportunities to make those bolt-ons accretive and value enhancing. And therefore, we don't exclude any of our technologies nor any of the target markets. Adrian Widmer: Maybe then on the question as to price/cost spread. I mean, on the input cost here, I mean, you mentioned oil price, but of course, it's also quite volatile. Typically, our base case is rather flattish development, but particularly also given geopolitical events can have an impact here also in regards to, let's say, capacity and utilization. But broadly speaking, at least for the next few months. That would be our expectation. As to pricing, we will continue to value sell. We will, of course, also continue to manage input cost increases. In China, we have seen quite a deflationary environment in '25. It's probably going to stay a bit longer, not the same magnitude, but expecting here some price impact in other parts of the world. So slightly positive all in all for '26. Dominik Slappnig: Okay. Two more questions from vertical attendance. This is Pujarini Ghosh, first one from Bernstein. And then we come back and have a final round of questions here for the room. Pujarini Ghosh: So I have a few. So could you provide an update on your Fast Forward program? How has it been progressing in the first few months? So basically in terms of the headcount reduction, the capacity optimization in China? And then also how are you progressing on the digital investments and the benefits that we were expecting for 2026. So my second question is on the margin guidance. And could you potentially talk through the puts and takes for going from the 18.4% margin in 2025 to the guidance of 19.5% to 20% in 2026? And my last question is on the material margin. So you always maintained it in a very close range of 54% to 55%, but it has been steadily increasing. So how should we think about the progress in future? Thomas Hasler: Okay. Thank you. I'll answer the first question, the Fast Forward question. Of course, this is a program that is not over in a couple of weeks. It has many elements to it. We are in the middle of the cost implementation -- cost-saving implementation, especially with a strong focus on China, also in consolidating the footprint in China. This is all considered into our '25, let's say, cost accrual, the execution, also the closing and transfer of capacity is something that needs to be well managed and is taking place now in the first few months of this year. So this is progressing. Front-loaded activities and again, in China has been the fundamental, let's say, change in the approach to the market. We have implemented a more agile, a more granular sales approach. We have reduced from 7 layers to 4 layers in making sure that we capture the opportunities in the various provinces, cities with smaller sales team that are also with smart incentives guided away from the former, let's say, top line growth incentives that have been very successful during many years. So here, these things have been implemented. These things are active as we speak, but the more structural elements by the nature of it takes more time. Also outside of China, the elements where also headcount reduction have been included require time to transfer responsibility, but also to respect the legal requirements in regards to union contracts and notice period. So this is still ongoing in the first month of the year, but will then cease and be completed in Q2 of '26. Adrian Widmer: Good. Then specifically on your sort of margin -- or margin bridge question. Yes, clearly, in '25, I mean, Fast Forward the onetime cost, CHF 86 million in EBITDA did have here an impact. So the starting point will be rather at 19.2%. It will also mean that we have here a structurally lower cost base. So we're expecting about 60, 70 basis points of contribution in '26 from Fast Forward. We'll have a smaller incremental element still coming from MBCC acquisition. The synergies, 20 to 30 basis points. The new bolt-ons should be sort of rather insignificant in terms of the dilution. In terms of material margin, and this is a bit connected to your last question here. As I was referring to the underlying input cost development and here, a slightly incremental pricing impact also here, a slight potential to increase, although we're sitting here, as you commented, at the upper end of sort of the broad guidance range, but this is not obviously carved in stone. And then last, we have the leverage piece. And here, this is clearly related to the top line fixed cost leverage. If we're at the lower end of the sales guidance, 1%, this will most likely mean sort of a similar type of negative leverage as in '25 as opposed to the upper range where clearly, this would be lower and be commensurate with closer to 20% overall EBITDA. Dominik Slappnig: Okay. Thank you very much. So let's come back. I see there is one last question that we have from virtual. This is Vitushan from Baader Bank. Please come up with your question. Vitushan Vijayakumar: It is clear that the U.S. shut for [indiscernible] '25, notably in the fourth quarter. So however, according to what I understood, most of the projects have been postponed and canceled. Thereby, I was wondering if you have further information on this. I mean this is clear that if the projects have been postponed, there is a big chance for them to materialize in the future. So I wanted to know if you have any further visibility on those, please? Thomas Hasler: Okay. I think that's a fair question. And to be clear, I mean, the government shutdown hasn't put those projects at risk or changed the mind of the owners. It has delayed the implementation of the projects. And therefore, fundamentally, these projects are going into execution just with a certain delay because also after the shutdown until this backlog is then reestablished, it takes a bit of time. But it's not that these activities due to the shutdown would have been, let's say, now canceled. Dominik Slappnig: So excellent. Thank you very much. So before I give it back to Thomas, let's do a last round here in the audience and the question goes out here on this hand side, please. First one. Tsitsi Griffiths: I'm Tsitsi Griffiths from Federated Hermes. I have 2 questions. You talked a lot about digital transformation and innovation, but there wasn't a lot of talk about how you're using AI or leveraging -- we're seeing increased opportunities for using artificial intelligence. So could you expand on that and talk about how you see that affecting your position in innovation and digital transformation. The second question relates to the confirmed targets for sustainability, and it was great to see the performance on your Scope 1 and 2 emissions as well as your water disposal. We've seen quite a few companies in this sector cite a lot of challenges, including high energy prices, unfavorable public policy. We've also seen just general reduction in investment. So it would be good for you to expand on if these factors have weighed in, in your reconfirmation of your sustainability targets, especially in particular to your climate targets as well. Thomas Hasler: Good. I think we are going to communicate over the course of the year much more on our digital transformation as this is the investment part of the Fast forward that makes us most excited at this structurally changing, let's say, our competitive ability in the market. Most pronounced and most advanced is our ability to work on the innovation side. We have our 16 global technology centers, which in the past used to make their experiments stand-alone and shared outcome, shared fantastic innovation in forms of product formulations. With AI enhanced tool, we have now the possibility to actually select every single data point of an experiment and put it into the data lake so that every, let's say, effect on experiment level can be utilized for then other experiments and shortening the development cycle, at the same time, also catching effects, which may on the original purpose of an experiment not have been a target, but could be a target in another prospect. So this availability that everything that in the 1,800 chemists go on when they every day make tests and verify, they have a clear target on what they want to achieve. But this system, this centralized system is now collecting all the data that are constantly generated and then they can be, let's say, utilized for different purposes for saying, okay, I need this effect. I have a substrate. I need to bond to this substrate and where shall I start? And this can then trigger into this massive information that is available to say here have been experiments and you can dial in and you can shortcut massively development time and enhance also the scientists with, let's say, initial staff basis where they otherwise would start at scratch and try to compare through the traditional way in looking into products and innovation that have been established. This is very tangible. This is ramping up. We have here a very strong, let's say, innovation culture in the traditional R&D enhanced with data scientists that are kind of pairing themselves with the, let's say, the nature scientists, and this is having great traction. And we will come back on that as this is constantly evolving. But this is one of the 3 major transformative elements. The others are on supply chain excellence, ease of doing business, being able to bring the customer the value instantly where needed and shortcutting traditional ways of having inventory through several steps rather bringing it to where it is consumed, which is the construction side at a given time at a given slot and allowing so also that efficiency for our customers is increasing, net working capital is decreasing. These are things on the supply chain, on the automation of our process inside and towards the customer. And ultimately, the sales excellence, so the interaction with our customer, also having much more, let's say, outside in, inside out information to also bring more leads and possibilities to our customer by having all this, let's say, access into the market data and also show the relevance where they probably have the best possibility together with us to win business for them. So it is an incremental sales aspect instead of waiting for the customer to come to us actually also utilizing our capabilities to bring business to the customer. And these are elements that we are working on. This is in the making. It requires a strong foundation, a strong harmonized database that we also have part of our investments going into establishing the lake, which then becomes then for the machines and for the tools that we want to utilize then the base. But it is fantastic. We have a market-leading position across the globe, across the technology, across all the segments. We have the strongest inside data lake at hand, and we want to utilize that. And then empower that with external information, which makes it unique towards the market, the value we can provide to our stakeholders, not only contractors, but also architects, specifiers still living in an ever-growing complexity world, and this is decomplexizing the world for them. Tsitsi Griffiths: And then just a bit on the challenges around your sustainability targets. Thomas Hasler: Here, I think it's a fundamental difference between us as we are not energy heavy. We are not, let's say, upstream. We are not on the heavy side. Our own energy consumption, as you have seen, we can steer that quite nicely. Our Scope 3 challenge is a challenge that we actively address with our suppliers as this is the input there. We have it in our hands also to extend the life of our products and therefore, also improve the Scope 3, which is also, of course, the value for the customer. The longer it lasts, the better, the less renovation, the less running cost, a very strong aspect in the ROI evaluation of our customer. And therefore, for us, whatever you see eventually happening at other companies that are scaling back for us actually it's full steam in because it is accretive, it's performance enhancing, and it is also very relevant for our customers. Dominik Slappnig: Okay. Last question, I'll be conscious of our time goes to Martin Flueckiger from Kepler Cheuvreux. Martin Flueckiger: I've got 3 actually. First one is on data centers. You've been -- Thomas has been raving about data center growth. And I was just wondering whether you could put your money where your mouth is and basically reveal what kind of growth you've seen in data centers in the U.S. in 2025 organically? And what kind of outlook you're foreseeing in this market for 2026? That's my first question. Then my second question is on -- I guess that's for Adrian. It's on the margin bridge again. Just wondering at current spot rates, what kind of headwind from FX do you expect for 2026? I'm not asking you to predict currency movements, just on current spot rates, what you're seeing there and what kind of nonmaterial cost inflation you think is a reasonable assumption for this year? And then my final question is on your statement with regards to expected market decline in 2026. Just curious about how you define that market. Are you talking about global construction output growth or decline? Are you talking about construction chemicals? And if it is the latter, are you talking about the global market as such? Or do you sales weight it according to your own exposures? Thomas Hasler: Okay. I take the data center question. As you say, I'm excited it is a strong contributor on the commercial segment, not only in the U.S. but across the board. It has a strong double-digit increase over the years consistently, and we expect also in '26 that this will double-digit grow on that side. That's in particular on the roofing side, on the flooring side, waterproofing side, sealant side, all these aspects play here. So this is one of the, let's say, growth engines of our U.S. business. It's very significant. And therefore, it's also creeping up in relevance of the total share of our U.S. business. Adrian Widmer: Then on your crystal ball question here in terms of exchange rates, of course, and you said it, it's difficult to predict. But let's say, at current prevailing rates, we're basically looking at sort of around 3% to 4% negative foreign exchange impact as a best guess. But of course, this is quite volatile. In terms of overall inflation, the overall expectation would be to come down to let's say, below the 3%. Obviously, on the wage side, we had a bit more than 3% still in '25. But here, I would assume there is going to be rather a bit of a reduction. So probably around 2.5% in terms of overall inflation. On, let's say, your market question, and this here, obviously, we are operating in many different markets in many different segments. It is what we would consider sort of our addressable market, not specifically sales weighted, although there is a China element in and it's really looking at sort of the most relevant indicators, which may also vary sort of across here the business. So it's an estimation overall, which we're seeing here and which this number is based on. Martin Flueckiger: Okay. But just to clarify, my question regarding FX and nonmaterial cost inflation headwinds were not related to impact on sales growth. I was just wondering, based on the chart that you've shown in your presentation for the EBITDA bridge, whether you could put those bps down to those 2 drivers roughly? Adrian Widmer: And here, we -- I was showing it's roughly sort of a 20 basis points of additional impact. It was more on the OpEx side, actually not so much on the raw material with the expectation of FX to be not quite as severe. I would also see here that this is rather smaller, if any. I mean, we have overall quite a strong natural hedge in terms of cost base being where we sell. So from an effect on top of translation, I would rather see this as a minor impact for '26. Dominik Slappnig: Okay. Thank you very much for all of your questions. And with this, I'm heading back to Thomas for a final remark. Thomas Hasler: Good. Thank you very much. I hope you enjoyed the last 2.5 hours and the insights that we provided the granularity and question answered. We are very confident about '26. We don't want to talk so much about the markets as we cannot influence. We can influence many things, but not the market and not the FX. We took decisive actions last year to enable us to outperform the markets also going forward significantly our peers. We like the comparison. We are competitive, but we also see that our organization is moving ahead and gaining market share as a key element also the name of the game in 2026, driven by innovation, driven by incremental value for our customers, for the stakeholders, taking pain out of their let's say, daily life. That's where we are best in. And at the same time, making sure that we are also benefiting and also our shareholders are benefiting by increased margins as we grow our business in the market. With that, I close our session here, but I would like to invite for all those that are here present and to join us for a quick small lunch, and we can continue to chat. And for those that are virtual, I thank you for participating, and I wish you a nice weekend and see you sometime somewhere in the near future. Thank you.
Francois Michel: Hello, everyone, and thank you for being here today with us in Paris and also online. I'm, of course, very pleased to meet you all for the first time, and I look forward to having many more interactions with you and with the financial community at large. Today, here with Thierry Hochoa, who is GTT CFO, we will be presenting our financial results for 2025. And Karim Chapot, who is our Senior VP for Technology, will also come on stage to talk about our technologies. Karim has been in GTT for nearly 3 decades. The other members of the Executive Committee are here with us today, and we are all available at the end of this presentation to answer any questions you may have. So the agenda for today is the usual one. I will start by sharing the 2025 key highlights. Then together with Karim, we will give you an update on our technologies and solutions and our innovation strategy. I will then walk you through the market update. Thierry will cover our 2025 financial performance, and I will conclude this presentation with the usual guidance and some key takeaways before opening the floor to your questions. So to start -- I will start with a couple of personal and very important comments on how I see GTT. GTT is a unique company by many, many aspects. And I find it after a couple of weeks in my role, very impressive, even more impressive than what I thought it was. We have a unique technology and expertise which sits at the core of the LNG global value chain. Our expertise is unmatched, and it relies on a very long, very long solid track record of 60 years. There is, of course, in the company, a large number of talents of very competent staff experts and a good combination of IP and skills. It's not only formal IP, it's a lot of skills in the trade. And all of this makes it a very strong basis to create value, which -- in a sustainable fashion, which the company has done successfully in the past and which I can assure you will continue in a very solid, very sustainable manner in the future. I wanted to make this point is something that I do believe fundamentally. That's also why I joined this company. And it is also a belief that is shared amongst our staff and employees. So it's the core DNA of the company. Now key figures. So I'm also very proud to announce that 2025 has been a historical year for GTT. You have seen the release. We have seen a very significant increase both in revenue and in EBITDA, reaching record high levels for the third consecutive year. Our revenue has increased to EUR 803 million or plus 25% year-on-year. Our EBITDA has increased to EUR 542 million, which is plus 40% year-on-year. Our net result has also increased markedly to EUR 414 million. And this has led the Board to propose a dividend of EUR 8.94 per share, which is in line with GTT's constant commitment since the IPO. We continue to provide also a good visibility on the activity of the company. At the end of '25, the order book of GTT is solid. It stands at EUR 1.6 billion. Now regarding the key highlights, and this slide is very important in the presentation. And I start with the core business, which is the membrane containment solutions. The year 2025 was extremely positive in many aspects, but it was singular also. Why? Because the first part of the year, and you see this clearly in the chart -- on the chart on the right, was impacted by very important geopolitical tensions, notably between the U.S. and China. Of course, the discussions on tariffs weighted a lot on the decisions from shipowners to place new orders. And so we saw a moderate order intake well until Q3 and even with a through in Q2, only LNGC was ordered in Q2. It is temporary, but it is as it is. And so what is positive at the end is that the momentum picked up in Q4. You see we have registered 18 LNGC orders in Q4 alone, which is almost as much as the 19 that we have had during the first 9 months of the year. And I can assure you that the momentum continues in '26. We are seeing a very high level of activity of commercial activity. Since the beginning of the year, we have announced 14 LNGC orders since January so far in '26, and we expect many, many more to come quickly. So this temporary slowdown, in fact, is counterbalanced for us by a very high level of activity that has picked up after the end of Q3. And this dynamic is quite similar, was quite similar for FIDs. If you look at the FIDs for new liquefaction trains, in fact, we saw a somewhat moderate start of the year overall and a clear acceleration in the second part in the second half of the year. We could have put the chart here. And overall, '25 was a record year for the decisions to -- final investment decisions for LNG trains with a record level of 84 million tonnes per annum, of which 62 million in the U.S.A. alone. We estimate that these FIDs announced last year will translate into additional needs for new LNGC vessels, representing roughly 150 additional vessels. And so of course, as a consequence, we are confident about the fact that the our order entry -- the level of activity or commercial activity, the order entry will be dynamic, will be good in the quarters to come, but also in the medium term. Second important points for 2025, it is the year when our marine and digital activities, and this is how we call them today, reached a critical mass. We expanded our digital solutions with the acquisition of Danelec. This activity now brings together digital solutions and services dedicated to what we did before, which is services mostly to the LNGC market, but also right now with -- to the wider maritime fleet serving 17,000 vessels. And we now have a very robust platform, a critical mass of people of skills and a large installed base of products, which have reached the market. It may sounds a very simple, but for a medium-sized company, the size of GTT, having an addition of almost 200 highly competent, highly expert people coming in the digital area will allow us to accelerate massively in this area versus what we had been able to do in the previous years. So with this, we are very well equipped to create value in the digital area, marine and digital area, but also for our core LNGC market, and I will come back to it. The third type of activities that we have, and we single out what we call advanced technologies, what I call advanced technologies. Which are the type of activities that are breakthrough in nature and with a very, very high level of technical content. As you know, GTT is a technology company. We need a couple of activities, which are really ahead of the curve, extremely innovative and where we can take perhaps sometimes together with partners, some limited risk to really push the boundaries in terms of technological innovation. Our venture arm, GTT Strategic Ventures had an active year last year. We added 2 new participations, novoMOF, so Metal-Organic Frameworks, but also CorPower. And we also increased our stake in bound4blue to support its industrial developments. Our advanced engineering and modeling consulting team, which is called OS, which has been part of GTT since 2020, continued the development of its modeling solutions and a very active year for AI, in particular, for the maritime applications, but also for other types of applications. And as you know, we have actively taken the decision to focus, I would say, Elogen on the development of its core stack to take into account the slowdown on the [ hydrogen ] market and also focus [ hydrogen ] on what GTT is the best at, which is developing the core technology. So all of this well done in the year. Now let's turn into our technologies and solutions before looking at our market. First, a couple of comments on our innovation strategy. As I was saying, technology and innovation are at the very core of the DNA of GTT. Again, that's the reason I joined because it sets this company completely apart versus traditional company. We have a huge number of experts at the top level in the world in our field. We have more than 3,600 active patents, and we filed again last year, 68 patents, which is slightly upward versus '24. And our innovation strategy is, of course, built by the teams. It's built around the level of expertise that they have, but it's built -- it follows a very simple, I would say, step-by-step disciplined approach, which I will try to summarize as such for the core business. First, we work to improve the efficiency of our containment systems, not only through breakthrough innovations and sometimes we communicate on the breakthrough innovations such as NEXT1, which is a fantastic system, but also with a very sustainable gradual approach to upgrading our existing systems. We have -- our systems, Mark III and NO96 are improved, I would say, almost every quarter with new designs, with new add-ons, with new solutions that allow them to perform better for customers. And this is what makes our innovation strategy so specific. Second, we also invest beyond our own internal systems to improve the overall performance of the LNGC tankers. For instance, we released the design of a new LNGC architecture with 3 tanks and a capacity of 200,000 cubic meters. That means lower boil-off rate, lower operating costs, lower CapEx for the owners. And all of this creates a lot of value for the industry. This comes from us. The third way, and this is an area where you will see an acceleration in the coming years because it's an area where we can invest in a value-creating fashion in a very solid manner, thanks to our newly acquired digital platform. We, of course, have a lot of know-how and a lot of technologies to support the ship operations, especially the LNGC operations through their lifetime. Because we provide technical assistance at various steps of the ship's life because we know how to prevent sloshing because we give day-to-day advice to optimize maintenance or to, for instance, perform alternative survey scheduling. So this is an area where we create value through innovation and that will accelerate. Now to give you more details or better illustrations than I can about those technologies, let me hand over the floor to Karim Chapot, who will present you our solutions. Karim Chapot: Thank you, Francois. Hello, everyone. Thank you for joining us today. I'm very pleased to give you more details and share what made GTC so distinctive. As Francois said, we regularly improve our technology. So we have our standard product, NO96 [ SmartFeed ] and there are regular updates to improve the thermal performance, to improve the reliability of the technology to fit for needs of our clients, and that's something that we did for years. But we are also developing new technologies, upgrade technologies. And this next one product is really our future product. It's really -- it's fantastic products, as said by Francois, which is an upgraded thermal performance, fantastic reliability. And we have the best product today with this next one. And we are also developing new solutions, and that's really where the membrane shine. It's the ability to cover new needs. And for example, for ammonia and low carbon fuel, membrane is fully adapted. And that's really what matters for us for the future. We have a solution. We have upgrades to cover new future needs for fuels. All that will be transformed in the future because we have -- we are coming in a new area, I would say, it's an area of data, and this is made possible with Danelec. And through technology, we improve data collection, and that's really new now. We have access to a lot of information. And based on this information, we are in position to better understand what's happening on shipping operation. So to answer to very specific questions that where it was not possible in the past. So you have -- nowadays, you need to understand that you have several sensors on the ship. This sensor, we have access to the data. And through the data, we are in position to provide very detailed answers. And let's give an example of this kind of question that we have regularly from our clients. Imagine that, for example, in the United States, we have Shell gas with very high level of nitrogen. This is typical of what we have. And this generates a lot of issues for the clients. When you have a very high level of nitrogen, it means that the cargo is very cold. It means that you have a risk of boiler freight, very high level of boiler freight at the beginning of the voyage. You have issues regarding, I would say, the thermal efficiency of your fuel, which means risk of clocking on the propulsion, et cetera, et cetera, mixing of cargoes. This is really where GTT is very strong. It is understanding also operations. So it's not only the containment, but understanding the operation and how we can answer in a very precise manner to our clients on a day-to-day operation and provide the best answers for them to improve their operation. And that's where we would like to focus today our efforts and provide value to our customers. This is here just one example, but we have many, many examples coming every day where we could provide answers and industrialize our answers. So through the combination of expertise and data, we can improve today and tomorrow all these digital platforms based on the know-how that we have gathered all along the year, based on this data and the understanding of the limit of the technology, we can provide real-time monitoring and answer to all their potential need. And I would say, improve the overall value chain from the terminals from the liquefaction terminal to the regasification terminal. So we started already when you look at the maintenance, what we call the ASP alternative survey plan based on all this data and knowing exactly what happened on the ship in operation, we are in a position to really improve the operation of the ship. And instead of opening the tank every 5 years, we propose to the client to open the tank to every 7.5 years. So we increase the time duration between the opening of the tank. And this generates, of course, an optimization of the OpEx of the -- for the owner. And so that's a great solution that is today had a lot of success. So our objective is clear. We want to reinforce our technical leadership by providing these high-value services. This is possible because we have very, very good relation with all the shipowners. We have I would say, very good relation with all the value chain, with all the stakeholders, the charterers. And by having this very strong link, we are in a position to fully understand their needs and to fulfill those needs. And that's really where we would like to dig into. So with this proximity and combined with decades of operational experience and having a deep know-how of experience, it's enabled us to offer relevant solution and innovation and not just be focused on the tanks. So thank you. And now I hand back to Francois. Francois Michel: Thank you, Karim. Now let's look at the market dynamics. My take on this is very simple, I would say. The LNG carrier demand will be very, very good, very strong in the future for very tangible, very concrete reasons. First, there is a growing need for energy and natural gas, in particular, which is a flexible energy will grow and it's also complementary to renewables. Second, to transport this gas -- there is a growing trend to liquefy it for obvious geographic reasons, I would say, but also because it provides greater flexibility and security, both for the producers and for the consumers. And third, and I will dive into this because it's important in our 10-year forecast. The LNG carrier fleet is aging, and this will drive a need for new vessels. So let's take those topics in turn. First, if we start with the traditional energy forecast, as I was saying, and you see it on the chart, what is interesting for us to see is that, of course, the renewable energy is growing, but it is growing in tandem with the growth coming from natural gas. And we view natural gas as slowly, gradually step-by-step in a solid fashion, increasing its share in the overall energy mix, reaching 26% by 2035. Second, as I was saying, natural gas can be consumed locally or exported, but for geographic reasons as well as geopolitical reasons, really core geopolitical reasons, you will see less and less pipelines and more and more liquefactions to provide greater flexibility and greater safety or security of supply to the consumers. The results of this is that the LNG demand will grow in a steady fashion at about 4.5% in the coming years, which is higher than the gas trade, which is higher than the gas demand and of course, higher than the global energy demand growth in volume of slightly below 1%. And this is exactly what you see in all the major forecast from Wood Mackenzie, from BP, from Shell, and they are all pointing towards a sustained growth in demand for LNG well into 2040 and most likely way beyond. It is also worth noting that the IEA has recently reintroduced its current policy scenario this year and also upgraded its stated policy scenario. Second, it's also important to note that all of those forecasts have been revised upward recently. So we see in a consistent manner, a very, let's say, solid growth in demand for the next decades in LNG. And as you can see on the right, with the various projects that have reached FIDs in '25, we now expect the supply to be approximately enough to cover the demand into 2035 or so. But of course, more liquefaction capabilities will be needed to meet the demand from 2030 -- 2035 onwards. One comment on what we call the shipping intensity. The shipping intensity is the number of ships that are needed to transport 1 million tonne per annum of natural gas per year. What you see on this chart is that the fastest-growing producer of LNG is the U.S.A. The fastest-growing consumer of LNG is Asia and the longest route is the U.S.A. to Asia. If we add to that the fact that the Panama Canal is congested, you will see overall an upward movement in the LNG intensity over time for -- again, here also for very concrete, very basic reasons. Now if we look in details at -- if we zoom in on the FIDs, as I mentioned before, 2025 was absolutely a record year in number of FIDs. We have a total number of 84 million tonnes per annum of FIDs, including 62 million in the U.S.A. And I try to compare this with the figures from the past. The average for the past few years was between 20 and 25 a year. So very, very -- more than 3x the average of the previous years. And just this single year, not yet translated into additional LNGCs orders really for real, will represent an additional need of 150 vessels. So it's a very positive point in terms of outlook. What is also interesting is that additional projects, more than those ones will be needed to serve the LNG demands that we have seen on the charts before and that some of those projects are well advanced in terms of SPAs. In fact, we have counted more than 50 million tonnes per annum of pre-FID SPAs, so SPAs that have not been included in signed firm FIDs yet. And this is -- this bodes very well, in fact, for the activity level of future FIDs. We have also put on this slide the number of projects, the list of projects which could take FID in '26 and '27. Of course, it's always very difficult to point to which project exactly will take FID when, but that gives you an idea of the material reality of this trend. The third driver for the LNGC demand, which I wanted to underline is the fleet replacement. And here, we need robust statistics. The LNG carrier fleet is aging. And in the next 10 years, more than 300 vessels will be more than 20 years old and of which a bit more than 200 will be more than 25 years old. And interestingly, by the way, you will see on the next slides that's when ships are being scrapped today, they are being scrapped at 25 years old. So there is a turning point in the value of the ship at about this age. And as you can see on this middle chart, less than half of the fleet today is running on the latest types of engines, which are far more efficient than the older ones. So I would say, regardless, our view, our basic view is that regardless of additional incentives such as the EU ETS, which will, of course, put some additional pressure to decarbonize this full industry and which will further increase gradually over the years to come. But I would say, regardless of this, we are convinced that simple economics will put pressure on the fleet to scrap more and more vessels and to replace them with new ones. And we are already seeing this happening because, as you know, and this is what you see on the left chart, we have seen last year a record number of scraps and conversion. The total number of ships being scrapped or converted has reached an all-time high of 19 ships. All of these factors combined will lead us to review upward our long-term estimates for LNGCs over the next 10 years, which we know put here, hence, the plus-plus after the 450. It's a little bit early for me. I've not met all customers. So it's a little bit early for me to give you very specific figures on that. But let's say, all the indications we have, markets indications we have for the moment point to a solid upward revision of this figure. So we see a very solid level of activity in our sectors for fundamental reasons. The rest of the activity is good. We see it as solid, and we have not made any revisions. Now if I turn to another market for us, which is LNG as a fuel. As you know, LNG as a fuel -- the LNG as a fuel market continues to be booming. And in fact, it has reached more than 150 units, both in '24 and in '25, and I believe that it will stay at a very high level. In fact, for fundamental reasons, when you talk to ship owners or the shipyards, LNG is winning the battle of the fuel compared with methanol or compared with oil, and this is clearly a fundamental trend. Second, what is also positive is that we are convinced that membrane type solutions and our solutions are the right ones for many of those LNG tanks. Not for all, but for many of them, if not for the majority. So a very significant share. Now of course, because this market has increased very fast, we need to make sure that we bring the membrane type solutions in a way that answers to the shipyards needs and to their level of expertise in how to handle membrane type solutions as fast. And it's also true that in the very short run, using a Type C tank is easier for a shipyard. So we will be working on that. We have a strong expertise. We have delivered a lot of systems, and we have come with a very strong action plan on this, which is summarized at the bottom here, but where I'm involved myself. First, of course, we invest and we will continue to do so in R&D to make sure that membrane type solutions keep improving. We have come up with new systems in '24 with the recycle with the [indiscernible] technology, and we just got an AiP for GTT Cubiq in -- do a couple of weeks ago. So you will see more and more innovation to have better membrane systems. But second, which is even more important to me, we will be working together with partners very close to the shipyards that are building the ships so that's we bring our membrane type solutions in a very, let's say, easy to do business with pre-industrialized fashion so that the shipyards can almost bring them plug and play in their own processes. And here, I see a potential, very concrete potential creation of value leveraging on our expertise. Especially for the shipyards that have not been used to using membranes for LNGC, which I think this is the hurdle today for the growth in our solutions. Now third market for us is marine and digital solutions. And as you know, we had already been developing a number of solutions historically in GTT, building on our own internal forces, building on advanced modeling and engineering capabilities, the OS team in particular, and also some acquisitions, Ascenz Marorka, and BPS. Everything changed in scale and in nature. And I insist on the fact that everything -- I mean, everything gained a critical mass last year in '25 because we [ know ] have a critical mass of solutions of staff and also on the number of ships that we serve. We [indiscernible] we have systems installed on 17,000 ships, which changes everything. The second point, which is very important and which I will underline is that we are not purely in hardware, and we are not purely in software here. We have the right mix, the right balance on the hardware and software solutions. And my view of this is -- and this is one of the reasons why we wanted to call this activity marine and digital is that it's not purely a software venture. It's very solid, robust systems at the core of the ship's operations, mixing hardware and software. With this, it brings us a very solid base to do 2 things. First of all, to accelerate the development of the marine and digital activity led by Casper Jensen. And we will keep developing on this. And I can tell you, I'm very confident about the synergies that we have announced so far, not only on cost, but also and more importantly, the sales synergies that will result from this. So the integration is running very well. We are confident, and we are solid there. Second, we will leverage this platform to create new services, really tangible concrete value-creating services for the LNGC fleet where we can mix this digital expertise and the expertise that we have in the membrane, in the containment systems and in the molecule handling, I would say. So let me hand over the floor now to Thierry for the financial overview, and then I'll be back for the '26 guidance and takeaways. Thierry Hochoa: Thank you, Francois. Good morning, everyone. Now moving on to the financial part of the presentation, and let's start with the order book. We can say the order intake has been more moderate than in 2025 than in previous years with 45 new orders in 2025 for the core business and 19 new orders for [ LNGs ] fuel, sorry. As mentioned by Francois earlier, part of the orders has been delayed from 2025 to 2026 and due to geopolitical uncertainties, but our backlog remains very solid with 280 units, 88 units at the end of December for the core business and 48 units for LNG as fuel. Moreover, the beginning of this year give us positive signals and confidence with the future or for the future because we have already been booked or notified of 14 orders of LNG and [indiscernible] carriers as of today. What does it mean 288 units in terms of consumptions and flows for the core business and in terms of revenues. This means EUR 1.6 billion in revenues already secured. This means strong visibility for GTT in the years to come with EUR 609 million in revenues in 2026, and for the core business alone. This means EUR 542 million in revenues for 2027. Now moving on to our revenue. Total revenue amounted to EUR 803 million in 2025, up plus 25% compared to last year, mainly driven by new builds and higher numbers of constructions under construction in 2025, mainly driven by services activities as well, which are almost stable at EUR 23 million, thanks to development of our certification activities and -- but less pre-engineering studies, mainly driven by Marine and Digital Solutions increasing their revenues by 131% compared to last year at around EUR 36 million and including Danelec activities, which generated EUR 6 million in 2025 in 5 months. And finally, revenue generated by electrolysers activities at EUR 4.6 million, reflecting our desire to mainly focus on our technology and on a few profitable projects. Let's continue with the other main aggregates of the P&L, in particularly the EBITDA and EBIT. You can see the impressive increase, respectively, by plus 40% for the EBITDA and 26% for both -- sorry, for EBIT compared to last year. This is mainly explained by the increase in revenue from GTT's activity -- main activity. This is explained by the absence of significant delays in ship construction schedules and this is explained by a strong and close monitoring of our costs. As a consequence, the EBITDA margins amounted or amount to 67% in 2025 compared to 60% last year. Net income also increased by 90% compared to last year, including the [ outsourcing ] cost of Elogen. Two additional comments on this slide. The first one regarding investments. Our investments increased mainly linked to the acquisition of Danelec for EUR 194 million in 2025 and the new minority stakes within the framework of GTT Ventures Capital. And regarding our cash position at EUR 347 million at the end of 2025, if we consider our first loan taken out for the acquisition of Danelec, the net cash position reached EUR 237 million at the end of 2025. So thanks to our strong activity and robust financial figures, the dividends distributed will represent 80% of the consolidated net income as announced in our guidance last year in the same place. This represents EUR 8.94 up -- per share, up 90% compared to last year. I will now hand to Francois to -- for the 2026 outlook and the conclusion. Francois Michel: Thank you, Thierry. So regarding the '26 outlook, so what we see is that we see '26 revenues ranging between EUR 740 million and EUR 780 million, still marking the second best year for GTT and following a record 2025. As we explained, there is a gradual end of the 2022 order peak, which was the very, very abnormal peak with 162 LNGC ordered in a single year and a somewhat moderate start of the '25 level. They have a mechanical impact temporarily, I would say, on the level of activity in '26. but it's not a level that will stay on -- it's not an effect that will stay on forever. So it's very temporary in terms of, I would say, slowdown. Second, our EBITDA level is expected in between EUR 490 million and EUR 530 million, very solid level, which I am sure you have noticed implies a very high level of EBITDA margin, and we will maintain a very strict cost discipline and execution control discipline to secure this level, I can assure you. The third point where we will be absolutely disciplined is dividend policy. We will maintain our dividend policy, which has been the core of our promise to investors over the past years and since the IPO. So that sums it up for the '26 outlook. Now before opening the floor to your questions, let me summarize or give you a few takeaways. So '25 is absolutely a record year for GTT. It shows that's the group has the right strategy, a fantastic, very unique positioning at the core of the LNG value chain, the capacity to execute on this positioning, the teams that are needed to secure this execution hence that also the discipline and the policy to execute it up to, of course, the dividend policies. So it also means that the staff have done a great job, and I would like to thank all of the teams for having delivered such a fantastic performance. Of course, we have been helped by a very good market, in particular in '25, but it will continue doing so in the future. Secondly, '25 is also a very good year for us when it comes to looking not at the past, but in the future because the record high level of FIDs that we have seen and that are solid and firm will translate into additional needs of 150 ships just for one single year. Third, at the end of '25, we still have a very solid order book at EUR 1.6 billion, which gives us a lot of -- of course, a lot of robustness in our forecast for the coming years. We are also -- '25 has also been the year that when we have built a real marine and digital activity, which we will leverage to create more value in this field, in this sector, but also for the core business of containment systems because it allows us to do a lot of activities through the lives of the ships for LNGCs, which we could not do before. So it will be -- it will allow us to create a lot more value. And third, I can tell you that when I look at what lies ahead, of course, we will continue to leverage our very strong expertise, the model of GTT, which is technology expertise based in the LNG and in, I would say, in the LNG world, but mixing it with advanced know-how and the good skills in data and digital will create a lot of value for all stakeholders, for a lot for our customers, but of course, a lot also for our shareholders. Now thank you for your attention. I hope the presentation was clear. And we and together with the management group here and Thierry, in particular, we are happy to answer to your questions. Jean-Luc Romain: I have a question about your technologies and the adoption of your new technologies. You mentioned GTT NEXT1 is a fantastic technology and Mark III and NO96 are continuously improved. What would convince the shipyards or the shipowner to move from continuously improved NO96 or Mark III to the NEXT1 technology. Same question for Cubiq. Francois Michel: I will -- thank you for your question. I will let Karim Chapot answer on the particular technologies and then perhaps give you some complement on the marketing strategy. Karim Chapot: Yes. Regarding -- that's true that NO and Mark have a fantastic legacy and had a lot of success and both clients and shipyards love this technology. But it's clear that the next one has a major advantage. It's first the level of reliability that is much higher than Mark III and NO. And also something that is special is the ability to be enhanced. This NEXT1 technology is designed for the future, is designed to, in fact, be really efficient in a world where we are -- we have a huge tension on the CO2 price and the requirement from the client to be at a very, very low boil of freight. And we are selling a solution at 0.07, but they are strong options and optionality on the design to be further improved, and that's really where the next one shine. So today, of course, the shipyards are looking at it. They are developing all this industrial scheme. We are working with them. We are supporting them. We are marketing the solution to the owners. And we see some very influent owners really interested by this optionality. For sure, as soon as the IMO and I would say, the LNG -- the [indiscernible] start to be important on the cost of CO2. It will go gradually, then the next one will really shine based on its characteristic, based on this thermal capabilities in improvement, based on its design, which this optionality are rather limited, I would say, for Mark III and NO96. Regarding the over solution, the Cubiq solution, the Cubiq solution is a solution that has the advantage of first reducing the cost. So we have removed the chamfers. So we have a solution that is fully optimized CapEx-wise. And this was promoted to the shipyard, and I can tell you they are really interested. They are interested because it offers really an optimum in the volume occupation for the ship. So you really, for example, for a different type of ship, you really have further volume that you can promote. So for example -- well, for different kind of applications. So the design is such that you optimize the volume, but you also reduce significantly the cost. And so that's an optimum. And we worked on the liquid motion side to reduce the sloshing load and improve the cost of the insulation. So by having all this improvement, we are in position to deliver a very good product for LNG as fuel application. And today, we see real interest for major shipyards. Unknown Executive: Can you please give some detail about the LNG global shipping market? What's the part of EU in the shipping market? And what could happen if the Russian gas come back to EU? It may happen. That's my first question. Second question is everything seems to run perfectly. So what is your worst nightmare. Francois Michel: So thank you for your question. Your first question was the LNG market dynamic for the EU and Russia, right? Okay. Thank you for your questions. So first of all, there will not be -- the way we anticipate is even if there is, let's say, a ceasefire or end of the war, then there will still be sanctions and there will be no additional orders or no activities until sanctions are lifted for the Russian projects. So no, if at some point in the future, the sanctions are lifted, we expect some Russian projects, Arctic LNG 2, for instance, to be able to reopen exports, including to the EU, and that would require additional ships, which will generate activity for us. That's the way we see it. So it's possibility to sell more. For the moment, it's totally close, and we are just monitoring the situation. Second -- your second question is everything runs perfectly. Yes, GTT is, I would say, it's an impressive machine. So I will not say the opposite. But of course, I see many things where I believe we can accelerate and create even more value and very concrete things building on what I have seen in the past. I will give you some very concrete grounded examples. One is, of course, leveraging what we have as a platform for digital applications to develop -- to be better in terms of service and maintenance and high value-added services for the LNGC market as a whole is something that -- I think it's a first win for us. Second, working better for the LFS and for the onshore market, understanding better the supply chain constraints, very close to the shipyards and the manufacturing constraints is also something where I think we can remove this bottleneck and increase our market share and the penetration of our solutions for those concrete applications. Then there is -- there are long-term very operational topics where that I will describe over time in the next couple of months, where I think the company can be even stronger on its core business and what has been done in the past. So I see a lot -- I'm very optimistic. I think I see even more potential for additional value creation and acceleration than what I thought before joining, to be frank. Henri Patricot: I have 2 questions. The first one, I know you said it's still early, but I wanted to come back to the 450++ and wondering how much is plus, plus worth? Are we taking 25, 50, 100 more orders? And what's giving you this increased confidence around this long-term outlook? And then secondly, on digital, you referenced the potential for synergies and growth. Just wondering, how do you expect that to translate into digital revenue growth this year and beyond? Francois Michel: Thank you for your questions. I did hesitate a lot on the wording of the 450++ because I knew it would trigger some questions. But I wanted to give you a deep indication on the fact that I am convinced that this number can be revised upwards. This number is the combination is the cumulative of 3 things. It's the amount of ships that still need to be delivered for existing projects that have reached FIDs. It's the amount of ships that will be needed for new FIDs, and this is where we have the highest uncertainty. And it's the amount of ships in the coming decade that will need to be scrapped. And there, we see a solid 200 to 225 ships being scrapped and that will need to be replaced for the various reasons that I explained before. So we had communicated before on the fact that the number would be slightly up versus 450. I see it significantly upward versus 450. That's the first thing. So significantly up, not just a handful, okay? Now let me turn to Thierry for the specific question on digital. Thierry Hochoa: Okay. Just regarding the digital activities, you know that we do not provide any guidance per [ BU ] -- but I can tell you that the growth of the digital will be significant first because we are going to integrate for 100% of Danelec and for the full year of 2026. That's a mechanic approach. And regarding the organic growth for the digital activities, we expect to deliver the synergies that we discussed last year. And we have a strong dynamic regarding the combination of hardware and software. And you know that regarding this acquisition, we do not have any common clients. And it's very easy, I guess, to combine these 2 activities and to develop common figures and common growth for the digital activities. But we do not disclose any figures per [ BU ]. Jean-Francois Granjon: Three questions from my side. The first one, regarding the expectation, we see an acceleration of new orders in the second half of last year and the case for the beginning of this year. Do you estimate that this should have a positive impact not on 2026, but on 2027 growth for the top line and for the earnings? The second question concerns the digital business. We see a strong improvement for the gross margin, 77% versus 48% previously. So can you explain what's happened? And do you consider this sustainable to see such a level of gross margin? And the last question regarding Elogen. We saw a strong cut for the losses last year. What do you expect for 2026 and above. Francois Michel: Thank you for your 3 questions. I will take number one and number three, and Thierry, you can -- Chap you can take the one on margin of digital. So one is the very positive dynamic that we see in order entry today, can it already have an impact as of '27? Yes. Yes, it definitely can. The extent for that is still unknown. But today, the average time between an order, a firm order and steel cutting is about 14 months. So I would say, in between 12 and 18 months. So it can have an impact or the beginning of an impact in '27. This is also the reason why the early '25 loss of moderate intake had an impact on our sales this year. So we are still in the period where what we are recording right now and what has been recorded in a very positive manner last year can be integrated in '27, Yes, of course. Jean-Francois Granjon: Francois, you expect some new growth for the top line in '27 versus '26? Francois Michel: It's too early to discuss, but it will have an impact. I mean if the level of orders stay at the level that we see today, of course, it will have a impact. The third -- your third question was regarding Elogen. The decision to focus Elogen on the core technology development was absolutely the right one, given the market and given also the fact that there is still a lot to do to further improve the products to make it really the best stack or the most efficient stack in, I would say, at least in the Western world. So we are there. We are very solid in terms of technology. We have limited the losses of Elogen to just a couple of million euros a year, which is a very reasonable result. And this is what we have for today. So we keep -- we will be running on a handful of projects, not more than that, small-sized projects to keep developing the technology. We will not take long, large exposures to large projects. We don't need that in the current market conditions, and we will progress from there. Thierry, you want to say a word on the [ margin ]. Thierry Hochoa: Thank you, Jean-Francois, for your question and to underline the impressive increase in gross margin for the digital activities. As I've already discussed last year regarding this activity to increase and to have profitable activity, we need to have a leadership position in this area, definitely. And in '25, we increased our price and mainly for Ascenz Marorka. So that's why we have this level of gross margin today. And we will continue in that way because today, thanks to Danelec, we have a leading position in specific areas, and we will continue to increase our price if we have this capacity and the possibility regarding these elements and the clients. Francois Michel: I think also Danelec brings us -- Danelec is a very structured company combining hardware and software. So it has an approach to value in this digital world, which is very grounded, very solid. The Ascenz Marorka know-how is extremely, I would say, engineering driven. And so mixing the best of both, which is a lot of technology from Ascenz Marorka and Danelec very solid P&L driven is a good way to create value, and this is what we are already seeing in the figures. Unknown Executive: We have a couple of questions from analysts online. So we will take them. And afterwards, we can take some few questions from the room again. Operator: The first question is from Matt Smith of Bank of America. Matthew Smith: My first question was around the record FID activity that we've seen for LNG projects in '25. So I agree that, that really underscores a big pickup in order intake for yourself versus the 2025 results. I guess I just wanted to ask how quickly you felt that those orders need to flow through. Is that the sort of next 12 months? Or is it the next 3 years? What is your sense on timing there? That would be the first question. And the second one, much broader. We talked to geopolitical uncertainties, a very broad term sort of impact in 2025 orders. Could you sort of zoom into some of the more specifics as it relates to LNG trade and whether some of those uncertainties we look to have a bit more clarity on today, please? Francois Michel: Thank you. Thank you. So thank you for the 2 clear questions. We are already seeing very active discussions regarding the potential orders after the projects that reached FIDs last year. So very concrete, very -- our teams are involved in many of those discussions as we speak. So we expect those orders to come for some of them quite quickly and for others, I would say, within the next 18 months or so. So that's the best estimate I can give you today. But not -- it's not 3 or 4 years, I would say, within the next 18 months, perhaps 24 months for some projects, but not longer than that. So that should give us a good level of order. Perhaps there can be some slippage, but best feeling that I have today from looking at the company. Again, I'm new, but that's my best assessment. Second to your question on geopolitical tensions. Of course, there can be -- there could be a surge in tensions between the U.S. and China. What we have seen so far, however, is that if you look at the direct impact of the trade discussions or the tough trade discussions between the U.S. and China on the LNGC market, there have been very limited -- the LNGC market has been excluded from the tariff discussions on the port duties between the U.S. and China. And even if it were revived in one way or another, it would leave enough time for the market to adjust or to reroute the ships. Perhaps -- the one factor that could create some [ deformation ] is, of course, if there were some additional intense pressure for a lot of players in the industry not to use Chinese shipyards as there was last year. I mean, if you look at the number of orders on 2 Chinese shipyards, it was very limited last year. And then fortunately, it came back up this year with 6 new orders. That could create some bottlenecks in the supply chain in Korea. But I would see the risk being there. But again, Korean yards have capacity. They have spare capacity today as we speak. They have also the capacity to allocate capacity resources from non-LNGC market to the LNGC market. So we are not seeing a bottleneck as we speak. Operator: [Operator Instructions] The next question is from Richard Dawson of Berenberg. Richard Dawson: Two from my side. Firstly, implied EBITDA margin guidance is very resilient for 2026 despite the potential reduction in the core business. So interested just to understand what's supporting that margin, and given we could see some operating leverage reduce as core revenue falls and also the digital service business ramps up, which I believe is somewhat dilutive to group margins. That's the first question. And then secondly, maybe a bit of a broader topic, but there was some news in January that India is exploring options to construct some LNG vessels domestically. Have you had any early discussions with those Indian shipyards about using GTT's technology? And how quickly do you think any increase in shipyard slots could come online? Francois Michel: Thank you for your clear questions. Let me start. India is a country I know very well. And yes, we have had early discussions with Indian shipyards. Now how fast can India enter into the LNGC market, we will see. But if it is the case and when it is the case, we will be there and well positioned. That is clear. And this is an area that we are working actively on. Second, in particular, in tandem in particular, good coordination with Korean yards, to be frank. Second, regarding your question on EBITDA, and I will let Thierry answer this one, but I can tell you the discipline on costs in GTT is strong, and I will clearly make sure it remains very strong. Thierry Hochoa: Yes. We are very confident to deliver this EBITDA margin in 2026 because we have this cost discipline definitely. And I remind you that we have a flexible cost in our P&L. And definitely, when we have less activities, we can react very quickly regarding and to adjust our P&L. So that's why we are very confident because if we have less activities in 2025 in terms of orders, our different directions and department, so we'll adjust definitely their charge to take into account these less activities. So that's why we are very confident regarding this guidance and the EBITDA margin that we need to deliver in 2026. Francois Michel: And yes, at this level of activity, we are very, very, very far from a position where it would start to be difficult for us to adjust our cost base. Operator: The next question is from Guilherme Levy of Morgan Stanley. Guilherme Levy: Francois, I wish you all the best in the new position. I have 2 questions, please. The first one, you alluded in the press release to a potential of cross-selling from your digital services business of EUR 25 million to EUR 30 million by 2030. I was wondering if you can provide us more color around the progress to 2030. And then secondly, just thinking about your currently very strong net cash position. I was wondering if you could put more of that cash to work in the near term how are you thinking about M&A? And also, just curious about dividends. But of course, you reiterated your dividend policy. And in a year with slightly lower EBITDA, that will ultimately mean that your dividends could decline next year. Would you be keen to keep dividends flat for longer using your net cash position? Francois Michel: Thank you for your questions. I think your question on cross-selling for digital raises a broader question regarding how efficient we are to generate synergies between Danelec and BPS and Ascenz Marorka. But so let me give the floor to [indiscernible] for the broader question on how well we are executing the synergies. And then perhaps, Thierry, you can comment on the actual levels of the synergies and also the question on cash generation. Unknown Executive: Thank you, Francois. On the broader side of the equation, clearly, when the announcement was made by GTT to acquire Danelec, it was mentioned that we, in combination, the Ascenz Marorka, Danelec and BPS would be on board around about 17,000 vessels. Not all those vessels carry all our solutions and all our services. The vast majority of those vessels carry either VDR or shaft power meter. And those 2 hardware propositions are actually a way in for us to try to sell other services. But we actually, in the cross-selling activities, and I think Thierry can probably comment on the actual numbers, I can comment on the activities. We go about this in a very structured way. So we have mapped all those 17,000 vessels down to IMO numbers with unique products and services. And then we basically reach out to all of them to see whether we can add more within our own digital domain. And as part of those 17,000 vessels, there are also some LNG core vessels that we should be able to sell more to. So a lot of activities around that. And clearly, also one of the biggest activities is to try to streamline our offering and not do duplicate offering into the market. We want to streamline the offering around performance, around voice optimization and not have more than one solution to our customers. Francois Michel: Thank you, [ Kasper ]. Thierry Hochoa: Yes. Regarding the figures of revenue synergies, we have an estimation around EUR 25 million, EUR 30 million for these 2 activities. And the rationale is the fact that with Danelec, we have 15,000 vessels and Ascenz Marorka, we have 2,000 vessels. And the combination of the software that we have in Ascenz Marorka, our current affiliate and to impose this solution to the vessels of Danelec can deliver these synergies around EUR 25 million, EUR 30 million. That's the combination of 2 and based on this 15,000 equipped vessels of Danelec or from Danelec. Francois Michel: Do you want to take the question on the cash. Thierry Hochoa: Can you remind me your question, sorry, regarding your cash generation? I'm sorry. Guilherme Levy: On the cash generation, I was just wondering what could we have in mind in terms of uses for your net cash position at the moment? Just thinking about dividends, your willingness to keep dividends flat even though you have reiterated your dividend policy of 80% of net income for the next year? And also if there is any sort of inorganic growth opportunity that you have identified for the near term? Thierry Hochoa: Okay. Thank you for your question. And yes, I think the first element and first topic for the cash allocation is the dividends. We have a strong dividend policy, 80% of our net consolidated results and we will continue and confirm that we will use our cash for that. The second element is organic growth. You know that we have ambition for our technology for next one. That's an example. But for the other technologies that we are working on it to protect our core business. And we will continue investing our R&D around 10% of our revenue in average, and we will continue that way. And if tomorrow, we have opportunities in M&A, especially in digital because once again, we need to have a leadership position to have the pricing power and to be more profitable with this activity, we will continue in that way as well. Operator: The next question is from Kevin Roger of Kepler Cheuvreux. Kevin Roger: First of all, welcome on board, all the best for the new position at GTT. And I'm very sorry for that, but I will have maybe not a nice one for you, and it's around Elogen. For us, it's quite difficult to make the difference between the technologies available on the market. You come from a player that has also an electrolyser of technology. So I was wondering if you can share a bit with us your take on what is different for Elogen compared to the Street in terms of value to the market, technology, et cetera. That would be the first one. And the second one is just maybe as a kind of second derivative from the one with the cash, but you have generated a lot of cash in 2025. You have already offset in a sense the acquisition of Danelec. So why don't you offset the provision on Elogen for the dividend payments, keeping the 80% of the net results, which include a EUR 15 million provision roughly on Elogen. So just maybe also to understand why you do not offset that for the shareholders on the dividend payments, please? Francois Michel: Thank you for your warm welcome. And I'm very happy to take your questions. First on Elogen. So Elogen is a specialist in high-performance PEM applications with, I would say, medium-scale electrolyzers, which are very -- at a very high level of performance for small-scale applications. The market to produce [ hydrogen ] is, in fact, very broad, it ranges from projects of a couple of hundreds of kilowatts to sometimes up to 1 gigawatt of projects. For some projects in India, it's 650 twice to 650 megawatts for a single project. Elogen is not playing in this market. Elogen targets and has the right technology to target projects up to a couple of megawatts. And those projects are coming at a reasonable pace. They will be -- they will come more and more as the overall hydrogen supply chain matures, which is why we should not accelerate too much in this field because we should not be ahead of the market. We need to be ready when the market develops gradually. And during the time that the market matures, we keep investing to have the best technology to sell those, I would say, intermediate size and small-sized projects. Elogen has very good products for this kind of applications. But of course, this market is, for the moment, relatively slow. And so we want to go at the pace that is required by the market. And we want also to keep a technological -- an edge over the technology. And I think something that GTT has done very, very well. If you look at what happens on the Elogen market is that you have some PEM players who have targeted very, very large projects and build up enormous capacities. GTT has not done so. We are focused on the right scale of the projects to keep investing in a prudent, in a cautious manner on developing its technology for the right projects. I think it's quite successful as an approach. The second is what about the cash and the dividend policy? I can tell you, GTT will maintain its dividend policy, which has been the core of the value for the company and for the shareholders since the beginning. Here, I see no value -- no reason to make an exception, but perhaps Thierry, you can comment. Thierry Hochoa: Yes. Thank you, Kevin, for your question. And this provision, EUR 45 million for Elogen. We can say that we consider this EUR 45 million for the provision to be operational costs, and that results in a cash outflow such as the construction of the gigafactory. So we consider that operational cost, and it's part of our operational results. So that's why we consider that's not necessary to retreat this element regarding the dividends. And second aspect, Kevin, we consider that a yield of nearly 5% remains satisfactory yield, I guess, Kevin. Operator: The final question from the online question this is from Jamie Franklin of Jefferies. Jamie Franklin: My questions have actually been answered. Thank you so I will hand it over. Francois Michel: Thank you. Any more questions from the room? Okay. So I would like again to thank you all for attending this presentation, both in Paris and online. We will have a lot of, let's say, opportunities to interact. Please call us any time. We're happy to take your questions and to interact and also to take your advice guidance on how we can improve further. Thank you.