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Operator: Good day, and thank you for standing by. Welcome to the Appian 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, Brian Denyeau from ICR. Please go ahead. Brian Denyeau: Good morning, and thank you for joining us. Today, we'll review Appian's fourth quarter 2025 financial results. With me are Matt Calkins, Chairman and Chief Executive Officer; and Serge Tanjga, Chief Financial Officer. After prepared remarks, we'll open the call for questions. During this call, we may make statements related to our business that are considered forward-looking. These include comments related to our financial results, trends and guidance for the first quarter and full year 2026, the benefits of our platform, industry and market trends, our go-to-market and growth strategy, our market opportunity and ability to expand our leadership position, our ability to maintain and upsell existing customers and our ability to acquire new customers. These statements reflect our views only as of today and don't represent our views as of any subsequent date. We won't update these statements as a result of new information unless required by law. Actual results may differ materially from expectations due to the risks and uncertainties described in our SEC filings. Additionally, non-GAAP financial measures will be discussed on this conference call. Reconciliations of GAAP to non-GAAP financial measures are provided in our earnings release. With that, I'd like to turn the call over to our CEO, Matt Calkins. Matt? Matthew Calkins: Thanks, Brian. Thanks, everyone, for joining us today. In the fourth quarter of 2025, Appian's cloud subscriptions revenue grew 18% to $117.0 million. Subscriptions revenue grew 19% to $162.3 million. Total revenue grew 22% to $202.9 million. Adjusted EBITDA was $19.7 million. For the full year, Appian's cloud subscriptions revenue grew 19% to $437.4 million. Subscriptions revenue grew 18% to $576.5 million. Total revenue grew 18% to $726.9 million, adjusted EBITDA was $76.8 million. 2025 was a successful year for Appian for several reasons. First, we executed our strategy to sell big deals to leading organizations. The number of customers that purchased over $1 million of software this year grew 50%, nearly doubling the value of our 7-figure transactions. I'll share 2 quick examples. A European pharmaceutical research organization purchased a 7-figure software deal to digitize its clinical trial site selection. Appian will accelerate its selection process with AI, improving patient selection efficiency and reducing trial costs. Separately, a North American aerospace manufacturer purchased a 7-figure software deal to automate a core manufacturing system and save the company nearly $60 million over the next 3 years. The second reason Appian had a successful 2025 is that our position within the U.S. public sector strengthened partly due to structural changes. We closed big deals as the new administration have emphasized efficiency and changed how it purchases and implements technology. For example, a U.S. military branch named Appian its cornerstone platform to modernize operations and increase efficiency. In Q4, it signed a 7-figure software deal to unify systems and deploy them to over 100,000 users. The federal government has shifted to partner more directly with software vendors and reduce its reliance on intermediaries. Appian stands to benefit as indicated by the enterprise agreement that the U.S. Army awarded us this quarter. The Army is already an 8-figure ARR customer. This new framework allows it to purchase $500 million in Appian software and services over the next 10 years. This agreement shows the Army's ambition and commitment to use Appian to modernize systems and transform operations with process and AI. The third reason Appian had a successful year is that we continue to increase our operational efficiency. We've now increased our go-to-market efficiency in 10 sequential quarters. You know this metric means a lot to me, I always mention it. Appian generated 11% adjusted EBITDA margin for the full year 2025 compared to just to negative 8% just 2 years before. We created $63 million in operating cash flow compared to a loss of $110 million 2 years ago. Credit these efficiency improvements to tighter resource allocation and sales, global diversification and back-office AI enhancements. We're creating an operating model that's built to drive further margin expansion going forward. Appian's strong financial performance puts us in a position to start consistently returning capital to shareholders. Today, we're announcing a $50 million stock buyback. Finally, I'll tell you the best thing about 2025. The best thing is that it's become common knowledge over the past 6 months that AI needs process, also known as workflow. Without a process framework, AI cannot add value to complex work streams or collaborations. Market analysts and researchers like Gartner and MIT published papers on the topic. Customers, prospects and partners have all confirmed the trend. Our competitors shifted their messaging, began talking about workflow and added rudimentary process technology. This trend validates Appian's long-standing position on the issue and recognizes the synergy between AI and process that we built our strategy around. I'll take a moment to explain why AI needs process. AI is probabilistic, which is to say it's slightly unpredictable. Most important work at the large organizations Appian targets requires total reliability. So AI needs a deterministic framework like our process layer. That deterministic layer provides direction and guardrails and certain functionality you wouldn't ask AI to write on its own. Code is becoming cheap, but mistakes aren't. So the more important to the work, the more essential is the deterministic layer. In the coming years, AI will do a lot of work and write a lot of software, but it's not going to do it alone. Where AI goes, process must also go. Our technology is an essential enabler of AI. Appian has been a process leader for more than 20 years. We were a pioneer in this market back when they called it business process management. We led providing BPM in the cloud. We led in building a process-centric suite. Our unitary platform provides workflows, data fabric, process mining and built-in security. We led again embedding AI in our processes. We've earned trust at the largest firms and are executing mission-critical processes to the highest standards. 2/3 of the world's top 10 life science firms, asset managers and non-Chinese banks are Appian customers as well as all 15 cabinet-level agencies and military branches in the U.S. government. These groups use our platform for complex mission-critical processes like customer onboarding, claims management, patient intake, regulatory compliance and procurement. Exponential growth in our AI traffic shows that our platform is becoming an AI vehicle for large organizations. AI use on our platform grew 14x year-over-year. AI use on our platform grew 14x year-over-year, and we are monetizing that growth. Customers must upgrade to Appian's AI license tier, which comes with an average price increase of 25%. A meaningful number of customers make this upgrade every quarter, including this quarter. Much of our revenue profit and pipeline growth in 2025 is a result of our synergy with AI. Most of the 7-figure software deals we booked this year were driven by a desire to access our advanced features like AI. Here are 3 examples. First, a leading pharmaceutical company deployed Appian AI into an existing application this quarter. The application tracks interactions between the company's sales team and health care practitioners to ensure compliance with international regulations. We're deploying an Appian product called Doc Center that uses AI to parse incoming e-mails, documents and other communications. Doc Center uploads data, pre-populates forms, triggers workflows and accelerates response times, in this case, by 88%. Next, a top advocacy organization representing over 100 million Americans and 7-figure ARR customer, named Appian an enterprise standard this year. It recognized the importance of deploying AI within an Appian process after evaluating various AI vendors. In Q4, it purchased a large upgrade to access our latest AI features. The group will deploy Appian AI agents to reconcile tens of thousands of invoice payments annually. Reconciliations used to take over an hour per invoice, now the organization expects to complete tie-outs in just minutes. Finally, a network of European banks signed a 7-figure software deal this quarter to access our latest AI features. The group already runs know your customer and loan overdraft processes on Appian. In Q4, they named our platform as an enterprise standard for modernizing core processes. The conglomerate will use Appian Doc Center to classify and extract data from dozens of documents to open cases for processing. The banks expect to save more than EUR 20 million over 3 years as they scale operations. Recent market moves show investors are concerned that AI poses an existential threat to software firms, including Appian. There are 2 main worries. First, the AI will do all the work that software used to do; and second, that AI will write all the applications. I'll address each point. First, Appian leads in the technology that AI cannot thrive without. It's becoming understood now just how much AI needs process. AI is probabilistic technology, not reliable enough for the highest value use cases. Unpredictability is an indelible part of AI's identity. Years of improvement will not make it otherwise, nor will enterprises ever decide to accept AI level unreliability. A deterministic layer is essential. Something to direct the work, something to detect and remediate the errors, something that can produce perfect outputs from imperfect efforts. Process and workflow is that technology. Long before AI, process orchestration was developed to best utilize that other unpredictable worker, the human being. As repeated studies attest, AI is not yet transformative in the enterprise. In PwC research last month, most CEOs report AI having no impact on revenue or cost. But impact is coming when AI is connected to valuable work streams, and Appian is leading the way. With the help of a process layer, AI will be a very productive worker indeed and very widely deployed, providing a framework so that AI can address the world's most important work. It's like selling pickaxes in a gold rush. Second, about AI writing code. We sell to our customers value and safety, not code. Approximately 80% of our revenue comes from highly-regulated industries and the government sector. Customers buy Appian for performance, precision and peace of mind. We sell compliance to regulations, reliable customer service and accurate decisions. We sell the reassurance of a community of practitioners and 24-hour expert support. AI-generated code cannot provide these things. Only with Appian's deterministic framework, can AI create applications and perform work to meet the most exacting requirements. This is the reason why no Appian buyer has ever suggested to me that they would vibe code a critical system. They know better. This current concern about AI-generated code reminds me of the open source scare years ago. Open source seemed to threaten the pricing power of the entire sector. But in the end, it proved that code isn't the center of value in enterprise software. The value comes from the community and the support and the corporate commitment to reliability. Since open source became a popular term in the late '90s, the global software industry has grown by a factor of over 5x. Appian has faced open source competitors in our market. They appealed best to low-end buyers and had no impact on our growth. I expect AI-generated code to be adopted in mistake tolerant and low-value use cases. To write enterprise code, AI needs a platform like ours that facilitates careful specification, developer collaboration, revision and the strategic reuse of preexisting assets. In conclusion, the more organizations use AI, the more they need process orchestration. Process mitigates AI's shortcomings. Together, AI and process can address the world's most critical jobs, but AI cannot do it alone. Before I end my segment, I'd like to welcome Dave Link to Appian's Board of Directors. Dave is an expert in scaling enterprise software companies and applying AI to complex globally distributed systems. He is the CEO of ScienceLogic, an AI-driven observability and IT operations platform. I'm excited to welcome him to our team. I also want to thank Jack Biddle for his exceptional contributions over the course of many years on the Appian Board. And with that, I'll hand the call to Serge. Srdjan Tanjga: Thanks, Matt. Before turning to our fourth quarter results, I want to cover some changes that we are making in our reporting in order to give investors better insights into our financial performance. First, we have reclassified certain IT, cybersecurity and facility expenses from our G&A expense line item into other line items in our P&L. There is no change to our total expenses, just which line item they are shown in. We believe this new presentation of our financial is more comparable to those of other software companies. Second, we are introducing a new metric, cloud net ARR expansion. This metric is calculated by taking the ARR of our cloud customers at the end of the prior year period and measures the ARR of those same customers at the end of the current quarter. We report cloud net ARR expansion in constant currency. We believe this metric gives investors a more timely insight into our business and is more comparable to how other software companies report expansion from existing customers. Going forward, we will no longer report cloud gross renewal rate and net revenue retention. Finally, we refine our definition of a customer. We now aggregate entities based on their ultimate parent company or an equivalent government entity, whereas previously we counted at a more granular level. As with our other changes, we believe this new methodology is more common practice. Please refer to the earnings call supplemental deck for further information on these changes. Now let me turn to our Q4 results. We had a strong quarter of new business driven by continued AI traction and ongoing momentum in our focus on the high end of the market. The standout performer was our commercial North America theater with the fastest new business growth in over 3 years. Cloud net new ACV bookings were approximately 76% of total net new software bookings in Q4 compared to 65% in the prior year. Q4 cloud net new ACV growth was the strongest we've seen in almost 3 years. Appian met or exceeded the guidance ranges we provided on our key metrics of cloud revenue, total revenue and adjusted EBITDA. Cloud subscription revenue was $117 million, an increase of 18% year-over-year. We achieved the high end of our guidance even as FX contributed approximately $1 million less than what was assumed in our guidance. On a constant currency basis, cloud subscription revenue increased 16% year-over-year. This quarter was more back-end loaded than normal in terms of new business, resulting in relatively little revenue contribution from new business in the quarter. Our constant currency cloud ARR growth, which represents the exit run rate was stable versus Q3. Total subscription revenue was $162.3 million, an increase of 19% year-over-year. On a constant currency basis, total subscription revenue grew 16% year-over-year. Professional services revenue was $40.6 million, up 36% compared to the fourth quarter of 2024. Total revenue was $202.9 million, an increase of 22% year-over-year. On a constant currency basis, total revenue grew 19% year-over-year. Our cloud net ARR expansion was 114% in Q4 compared to 113% a year ago and 112% in the prior quarter. The uptick was driven by a particularly strong quarter of upsells to existing customers in Q4. We ended the year with 140 customers with $1 million plus of ARR compared to 115 a year ago. Now let's turn to profitability. Non-GAAP gross margin was 73% compared to 77% from the year-ago period and 74% in the prior quarter. Our subscription non-GAAP gross profit margin was 86% compared to 88% in the year ago period and 86% in the prior quarter. Professional services non-GAAP gross margin was 23% compared to 27% in the year ago period and 31% in the prior quarter. Total non-GAAP operating expenses were $131.5 million, up from $109.8 million in the year ago period. Adjusted EBITDA was $19.7 million, ahead of our guidance of $10 million to $13 million and compared to adjusted EBITDA of $21.2 million in the year ago period. This outperformance relative to our guide was largely driven by greater-than-expected revenue. Non-GAAP net income was $11.1 million or $0.15 per diluted share compared to a non-GAAP net income of $13.2 million or $0.18 per diluted share for the fourth quarter of 2024. This is based on 74.9 million diluted shares outstanding for the fourth quarter of 2025 and 74.6 million diluted shares outstanding for the fourth quarter of 2024. Turning to our balance sheet. As of December 31, 2025, cash and cash equivalents and investments were $187.2 million compared to $159.9 million at the end of last year. For the fourth quarter, cash provided by operations was $1.1 million compared to $13.9 million for the same period last year. For the full year 2025, cash provided by operations was $62.9 million compared to $6.9 million in 2024. Turning to guidance. We are expecting to deliver another year of solid cloud subscription revenue growth and our third consecutive year of adjusted EBITDA margin expansion. Our focus is on consistent execution and capitalizing on the opportunity in front of us. Starting with the first quarter of 2026. Cloud subscription revenue is expected to be between $119 million and $121 million, representing year-over-year growth of 20% at the midpoint of the range. Total revenue is expected to be between $189 million and $193 million, representing year-over-year growth of 15% at the midpoint. Adjusted EBITDA for the first quarter of 2026 is expected to be between $19 million and $22 million. Non-GAAP earnings per share is expected to be between $0.16 and $0.20. This assumes 75.1 million fully diluted weighted average shares outstanding. For the full year 2026, our cloud subscription revenue is expected to be between $502 million and $510 million, representing year-over-year growth of 16% at the midpoint of the range. Total revenue is expected to be between $801 million and $817 million, representing year-over-year growth of 11% at the midpoint. Adjusted EBITDA is expected to range between $89 million and $99 million for an approximately 12% margin at the midpoint of the range. Non-GAAP earnings per share is expected to be between $0.82 and $0.96 or approximately 46% growth at the midpoint. This assumes 74.8 million fully diluted weighted average shares outstanding. Our guidance assumes the following. First, we anticipate our non-cloud subscription revenue to be roughly flat on a year-over-year basis in Q1 and in 2026 as our customers are increasingly opting for the cloud. Second, we expect professional services to grow in the teens in Q1 and high single digits for the full year. Third, total other income and interest expense will be approximately $3 million in Q1 and $12 million for the full year 2026. Fourth, our guidance assumes FX rates as of mid-February. Please note that we expect FX benefit to our reported revenue growth rates in Q1, but we expect FX to be roughly neutral to year-over-year growth for the rest of the year as we annualize the U.S. dollar depreciation from April of last year. Finally, as discussed previously, after 2 years of relatively flat OpEx, we are returning to a moderate pace of investment in 2026. We are investing in the growth of our sales org as well as the expansion of our engineering capacity in India. Despite these investments, we are forecasting 1 percentage point of adjusted EBITDA margin expansion in 2026. Before wrapping, let me also touch on our share repurchase announcement. As most of you know, we are very careful about dilution as evidenced by our stock-based compensation expense as a percent of revenue, which is less than half that of other software companies our size. As Matt mentioned, thanks to significant improvement in profitability over the last 2 years and becoming a meaningful cash flow generator, we are in a position to announce a $50 million share buyback. We expect this program will essentially offset the dilution from stock grants issued this year. We see this buyback authorization at the beginning of a consistent capital return policy for our shareholders. Our intention is to scale the size of our share repurchase program in line with the growth in our cash flow in the coming years. We will look to execute on this buyback during 2026. In closing, we are pleased with our Q4 results, in particular, our traction with AI and believe we are well positioned to deliver a successful 2026. We are excited about the opportunity ahead, and we'll continue to invest responsibly to maximize our long-term value. Before we move to Q&A, I'd like to invite you to our Investor Day in New York on May 14. We'll be sharing updates on our product and strategy, and you'll have the opportunity to hear directly from our customers. If you'd like to attend, please reach out to investors@appian.com. Now we'll turn the call over for questions. Operator? Operator: [Operator Instructions] And our first question comes from the line of Sanjit Singh of Morgan Stanley. Oscar Saavedra: This is Oscar Saavedra on for Sanjit. Yes. Congrats on the great quarter, guys. Nice to see the cloud net expansion uptick quarter-over-quarter. I was thinking maybe on the guide, it looks like Q1 guide is a bit of an acceleration from Q4. I imagine part of that is that expansion ticking up. But maybe can you help us understand a bit more the visibility and the confidence that you have given that acceleration? Srdjan Tanjga: Yes. So we're happy with how we wrapped up 2025, and we'll set up well for 2026 as evidenced by the full year growth rate of 16% for the year. Q1, I guess, 2 things I would say about it. Number one, it will benefit from strong new business that we had in Q4, which is why on a sequential basis is a robust guide. And then the other thing that I would call out is just that it is a quarter in which we'll still benefit from a meaningful FX tailwind. And that's clearly the primary difference between the full year guide and the Q1 guide. Operator: And our next question comes from the line of Raimo Lenschow of Barclays. Raimo Lenschow: Perfect. Congrats. That was a great Q4. I have 2 questions, one for Matt, one for Serge. Matt, if you think about -- I'm totally aligned with you with your vision around AI and agentic needed like a control layer. Like how do you think what gives you the right to be that? Because like, obviously, a lot of other people are kind of trying to eye for that because that kind of position will be very strategic as well. So talk a little bit about what Appian brings to the table that you can go to customers and say, like, I should be that layer. And then I have one follow-up for Serge. Matthew Calkins: Yes. Well, I want to say that we've been that layer for a long time. We've been that layer before large language models exploded onto the scene. We've been embedding AI actors, you call them agents, in our software, in our processes for about a decade doing jobs as digital workers because we've been a platform that enables and governs digital workers. So we're not a Johnny-come-lately to the idea of governing a digital worker or an AI agent. In fact, it's been our business, and we've been leading for a decade. So I think it's a natural for us to inherit this position as well. But I also want to say that because we have such a strong governance layer, such a unique ability to detect and remediate errors, such a monitoring layer and a self-improvement and an optimization layer, I think we're really uniquely equipped for this moment. I think there's some other vendors that went all in on agents and then realized they needed a governing layer, whereas we come into this market with a governing layer and are, therefore, really well equipped to give agents the structure they need in order to succeed. Raimo Lenschow: Okay. Perfect. And then, Serge, if you think about the slight increase in OpEx you talked about on the sales org, et cetera, how do you think about the evolution of sales capacity from here onwards? And I'm asking because it does feel like a whole new world is opening, and there's quite a few players in the software space that are now thinking about like we probably should think about sales capacity increases. Is this just one-off things? Or how do you think about that evolution here? Srdjan Tanjga: Thanks, Raimo. So I guess I'll start with a little bit of history. We've done a great job significantly improving our sales productivity and paybacks on our sales and marketing investment, really particularly last year. And that, frankly, gives us the right to grow our sales org because we want to do it in a financially responsible way. So that's point number one. Point number two is kind of like your point, which is the market is large and growing, and we are very underpenetrated versus the opportunity. So to us, this return to growth of the sales org is the beginning of a long-term trend. But it's important to do it consistently over time. What you don't want to do is overextend because it's a difficult operational task. What you want to do is bring in people, make sure they're successful, make sure that they reach their productivity and then do it again year after year. And that's fundamentally how you kind of put yourself in a position for multiyear growth. Operator: Our next question comes from the line of Steve Enders of Citi. Steven Enders: Okay. Great. I guess I just want to start on maybe the opportunity around AI. And I guess, given the purview that you have in some of these larger customers, just what have you seen so far from how their budgets or their purchase decisions are changing as they're looking to incorporate AI? And I guess maybe what does that mean? Or I guess, how do you kind of view the opportunity pipeline and given what that means for '26? Matthew Calkins: Yes. AI has been an unalloyed positive for us in our relations with our customers, maybe causing some consternation in the investing market. But in our sales situation, it's an entire positive. It gets us into higher-level conversations. It allows us to speak strategically to the top topic that's on executives' minds. We are more likely to win according to internal analyses when AI is a factor in the decision. So it's helped our TAM. It's helped our access. It's helped our win rate. We're benefiting in all dimensions from AI. Srdjan Tanjga: And Steve, if I can just add, just to give you a sense of how that's sort of playing out over time. Customers begin with proof of concepts. Then when they are ready for production use case, they need to upgrade to our advanced tier to have access to AI and production. And we talked about in the past about how the percentage of our customers that is on that tier is growing. And -- but plenty more that we can upgrade to advanced tier. Then what we're starting to see is some of those customers have already upgraded coming for the second or the third workload because they're happy with the performance of the first one. And that gives us incremental opportunities to grow revenue there. And then over time, we will have incremental tiers as more functionality comes online. So that's kind of the process of upselling AI and how it fits into a company's budget. Matthew Calkins: Yes. Let me follow on that. We've got this thesis, and you've heard it because I just talked about it, that AI belongs in a process and that within the deterministic framework of process orchestration, AI can really attach itself to valuable work and create new value. So we've detected that some of our solutions are ideal vehicles for demonstrating that thesis. And I mentioned in my prepared remarks, this solution called Doc Center, which is a pretty straightforward usage of our technology. Just ingest documents, launches workflows, uploads data, rapid turnaround, high accuracy. But it's just such a good demonstration that we are focused on driving this into dozens or scores of accounts as quickly as possible this year as we can because everybody who sees this knows our thesis is correct. And this is what I think we need to do in the market. We need to establish that our philosophy of making value out of AI is accurate. Every organization in the world right now is wondering how they can make use of AI. We're wondering whether AI can have a value proportional to its CapEx, and we have on our hands a demonstration of how to make that value. Just embed it within a process and it goes. And the results are tremendous and it's predictable and we can install it quickly. So where we see that we've got some of these winning demonstrations that establish how you could make value with AI, we're going to put the pedal down. Steven Enders: Okay. That's great to hear, and I appreciate the context there. Maybe on the Army enterprise agreement. I appreciate the color on the 8-figure customer there. But I guess kind of where do you see that spend potentially going? Or how do you kind of view, I guess, what incremental use cases or how you just kind of view that relationship developing moving forward with the enterprise agreement? Matthew Calkins: Yes. This is a threshold for us. This is an important moment in the growth of this organization. It represents a degree of confidence that an agency has not in the past shown in us. We've done a lot of great work, and we've done some big projects and delivered some wins, but we've never had a $500 million ELA like we do now with the Army. And that speaks volumes inside the Army. It allows us to speak to any part of the organization with great credibility, but it also allows us to go to other departments in the government and say, here's the department that knows us best. Here's evidence that -- of what they see in us. It also allows us to approach our partners and say like this is the kind of -- this is what we could succeed on together, and now we want you to help us somewhere else. So this is just a wonderful badge of seriousness, and we're going to wear it all around Washington. Really pleased with what that says. As for how we got it, I'd say a lot of the conversation is around modernizing legacy applications. And this is something I've spoken about on previous earnings calls, but I didn't get into it much this time. But I do want to mention that this topic is causing a lot of excitement amongst our customers and prospects. If I mentioned or demonstrate even better the technology that we have today to convert a legacy application into a modern Appian application, it typically stops the conversation cold. No matter what it is we were talking about, if there's a customer or prospect executive in the room, they want to stop everything and talk about legacy modernization. And we had conversations on that at the Army, who obviously has a number of legacy applications of their own, and that provided a lot of the momentum behind this award. Operator: Our next question comes from the line of Derrick Wood of TD Cowen. James Wood: Matt, I appreciate the thoughts on the landscape of AI versus software, given all the concerns out there. My question is when it comes to building software applications and processes for your customers, how are you guys using AI internally to accelerate that value delivery? And then when it comes to the LLM vendors, like what do you think the challenges they might have in trying to build their own software orchestration and governance layer up the stack? Matthew Calkins: Yes. Okay. So they are going to have some challenges, and it makes a world of sense for them to partner with us in order to complement the power of their model. Look, the whole industry is under pressure right now. In 2026, it's a time of testing, where AI has to demonstrate that it can create commensurate value to justify the CapEx. And I think it's the question on everybody's lips and every organization is wondering about it and the 56% of CEOs who reported no value in the PwC survey last month are wondering about it. Everyone is wondering where we will find the value. And of course, the answer is actually very simple. You just have to connect AI to the processes where the greatest value takes place. And that's a slightly complicated connection in order to pull off because AI needs role and responsibility and a constrained aperture functioning and checkups and revisions and learning and so on. It's just -- it needs what a process layer could have given it. And so I feel like this top question that looms over the economy in 2026 is a question that I won't say we have the answer to it, but I say we have a lot to say. We have a lot to say about this question. I'm excited about the ability to prove that answer in concert with the large language models. Of course, we're agnostic. We work with all and many of them. And for that matter, with the clients who are all desperate to find an answer to this question. They're all eager for value, but not wanting to take a risk and to move first and to run afoul of the many pitfalls in AI, the unreliability and the dangers that come with that. What was the first part of your question again? James Wood: Just how you're using AI internally to maybe help accelerate the value you deliver to customers? Matthew Calkins: Yes, that's right. Well, we're using it thoroughly, right? We're expecting major increases in all of our development capabilities this year because we're making a prolific use of AI. So I expect that to be excellent for our productivity and engineering. Also, we're using it in every deployment. So when our services teams are on site, creating new applications for our customers. They are invariably using AI, which is terrific for acceleration for optimization, for recommendations on improvements, just a marvelous way to get to the endpoint. And I want to clarify here that the endpoint is not a stack of AI written code. The endpoint is an Appian application, which provides the structure, the guardrails, the safety, the monitoring that AI alone wouldn't have provided. And also that Appian application, once you've used AI as the bridge to an Appian application, that application now has the flexibility, the ability to evolve over time to match new strategic needs or to cultivate greater efficiency or to leverage new technologies. It is a living vehicle instead of what you could call new legacy, right? You don't want to go from old legacy to new legacy. You want to move to a living vehicle that can adapt as your business evolves. James Wood: Great. And then for Serge, I mean, you guys had 36% growth in professional services, I think that was the highest in 8 years. Your on-prem business was quite strong as well. It doesn't sound like you expect that to continue in the upcoming year. Could you just give a little more color on what drove that outsized strength that seems to be a little more onetime? Srdjan Tanjga: Yes. Let me take them in order because they're different answers. So we've been very pleased with the demand we're seeing in our professional services business for -- especially in the back half of 2025. And it comes down to a couple of things. One is the world of AI because as Matt was just talking about, customers want to get the value but they're sensitive to get it at the levels of accuracy and performance that they are accustomed to. So when they choose our software, they usually also partner with us on implementation. Because we've done it before, we bring that implementation know-how, which is scarce in the market right now. And that helps us kind of sell both software and services when it comes to AI. And then the second piece is federal. Our success there and the change in how the government likes to deal with vendors has helped our professional services business on the federal side as well. And that really drove our business next year. And frankly, we're expecting it to continue driving that business next year with 9% growth rate. We did see an uplift in demand, and we're going to continue seeing growth there, but it's not going to be a step function as we have experienced here in the back half of 2025. And then on the on-prem side, we had a very strong Q4. Frankly, that was all federal. We credit to our teams when the shutdown ended, we were ready to go and we got the deals that we were going to get, frankly, even better than we would have expected had the shutdown not been there. So that's the story of the fourth quarter. But then as you look forward, I can tell you what we see quantitatively and qualitatively. On the quantitative side, we just see a bigger mix of cloud in the pipeline than has been the case historically. And then secondly, when we talk to our customers, even our on-prem customers, they are looking for incremental deployments in the cloud. So for example, one of the largest deals that we have in the pipeline in Q1, we'll see if we get it or not, is for a customer who did one of our largest on-prem deals last year. And that's not them moving their Appian workloads from on-prem to the cloud. That's incremental deployment in line with their own IT strategy and moving to the cloud, which is why the description or the forecast for the on-prem business is what it is. James Wood: Great. Congrats. Operator: Our next question comes from the line of Devin Au of KeyBanc Capital Markets. Devin Au: All right. First one I have, maybe for Serge. Could you maybe speak to the framework of kind of the '26 revenue guidance. I believe last year, given some leadership transition, some uncertainty around pub sec and changes around go-to-market, there could be some more conservatism being embedded in the initial guidance '25. Are you applying kind of similar framework here in '26? Or can you just speak to that a little bit more? Srdjan Tanjga: Yes. So how we forecast the business hasn't really changed internally, and there's no incremental conservatism or caution. From a macro environment, I think I can speak for the company, even though I wasn't here a year ago. It feels a lot less uncertain than it did a year ago back when [ DOGE ] was starting, and there was a lot of macro sort of headwinds or potential headwinds related to the international relations. So from that perspective, we feel like we have perhaps a better handle on the world out there than we did a year ago. The thing that I would say specifically, though, is I divide the guide into cloud and the rest of the business. As you can see, the cloud, it's just ratable. It's frankly a little bit easier to forecast, which is why the range there is narrower for the full year as a percent of total business, whereas then we have a broader range as a percent of the business for the rest of it just because as you've even seen last year, for different reasons, both on-prem and professional services can be lumpier. And that's why the range on the full year guide is as wide as it is. Devin Au: Got it. I appreciate the context there. And then just a quick follow-up on the strength that we're seeing from pub sec. You continue to see momentum there, which is encouraging, and it seems like Appian is really well positioned there. As you guys kind of return to sales capacity growth, could you just speak to like how are you thinking about the deployment of resources towards that vertical specifically and kind of how you guys are going to sustain and amplify the success there? Srdjan Tanjga: Yes. We are growing our capacity in the federal vertical, but we're growing it in other verticals as well. At the end of the day, I will just reiterate what I said, the size of our distribution is a limiting factor versus the size of the opportunity. And we don't want to try to address that in a big bang because then you run the risk of deteriorating execution. So we're going to hurry up slowly, and we're going to build sales capacity year in and year out. But certainly, that's the case in the federal space as well. Devin Au: Congrats on the strong results. Operator: And our next question comes from the line of Lucky Schreiner of D.A. Davidson. Lucky Schreiner: Great. I'll echo my congrats as well. I have a follow-up question on the guidance. Coming off a strong quarter, the cloud growth guide, there's a lot of deceleration baked into that throughout the year. So just I'm wondering, is that all FX related? The pipeline sounds strong. So is there maybe conservatism around deal timing or ramping of sales capacity? Just curious what's driving your outlook on specifically the cloud growth guide. Srdjan Tanjga: Yes. So cloud growth is 20% at the midpoint for Q1 and 16% for the year. And the majority of that really isn't anything about the underlying constant currency business. It's really about the fact that we still get one more FX bump in Q1 before it normalizes. Operator: Thank you. I'm showing no further questions at this time. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Operator: Good morning, and welcome to MTY Food Group 2025 Fourth Quarter and Year-End Results Earnings Conference Call. [Operator Instructions] Listeners are reminded that portions of today's discussion may contain forward-looking statements that reflect current views with respect to future events. Any such statements are subject to risks and uncertainties. that could cause actual results to differ materially from those projected in forward-looking statements. For more information on MTY Food Group's risks and uncertainties related to these forward-looking statements, please refer to the company's annual information form dated February 19, 2026, which is posted on SEDAR+. The company's press release, MD&A and financial statements were issued earlier this morning and are available on its website and on SEDAR+. All figures presented on today's call are in Canadian dollars, unless otherwise stated. This morning's call is being recorded on Thursday, February 19, 2026, at 8:30 a.m. Eastern Time. I would now like to turn the call over to Mr. Eric Lefebvre, Chief Executive Officer of MTY Food Group. Please go ahead, sir. Eric Lefebvre: Thank you, and good morning, everyone. This morning, we released our 2025 Q4 and fiscal year-end results, which you can find posted on our website. While macro conditions remain challenging throughout 2025, Q4 showed continued strengthening in many of our core metrics. We are encouraged by the acceleration in positive net unit growth, deepening of our development pipeline, robust free cash flow generation and lower leverage, which grants us greater financial flexibility. After many years of strategic focus, MTY's store network is now in its healthiest position in over a decade. Building off last quarter's positive momentum, Q4 experienced a net addition of 19 locations, which pushed us into positive territory on an annual basis for the first time since 2013. This has been achieved through a combination of strengthening of our partnerships with existing franchisees, selectively investing where we see the strongest returns and developing more tools to energize and monitor our business. Excluding normal seasonal weakness expected in Q1, we believe that we're in a good position for this positive momentum to continue into 2026. Turning to same-store sales growth. The macroeconomic backdrop remained challenging as consumers and business owners faced a variety of shocks throughout 2025. In Q4, our same-store sales declined by 1.7% overall, with Canada flat and the U.S. down 2.8%. Results were generally similar by restaurant type within each region. To counteract these pressures, MTY must continue investing for the long term in both the guests and the franchisee experience. Our priorities remain enhancing consumer engagement and decision-making through data science, fueling our omnichannel experience, which has significant white space in Canada and reinforcing all our brands through continuous improvements and innovation. Moving to profitability this quarter. Franchise operations segment profit reported a 53% improvement in Q4, which was primarily due to gift card breakage income, which Renee will address in a moment. Net of this impact, franchise operations in Canada remained flat, while the U.S. had a decline, which aligns with their corresponding same-store sales results that I mentioned earlier. During 2025, our free cash flows per share net of lease payments reached $5.68. The last 2 years have been the 2 best in our history, showcasing the resilience of our model and cash flow profile across business cycles. As such, we also raised our quarterly dividend by 12% last month to $0.37 per share. Before I pass the line to Renee, I would like to comment on the strategic review that was recently initiated by the Board of Directors. We cannot provide a specific time line or assurance that any transaction will result. I can confirm that the process is ongoing and active. For the purpose of today's call, I cannot comment on the process, but I can assure you that we will provide an update or make announcements as appropriate or as required by law. In parallel, MTY continues to be run as business as usual with the same discipline and long-term focus that's defined the company since our founding. With that, I'll turn it over to Renee to discuss the financials. Renee? Renée St-Onge: Thank you, Eric, and good morning, everyone. Normalized adjusted EBITDA came in at $87.7 million for the fourth quarter, up 48% year-over-year compared to the same period last year. This increase was primarily due to a onetime $29.5 million increase in gift card breakage income related to unredeemed gift card balances related to an acquisition we made several years ago. At the time, we took a conservative approach to the unused portion of the gift cards for that brand pending the accumulation of sufficient reliable redemption data. Based on the clear pattern that can be derived from this additional decade of usage data, we are catching up on the estimates of the portion of the gift cards that will not be redeemed. Moving forward, we expect the usage to remain consistent. As mentioned by Eric, this gift card breakage fee also positively impacted our franchise operations segment profit and normalized adjusted EBITDA. Net of this impact, franchise operations segment profit in Canada were flat, while the U.S. decreased by 12% Canada franchising revenue saw an increase of 1% due to higher recurring revenue streams from the increase in system sales generated by this segment, while the U.S. was impacted by a decrease to recurring revenue streams as a result of lower system sales. On the expense side, franchise operating costs in Canada were in line with the same period last year, while the U.S. and international were up $2.5 million. The increase were primarily due to higher wages as a result of normal inflation as well as IT licensing costs and expenses related to our gift card program. We continue to add higher quality new stores and capture efficiencies from our ongoing initiatives. We expect franchisee EBITDA growth to outpace same-store sales growth. Segment profit and normalized adjusted EBITDA for the Corporate Store segment came in at $7.9 million, up 23% or $1.5 million from last year. Margins improved to 7% compared to 5% in the same period last year. We remain confident in our ability to drive improvements in corporate store over time, which should result in margins moving towards the high single digits. Food Processing Distribution and Retail segment delivered revenue growth of 27%, driven by a shift in our retail model from a licensing agreement to vendor on record for some of our products. Our profit margins remained stable between the 2 periods at 11%. We believe meaningful opportunities exist within the retail channel for top line and margin expansion as we continue to build scale and strengthen our presence in underpenetrated markets. We reported $32.1 million in net income attributable to owners or $1.40 per diluted share, an increase of more than $87 million from the prior period. The improvement was primarily due to a onetime impairment loss recorded last year in relation to Papa Murphy's as well as the gift card breakage recorded this year. As Eric mentioned earlier, our asset-light and well-diversified business model continues to generate strong free cash flows. This performance provides us with significant optionality to reduce debt, invest for the future and return capital to shareholders. In the fourth quarter, cash flow from operations were $46.2 million compared to $43.7 million in the same period last year. Free cash flow net of lease repayments was $37.6 million, up 38% compared to $27.4 million in the same period last year. We ended the quarter with net debt of approximately $580 million. Considering our strong free cash flow generating ability, our debt-to-EBITDA of approximately 2x is at a level that gives us the opportunity to take advantage of the options we possess to deliver enhanced shareholder value. And with that, I'd like to thank you for your time and turn it back to Eric for closing remarks. Eric Lefebvre: Thank you, Renee. During the last 2 years, we focused on strengthening the core fundamentals of the business and laying the groundwork for improved performance as market conditions evolve. We've made significant strides, but our job is not done. There continues to be many opportunities to enhance shareholder value, we're pursuing them with both vigor and discipline. While near-term volatility in consumer sentiment remains, we believe MTY is well positioned to navigate this environment due to the strength of our people, the breadth of our portfolio and proven resilience of our business model. With that, let's open the line for questions. Operator? Operator: [Operator Instructions] The next question comes from the line of Derek Lessard with TD Cowen. Derek Lessard: Eric, nice to see the positive store growth, the net new growth there. Again, in the quarter, you reported another 19 net new openings, and you noted a strong development pipeline. So I was curious if you can maybe talk about which of the banners that you're seeing interest and/or the greatest strength in. Eric Lefebvre: Yes. Thank you, Derek. Yes, there's a few brands. Obviously, we -- not all our brands have the same strength. But for now, I mean, Cold Stone and Wetzel's remain our champions for the number of store openings and the growth we see in these 2 brands. But there is strength in other areas of our portfolio. I can name, for example, Taco Time in Canada, where we have a very strong development pipeline, very achievable and ambitious targets for this year and next year. Thai Express is another example where we finished the year strong, and we have ambitious targets for '26. So it's more than just Cold Stone and Wetzel's, but they remain the 2 champions. Derek Lessard: Okay. That's great color. And just maybe on the -- I noticed on the digital sales -- there was one -- I guess it was Papa Murphy's that dragged down your results. So the first question is -- the first question on Papa Murphy's is sort of when do you expect some stabilization in that banner. But then -- and as a follow-up, you also -- excluding that decline, digital sales in the U.S. were up actually 6%. So curious on some of the initiatives or platform improvements that you have going on that are driving that strong performance. Eric Lefebvre: Yes. Well, for Papa Murphy's, it's a pretty important brand for us. Obviously, in terms of sales, it's our #1 brand, and it's got a heavy component of digital sales. So if there's a decline in sales for Papa Murphy's, it automatically impacts the ratio for the entire business. That being said, Papa Murphy's had a reasonable Q4. It was not great, but it was -- sequentially, it was better than in some previous quarters. So stabilization is it's hard to know exactly when that's going to happen because we have good periods and then sometimes there's periods that are a little bit more challenging that follow. So we are in that volatile environment where we do a lot of things. We're trying a lot of things. We're trying hard to make the business work and to improve sales on a sustainable basis for this brand. But it remains challenging. Pizza is super competitive, as you know. A lot of our competitors have very aggressive promotions. And promotions, to be honest, that are hard for us to match. We need our franchisees to have a chance to turn profitability. And if you give the product away, it makes it difficult for them to achieve that. And even for our corporate stores that we own in the chain, we have skin in the game for Papa Murphy's. So obviously, if our franchisees feel the pain, we feel it as well. So I mean, we're working hard. We have a number of technologies that are being deployed. First leg of some new tools is going to kick in probably late March, early April. And we hope that's going to help us drive better business, help us communicate with our customers more effectively, hopefully acquire customers as well. So these new technologies are coming live soon, and Papa Murphy's will go first. and then other brands will be able to follow with these. And the second part of your question was regarding low-hanging fruits that we might have. And you can look at brands, for example, like Wetzel's Pretzels, where we're just only beginning with loyalty. We're just only beginning with digital. It represents almost nothing in our portfolio -- in our current sales. So we do see an opportunity there. And as mentioned in previous calls, we're lagging in Canada in terms of technology. We're almost there now with the cleaning up and preparing our data and making sure that we accumulate reliable and usable data. And we're almost there now with being able to deploy these tools. So we're pretty bullish on the potential of these technologies on the business. It took a little bit longer than expected for us to get there, but we're just there now. Operator: The next question comes from Bea Fabrero with Scotiabank. Bea Fabrero: For your U.S. market, do you expect same-store sales to turn around this year given the tax refunds and potential rate cuts? Eric Lefebvre: Well, yes, the U.S. market is -- it's volatile. I would say we had a good beginning of the year with some of our brands and more challenging for some others. I can't necessarily comment on refunds and rate cuts because I don't want to speculate on the impact and timing of these things. But obviously, they would help. They can't be negative for us. So if these things come, it's going to help. We're lapping a certain number of things this year. There was the -- in Q1, there was the tax abatement in Canada that we're lapping now that doesn't exist this year, obviously. So any help we can get from our regulators and our government is going to help for sure. Bea Fabrero: And another one on your franchisee profitability, have you seen any headwinds across the industry? Like how are your franchisees faring? Eric Lefebvre: Yes. Yes, there's -- our industry, by definition, always faces headwinds. There's always something. I mean it's the nature of our business. It's a competitive business and consumers right now are feeling the pinch, especially the lower-income consumers. But as far as franchisee profitability, there's pressure coming from costs and commodities, especially on the protein side. But from the data we accumulate, our franchisees' profitability is stable or improving for most of our brands. So I mean, we're taking many actions on a day-to-day basis to try to help that, whether it's purchasing, distribution, any different types of products or services they need in their locations. And that we also need in our corporate stores. So we're trying to take action. We're trying to measure it better and better also to be able to take action quicker as we might see symptoms coming in. And I think with more data and more granularity in our business, I think we're able to take more informed decisions and faster. Operator: The next question comes from Ryland Conrad with RBC Capital Markets. Ryland Conrad: Just to maybe start off on CapEx, obviously, a lot lower this year. So could you just share some high-level expectations on CapEx for 2026? And related to that, I know the focus has been on delevering recently, but how are you thinking about your free cash flow priorities evolving as this year progresses? Eric Lefebvre: Yes. Well, for CapEx, I think the year 2025 is the new normal. We do expect to have limited CapEx. There's always going to be some for our restaurants or for our plants. We have projects that have good ROIs, but we shouldn't see the massive CapEx that we saw in '23 and '24. I think that '25 is expected to be the new normal. As far as free cash flow opportunities, obviously, I can't comment on what we expect to do with our cash flows as there is a number of different things that are in the air at the moment. But we want to increase our optionality, paying down our debt seems to be the sensible choice now because that opens all the doors for us, and it makes all possibilities open for MTY going forward. So I won't comment on that further. Ryland Conrad: Okay. And then just on same-store sales, still seeing that bifurcation between Canada and the U.S. So could you speak a bit to what you're seeing there in terms of traffic and average check and just how those dynamics might be differing between the 2 markets? Eric Lefebvre: Yes. It's interesting to see that in the U.S., we're doing better with QSR and our casual dining is struggling a little bit, and we tend to see similar trends with our peers. It's a little bit more complicated to generate the traffic and also improve the basket size in our U.S. casual dining business. In Canada, we're seeing the opposite where not all of our casual dining brands are thriving at the moment. But on average, we're doing really good with most of our brands. And then QSR is struggling a little bit more and predominantly where we have mall-based locations in Canada, it seems that it's a little bit more of a challenge. So it's hard to understand exactly where each market is going, but we're trying to correct course on brands that are challenging and double down on the brands that are thriving at the moment. Ryland Conrad: Okay. And then just on Papa Murphy's again. I know last quarter, you unpacked quite a few of the initiatives underway there, including the loyalty program revamp. Could you just provide a bit of a progress update there and just whether you've seen greater engagement with that banner? Eric Lefebvre: Yes. Yes, we did -- the loyalty push that we did enabled us to gain a lot of new members to our loyalty program. And then in turn, that enables us to communicate with these customers more effectively and try to incentivize them and increase frequency with these new customers that we gained. The proof is in the pudding, though, we'll see in the coming months. It takes a little bit of time to be able to measure the impact of all these initiatives. We can measure a certain number of customers joining our loyalty program. We can measure a certain number of things, but it's the test of time that will tell whether that was successful or not. Certainly, an interesting push for us and trying to make the brand as relevant as possible to as many different types of consumers and generations of consumers as possible is critical for Papa Murphy's. So it's not going to be only one thing that matters. It's a collection of many different initiatives that we're pushing right now and that we will be pushing in the coming months that will matter. Operator: The next question comes from Michael Glen with Raymond James. Michael Glen: Eric, I'm just hoping maybe you can speak to what was the underlying motivation to pursue a strategic review at this point in time? And then are you able to indicate when the strategic review did actually begin? I know we saw the newspaper article about it, but had the review already been ongoing at that time? Eric Lefebvre: Yes. Unfortunately, Michael, I can't answer those questions. I apologize. Michael Glen: Okay. And then can you -- are you able to -- are you precluded or you're restricted from pursuing a normal -- the share repurchase program while the strategic review is ongoing? Eric Lefebvre: Yes, I can't answer that question either. Michael Glen: Okay. Then across the banners, you spoke about Papa Murphy's and Cold Stone. When we look across the U.S. banners, how should we think about -- when we're thinking about the consolidated margin you're reporting, how do we think about the variance of the profitability across the banners? Eric Lefebvre: Yes. Well, the first thing I'll say is that all our banners are profitable over a long period of time. There is some ups and downs depending on certain items. But the goal for us is to make all our brands profitable. And it's not necessarily all the big brands that are more profitable than the smaller brands. But in general, we're trying to achieve similar profit margins with all our brands. And whether a brand has 50 stores or 1,500 stores shouldn't preclude it from achieving profitability and having ambitious targets. So we're trying to achieve the same thing. There are exceptions to that. Obviously, some brands are a little bit harder to manage than others, depending on how spread out some geographies are and maybe some heavy lifting temporary for certain things, for example, for retraining our franchisees or major initiatives that require a lot of our people to be on the field to retrain or implement something. But over a long period of time, all our brands should have similar margins and similar profitability metrics. Michael Glen: Okay. And how do you -- across the QSR segment, there's been quite a large push in the U.S. towards more value offerings hitting menus. Are you seeing that impact in terms of the traffic at your stores? Eric Lefebvre: For some brands, yes. I mentioned Papa Murphy's earlier. As you know, pizza is a super competitive space and our peers are heavily discounting their products. So obviously, there's an impact. What we're seeing, and maybe I'll exclude the snack brands for that, where typically, we don't need to discount these products as much. But for most of the other brands, you do need to give your customers an entry point where they'll feel value. You might try to direct them to something else, but you do need to have that entry point for people to be able to compare. And if they need something to be more cost effective, you need to be able to offer it to the customers. So it's a fine line between over-discounting our product and offering an entry point that will be relevant in the market and also trying to create a habit to come to our stores and avoiding creating a habit of going to our competitors because the win back is always more expensive than the maintenance of a customer. Michael Glen: Okay. And then just finally, in the notes, and maybe you can actually disclose the number, but in the notes, there's -- the catch-up on the card breakage is indicated at something like $29.5 million. Is that the figure that we should use to come to -- like should we be -- is it fair to exclude that number from the EBITDA to get a sense as to what the impact was in the quarter? Eric Lefebvre: Yes. That number is -- should be excluded from the baseline. The breakage income is more or less -- other than that onetime adjustment, the breakage income would be more or less in line with previous years and is not expected to vary significantly in future years either. So that number can be used, yes. Operator: [Operator Instructions] We have reached the end of the question-and-answer session. This concludes today's conference, and you may now disconnect your lines at this time. Thank you all for your participation.
Operator: Greetings, everyone, and welcome to the Kaiser Aluminum Corporation Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kim Orlando, Investor Relations. Thank you. You may begin. Kimberly Orlando: Thank you. Hello, everyone, and welcome to Kaiser Aluminum's Fourth Quarter and Full Year 2025 Earnings Conference Call. If you have not seen a copy of our earnings release, please visit the Investor Relations page of our website at kaiseraluminum.com. We have also posted a PDF version of the slide presentation for this call. Joining me on the call today are Chairman, President and Chief Executive Officer, Keith Harvey; and Executive Vice President and Chief Financial Officer, Neal West. Before we begin, I'd like to refer you to the first 4 slides of our presentation and remind you that the statements made by management and the information contained in this presentation that constitute forward-looking statements are based on management's current expectations. For a summary of specific risk factors that could cause results to differ materially from the forward-looking statements, please refer to the company's earnings release and reports filed with the Securities and Exchange Commission, including the company's annual report on Form 10-K for the full year ended December 31, 2024. The company undertakes no duty to update any forward-looking statements to conform the statements to actual results or changes in the company's expectations. In addition, we have included non-GAAP financial information in our discussion. Reconciliations to the most comparable GAAP financial measures are included in the earnings release and in the appendix of the presentation. Reconciliations of certain forward-looking non-GAAP financial measures to comparable GAAP financial measures are not provided because certain items required for such reconciliations are outside of our control, and/or cannot be reasonably predicted or provided without unreasonable efforts. Any reference to EBITDA and our discussion today means adjusted EBITDA, which excludes nonrun rate items for which we have provided reconciliations in the appendix. Further, Slide 5 contains definitions of terms and measures that will be commonly used throughout today's presentation. At the conclusion of the company's presentation, we will open the call for questions. I would now like to turn the call over to Keith Harvey. Keith? Keith Harvey: Thanks, Kim, and good morning, everyone. Thank you for joining us. I'll begin on Slide 7. I'm pleased to report that our fourth quarter results continue to build on the momentum we've established throughout the year. This marks our fifth consecutive quarter of performance ahead of our internal expectations and we exceeded the full year outlook we provided in October. Start-up costs moderated versus the prior 2 quarters, while metal pricing remained a tailwind. For the full year, we delivered more than 25% EBITDA growth with margins above 21% and second half margins improving to nearly 24%, driven by our packaging investment that enhanced our mix along with modest operational progress in multiple areas of the business. Overall, we achieved record EBITDA in 2025 and established a solid foundation for continued growth as we move into 2026. We are positioned to harvest the returns from our recent investments, continue strengthening margins and generate free cash flow as we execute efficiently across the portfolio. With that, I'll turn the call over to Neil to review the quarter and full year financial results. I'll then return to discuss our end market trends, our 2026 outlook and the strategic priorities that will guide us in the years ahead. Neal West: Thank you, Keith, and good morning, everyone. I'll now turn to Slide 9 for an overview of our shipments and conversion revenue. Our full year total net sales were $3.4 billion after adjusting for the hedge cost of alloy metal of $1.9 billion, our conversion revenue for the year was $1.5 billion, relatively consistent with 2024. Our total shipments were GBP 1.1 billion, down GBP 64 million or 5% from 2024. Looking at each of our end markets in detail. Aerospace and high-strength conversion revenue totaled $457 million, down $73 million or approximately 14% and primarily due to a 16% decrease in shipments attributed to the commercial aerospace OEM destocking of plate products and the impact of the planned Phase 7 investment, which occurred in the second half of the year. Commercial aerospace OEM destocking began to ease exiting the fourth quarter of 2025. Across our other aerospace high-strength applications that includes the business threat defense and space end markets demand has remained strong. Packaging conversion revenue for the year totaled $544 million, up $54 million or approximately 11%, driven by our planned transition to coated products as we finalize commissioning of the new coating line. While shipments declined by 32 million pounds during this transition, reflecting a slower ramp-up of the coating line than originally anticipated, the shift is generating higher conversion revenue per pound, supported by the strong underlying market demand. General engineering conversion revenue for the year totaled $331 million up $14 million or approximately 4% year-over-year on a 6% increase in shipments. Tariff-driven reshoring activity and KaiserSelect quality attributes continue to create a favorable demand backdrop, supporting both volumes and pricing. And finally, automotive conversion revenue for the year totaled $122 million, up 2% year-over-year and a 6% decrease in shipments primarily due to persistently high interest rates and tariff-related customer uncertainty affecting the automotive industry on a whole. However, improved pricing and product mix helped offset the lower shipments. Additional details on conversion of revenue and shipments by end market application can be found in the appendix of this presentation. Now moving to Slide 10. And Reported operating income for 2025 was $189 million after adjusting for non-run rate income of approximately $1 million, our 2025 adjusted operating income was $188 million, up $63 million from 2024. In addition, 2025 operating income included a $6 million increase in depreciation expense associated with the Trentwood rolling mill Phase V expansion project and the commissioning of the new coating line at Work. An effective tax rate for the full year was 25% comparable to 2024. For the full year 2026, we expect our effective tax rate before discrete items to be in the mid-20% range including the impacts related to the new tax bill recently signed into law. Additionally, we anticipate that the 2026 cash tax payments for federal and state foreign taxes will be in the $5 million to $7 million range. Reported net income from 2025 was $113 million or $6.77 per net income per diluted share compared to net income of $66 million or $4.02 net income per diluted share in the prior year. After adjusting for net pretax nonrun rate income of approximately $15 million primarily related to legacy land sales and insurance settlements associated with prior year claims. Adjusted net income for the year was $100 million or $6.03 adjusted net income per diluted share. This compares to adjusted net income of $60 million or $3.67 adjusted net income per diluted share in 2024. Now turning to Slide 11. Adjusted EBITDA for the year was $310 million, up approximately $69 million from 2024. Adjusted EBITDA as a percentage of conversion revenue improved to 21.3% and approximately 470 basis points above our 2024 margin of 16.6%. In 2025, we also incurred approximately $47 million of nonrecurring operating and other related costs, primarily associated with our new coating line start-up at Work and planned Trentwood outage which were more than offset by the impact of metal lag gain from rising metal prices. The improvement in adjusted EBITDA, even with the 5% year-over-year decline in shipments reflects resilient underlying fundamentals across our business and our end markets, along with a richer mix of value-added products. Now turning to a discussion of our balance sheet and cash flow. At the end of December 31, 2025, total cash of approximately $7 million and approximately $540 million of net borrowing availability in our revolving credit facility resulted in a strong liquidity position of $547 million. As a reminder, the October extension of our $575 million revolving credit facility further demonstrates the strength of our balance sheet and the continued confidence our lenders have in our long-term strategy. The extended facility is set to mature in October 2030. Additionally, in November, we completed a $500 million offering of senior notes due in 2034 with favorable terms. We used the proceeds along with revolver borrowings and available cash to redeem our 2028 notes effectively completing a planned refinancing that extends our long-term debt maturity profile and supports our long-term financial flexibility. Our senior notes interest costs are fixed at $54 million annually, and as of the year-end, our net debt leverage ratio was 3.4x, an improvement from the 4.3x at December 31, 2024. Our full year 2025 capital expenditures came in at $137 million, following the completion of our major growth projects at Warwick and Trentwood. It is important to note that, that $168 million usage of working capital during 2025 was a direct impact to rising metal prices through the year. For 2026, we expect capital expenditures to be in the range of $120 million to $130 million, with free cash flow anticipated to be in a range of $120 million to $140 million subject to metal price movement and resulting impact in working capital. As a reminder, we define free cash flow as cash flow from operations less capital expenditures. Additionally, in 2025, we returned approximately $51 million to our shareholders through dividend payments, marking our 19th consecutive year of dividend payments to our shareholders. On January 13, we announced that our Board of Directors declared a quarterly dividend of $0.77 per common share, reflecting our ongoing commitment to disciplined capital allocation and delivering long-term value to our stockholders. With that, I'll turn the call back over to Keith to discuss our outlook. Keith? Keith Harvey: Thanks, Neil. Let me now turn to our outlook and priorities as we move into 2026 on Slide 13. In 2026, Kaiser will celebrate its 80th anniversary, a milestone that speaks to the resilience of our operations and the durability of our long-standing customer relationships. Fittingly, our outlook reflects what we expect will be record years for both conversion revenue and EBITDA. I'll begin with aerospace and high-strength products. We expect shipments to increase in the range of 10% to 15% in 2026 with conversion revenue expected up approximately 5% to 10%. This implies conversion revenue per pound, consistent with our first half 2025 run rate as last year's second half benefited from a richer aerospace extrusion mix as we upgraded plate line at Trentwood. The Phase 7 install was executed seamlessly and timed well to support the demand growth we expect in 2026 and beyond. Commercial aircraft production continues to recover with increasing build rates at our OEM partners. We are well positioned to support that growth with the additional plate capacity from Trentwood. As we've discussed previously, destocking at commercial OEMs has continued to temper near-term sell-through of plate products. However, we expect this to largely dissipate as we exit the year, if not earlier. We will continue to update you throughout 2026 on supply chain conditions. Importantly, I'm very encouraged by the momentum building in one of our premier markets, momentum that should benefit results in 2026 and continue to build through the end of the decade. Defense and business jet demand remains consistent, and we continue to benefit from new opportunities across space and specialty platforms. Now moving to packaging. Packaging demand and fundamentals continue to improve, supported by our long-term contracts that provide excellent visibility. Importantly, we completed our final contract commitment at this facility during the fourth quarter of 2025. For 2026, we are targeting shipment growth of 5% to 10% and conversion revenue growth of 15% to 20%. Our fourth coating line at Work is fully commissioned, qualified and progressing towards full production. This investment shifts our mix toward higher coated volumes now at approximately 75% and growing and supports the margin uplift we've targeted. The progress at Warwick reflects a multiyear journey that began with a strategic decision to acquire the facility in 2021. In 2026, we expect to see a step change in financial and customer satisfaction performance in this business. As we previously stated, while profitability will improve meaningfully in 2026, the line will not yet be operating at its optimal rate. We plan to operate at approximately 80% utilization as we continue to fine-tune quality and reliability. Customer service remains a core tenet of Kaiser's values and a key differentiator in all our markets. Now turning to general engineering. We expect another year of growth, supported by improving GDP and strengthening demand in the semiconductor market. Shipments and conversion revenue are expected to grow approximately 3% to 5% year-over-year, with the potential for even stronger growth depending on the strength of the North American economy as inventory levels at most customers remain at multiyear lows. Our businesses are well positioned to respond quickly as these markets continue to improve. Now turning to automotive. Automotive opportunities continue to expand. Even as we remain highly selective in the products and services we provide to this market. The shift towards more internal combustion engine vehicles in the light truck and SUV category are driving demand for several of our products at a faster pace than previously anticipated. To support this expected multiyear demand outlook we will be retooling select facilities and adding incremental capacity. While shipments and conversion revenue in 2026 are expected to decline approximately 5% to 10% year-over-year. This primarily reflects planned outages, most notably at our Bellwood facility associated with retooling rather than underlying demand. These actions position us to support higher demand and higher returns as market conditions evolve. Now turning to Slide 14 and our summary outlook. With our two major growth investments now behind us, 2026 will mark a shift toward harvesting returns through margin expansion. With the execution risk of large-scale projects largely behind us, we are proactively intensifying our focus on reducing both manufacturing and operating costs to drive additional operating leverage and maximize the return on these investments. These actions are expected to also strengthen cash flow, continue reducing our debt leverage ratios and improve our customer service standards. As we look ahead, we are establishing an initial outlook for 2026 of 5% to 10% conversion revenue improvement year-over-year, with resulting EBITDA growth of 5% to 15%, setting the stage for another record EBITDA performance year for the company. While metal pricing was a meaningful contributor to our performance in 2025. Our expectations for 2026 are driven primarily by operational execution with metal assumptions aligned with current future curves. In closing, we entered 2026 with a strong foundation, clear visibility into our end markets, and the assets firmly in place to deliver meaningful improvement in profitability and cash generation. We look forward to updating you on our progress throughout the year. With that, I will now open the call to any questions you may have. Operator? Operator: [Operator Instructions]. The first question comes from Bill Peterson with JPMorgan. William Peterson: Really nice results for the year. My first question is on the 2026 outlook at a higher level. So I think it looks like the aerospace conversion revenues below shipments, while packaging conversion revenues above shipments. Is there anything to call out on mix. If you think about Aero, for example, commercial business jet or defense, or is this more just more high strength in non-aero. And then on packaging, similar to, is this a pricing statement or a mix towards more coated products? Just any sort of color for the difference between the shipments and conversion revenue outlooks. Keith Harvey: Sure. Bill. Let me hit Aero first. We called out some specifics because, as you recall, we had an outage at Trentwood mainly through the third quarter. So if you looked at the 2 halves of the year, our shipments in the second half were actually down 25% from the first half of the year. That was mainly plate-related. And you saw a pretty higher number there because extrusions generally carry a higher price than the plate. We expect to come back rapidly on the plate in this year. So that -- the numbers we're reflecting there says we're back to having that full plate capacity -- and so you'll see that in the numbers. The prices have remained very strong and consistent. Of course, the majority of that is backed up by long-term agreements in place. And so as we've noted, as the industry continues to improve, continue to get improved shipments output by our customers, we should see those numbers pop up. From a mix perspective, what you will also see out of our flat roll shipments, Bill, we're starting to see activity again on the semiconductor side. So as you know, we put that capacity in that can service both aero and general engineering. I'm really encouraged by the activity at the beginning of the year on semiconductor. So I think after maybe a 2-year hiatus there, we're going to start to see some good activity through the balance of the year that should really support that increased capacity at Trentwood. As I move over to the packaging side and look at our business, I really think we're positioned for a very strong year. The -- we're in our seventh month of increasing output from our roll code for the new investment that we made. So we're beginning to see the better through throughput that was expected. We're beginning to get all the qualifications behind us. We're ramping up speeds. And so the opportunities there continue to exist, quite frankly, beyond what we have. We are working with some of our converters to try to get their performance up improved as I think the opportunities there exceed even all of our capacities there together. So as we also mentioned in our notes, we're really pleased to complete the final contract, multiyear contractual opportunity for the new capacity. So what you're going to begin seeing and what you have seen is that the mix shift has begun in earnest, you'll start seeing some improved pricing on that side as a result of those investments and the contractual commitments that were made. And so we're really positioned there. We talked about bringing that an additional 300 to 400 basis points impact on the total company. We're beginning to already see that, and they were a major influence into what happened for us even at the end of the year. So a lot of expectations for that for 2026. Food market, the food packaging side is very strong. It's even stronger than beverage. And as you know, we're a major player there. So we see full output. The surprise to me, and I'll just continue if I can. The surprise to me is the automotive opportunity that we highlighted in our comments with the move back toward the internal combustion engines, man, we're seeing demand on trucks and SUVs. So we made a decision to make an investment that we really hadn't contemplated in the last 12 months, but we'll be making that decision to increase our capacity through some of our highly specialty products and that all services trucks and SUVs. So that's going to be a unexpected focus for continued growth for us in that category. William Peterson: Can I pick up on that last point. This auto opportunity it sounds like it's capacity expansion, but if not, I'm just trying to get a sense, we'll just take away from other markets, how much capacity growth does this imply when will this -- I guess, when would we be ready to sort of support this effort? And maybe taking a step back some more to my question on the guidance. You're looking for this year to be down following a pretty rich, I guess, mix last year. Anything to call out from the market environment or platforms that you're on or things like that within the 2026 guidance? Keith Harvey: Yes. No. The only difference, we don't expect any price deterioration there in any of the markets, Bill. The only change that was going to be highlighted probably on the aero side was a slight adjustment as you bring back more plate as opposed to extrusion on the era. On the automotive piece that I was just referring to, we're actually -- these are actually fairly high-margin products for us. They're all specialty products. They are actually products that Kaiser has 10 or close to 100% supply position. And as the markets turn back to stronger growth on planned on trucks, especially around ICE vehicles. We're the only play. So there's going to be an outage at a couple of outages that we'll take through the year to prepare for that. So you may be -- actually, that may impact some of the shipments this year. but certainly preparing us for 2027 strength, continued strength, and we see these as multiyear. We don't think that the change, the shift that's gone to is just a single year temporary slope. We see this focus on ICE vehicles for trucks to be multiyear. That's what our customers are telling us. So we're going to ramp up the investment. And I would expect to see -- we'll highlight it more in April. But our automotive component here on very specialized products has the opportunity to increase substantially within the next 12 to 18 months. William Peterson: Okay. Maybe pick it up again on this. So CapEx guidance looks to be a little higher than expected. Is a lot of this driven by this auto opportunity? Or maybe you could parse out the CapEx guide maybe in the context, I guess, Phase 7, I think, came a bit under budget. Just any sort of context on the CapEx guidance? Keith Harvey: Yes. Actually, we were expecting to be probably somewhere between $10 million, $12 million this year. And that change in range for us is purely that automotive opportunity. Our customers would take it today. They're actually utilizing some steel products because they don't have the availability of the aluminum products in the quantities that they need. So we've updated that opportunity, and that's the reason that's probably a slightly higher CapEx than you may have expected. William Peterson: Great. Maybe just my last one. Obviously, you mentioned earlier that you're not expecting any changes, I guess, to sort of Midwest premiums and things like that. I assume that also may be similar around where scrap spreads are. But given the high prices that were -- or cost, I guess, for your customers given where aluminum pricing is today, are you hearing any evidence of demand destruction or what areas would you be concerned with? And then maybe secondarily, we're hearing more about derivative tariffs any potential impact to your business? I realize it's early days on that second point. Keith Harvey: Yes. No, it's fascinating what's going on. I can tell you this, Bill, this is a way to look at '25 and '26 for Kaiser. No question, we had some significant tailwinds. We had some significant higher operating costs as we put in these capacities. We don't expect those to extend into 2026. So you're going to see a recovery on those costs that were out in '26 versus -- excuse me, '25 versus '26. Our outlook also has the expectation that you won't necessarily -- you won't see that tailwind reoccur in 2026. Now it may we're still seeing favorable higher prices than expected in Q1. But our outlook did not assume that to continue throughout the year. And so that gain that we're talking about here is purely operational gain based on the investments we've made, the cost and the efficiency gains we expect to make in our operations. So any continued higher price tailwinds are going to be a tailwind above what we're talking about on this call. So it could conceivably go higher than what we -- that's why we gave the initial outlook the way we did. I have to tell you, as you ask the question and I look at it constantly, Bill. We've seen absolutely no demand destruction in any of our product lines. We're seeing the general market, the general business start out very strong. We see continued bookings shipments going through the months. I'm more encouraged than I had been on the general engineering with GDP. So I'm feeling better about that side of our business. Our packaging business, as I talked about, we can sell every pound we can make Food business is up to the high single digits year-over-year growth. And then when I look at what's going on, I know the market corrected felt like while this 232 tariffs were going to fall off. All indications that we're getting are that what they're considering is more downstream type products and not removing the tariffs, but perhaps loosening tariffs but addressing the full end product versus just the raw material. And at this point, we really don't see those tariffs coming off. And even if we did, we've commented, we're neutral to positive, slightly positive there. And we've said all along, while we appreciate and enjoy the tariffs -- excuse me, some of the tailwinds we get from metal pricing we should stay at any point if we saw a rapid decline, those could turn into headwinds. And so we'll call those out, and that's why we remain super uber focused on operational gains in our business, which we've highlighted here in our comments this morning. Operator: There are no questions in queue at this time. I would like to turn the call back to Mr. Keith Harvey for closing comments. Keith Harvey: All right. Well, thank you for joining us today. We're off to a strong start to the year, and we're excited for our 2026 prospects, and I look forward to sharing details on our continued progress in April. Have a good day. Operator: Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.
Operator: Thank you for standing by. This is the conference operator. Welcome to Torex Gold's Fourth Quarter and Full Year 2025 Results Conference Call and Webcast. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Dan Rollins, Senior Vice President, Corporate Development and Investor Relations. Please go ahead. Dan Rollins: Thank you, operator, and good morning, everyone. On behalf of the Torex team, welcome to our fourth quarter and full year 2025 conference call. Before we begin, I wish to inform listeners that a presentation accompanying today's conference call can be found under the Investors section of our website at www.torexgold.com. I'd also like to note that certain statements to be made today by the management team may contain forward-looking information. As such, please refer to the detailed cautionary notes on Page 2 of today's presentation as well as those included in the Q4 2025 MD&A. On the call today, we have Jody Kuzenko, President and CEO; and Andrew Snowden, CFO. Following the presentation, Jody and Andrew will be available for the question-and-answer period. This conference call is being webcast and will be available for replay on our website. Last night's press release and the accompanying financial statements and MD&A are posted on our website and have been filed on SEDAR+. Also note that all amounts mentioned in this call are U.S. dollars unless otherwise stated. I'll now turn the call over to Jody. Jody Kuzenko: Thank you, Dan, and good morning to everyone on the line. I thought it's important to start with our strategy slide here at the outset. It underpins some of the opening comments I want to make about the CEO transition that was announced a few weeks ago. As most to follow us well know, one of the key reasons Torex has been able to deliver results so consistently over the years is that we have anchored our business and systems. Planning, scheduling and executing work in very defined, clear and thoughtful ways. And these systems are in place across all aspects of our organization, not just production and maintenance work at the operations. Succession planning within Torex is no different. This is something we plan for at all staff levels of the business. . Since Andrew joined Torex as CFO in 2021. He's been an integral part of developing and executing against the strategy that has yielded very successful results to date and beyond strategy, designing and implementing the systems that have made us successful. Certainly, certainly within finance, but well beyond that as well, including systems that touch projects and operations, maintenance and supply chain, all of this has positioned us nicely to now actually execute on the succession plan. So this transition really is a product of planning, planning that will deliver continuity for Torex and by extension, our shareholders. Our stakeholders should expect to see no less than the consistent results this team has delivered together over the past several years. This also means that there won't be a material shift from the strategic pillars outlined here on Slide 4. Our focus in 2026 will continue to be on servicing the value that now sits within our expanded portfolio. First, by demonstrating the long-term potential of Morelos through drilling, by delivering preliminary economic assessment for the Los Reyes asset by midyear, starting drilling at the early stage exploration projects acquired in Nevada and Chihuahua and with the cash flow we're now generating with Media Luna behind us aggressively returning capital to shareholders. Reflecting on the accomplishments from 2025 here on Slide 5, the year was truly a transformational one for our company. We achieved commercial production at Media Luna in May and successfully ramped up ahead plan through the year, exiting 2025 at a mining rate of 7,000 tonnes per day, well ahead of our targeted 6,500 tonnes a day. We remain on track to achieve design levels of 7,500 tonnes a day out of Media Luna by midyear 6 months ahead of the schedule outlined in the feasibility study. The success of this ramp-up can be seen on the slide. You can see strong second half production as mining rates hit stride and throughput at the process plant remains strong and stable. Production is expected to remain around these H2 '25 levels going forward, noting that in this year, production is slightly weighted to the back half, and there are a couple of reasons for this grade and what we're seeing at the mine through stope sequencing and achieving that 7,500 tonnes per day run rate by midyear. Strong 2025 production supported by a backdrop of high metal prices resulted in record annual all-in sustaining cost margin of 51%. Additionally, record quarterly free cash flow of $166 million enabled us to fully repay the debt we had accumulated through the Media Luna project. I want to take a moment to underscore this point here. Torex paid for Media Luna out of cash flow, no stream, no royalties, no equity raise. And here we are, 6 months post commercial production debt-free. Lastly, on this slide, but certainly not least, our next level safety program has been appraised across the business, which is evident in the lost time injury frequency of 0.07 per million hours worked for both employees and contractors, compared this to the most recently reported Mexican mining industry average of 3.61%. 2025 has certainly marked 1 of the safest years on record at the Morelos Complex. We expect 2026 to be no different. Slide 6 outlines our 2026 guidance, which was released last month. Gold equivalent production of 420,000 to 470,000 is markedly higher than the 383,000 ounces produced in 2025. This primarily reflects the full year of production from the processing plant and steady-state mining rates at Media Luna this year. Costs are largely in line with the all-in sustaining costs of $17.83 per ounce gold achieved in 2025. This is elevated over previous years due to the impact that significantly higher metal prices have on the taxes royalties to government and the Mexican legislative profit sharing that we pay our employees. Sustaining capital expenditures are slightly higher than the $107 million spent in 2025, as you would expect because this marks the first full year of commercial production from Media Luna. Non-sustaining capital expenditures this year include $100 million to $105 million related to Media Luna North project costs. as well as $65 million to $70 million on various projects across Morelo that are centered on optimizing and driving efficiencies. One example of a project like this is the construction of a conveyor that connects the Guajes Tunnel to the Guajes crusher. This conveyor will reduce rehandling costs by more than $1 per tonne mined from Media Luna. At our guided metal prices of $4,000 per ounce gold, $45 per ounce silver and $4.90 copper and the Mexican exchange rate at 19:1, we have forecasted generating $450 million of free cash flow this year. With where metal prices are sitting today, we're now forecasting this to be upwards of $700 million of free cash in 2026. Moving on to our 5-year outlook here on Slide 7, you'll note the stable production profile we expect to deliver through at least 2030. This outlook is also markedly improved from the previous 5-year outlook of 450,000 to 500,000 ounces of gold equivalent per year through 2029. So if you normalize this year's outlook for the 2024 reserve metal prices used in the prior outlook, production would actually be closer to 480,000 to 530,000 ounces of gold equivalent. This is a market step-up. A few factors contribute to this increase, including the Media Luna ramp-up being ahead of schedule, continued mine life extension on ELG Underground from ongoing exploration success and mill throughput consistently delivering above design levels. On the subject of mill throughput performance is outlined here on the left on Slide 8, you can see the second half performance was ahead of the design rates even when considering the 5 days of scheduled mill maintenance we had in October. The chart on the right showcases the quick ramp-up we had for gold and copper recoveries, both consistently achieving design levels of 90% and 92%, respectively, and silver recoveries are also ramping up nicely to the design level of 85%. On the mining front, mining rates at both Media Luna and ELG Underground are shown here on Slide 9. The chart on the left displays the steady ramp-up at Media Luna this year. The key to unlocking the final step-up to 7,500 tonnes a day by midyear was the successful commissioning of the final rock breaker, the final waste pass and the final waste conveyor this quarter, all of which have now been completed. ELG Underground mining rates have also been consistently ahead of the 2,800 tonnes per day we targeted last year and even delivered a new quarterly mining record in Q4. I expect to see mining rates stay around this 2,800 tonnes per day through the end of this year before reducing to more normalized levels when consistent feed is being delivered from Media Luna North at the end of 2027. Those 2 things go together. Further details on the progress of Media Luna North is provided here on Slide 10. As we announced with our annual guidance release, total project CapEx is now expected to range between $108 million and $113 million compared to the pre-feasibility study estimate of $82 million. This increase primarily reflects the decision to purchase the mining fleet outright instead of leasing it, which just made sense in the context of this record metal price environment. Underground development is progressing very well. It sits today at about 40% complete. You can see the completed development here in gray and the development planned in red. We've already started development on the North Vent Adit and have started on the haulage tunnel from the Media Luna side coming in towards Media Luna North. With the development on track and procurement sitting at 30% of orders placed, including all long lead items, we expect first mine production by year-end and then expect to quickly ramp up this new mine through 2027. Moving on to Slide 11, I'll touch on our next development project in the pipeline Los Reyes. The preliminary economic assessment is progressing nicely and is on track to be completed by mid-year. For 2026, we have budgeted $18 million to complete the PEA, commence the PSS and conduct 20,000 meters of drilling on the property. I want to note here that delivery of the PEA is not dependent on resuming drilling activities at site given the amount of drilling completed to date. That said additional drilling will be required to adequately advance the pre-feasibility study. We have to conduct more metallurgical testing, some geotechnical work, we have work to do to derisk the resource model and in certain areas, we're looking to upgrade more inferred resources to the indicated category. I want to make a comment here on security at Los Reyes. No different than the approach in Guerrero, the safety of our employees and contractors as the most important consideration of this project. We will not resume drilling at Los Reyes until we have confidence -- complete confidence that it can be done both safely and sustainably, that's key. We're working closely with local communities, and we're working closely with all 3 levels of government to create the conditions for these employees and contractors to return to their field work. Lastly, our exploration program for the year is summarized here on Slide 12. The overall budget for this program has increased to a record $77 million for 2026. Approximately $43 million of that will be attributed to Morelos as you would expect to conduct just over 113,000 meters of drilling. Similar to previous years, the program will focus on replacing reserves and expanding resources at ELG underground and Media Luna cluster, with a smaller portion of the budget set aside to explore 2 higher priority regional targets Atzcala and El Naranjo. I've already mentioned that $18 million has been earmarked for both exploration and study-related costs at Los Reyes, these coming months here will determine whether in the extent to which it will be spent. In Nevada, we expect to spend $12 million primarily on 7,500 meters of drilling at Gryphon, where we have the option to earn into 100% of the property. Additionally, 2,500 meters of drilling will be conducted at Medicine Springs, where I'm pleased to say we earned into 100% ownership as of January. Finally, $4 million of set aside for 5,000 meters of drilling at Batopilas and early-stage targeting work at GD. All in we're pretty excited about our exploration program this year. It's quite robust with plenty of high-quality targets across the entire suite of assets. In terms of news flow, you can expect our annual reserve and resource update late March per usual, and we'll look to provide an update on some of our exploration programs in Q2. With that, I'll turn the call over to Andrew to walk through our financial results. Andrew Snowden: Okay. Thank you, Jody, and good morning, everyone. So before we dive into the financial details this morning, I did want to take a moment just to acknowledge Jody's retirement announcement. I believe I share the same sentiment as everyone on the line that Jody has done an incredible job of delivering on her mandate as CEO. With the Media Luna project complete and a clear line of sight on production for at least the next 10 years, generating strong free cash flow and a return of capital program now in place the company is well set up for this next stage of growth. May I echo Jody's comments that the underlying message from my transition to CEO in June is one of continuity. And I look forward to continuing the strong relationship we've built with all of our stakeholders by building on the strategy we've been successful in executing over the past several years. . Moving now on to our Q4 financial performance here on Slide 14. Our excellent second half performance and the current metal price environment resulted in record margins of 51% for the year and a record 57% for the quarter. Q4 costs were slightly higher quarter-over-quarter, primarily reflecting the first quarter of paste backfill in Media Luna as well as the impact of higher metal prices on royalties. Given the timing of paste commissioning, we will incur some additional costs at Media Luna through until mid-2027 as we look to catch up on the backfilling backlog incurred during the 2025 year given the delays in completing the paste plant. The lower chart on this slide just shows a record free cash flow of $166 million generated in Q4 as Media Luna really came into its stride. Turning to our cash balance through the 2025 year are shown next on Slide 15, with record adjusted EBITDA of $730 million for the year enabled us to execute on a number of capital allocation priorities, including the acquisition of Reyna Silver for $27 million in cash repaying all but $30 million of our debt balance by the end of the year, and we subsequently fully repaid our debt in January. And we also returned $44 million of cash to shareholders through a combination of dividends and share buybacks. This is in addition to the over $350 million of capital expenditure for the year, most of which was related to the completion of the Media Luna project. Turning next to Slide 16. I just -- I do want to just take a moment here to remind everyone at the cash flow seasonality that we typically see year-on-year. While production is expected to be largely consistent quarter-over-quarter, albeit slightly second half weighted, the first half of the year is when our heaviest tax royalty and profit-sharing payments are made. I wanted to just walk through briefly here some of the key cash payments that we're expecting here through that first half period. You can expect to see a 1% royalty payment, which we pay in March each year, about $12 million. Our 8.5% mining tax payment is also due in March. We expect that to be about $55 million. And we also have the annual income tax true-up, which is paid in March and that's expected to be about $20 million this year. And this is all in addition to the regular quarterly tax installments of at least $60 million in Q1. And related to fiscal 2026 as well as a quarterly 2.5% royalty. Additionally, we do have several employee payments scheduled for the first half of the year. And this year, we paid about $30 million in January related to the company's long-term incentive plan. And in Q2, we'll see a $35 million payment related to the payment of our annual profit sharing in Mexico. And as usual, Q3 and Q4 are expected to be our strongest cash flow quarter of the year. Our balance sheet and liquidity position are clearly well set to fund these payments and we've laid out next on Slide 17. As of year-end, we had about $30 million of debt remaining outstanding, and we subsequently repaid that, as I mentioned, in January. So we're now sitting here debt-free. Total liquidity at the end of the year sat at $426 million, $120 million of which was in cash. And we continue to have access to our $350 million credit facility, which matures in June of 2029. As well as an accordion feature of $200 million that is available at the discretion of the lenders. Now being debt free, we expect our cash position to quickly build over the coming year, especially at current metal prices. And that to be available for capital allocation priorities. Overall, we're an excellent financial position to deliver and execute on these capital allocation priorities, and these are summarized on Slide 18. Our focus remains on deploying in 4 key areas: firstly, increasing mine life and expanding margins at Morelos, which we're doing so through the exploration program that Jody spoke to just a few moments ago. Growth through Los Reyes, our portfolio of early-stage exploration projects and value-accretive M&A, should an opportunity present itself. Thirdly, building on our balance sheet up to the minimum of $200 million cash. And finally, continuing to return capital to shareholders, which you can see summarized next on Slide 19. Just to touch on that return of capital. In the second half of 2025, we returned about $44 million to shareholders through our Phase 1 return of capital program. This is comprised of a quarterly dividend of $0.15 a share, the first of which was paid in December and coupled with some share buybacks. In total, we purchased over 800,000 shares in 2025 and at an average price of CAD 57 a share, and we've continued to be active on the NCIB in 2026, repurchasing over 400,000 shares at an average price of just under $67 a share. And that's year-to-date. We also just last night declared our second quarterly dividend at that $0.15 a share level. We expect to continue to opportunistically buy back shares this year and have just entered into an automatic share purchase plan to enable share repurchases at times when we are in blackout period. With numerous exploration targets in the pipeline for this year, operations at Morelos delivering ahead of expectations and the record free cash flow generation as well as the solid return of capital program in place or well set up to embark on our next chapter of growth. And with that, operator, I'd like to open the line for questions. Operator: [Operator Instructions] Our first question comes from Allison Carson with Desjardins. Allison Carson: First of all, I was wondering if you could discuss how the security situation at Los Reyes could impact the work you've planned for 2026 and what that could mean for the overall time line of the project? Jody Kuzenko: Yes. Thanks, Allison. That's a good question. It's certainly on everybody's mind with the incidents occurring in Sinaloa over the course of this last month. I want to start by saying how saddened we are by the incident. I mean this is a situation where the Mexican mining community really comes together. 10 men lost their lives, 10 good miners. And it's just an absolutely tragic situation. As I said in my commentary, we had plans to start drilling this year and $18 million allocated. The team here, desktop in Toronto and Vancouver is working away on the PEA that work continues. We expect to have the PEA ready and available to market by middle of the year this year. The big question on everybody's mind is, if and to the extent we're unable to get to site for a bit of a prolonged period at what point does that start to impact the pre-feasibility study? Because as I mentioned, we have to get to site to actually do the work. And the way we're thinking about it is probably about middle of the year this year. If the teams aren't on site doing environmental baseline work additional drilling, get some additional samples for the geomet work and the Hydro G work, then the pre-feasibility study will start to be shifted out from mid-2027, down towards the end of 2027. This is not like a week-for-week month-for-month shift because, of course, we'll work to compress it because we're not going to be capital constrained here. We want to get on with building this mine, but there will be some impact if we don't have the data available to us by accessing the deposits. I will say in terms of security situation more in terms of the security situation more broadly. There are state-by-state nuances in security. And even within states, there are local nuances. And so that's very much the case here in Sinaloa. I will also say that when we made the decision to acquire this project, we diligenced this issue extensively. We knew what we were getting into. And my view is that, that was deeply reflected in the purchase price. The outcome of the events of the last month is that government at all levels is now deeply involved. They have to be. And so the work we have been doing has gained some new momentum here to enable us to create the conditions to put our people to work and put them to work safely and sustainably. So we're optimistic that, that can be achieved. Allison Carson: That's great. It's very helpful to get all that color in there as well. My next question is just on Media Luna. With the strong mining rates out of Media Luna in Q4 and now that we're already partway through Q1. I was wondering if you could comment on whether we're seeing rates continue to advance ahead of schedule? And if it appears likely that the ramp-up will be completed ahead of mid-year . Jody Kuzenko: I'll take that one, too, Allison. I mean, I consider the ramp-up to be complete. The difference between 7,000, 7,500 tonnes a day isn't really that significant, it's a couple of extra loads onto the belt. The real ticket to getting it ramped up stably was bringing on that last waste path. So we have an outlet for the waste and can start campaigning waste through Guajes tunnel. The other thing that has happened over the course of the last, I would say, 5 months is that we've really broken the back of the paste plant. All of that infrastructure that supports backfilling is now working very well and to design rates. And the other thing that has happened is we've connected now the pace plant to the stable source of reliable energy, which is the low voltage power line instead of using the dead set. So all of that bodes really well for this continued accelerated ramp-up and even ramp up beyond the 7,500 tonnes a day. So feeling very confident about what we're seeing out of Media Luna from a volume perspective. . Allison Carson: Great. That's very helpful. Congratulations on the great 2025. Operator: Our next question comes from Lauren McConnell with Paradigm . Lauren McConnell: Jody, congratulations on your retirement announcement. And I think I speak for most and saying things, we'll obviously miss you on these calls and tours. You've been wonderful obviously, to work with from this side of things, but look forward obviously to continuing working with Andrew and the rest of the team. My first question comes about EPO or Media Luna North. What are sort of the critical path items to keep first production in Q4? Is it development meters, long lead procurement or infrastructure tie-ins. And where do you see sort of the highest risk in execution? . Jody Kuzenko: That's a really good question. We see Media Lunas a very low-risk project. largely because there's hardly any construction to do. Remember, it just ties back into all of the Media Luna ore handling system. So there are 3 things really on the list. One is development. I mentioned how well we're progressing on it. We have no issues with continuing at the rates we're seeing. The other is landing the long-lead electrical equipment and fans and ventilation. Both the fans and the electrical equipment have been ordered. We expect those to land here in the coming months tying them in will be orders of magnitude more simple than the electrical and ventilation tie-ins that happened at Media Luna. And so the way we are looking at it is that Q4 of 2026 for first production is a very solid forecast. We very much expect to be producing ore through the back half of this year at Media Luna North, and that will then enable us to dial back rates at ELG Underground. So in terms of the overall production profile, you should be thinking about the mill as consuming 10,800 tonnes a day, 7,500 tonnes or more of that coming from Media Luna and then the delta divided in some way that makes sense between Media Luna North and ELG underground, but feeling very good about the progress of. It's a very -- I would describe it as an uncomplicated tuck-in to the Media Luna cluster. Lauren McConnell: And then just to be clear, too, with the Media Luna North tie in. Is there any impact to Media Luna copper mining rates or processing at that time? . Jody Kuzenko: That's actually a really good question. One of the things, as we were completing a study on Media Luna North was the integrated mine planning with Media Luna, so that we didn't get in the way of taking stopes at Media Luna or material handling, what stope is going to be available as many of the Luna North comes on as we would expect with Torex, that is very, very tightly planned. Those 2 assets need to work coherently and together so that they complement one another, not get in each other's way. And so that's planned. We don't expect any impact to Media Luna production as we bring on Media Luna North. Operator: Our next question comes from Don DeMarco with National Bank Financial. Don DeMarco: Thank you, operator, and good morning to the Torex team. Congratulations on the high free cash flow and the debt-free status. So my first question on the mining rates at Media Luna. So -- now that you're on the cusp of achieving that 7,500 tonne per target and sooner than expected, is there a potential? And do you see merit in exceeding this mining rate? . Jody Kuzenko: There is potential to exceed that mining rate, Don. There will come a point in time in the not-too-distant future that we'll be talking about production from the Media Luna mine collectively, which will include Media Luna North and then eventually Media Luna East and Media Luna West. What we would do with the material is produced it laid on the ground, stock pilot and feed it through the plant in the event that we face an interruption out of the mine for whatever reason. But we will be mill constrained moving forward. And so as we start to produce more from the underground, we are actually, as a management team, turning our attention to the possibility of upsizing the flotation circuits at the mill, which will be the constraint. That could unlock some additional production from a finished ounce perspective at Morelos. And so this is an evolving increase. First, we've got to get the mines. We've got to bring EPO on and get that producing to more than 10,800 tonnes a day and concurrently do a study to see how much CapEx it would be to bring the mill back up to that 13,000 tonnes a day we used to run at when we were in open pit production, which essentially involves adding cells to the flotation circuits. So exciting times for us from a life of mine planning perspective, that I would characterize as very much as upside only here. Don DeMarco: Okay. That's great. And that's actually -- that was my next question about the mill. I mean I think now that you're in production really hitting your stride it's -- the questions turn to the levers to optimize and upsize the operations. So you mentioned 13,000 tonnes per day at the mill, and we'll look forward to more. But is that kind of an upper limit then -- or is there scenarios before that? Or is it just too early to kind of know where this might head at some point in the future? . Jody Kuzenko: I think there are scenarios to get us from the current 10,800 to 13,000 in a stepwise incremental way. It's not something that you should think about as all at once. And based on the information and the equipment and what we know today, you should be thinking about 13,000 in that range as an upside cap. Beyond that, we would need a new grinding circuit, which then you start to do through your life of mine very, very quickly, producing 450,000 to 500,000 ounces a year is already a really big mine. Don DeMarco: Okay. And then maybe just as a last question. I mean, how do you manage? you have a development team and operations team. Do the 2 teams kind of work interchangeably, whether it's on development or operations? And -- or do you kind of redeploy the development team to work on North how do you kind of manage the different skill sets and sort of that's very required on site. Jody Kuzenko: Really that's a really good question. And it will become increasingly important for us as we bring on Media Luna North and we are looking to deploy our development team and our operations team as cost efficiently as safely and as productively as possible. I don't know that interchange is the right word, but cooperatively is definitely a word. And I'm going to give you a specific example of this. We originally, when we were doing the development on Media Luna North had development reporting into the projects team, right? That's a normal thing to do. It's a new project. The project owns the project, and then we'll be handed over to the operations once it's complete at the end of the year. Because there were so many synergies available to us with equipment, with men, with material with supervision, we moved the development of Media Luna North over to be hung from the operations team so that the crews could be lined up together so that we made sure that we were maximizing productivity and minimizing costs and downtime. Just a really specific example of how we're thinking about that Media Luna deposit as a cluster. And as I said, there will come a point where we're treating it as one integrated giant mine. Don DeMarco: Okay. And congratulations again on your retirement. Operator: As appears, there are no more questions, this concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
Operator: Ladies and gentlemen, thank you for standing by. My name is Desiree, and I will be your conference operator today. At this time, I would like to welcome everyone to the Triple Flag Precious Metals Fourth Quarter 2025 Conference Call. [Operator Instructions] I would now like to turn the conference over to Sheldon Vanderkooy, CEO. You may begin. Sheldon Vanderkooy: Thank you, Desiree. Good morning, everyone, and thank you for joining us to discuss Triple Flag's Fourth Quarter and Full Year 2025 results. Today, I'm joined by our Chief Financial Officer, Eban Bari; and Chief Operating Officer, James Dendle. Triple Flag had an outstanding year in 2025 and is extremely well positioned in 2026. We finished the year strong in Q4, resulting in record performance for full year 2025. We achieved record production of 113,000 GEOs. This was in the upper half of our guidance range and is the ninth consecutive year-over-year increase. Higher production and higher gold prices translated into record cash flow. Cash flow per share was $1.54 per share, a 45% increase from 2024. The model is working as it is intended, directly translating higher gold prices into rising cash flow per share. We continue to benefit from rising prices in 2026. In Q4, the average gold price was $4,135 an ounce, well below current spot prices of just under $5,000 per ounce. Moving ahead to 2026, our guidance range is 95,000 to 105,000 GEOs, which reflects the well-understood mine sequencing at Northparkes. It also reflects the planned step down in the Cerro Lindo stream rate following the successful delivery of 19.5 million ounces of silver since we acquired the stream in 2016. That was Triple Flag's first investment. We continue to see a long life ahead for Cerro Lindo with strong exploration potential as well as exposure to the silver price going forward. Our portfolio has significant embedded growth. Our 2030 outlook is that production in 2030 will grow to between 140,000 to 150,000 GEOs. This is approximately a 45% growth from the midpoint of our 2026 guidance. This is driven by multiple assets advancing through construction, permitting and study stages, including Arcata, Kone, Eskay Creek, Era Dorada, and Goldfield. Importantly, it is not dependent on any one large project. Looking beyond 2030, we have meaningful GEO growth potential from a number of large-scale assets located in the best jurisdictions, Australia, the United States and Canada. First, Hope Bay is located in Northern Canada and Agnico has stated that it is progressing towards a construction decision, which is expected in May of 2026. Second, Centerra released a positive PEA on Kemess targeting potential production in 2031. Kemess is located in British Columbia. Third is the Arthur project in Nevada, where AngloGold is expected to imminently release a pre-feasibility study, which I am quite eager to see. Last and most significantly is our flagship asset, Northparkes, located in Australia, which is clearly positioned as a significant growth asset for Triple Flag. I want to congratulate Lawrie Conway and the Evolution team for all the success they have had at Northparkes since they have acquired Northparkes. It is truly impressive. A week ago, Evolution released a significant update on Northparkes, which has 3 related catalysts for Triple Flag. First, Evolution approved the development of the E22 block cave. E22 has very attractive gold grades for Triple Flag and block cave development is the value-maximizing approach for both Evolution and Triple Flag. Second, Evolution has announced that it is studying expanding Northparkes from the current 7.6 million tonnes per annum to 10 million tonnes per annum or potentially more. There is tremendous demand for copper, and Northparkes is a very large resource. So the potential value creation of an expansion is clear. This could be very beneficial to the Triple Flag stream. And last, Evolution has identified a very attractive gold-only deposit on the property named E44. We had constructive discussions with Lawrie and Kirron and their team. And together, we came to an agreement that will allow for the development of E44, which was previously not included in Evolution's life of mine plan at Northparkes. As part of that agreement, Triple Flag will receive guaranteed minimum deliveries from E44 starting in 2030. Northparkes is a byproduct stream, so the potential to also benefit from primary gold deposits is a fantastic bonus for Triple Flag and its shareholders. All of these factors together clearly position Northparkes as a growth asset for Triple Flag for the next decade to come. I'd also like to touch on our capital deployment in 2025. Triple Flag invested over $350 million in value-accretive deals. This included the Arcata restart and ramp-up in Peru, the Arthur Oxide project in Nevada, the Johnson Camp mine that is ramping up in Arizona and the Minera Florida producing mine in Chile. These transactions provide current and growing cash flow or in the case of Arthur, represent exposure to a premier development project with a clear path to production and further exploration upside. Importantly, all of these assets are also located in mining-friendly jurisdictions. Overall, Triple Flag is exceptionally well positioned to deliver long-term and organic value for our shareholders from a diversified portfolio of producing and development assets across premier mining jurisdictions. I will now turn it over to Eban to discuss our financial results for 2025. Eban Bari: Thank you, Sheldon. As you can see on this slide, 2025 was a record year across all financial metrics, driven by strong GEOs and record precious metals prices. As Sheldon noted, these record prices have since been broken by new records with spot, gold and silver well above even the Q4 average. Operating cash flow per share, the single most important metric we focus on as management, increased 45% to $1.54 per share. This metric best reflects the underlying operating performance of our core streaming and royalty business. This strong cash flow generation continued to support all of our capital allocation priorities given our high-margin business, including shareholder returns and external growth opportunities. On shareholder returns, we paid out nearly $46 million in dividends to shareholders in 2025, which reflected a progressive 5% dividend increase in the middle of the year, our fourth consecutive increase since our IPO. In addition to our dividend, we were active and accretive on our share buyback during the year. In 2025, we bought back USD 9 million of our shares in open market at approximately $17.39 per share. We expect to remain active on our NCIB opportunistically going forward. On external growth front, as Sheldon mentioned, we reinvested over $350 million into new streams and royalties in 2025. Arcata, Arthur, Johnson Camp Mine and Minera Florida all provide either immediate or near to medium-term cash flow, significant exploration potential and exposure to premier mining jurisdictions with strong operators. I'm pleased to highlight that even with this level of capital deployment and as a result of our strong cash generation, Triple Flag is debt-free at year-end with more than $70 million in cash and $1 billion available on our credit facility. We remain well positioned to deploying capital into transactions that are accretive, fit with our strategy and deliver value throughout the cycle. Moving forward to 2026 guidance. As Sheldon noted, we expect GEOs of between 95,000 and 105,000 ounces for the year. We expect these GEOs to be all derived from gold and silver and reflect a conservative gold to silver price ratio of $72 for the whole year with a lower ratio assumed in the first half. Depletion is expected to be between $65 million and $75 million, slightly lower than 2025, reflecting the sales mix we expect in 2026. G&A costs are expected to be between $30 million and $32 million, consistent with our actual expenses in 2025 that reflect the impact of Triple Flag's strong share price increase throughout the year on share-based compensation expense. Finally, our Australian cash tax rate for Australian royalties will be approximately 25%, consistent with prior year actuals. I will now pass it on to James to discuss our asset portfolio. James Dendle: Thank you, Evan. Triple Flag has achieved a consistent track record delivering long-term GEOs growth since our first full year of operation in 2017. Beyond the guidance we have set for 2026, we see further organic growth to 140,000 to 150,000 GEOs in 2030. Midpoint to midpoint, this represents ounce growth of 45% from 2026 guidance, which I'll discuss further on the following slide. Our long-term organic growth outlook of 100,000 to 150,000 GEOs in 2030 is robust and reflects the achievement of several derisking milestones delivered by our operators over the past 12 months. We are seeing meaningful progress across the portfolio, supported not only by constructive commodity price environment but also by favorable permitting regimes across the jurisdictions to which we have exposure. Arcata, Kone, Eskay Creek, Era Dorada, Goldfield, South Railroad, and DeLamar are a few examples of the many assets in our portfolio that are advancing rapidly towards production or steady-state ramp-up over the medium term. Touching on only a few of them, we were exceptionally pleased to see in 2025, the Eskay Creek project in British Columbia received full permits in less than 1 year after submission. Aura Minerals received a construction license for E Dorada within 1 year of its acquisition and Centerra's renewed focus on the Gold Field project as a straightforward heap leach operation in Nevada. Beyond 2030, our portfolio is expected to deliver further GEO's growth from Arthur, Kemess, Hope Bay as well as the growth initiatives at Northparkes, which I'll discuss in the following slides. Beyond 2030, Arthur, Kemess, Hope Bay and Northparkes represent world-class, long-life assets located in the most stable and established mining jurisdictions. They provide substantial growth potential beyond our 2030 outlook and demonstrate the quality of Triple Flag's portfolio. At Arthur, we see the imminent release of a pre-feasibility study by AngloGold as an important catalyst in providing greater insights on the potential of this district scale system, starting with the Merlin silicon deposit as straightforward oxide open pit projects. Arthur will be a cornerstone asset for Triple Flag in the 2030s. At Kemess, Triple Flag holds a 100% silver stream. The January 2026 preliminary economic assessment supports a large-scale copper gold, silver operation reaching production by 2031, leveraging existing brownfield infrastructure and permits from the previous mining operation. Notably, the PEA mine plan only represents 47% of the total indicated and inferred resources, providing potential upside for future ounces to be included in subsequent economic studies. At PFS, the Kemess is expected in 2027. At Hope Bay, our 1% NSR royalty covers a district scale gold system on an asset operated by Agnico Eagle, the premier Canadian Arctic underground miner. In their year-end results from last week, Agnico noted that annual gold production is expected to be 400,000 to 425,000 ounces with a potential construction decision in May 2026 and a potential restart in 2030. I'll go into more detail on Northparkes on the next page. Northparkes is Triple Flag's largest asset. It's an established high-quality copper gold operation in Australia operated by Evolution Mining. Numerous growth projects have recently been approved that Sheldon referred to, which unlock the value from this world-class copper gold endowment. Currently, the E48 sublevel cave is ramping up and supports near-term gold production growth. Over the medium term, the E22 ore body will be advanced as a block cave, a large, low-cost operation with initial production by 2030. During this time frame, the E44 gold dominant deposit will also be advanced production. This is an ore body not previously included in Evolution's life of mine plans. Minimum guaranteed deliveries will commence in 2030 for a period of 7 years with potential for meaningful life extensions beyond this initial period. Finally, and perhaps most importantly, is the potential for mill expansion to at least 10 million tonnes per annum, which is currently being studied over the next year. We believe that this potential expansion is the optimal path forward to unlock the value from not only the 550 million tonnes of current measured and indicated resources but other prospective and underexplored targets that could materially add to the expected production profile with the improved scale and processing optionality. These growth projects demonstrate that Northparkes is not a static asset. It's a dynamic world-class mining operation with lots of embedded optionality that will drive value for decades to come. I'll now pass back to Sheldon for closing remarks. Sheldon Vanderkooy: Thank you, James. After delivering record performance in 2025, Triple Flag is in an exceptionally strong position as we look ahead to 2026 and beyond. We have a clear and derisked pathway to robust growth of 140,000 to 150,000 GEOs in 2030. Our project pipeline progressed very well in 2025 and now in 2026. Beyond 2030, Triple Flag shareholders can expect significant additional GEO growth from long-life district scale assets, including at Northparkes, Arthur, Kemess and Hope Bay, all from projects with clear line of sight to production, a top-tier operator and located in Australia, Canada or the United States. Northparkes is our cornerstone asset and is clearly positioned as a growth asset over the next decade. On the deal front, we deployed over $350 million in 2025 across multiple accretive transactions, demonstrating our ability to source and execute on high-quality opportunities that deliver compounding per share growth from good assets, good regions and good operators. Our balance sheet remains pristine. We exited 2025 debt-free and with over $1 billion in total liquidity, providing us with substantial financial flexibility to continue pursuing accretive growth opportunities as well as to allocate capital to progressively growing returns to shareholders. That concludes our prepared remarks. Operator, please open the floor to questions. Operator: [Operator Instructions] The first question comes from the line of Cosmos Chiu with CIBC. Cosmos Chiu: Maybe my first question is at Northparkes. Great to see that you're investing more money into Northparkes at the E44 deposit. I guess my question is, are there more opportunities like that in terms of something similar to E44 gold-rich, something that would not be in the mine plan unless there's a partner coming in and hoping to put up some of the CapEx? And then maybe if you can also talk about the geological setting because it must be a very clear variety of different geological settings if there are copper-rich deposits and gold-rich deposits. I'm just trying to figure out where some of these gold-rich deposits came from. Sheldon Vanderkooy: Yes. Thanks, Cosmos. This is Sheldon. I'll start and then pass it over to James. So historically, the Northparkes property had gold deposits, kind of shallow surface gold deposits and it was very interesting. Now of course, when we came in and did the stream, we really did the stream as a byproduct stream, which works because we get about 60% of the gold revenue that Evolution gets from Northparkes. And that works if the primary revenue is the copper. But for -- but if it's gold only, we had to come to the table with Lawrie and the team and work something out. But this is really exciting for us because the idea of getting a gold-only deposit there and us also having access to that was really key. There's nothing else right now on the horizon but is there a potential there? Well, I'll let James speak to that but there have been gold dominant deposits on that property in the past. James Dendle: Yes. And Cosmos, it's James. As Sheldon noted, the first mining at Northparkes is actually, as you probably remember, in the mid-90s as a gold project, and it was actually first explored with shallow holes for gold mineralization. So there is a history there, but it's very clearly transitioned to a copper deposit for the last 25 years or so. So when you think about it geologically, yes, the gold is clearly associated with the copper, and it's a very prospective region. And I think what we're seeing with Evolution is exactly what we hoped when they acquired the asset. They think very expansively and very creatively about how to maximize value from operations. And I think that's been a big part of their success with assets like Ernest Henry. And they're applying the same approach to Northparkes, which is to say there's a large resource, let's look at expanding capacity. And then with that expanding capacity, what else can we do with it, which has caused them to really look at the gold deposits in a way that wasn't done in the past. And the short answer is E44 is the most known but there are a large number of targets across the property that are sort of known from some of the historical work that have not been tested and defined in a systematic manner, which I think really speaks to the opportunity to find more of this type of mineralization, which with the expanded mill capacity Evolution to take advantage of. Cosmos Chiu: Great. That's great to hear, James. And then maybe my next question is taking a step back here. In the royalties and streaming industry, we've now seen recently some billion-dollar deals or even multibillion-dollar deals. I know, Sheldon, you mentioned that you deployed about $300 million last year. But in terms of these $1 billion-dollar deals, multibillion-dollar deals, is that something that Triple Flag could be interested in, could be competitive in? Or is that slightly too large for you at this point in time? Sheldon Vanderkooy: We've always said that like our sweet spot is really in the $200 million to $500 million range. And I don't think that, that changes. And when you look back, Triple Flag actually is coming up on our 10th anniversary. And over the last 10 years, the vast majority of the capital deployment in the sector has been in that strike zone. So I feel really good about that. There was a large deal done earlier this week, and $4.3 billion is too big for Triple Flag. I think that's okay. But there's plenty out there, I think, that we can grow and deploy on. And again, our -- relative to our size, I think we have -- we definitely have an ability to grow because when you look at the size of Triple Flag and $350 million of deployment, that's meaningful. So if we do a $400 million deal, that is -- that moves the needle for Triple Flag, and I think that will be very well by our shareholders. Cosmos Chiu: Great. And then maybe one last question. As you talk about the different growth opportunities within your portfolio, I guess one asset you did not mention was Pumpkin Hollow. I know there's a bit of history behind it. But now it seems like Pumpkin Hollow has a new owner, Kinterra, and they seem to have be able to raise a lot of capital. So Pumpkin Hollow once again, is this something that we should start talking about? Is there something that we should start getting excited about? Or is it still too early at this point in time? Sheldon Vanderkooy: Yes. So we retain a royalty on the Pumpkin Hollow open pit. And that actually, I think, looks like a really nice royalty because that is copper in the United States, and we're a royalty and we're on title and that survived all the processes that went on there. So I am quite keen to see what Kinterra is doing there, and that represents some very nice copper exposure from the United States for Triple Flag shareholders. Triple Flag will not be investing any more money in Pumpkin Hollow. I can -- I'll say that clearly. Operator: Our next question comes from the line of Tanya Jakusconek with Scotiabank. Tanya Jakusconek: I have a couple of questions, if I could, start with a very easy one. Can I know that you use a very different ratio. I just kind of want to assume like a flat gold price, flat silver price, et cetera. Can you give us just an idea of how the year is going to look like from a quarterly perspective? We have some step downs. We have other things happening. So I'm just trying to understand how should we think first half, second half, et cetera? Sheldon Vanderkooy: Yes. Tanya, we give our annual guidance. We're not going to break it down by the quarters. And you've kind of correctly identified the one factor, which is the Cerro Lindo step-down will occur sometime in the second quarter, we believe but I can't give any more quarterly guidance over and above that. Tanya Jakusconek: Okay. What about the capital returns? I think those are -- you focus on the dividend and you like the fact that you progressively increase that dividend. How should we be thinking about it for midyear? Sheldon Vanderkooy: Yes. I think nothing's changed on our philosophy on capital allocation. So as you cited, we have a progressively increasing dividend. We've increased it every year since we've been public. I see no reason why we would change that. I think it's very -- it goes over very well with shareholders. So that's the dividend. And then we're looking to deploy capital into accretive opportunities for shareholders. It's really that simple. Tanya Jakusconek: Okay. And in terms of the opportunities, I think you mentioned that $200 million to $500 million range being your sweet spot and see some bigger deals. So I have a couple of questions on this front. The first thing is I've noticed that 2 people shopping in their own closets [indiscernible] and Wheaton. Are there any other things to do in shopping in your own closet? Any other opportunities on assets you own? Sheldon Vanderkooy: That's an analogy. I haven't heard before. I like it. I guess we just... Tanya Jakusconek: Let all the time, by the way, Sheldon. Sheldon Vanderkooy: It's natural when you have a relationship with a party or you already have a position in a property that those are the things you look to. And with Northparkes, that was obviously a natural for us. And would be looking for other opportunities like that? Yes, perhaps. But these things are -- they're never done until they're done, and I don't want to start front-running anything, but we try to engage closely with all of our partners. Tanya Jakusconek: And in terms of opportunities that are out there, would you say most of them now are focused on asset builds? Or are the royalty portfolios still available? We saw one last night as well, anything -- any color on opportunities that are out there? Sheldon Vanderkooy: It's going to be the same answer as has been received by, I think, everyone for the last little while. There's a variety. There's third-party assets that are coming up for sale. There's people looking for financing for various things, and that can be development or that could be other reasons. It's -- I wouldn't say there's any like one big thematic out there. And it's kind of our job to look at the opportunity set and try to generate some of our opportunity set as well. So I wouldn't say there is any kind of one sort of theme that I'm seeing out there. The opportunity set looks pretty robust to me. And I think we've seen not just ourselves but other people deploy. I think that bodes well for the sector as a whole. Tanya Jakusconek: Okay. And then we've seen some very big silver opportunities. Are there any smaller ones that fit that $200 million to $500 million range that you're seeing out there? Sheldon Vanderkooy: Yes. And again, I wouldn't consider $200 million to $500 million to be small for a company of Triple Flag size. That would be quite meaningful. There's silver opportunities. There's also gold opportunities out there. I think our focus is always probably gold first, silver, second but we like precious metals. And if it's a good silver asset or a good gold asset, we really want to be on good assets with good operators. Tanya Jakusconek: Yes. When I meant the smaller silver opportunities, that was relative to the $4.3 billion. So relative to... Sheldon Vanderkooy: Yes, most things are small relative to $4.3 billion. Operator: Next question comes from the line of Brian MacArthur with Raymond James. Brian MacArthur: Could you just give us an update on ATO and maybe what you -- if you assumed any contribution this year? And then as you go out to 2030, what you're thinking, i.e., expansion or baseline, if you could just give us an update on that, that would be great. Sheldon Vanderkooy: Brian, it's Sheldon. I'll answer that one. Like look, ATO is in litigation. We've been quite upfront with the market on that. We feel very confident in our position. And that process is kind of going through the court. So I can't say too much. But what I will say, and I think this is really pertinent and I'm glad you asked the question, we took it out of our 2026 guidance, and we took it out of the 2030 5-year as well. So that doesn't reflect our confidence in our position but rather, we just want to remove it as a potential distraction for investors to have to get a handle on. So when you look at those figures we put out for 2026 and for 2030, there's 0 contribution from ATO in there, and ATO is only upside, not downside relative to those figures. Operator: That concludes the question-and-answer session. I would like to turn the call back over to our CEO, Sheldon Vanderkooy. Sheldon Vanderkooy: Thank you very much. Really appreciated speaking with everyone and looking forward to a great 2026. Bye. Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining in. You may now disconnect.
Penny Himlok: Thank you. Good morning, everyone, and thanks for joining us this morning. On behalf of Kumba's executive team, a very warm welcome to those of you here in the room with us and to everyone joining us on the line. I'm Penny Himlok, Head of Investor Relations, and I'm pleased to be joined by our CEO, Mpumi Zikalala; and our CFO, Xolani Mbambo, who will take you through our annual results shortly. Before we get started, just a quick safety note. As you know, safety is our first study. There are no safety drills today. So, if you do hear an alarm, please follow the instructions and calmly make your way back through the exit through which you entered and please meet in the front where safety Marshalls will give you further instructions. [Operator Instructions] And of course, please take and note the disclaimer, especially with going the forward-looking statements. Turning to today's agenda. We'd like to -- we'll be keeping to the usual flow. Mpumi and Xolani will walk you through our performance for the year, and then we'll open the floor for Q&A's. We also have members of our executive team today with us, and they will be available to address any questions at the end. Thank you. I'll now hand over to Mpumi. Nompumelelo Zikalala: Thank you, Penny. Good morning, everyone. It's great to see all of you again. And as Penny said, thank you for joining us this morning. 2025 was another year marked by macro volatility with geopolitical tension and trade policy uncertainty that have become, as you all know, for now at least, the new norm. Our priority has again been to limit the impact of that volatility by focusing on operational excellence to be as competitive as possible, whilst we market our product to fully realize the full value of its quality. The business reset in 2024 laid a firm foundation and disciplined execution in 2025, resulted in consistent output and reduced costs despite an increase in waste mining and thus bringing back the mining fleet that we previously parked. We also made steady progress on our UHDMS technology project, a key investment that unlocks more value from our resource base, optimizes rail capacity and strengthens our position in the premium high-grade iron ore market. I'm pleased to say that logistics performance has certainly remained stable. I know that, that question keeps coming up. There's still more work to do, but we are seeing real progress as a result of the collaboration between the National Logistics Crisis Committee, the Ore User's Forum, which Kumba is part of, Transnet and indeed our government. As we move into 2026, I believe we remain well positioned to deliver long-term value for all our stakeholders. Now moving into the results. Let me begin, as I always do, with safety, which, as you know, by now, is our first value. This year, we achieved 9 consecutive fatality 3 years of production at Sishen and as of last week Friday, 3 years at Kolomela. These are important milestones and a testament to the dedication and vigilance of our workforce shift after shift. But success can bring the risk of complacency. So, we know that we still have more work to do, particularly as the UHDMS project changes our risk profile with an increasing number of service partners, particularly at Sishen Mine. While our total recordable injury frequency rate of 0.95 remains well below the ICMM industry average of 2.29 for 2024, we must remain fully focused on our first value, which, as I said, is safety. And we made good progress embedding Kumba's safe way of work through constructive collaboration with our service partners and the implementation of our fatal risk management program, which is a program that encourages our teams to know what it is that can cause them significant harm in a simple and focused manner. On the health and wellness front, we have now passed 9 years with no significant health incidents, and this reflects the high standard of care we apply to occupational health and the safeguards we put in place across all our operations. Turning to our business overview. We benefited from a more cost-efficient base and delivered on our sales, production, as well as our cost guidance. Production was driven by strong growth from Kolomela, whilst improved rail performance helped us with slight improvement in our sales. Higher iron ore prices, lower operating expenses and a stronger exchange rate contributed to a 14% increase in our adjusted EBITDA. In addition, return on capital employed improved by 5 percentage points to 46%, reflecting more efficient use of our capital to generate earnings. On the back of the solid financial performance, we declared a final cash dividend of ZAR 5 billion. And in addition to this, ZAR 1.6 billion will go to our empowerment owners, which include the Sishen Iron Ore Company Community Development Trust and as you know, our frontline employees. This brings the total full year dividend to ZAR 10.3 billion to Kumba shareholders, and this number excludes the ZAR 3.3 billion that's the dividend towards our empowerment owners. We have a strong track record of delivering stakeholder value, and we delivered again bringing ZAR 58 billion of enduring stakeholder value, and this covers the whole range of our stakeholders. With that, moving on to sustainability. Our purpose remains for us to reimagine mining to improve people's lives. And through our sustainable mine plan, we've done exactly that. Water is a vital resource. And although we operate in a water scarce region, both of our mines are water positive, and we share this excess water that we intercept with our local communities, as well as other local businesses as well. We supplied over 16.5 billion liters of water to our communities, providing drinking water to around 200,000 people in our local communities. We also reduced our freshwater withdrawals by 4% to below 7 billion liters, contributing to an overall 19% reduction from our 2015 baseline. We've created over 800 employment opportunities outside of our mines. You know that we need to drive for efficiencies within our own mines. But when you look at the number of 800 jobs, this brings us to a cumulative number of jobs supported outside of our mines since 2018 when we started measuring this to well over 42,000 jobs. In 2024, Kumba became the first African iron ore miner to achieve the IRMA 75 standard and IRMA stands for the Initiative for Responsible Mining Assurance. And as we've said before, not everyone from the mining industry subjects themselves to this level of assurance. You do it because you want to do it. Well, I'm pleased to say that during 2025, both operations maintained IRMA 75, solidifying our position as a supplier of responsibly mined iron ore. Tomorrow, together with the rest of the Anglo American Group, we will be updating the market on our sustainability strategy. I've got to say that over the years, we have made significant progress. And we also, however, recognize that a lot has changed, both within our business as well as broader stakeholder expectations. I am very proud of the work we have done over the years and the milestones that we've achieved and look forward to sharing more details just around our refreshed strategy with you tomorrow. Now moving on to stakeholder value creation. We continue to deliver meaningful impact to our various stakeholders, as I said, through the ZAR 58 billion in shared value. We contributed ZAR 7.4 billion to the national fiscus through income taxes and mineral royalties, helping our government provide essential services and infrastructure to our fellow South Africans. Closer to home, 84% of our employees are from our mine communities, and this is in the Northern Cape province, a province that we call home, and their salaries and benefits, which they get directly benefit the local communities. We also support the local economy by ensuring resilient local supply chains. We spent ZAR 19 billion on BEE suppliers, of which ZAR 3.5 billion was with our local host community suppliers. And here, we focus significantly more on youth and women-owned businesses. For the community more broadly, we invested ZAR 485 million in direct social investment, focusing on the areas that matters the most, and that's health, education, as well as community development. Now I will take you through our operational performance. As I said earlier, it was a solid operating performance. Waste mining rose 6% with both operations gaining momentum over the year. Production was up 1% compared to 2024 and in line with our guidance of delivering between 35 million and 37 million tonnes. We took advantage of improved grade performance to reduce stocks at the mine and return our Saldanha Bay port stocks to more optimum levels of 1.8 million tonnes. And for those who followed us for some time, you know we haven't been at these levels for quite some time. The increased volumes also supported a 2% increase in sales to 37 million tonnes at the top end of our guidance. Next, looking at production in a bit more detail. The overall focus for 2025 was getting the basics right, which for us is operational excellence and cost discipline. While waste mining was at the lower end of guidance, we importantly gained operational momentum through the year, with a 6% step-up in the second half, if you just compare H1 and H2. Waste volumes are driven by Kolomela's 30% increase, while Sishen was hampered by asset reliability challenges and only increased by 2%. As we move through 2026, we continue ramping up waste mining and we will need to invest further in our mining equipment to improve asset reliability, as well as operational efficiencies, and Xolani will touch a little bit on this a little bit later in the presentation. Looking at production, Sishen was marginally lower as a result of the planned drawdown of high levels of finished stock and plant maintenance that we did in preparation for the UHDMS main tie-in that will take place in the second half of this year. This was offset by a 7% increase from Kolomela, in line with our flexible approach to production. Cost discipline remained an important focus, and we realized over ZAR 600 million in cost savings during the year, bringing our cumulative savings since we started our reconfiguration back in 2024 to now ZAR 5.1 billion. And this important work just around the drive for cost efficiencies will continue. Now turning to Transnet's logistics performance. Ore railed to the port rose by 6%, and this was despite the 4 derailments that took place during the year. And I should tell you that the rate that we are seeing outside of the derailments should tell you that, that's actually increasing. Rail performance improved to 84% of contracted volumes, which together with improved equipment availability at Saldanha Bay Port resulted in a 2% increase in our sales. It's encouraging to see the improvement in Transnet's rail performance, and this is a direct result of the joint collaboration between Transnet and the Ore User's Forum. And as you know, Kumba is very much part of the OUF or the Ore User's Forum. The Ore Corridor Restoration program and the mutual cooperation agreement have enabled edge and maintenance to be done more timelessly and also efficiently. The planned 10-day annual maintenance shut, as well as a 26-day shut to refurbish stacker reclaimer #3 in the second half of the year were all completed successfully. The recovery of the logistics network is key to unlocking value, and we are certainly moving in the right direction. However, as we've said before, there's definitely still more work that needs to be done to restore the network to previous performance levels, and this will take some time. In terms of private sector partnerships, also called PSPs, the Ore User's Forum submitted a follow-up response to the request for information in November. As you may remember, we gave our initial response in May, and this was a follow-up response requested by government. So, they played back what they had from all the submissions in May and asked people to comment on that document, and that's what we submitted in November. As we consider the way forward, our key principles for participating in the PSP are essentially as follows. Number one, government needs to retain ownership of the assets with a private consortium using, maintaining and operating the OEC. Secondly, and here, I must add, Kumba is first and foremost, a mining company. We do not have the skills to manage a logistics system. And therefore, we need to partner with the concessionaire who can deliver the right services for us, as well as other users of the line for the benefit of not just Kumba, but clearly for the benefit of other users and ultimately, the country as a whole. Number three, for the concession to work, this should cover the full integrated system. It's the rail, the port as well as freight. And this should be over an extended period to unlock Kumba's life of mine ambitions. And then last but definitely not least, and very importantly, we would want to secure a viable commercial pathway, including the syndication of capital with partners. We certainly look forward to the release of the commercial request for proposal, which is the next phase, simply because this will be a key milestone in the PSP process for the OEC or the Ore Export Corridor. Notably, we've commenced with the work to renegotiate the Sishen logistics contract, which expires at the end of 2027. We aim to substantially conclude the renegotiations by the beginning of next year, which will be well ahead of the expiry of the Sishen contract. And now it's my great pleasure to hand over to Xolani to take us through the financials. Xolani, it's certainly great to have you on board. And I don't feel like Xolani is new anymore because he's certainly already adding value. And I'm sure that this marks the first of many presentations that we'll be doing together. Thank you. Please give him a hand. Xolani Mbambo: I'm not sure if Bothwell will be pleased when he hears this, because it appears that the numbers we put into the market are positive. And I only joined in January, and I'm graving the credit. So, thank you, Mpumi, for the kind words. It's really a privilege to be here today and for you to be listening to me to present these results. Last year, I had the opportunity to spend time with the Kumba leadership team when they were launching the culture. This gave me meaningful insight into the organization. I got to understand our people, the culture and the values that actually drive us as an organization. I've also been fortunate to visit both our Sishen and Kolomela operations. Seeing the dedication of our teams on the ground has been invaluable and has reinforced my confidence in the strength of this business. So, there is no turning back as Mpumi. So, now let's take a look at the market environment. As Mpumi mentioned, the period under review reflects a complex global operating environment, I'm sure you know of that. It's one that's characterized by elevated geopolitical risks and evolving trade dynamics. This has placed pressure on regional economic conditions, resulting in shifting demands for steel and iron ore products. So, if you look at the 3 regions where we send our product, in Europe, their GDP growth was 1.6% with crude steel output falling by 2%. And that was on the back of weak demand. However, the implementation of import tariffs, CBAM and CBAM is expected to fuel recovery in steel prices in the region. China achieved its GDP growth target of 5% for 2025, although steel output fell by 4.6%. This is because property remained sluggish and infrastructure investment declined. The bright spot was industrial production up 6%, and this is linked to exports, which remained robust. If you look at Asia, their GDP grew by 3.8% and steel output rose 3.2%. Growth was driven by urbanization, infrastructure, manufacturing in countries such as India, Vietnam and Indonesia. So, on the next slide, we look at the iron ore supply and demand impact on prices and premium. Following a strong start to the year, Chinese steel mill profitability came under pressure, as raw material input prices increased. We certainly got a lot of questions in our sessions this morning on that. Additional output from Australia and Brazil resulted in lump premium dropping to record lows. I'm told that we've now put [Technical Difficulty] from Brazil and Australia. Despite the tariff uncertainty and market volatility last year, our high-quality product attracted a quality premium of $10 per ton. Price increases in the latter part of the year yielded positive timing effects and marketing premium of $1 per tonne, a sharp reversal from negative $7 per tonne that we achieved in 2024. This is all good work that's been done by the marketing team. I can see them in front of us here, and I'm hoping they will continue to deliver on that as we focus on production going forward. Consequently, our average realized iron ore price at $95 per tonne was 12% above the benchmark price. What's important is that this is ahead of what our peers have achieved in the market, and it really enforces our strategy of focusing on premium product. So, let's look at the financials in terms of what all of this means. Kumba delivered a resilient set of results. I've discussed our average realized prices on previous slide, which contributed to this uplift in our earnings. If you look at our costs, particularly on C1, they reflect the stronger rand-dollar exchange rate. We delivered solid EBITDA, and I'll talk about this in more detail later. The headline earnings per share increased by 18% to ZAR 45.97, translating into dividends that offer shareholder value, real shareholder value. If you take a look at EBITDA, we achieved ZAR 31.9 billion, which was underpinned by revenue growth, lower costs, as well as positive stock movement. This was partly offset by a stronger rand, cost inflation and lower shipping revenue. We also received a boost from other operating income for logistics underperformance, which we reported on at interim last year. I'm sure you'll recall that number over ZAR 900 million. In total, EBITDA rose by 14%, giving our EBITDA margin a positive uplift of 46%, to 46%, I wish it was 46%. Last year, we were at 41%. What's even more encouraging for me is that our EBITDA cash conversion of 102% reinforced the quality of these earnings that we've achieved. So, not only do you see EBITDA, which in some instances can be removed from cash, we actually converted it to cash for every rand of EBITDA we generated, we generated cash of over ZAR 1, which is excellent. Now let's take a closer look at our C1 unit costs. Our C1 unit cost increased to $40 per tonne, and that's really a function of a stronger rand. In the absence of that, we would be retaining the similar level. In fact, at a constant rate of $18.60, which is what we guided on to the dollar, our C1 cost would be $38 per tonne, coming in just below the guidance of $39 per tonne. So, the strengthening rand isn't helping in this instance. Benefit from positive WIP stock movements and deferred stripping costs were outweighed by stronger rand and inflationary cost increases, as you can see in the chart. We continue to focus on cost optimization to preserve and grow our margins. Now let's move on to our unit costs at the mine level. If you look at Sishen, their cash unit costs remained broadly flat at ZAR 530 per tonne, and that's within the guidance that we provided last year. Sishen's cost inflation increase was offset by lower contractor mining volumes, capitalized deferred stripping costs and positive WIP stock movement. For 2026, we are guiding slightly higher unit cost of between ZAR 530 and ZAR 560 per tonne to reflect lower production later in the year when we actually implement our UHDMS main tie-in. Kolomela's cash unit cost, on the other hand, improved by 7% to ZAR 374 per tonne, and it outperformed the guidance that we gave to the market, which is excellent. Performance was on the back of deferred stripping cost capitalization, positive stock movement and production volume uplift. I'm pleased to say that cost inflation was more than offset by our cost optimization at Kolomela. So, they did a splendid job there. For 2026, we are keeping the unit cost guidance at between ZAR 430 and ZAR 460 per tonne. Now let's turn to our cash breakeven price. As mentioned, our breakeven price reflects our all-in costs. So, when you look at, this is all-in cost -- and this includes sustaining capital net of premium and above plus 62 index. This is where I expect my colleagues on the project side to reduce the CapEx and still deliver the same and then the marketing guys to pump the premium and make sure that they reinforce our exposure to premium product. And as long as we continue to do that, of course, in conjunction with the cost reduction going forward and driving efficiencies, we will maintain that breakeven price at an acceptable level. And all it means for us is at what level as a business should the iron ore price drop before things start to fall apart. So, the lower the price, the higher the -- what I call the safety margin. Improved breakeven price was underpinned by market premium and lower freight costs. Our goal remains to enhance margins by improving breakeven price through cost reduction and improving product premium. I'm saying that product premium improvement. Now let's move on to CapEx. If you look at our capital expenditure for 2025, it was ZAR 10.4 billion. And the key driver for that was ZAR 1.7 billion, which we spent on our UHDMS project. CapEx for this project will be phased in line with implementation sequence, and Mpumi will talk about that later in her closing slides. Our stay-in business, which is key for sustaining our business operationally going forward was flat, and it was in line with our guidance. Again, that's a reflection of our discipline. If you look at our deferred waste stripping, which was mainly driven by higher stripping ratio at Kapstevel, it was relatively high in Kolomela. Over the past months, our teams have undertaken a thorough review of our operating environment, the growth pipeline and the long-term strategic positioning of this business. So, what has emerged is that our mine optimization has given us cost efficiencies and the team that I found have delivered on that. I can't claim it at the moment. As we ramp up activities, we need to drive further cost improvements. These improvements must come through operational efficiency and better supply management. We wanted to fully capture these opportunities. We also want to ensure that we remain competitive and well positioned for the next phase of growth. And for me, competition means we far from the market. Australians are closer to the market. We need to be consciously aware of our cost position all the time. To achieve this, we are stepping up our capital investment program. This will help improve productivity and strengthen our long-term value creation. So, as a result of all of this, our CapEx guidance for this year is between ZAR 13.2 billion and ZAR 14.2 billion. Expansion CapEx is largely driven by our UHDMS, which we've mentioned several times now, is an exciting project, and the balance is on the exploration and technical studies. All of this is for growth. We are refocusing this business on growth. Between ZAR 3 billion and ZAR 3.2 billion has been allocated for this year. We are investing in work to support our future pipeline of life extension projects. And again, Mpumi will talk about this in her closing presentation. The total stay-in business CapEx is between ZAR 6.6 billion and ZAR 7 billion. About 2/3 of that relates to safety, capital spares, plant and infrastructure project or upgrades. Approximately 1/3 is allocated to heavy mobile equipment, which we are recapitalizing. In fact, our equipment in some of our equipment are beyond life and therefore, the agent needs to be replaced and that replacement will result in cost efficiencies going forward, as well as operational efficiency. So, it's quite key that we do that. And as an example, some of our trucks in many cases, are now close to 120,000 hours of operations. And typically, we normally replace at 80,000 hours. And that makes them less cost efficient to operate. The deferred stripping CapEx is expected to be between ZAR 3.6 billion and ZAR 4 billion. That's critical for us to continue to ensure that we open-up enough surfaces going forward for us to continue mining. This is due to mining higher stripping ratio in some instances as well, particularly at Sishen as we access the sections that have got a higher mining stripping ratio. In the medium term, CapEx will remain at similar levels. As you know, our UHDMS CapEx will peak this year and will then continue to reduce until the project is completed in 2029. Our baseline stay-in business, which is run of the mill business as usual, will be approximately ZAR 5 billion per annum on average in the medium term. Heavy mobile equipment, replacement CapEx is about ZAR 2.5 billion per annum on average going forward. Lastly, deferred stripping CapEx will remain at around ZAR 4 billion per annum on average. Now let's look at how we've allocated our capital. Our disciplined approach to capital allocation remains unchanged as a principle. Sustaining CapEx, value-accretive expansion projects and sustainable returns to shareholders remains our priority. For the year under review, we generated cash of ZAR 17.2 billion after paying for sustaining capital. That's a good achievement. ZAR 12.2 billion was used to pay base dividends to our shareholders. That was before allocating ZAR 4.8 billion to discretionary capital. This was largely focused on the UHDMS project together with additional dividends that would have been carried over from 2024 paid in 2025. Our dividend policy remains unchanged, and that's between 50% and 75% of headline earnings that we generate. It's very important that we understand that. We delivered ZAR 12 billion of attributable free cash flow. This has underpinned our Board's decision to declare a dividend of ZAR 15.43 per share for the second half of last year. Together with ZAR 16.60 per share that was declared at interim, our total dividend is ZAR 32.3 per share. And this means 70% payout of our headline earnings for the year. And this is at a yield of 9%, which remains a respectable yield. Maintaining a resilient and efficient balance sheet, especially in this volatile environment is extremely essential. And before I hand back to Mpumi, let me take you through my key focus area as I joined the organization. So, my priorities are very clear. First is to strengthen on cost efficiency. Good discipline over the past 2 years has delivered over ZAR 5 billion in cost optimization across 2024 and 2025, which Mpumi touched on earlier. It's important to continue that focus moving forward. And I will apply a fresh perspective on the ways in which we can be more efficient, and I cannot do it alone. I will do it with the support of the team. Second, is to enhance capital discipline. Cash flow performance need to be a critical focus for this business and every rand spend needs to be strongly challenged. In that context, we clearly have important investment programs in key phases. And these are notably our UHDMS project and HME program. So, going forward, there will be an increased capital intensity in this business. So, it's quite key that we focus on that spend. There will be strong discipline and tight governance on all decisions to ensure that money is well spent. Lastly, we remain committed to paying dividends through the cycle and maintaining our strong policy as it is. A payout of 50% to 75% as a dividend policy is quite strong. On that note, I'd like to thank you for listening to me. And now back to you Mpumi. Nompumelelo Zikalala: Thank you, Xolani. It's certainly great to have you on board. You've certainly hit the ground running, and it doesn't feel like you've only been here for a couple of weeks. And I'm looking forward to us working this journey together with the rest of our Kumba team. And then back to the room, ladies and gentlemen, before we wrap up, I would like to spend a few minutes running through how we see the picture of iron ore going forward and then make some specific comments around Kumba's future and our next steps to creating value. Turning first to the iron ore market. Our long-term view on global steel demand remains positive. Structural forces including economic development, population growth and the global shift to cleaner technologies will continue to shape and support demand over time. At the same time, the steel industry is becoming more fragmented and multipolar. While Chinese demand is expected to moderate, rising demand from India and other developing regions will more than offset this. And importantly, there's simply just isn't enough scrap in the system to meet this growing requirement. That reinforces strong fundamentals for iron ore as the primary source of iron units. If we focus on lump ore, which, as you know, is our core market, we are seeing interesting dynamics. The lump premium has been under pressure due to margin compression and increased supply. But as this excess supply works its way through the system and profitability improves, we anticipate much tighter markets emerging. The data already shows how lump supply is nearing its peak with most new volumes coming only from costly replacement projects in Australia. With 2/3 of our portfolio in lump, Kumba is well positioned for the shift that we see. Additionally, our product properties are well suited for blast furnace applications. As seen on the chart on the right, our products combined alumina and silica is within the ideal blast furnace zone. And this is the sweet spot that steelmakers operators aim for. Steelmakers blend different ores to reach this zone and many mainstream ores fall outside of this zone. And as a result, our ores are used strategically to optimize these blends. So, this is beneficial for our customers. We also serve a diversified customer base. Our premium lump goes into traditional markets where steelmakers prioritize high-grade ores, while our standard products are sold largely into China where demand is more price elastic. Across the range, our products consistently offer higher iron ore content, supporting stronger blast furnace performance. And with our UHDMS technology set to triple our premium grade supply, we gained the scale and flexibility to support this growing market demand for higher quality iron ore. This is where our product, quality, our technology, as well as our long-term strategy converge. And it is a key differentiator for Kumba as the industry evolves. Now let me give you an update on the progress made on our UHDMS project. We've received quite a few questions around the project. So, 2025 has been an important and productive year for our UHDMS project at Sishen. We've now completed 37% of the overall project, with 90% of the engineering work behind us. For those who may remember, previously, we paused the project because we are not happy with where we were from an engineering design perspective. So, it's pleasing to be sitting in this position at this point of the project. All major procurement has been completed. And because we are following a modular build approach, our Jig plant will continue running during the main tie-in, which will take place later on in the year. I know people have been asking when exactly. It's in the second half of the year, in August to be specific. And during this time, we will use stockpiled material to support consistent sales as we execute the main tie-in. And that's where when we talk about guidance, you'll see the differentiator, but we've essentially said that our sales guidance will remain going forward. On capital, we remain on track to complete the project within our overall capital budget. And as a reminder, we are phasing our investment in line with the execution of the project, which follows a modular approach. Our total capital spend on the project will be ZAR 11.2 billion and in line with the overall project progress, we've invested ZAR 4 billion to date. The construction of our first coarse and fines modules has progressed steadily. In parallel, the new coarse and fines modular substations has been completed. The bulk of the construction was actually done offsite, and we then moved the constructed modular substations to the site. And these are in the process of being connected to the first modules. The construction of the first modules has been slightly slower, but this has allowed us to learn the lessons, and we will apply these into subsequent modules. We anticipated this and planned for the modular approach simply because we knew that constructing within an existing plant was going to allow us to land. So, it's great to see these lessons coming through. These lessons will also position us well as we move into the main tie-in later this year. We are on track for the main tie-in with critical milestones achieved. And what's good for us is that a portion of the work originally planned to take place during the tie-in was actually brought forward for execution ahead of the main tie-in in order to derisk the scope of the main shut where possible. So, we wanted to limit the amount of work that we'll do in the second half of this year. Our UHDMS project certainly remains one of the most exciting projects in our pipeline. The technology not only enables us to increase the volume of premium grade products, it also allows us to use low-grade material more effectively, cutting waste and improving our overall cost efficiencies. And I've spoken about this before to say we are reducing our cutoff grade from 48% to 40%. And the economics around the project speak for themselves. EBITDA margins above 50% and an IRR of over 30% means that payback from full production is just 3 years. But for me, what matters most is the long-term benefit. UHDMS gives Sishen meaningful life extension and strategic flexibility for years to come, fundamentally delivering long-term sustainable value for all our stakeholders. Next, I would like to talk about the strength of our mineral endowment. Now quite a few of you have been asking us about the future of our business. And now I'm delighted to share some exciting news around this because you've been asking us to share a little bit more. Right now, we have approximately 764 million tonnes of exclusive mineral resources, and that's a powerful foundation. 471 million tonnes of that is already confirmed from our 2024 resource cycle. And we've added another 293 million tonnes, 2/3 at Sishen and 1/3 at Kolomela, which really shows that our exploration program is doing exactly what it's meant to do. We are not slowing down. Our exploration teams are actively expanding our understanding of the ore body and building options for the future. As I've said before, the Northern Cape province is a very interesting province when it comes to iron ore. At the same time, our mine planning engineers are enhancing pit designs to optimize the extraction of the ore body. Our ore reserves now stand at around 802 million tonnes. And since 2022, we've added 175 million tonnes before depletion. Now that's a big step forward and speaks to the long-term resilience of our business. We've just added another year to both Sishen and Kolomela's life, taking their life of mine to 2041. Our ambition is to, however, increase life of mine, and we are working towards a value-accretive pathway to improve or increase or extend Kumba's life of mine. I've already spoken about our UHDMS project at Sishen, which is exciting. I'd like to zoom into Kolomela. Here, we are building on a strong foundation. We are making real progress on 2 important resource areas. Firstly, Ploegfontein, already part of our resource base is moving through further studies and additional drilling to further increase our confidence around this great resource. I'm also pleased to announce that Heuningkranz has now also been added as a new resource area and it's progressing along the same track to convert its resources into reserves. Both areas make smart use of Kolomela's existing infrastructure, which will keep capital cost down and speed up future development timelines. So, in summary, our asset base is stronger today. We're investing in the right work, the studies, the technology, the exploration, as well as the increase in our asset base through the recapitalization of our HME fleet, which Xolani spoke about earlier. All of this is aimed at unlocking high-quality iron ore tonnes, improving margins and extending the life of our mines. And key to this is that it needs to be value accretive. And we are doing this in a disciplined way that ensures long-term value for all our shareholders. And that then brings me to our full year guidance. For 2026, we expect total production of between 31 million and 33 million tonnes, reflecting the main tie-in of the UHDMS project. As you recall, we guided the same number last year, so this hasn't changed. This is linked to 22 million tonnes from Sishen and 10 million tonnes from Kolomela. We have also maintained our sales guidance of between 35 million and 37 million tonnes, as we plan to supplement production with finished stock. Our C1 unit cost guidance is $45 per tonne and remains unchanged in real terms. The move from $40 to $45 per tonne is purely an exchange rate translation effect. Previously, our guidance was based on an exchange rate of ZAR 18.60 to the dollar and using a stronger exchange rate of ZAR 16 to the dollar naturally lifts the dollar reported cost. As you've heard from Xolani, capital expenditure is expected to be between ZAR 13.2 billion and ZAR 14.2 billion for the full year. Now before moving to Q&A, I would like to remind you, as I always do, of our value proposition. As we look ahead, the message is simple. While the macro backdrop will remain uncertain, we are clear on what matters most and executing well on what we can control. My priorities and my team's priorities for 2026 are very clear. Firstly, to continue lifting and improving on operational excellence because you can never stop on that, as well as driving cost efficiencies, Xolani spoke about this and the great execution on both our UHDMS project, as well as HME investment. Secondly, working towards logistics stability and optimizing risk-adjusted returns with long-term logistics capacity through the right partnerships. And last but definitely not least, understanding and advancing our potential value-accretive pipeline of life extension options, and I've spoken about them. And these will all be aimed at meeting market demand. Now across all of these initiatives, we will keep really tight control of capital and a strong focus on cash flow performance. That stands to ultimately benefit all of our stakeholders with Kumba in the best shape it can be to deliver results today, tomorrow and beyond. I'm exceptionally grateful that we have strong teams, and these are across all the various areas of our business. We also have a very supportive Board and committed partners across our stakeholder base to achieve this. And of course, we have the privilege of working with world-class assets. And that gives me absolute confidence in our ability to deliver sustainable value for all our stakeholders. With that, I will now hand over back to Penny, who will lead the Q&A session. Penny Himlok: Thank you, Mpumi. We'll now open for questions firstly in the room. I see already a hand up. And then we'll move to the questions on the webcast line and the conference call. Thanks. I see Tim has his hand up. Unknown Analyst: Congratulations on the results. I thought the received pricing was very good and operationally very solid, so well done. I'm just interested in -- I've got 2 quick questions. The first one, just on your resource and your reserve increase and resource change or your reserve and resource change. Just wonder if there's a change to the life of mine stripping ratio, just how you see the pit shell, how we should think about stripping over the course of life out to 2041. And then you've sort of indicated that you see potential for life beyond and you've declared this big resource. Perhaps you could just speak about the process of the sort of the ore body and what that means in terms of what it would take to convert that resource into reserve? Do we need higher prices? Or is it just a drilling issue? And then lastly, just a quick one. Kolomela, the cost was a really good cost result, but a bit of a step-up in costs for this year. If you could just give us a bit more color, that would be appreciated. Nompumelelo Zikalala: Thanks, Tim. Do you want us to answer, Tim or do you want us to take a few more questions, Penny? Penny Himlok: I think we should as Tim has asked quite a few questions, let's address those. Nompumelelo Zikalala: Okay. Thank you and it seems we will not remember all the questions. Tim, starting with the first question, and I'm going to ask our Executive Head of Technical and Strategy, Gerrie, to add to this. So, in our guidance slide, you would have seen that we talk about both this year's strip ratio, as well as the life of mine strip ratio, which essentially caters for the endowment that's already been converted into reserves, and that forms part of our life of mine plans. So, when we guide on those figures, that's already, I guess, built in. And as we've said before, clearly, Sishen's strip ratio reduces if you just look at this year and the future years. And if you look at Kolomela, it's fairly flat. I mean it's a slight difference. I'm going to ask Gerrie to talk a little bit just about the phasing and to also talk about the process that will now follow for both Ploegfontein as well as Heuningkranz, just the move from resources to reserves. Thanks, Tim. Gerrie Nortje: Yes, thank you, Mpumi. Tim, some really good questions, as always. Look, I think, firstly, just on the strip ratio after 2041. Of course, we can't guide on that at this point in time. We've only declared resource. we have not yet declared a reserve and as such, it's not included in the life of mine plan yet. So, maybe I'll start with the approach that we follow in terms of how we optimize our business. So, you will see in the resource reserve statement that we apply a 0.7 revenue factor for reserves. The reason we do that is to ensure that we always have a healthy margin throughout the life of mine. Now of course, you can follow different approaches and will impact the margin. What we have changed fundamentally last year as part of the business reconfiguration is to take a cost approach. So, not to only respond to prices, but to make sure that we target the right cost position. Now if we look at the current guidance and the cost position, essentially, if you look at CBEP, we are attempting to remain within those ranges over the life of mine and even when we extend the life to maintain a similar cost position. So, our objective is to remain below the $70 per tonne. And as such, when we optimize the mine, enhance the life, we target that, and that's why we then derive the revenue factor, which will then obviously declare the reserves. Now, Ploegfontein and Heuningkranz has been in the portfolio for a number of years. Ploegfontein previously declared as a resource, Heuningkranz only declared now. The reason we declared it now is we do meet the requirements from an RRPEEE perspective, and we are comfortable that it meets the requirements to declare resource. Now it forms a really important part of the life extension of our business. What we are doing at the moment is improving the geological confidence and the study work. As soon as we get to a pre-feasibility level and the geological confidence at the required levels, we can then declare a reserve. Now typically, it takes us about 2 to 3 years to work through the study phases. It could be a bit longer, but we have time if you consider by when we have to respond to extend the life of mine. So, immediate focus now is to drill additional holes at both Ploegfontein and Heuningkranz, as well as other areas of Sishen to complete the studies, put it through the different stage gates and then, of course, declare a reserve. At that point, we will then be able to update the life of mine and we'll also then guide on the life of mine strip ratio. But we are attempting to remain at similar levels over the life of mine in terms of strip ratio. And of course, it will give us optionality of extending the life quite significantly. Now if we just look at Heuningkranz quickly, I'll just say one more thing for me. So, Heuningkranz is about 20 kilometers away from Kolomela. Ploegfontein is located on the Kolomela mining reserve, as well as Heuningkranz actually. So, we don't anticipate massive capital investment to unlock the resources and reserves in time. Reason for that being we can leverage the Kolomela infrastructure and the hub to essentially mine those areas. So, that's why we really like this. Secondly, if we look at the cutoff grade that we've applied for Heuningkranz, 61% Fe, the bulk of that will essentially be DSO. So, we will not require extensive beneficiation. Again, lots of benefits in terms of tailings requirements, as well as beneficiation requirements. So, it is essentially part of our strategy to extend the life without increasing the cost and making sure that the margins can potentially increase. So, I added quite a bit there, Tim, but... Nompumelelo Zikalala: Yes. So, Tim, as you can see, we're very sensitive not just to the excitement around the resource, but essentially how we'll ensure that whatever it is that we look at will be value accretive. And then coming back to Kolomela cost. Thanks, Xolani. Xolani Mbambo: Yes, if you look at the performance of Kolomela in 2025, there was a benefit of uplift in volume in terms of the tonnage. They actually overperformed, and that would then be a function of a lower cost per tonne. The expectation going forward is that the volumes will normalize, of course, at a similar fixed cost. And the other thing that we're addressing now through our colleagues is, if you look at the drilling machines, they're quite old. And therefore, the cost of maintaining those and operating them is becoming a challenge. And that's one of the reasons why we've now have got that replacement program going forward, which will assist in ensuring that those machines are replaced and therefore, start running efficiently, both from operational perspective, as well as from cost perspective. So that's what guided our view going forward. Nompumelelo Zikalala: Yes. And Tim, to close off on this, we actually spoke about this during the period of the reconfiguration that -- so, you would have seen a higher differential between what we said around the strip pressure for the year and the life of mine strip ratio. So, we spoke about the fact that we would see an increase in terms of the stripping that we need to do at Kolomela, still very much part of the plan that we've spoken about before, which is linked to Kapstevel South. So, we still remain on track. Penny Himlok: Brian? Nompumelelo Zikalala: Brian? Brian Morgan: It's Brian Morgan, RMB Morgan Stanley. Just a question -- 2 questions, actually. So, on the HME replacement that you've spoken about, can you just tell us, is it the '26, '27 story? Does it begin to roll off later on? Or is this a new normal? I think in the past, we've seen these sort of cycles and they last for 2 or 3 years and then they roll off. Just if you could just give us a bit of color on that. And then, just on the rail contract, I think I've asked this before, but I'm still not sure in the answer. If we're aligned third-party access onto the rail and you've got the PSP on the maintenance and everything like that, who would you be contracting with? Who are you negotiating your new rail contract with? Nompumelelo Zikalala: Thanks, Brian. Two interesting questions. I'll take the first one just for the HME replacement. Firstly, I think our teams have done a good job. So, if you consider that effect, I'll use a trucks example, and I'll talk about drills as well, Xolani spoke about that. Typically, other miners would do their replacement at around 80,000 hours, but our teams had a look at saying, could we actually extend the hours on a truck without spending significantly more because as you can imagine, it's more of an OpEx issue. But you get into a space where it becomes more expensive to run the fleet and your efficiency start reducing. So, we've stretched it, and that's why Xolani spoke about the fact that some of our trucks are now sitting at close to 120,000 hours. But clearly, we are not just opening the pockets from a capital perspective. We are still following a logical approach to say, how do we do condition monitoring, what do we replace, et cetera. Now if I use the example of drills that Xolani spoke about from a Kolomela perspective, this one is a simple one. The drills are there, the spares are obsolete, so you can no longer get them. So, what does that mean? It means that you can't maintain that fleet. And with the replacement, we are trying to do a like-for-like, which will help us with the balance of our spares that we essentially keep. So, we're following, I guess, a logical approach that ultimately says that as you replace the fleet at the right time, you get a swing in between the OpEx, which would have started going up and your CapEx clearly because you do the investment and that essentially then drops your OpEx on a go-forward basis. And then the second thing that you get is just around productivity of the fleet itself. So, what's the timing, which is your question? So, you would have seen that we guided for next year, but we essentially gave you guidance for the medium term, which is typically 3 years. And we will continue doing further optimization work. But as you can imagine, it's not as if the entire fleet is sitting with the same number of hours because we typically would have bought the fleet at different intervals. So, we'll definitely keep you updated on that part. The key is, we are following a very logical approach with regards to the replacement of the kit, and we essentially think about the life cycle cost and balancing both OpEx and CapEx. Let me just check if Xolani or Gerrie you want to add anything? Xolani Mbambo: No, go ahead, yeah. Nompumelelo Zikalala: And then on the rail contract, it's an interesting one, Brian, because as you say, there are multiple things that are taking shape. So, the reforms are taking place. And this is where you see the doors being opened around PSPs, and we are tracking that through Vempi, who heads up the space exceptionally well for us. The work around PSPs with us being clear that when we talk about PSPs, we don't necessarily want to be a concessionaire because people started saying, do you want to be a rail company? And we said, no, no, no. We just want to partner with the right people. And then secondly, what's also taking place within the reform space is exactly what you've spoken about, the train operating companies. So, we're keeping track in terms of what's happening in that space because ultimately, this is all about, I guess, the liberalization of this space. But it's just that the multiple things are taking place at the same time. At the same time, we've still got a contract. So, the other elements are maturing, but they are not yet finished. So, it is just right that we continue with the renegotiation of our contract. For us, what's been pleasing is that in engaging with Transnet, they also want to go through the renegotiation because if you think about them, they are also thinking about the fact that they want security. Clearly, the different things are happening at different timelines, but we are moving them in parallel and making sure that we are very much mindful of what's happening in the various spaces. The key, however, is that as various things taking place at the right time for the right reasons. It's just that we need to make sure that we remain on track just in terms of the various monitorings. Vempi, do you want to add anything, go for it. Unknown Executive: Good morning. Hi, Brian. Nompumelelo Zikalala: Head of Logistics. Thanks, Vempi. Unknown Executive: Brian, just a quick comment. I think there's 2 things that you need to understand. The first one is, we always thought that the PSP work will happen before the contract renegotiation takes place. We've now seen that, that is slowing down a little bit, which means that we need to renegotiate the contract now before it expires at the end of 2027. So, that's the first thing. The second thing is the regulatory reform that's happening at the moment means that we are going to renegotiate the contract with Transnet from a freight rail and a port perspective. So, our new contract is likely going to be with freight rail and ports, but it's going to exclude the infrastructure manager because Transnet is now being split up in the infrastructure manager and also the rail and port operations. What we are considering at the moment is to see whether we can move closer to TRIM, which is the infrastructure manager because the infrastructure management is going to be the critical part that takes us back from the levels that we are seeing at the moment to the design capacity that we all want to see in a couple of years' time. So, although we're contracting or potentially going to contract with Transnet freight rail and port terminals, we're also keeping the options open through the network statement to see what options there are to apply directly from slots or for slots directly from TRIM. Nompumelelo Zikalala: So, we'll stay close to all the various aspects that are moving, Brian, yes. Penny Himlok: Okay. I don't see any more hands in the room. If there are no further hands, I'll go to Chorus Call. The first question is from Shashi from Citi. He's asked, how much of the operating cost benefit can we expect from the mining fleet recapitalization program? That would be for you, Xolani. Xolani Mbambo: Yes. That's a very good question. So essentially, what we -- the way the process is going to run is that as the, as the equipment gets replaced or just before it gets replaced, there will be a business case for each of the equipment in terms of what it does on the maintenance cost in relation to its replacement. And that will start coming along as we actually execute on implementation. So -- and also because we're going to be dynamic around a choice whether we stretch some of the machines so that we've got the staggering. It's not a question of having a view at this point in time in terms of how it's going to shape the maintenance cost going forward. But certainly, as we run through the business plan, it's one of the things that I'll be looking at in terms of if you execute on a particular replacement of, let's say, the truck what are the maintenance cost of the existing truck that is being replaced and what then happens on the business plan to make sure that those savings are actually captured. And if you don't see that coming through our EBITDA going forward, then I'll be here to be challenged on it. So, we don't have a -- I wouldn't say here and say I actually do have a view of what that looks like, but I certainly will have a view as each equipment piece gets replaced. Penny Himlok: Thanks, Xolani. Nompumelelo Zikalala: Do you want to add... Gerrie Nortje: I'll just add one more thing. So, remember, there is a bit of a lag. Now of course, there's a clear cost benefit in the recapitalizing fleet. If you consider the capital required to essentially continuously replace components versus a new equipment, you have a number of years where you don't spend anything on components. So, there's a huge cost benefit. The fleet is quite large. So, it does take a bit of time to get through it. And when you start getting through it and the lag starts coming through, the cost benefit will be clear. And I think the cost benefit will be in both the CapEx as well as the OpEx. But I think just be mindful that the fleet is large. It takes time and it's got a bit of a lag, but when it comes through, it will be clear. Penny Himlok: Thanks, Gerrie. Well, maybe we should give Timo a chance. There's a question on CMRG that's also come through. That's from Anton Nolo. He's asked, how much of an impact is the dispute between the major miners and CMRG going to have in the iron ore price and the lump premium? Unknown Executive: Thank you. I was feeling a bit left out, so I'm happy to get a question. How much about the impact on the iron ore price from the CMR dispute? Well, when you talk about the dispute, I think you're referring to BSP's dispute with CMR. I should add that we are engaged in discussions with CMR. We have been for much of 2025. They are not easy discussions. They have accelerated late in 2025. They have intensified, but they are very constructive discussions, I must say. There is a bit of a shift in the power balance between buyers and sellers in the iron ore market, given that CMR represents probably 2/3 to 3/4 of overall iron ore imports into China. So, they are forced to be reckoned with. It's too early to speculate what the outcome of our discussion with CMR is going to be. We continue those discussions. In fact, Ibrahim and myself, we're on our way to Beijing next week. We were there in January. We've got our next meeting lined up for March also. So, we are in those discussions. They are in a very positive spirit being conducted, and they span many elements, the use of index. I mean, many elements are included in those discussions. So, it's too early to speculate where we're going to land with CMR. Impact on the lump premium specifically, I really don't expect much of an impact on the lump premium at all from the CMR discussions. The lump premium that you've seen for the past year, a lot of people focus on the low lump premium that we've seen recently. But keep in mind that for the year as a whole, the lump premium was pretty much in line with what it was in 2024. We've started seeing a recovery in the lump premium. It's got nothing to do with CMR. It's got to do with the fact that the lump premium was really low, mills have started using more lump. The share of lump in that burden has gone up by about 1 percentage point already. I think we would have seen a stronger recovery in the lump premium had it not been for the very strong metallurgical coal prices. So, the lump premium is on its way back, I believe, to a level of $0.15 to $0.20 per dmtu where it has been. But keep in mind, the lump premium tends to be extremely variable. So, we are starting from a low base now back to that $0.15 to $0.20 level. Longer-term, we continue to be very positive on the lump premium. And the slide that we showed indicates that we think we are nearing peak supply in lump and that from a couple of years out, we're going to see a steady reduction in the availability of lump, coupled with a continued increase in the use of lump in blast furnaces, I think that's a very, very positive picture for the lump premium. Penny Himlok: Thanks, Timo. And we have a question from Andrew Snowden from [indiscernible]. He's asked, and this would possibly be for you, Xolani, to speak about the impact on cash flow from potential working capital release in 2026 as we draw down inventory. Can we give any color on this by way of guidance? Andrew likes to ask for more information and we will have a chat with Andrew when we're down in Cape Town, but maybe we can just give him some highlights. Xolani Mbambo: Yes. Look, it's a tricky one. So, essentially, you'd have seen an uplift in our volumes on the stock side, both from WIP and to an extent from last year, you'd have seen finished goods or the saleable tonnes in terms of the mix more on the port than what we'd have seen in the prior year. And of course, all of those will wash through the income statement. And what will then happen is unless we stick to the mine plan that calls for more, we should see no impact in working capital in terms of the stock movement. But if at the moment to deviate from that, then of course, you'll see a negative effect on your income statement, as well as on your cash flow in terms of the movement. So, it's a function of us making sure that as we mine, we stick to the mine plan, so that the flow of WIP movement remains constant in terms of the cash flows. That's how I can give as a guidance in terms of what you're looking for. But on the one on one, we can perhaps go a bit more detail to understand specifically what is it that you'd be looking for on that cash flow. Penny Himlok: Thanks, Xolani. We've got a question from Katekar from Investec Bank. She's asked about the UHDMS tie-in in August, if it's been fully derisked? And if not, what are some of the aspects that could still surprise? Nompumelelo Zikalala: Yes. Thanks, Katekar. So, I guess a couple of things around the tie-in. One is the planning of the actual tie-in has been completed. And that's fundamental because we wanted to conclude the planning and also do assurance on the plan because you typically have our own team, and we bring in additional experts to say, is there anything else that we should think about? But we're in a good place. The second thing is we spoke about where we are with regards to the procurement and also the selection of the company that will be leading the tie-in. The good thing is that we are not taking one of the companies that are working on the modules and asking them to work on the tie-in. We're going with a separate company because we don't want them juggling balls between what they are doing on the modules and what they are doing on the tie-in. We want them fully dedicated to the tie-in. We've already onboarded them, a solid company. We've had to pay slightly more, but it's okay because we want the right skills to come in and execute the tie-in. The third thing is that, our teams looked at the scope of the tie-in and looked at work that they could do -- that they could essentially do upfront, and we supported that. They started this work in 2025, and it will continue, because we want to execute as much as we can before the main tie-in because with the main tie-in, clearly, you stop everything. But if you can try and do some of the work upfront, it just reduces the level of complexity, clearly, not completely, but we've aimed at doing our best around this. And then I mean, last but definitely not least, we are also thinking about, I guess, all the various aspects around the tie-in, not just looking at work that will be happening within the project, but also the interface just around work that will be done by our own other Kumba team, so our stay-in business capital team because we want to do opportunistic maintenance. If the plant stops for a couple of months, it makes sense to try and do as much maintenance as possible because the plant is there and it's available. So, the interface of the various pieces of work has been well thought through. We've brought in a plan who's looking at all the various interfaces and how all the aspects will integrate. So, I guess that go. In terms of just front-end loading, think about it like this, it's February. We are already talking in detail on the tie-in. We will assure this plan at the end of March, rolling into the beginning of April because we want to land as much as possible. So, we're not leaving it and saying, let's just conclude the plan in June or July. No, it's a major one for us. I guess then what are the risks? I'm a realist when it comes to projects because sometimes there are some unknowns that may take place. So, how have we thought about dealing with these risks? We've thought about the level of stock that we have ahead of the tie-in. And I know people used to ask us why are you carrying these volumes of stock, so 7.5 million tonnes last year. Well, it's there not just for us to meet our production guidance this year, but it's also saying if for whatever reason something happens and the tie-in takes slightly longer, we could just continue selling out of stock. The other thing that we've also thought about is that during the tie-in, the only section that will be on full stock is the dense medium separation processes linked to our coarse and fines DMS. But the rest of Sishen actually has a jig plant. That jig plant will continue running and Kolomela will continue running as well. And that's to cater for any other eventualities that may take place, either with the tie-in itself or the commissioning phase or the ramp-up post the tie-in. So, we've had lots of thinking around this. And Gerrie, I'll check if you want to add anything? Gerrie Nortje: One thing, Katekar, so, I think Mpumi covered the front-end loading piece. What we've also done as part of the main shut is we've gone with the P90 schedule. So, we have built in contingency allowance for any sort of delays or slippages. Can it be longer than that? Yes, it's possible, probably not likely, but it's possible. And I think Mpumi covered the contingency plans that we have in place. Maybe last comment, we also have Kolomela mine, and we always consider how we can use Kolomela mine to further derisk in the event that we have to. So, essentially, again, looking at this from a portfolio point of view. So, both production as well as stockpiles, as well as additional processing capacity like the Ultra DMS at Kolomela, for example. Nompumelelo Zikalala: Maybe Gerrie, let me just add one more. So, the P50 schedule said 75 days. The P90 schedule said over 100 days. We have planned for the longer schedule. So, typically, you would go for the shortest ever possible schedule. We are saying, let's plan for the longer schedule, which assists us with derisking any eventualities that may take place. What's good is that, as I've said, we've selected the contractor that will work on this. Their days because clearly, they've got the plan, which we've then integrated into our broader plan has a shorter duration. But still, we've planned on the P90 schedule. So, Gerrie and I normally have this discussion. We talk about both sides of the risk. So, either it may take longer, but it may also take a shorter period because we may be closer to the P50 and closer to the dates that have come through from our contractors. But we are taking a very, I guess, I mean, I've never seen our teams looking at this level of detail hour-by-hour, what will be done where in which section of the plant and who will be doing it. And that's the right to do -- the right way to do it, yes. Penny Himlok: Thanks, Mpumi. Thank you. Back to our favorite topic, Transnet. We've got a question from Thobela Bixa from Nedbank. He's asked, rail to port has been up 6%, but sales only up 2%. Is there a bottleneck at the port? So that's the operational question, and we have a strategic question on logistics after this. Nompumelelo Zikalala: Yes. So, Thobela, maybe let me just take this one. So, when we spoke about the independent technical assessment, we looked at everything. We looked at rail and we looked at the port. And in as much as there's work that needs to be done on the rail side, there's also work that needs to be done on the port side. And the approach to the ore corridor restoration program takes a holistic approach because to the question, you don't want to have one section running and another not running. And then we spoke briefly about the 26-day additional maintenance that needed to be done as part of the refurbishment of stacker reclaimer #3. All that I'll say is that when Vempi and the team work with Transnet, they take a holistic approach. It's the whole integrated system. Penny Himlok: Thanks, Mpumi. Katekar, just made a small -- another little add-on to that Transnet question also from an operational perspective, and that is just that your production guidance has been actually unchanged and will certainly change in 2027, 2028, it says 35 million to 37 million tonnes. Does that mean you don't really have that much confidence in the recovery of the rail and port, I guess, in the short term? Nompumelelo Zikalala: Yes. Thanks, Katekar. So, we've taken a balanced approach to this. The independent technical assessment identified things that need to be done. And there were 2 pathways. It was either stopping the entire infrastructure and fixing everything in a couple of months. And clearly, that wasn't ideal. It would have had a significant impact, not just to our business, but to Transnet as well. And secondly, one would have needed a lot of money to do all that work. And then the second pathway was actually phasing the work, and that's exactly what the Ore Corridor Restoration program work face. We just need to be mindful that the things that are broken still need to be fixed. So, if I look at this year, they've actually added a second shut, and we support this. So, this is the annual maintenance shut. We typically talk about the maintenance shut that's normally a 10-day shut that takes place in the second half. Well, this year, we will have 2 shuts, one in the first half and one in the second half. And the good thing is that during this period, they will actually be doing catch-up on the backlog maintenance. So, Vempi, I don't know if you want to add anything to that? Unknown Executive: I think you've covered it well. Just what's standing between us or the system from where it is at the moment and getting back to the 60 million tonnes per annum that is seen before is again what you've spoken about the capital replacement. And there's 2 things that need to happen. Firstly, we need to help Transnet with the planning and the procurement that needs to take place to get all of the orders done, so that the work can take place, firstly. But secondly, we also need to find the right commercial vehicle for the money to be spent. So, we know that there's this budget facility for infrastructure that governments made available to Transnet, but they also need the vehicle for that money to be spent. So, those are the 2 things that are standing between us and getting back to 60 million tonnes per annum for the ore corridor. And that's why we're comfortable with the levels that we've guided over the next year. Nompumelelo Zikalala: And then the longer-term, it's just a recognition of the fact that this is not a quick fix and the allowance for the time to actually do the work because you run the system outside of that time. I guess maybe just one last thing. If you think about it, last one is this double the amount of the annual shut period, but we've kept the guidance the same. That actually talks about the fact that we expect to see a higher operating rate when the system is running. It's just that you'll still stop it for, I guess, 2 separate durations. And we would also support this being repeated next year simply because the work needs to be executed. Penny Himlok: Thanks, Mpumi. One question also on Transnet or the actually the PSP reform process from Thlaku from SBG Securities. He's asked that you've mentioned the PSP info reform process has somewhat slowed. Should we assume a longer time line before private operators meaningfully increase rail throughput in general? Sorry, what -- could you expand what these key bottlenecks are that's holding back the process? Nompumelelo Zikalala: Yes. I think let me take this one. So, Thlaku, if you think about it, there was the initial RFI period, then the PSP unit came to play back what they had, and this was over 700 pages. And I've got a wonderful team. So, they looked at these pages together with the rest of the Ore User's Forum, and we provided feedback. And the reason why we did that is because the last thing that any of us want is to see a release of the next phase or the RFP phase that's not bankable. So, it taking longer shouldn't be seen as a negative thing for as long as it will assist in terms of improving the quality of the output of that commercial RFP that will essentially come out. Clearly, if you track what's happening within the country as a whole, you may have seen that there's been a schedule that's been released for 3 other RFPs in other corridors. We, from our side, are waiting for the release of our RFP. But clearly, to Vempi's point, we are mindful of the fact that with that taking place at a -- within a slightly longer time frame, the work that still needs to be done needs to be done and that's why we've got the Ore Corridor Restoration program, and we continue working with Transnet. Penny Himlok: Okay. We've got another question on the Ploegfontein, Heuningkranz. There's been a question from Bruce Williamson from Integral Asset Management. He's asked, what is the early indication of the FE average grades that we are seeing at Ploegfontein and Heuningkranz and also lumpy ratios? That's from Bruce Williamson. Gerrie Nortje: So, just on Heuningkranz, firstly Heuningkranz-Kolomela combine 150 million tonnes of resources. Cutoff grade applied at Heuningkranz 61% FE doesn't speak to the average. It speaks to the cutoff grade. The average grade is about 65%. So, it's fantastic, I mean it's what we like to see, and it's actually higher than what we have at Kolomela mine. At Ploegfontein, we apply a 50% cutoff. The reason we do that is because we still have an ultra DMS at Kolomela mine that we can use to beneficiate some of the medium-grade ores. The average grade again is higher than that. Our thinking is that when we -- as we sort of progress the exploration and the studies work and we get closer to declaring reserves, we'll be able to specifically guide on that. But our thinking at the moment is that we have to come up with a blend. So, whilst Kolomela is still mining the current pits, we start mining Ploegfontein and Heuningkranz and essentially have a complex approach to it rather than depleting Kolomela mine then going to Ploegfontein then going to Heuningkranz. Now of course, that also gives us fantastic optionality at Sishen mine because, again, we look at it from an integrated perspective. So, we will now be able to rebalance the entire portfolio to ensure the life extension is material as opposed to just sort of extending by a few years every time we've done a study. Now the timeline is about 2 to 3 years to do the study work. The confidence is actually quite high for Heuningkranz, the bulk of it is already at an indicated level. So, the drilling now is focusing on essentially getting that up to a measured level. So, a few things we have to understand just in terms of permitting. It is part of the Kolomela mining right. But of course, there's a number of additional permits that we just have to revisit, make sure that we're not seeing a material change and get the drilling and confidence up. But our intention is to maintain the lump fine ratio, as well as maintain the average FE spec or improve going forward. Penny Himlok: Thanks, Gerrie. Anything to add, Mpumi? Nompumelelo Zikalala: No, I think he has covered it exceptionally well. I have to say I'm excited. I mean I look at the level of passion from all our various teams. And in this space, it's our geologists and our miners. It's good work that's been progressed. Penny Himlok: I'm mindful that we're reaching the close of our time. I just wanted to check if there's any questions on the webcast link? I see there are none. Okay. There's just one last question that we now have, and that's essentially regarding the fleet in terms of the recapitalization. That's basically from Bruce Williamson again. He's asked, with the next range of fleet purchases, will that move into the autonomous space? And what impact could that have on employment? Nompumelelo Zikalala: Yes. I think I'll take that. So, Bruce, interesting. People look at autonomous as if it's something that's far, but I'm not mindful of the fact that we've actually got a portion of our fleet that's already autonomous. So, if you go to both Sishen and Kolomela and look at our drill fleet, you'll see 2 patterns, one with blue cones, which means autonomous, fully autonomous, somebody sits at the control room and runs that fleet. And then you'll see one with normal cones, which essentially means that there's still the person that's sitting and operating that machine. So, we should never see it as something that we should be scared of looking at. And I can certainly say that we will, on a continuous basis, particularly as we look at the next wave of replacement, consider autonomous because ultimately, what you do is you look at the business case of everything. And then you look at the implications of that. But I don't ever want us to see the move towards autonomous as a negative thing. And because it's not, I mean if I look at our teams at Sishen and Kolomela just around the drill fleet, it's interesting. All of a sudden, if we have an operator who's a pregnant female, as soon as they find out they can't operate the drill. But now guess what, they continue doing their job from the control room. So, yes, I can definitely say that as we look at the next wave, we will always consider all the various options and clearly consider the implications, yes. Penny Himlok: Thanks, Mpumi. And that concludes our Q&A's for today. Thank you, everyone, for joining us today, and please stay for some refreshments. We always look forward to catching up with you. Thank you. Nompumelelo Zikalala: Thank you, Penny.
Operator: Hello. My name is Jamie, and I will be your operator this morning. I would like to welcome everyone to the Garrett Motion Fourth Quarter and Full Year 2025 Financial Results Conference Call. This call is being recorded, and a replay will be available later today. After the company's [indiscernible] question-and-answer session. At this time, I would like to turn the call over to Cyril Grandjean, Garrett's Vice President, Investor Relations and Treasurer. Cyril Grandjean: Thank you, Jamie, and good day, everyone. We appreciate you joining us to review Garrett Motion's Fourth quarter and Full Year 2025 Results. Our presentation and press release are available on the Investor Relations section of our website. Today's discussion includes forward-looking statements that involve risks and uncertainties. Please refer to our SEC filings, including our most recent annual report on Form 10-K for a discussion of factors that could cause our results to differ materially from these forward-looking statements. Today's presentation also includes certain non-GAAP metrics, which we use to help describe how we manage and operate our business. Please review the disclaimers on Slide 2 of our presentation as the content of our call will be governed by this language. With me today are Olivier Rabiller, President and CEO, and Sean Deason, Senior Vice President and CFO. Olivier will begin with highlights from another year of strong performance and strategic acceleration. Sean will then review our 2025 financial results and '26 outlook. With that, I'll turn it over to Olivier. Olivier Rabiller: Thank you, Cyril. Good morning, everyone, and welcome. 2025 was another fantastic year for Garrett. We delivered strong operational performance in a complex industry environment, and at the same time, advance our strategy, increasing share of demand, growing our portfolio, expanding margin and securing key awards and partnership across turbo, zero-emission technologies and industrial application. In Q4, net sales were $891 million and adjusted EBIT was $122 million with a 13.7% margin. For the full year, net sales reached $3.58 billion and adjusted EBIT was $510 million with a 14.2% margin. Adjusted free cash flow for the year was $403 million, once again demonstrating our disciplined execution and operational rigor. These strong results allowed us to stay firmly on track with our capital allocation framework, returning significant capital to shareholders and strengthening our balance sheet. In 2025, we voluntarily repaid $50 million of our term loan, repurchased $208 million of common stock and paid $52 million in dividends. As you will see later on, we plan for another year of strong execution for 2026, as we anticipate further share of demand gains, margin expansion and strong free cash flow. Sean will obviously provide additional details on our 2026 outlook later in the presentation. But for now, let me move to Slide 4. In 2025, we continued to strengthen our core business while accelerating our zero emission technologies. We secured a significant number of new light vehicle turbo awards driving our growing share of demand in gasoline VNT applications and increasing our traction in hybrid and range-extended electric vehicle platforms. These wins reinforce how our differentiated technologies remain central to efficiency and emissions reduction for our customers. We also won important awards in diesel applications for light commercial vehicle and trucks, where diesel remains highly valued for its lower emissions, fuel economy and high torque. And I want to pause on this point for a moment. Back in 2018, light vehicle diesel represented 41% of our revenue and many questioned whether Garrett could sustain its margin through the transition to gasoline. Today, gasoline accounts for over 44% of our sales, and diesel remains resilient at more than 23%. And as just mentioned, we delivered a 14.2% adjusted EBIT margin, once again demonstrating the strength of our business model grounded in technology leadership and operational excellence. Beyond light vehicles, we also secured numerous commercial vehicle awards across on-highway, off-highway and industrial applications. This momentum was further supported by our first series production awards for our largest turbo frame size, the MEG, as well as the first aftermarket sales for this product line as a retrofit option in the aftermarket space. Moving now to our Zero Emission and Industrial Technologies. In addition to the wins and progress we have announced in 2025, we made 2 announcements in February that are very significant when it comes to that part of our portfolio. First, we announced a series production award for mobility equaling compressors with a leading Chinese bus and truck HVAC supplier. Second, and even more important, we launched a strategic collaboration with Trane Technologies to integrate Garrett's next-generation oil-free, high-speed centrifugal compressors into Trane's commercial HVAC applications, from unitary rooftop and modular chillers to large capacity chillers, bringing the maturity, quality and scale of the products we have developed in the automotive industry into the industrial world and extensive testing in Trane's labs confirmed the clear performance benefit versus incumbent solution. Initial units from Trane will be available to select suppliers -- select customers already this year with broader series production across applications beginning in 2027. But let me spend a little bit more time on this cooling opportunity on Slide #5. We have developed an oil-free, high-speed centrifugal refrigerant compressor for HVAC applications by combining core Garrett technology, high-efficient turbomachinery, our unique oil-free foil bearings, high-speed electric motors, ultra-high frequency inverters and model-based control software. And importantly, all of this comes straight from our technologies we have already developed, validated and industrialized at automotive scale and quality. Our testing has shown that our technology can deliver more than 10% real world energy savings compared to incumbent solution. This allows HVAC operator to materially reduce the total cost of ownership and helps limit energy demand in power-intensive environments such as data centers. These benefits are even greater as customers move to ultra-low global warming potential refrigerants. Our E-Cooling compressor portfolio, introduced at the AHR HVAC Show in Las Vegas earlier this month, has already attracted strong interest from this industry. The product range spans from 7 to 500 tonnes or from 25 to 1,750 kilowatts of cooling capacity, enabling us to serve applications from rooftop and unitary system, battery energy storage cooling, computer in-room air conditioners to small and large chillers used in comfort cooling and hyperscale data center. These offerings leverage several of our key differentiated technology to address the fast-growing needs of a sector that will progressively shift to ultra-low global warming potential refrigerants. Industrial cooling represent a significant growth vector for Garrett and is expected to scale quickly to more than 5% of our revenue by the end of the decade as programs launch and ramp up. Taken together, these developments show how Garrett is executing, diversifying and expanding outside of the automotive industry, a deliberate part of our strategy. Cooling is now a tangible vector of growth on top of high-speed E-Powertrain, fuel cell compressors and alongside our core turbo business. With that, I'll turn over to Sean to discuss our Q4 and full year 2025 financial results in more details. Sean Deason: Thanks, Olivier, and good morning, everyone. I will begin my remarks on Slide 6, where we talked about our quarterly financial trends. As Olivier highlighted, we delivered another year of strong financial performance in 2025. We finished Q4 with net sales of $891 million, driven by gasoline share demand gains and a slow recovery of commercial vehicle, partially offset by continued weakness in aftermarket. We delivered $122 million of adjusted EBIT, equating to a 13.7% margin. Adjusted EBIT in Q4 was down sequentially, driven by unfavorable product mix and onetime headwinds, but in line with our 2025 full-year outlook midpoint of $510 million. Finally, adjusted free cash flow was a very strong $139 million in the quarter, as the business continues to efficiently convert earnings into cash. Now, moving to Slide 7, we show our net sales bridge by vertical as compared with the prior periods. In the fourth quarter, net sales increased by $47 million versus the prior year or 6% on a reported basis and 1% on a constant currency basis, reflecting favorable foreign exchange currency impacts. We experienced growth in commercial vehicle in diesel. Gasoline volumes declined outside of Europe, particularly in Asia. For the full year of 2025, we experienced gasoline growth across most regions through a number of new launches and ramp-ups. Our commercial vehicle off-highway sales expanded as well across regions. These gains were partially offset by lower diesel, particularly in Europe, where the industry continued to decline. Aftermarket declines were driven by lower demand for off-highway applications, particularly in North America. And finally, during Q4 and the full year, we recovered $10 million and $40 million of tariffs, respectively. Turning to Slide 8. As mentioned earlier, during the quarter, we generated $122 million of adjusted EBIT and a margin of 13.7%, which was down 100 basis points. Q4 operating performance was in line with expectations, as we absorbed several onetime charges in addition to an unfavorable mix and a 20 basis point margin dilution due to tariffs. The unfavorable mix was driven mostly by growth in small engine light vehicle diesel, partially offset by growth in commercial vehicle applications across regions. For the full-year 2025, unfavorable mix was driven by increased light vehicle gasoline and softness in the aftermarket, mostly in North America, partially offset by increased commercial vehicle. Now turning to Slide 9. I'll walk you through the full year 2025 adjusted EBIT to adjusted free cash flow bridge. We delivered strong adjusted free cash flow of $403 million for the year. We had a slight working capital benefit, which reflects the very strong fourth quarter working capital recovery of $60 million. Capital expenditures came in slightly lower than anticipated due to timing, and cash taxes, depreciation and cash interest were all in line with our expectations. Taken all together, these strong results equate to a free cash flow conversion of nearly 80% in 2025. Now moving to Slide 10. We closed the year with strong liquidity of $807 million and a very healthy balance sheet. In Q4, we repaid $50 million of our term loan bringing our net leverage ratio to approximately 1.9x as of year-end. We continue to have no significant debt maturities until 2032. Moving to Slide 11. We continue to generate strong cash flow and return capital to shareholders. In the fourth quarter, we repurchased $72 million worth of shares for total repurchases of $208 million in 2025, reducing our share count at year-end to 190 million -- to 191 million shares outstanding. We also increased and paid a dividend in Q4 of $0.08 per share and authorized a $250 million share repurchase program for 2026. As of February 13, 2026, we had 189.97 million shares outstanding. Additionally, we just declared our Q1 2026 dividend for $0.08 per share. We continue to target distribution of approximately 75% of our adjusted free cash flow to shareholders over time through dividends and share repurchases, the latter of which will vary over time and will depend on various factors, including macroeconomic and industry conditions. I'll now turn to Slide 12 to discuss our 2026 outlook. At the midpoint, industry assumptions for this outlook can play a 2% decline of the global light vehicle industry, an average BEV penetration of 19% and a slight recovery in commercial vehicle, including on and off highway of 1.5%. The financial midpoints implied in this outlook are as follows: net sales of $3.7 billion, net income of $315 million, adjusted EBIT of $545 million, implying a 14.7% margin, net cash provided by operating activities of $455 million, and finally, adjusted free cash flow of $405 million. Capital expenditures and RD&E expenses are expected to be 2.5% and 4.2% of sales, respectively, in line with our financial framework. Approximately 50% of our RD&E will be directed towards zero-emission technologies and industrial cooling. Now turning to Slide 13. We show our 2026 midpoint outlook bridge for adjusted EBIT. For 2026, as discussed on the prior slide, our midpoint outlook is $545 million with a 14.7% implied margin, up 50 basis points compared to 2025. This adjusted EBITDA improvement is expected mostly from increased volumes and our continuous focus on operating performance and productivity, which offsets unfavorable pricing, net inflation and product mix. I'll now turn the call back to Olivier for closing remarks. Olivier Rabiller: Thanks, Sean. Now, let's turn to Slide 14. Our strategic priorities remain clear and consistent. We aim to identify and deliver on our customer needs by leveraging our capabilities to develop differentiated, high-speed and highly efficient technologies. In doing so, we generate robust returns for our shareholders. Let me wrap this up on our final slide, Slide #15 with 3 takeaways. First, we delivered strong full year 2025 results in line with our guidance, including share of demand gains, margin expansion and strong cash flows. Second, our pipeline is expanding in turbo and accelerating in zero emission technologies and industrial applications. We secured our first production wins for our E-Powertrain and E-Cooling technologies, and we are now generating meaningful traction in power generation and E-Cooling technologies for industrial applications. Third, we remain disciplined in our capital allocation, investing in what wins and returning capital to shareholders. We are extremely well positioned to outperform in 2026 and beyond and look forward to welcoming you to our Investor Day planned for May 20 in New York, where we will provide additional updates on our long-term strategy and outlook. Thank you for your time. And operator, we are now ready for Q&A. Operator: [Operator Instructions] And our first question today comes from James Mulholland from Deutsche Bank. James Mulholland: So just some questions on the Trane partnership and the use of the high-speed compressor. Could you give us some sense of the economic opportunity here in the shorter term, understanding that it might get to 5% of sales in a few years? But what level of contribution would you expect in '27? And what kind of margins should we expect there? Will it be accretive at start of production? Or will there be a ramp-up? And is part of the CapEx this year going to be in preparation for that? Olivier Rabiller: That's a great question, James. And you're giving me the opportunity to precise a few points there. Yes, it's a very significant opportunity. We are introducing a technology that is unique with the leader of that space and with the broad range of portfolio of applications from small cooling to much bigger cooling needs. This is something -- and quite frankly, the uniqueness is linked to what has already matured into the automotive space. So we are uniquely positioned to provide that to this industrial sector. So that's just something I wanted to remind everyone again. We see today that we will deliver the first application in 2026 with a number of customers, but the real ramp will come for 2027. Today, we are not giving you numbers on 2027. It will be the start, but the number we are giving you and that you picked up the 5% -- in excess of 5% of revenue by the end of the decade shows the magnitude and the speed of the ramp-up that will happen between now and then. In terms of CapEx, it's all included in our plan, and that's all taken into account in the 2.5% CapEx guidance that we gave for 2026. We are still applying to this new line of product the same discipline in CapEx spend for the new product lines. And there are a number of elements, as I was mentioning before, that are the same or leveraging the scale that we have on the automotive side. So that limits the CapEx that is just specific for that business pursuit. James Mulholland: Great. Okay. And then quickly on my follow-up -- sorry, go ahead. Olivier Rabiller: There is just 1 point I did not answer your question about margin. Yes, it is accretive. James Mulholland: And so accretive on start of production essentially. Olivier Rabiller: Yes. James Mulholland: Okay. Great. And then on my follow-up, your largest competitor announced last week that it's going to be diversifying into power generation for data centers. Now, I think in the past, you've mentioned you would do about $100 million in sales for '25, and that should grow, I think, double digits this year. Outside of the HVAC opportunity, do you see other areas to increase exposure or use your tech stack to further penetrate that data center up and its growth outlook? Would you look to do inorganic acquisitions to tap into that further? Just your thoughts on that. Olivier Rabiller: Well, we are very consistent with what we said about our technology for a long time saying that we will favor verticals that are valuing the technology that we put in our products. And obviously, when you get into commercial vehicle, on-highway, off-highway and even more in industrial space, these are the spaces that are valuing where customers are valuing the technology we bring. So it's true. We've developed -- we had already a position on genset. And today, the biggest part of the demand for genset -- big genset is data center-driven. And we've developed our range. We've developed a new range of products on top, and you may have seen that we just made a few important announcements showing that in a matter of a very short amount of time, we've been able to secure OE wins with these new products and even get into retrofitting some of the products that we are already into the marketplace. So we'll keep on pushing that range of product. And yes, we are seeing a very significant growth above and beyond the $100 million that we mentioned in Q3 2025. And we expect that growth, obviously, to amplify as we get into 2026. The cooling side is very interesting. We'll keep on obviously developing our position on the genset side, but the cooling side is very interesting. It's obviously a very dynamic industry, driven by the growth of cooling across many applications, and obviously, the data center piece. And once again, we have the right building blocks into the company that allow us to propose something that is not existing there. And the fact that a lot of equipment is being ordered give us the momentum into the marketplace to adopt our technology. So yes, overall, the only thing I could say is that, yes, it's very significant. It's probably growing a bit faster than what we had anticipated at the beginning, but extremely consistent with everything we've been saying for the last few years that we would reinforce on power generation and including leveraging the building blocks that we have in the company and that are differentiated versus what's existing out there. Operator: Our next question comes from Ryan Brinkman from JPMorgan. Ryan Brinkman: Maybe a similar one. I just wanted to ask, following the announcement of the strategic collaboration with Trane, how you would compare and contrast the relative opportunity of, on the one hand, supplying industrial charges for the stationary power gensets located outside of the data centers to provide energy for their operational cooling versus on the other hand this newer opportunity to participate in cooling itself. On [ Madden's ] call the other week announcing sale of the portion of their business that includes thermal management to the stationary power gensets that you discussed that while market for data center stationary power generation will start to grow very quickly. The market momentum of [indiscernible] centers was thought to grow quite a bit faster still. So how do you see these 2 markets growing? And how should we think about the relative margin or content opportunity or competitive edge for Garrett in these 2 different relatively related markets? Olivier Rabiller: You were breaking quite a bit into the -- on the phone line. So I think, if I may, to rephrase your question that you were asking us to give a little bit of a comparison of the growth that we are seeing on the one hand with the power gen and the big turbo space, and on the other hand, the cooling, both of them being more directly or less directly liaise to the growth that we see on to the data space. Is it your question? Ryan Brinkman: Yes. Olivier Rabiller: So I would say it's difficult to compare. Both of them are growing fast. And you see that for the players that we are dealing with. On the one hand, it's Trane, obviously, that we talked about, but not only. And on the other hand, with the biggest customers we are having today and the big engines, and you know all the big names out there, whether they are in the U.S. or in Asia. So it's difficult to compare the 2. They are all driven by this. They are all driven, I would say, on the power gen side by other fundamentals that are not only directly linked to data centers when it comes to increased needs for power generation. There is a need for energy all around the world, and that is not only -- it's partly driven by data centers, but not only driven by that. And then on the cooling side, I would say not everything is driven by data center either. You have a lot of macros that are driving the demand. And also in that space, driving people to refresh the technologies that they are using because when we announced that with the equipment that we are putting on the marketplace with Trane we can save up to 10% energy compared to incumbent application. That's very significant when you combine the 2. Need for energy on the one hand. This is an underlying macro. And on the other hand, there is a need for cooling that is much more energy efficient, and this is where we play. So I think we are addressing very well those 2. I will not oppose the 2. I mean, quite frankly, when we say that, cooling we forecasted to be quickly above 5% of our revenue. And you know that the industrial world is not ramping up exactly at the speed of the automotive industry. That means a very quick ramp-up by industrial standard anyway. And we are seeing today a very quick ramp up as well on the industrial side for turbos. So we are very pleased with that. We are very pleased with the growth, and we'll keep on funding that with our disciplined approach so that we are successful with it. Ryan Brinkman: Great. And I apologize for the connection. And just lastly from me, relative to the new light vehicle turbo awards in key geographies, including diesel for light commercial vehicles and hybrid gasoline applications, is the pace of new wins relatively consistent with your past observation recent years? You have been winning on the order of magnitude of roughly 1/2 of industry turbocharger awards. And given that your current revenue share of turbochargers might be closer to 1/6, what does this imply do you think for your future multiple market in light vehicle turbos? Olivier Rabiller: So Ryan, we are very clear. We've been keeping on winning, and the way we measure that is we measure our business win rate, and we publish that once a year. It has been very consistent, above 50%, when you look at the last 5, 6 years. When we win at that level, it means that we are increasing our share of demand in the industry. And if you do the math, and I'm sure you're doing that very carefully, you will see that with the guide we have on revenue and the results we have on the revenue for 2025 versus what the industry is doing, we are obviously winning shares. And we'll keep on winning shares with what we have. The underlying drivers for that, what we explained in the past being a technology-driven consolidation, the industry needs a wide portfolio of technologies and advanced technologies, especially as we get to hybrid vehicles, where we need more viable geometry turbo, there we need more electric boosting solutions, and we are launching a number of those this year. And therefore, not everyone can provide that. And there is also another consolidation that has happened is that the carmakers and the truck-makers want to make sure that they work with players that are relevant today and will be relevant tomorrow as the industry keep on shifting towards more electrified solution. So I think we are well positioned on those 2, and that drives shares that is growing for the leaders of the industry. And there is absolutely no change. And when you look at our revenue guide, it's a good illustration of that. Operator: Our next question comes from Jake Scholl from BNP. Thomas Scholl: One more question on the train e-compressor win. Now that you've had a chance to see how the compressor performs as part of a total system, can you talk a little bit about the efficiency gains you're seeing, especially against competing oil-free compressors using magnetic foil technology instead of your -- I'm sorry, magnetic bearing technology instead of your foil bearings? Olivier Rabiller: Well, a few things. I will not get into a lot of technical details today on this call, and I'm sure we can have a very deep detail on the technical discussion when we meet for the Investor Day in May. But what we see is that our solution first is proven at scale. I mean, the industry has been looking for the most effective and efficient solutions that are oil free. And today, we are having a lot of traction even from people that are using mag bearing towards our type of bearing. It's less difficult to control in other way. It's difficult for me to get in 5 minutes into why it is less difficult to control and the efficiency gains. But clearly, we have efficiency gains. We have controllability. We have maintenance. We have all of that, that plays in favor of our solution, both for where you have mag bearing that are the big stuff, but also where we are smaller compressors that are cell compressors and that are much less efficient from an energy standpoint. Thomas Scholl: Got it. And then, I just wanted to double click on your SG&A cost savings this year. That's -- it's a pretty impressive number. Can you talk a little bit about where those are coming from? And do you see additional cost savings opportunities going forward? Olivier Rabiller: Yes, but as we've always said, we are always working on the efficiency of the company. We are always leveraging everything we can to make the company faster, more nimble, more agile, more reactive. Today, we have a number of tools at our disposal, whether it's fine-tuning the organization, developing systems. And I would not get on the famous AI stuff that everybody is using, but we are obviously having an agenda to transform the company to make it even more efficient in the future. So we are pleased with the results we are having on SG&A. But in all fairness, because we like performance, we are looking for a step improvement versus that in the coming years. Operator: Our next question comes from Nathan Jones from Stifel. Nathan Jones: I've got one on the Trane partnership as well. You talked about 5% of sales by 2030. Can you confirm that's all coming from the Trane partnership? And then, is there any exclusivity in the product with them? Or are you able to market and sell this to other suppliers in other areas? And if so, can you just comment on what the overall addressable market might be for the products? Olivier Rabiller: So first, we are very pleased to work with Trane, which are the leaders in terms of equipment, but they're also a technology leader in that industry and a company that is setting the trend. So for us, it's very important to work very closely together in the coming years, and we are very pleased with this agreement, obviously, because that's giving us very quickly the scale and the understanding of the marketplace. Quite frankly, in the long run, we'll keep on leveraging that partnership, and as opportunities are coming with other players and other segments of the cooling industry, we will certainly develop relationship with some other players. We had already a ton of people coming to us asking for questions at the show. I think I don't want to be too proud of it, but I think we had a turnout from the rest of the industry that we were not expecting. Nathan Jones: So is it fair to say then that kind of by that 2030 target, the product is going to generate more than 5% of revenue. It's 5% of revenue with Trane, but there will be other opportunities as well. Olivier Rabiller: There will be other opportunities by 2030 that go beyond Trane, that's for sure. And we are giving that as a view and that purely depends on the speed at which the industry is ramping up. That could be depending on the take of the industry that could go very, very quick and even potentially quicker. Nathan Jones: I guess, my follow-up question is going to be on your other zero emission progress. You've had a number of predevelopment contracts ongoing for the last few years. Can you talk about that progress towards getting those to awards and plans for start of production on that? And then, is the $1 billion of revenue from all of these portfolio products still a target for 2030? Olivier Rabiller: So clear, we are seeing a lot of -- it's not because we talk about Trane today that we're not seeing traction with the rest. We have an accelerated number of predevelopment programs that we are working on. Today, we are working on many more predevelopment programs than what we are doing a year ago to give you an idea, both passenger vehicle, commercial vehicle and industrial application. We've talked a lot this year about the award we got for E-powertrain for commercial vehicle, heavy duty. We will be in production already next year at this time. So it's not just a PowerPoint kind of discussion that we are having. We are talking production for heavy-duty electric axle 2027 -- beginning of 2027. And then from there, obviously, it's bringing interest about programs that we have not communicated about yet that are leveraging what we do on those vehicles to apply that to other vehicles. I'm talking about commercial vehicle space. On the passenger vehicle side, we are making very good progress now on the testing of our solutions. And we are confirming benefits of our solution versus incumbent solution in the industry, even greater than what we had seen and communicated initially. So now, it depends on the speed at which the decision-making is happening at our customers. But quite frankly, the benefits have been confirmed. And if anything, they are greater than what we are and our customers were expecting both in the passenger vehicle and in the commercial vehicle space. On the E-Cooling, we just confirmed the first few wings for E-Cooling for mobile application, same again. Obviously, it's not a surprise that we tend to win earlier in China because the industry tends to make decisions and move faster than in the rest of the world, we all know that. But at the same time, it's a very positive for us because it shows that we can win in the most competitive market you have out there. So we take it like we are moving at China speed on a lot of that stuff, and we are delivering the performance at the cost customers are willing to pay in the toughest industry around the world. So in all fairness, we have a long answer, yes, we are doing progress. And yes, I'm very pleased with it. More to come. Operator: Our next question comes from Hamed Khorsand from BWS Financial. Hamed Khorsand: First question was, could you just reconcile the 2 comments you made? And Sean, you said that you're expecting EBITDA margin to expand because unit volume would increase, but then you're giving guidance with the expectation that global units will be down this year. So are you -- where -- could you just reconcile that, please? Olivier Rabiller: And maybe before Sean picked that up, the comment we made on the industry down is for the light vehicle industry. And in the light vehicle industry that is down, we are expecting to be up despite the growth of battery electric vehicle. So that means significant share of demand gains for Garrett. Do you want to comment, Sean? Sean Deason: No, that was exactly what I was going to say, Olivier. And it's also, obviously, there's growth in commercial vehicle as well. So we're quite pleased with the guide. And of course, it's underlined by our strong productivity performance that we have demonstrated over the cycles, over various cycles, and we'll continue to do so in 2026 and going forward. Hamed Khorsand: Okay. And then, you've reported that the commercial went up this quarter, and it looks like it's going to go up again in '26 in your forecast. Is that because of what's happening in off-highway? Or is that because of the commercial on-road aspect? Olivier Rabiller: It's because of off-highway and specifically industrial turbos. So back to the question of one of your peer before, Hamed, we are seeing the growth on the industrial turbo side driven by genset. Operator: And our next question comes from Eric Gregg from Four Tree Island Advisory. Eric Gregg: First up, congratulations on a really strong Q4 and 2025 to the whole team there at Garrett. The first question, following up on the 2 -- to the caller or 2 people ago, but one is, is Trane exclusive? Or is it exclusive for a few years in commercial HVAC? And does that exclusively fall away after that? And then second of all, is that oil-free centrifugal commercial technology -- compressor technology? Is that going to be additive in HVAC to your $1 billion 2030 zero-emission sales target? Or is that -- given the zero emission vehicle penetration seems to have slowed a bit, is this just the way to kind of meet that $1 billion target that you laid out a year or 2 ago for 2030 zero emission revenues? Olivier Rabiller: So first of all, just to clarify your point, we are not developing a new line of projects just to patch a weakness that we would have on the other side of the portfolio. We make decisions on the portfolio to go where we have differentiated technology and where we see growth moving forward. So it's not like we have one investment that comes at the expense of the other or the other way around. Yes, it's part of our ambition towards the $1 billion, and that's obviously counted as part of that. Now, we will update you on that during our next investor meeting, and we'll give you more clarity about the way it goes. But we are very pleased to have not only one driver that gets us there, but several drivers and are depending on different industries, which is the best option and the best way that we can strengthen towards our ambition. Then, your point, it observes that when you work with someone like Trane, you place a lot of eggs in the basket that helps you be successful on the marketplace. So at the beginning, it's true that we'll dedicate a lot of attention with Trane. But over time, that doesn't prevent us from developing ourselves with other players. Operator: And with that, we'll be concluding today's question-and-answer session as well as today's presentation. We do thank you for joining. You may now disconnect your lines.
Operator: Good day, and welcome to the CRH Fourth Quarter and Full Year 2025 Results Presentation. My name is Christa, and I will be your operator today. [Operator Instructions] At this time, I'd like to turn the conference over to Jim Mintern, CRH Chief Executive Officer, to begin the conference. Please go ahead, sir. Jim Mintern: Hello, everyone. Jim Mintern here, CEO of CRH, and you're all very welcome to our fourth quarter and full year 2025 results presentation and conference call. Joining me on the call is Nancy Buese, our CFO; Randy Lake, our COO; and Tom Holmes, Head of Investor Relations. Before we get started, I'll hand over to Tom for some brief opening remarks. Tom Holmes: Thanks, Jim. Hello, everyone. I'd like to draw your attention to Slide 2, shown here on the screen. During our presentation, we'll be making some forward-looking statements relating to our future plans and expectations. These are subject to certain risks and uncertainties, and actual results and outcomes could differ materially due to the factors outlined on this slide. For more details, please refer to our annual report and our other SEC filings, which are available on our website. I'll now hand you back to Jim, Nancy and Randy. Jim Mintern: Thanks, Tom. Over the next 30 minutes or so, we will take you through a brief presentation of our fourth quarter and full year results, highlighting the key drivers of our performance over the course of 2025 as well as providing you with an early indication of our expectations for the year ahead. For us at CRH, the efficient allocation of capital is a core competency. Through our disciplined and value-focused approach, every dollar we deploy is rigorously assessed to maximize shareholder value. This morning, we are going to discuss our capital allocation activities during 2025 and how we believe our superior strategy will continue to deliver industry-leading growth for our shareholders. Turning to Slide 4. We are pleased to announce a record financial performance for 2025 with another year of double-digit growth in adjusted EBITDA and our 12th consecutive year of margin expansion. All of this is delivered through the dedication and commitment of 83,000 people across our business. And I am proud of how our teams executed against the strategic priorities we outlined during our Investor Day last September. Our performance was further supported by our growth algorithm and the CRH Winning Way, which is deeply embedded in our culture and the engine behind everything we do. 2025 was also a busy year investing for future growth and value creation. Our ability to deploy capital in high-growth markets, integrate at scale and deliver unique synergies through our connected portfolio is a key differentiator for our business. We invested approximately $4.1 billion in 38 value-accretive acquisitions across our 4 connected growth platforms of aggregates, cementitious, roads and water. And we have an attractive pipeline of further growth opportunities in front of us, supported by our unmatched scale, connected portfolio and proven growth capabilities. We also invested $1.7 billion in growth CapEx projects, leveraging our size and scale to fully capitalize on high-returning, low-risk investment opportunities that will drive organic growth, support margin expansion and create long-term shareholder value. The strength of our balance sheet also enables us to deliver significant accretive returns to shareholders through dividends and share buybacks. In line with our strong financial position and policy of consistent long-term dividend growth, I am pleased to report that the Board has declared a further quarterly dividend of $0.39 per share, representing an increase of 5% compared to the prior year. In relation to our ongoing share buyback program, today, we are commencing a further quarterly tranche of up to $300 million, demonstrating our focus on the efficient allocation of our capital. Turning now to the year ahead. The outlook for our business is positive, supported by favorable end market dynamics and the benefits of our superior strategy. Assuming normal seasonal weather patterns and no major dislocations in the political or macroeconomic environment, we expect full year adjusted EBITDA to be between $8.1 billion and $8.5 billion, representing another strong year of delivery for CRH. Turning to Slide 5, where you can see some of our key financial highlights for the fourth quarter and the full year. And I think this slide really speaks to the strength of our performance. We had a strong finish to 2025 with quarter 4 revenues, adjusted EBITDA and margin growth ahead of the full year outturn. Total full year revenues of $37.4 billion were 5% ahead of the prior year, supported by favorable end market demand, disciplined commercial execution and contributions from acquisitions. This enabled us to deliver $7.7 billion of adjusted EBITDA, 11% ahead and a further 100 basis points of margin expansion, demonstrating our relentless focus on continuous performance improvement across our business. All of this translated into further growth in our diluted earnings per share, up 3% compared to 2024 or 8% ahead when excluding one-off gains on divestitures in the prior year. I am pleased to report another year of strong cash generation, delivering $5 billion of adjusted free cash flow, 18% ahead of the prior year and demonstrating the quality of our earnings and continued focus on cash conversion. Next to Slide 6, where you can see the consistency of our financial delivery over time. As I mentioned earlier, 2025 represented our 12th consecutive year of margin expansion, representing an average annual increase of approximately 100 basis points since 2013. You can also see that in addition to growing our top line, we have delivered 14% compound annual growth in adjusted EBITDA and 18% in diluted earnings per share. Overall, our track record across each of these financial metrics really demonstrates the strength of our connected portfolio of businesses and our ability to deliver consistent long-term performance improvement. When you look at our performance through the lens of total shareholder return, the story is just as compelling. As you can see here on Slide 7, we have significantly outperformed the S&P 500 Index over the last 1, 10 and 55 years with compound annual TSRs of 36.8%, 18.8% and 16.3%, respectively. Our consistent outperformance compared to the broader market highlights our position as a leading compounder of capital and demonstrates why CRH continues to be such a powerful platform for long-term growth and shareholder value creation. Turning now to Slide 8. And here, you can see the growth algorithm, which we presented during our Investor Day last September. Cultivated and refined over 50 years, this is what drives our performance year after year. As the leading infrastructure play in North America, we are uniquely positioned to capitalize on 3 large and growing megatrends: transportation, water and reindustrialization, which we believe will support significant growth and value creation for our business going forward. Next, the CRH Winning Way, core to who we are, deeply embedded in our culture and the engine behind everything we do. Through our winning way, we execute our superior strategy with discipline and focus. We drive leading performance across 4,000 locations through a culture of continuous improvement. We are responsible stewards for our shareholder capital, and we leverage our proven growth capabilities to build leadership positions in high-growth markets. All of this is supported by 4 key enablers: customer centricity, empowered teams, unmatched scale and our connected portfolio of businesses. Our winning way is what really sets CRH apart. It is the force multiplier that enables us to fully capitalize on growing infrastructure megatrends. In summary, our growth algorithm represents a powerful combination, which has delivered over the last decade. And as you can see on Slide 9, it underpins our medium-term financial targets, which we presented during our recent Investor Day. We expect to deliver average annual revenue growth of between 7% and 9%, supported by our leading positions in high-growth markets, alignment with growing megatrends as well as contributions from growth CapEx investments and further M&A. Building on our strong track record of 12 consecutive years of margin expansion, we are targeting further margin improvement across our business with an adjusted EBITDA margin target of 22% to 24% by 2030. We also continue to focus on strong cash generation. And over the next 5 years, we expect to deliver average annual adjusted free cash flow conversion of over 100%, underpinning approximately $40 billion of financial capacity to invest for future growth and deliver further returns to our shareholders. Overall, these targets reflect the scale of our ambition to 2030 and our 2025 performance provides us with good momentum as we embark on that journey. Now at this point, I will ask Randy to take you through the performance for each of our businesses. Randy Lake: Thanks, Jim. Hello, everyone. Turning to Slide 11 and beginning with Americas Materials Solutions, which delivered a strong Q4 and full year performance against record prior year comparatives. Total full year revenues and adjusted EBITDA were 5% and 7% ahead, driven by good pricing momentum, operational efficiencies and contributions from acquisitions. Aggregates pricing increased by 4% or 6% on a mix-adjusted basis. Cement pricing increased by 1%, reflecting regional variances across our operating footprint and supporting another year of margin expansion. Despite some challenging weather conditions impacting activity levels, revenues in our roads business were 4% ahead, driven by improved pricing and contributions from acquisitions. In terms of the demand environment, I'm pleased to report that the underlying backdrop remains positive, supported by our strategic alignment with 3 growing infrastructure megatrends. Transportation infrastructure continues to be supported by strong state and federal funding. Approximately half of highway funds in the IIJA have been deployed to date, highlighting the significant runway we still have ahead of us. We also continue to benefit from investment in the whole area of water infrastructure. Over 85% of roads require water management systems, and our connected portfolio enables us to self-supply our own aggregates and cement to meet growing demand for our water infrastructure products as well as provide more value to our customers. Reindustrialization activity also continues to be strong, particularly in large-scale manufacturing and data center projects. I'm also pleased to see further margin expansion, up 30 basis points on the prior year to 23.5%, demonstrating strong cost discipline and operational efficiency across our business. So overall, a robust performance for our Americas Materials Solutions business. And as we look ahead, I'm encouraged by the positive momentum in our bidding activity and backlogs, which are ahead of the prior year. Next to Americas Building Solutions on Slide 12, where our business delivered further profit growth and margin expansion in the fourth quarter and for the year as a whole, driven by good underlying demand, strong commercial management, operational efficiencies and contributions from acquisitions. Our Building and Infrastructure Solutions business continues to perform well, supported by strong data center demand and continued investment in water, energy and communications infrastructure. In our Outdoor Living business, we continue to experience resilient underlying demand in residential repair and remodel activity. Revenues were in line with the prior year, a good performance in the context of subdued activity in the new-build residential segment and unfavorable weather in certain markets. For Americas Building Solutions overall, total revenue growth of 1% translated into a 6% increase in adjusted EBITDA and a further 100 basis points of margin expansion, supported by ongoing business improvement and asset optimization initiatives. Moving to International Solutions on Slide 13, where our business delivered strong profit growth and further margin expansion in both the fourth quarter and the full year, driven by good pricing momentum, contributions from acquisitions and disciplined cost control. On top of an 8% increase in revenue, we delivered a 23% increase in adjusted EBITDA and a further 200 basis points of margin expansion. In Western Europe, solid infrastructure and reindustrialization demand offset subdued residential activity levels. While in Central and Eastern Europe, we experienced positive demand across our key end markets and some early signs of recovery in new-build residential activity. In Australia, our business continues to perform very well, benefiting from good underlying demand, operational improvements and synergy delivery from recent acquisitions. Overall, we're pleased with our performance in 2025 with record revenue, adjusted EBITDA and margin across each of our businesses, reflecting our leading performance mindset and culture of continuous improvement. At this point, I'll hand you over to Nancy to take you through our financial performance and capital allocation activities in further detail. Nancy Buese: Thank you, Randy. Turning to Slide 15 and our financial strength and optionality. We have a robust balance sheet with a net debt to adjusted EBITDA ratio of 1.8x at year-end, reflecting strong cash generation and a relentless focus on maintaining our financial discipline. We generated $5 billion of adjusted free cash flow in 2025, a strong performance representing a conversion ratio of 130% of net income and consistent with our 2030 financial targets. The strength of our balance sheet and cash generation capabilities underpins the significant financial capacity we expect to have at our disposal over the next 5 years, approximately $40 billion to invest for future growth and deliver shareholder returns, consistent with our long track record of value creation and reinforcing our position as the leading compounder of capital in our industry. Turning to Slide 16. You can see a summary of our capital allocation activities in 2025. First, to M&A, where we invested $4.1 billion on 38 value-accretive acquisitions, further strengthening our connected portfolio and leading positions in high-growth markets. We're pleased to report that the integration of Eco Material, our largest acquisition in 2025, is progressing well with some good early wins on commercial, operational and logistical synergies to enhance performance and create long-term value for our shareholders. In fact, over the last 3 years, we've completed 100 acquisitions, demonstrating the benefits of our unmatched scale and connected portfolio, and we have a strong pipeline of further opportunities in front of us, supported by our proven growth capabilities and the fragmented nature of our industry. We also invested $1.7 billion in growth CapEx, leveraging our size and scale to fully capitalize on high-returning, low-risk investment opportunities to expand capacity in high-growth markets, improve operational efficiency and optimize our energy usage, all of which will drive long-term shareholder value. We continue to deliver significant accretive returns to shareholders through dividends and share buybacks. In 2025, we returned $1 billion in dividends, 6% ahead of the prior year on a per share basis and representing an increase of over 60% since 2019. We have a proud track record of delivering 42 consecutive years of dividend growth and stability and are committed to our policy of consistent long-term dividend growth. Through our ongoing share buyback program, we also repurchased $1.2 billion of shares in 2025. And today, we are commencing a further quarterly tranche of $300 million to be completed no later than April 28. Since the inception of our buyback program in 2018, we have returned approximately $10 billion to shareholders, representing 23% of our shares in issue at an average price of $50 per share. Overall, we deployed $8 billion to growth investments and shareholder returns in 2025, demonstrating our focus on the efficient allocation of capital to maximize shareholder value. Randy and I will take you through our growth investments in further detail. First, to M&A on Slide 17, where we have a proven track record of value creation over many years enabled by our unmatched scale, connected portfolio and empowered teams. 2025 was an active year from an M&A perspective with $4.1 billion invested in a total of 38 acquisitions across our 4 strategic growth platforms of aggregates, cementitious, roads and water. From a materials perspective, we added 1 billion tons of high-quality aggregate reserves to our business, further strengthening our market-leading minerals reserve position. From an annual production standpoint, we added 8 million tons of aggregates, 2 million tons of asphalt and 10 million tons of cementitious materials. Randy Lake: On Slide 18, you can see some of the acquisitions we completed, combining strong local brands with our global scale to build out our connected portfolio across our 4 growth platforms. For example, in December, we acquired North American Aggregates, a leading supplier of aggregates serving New York and New Jersey. This strategic acquisition secures valuable aggregate reserves and enhances our ability to meet the long-term needs of our customers in the region. In addition to our acquisition of Eco Material, which Nancy mentioned, is progressing well, we continue to develop our cementitious platform with the acquisition of Rock Solid Materials in Louisiana and Independent Cement in Australia. In our roads business, we acquired Talley Construction, a connected provider of asphalt paving and construction services in Greater Chattanooga, Tennessee as well as parts of Georgia, Alabama and North Carolina. This acquisition is a strong strategic fit with our existing offering and will enhance our ability to serve our customers in these markets. In water, our strategic investment in Voda AI expands our capabilities in water asset management with AI technology. This platform helps utilities manage aging water infrastructure by providing AI-driven predictive analytics to assess pipe condition and risk across transmission, distribution and collection systems. So a busy year on the acquisition front as we continue to develop our connected portfolio in attractive high-growth markets. Turning to Slide 19. We're also continuing to invest in our existing business. As you can see on the left-hand side of this slide, we have deliberately stepped up investment in growth CapEx in recent years, leveraging our footprint, scale and connected portfolio to fully capture the high-returning, low-risk opportunities that we've identified across our markets. In 2025, we invested $1.7 billion in growth CapEx. These investments are carefully targeted to expand production capacity in high-growth markets while also driving greater operational efficiency through automation and advanced technologies that reduce cost and enhance performance. We're also making investments that reduce our reliance on fossil fuels to optimize our energy consumption as well as increasing our circularity and sustainability performance. On Slide 20, you can see some examples of growth CapEx investments that we're making. At our Roseville quarry in Ohio, we're investing approximately $75 million in a new quarry and processing plant to access over 100 million tons of premium aggregate reserves. The investment will strengthen our connected portfolio in the region, reduce production costs and enhance our ability to serve customers in the high-growth Columbus market. In Marissa, Illinois, we're building a new grinding and blending facility, which will increase production capacity for supplemental cementitious materials and enable us to serve customers in new markets. We also recently completed the construction of a $100 million precast pipe and box culvert plant just outside Austin, Texas, which will enable us to meet growing demand for our water infrastructure products. The location is very attractive from a market growth perspective and will also enable us to self-supply our own aggregates and cement from our existing operations in the area. These are just a few examples of how we're deploying capital efficiently, high-returning, low-risk investments that expand our production capabilities, support margin growth and enhance long-term shareholder value. Jim Mintern: Thanks, Randy. Another active year on the investment front, and I'm encouraged by the strong pipeline of opportunities we see in front of us. Let me now take a moment to outline how we are strategically positioned for the future. On Slide 22, you can really get a sense of the unmatched scale and connected portfolio of our business across North America, our largest market. Scale matters in our industry. And when combined with the connected nature of our local networks, it provides us with commercial, operational and strategic advantages that set us apart and enable us to deliver superior performance year after year. Carefully developed over 5 decades of entrepreneurial leadership, we have strategically and deliberately built out 4 key growth platforms: aggregates, cementitious, roads and water to become the #1 infrastructure play in the region, a position that is almost impossible to replicate today. Aggregates are the foundation of our business. They feed into everything we do from our cementitious business to our roads business to our water infrastructure platform. Approximately 95% of our revenue is connected back to this product. And with 230 million tons of annualized volumes and 20 billion tons of reserves in the ground, our aggregates position in North America is unrivaled. Turning now to Slide 23. As the #1 infrastructure play in North America, our strategic positioning and capabilities across 3 of the most powerful megatrends shaping our future are unmatched. We play a critical role in building and maintaining U.S. transportation infrastructure, the largest and most extensive network in the world. Through our connected portfolio, we are the largest paver in the U.S., equal to the next 5 largest players combined. We have a fully connected customer offering, enabling us not just to provide the aggregates, but the mix designs, the asphalt and the paving capabilities, value-added products and the services that are essential to a finished road. This enables us to capture profit at each step of the chain and maximize value for our shareholders. Transportation infrastructure remains one of the most recurring and predictable revenue streams for our business, underpinned by a robust and sustained public funding backdrop at both the state and federal level. One of the most urgent challenges we face today is the whole area of water. Across the U.S., much of the existing water infrastructure is outdated and no longer fit for purpose. With roughly 1/3 of the U.S. water infrastructure network more than 50 years old, the need to update the systems that collect, transport and treat water is critical. As a leading provider of water infrastructure in the U.S., our national footprint and deep expertise gives us a significant advantage as investment in this area accelerates. Over 80% of the products we produce in our water business consume aggregates and cementitious materials. And since over 85% of roads require water management systems, the strength of our water platform reinforces the benefits of our connected portfolio and shared customer base. We also continue to benefit from a powerful wave of reindustrialization activity. AI is fueling rapid expansion of data centers. And with 85% of all U.S. data centers within 25 miles in one of our locations, we are well positioned to benefit. In addition to being very materials intensive, these highly specified facilities require state-of-the-art water, energy and communications infrastructure, which fits very well with how we have strategically positioned our business and our customer offering. Taken together, these 3 megatrends represent one of the most compelling growth opportunities in decades. With our unmatched scale and connected portfolio across aggregates, cementitious, roads and water, we are uniquely positioned to capitalize. I will now ask Randy to briefly take you through some examples of how we are driving value at scale and leveraging the power of our connected portfolio. Randy Lake: First, an example from our roads business on Slide 24, the Mountain View Corridor in Northern Utah, where we participated in the most recent phase of this 35-mile infrastructure project. Through our fully connected offering, we were able to supply 1 million tons of aggregates, 100,000 tons of asphalt as well as the paving services and the water infrastructure systems that were needed. By leveraging the benefits of our connected portfolio and unmatched scale, we were able to increase asset utilization, reduce capital intensity and generate higher profits, cash and returns for our shareholders. On Slide 25, you can also see how we drive value at scale in reindustrialization. We are currently involved in over 100 data center projects across the U.S., where typically construction accounts for up to 15% of the total project cost. Speed and quality are critical for these customers. And through our unmatched scale and connected portfolio, we're uniquely positioned to capture a higher share of wallet on these projects. We're able to supply not just essential materials, but state-of-the-art water, energy and communications infrastructure for these highly specified facilities as well as helping to develop all the surrounding infrastructure that's required, particularly road infrastructure. These are just 2 examples of our strategy in action, enabling us to maximize value for our customers while also generating higher growth, profits and cash for shareholders. Jim Mintern: Thanks, Randy. Now before I discuss our financial expectations for the year ahead, let me share our thoughts on the outlook across our markets. First, to transportation, where the demand backdrop is robust, supported by the continued rollout of federal funding through the IIJA, where approximately 50% of highway funds are yet to be deployed. State level funding is also strong with 2026 DOT budgets up 6% on the prior year. In fact, 2026 is expected to be a record year for investment in transportation infrastructure, which bodes well for our business given our unmatched scale and market-leading position. We are also encouraged by the progress being made in Congress regarding a multiyear reauthorization of highway funding with continued bipartisan support for increased infrastructure investment in the years ahead. In our international business, we expect robust demand in infrastructure to continue, supported by significant investment from government and EU funding programs. We also see robust demand for water infrastructure with high single-digit growth projected in the areas of water quality and flow control for 2026. In reindustrialization, we expect continued strong demand for large-scale manufacturing and data center investment in both the U.S. and our international markets. And with the benefits of our unmatched scale and connected customer offering, we are very well positioned to benefit in this area going forward. In the residential sector, we expect repair and remodel demand in the U.S. to remain resilient, while new build activity remains subdued as a result of ongoing affordability challenges. As we have said in the past, this is not a demand issue, and we believe the long-term fundamentals in this market remain very attractive, supported by favorable demographics and significant levels of underbuild. In summary, the overall trend is positive for our business with our strategic focus on growing infrastructure megatrends and the benefits of the CRH winning way, leaving us uniquely positioned to capitalize on the strong growth opportunities that lie ahead. Turning now to Slide 28. And against that backdrop, here, we have set out our financial guidance for 2026. Assuming normal seasonal weather patterns and no major dislocations in the political or macroeconomic environment, we expect full year adjusted EBITDA to be between $8.1 billion and $8.5 billion, net income between $3.9 billion and $4.1 billion and diluted earnings per share between $5.60 and $6.05, representing another strong year of delivery for CRH. It's still very early in the construction season, but we feel good about 2026. And we will, of course, update you on our expectations as the year unfolds. So that concludes our prepared remarks today. I will now hand you back to the moderator to coordinate the Q&A session of our call. Operator: [Operator Instructions] We'll take our first question from Adrian Huerta with JPMorgan. Adrian Huerta: My question is with -- regarding the guidance, if you can give us further color on the guidance and the underlying assumptions that you have in terms of how we should see the top line growth and the EBITDA growth on the different divisions and if the guidance includes this recent divestment that you did as well? Jim Mintern: Adrian, good to hear from you, Jim here. Maybe I'll kick it off and just kind of set out the broad background to the guidance of '26. And I might ask Randy then to comment on the specifics on volume and price and then maybe Nancy might write it up -- just wrap it up in terms of the puts and takes from a financial perspective. But overall, firstly, listen, after stepping off a really strong 2024, we got good momentum in Q4 and good momentum in 2025, a record year, and that's good momentum into '26. From a U.S. perspective, maybe first, really positive backdrop into 2026. And the key growth areas for us are really around transportation, water and reindustrialization. And when I say transportation, for us, that's really our road business. And as I said, it's really our most predictable and recurring revenue stream. We're sitting here at the start of the year. This is the one that we have most visibility on. And it really is -- it comes about from our coast-to-coast presence in 43 states. And typically, over a full year, we do over 1,000 jobs per annum, somewhere between 9 to 12 weeks average size job. And this is a business where scale matters, right? And really, we get the benefit of our connected portfolio, and that's what drives the consistent performance on the road business. From a funding perspective, 50% of the IIJA funds are yet to hit the street. And the state budgets are up 6% as we head into 2026 as well. So really positive backdrop from our roads business heading into 2026. Next, on reindustrialization. And for us, that's data centers. And again, for us, I think we really see the benefit of our connected portfolio here. If you think about it, a lot of the very first construction on those sites is around the energy, the water and the communications, infrastructure, that critical services infrastructure that goes into those sites. We then support that with our aggregates, our concrete and finally, our asphalt as well in terms of paving the road access. So we really kind of get above good share of wallet on those jobs, and the outlook is very good. We're active on over 100 data sites. And I think if you look at the -- in total across the U.S., there's a CRH facility within 85% of all data sites within 25 miles. So we're busy on data sites. Maybe turning next to water. Again, a good outlook, strong funding backdrop, still a lot of unspent funds coming out of the IIJA. And when you look at the aging network of water infrastructure across the U.S., really a critical investment in terms of going forward. From a res perspective, we're not -- our kind of base case for '26 is that we're not really assuming any help. It remains very subdued, and that's an affordability, not a demand issue. With a 30-year fixed mortgage, still a shade over 6%, it's just too high. So as I said, we're not expecting any benefit from new build res in 2026. Turning now maybe to international. From a Europe perspective, first, a very strong infrastructure base and funding level across our business, and that's both at an EU funding level, but also at an individual state funding level as well. We're seeing positive activity in reindustrialization across Europe, and we continue to see residential recovery. I mean, Europe is more advanced on that interest rate cut cycle. They've had a 200 basis point cut in the last 12 months, and we're beginning to see that come to fruition across our European footprint. And maybe finally, in terms of Australia, a really good performance in 2025. And as we head into 2026, I think the timing is good in terms of a continued recovery of the residential cycle in Australia. Maybe, Randy, will you pick up what that means in terms of volume and prices? Randy Lake: Yes. Maybe just to reflect real quickly on how we finished 2025. So I'd say a really, really solid performance, Ag. Volumes up 4% year-over-year and pricing up 6% on a mix-adjusted basis. So good work by the teams in the markets that we serve. And actually, within cement as well, volume and price plus 1%. And I think you have to reflect back on cement, at least look back to 2024, coming off a very strong year where pricing was up 8%. So the teams have done a nice job, really reflects more so our footprint in terms of our operating locations. But Jim, I think, called out the underlying drivers for 2026. I've said this before, our future is really predicted a lot by our backlogs. It gives us kind of a 6- to 9-month view and bidding activity is strong. We're winning our share of business. And so it's positive to see and supportive of what our expectations are for this next year. In the U.S., we're looking at ag volumes up low single digits, supported by mid-single-digit pricing. And then cement as well, low single-digit volumes and pricing in low single digits and again, building off a good 2025, but it's reflective of really the underlying investment that's happening both in the infrastructure space and data centers in particular. A number of the same macro drivers impacting us in our international business, again, EU support for underlying investment in infrastructure and nonres activity. And so our expectations for cement in the international business is volume up low single digits and pricing up low to mid-single digits. We're still operating in an inflationary environment, labor, raw materials, subcontract, all continue to increase. So it really focuses the eye and the attention on our need for pricing momentum. So the expectation as we look at it for the full year is another year of margin progression. Nancy Buese: So to bring it all together from a financial perspective and what's encompassed in our guidance for 2026 is just reflecting on a very active year of M&A in 2025, where we spent $4.1 billion on 38 deals. A reminder, Eco is the largest of those that we completed last September. And as we've said previously, we expect about $200 million of net incremental EBITDA in 2026 from those acquisitions. And that's really unchanged from our previous guidance. The way to think about it is the contribution from those recently closed acquisitions is really offset by the recent -- or the divestment we've announced of our Construction Accessories business, which we expect to close later this year. Operator: Your next question comes from the line of Michael Feniger with Bank of America. Michael Feniger: I would just love to get your view on the prospects of a new multiyear highway bill in 2026 and really the time line of when you're thinking this could get done. If we get a CR, a bridge, how do you think that impacts your customers, the DOTs? Do you see any shifts in types of projects and letting activity given your big position, obviously, with roads and your comments that 50% of the funds have not yet been deployed from the prior IIJA? Jim Mintern: Mike, yes, maybe first, I might give a bit of context to set out the context and then ask Randy maybe just update where exactly we see it right now in Washington. Overall, as I said, we're in a really positive place from an infrastructure perspective. And we see it in the funding levels. And as Randy just mentioned, we see it in our bidding activity, and we see it in our backlogs as we head into 2026 and the season. Now if you take 2026 as an example, right, the federal highway funding for this year is at all-time record levels. And you've probably seen the very recently approved appropriation bills have set aside $75 billion for highways alone in 2026. Now also the IIJA dollars are continuing to flow with over 50% of the highway funds, as I said, yet to hit the street. So we're very confident that, that will continue to support continued investment well beyond the current IIJA's expiry later this year. And with that level of funding, again, given the scale of our road business, we really are the biggest beneficiary of that funding. Randy Lake: Yes. I guess, just in terms of where we think -- see things playing out for a new infrastructure bill, I think early signals are positive. We're encouraged by the conversations that are happening both in the House and the Senate. You have Chairman, Graves, of the House T&I Committee and Chairwoman, Capito, from the Senate -- the Senate EPW Committee. They're working on their individual pieces of legislation in around the surface transportation bill. I think you couple that with a commitment from Transportation Secretary, Duffy. He's certainly a very strong advocate for a multiyear highway bill that's, I'd say, more focused on core infrastructure. So you have 3, obviously, core constituents aligned and around the underlying need. And by the way, this has always been and continues to be a bipartisan issue. So it's great to see the positive momentum behind those conversations we would expect. We'll see the first insights into those legislations come middle part of this year. To your question or the comment around what if there's a continuing resolution and we get a 1-year extension. I think as Jim said, we're coming off a record level of funding. In addition to that, you have the tail of the IIJA funding that would yet to be deployed. And so net-net, we would see a positive increase in terms of underlying investment for '26 and '27. Unfortunately, we've been there before. We've experienced that. And what that actually means in practicality is you see more dollars allocated to R&M activities, which actually plays to our sweet spot. So -- and that's really a focus on the federal piece. You got the states who have been very active, both at the state -- individual state level and the municipality level, 6% increase in funding in the DOTs for 2026. So in totality, we're going to see a continued advancement in the total dollar spent in infrastructure. So good conversations across the aisle, broad support, underlying need. I think everybody recognizes that. So we'll stay engaged over the months ahead, but look forward to a positive outcome. Operator: Your next question comes from the line of Shane Carberry with Goodbody. Shane Carberry: It's just one really in terms of the International Solutions business and just how strong the growth was in 2025. And in particular, it would be really helpful if you could go into a little bit more detail around the building blocks to that significant margin increase year-over-year, it would be very helpful. Jim Mintern: Yes. Sure, Shane. Yes, really a very strong performance on the international division in 2025, with revenue up 8%, EBITDA up 23% and margin expansion of 200 basis points. In addition to kind of the core financial performance, there was actually some really good portfolio optimization work undertaken during the year in the international division. When I look at it in terms of international, I always think of the kind of 3 areas for me. Firstly, we've had another really strong performance in year from our Eastern European business, and that really reflects our leading position in this region. And it's really what's driving that is a very strong underpin of infrastructural funding, mainly coming from the EU infrastructure fund, good reindustrialization activity. And as I mentioned earlier, we're beginning to see the signs on the back of the interest rate cuts, some early signs of recovery in residential also. Moving to Western Europe. Again, a very good performance in 2025, and that was underpinned by strong infrastructure generally across Western Europe. I'd call out maybe a strong performance in Ireland, in the Nordics and Spain and maybe more muted in terms of France and the U.K. in 2025. Australia had a really strong year and really reflecting in our first full year, our first 12 months of Adbri, a great start, right? And what's driving that is really more synergies than we would have originally anticipated and earlier delivery on those synergies. Also, Australia, as I said earlier, has benefited from a recovery on the residential cycle also. Now looking into '26, really good momentum across the international division heading into 2026. We're expecting another strong year of growth from Eastern Europe. We're seeing signs of recovery in France and in U.K. on the residential market. We see in terms of the permits. We see it in terms of the starts, which is encouraging heading into '26. And we're looking for another year of continued growth in Australia on the back of that res cycle improving. Overall, from a pricing perspective, across our aggregates and cement position, we're looking for a good year in terms of pricing across the international business, and that would be our ninth consecutive year of good pricing across the European cement business. So overall, very positive about the international outlook into '26 and looking forward to another year of progress. Operator: Your next question comes from the line of Angel Castillo with Morgan Stanley. Angel Castillo Malpica: Jim and Nancy, congrats on the strong quarter here. Just wanted to ask about 2 aspects, I guess, impacting your fiscal year '26 guide. First, on Eco Materials, can you just give us a little bit more color on the progress of that integration? It seems like from the prepared remarks, it sounds like there's some early wins and strong operational performance here that could be perhaps coming in better than maybe it was expected. So just curious, as we think about that contribution of $200 million from acquisitions, whether there's maybe some upside risk to that? And then just second, just on the cost inflation, if you could kind of outline a little bit more what your cost assumptions are in terms of the key buckets for 2026. And then just as you think about mitigation or cost control initiatives, whether there's something here that might represent kind of upside, downside risk to the guide? Randy Lake: Yes. Thanks, Angel. This is Randy here. I'll take the questions in and around Eco. Yes, we're 5 months in, in terms of the Eco being part of CRH. I guess I'd first say, certainly a very highly complementary business to our existing cement footprint across North America. I think it really strengthens our position as being the leading cementitious player in North America. If you look at the combined now productive capacity between our cement business and Eco, around 25 million tons. In addition to that, there's a broad network that was very complementary to our existing Ash Grove terminal and rail network. We now have over 125 separate locations, whether source locations, production facilities, terminals, really this national coverage now from a logistical standpoint. And I'd say the other thing that has been -- certainly continues to be impressive is the innovation capabilities that Eco has. I mean, I would call them a market maker of scale in and around the cementitious space, SEMs in particular. They have long-term supply agreements of high-quality SCMs. For us, it was an obvious place to go in terms of accelerating our cementitious strategy. SCMs, in particular, is the fastest-growing segment of cementitious growing at twice the rate by 2050 versus traditional cement. So a great fit overall. I'd say the early days. The integration is going well, super team, a very strong cultural alignment. I think one of the things that stands out that they've done well and enhanced our position as well as the value of those deep local relationships. It's something that we value across our network. They certainly have as well. And I think that gives long-term surety in regards to underlying supply and engagement with the customers. In regards to the opportunities, the synergies, I would bucket them, obviously, in probably 2 areas from a commercial standpoint, a number of cross-selling opportunities for new and existing customers, whether that's from our traditional Ash Grove Cement business or it is with Eco. So it's opened up new markets, new platforms for us, which is encouraging. That's moving faster than anticipated. And obviously, the ability to self-supply SCMs was a critical element across our network. We consume a significant amount of cementitious products within our Material Solutions business, within our Infrastructure business and Outdoor Living. So we're capitalizing on those opportunities. And then, I guess, from an operational standpoint, 2 things: one, maximizing the logistics capabilities, the railcars, driving efficiency there, the terminal network really being able to lay out a strong network to serve our customers. And then I'd say from an operational standpoint, we have a global technical services team working in conjunction with the Eco team really driving a high level of operational performance and improvement as we would have seen at Ash Grove or with the Hunter acquisition in Texas. So combined, I think we're off to a tremendous start, really making good inroads in terms of the underlying market. I think there's a tremendous amount of value yet to go get in and around both for the business and for and ultimately for our shareholders. Jim Mintern: Yes. And maybe on the second part, just in terms of the cost inflation, Angel, where we're continuing to see inflation is across labor, across raw materials, both in services and maintenance. And it's that cost inflation is really driving our pricing for 2026. And that pricing, together with continued kind of relentless performance improvement programs that we have across the business is really what's driving our expectation of another year of margin progression in 2026, which will be our 13th consecutive year of margin increase. Operator: Your next question comes from the line of Keith Hughes with Truist. Keith Hughes: My question is in Americas Building Solutions. For the year, there was a nice increase in EBITDA even though we're in a weak -- organically, even though we're in a weak market because of the residential. If you can could tell me what worked in the year? And what's sort of the outlook within Americas Building Solutions for 2026? Jim Mintern: Keith, good to hear you. In terms of the -- what's in it in terms of outlook, first in terms of 2025, the Americas Building Solutions is made up of our Infrastructure business and also our Outdoor Living business. Obviously, Outdoor Living, more exposed on the residential, primarily the majority of it is on the repair and remodel. I would say it was a resilient performance in 2025. The strong performance really came from the Infrastructure business. And that Infrastructure business, I mentioned it earlier in terms of where it plays, but particularly if you think in terms of reindustrialization, it's all the kind of subterranean concrete products that are going in and around energy, around water, around communications into those large data center facilities, but also the big chip plants as well and the complex manufacturing reshoring projects what we're seeing at the moment. So that activity, strong performance in 2025, together with, I would say, a very good focus in terms of optimization of both businesses early in the year, right? We took a lot of optimization and performance initiatives in that division in early 2025. And that really came through in terms of the EBITDA and margin expansion for the year. So I think good performance in '25 and a good outlook, again, given the backdrop primarily on the reindustrialization side in 2026. Operator: Your next question comes from the line of David MacGregor with Longbow Research. David S. MacGregor: I guess if we could start by just talking about M&A and what you're seeing in the way of change in the environment in 2026. And then with such an active acquisition program as you've been conducting, can you just talk about the synergy realization experience and how that's progressing? Jim Mintern: Yes, absolutely, David. Listen, a good year, obviously, in terms of M&A activity. We did 38 deals, $4.1 billion, of which the largest was Eco Material, which closed in September. So -- and that was on the back actually of a very strong year in 2025 as well, '24 rather, when we did 40 deals. So I think we're seeing good levels of activity across the M&A pipeline. As we're into '26 at this stage, we have good optionality in terms of where we deploy capital in 2026. I think in terms of synergy side of it, again, it comes back to -- a lot of it comes back to the nature of our strategy and our portfolio, that connected portfolio, which enables us to maybe identify synergies that maybe other parties cannot do in terms of transactions. But then crucially, given the kind of competence that we have, I mean, it's one thing doing 38 deals. It's nothing being able to integrate them at pace and really secure kind of early delivery on the synergies from that perspective. And that's just a core competency of what we do. There's a very detailed playbook to support that, as you can imagine. But I do think what's key to us strategically is the connected nature of the portfolio. Operator: And we have time for one more question. The last question is going to come from Kathryn Thompson with Thompson Research Group. Kathryn Thompson: In your Investor Day in September, CRH had, and as you noted in the call earlier today, outlined 3 megatrends driving growth, transportation, water infrastructure and U.S. reindustrialization. How much of a -- against this backdrop, these megatrends and the things that you've talked about already today, how much of a differentiator is your connected portfolio that you spent a lot of time talking about when it comes to your M&A pipeline and the optionality you have for growth. Jim Mintern: Thanks, Kathryn. And maybe building a bit on the last question from David as well on that point. It's a really good question, right? And it's not just about the M&A pipeline, but it really is at the core of our performance agenda as well, right, and in terms of our leading performance. And it actually strikes right to the core of who we are, right, and strikes right to the core of our strategy. And maybe firstly, from an M&A perspective, right? If you consider the fact that the scale of our business and the connected nature of the portfolio, over 4,000 locations across the business, over 2,000 in North America. And it's really that scale and the connected nature of the portfolio, which is what really gives us that optionality of where to deploy capital, right? Now we've said in the Investor Day, we're deploying it across 4 growth platforms across aggregates, cementitious, roads and water. Now if you consider the year just gone by, 38 deals in 2025, 40, as I said, in 2024. And in fact, over 100 deals in the last 3 years. The vast majority of those deals are getting sourced locally. And they're being sourced through the fostering of local relationships, often built up over decades. And that kind of local relationship in a lot of instances gives us really a lot of exclusive looks on deals and often makes us really the acquirer of choice. Now as I said to David, just on the last question, it's not just about the deals, really. It's about that ability to integrate them at scale. And I think that's a real core competency we have, right? As we look into 2026, the pipeline is good. And we mentioned in the Investor Day that you referenced that over the next 5 years, we're going to have $40 billion of financial capacity to deploy, and we expect to deploy up to 70% of that on the growth side of the equation, so between M&A and between our growth CapEx. Now we are really focused on deploying that capital into higher growth markets and across those 4 connected portfolios. However, we will remain disciplined and really value focused on the deployment of that capital. But I think what's crucial to it is that it's the connected nature of the portfolio gives us the optionality where we deploy that capital across which markets, i.e., growth markets and then across the platforms. And maybe the second part of it, as I said, is not just about M&A, it's really about performance, right? And it's really core -- that connected portfolio is really core to how we're able to deliver quarter after quarter, year after year in terms of performance. Firstly, it enables us simply to offer a more complete customer offering, which really maximizes the growth and the value creation. And we talked earlier about the range of connected products that we're supplying into the data centers, which ultimately enables us to win a higher share of wallet. Now if you look at the roads business, and I think we called it out in the Investor Day, the connected portfolio is really essential to that business, and it brings the predictability, the recurring nature of it, the really high cash yielding and high returning aspects of that business. And put simply, it enables us to turn $1 in terms of supplying a ton of bags into $6 or 6x more profitable by supplying a more connected portfolio. So that connected nature of the portfolio really enables greater visibility and also really helps in terms of the production and planning efficiencies. So I think good question. It's at the core of what we do from an M&A perspective, but crucially as well is what drives that quarter-after-quarter consistency resilience and predictability in the performance of the business. Thanks, Kathryn. Okay. Well, thank you all for your attention. And as always, if you have any follow-up questions, please feel free to contact our Investor Relations team. We look forward to talking to you all again in April when we will report our first quarter results. Thank you. Have a good and safe day. Operator: Thank you. Your conference call has now ended. You may disconnect.
Operator: Welcome to Group ADP 2025 Full Year Results Presentation. [Operator Instructions] Now, I will hand the conference over to Cecile Combeau, Head of Investor Relations, to begin today's conference. Please go ahead. Cecile Combeau: Thank you, and good morning, everyone. Thank you for joining us for our 2025 full year results presentation. I am here with Philippe Pascal, our Chairman and CEO; and Christelle de Robillard, Executive VP for Finance, Strategy and Development, who will first go through prepared remarks for about 20 minutes before the Q&A session, for which we will aim for 40-minute duration. Before we start, and as usual, I remind you that certain information to be discussed today during this call is forward-looking and is subject to risks and uncertainties that could cause actual revenue and results to differ materially. For these, I refer you to the disclaimer statement included in our press release and on Slide 46 of our presentation. I will now leave the floor to our Chairman and CEO, Philippe Pascal. Philippe Pascal: Thank you, Cecile, and good morning, ladies and gentlemen. Thank you for joining us to discuss our 2025 full year results. Let me first turn to Slide 3 for our key highlights. 2025 has been a strong year for the group and a key step in preparing our next strategic cycle. When I took office as Chairman and CEO a year ago, I set clear priorities: reinforcing our economic model in Paris through an economic regulation contract; deliver the best possible quality of service and accelerate the rollout of the Extime model; secure the contribution of our international activities; and support all this with more agile and engaged corporate culture. With the new management team, we made solid progress on each of these priorities. We launched a very successful employee shareholder plan and modernized our compensation structure at ADP SA level. We improved quality of service day after day, started the Connect France partnership with Air France in June, and announced the renaming of Paris-Charles de Gaulle's infrastructure by 2027. We delivered key projects, our international assets and resumed dividend payment from TAV. And of course, we submitted our proposal for 8 years' Economic Regulation Agreement, now awaiting the regulator's first opinion. These achievements are combined with a strong operating performance in 2025 with all of our financial targets met, allowing the Board to propose a dividend of EUR 3 per share to the next general meeting after our dividend policy. About our financial performance on Slide 4. Revenue reached EUR 6.7 billion, up nearly 9%. This reflects strong [ project ] traffic during the year and the continued development of our service businesses, included the scope effect from the acquisition of P/S and Paris Experience Group at the end of 2024. EBITDA also showed solid growth, up 12%. This performance comes from higher revenue and from disciplined cost execution, leading to further margin expansion. Finally, net result came at EUR 382 million. It was affected by FX noncash item and tax impact in 2025, but remains 12% compared with 2024. Let me now move to Slide 5 about our employee-related achievements, which are a key driver of long-term value creation. Our employee shareholding operation was a clear success with 3 out of 4 employees subscribing. Employee ownership now represents almost 2% of the company's capital, showing strong internal alignment and confidence in the group's trajectory. It also creates collective incentive by sharing future value creation. Just a few weeks ago, we also reached an agreement with trade unions to modernize our compensation framework and employee status. The goal is to build a more consistent, financially sustainable and performance-driven model. The impact of this reform is already reflected in our 2026 outlook. This measure will support our long-term cost trajectory, the same that was underlying our cost discipline, Economic Regulation Agreement proposal. A quick word now on Slide 6 about the simplification and renaming plan for Paris-Charles de Gaulle Airport announced at the end of 2025. Our objective is simple: make the passenger journey clearer and smoother, especially for connecting travelers. In March 2027, when the CDG Express high-speed link opens, all terminals will adapt a single numbering system, and boarding area will be renamed using specific letters. This will bring Paris back in line with the best standards of major international hubs. This renaming is a visible step, but it is only one of the main projects we will continue to roll out to reinforce the attractiveness of Paris hub and other initiatives such as the ones included in our Connect France partnership with Air France. On Slide 7 now, still on the performance of our Paris assets, we continue to support it with several infrastructure projects delivered in 2025. First, the refurbishment of Runway 1 at Paris-Charles de Gaulle, which now meets best-in-class industry standards. Second, the commissioning of our geothermal plant for Paris-Charles de Gaulle Airport, a key milestone in our decarbonization road map. Third, the restructuring and extension of airside area at Paris-Orly, unlocking additional aircraft capacity and improving operational fluidity. And finally, the upgrade of baggage handling system in [ Terminal 2E ] and 2C at Charles de Gaulle, enhancing reliability. This project illustrates our ongoing efforts to maintain the high-performing and reliant Paris hub. Finally, let me turn to Slide 8 and highlight the key achievements in our international assets. We delivered several major infrastructure projects in 2025, including the expansion of Antalya Airport in Turkey and the expansion of Delhi Airport in India. Both platforms are now ready to support further traffic growth and to capture more retail potential, thanks to new commercial areas. Both Antalya and GMR Airport secured refinancing operation. At the same time, TAV Airports successfully negotiated a 5-year concession extension for Tbilisi airport, which is a highly contributive asset. And on the back of solid performance and deleveraging, TAV announced it will resume dividend payments this year, TRY 3.61 per share, or roughly EUR 10 million for ADP SA, to be paid in 2026. Overall, 2025 has been a year of strong execution and reinforced our foundation for the next strategic cycle. I will now hand over to Christelle, who will take you through the 2025 financial performance in detail. Christelle Robillard: Thank you, Philippe, and good morning, everyone. Let's jump to Slide 10 and dive into our 2025 results. In 2025, we delivered continued solid traffic growth overall with different trends across our platforms. In Paris, traffic grew by 3.4%, fully in line with our annual assumption. Growth was driven by international passengers, while domestic traffic continued to decline. Looking at the group, TAV Airports delivered a solid 6% traffic increase, supported by its international assets. GMR Airports showed 3% growth, reflecting a resilient underlying profile despite some challenges during the year. AIG, specifically Amman Airport, recorded 11% growth even in a tense geographical context. Overall, these trends confirm the strength of our portfolio and the resilience of our geographically diversified model. Now, turning to retail trends on Slide 11. Extime standard packs stand at EUR 31.7 in 2025, up 3.6% compared to 2023, but down 1.2% compared to 2024. After an outstanding first quarter, we saw a downturn in Q2, driven by several factors. First, a number of ADP-specific elements, which were largely anticipated: works in Terminal 2EK, the full year impact of the reopening of Terminal 2AC and the reallocation of some airlines there, but also a negative comparison base compared to 2024 due to lower advertising and the end of Olympic merchandise sales. In addition to these internal factors, broader external trends also weighed on performance. First, the slowdown in the luxury sector, but also significantly less attractive FX conditions since Q2 with stronger euro, while pricing strategy from luxury brands do not compensate for this effect. Despite these headwinds, we remain confident in the strength of Extime model. Underlying trends in most activities continue to support our long-term strategy. Moving to Slide 12 about consolidated revenues. As said earlier, it reached EUR 6.7 billion, up 9% this year, reflecting a solid momentum across all our main segments. In Aviation, the revenue increase was primarily driven by the continued growth in international flows, as well as the 4.5% airport fees increase implemented in 2025. In Retail and Services, despite the headwinds I just explained, contribution to revenue growth was strong, benefiting from the international traffic growth and positive scope effect from recent acquisitions, which serve the development of our model. Abroad, TAV Airports' international assets and services companies were the biggest driver, while growth in Turkey was more moderate due to macroeconomics. AIG showed a remarkable rebound, showing resilience despite the geopolitical context. Moving to Slide 13 to focus on our EBITDA. For 2025, EBITDA is up more than 12%, driven by revenue growth and good cost control. Excluding the integration of P/S and PEG, EBITDA is up 11.3%, above our EBITDA guidance of at least 7%. This strong performance reflects several factors: tight cost discipline in itself at ADP SA and retail subsidiaries, as well as at TAV. Parisian infrastructure is now fully open, which provides some operational leverage. We also benefited from positive base effects linked to Olympics-related expenses, which disappeared in 2025, and also the postponement of Exit/Entry System deployment to late 2025 and with a progressive rollout. 2026 OpEx are expected to increase due to this EES deployment. Slide 14 now to look at our net income standing at EUR 382 million, up EUR 40 million. This figure reflects strong EBITDA growth, as well as the base effect from the 2024 accounting impact linked to the GIL and GAL merger. However, they are largely offset by other effects worth reminding: in D&A, the negative base effect from last year impairment reversal at AIG; in taxes, the exceptional tax surplus on large corporations in France for EUR 92 million; and as was the case in H1, all through the P&L, we recorded impact from the abnormal variations in FX rates in 2025, affecting notably the contribution of TAV and GMR Airports for a total net loss of EUR 130 million at the net income level. Overall, this all resulted in a net income attributable to the group of EUR 382 million. The cash position of the group is nevertheless solid, as apart from the tax impact, these negative impacts are mainly noncash ones. So turning to the group debt on Slide 15. You can see net debt stood at EUR 8.6 billion at the end of 2025. Net debt-to-EBITDA ratio is improving to 3.7x EBITDA, in line with our 2025 target of 3.5x to 4x EBITDA. This deleveraging has been driven by the strong EBITDA growth, as well as the disciplined CapEx execution, both in Paris and at group level. Moving to Slide 16 to conclude this financial part, I will focus on the regulated activities. As you can see on the left part, regulated ROCE for 2025 stands at 4.3%, up 0.3 points compared to 2024. The strong growth from traffic and increase in airport charges was notably offset by the higher tax rate applicable in France for 2025. Let's look now at the right side of the slide, which summarizes the situation regarding 2026 tariffs. Our initial proposal, which included a 1.5% increase, was rejected in December, mainly due to divergencies on analytical accounting rules used to allocate costs and assets to the regulated perimeter. We then submitted a second proposal with flat tariffs on average. This proposal was also rejected on February 10, which means that airport charges will remain at 2025 levels from April 1, 2026. This is already reflected in our 2026 financial guidance, which Philippe will comment in just a moment. Now, importantly, the regulator explicitly stated in their decision that the ERA is the right framework to address structural topics such as allocation keys and that our envisaged timing remains valid. Our priority is to work through the regulatory process constructively, while protecting the interest of the company and its shareholders. With that, I will now hand it back to Philippe, who will now comment on our outlook and our strategic priorities. Philippe Pascal: Thank you, Christelle. Let's now turn to the financial outlook for 2026. Our 2026 guidance is built with discipline with 3 factors explaining the calibrated EBITDA outlook: flat regulated tariff in Paris; higher-than-usual staff cost increase linked to the reform in wage structure at ADP SA level; retail revenue dynamic in a still challenging context and continuing works in Terminal 2E Hall K. All in all, we expect EBITDA growth to be driven by international assets, TAV in particular, to reach above EUR 2.35 billion EBITDA at group level. We will continue to invest to prepare the future around EUR 1.45 billion at group level, on which, around EUR 1 billion at ADP SA with a gradual increase compared to actual 2025 CapEx, in line with the program set out in our proposed Economic Regulation Agreement. Our dividend policy remains unchanged, 60% payout with a floor of EUR 3 per share. Our proposal for Economic Regulation Agreement for '27-'34 will be negotiated over the course of 2026. Slide 20 shows the key parameters of our proposal, which are designed to secure a fair remuneration of the investments included in our plan. Slide 20 shows the timeline for the elaboration of this new Economic Regulation Agreement. And I want to highlight that despite the non-validation of the 2026 tariff, the process is fully on track. We are fully committed to deliver a good agreement, ensuring fair remuneration of investment. We have the support of airlines. We can see on the slide that we started the year with a positive constructive vote from airlines, both on the duration and on the industrial plans, which confirm the quality of our proposal and their support. We also have the support of the French State, which asked the regulator to issue a nonbinding opinion on our proposal, which is then expected by April 11. We anticipate that the regulator will make some negative comments on allocation key because the analytical accounting keys underlying our proposal are similar to those used for the 2026 projected tariff. We work through the process constructively, and the Economic Regulation Agreement is an appropriate framework to address such structural topic. And during the rest of 2026, we will continue negotiation with the State and hold the second round of user consultation in September. The objective remains unchanged: to obtain the binding approval of the ART in Q4 2026, followed by the signature of the Economic Regulation Agreement so that it comes into force on January 1, 2027. Overall, the timeline is progressing as planned with no deviation versus the schedule we shared in December. Moving to Slide 21, which illustrates how 2026 will be a year dedicated to preparing our next strategic plan for '27 -- 2027 and 2030. We will focus on 4 main pillars. First, economic regulation elaboration. With the negotiation of the new Economic Regulation Agreement, its signature will bring clarity and long-term [ visible ] on the financial trajectory of our regulated activities. Second, cultural transformation, continuing to build a more agile and performance-driven organization, while strengthening the employee engagement. Third, corporate social responsibility, ensuring our road map stays aligned with long-term environmental and climate ambition and accelerating our commitments. And fourth, the portfolio review, focusing on nonregulated activities to refine our strategic priority and management focus and to optimize our portfolio for long-term value creation. Together, these 4 pillars will shape the foundation of the group's next strategy ambition. With that, let's open the line for Q&A. Thank you. Operator: [Operator Instructions] The next question comes from Cristian Nedelcu from UBS. Cristian Nedelcu: The first one on this allocation of cost between regulated and nonregulated. [ ART ] concluded that there's a differential of 50 to 100 basis points on your returns due to the different views on cost allocation. Could you give us a bit more details? What are the arguments on your side that you believe the way you approach cost allocation is the correct one? Do you see reasonable chances to convince them to drop this claim going forward? And secondly, considering a more conservative view from ART in terms of your actual regulated returns, at least from my side, it seems that CapEx and a multiyear regulatory framework are the only things that could avoid cutting your tariffs in 2027. So in this sense, what is the minimum level of WACC that you're willing to accept in order to deploy this CapEx plan that you presented for ERA going forward? Philippe Pascal: So thank you for your question. So perhaps just to have a view about the debate with the regulator, there are 2 main areas of misalignment in the view of the regulators, the WACC and the allocation key, as you say. Perhaps to start on the regulated WACC, main takeaway from last week's decision is that the regulator clearly stated that the WACC will be higher in case of multiyear agreements. And we will have more insight when this -- issue their nonbinding opinion of the economic regulation proposal, which is expected in -- by April. So it's not possible to give you a minimum of WACC. The key element is to have a global balance and a fair remuneration at the end of the day for our Economic Regulation Agreement, but also if we don't have an Economic Regulation Agreement. We are very confident that Economic Regulation Agreement, it's a good vehicle to find a very fair remuneration for us due to the fact that the head of ART said clearly that we can discuss about that through this process, and the fact that in the methodology of the French regulator, we can have a higher WACC when we have a multiyear agreement. So, in line with this element, we are convinced that in the process, we can find a good balance. On allocation keys, in fact, the regulator estimates that we should implement analytical accounting correction that could increase the ROCE, the regulated ROCE by around 0.5 to 1 point. Among the pushbacks from the regulator on allocation keys, the most material are the space allocation key to allocate costs between scope regulated to share space in our terminals, in the boarding area, near the shops and so on. The key related to access to allocate the cost related to our airport shuttle system -- airport shuttle is a key element also -- we will resume discussion with airline and work through the regulatory process constructively, while protecting the interest of the company and its shareholders. That is very important for us and very clear. It's the fact that the French State, the decision of the government is to have a dual-till system with a regulated scope and a nonregulated scope. So we can obviously discuss about the cost allocation key if we respect this dual-till system. So we have -- obviously, we have to find the good rules and the good [ team ]. We have to work with the airlines. We have to work with the French regulator, and this work is on track with both airlines and the regulator. But at the end of the day, you have to respect the dual-till system. And I know that for the French State, it's vital because it's at the end of the French State, not at the end of the regulators. So globally, to answer your question, in fact, we have this key question of WACC and of allocation key, but we are very confident that the Economic Regulation Agreement and the process to elaborate this agreement, it's a good process to success, and we are confident to do that. It's the reason why we are not so worried about the decision of 2026 tariff. Operator: The next question comes from Tobias Fromme from Bernstein. Tobias Fromme: I'm trying to understand your traffic growth guidance in a little bit more detail. On Slide 7, you elaborate on the 2026 investment projects. What's the estimated impact of those projects on traffic growth, especially looking at sort of the runway renovation at CDG and capacity extension at Orly. If you will sort of not have to implement those projects, would the sort of guidance be very similar? Like, can you effectively shift the impact a little bit by having more aircraft flying into CDG, for instance? And then, on retail, when I look specifically at the different quarters, the performance of the businesses in the different quarters, I see that duty free has obviously gotten a lot worse over the quarters, about 8% Q1, Q2, flat in Q3, and then minus 2% in Q4. Is that the trajectory we should keep in mind for 2026 as well? And have you maybe seen anything on duty free in the first 2 months -- first 1.5 months of 2026? And that's it. Christelle Robillard: Thank you for your question. So regarding the first one in terms of traffic, so as you've seen, we've posted a guidance of traffic expected growth between 1.5% to 2.5% in Paris, mostly driven by international. Just to remind you that it's totally in line with the assumption taken in the Economic Regulation Agreement, and there have been no change since then. So globally, we expect in 2026 to see similar trends as in 2025, continued dynamic growth of international traffic with Middle East and Asia notably, as other destinations have already more than recovered, but also a steady and lower growth for the Schengen area traffic, where traffic is now [ mature ] and above 2019 levels, and finally, French domestic traffic to remain structurally lower. Regarding your specific question between CDG and Orly, indeed, the traffic in 2026 will be affected by temporary airside works at Orly that will constrain operations from April to December 2026. There will be, to be very precise, 2 work phases impact operation: April to early August, works on some taxiway; and from mid-August to early December, works on the runway itself. Some airlines can have chosen to proactively adjust their programs, reducing flights, transferring some activity to CDG and to reshape schedule. Some indeed chose to frontload reduction early in the season to smooth operational adjustments. But crucially, what you have to have in mind is that airlines will keep their early slots. And so, these cuts are just tactical, not structural. And all these elements of traffic in Orly are fully embedded in our 2026 traffic assumption. Regarding your second question in terms of retail performance, so indeed, the performance was quite different quarter-by-quarter. There was more an outstanding performance in Q1, and then a gradual decrease. Clearly, that began when the euro appreciated a lot. So, as you understand, our performance has been impacted by all those FX tailwinds. Regarding 2026, our assumption is broadly a stable FX rate with no reversal of the 2025 currency impact. There was also this trend regarding the slowdown on luxury categories, which have also affected once again due to this sensitive FX competitiveness. So this is something on which we will pay attention for sure. But our assumption takes into account, as I said, a broadly stable FX. You saw that we posted a hypothesis above EUR 32 in 2026. We have some levers to drive this [indiscernible] in 2026 and the [indiscernible] strength, the traffic mix improvement, so all this should contribute to stabilize our retail performance. Operator: [Operator Instructions] The next question comes from Dario Maglione from BNP Paribas. Dario Maglione: Two questions around the long-term regulatory agreement. I'm quite intrigued. You mentioned that you have support by the airlines for this agreement. Can you elaborate? And then, second question on this OpEx allocation and projection on regulated revenue. To what extent you're trying to find a compromise with ART or actually try to bring on board what ART said and just implement it? Philippe Pascal: Thank you for your first question about the support of airlines. In the formal process of the negotiation of an Economic Regulation Agreement, the starting point is the publication of the proposal in December. And the first step is a dedicated vote in a specific committee that we -- all the main airlines and representative organizations of airlines. So we executed this first step at the end of January in 2 elements. The first element, it's a specific for duration, and we obtained the full support of the main part of the airlines. And the second vote, it's about the proposal. That is clear. It's the fact that we have a favorable vote, positive vote due to the fact that all the airlines, and in particular, the main airlines in Paris support the industrial plan, the fact that we can develop and we have to develop the platform in Paris-Orly, but mainly in Paris-Charles de Gaulle. We have to develop the hub of SkyTeam. And we manage well this process because it's the industrial process. It's the result of a strong discussion with airlines and also the consultation of our main stakeholders during the consultation in 2025. So our proposal, it's a result of the first informal consultation and negotiation with the airlines. So -- but the good success is the fact that officially, when you consult the airlines, all the airlines adopt this project with a favorable vote. It's a good thing to try to convince the French regulator that it's a good Economic Regulation Agreement and well balanced. That is -- for your second question about the allocation keys, the ART requested an analytical accounting adjustment, but we have just said, it's to increase the [indiscernible]. The main pushback related to space allocation key, as I say, it's the number of square meter in the regulated and in the nonregulated scope, and also the key related to access. These topics require structural formalized work with airline, which are resuming immediately. So we work a lot, and the ERA is precisely the appropriate framework to solve this technical point. We have -- with the French regulator, we have a discussion, regular discussion, technical discussion, professional discussion. The regulator demonstrates a good understanding of airport infrastructure constraints. But we do not prejudge decision, but the tone is forward-looking. And ART confirmed that the ERA is the right avenue to [ track ] long-term topics. So, for the moment, we have a positive discussion. In fact, we are a little bit surprised about the decision of -- in December that is not in line with all the work that we executed with airlines and also with the regulators. So, a little bit surprised, but it's not the same tone before than after the decision, perhaps due to some claims about some airlines. But all in all, we have to continue the discussion and remind that the question of cost allocation key, it's also the question of the dual-till system. So it's not just the regulator, but it's also the French State. And we are very confident about that because our industrial project is vital for the development of the airport sector in France. So it's -- we have the full support of the French State. Operator: The next question comes from Jose Arroyas from Santander. José Arroyas: I wanted to ask you about your plans to review the company's portfolio. I think this is also something you talked about in December. But what do you exactly mean by a strategic review of nonregulated assets? Are you looking to sell some of the assets you already own partially or fully? Or are you looking to buy more of the assets you own? And if it is the latter, what type of businesses would you be considering adding? Christelle Robillard: Thank you for your question. So indeed, we announced in mid-December last time that we were going to conduct a portfolio review. So this is, of course, still our expectation. So the 2026 portfolio review will cover all nonregulated activities with the aim of clarifying long-term value drivers and the strategic role of each asset. We assess indeed every asset based on long-term value creation, strategic relevance and capital efficiency. At the end of the day, this review is not designed to trigger a major disposal. Having said that, we apply a clear discipline to cost allocation. We consider both disposal or acquisition only when they reinforce our long-term industrial and financial profile. So this is the way we will conduct this work. Thank you. Operator: The next question comes from Cristian Nedelcu from UBS. Cristian Nedelcu: Could I kindly ask on the OpEx side? You talked about the new compensation structure reform. Could you give a bit more detail on the actual wage increases in '26 and then the long-term savings associated with this new compensation structure? And maybe on this topic, could you talk, for ADP SA, the other OpEx components, what type of inflationary pressure would you expect in '26 versus '25? And the second one, if I may, coming back to the allowed return, I think ART proposed a 5.3%, 5.4% WACC for Toulouse and Marseille airports. And I know these are different assets with different considerations. But I'm just trying to take a step back if, at the end of the day, ART believes today, you're earning somewhere between 4.5% to 5.5% regulated return, you're not too far away from this 5.3%, 5.4% WACC. So what I'm trying to think conceptually, in my eyes, from here to grow your tariff, effectively, it's all underpinned by your regulated asset base growth or by your CapEx because if the WACC indeed ends up being 5.3%, there doesn't seem to be a lot of tariff increase. So could you help us a bit -- am I missing something? Are you still confident in a healthy tariff increase above the inflation levels in France over the next years? And what are the arguments in that regard? Christelle Robillard: So I'll comment on your first question regarding the staff cost reform. So, as you have understood during the presentation, this is a comprehensive renovation of ADP SA remuneration structure for both nonexecutive and executive, aimed at making salary progression more predictable, more individualized and structurally more sustainable. As mentioned, this reform will generate a significant impact in 2026 as we implement salary increases to compensate for the withdrawal of certain future benefits, especially the automaticity of salary increases. This will create a onetime larger step-up compared to our usual staff cost trajectory. In practical terms, the 2026 wage increase will be roughly twice the normal annual run rate. But clearly, all this impact is fully included in our 2026 guidance for recurring EBITDA above EUR 2.350 billion. Clearly, this will -- the aim of this reform is to rebalance the compensation structure and to make it more sustainable over the long-term period. So it will also help secure the assumption we took in the Economic Regulation Agreement of wage inflation at CPI plus 0.6 points. Regarding other OpEx evolution assumptions, so on your question about the inflation, we are expecting some classical inflation hypothesis, so between -- I would say, close to 1.5%. So, no specific element on that. Maybe just keep in mind that our OpEx base will be impacted, but like usual -- as usual, on consumable, by the trends with our level of activity and sales; on external services, as I mentioned in my presentation, by the deployment of Exit/Entry System, which was postponed in 2025; and on staff expenses, by this wage reform. And maybe just worth to say that, as you saw also, there was no significant move on the tax front. Philippe Pascal: So about the WACC, so what is clear for us is the fact that it's not possible to sign an Economic Regulation Agreement if we don't have a fair remuneration. The fair remuneration, we have 2 aspects of the fair remuneration. It's a level of WACC, but it's also the fact that we have to assume a pure convergence between the regulated ROCE and the regulated WACC. So about the regulated WACC, in fact, we can compare the situation of ADP with the situation of a regional airport. It's, as you say, not really the same airport, the same risk. That is a key element. the specificity of ADP, the fact that we propose an Economic Regulation Agreement for 8 years with EUR 8 billion. When you compare with Toulouse, it's not comparable because we have just a CapEx plan for EUR 130 million for 5 years, and we propose in ADP EUR 8 billion for 8 years. So globally, in terms of risk, we have a higher risk in ADP compared to the regional airport. And we are very optimistic for this real environmental economic view and the fact that, in the methodology of the French regulator, we have in line -- the fact that we have to assume a part of risk. We are globally confident at the methodology of the regulator that is -- it seems the level of regulated WACC is higher in case of this multiyear agreement, higher so probably in the high part of the range, perhaps a little bit higher. We have to assume that. So, in terms of CapEx program, for me, the question of the level of CapEx, it's not in line with the level of WACC. We have to -- we need a fair remuneration for a low CapEx program or high CapEx program. It's the same thing. So in fact, if we don't have an Economic Regulation Agreement, mechanically, we -- it's not possible to deliver an industrial project as we plan. But we are globally confident due to the fact that it's vital to launch this plan and to compete with our main competitors like Istanbul, [indiscernible] and so on. Operator: There are no more questions at this time. So I hand the conference back to the speakers for any closing comments. The next question comes from Nicolas Mora from Morgan Stanley. Nicolas Mora: Just wanted to come back on the cost allocation and just the support of airlines. Obviously, they are on board on the industrial plan. I don't think anybody questions that. From the ART documents, they're not really on board on the cost allocation. I mean, they're talking about north of EUR 200 million of cost they would like to be put into the unregulated perimeter. They would like a cut in RAB. So is there for you a point where you just walk away because you just can't -- just basically can't [indiscernible] a 3-digit number of costs being switched into the unregulated perimeter? That's the first question. Then on -- if we can come back on the results and just on the retail, just in '25, can you explain a bit why the operating leverage is so good? I mean, the step-up in EBITDA is quite impressive versus the revenue rise. Just wanted to know if there were any special elements there or what you're doing to actually squeeze a little bit more from the revenue? And thinking about retail in '26, just a confirmation. So we're going to start the year with tough comps, still some FX headwinds, still some construction headwind. So the year is pretty dramatically back-end loaded in terms of improvement in performance and spend per pax. And last one, sorry, on '26 guidance. Can you help us understand what you've put for TAV in your EUR 2.350 billion EBITDA kind of minimum guidance? Are you at the midpoint? Are you at the low point, the high point? Because TAV range is quite wide. Just trying to understand what you've got in there for TAV and imply what you've got for Paris Airport. Philippe Pascal: So thank you, Nicolas. So about your first question and the fact that we have to discuss with the airlines about the cost allocation key, in fact, we have the support of the airlines to execute the industrial project but also to execute this project through an Economic Regulation Agreement. It's support in principle, but we have to discuss about the details. We have to discuss about the global economic balance. So it includes the cost allocation key. It includes also the level of WACC. It includes the level of CapEx, of OpEx and so on. So -- but in principle, it's a result of first discussion that is appreciated from the airlines. In terms of cost allocation key, we discuss a lot with the airlines. We execute all the guidelines of the French regulator. And it's quite a surprise for us to have a negative decision of the French regulator due to the we take account for all the elements that the French regulator wants to study. So, after that, in terms of cost allocation key, as I say, it's a global balance with all the other factors, first. And the second point, specifically for the allocation key, the question is perhaps to discuss about the key in terms of square meter for the regulated scope or not. But it's also the fact that we have some red line, and the red line is to assume the fact that the decision of the French State is the dual-till system of ADP. So, that is the red line, and it's red line for ADP, but it's mainly a red line for the French State. For the other question, Christelle? Christelle Robillard: Yes. So regarding your second question in terms of retail performance, so indeed, Retail and Services outperformed despite the SPP headwinds we just mentioned in our presentation. So this solid growth was attributable to 2 main elements. First, a solid cost discipline. This was the case at all the group level, as you can see, because we outperformed on every segment, but this was particularly the case on the retail segment. We also had a cautious stock management and purchasing policy. So this is the first reason. And the second reason is the Extime model, which clearly continues to drive higher-margin categories such as beauty. Maybe just to mention one figure, interesting figure, on Beauty, we made a plus 6% performance compared to a minus 2.6% on the national market. So it shows the robustness of our strategy and model. So this performance is partly structural, as you can understand. Extime has clearly raised the operational and commercial productivity of our retail ecosystem despite the FX and luxury cycle headwinds that remain in the near term. More generally, once again, when you look at our 2025 financial performance, we were well above our guided at least plus 7% EBITDA, but with strong double-digit increase all across our segments, both in aviation, retail and international. Maybe concerning your third question, the assumption we are taking in our EBITDA guidance for TAV, so the guidance we take at the group level above EUR 2.350 billion is totally in line with the EBITDA guidance disclosed by TAV, which is guiding for EUR 590 million -- for a range between, sorry, EUR 590 million and EUR 650 million EBITDA in 2026. That means EUR 30 million to EUR 90 million EBITDA growth. So this is the underlying assumption for TAV. And bear in mind that the rest of the performance of the group will be impacted by flat regulated tariff in Paris, by the higher-than-usual staff cost increase that I mentioned previously, and this retail revenue dynamics in a still challenging context and the continuing works in Terminal 2E Hall K. Thank you. Operator: There are no more questions at this time. So I hand the conference back to the speakers for any closing comments. Cecile Combeau: Yes. No more questions this time indeed. And so, it's time to close today's call. Thank you, everyone, for having logged into this conference. The next planned quarterly publication will be on April 28 with the 2026 first quarter [ review ]. And in the meantime, of course, feel free to get in touch with Eliott or myself in the Investor Relations team for any follow-up questions. Enjoy the rest of the day. Thank you. Operator: Thank you for your participation. You may now disconnect.
Operator: Greetings. Welcome to the Avis Budget Group Q4 Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to David Calabria, Senior Vice President, Corporate Finance and Treasurer. Thank you, David. You may begin. David Calabria: Good morning, everyone, and thank you for joining us. On the call with me are Brian Choi, our Chief Executive Officer; and Daniel Cunha, our Chief Financial Officer. Before we begin, I would like to remind everyone that we will be discussing forward-looking information, including potential future financial performance which is subject to risks, uncertainties and assumptions that could cause actual results to differ materially from such forward-looking statements and information. Such risks and assumptions, uncertainties and other factors are identified in our earnings release and other periodic filings with the SEC as well as the Investor Relations section of our website. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results and any or all of our forward-looking statements may prove to be inaccurate, and we can make no guarantees about our future performance. We undertake no obligation to update or revise our forward-looking statements. On this call, we will discuss certain non-GAAP financial measures. Please refer to our earnings press release, which is available on our website, for how we define these measures and reconciliations to the closest comparable GAAP measures. With that, I'd like to turn the call over to Brian. Brian Choi: Thanks, David, and thank you to everyone joining us today for our fourth quarter and full year 2025 earnings call. If you reviewed our earnings release and financial supplement, you'll have seen that this was a difficult quarter. I've said before that delivering on quarterly results is foundational. And when operational performance speaks for itself, we earn the right to focus on the bigger picture. This quarter, we didn't earn that right. We fell significantly short of guidance, that's unacceptable and I have no excuses to offer. What I will say is that the decisions we made were grounded in the information we had at the time. The outcomes were not what we expected but the process was disciplined, and I think that distinction matters as we look forward. What I owe you today is a clear fact-based explanation of what happened, how we're now responding and where this means we're headed as a company. I'm going to structure my remarks around 3 horizons. Horizon 1 is a backward-looking view focused on what drove our fourth quarter miss. Horizon 2 is the present, the actions we're taking now to position the business for 2026. Horizon 3 looks briefly at how this all fits into our longer-term strategy. I'll get into a fair bit of detail on Horizon 1 because that's what this quarter demands. Let's start with what we're bridging. On our October earnings call, we guided to full year adjusted EBITDA of $900 million, implying roughly $157 million in the fourth quarter. Yesterday, we reported full year adjusted EBITDA of $748 million. That means we missed our fourth quarter forecast by approximately $150 million inside the span of 3 months. I'll walk you through the specific drivers of how that happened. But first, it's important to note that this miss was entirely in our Americas segment. Our international business executed a meaningful turnaround in 2025 and performed as expected in the fourth quarter. The issues we're discussing today are concentrated in the Americas. In October, we expected Americas rental days to grow about 3% in the fourth quarter. That was consistent with third quarter trends and supported by TSA passenger growth of roughly 3% year-over-year in the month of October. So while government travel immediately declined sharply following the shutdown, overall commercial demand initially held up. That changed abruptly in November. FAA flight reductions, air traffic control disruptions and extended TSA wait times materially reduced discretionary travel as it increased both uncertainty and inconvenience. Commercial rental days went from mildly down in October to down 11% in November. December stabilized but by then, the damage to the quarter was done. As a result, instead of growing rental days by 3%, we delivered flat volume for the quarter. That whipsaw demand created our second challenge, fleet size. When demand weakens, the right response is to reduce fleet. The problem was timing. The fourth quarter is the most difficult period to sell used vehicles as dealers focus on clearing new model year inventory. Aggressive new car incentives, pressure used car pricing, which is why under normal circumstances, we defer meaningful defleeting until the first quarter of the following year. This year, we couldn't wait. Given the speed and magnitude of the demand decline, we chose to defleet in November despite unfavorable market conditions. Used vehicle prices reflected that reality. The Manheim rental index price per vehicle declined nearly $1,000 or 4.3% from October to November. That impacts us in 2 ways: lower gains on vehicles sold and a lower valuation mark on the fleet we retained. As a result, monthly net depreciation per unit in the Americas came in at $338 in the fourth quarter. Our initial estimate in October was slightly lower than $300. The silver lining is that used vehicle prices stabilized in December, recovering most of the November decline. We believe selling fleet aggressively was still the correct decision from an asset management standpoint, even though it came at a cost, not acting and carrying excess fleet into a soft demand environment would have created greater operational and financial issues. This was the right call, even though the timing made it painful. But despite us taking decisive action, industry capacity remained elevated relative to demand in the fourth quarter, which leads us to our third unforeseen factor, pricing. Through the first 3 quarters of 2025, RPD on a 2-year stack had been sequentially improving. Based on early fourth quarter trends, we expected that improvement to continue. Instead, November reversed that progress. Weakened demand and excess industry supply pressured pricing across the market. Length of rent restrictions were largely absent industry-wide and RPD deteriorated more than expected. In the Americas, RPD finished the quarter down 3.7%. When we guided in October, we thought this would be closer to 2%. I don't believe this was an Avis-specific dynamic. Industry capacity remained elevated and pricing pressure was evident across competitors as well throughout November and early December. For how this all impacted our results, let me pass it over to Daniel. Daniel Cunha: Thank you, Brian. Financial results of our business are really driven by just a few key variables. As this quarter demonstrated, these variables are often interconnected and can be difficult to predict. When rental days depreciation in RPD all move off plan at the same time, the financial impact compounds quickly. Here's the bridge. Lower rental days and weaker RPD drove approximately $40 million of the adjusted EBITDA miss on the revenue side. Higher gross depreciation and lower gains on sale accounted for an additional $60 million. The remaining approximately $50 million relates to our insurance reserves for personal liability and property damage or PLPD. As part of our actual review for year-end, we increased our PLPD reserve in December, while new incident trends are improving, we chose to reset our reserve base line conservatively as we enter 2026. This was a deliberate decision as we do not want to carry additional risk. Taking this action now puts us in a stronger position, more stable for 2026. When you step back and consider all these factors together, I find it useful to evaluate the puts and takes across 2 dimensions: macro versus micro and temporary versus structural. In my view, the majority of our underperformance this quarter falls into the macro and short-term category. Demand softness and pricing pressure were industry-wide and appear transitory based on recent trends and forward bookings. Depreciation is clearly macro driven, but the health of the used car market won't be fully known until the tax refund season later this spring. December and January trends suggest the market has stabilized, and we'll keep you updated as the months progress. As far as the operations go, my key point is this. Recall challenges aside, we do not believe the specific conditions that cause rental days, depreciation and RPD to move against us simultaneously are present today, and we're operating the business to reduce the likelihood of that alignment recurring. Demand has stabilized, fleet is better aligned with volume and pricing is slowly improving. Let's close out Horizon 1 by addressing the approximately $500 million write-down we took on our EV fleets at year-end. Our write-down is never something we welcome. We view this action as a deliberate reset that strengthened our balance sheet and reduced future risk. Following the passage of the Big Beautiful Bill in July, which made 100% bonus depreciation permanent. The outlook for tax position became much clearer that prompted us to reassess how to best monetize the Federal EV tax credits that we had limited ability to utilize internally. As a result, we completed the transaction allowed us to monetize the majority of our EV tax credits and generate $180 million of cash to date. Importantly, this also give us the opportunity to reassess the economic life of our EV vehicles. Based on market conditions and our operating experience, we concluded it was prudent to shorten the remaining useful life from 36 months to approximately 18 months. We've been depreciating these vehicles at roughly $600 per month. So exiting them earlier meaningfully reduces our exposure to residual value risk and technology obsolescence, while accelerating capital recycling. More broadly, the automotive industry is recalibrating how it thinks about EV economics, and we're doing the same. The decisive action strengthens our balance sheet, pulls cash forward and reduces future volatility and depreciation. I want to thank our tax and treasury teams for all the work they put in to allow us to take advantage of this opportunity. With that, let me turn it back to Brian for Horizon 2 to discuss what actions we're taking from the learnings of the fourth quarter and how we're planning for 2026. Brian Choi: Thanks, Daniel. 2026 will be the first year in which this management team has had the opportunity to build an annual plan from the ground up. As a result, you will see some clear philosophical differences in how we operate the business. The most important shift I want to highlight is how we define operational success when it comes to fleet availability. Coming out of the COVID recovery, the operational ambition in the Americas was to be the last provider with an available car on the lot. In a supply-constrained, high-demand environment, that strategy worked. Having the last car available meant you had pricing leverage on late rentals and that was largely the reality in 2021 and 2022. That approach does not work in a normalized environment. Carrying excess fleet requires holding more vehicles during shoulder periods, which pressures RPD. It also requires larger fleet purchases, often at less favorable economics. We've seen firsthand that prioritizing absolute availability over discipline introduces volatility into pricing, depreciation and ultimately, into earnings and balance sheet health as well. In 2026, we are prioritizing utilization over fleet growth in search of rental days. That shift is already underway. As I mentioned earlier, we sold a substantial number of vehicles in the fourth quarter into a thin buying market. Since then, buyers have returned and in the first quarter of 2026, we are actively utilizing every disposition channel available to rightsize our fleet. In January, we sold a record number of vehicles. That momentum continued into February, and we expect elevated disposition activity through the peak tax refund season in March and April. The lesson from the fourth quarter is straightforward. While we don't control macro events like government shutdowns, we can control how nimble we choose to be as a company. Running a tighter fleet reduces the risk of being caught off-footed when demand unexpectedly softens. And in scenarios where demand is stronger than expected, we will deploy fleet to the most profitable segments of the business and rely on operational execution to capture those opportunities. We are asset managers and our focus is on sweating our assets. You should see this discipline reflected in lower fleet size and higher utilization as the year progresses. Our fleet rightsizing strategy also prompted us to take a hard look at how we structure our OEM partnerships. Avis Budget Group is one of the largest vehicle purchasers in the world and replace a high value on the long-standing productive relationships we've built with our OEM partners. These relationships matter, especially in periods of stress. When our partners face challenges, we've worked through them constructively and in most cases, that approach has served both sides well. In 2025, however, recalls became a more meaningful operational and financial headwind than we anticipated. We exited Q4 with approximately 14,000 vehicles still grounded as parts availability remains constrained. The impact of recalls in the fourth quarter alone including only depreciation, interest parking and parking expenses even before factoring in lost profits and gains on sale was nearly $40 million. We operate in an asset-intensive business and returns depend on our ability to actively deploy and monetize those assets. When vehicles are sidelined for extended periods with no clear path to resolution, that directly undermines the economics of our business model. This experience has clarified something important for us going forward. Reliability and execution matter just as much as price and volume when we determine fleet purchasing decisions. As part of our 2026 planning process, we are rebalancing our OEM exposure to reflect that principle. OEMs that demonstrate consistent execution, transparency and responsiveness will continue to be core partners for us. Where those standards are not met, we will reduce exposure over time and reallocate volume accordingly. This is not about short-term pressure or one-off issues. It is about aligning our fleet strategy with dependable partners who enable us to run a more predictable, capital-efficient business. Given the scale of our fleet purchases, even modest reallocations can have meaningful economic impact. As we look ahead, our OEM strategy will be guided by a simple objective, deploy capital with partners that allow us to reliably earn attractive returns across cycles. The final strategic change I want to address for 2026 is how we think about costs. At this new Avis Budget Group, cost is not something to be cut for its own sake or simply managed quarter-to-quarter. Cost is capital. And like any capital allocator, our responsibility is to deploy that capital where it earns the highest possible return for our customers, our employees and our shareholders. Our job isn't to spend less. It's to be deliberate. When we treat costs as scarce capital, we rationalize in areas where returns are low so that we can invest with conviction in the areas that matter most. One action funds the other. We put this philosophy into practice at the start of the year. In January, we implemented a global reduction in force to reset our organizational structure to what we believe is appropriate for the business we plan to run in 2026 and beyond. This was a deliberate onetime action. Separately, we have strengthened our performance management processes, which led to exits this January. This will be an ongoing discipline going forward. The fourth quarter reinforced an important reality. This is a business with inherent volatility. Rental demand, used vehicle pricing and RPD are variables we don't fully control that makes it even more critical that we rigorously control what we can control. A lean, flexible cost base is essential to manage through uncertainty and improve earnings stability. This approach extends well beyond headcount. We are conducting a thorough review of our business portfolio to ensure each segment meets our capital return thresholds and strategic objectives. In December, we made the difficult decision to exit Zipcar U.K. In January, we restructured Zipcar's U.S. operations to put that business on a more sustainable footing. Throughout 2026, we will continue to evaluate noncore and adjacent businesses, including package delivery, ride hail and certain franchise activities to ensure capital and management attention are allocated where they create the most value. Let me be clear. This discipline does not mean we are pulling back from investment. It's not an either/or proposition. Cost rationalization is what enables investment. That capital comes from making tough intentional choices elsewhere. That's exactly how we started 2026 and how we expect to manage the years going forward. Taken together, these actions are designed to lower earnings volatility, improve margin durability and sustainably increase free cash flow generation, which brings me to Horizon 3. I'll keep this brief because our long-term strategic direction remains consistent with what we've previously communicated. We remain intensely focused on the execution of several key initiatives. Our top priority is customer experience. Over the past several years, the rental car industry has seen quality standards drift. It is not acceptable to Avis and it's something we are addressing head on. We are rearchitecting our customer experience organization from the ground up with clear ownership, defined metrics and tight accountability. Our objective is straightforward, consistently deliver the best product in the industry. It begins with our fleet. The average age of our U.S. rental car fleet will be less than a year old by the end of the first quarter. We haven't been able to say that since before the pandemic. We are also continuing to build out Avis First. What began as a leisure-focused offering will expand meaningfully into commercial accounts in 2026. Feedback from our early strategic accounts has been strong, and we see significant opportunity to deepen relationships by delivering a more differentiated premium experience. Finally, our partnership with Waymo continues to progress as planned. Our Dallas launch remains on schedule with real estate development, hiring and training and compliance certification all tracking to plan. Waymo is currently offering employees fully autonomous rides in Dallas, which is a final step ahead of welcoming public riders soon. As we announced last year, we do intend to explore additional cities with Waymo in the future and are in active conversations with them. We believe our core competencies are mission-critical to operating autonomous mobility at scale. We're working alongside Waymo to prove that in practice as additional markets come online. To close, the fourth quarter was a setback, and we treated it as a catalyst for change. We've clearly diagnosed our challenges. We've been decisive about the actions we've taken and disciplined in how we're repositioning the business. The focus now is execution, running a tighter fleet, allocating capital deliberately and raising the bar on customer experience. These actions better align the company with the operating environment and strengthen our ability to generate durable returns. With that, Daniel, David and I are happy to take your questions. Operator: [Operator Instructions] Our first question has come from the line of Andrew Percoco with Morgan Stanley. Andrew Percoco: I want to start with your 2026 guidance. Obviously, a fairly wide range for adjusted EBITDA. And I'm just hoping that you can kind of walk us through what some of your working assumptions are on some of the key inputs like RPD and DPU. I see that you guys are guiding for DPU to be up in the first quarter and then a moderation thereafter. So just hoping to get a better explanation for what's embedded in the guidance relative to kind of where you exited 2025. Thank you. Brian Choi: It's pretty important saying that we're assuming that fleet size is going to decrease into 2026, something that hasn't been the case for the past few years. We're going to focus instead on utilization and making sure that we get the right business in terms of a contribution margin perspective. Daniel, anything you want to add? Daniel Cunha: I'll just highlight that if you look at the 2025 results where we landed and you make 2 adjustments only, right, and you ignore $100 million of recall impact and the one-off impact of PLPD, you're in the middle of the range, right, and how we perform better than the range or slightly below is going to be a function of how the marketing channel on the RPD and on the fleet size perform, believe we have a path for the top of the range, but coming out of Q4, we have some significant headwinds, we're being conservative. Brian Choi: Andrew, maybe just to add over there. I realize it's a wide range. We expect to narrow that range as the year progresses. But just given what we saw in the fourth quarter, which was a large miss in itself, we want to make sure that we retain flexibility. So listen, the fourth quarter, it wasn't driven by a gradual deterioration in trends. Things happened very quickly, short term. It was a shock and we can't eliminate volatility in the industry, but by materially tightening the fleet levels and adjusting our operating posture, I think we've reduced the probability of another compounding effect like that. Andrew Percoco: Got it. Okay. That's super helpful. And maybe just to follow up on, I mean, there's continuing to be a pretty big dispersion in some of the metrics between the Americas and your international segment. So just curious, as you talk about fleet resizing and some of the actions you're taking, is that more of an Americas comment or is that global? Just trying to get a better understanding of what the differences you're seeing across geographies and maybe how you're tackling those challenges. Brian Choi: Sure, I'll start. Andy, the comments that we made around OEM repositioning and the actions we're taking around depreciation, that's entirely in the Americas segment. So the used car market in 2025 in the U.S., it was unusually volatile. So Manheim values, if you recall, they were roughly flat year-over-year in the first quarter. And then amid tariff uncertainty really spiked into the second and third quarter. And then it exited the year essentially flat again. So by year-end, pricing normalized completely relative to where it began. Given that environment, we're proactively adjusting depreciation in the fourth quarter to reflect current residual expectations rather than carrying forward prior assumptions. That's why you see that $400 number in the fourth quarter -- in the first quarter of this year. So we expect depreciation to be elevated in the near term as we normalize fleet economics, but we do see a path towards a low 300s monthly run rate as we move throughout the year. So the market today appears orderly in the U.S., seasonal strength is building into tax refund season. And we're -- our planning assumptions are not dependent on some sharp rebound in used car prices. So we're underwriting returns at levels that allow us to perform across a range of scenarios. Daniel Cunha: I'll add, Brian, a couple of things. In the Americas, we have made bigger strides in improving utilization, right? In spite of the 3-point impact of the recall in the quarter, we managed to grow utilization by about half a point which is meaningful improvement. And that's why we also have the more flexibility in reducing the fleet and still serving customers in rental days, right? On the international, if you think about the per unit cost, there is less volatility, as Brian described, the Manheim situation is American situation, but we also have a much higher share of program cars in international, which insulates them a little bit from this impact in the short term. Operator: Our next questions come from the line of John Healy with Northcoast Research. John Healy: I wanted to spend a couple of minutes on fleet cost. I think in the slides, you guys talked about $400 million in Q1 and a full year, let's call it, $325 million or so at the midpoint. I'm just trying to understand the confidence in the full year because that to me that first quarter number is awfully high, which would imply that the rest of the year is probably sub $300 million. I don't know if I'm looking at that in an incorrect way, but just trying to understand the confidence of why it steps down just so much when we've been in a period over the last 2 years where we've probably maybe underappreciated more relative to the -- underappreciated relative to the market rather than more. So just trying to understand that $325 million number for the year. Brian Choi: John, so like I said earlier, in terms of the volatility that we saw in the 2025 you'll see that our models, which we're forecasting when we sell these cars into the future. They're built off of future forecasts primarily in Black Book and Moody's. Those forward-looking economic models assume the impact of tariffs to continue throughout the life of these vehicles. As we've seen in the fourth quarter, that isn't the case anymore. So we've adjusted our internal models accordingly as well. So what you're seeing in the fourth quarter is kind of a catch-up to show up -- to show that reality and then normalizes over time. What we're seeing is for 6 months of that elevated period where we saw tariff impacts. Had we known it would evaporate, we probably wouldn't have been -- we probably would have been a little more conservative in our depreciation assumptions. What we're doing right now is we're just rectifying that in the first quarter to make sure that we reset to where we need to be. John Healy: Understood. And then just any commentary on just the pricing environment that you've seen kind of year-to-date and how you're seeing competitive pricing trends or your pricing trends into the spring season? Brian Choi: Sure. So January reflected many of the same pressures we saw exiting the fourth quarter. So industry pricing remained competitive. Commercial demand was slower to ramp given the calendar. But that said, the actions we've taken to reduce fleet are beginning to align supply more closely with demand, particularly as we move into February and March. So we're not providing month-to-month guidance, John. But pricing has stabilized relative to where we exited in January and the rate of erosion that we saw post COVID has clearly moderated. So importantly, our 2026 plan, it doesn't assume aggressive pricing recovery. It's built around disciplined fleet sizing, utilization improvement and cost control. So we're working towards achieving better RPD, but we're not dependent on it to hit our 2026 guidance. Operator: Our next questions come from the line of Chris Stathoulopoulos with SIG. Christopher Stathoulopoulos: So David, Avis has effectively missed the full year guide for 3 years now. Now I under -- this is under a different leadership here you've only recently gotten into the practice of giving explicit guide. So some of these to be fair, more on the soft guide side. But I guess how do we get comfortable with the full year guide here? And maybe if you could and I think this was the lead-off question, but the line dropped or something. If there's an EBITDA bridge you could walk us through anything on the KPIs and then perhaps if you could quantify what could be described as lost revenue or embedded demand for last year. So the impact of tariff shutdowns, FAA cancellations, weather, Zipcar, I don't think you gave any impact on what that looks like from a noncash or comparable issue. But I just want to understand here your base case assumptions for the EBITDA bridge for this year and how we should think about what, I guess, was out of your control for last year. There are a lot of items there. And maybe if you could put some numbers around that, that would help us with the modeling. Brian Choi: Let me start and I'll pass it over to David and Daniel. But in our prepared remarks, we gave a bit of guidance in terms of what happened at least in the fourth quarter relative to what we were expecting. So on the revenue side of things, roughly $100 million of impact. And from a balance sheet perspective, we took another $50 million increase to our PLPD reserves. Chris, let's be honest, like the market moves quickly over here. So anchoring on specific metrics to say this is how we're going to plan for the entire year, just really isn't feasible for us. So the metrics we gave you are the metrics we feel comfortable guiding to right now which is that depreciation will be in the range that we described. It's going to be elevated in the first quarter. It's going to come down after we have that catch-up in the low 300 level. Utilization is going to be higher and fleet is going to be lower. I understand that the past 2 years, they've been pretty volatile and consistency in delivering on guidance matters. This is the first outlook like built entirely under the current leadership framework. It reflects more conservative assumptions and a structurally tighter operating model. So our objective this year is to earn back confidence through consistent execution. Daniel. Christopher Stathoulopoulos: Okay. On Zipcar, if there are any numbers you can give us for the U.K. segment? Daniel Cunha: That has not impacted the results. Those actions were taken at the very end of the year, beginning of this year. Chris, so that has -- had no material impact. Christopher Stathoulopoulos: Okay. And then as a follow-up, Brian, I didn't hear any comments on your prepared on the -- your premium efforts. All the tech efforts. Is this on pause until you get the tactics around the fleet right? Or are you continuing to move forward with that initiative? Brian Choi: No, it's not taken on pause. And in fact, like a lot of the cost rationalization that's happening in the business is being used to fund those initiatives. So I think we said in our prepared remarks, Avis First is still a go. We're concentrated on making sure that the product is right and getting a lot more adoption in the airports it's in before we expand meaningfully, but it is going live now in Europe. I think Munich just came online. And we are going to start offering the product to our commercial customers. So we think that the Avis First aligns tightly with our core philosophical tenet, which is tying Avis to a premium customer experience. Christopher Stathoulopoulos: Okay. If I could squeeze in 1 more. Does the base case EBITDA guide here for the full year assume Americas revenue up. Daniel Cunha: It does. Christopher Stathoulopoulos: Because it's been down -- so I'm guessing if the base case -- your EBITDA guide at the enterprise level, does that assume you're growing Americas revenue for the full year? Brian Choi: Let's assume that we're modestly growing revenue, Chris. You're right. We have been declining for the past few years, given the COVID boom. The question that's been on everyone's mind is what is normalized what does a normalized environment look like? I do think that we're entering into a normalized environment here. Operator: Our next questions come from the line of Dan Levy with Barclays. Joshua Young: Josh Young on for Dan Levy. So I have 1 question and then a follow-up. Could you walk us through the puts and takes on the EV impairment and then just in terms of how we should think about sizing the potential benefit to DPU. I know you mentioned that it was previously around $600. So how should we think about that into '26. Daniel Cunha: Yes. I'll maybe start from first principles and our strategic priorities. Then we've shared in the past how we feel about the capital structure and how deleveraging has been a key priority for us, right? And when the Big Beautiful Bill came along and made the 100% bonds depreciation permanent, it really reduced our expected tax liabilities going forward, right? And as a result of that, we had no clear path to using those tax credits, and we immediately started looking for ways of monetizing on those we had a substantial amounts on our balance sheet. So when we found a path here that allowed us to monetize on $880 million of debt, we jumped on it, right? So with that decision to execute the deal and I'll ask David here to share a little bit on the structure which was a complex deal. We essentially committed to that path. And along the way, we evaluated EV strategy. I know there's a lot going on in this market, lots of OEMs rethinking how their own capital allocation, their own strategies are evolving in that space. And we thought it would be prudent, right, and reduce risk overall to shorten the economic life of those vehicles, right? So operating them for a period of time, I think will reduce the overall risk. On the DPU front, it's essentially allowing us to also cut the depreciation in half, right? So you go from about $600 with slightly north of $300 a month. That should help improve depreciation as the year develops. But David, do you want to share a bit on the structure, this was a somewhat complex in the... David Calabria: Sure, Daniel. I just want to stress this we really view this. This was not an issue. This was an opportunity and we took it. And so what we were able to do was take tax credits that had little to no value, as Daniel said, monetize that, use that against the cap cost of our vehicles to reduce the depreciation funded by a new securitization that we created, is an incredibly complex transaction that I have to give my treasury team and the tax team a lot of credit for figuring that out and getting it done in such a short time. Joshua Young: And then as a follow-up, just to circle back to the collaboration with Waymo. What are the key financial considerations there? And how soon might you see a material benefit from the partnership? Brian Choi: Yes. Josh, we're not getting into the specifics of the economics here. Like I said, Dallas is gearing up to come online, and we think that we'll be taking riders from the public pretty soon. But other than that, we're not really getting into too much of the financial details. I think from our perspective, right now, near term, Waymo is about building operational capability and not deploying outsized capital. So I do want to mention that the vehicles in Dallas are on Waymo's balance sheet today and that structure reflects the current phase of the partnership. So over time, if the economics justify it, we would consider owning vehicles ourselves, but only under the same return thresholds and balance sheet discipline that govern the rest of our fleet. And we're focused on scaling this thoughtfully. We are looking at other cities. We're going to expand our capital involvement only where returns are clearly aligned. Operator: Our next questions come from the line of Stephanie Moore with Jefferies. Stephanie Benjamin Moore: I was hoping you could talk a bit about your expectations for the first quarter. Admittedly, there's a lot of moving pieces as it relates to the impairment charge, higher fleet costs, I'm assuming probably weather is still -- weather will be an impact as well. So maybe if you could talk about the first quarter as well as some of the underlying trends you're seeing. I think you noted that underlying trends from a volume and pricing standpoint did improve as 4Q progressed. So curious, obviously, taking into account seasonality, how underlying trends have been January through February. David Calabria: So what I would just say is from our standpoint, when you think about where we were last year from a Q1 standpoint, we're sitting here talking about having a higher depreciation. Brian talked about how things are looking a little more stable from a revenue standpoint in February and March, but January did have some weather-related incidents there, too, a lot of flight cancellations. So we are looking at a lower number, lower EBITDA in the first quarter, but then easing back towards something that's more normalized in the second, third and then fourth quarter. So I would expect us to be lower in Q1. Brian Choi: Yes. Stephanie, that being lower is on an EBITDA basis. And the way that I would describe it is it's going to be kind of a tale of 2 cities situation. The actions that we're taking around the fleet rationalization, that is helping the revenue side of things. So I do think that you'll see in the first quarter that revenue is stabilizing. It's becoming much more healthy. And yes, the January storms, that was a setback. But even though we couldn't predict it because the fleet was already being reduced, we were able to absorb that demand disruption without creating the same economic imbalance we saw in November. So from our perspective, the work that we're doing around the revenue side of things, I think you're going to see that materialize in the first quarter. But like we said earlier, there is a bit of a reset that we're trying to do on the fleet side of things. We're going to absorb it all in the first quarter with that $400 DPU. So what you'll see is a healthier on the revenue side, a reset in the first quarter on the depreciation side, which will result into lower year-over-year EBITDA in the first quarter. But we think that puts things where it should be, and you'll see things improve materially going forward. Stephanie Benjamin Moore: Understood, very clear. So maybe once we get past the first quarter, maybe talk a little bit about your level of confidence in achieving the guide for the full year, specifically as it relates to actions that are within your control. And I think we all understand that this can be a very complex and dynamic industry. So maybe just speak to the actions specifically related to Avis and some of your operational improvements, productivity initiatives and the like that you think can help potentially provide an offset if what we keep seeing is general volatility in the overall industry? Daniel Cunha: Stephanie, I'll keep the bridge relatively simple, but I think if we anchor ourselves on the 2025 results, right, if you add back the impact of the recall of $100 million conservatively. And the one-off nature of the PLPD, the insurance reserve adjustment we had in Q4, you're already at the middle of the range, right? One item that we offer for 2026. One of the pillars of our plan is a continued improvement in utilizations in the Americas, right? An improvement that the team has already been delivering on during 2025. And that's worth about $100 million for us next year. So that -- with those 2 one-off unusual, you're in the middle of the range. And just with one of the initiatives, we could potentially make it all the way to the top of the range. And that's already assuming like Brian mentioned some conservatism on the rate side of the house in the Americas. So that's how we feel about it. We feel it's achievable. It's obviously a new high for the company on a non-COVID period. Brian Choi: Stephanie, I think we operate in a business with inherent volatility. So that's why it's very important to control those things that we can control, and that's reflected in how we're planning for this year. So the structural actions that we're implementing, which is tighter fleet discipline, cost rigor, capital allocation focus, that's all designed to reduce volatility and strengthen the earnings base over time. So as we move through the year, our objective is to demonstrate that the business can sustainably generate EBITDA north of $1 billion annually and then grow from that base through disciplined execution. As I said earlier, this is the first time that we're coming up with the plan that this leadership team is under this new operating philosophy. We have every intention of getting it. Operator: Thank you so much. Ladies and gentlemen, this does conclude today's question-and-answer session. And with that, the call will come to a close. We appreciate your participation. You may disconnect your lines at this time, and enjoy the rest of your day.
Operator: Welcome to Group ADP 2025 Full Year Results Presentation. [Operator Instructions] Now, I will hand the conference over to Cecile Combeau, Head of Investor Relations, to begin today's conference. Please go ahead. Cecile Combeau: Thank you, and good morning, everyone. Thank you for joining us for our 2025 full year results presentation. I am here with Philippe Pascal, our Chairman and CEO; and Christelle de Robillard, Executive VP for Finance, Strategy and Development, who will first go through prepared remarks for about 20 minutes before the Q&A session, for which we will aim for 40-minute duration. Before we start, and as usual, I remind you that certain information to be discussed today during this call is forward-looking and is subject to risks and uncertainties that could cause actual revenue and results to differ materially. For these, I refer you to the disclaimer statement included in our press release and on Slide 46 of our presentation. I will now leave the floor to our Chairman and CEO, Philippe Pascal. Philippe Pascal: Thank you, Cecile, and good morning, ladies and gentlemen. Thank you for joining us to discuss our 2025 full year results. Let me first turn to Slide 3 for our key highlights. 2025 has been a strong year for the group and a key step in preparing our next strategic cycle. When I took office as Chairman and CEO a year ago, I set clear priorities: reinforcing our economic model in Paris through an economic regulation contract; deliver the best possible quality of service and accelerate the rollout of the Extime model; secure the contribution of our international activities; and support all this with more agile and engaged corporate culture. With the new management team, we made solid progress on each of these priorities. We launched a very successful employee shareholder plan and modernized our compensation structure at ADP SA level. We improved quality of service day after day, started the Connect France partnership with Air France in June, and announced the renaming of Paris-Charles de Gaulle's infrastructure by 2027. We delivered key projects, our international assets and resumed dividend payment from TAV. And of course, we submitted our proposal for 8 years' Economic Regulation Agreement, now awaiting the regulator's first opinion. These achievements are combined with a strong operating performance in 2025 with all of our financial targets met, allowing the Board to propose a dividend of EUR 3 per share to the next general meeting after our dividend policy. About our financial performance on Slide 4. Revenue reached EUR 6.7 billion, up nearly 9%. This reflects strong [ project ] traffic during the year and the continued development of our service businesses, included the scope effect from the acquisition of P/S and Paris Experience Group at the end of 2024. EBITDA also showed solid growth, up 12%. This performance comes from higher revenue and from disciplined cost execution, leading to further margin expansion. Finally, net result came at EUR 382 million. It was affected by FX noncash item and tax impact in 2025, but remains 12% compared with 2024. Let me now move to Slide 5 about our employee-related achievements, which are a key driver of long-term value creation. Our employee shareholding operation was a clear success with 3 out of 4 employees subscribing. Employee ownership now represents almost 2% of the company's capital, showing strong internal alignment and confidence in the group's trajectory. It also creates collective incentive by sharing future value creation. Just a few weeks ago, we also reached an agreement with trade unions to modernize our compensation framework and employee status. The goal is to build a more consistent, financially sustainable and performance-driven model. The impact of this reform is already reflected in our 2026 outlook. This measure will support our long-term cost trajectory, the same that was underlying our cost discipline, Economic Regulation Agreement proposal. A quick word now on Slide 6 about the simplification and renaming plan for Paris-Charles de Gaulle Airport announced at the end of 2025. Our objective is simple: make the passenger journey clearer and smoother, especially for connecting travelers. In March 2027, when the CDG Express high-speed link opens, all terminals will adapt a single numbering system, and boarding area will be renamed using specific letters. This will bring Paris back in line with the best standards of major international hubs. This renaming is a visible step, but it is only one of the main projects we will continue to roll out to reinforce the attractiveness of Paris hub and other initiatives such as the ones included in our Connect France partnership with Air France. On Slide 7 now, still on the performance of our Paris assets, we continue to support it with several infrastructure projects delivered in 2025. First, the refurbishment of Runway 1 at Paris-Charles de Gaulle, which now meets best-in-class industry standards. Second, the commissioning of our geothermal plant for Paris-Charles de Gaulle Airport, a key milestone in our decarbonization road map. Third, the restructuring and extension of airside area at Paris-Orly, unlocking additional aircraft capacity and improving operational fluidity. And finally, the upgrade of baggage handling system in [ Terminal 2E ] and 2C at Charles de Gaulle, enhancing reliability. This project illustrates our ongoing efforts to maintain the high-performing and reliant Paris hub. Finally, let me turn to Slide 8 and highlight the key achievements in our international assets. We delivered several major infrastructure projects in 2025, including the expansion of Antalya Airport in Turkey and the expansion of Delhi Airport in India. Both platforms are now ready to support further traffic growth and to capture more retail potential, thanks to new commercial areas. Both Antalya and GMR Airport secured refinancing operation. At the same time, TAV Airports successfully negotiated a 5-year concession extension for Tbilisi airport, which is a highly contributive asset. And on the back of solid performance and deleveraging, TAV announced it will resume dividend payments this year, TRY 3.61 per share, or roughly EUR 10 million for ADP SA, to be paid in 2026. Overall, 2025 has been a year of strong execution and reinforced our foundation for the next strategic cycle. I will now hand over to Christelle, who will take you through the 2025 financial performance in detail. Christelle Robillard: Thank you, Philippe, and good morning, everyone. Let's jump to Slide 10 and dive into our 2025 results. In 2025, we delivered continued solid traffic growth overall with different trends across our platforms. In Paris, traffic grew by 3.4%, fully in line with our annual assumption. Growth was driven by international passengers, while domestic traffic continued to decline. Looking at the group, TAV Airports delivered a solid 6% traffic increase, supported by its international assets. GMR Airports showed 3% growth, reflecting a resilient underlying profile despite some challenges during the year. AIG, specifically Amman Airport, recorded 11% growth even in a tense geographical context. Overall, these trends confirm the strength of our portfolio and the resilience of our geographically diversified model. Now, turning to retail trends on Slide 11. Extime standard packs stand at EUR 31.7 in 2025, up 3.6% compared to 2023, but down 1.2% compared to 2024. After an outstanding first quarter, we saw a downturn in Q2, driven by several factors. First, a number of ADP-specific elements, which were largely anticipated: works in Terminal 2EK, the full year impact of the reopening of Terminal 2AC and the reallocation of some airlines there, but also a negative comparison base compared to 2024 due to lower advertising and the end of Olympic merchandise sales. In addition to these internal factors, broader external trends also weighed on performance. First, the slowdown in the luxury sector, but also significantly less attractive FX conditions since Q2 with stronger euro, while pricing strategy from luxury brands do not compensate for this effect. Despite these headwinds, we remain confident in the strength of Extime model. Underlying trends in most activities continue to support our long-term strategy. Moving to Slide 12 about consolidated revenues. As said earlier, it reached EUR 6.7 billion, up 9% this year, reflecting a solid momentum across all our main segments. In Aviation, the revenue increase was primarily driven by the continued growth in international flows, as well as the 4.5% airport fees increase implemented in 2025. In Retail and Services, despite the headwinds I just explained, contribution to revenue growth was strong, benefiting from the international traffic growth and positive scope effect from recent acquisitions, which serve the development of our model. Abroad, TAV Airports' international assets and services companies were the biggest driver, while growth in Turkey was more moderate due to macroeconomics. AIG showed a remarkable rebound, showing resilience despite the geopolitical context. Moving to Slide 13 to focus on our EBITDA. For 2025, EBITDA is up more than 12%, driven by revenue growth and good cost control. Excluding the integration of P/S and PEG, EBITDA is up 11.3%, above our EBITDA guidance of at least 7%. This strong performance reflects several factors: tight cost discipline in itself at ADP SA and retail subsidiaries, as well as at TAV. Parisian infrastructure is now fully open, which provides some operational leverage. We also benefited from positive base effects linked to Olympics-related expenses, which disappeared in 2025, and also the postponement of Exit/Entry System deployment to late 2025 and with a progressive rollout. 2026 OpEx are expected to increase due to this EES deployment. Slide 14 now to look at our net income standing at EUR 382 million, up EUR 40 million. This figure reflects strong EBITDA growth, as well as the base effect from the 2024 accounting impact linked to the GIL and GAL merger. However, they are largely offset by other effects worth reminding: in D&A, the negative base effect from last year impairment reversal at AIG; in taxes, the exceptional tax surplus on large corporations in France for EUR 92 million; and as was the case in H1, all through the P&L, we recorded impact from the abnormal variations in FX rates in 2025, affecting notably the contribution of TAV and GMR Airports for a total net loss of EUR 130 million at the net income level. Overall, this all resulted in a net income attributable to the group of EUR 382 million. The cash position of the group is nevertheless solid, as apart from the tax impact, these negative impacts are mainly noncash ones. So turning to the group debt on Slide 15. You can see net debt stood at EUR 8.6 billion at the end of 2025. Net debt-to-EBITDA ratio is improving to 3.7x EBITDA, in line with our 2025 target of 3.5x to 4x EBITDA. This deleveraging has been driven by the strong EBITDA growth, as well as the disciplined CapEx execution, both in Paris and at group level. Moving to Slide 16 to conclude this financial part, I will focus on the regulated activities. As you can see on the left part, regulated ROCE for 2025 stands at 4.3%, up 0.3 points compared to 2024. The strong growth from traffic and increase in airport charges was notably offset by the higher tax rate applicable in France for 2025. Let's look now at the right side of the slide, which summarizes the situation regarding 2026 tariffs. Our initial proposal, which included a 1.5% increase, was rejected in December, mainly due to divergencies on analytical accounting rules used to allocate costs and assets to the regulated perimeter. We then submitted a second proposal with flat tariffs on average. This proposal was also rejected on February 10, which means that airport charges will remain at 2025 levels from April 1, 2026. This is already reflected in our 2026 financial guidance, which Philippe will comment in just a moment. Now, importantly, the regulator explicitly stated in their decision that the ERA is the right framework to address structural topics such as allocation keys and that our envisaged timing remains valid. Our priority is to work through the regulatory process constructively, while protecting the interest of the company and its shareholders. With that, I will now hand it back to Philippe, who will now comment on our outlook and our strategic priorities. Philippe Pascal: Thank you, Christelle. Let's now turn to the financial outlook for 2026. Our 2026 guidance is built with discipline with 3 factors explaining the calibrated EBITDA outlook: flat regulated tariff in Paris; higher-than-usual staff cost increase linked to the reform in wage structure at ADP SA level; retail revenue dynamic in a still challenging context and continuing works in Terminal 2E Hall K. All in all, we expect EBITDA growth to be driven by international assets, TAV in particular, to reach above EUR 2.35 billion EBITDA at group level. We will continue to invest to prepare the future around EUR 1.45 billion at group level, on which, around EUR 1 billion at ADP SA with a gradual increase compared to actual 2025 CapEx, in line with the program set out in our proposed Economic Regulation Agreement. Our dividend policy remains unchanged, 60% payout with a floor of EUR 3 per share. Our proposal for Economic Regulation Agreement for '27-'34 will be negotiated over the course of 2026. Slide 20 shows the key parameters of our proposal, which are designed to secure a fair remuneration of the investments included in our plan. Slide 20 shows the timeline for the elaboration of this new Economic Regulation Agreement. And I want to highlight that despite the non-validation of the 2026 tariff, the process is fully on track. We are fully committed to deliver a good agreement, ensuring fair remuneration of investment. We have the support of airlines. We can see on the slide that we started the year with a positive constructive vote from airlines, both on the duration and on the industrial plans, which confirm the quality of our proposal and their support. We also have the support of the French State, which asked the regulator to issue a nonbinding opinion on our proposal, which is then expected by April 11. We anticipate that the regulator will make some negative comments on allocation key because the analytical accounting keys underlying our proposal are similar to those used for the 2026 projected tariff. We work through the process constructively, and the Economic Regulation Agreement is an appropriate framework to address such structural topic. And during the rest of 2026, we will continue negotiation with the State and hold the second round of user consultation in September. The objective remains unchanged: to obtain the binding approval of the ART in Q4 2026, followed by the signature of the Economic Regulation Agreement so that it comes into force on January 1, 2027. Overall, the timeline is progressing as planned with no deviation versus the schedule we shared in December. Moving to Slide 21, which illustrates how 2026 will be a year dedicated to preparing our next strategic plan for '27 -- 2027 and 2030. We will focus on 4 main pillars. First, economic regulation elaboration. With the negotiation of the new Economic Regulation Agreement, its signature will bring clarity and long-term [ visible ] on the financial trajectory of our regulated activities. Second, cultural transformation, continuing to build a more agile and performance-driven organization, while strengthening the employee engagement. Third, corporate social responsibility, ensuring our road map stays aligned with long-term environmental and climate ambition and accelerating our commitments. And fourth, the portfolio review, focusing on nonregulated activities to refine our strategic priority and management focus and to optimize our portfolio for long-term value creation. Together, these 4 pillars will shape the foundation of the group's next strategy ambition. With that, let's open the line for Q&A. Thank you. Operator: [Operator Instructions] The next question comes from Cristian Nedelcu from UBS. Cristian Nedelcu: The first one on this allocation of cost between regulated and nonregulated. [ ART ] concluded that there's a differential of 50 to 100 basis points on your returns due to the different views on cost allocation. Could you give us a bit more details? What are the arguments on your side that you believe the way you approach cost allocation is the correct one? Do you see reasonable chances to convince them to drop this claim going forward? And secondly, considering a more conservative view from ART in terms of your actual regulated returns, at least from my side, it seems that CapEx and a multiyear regulatory framework are the only things that could avoid cutting your tariffs in 2027. So in this sense, what is the minimum level of WACC that you're willing to accept in order to deploy this CapEx plan that you presented for ERA going forward? Philippe Pascal: So thank you for your question. So perhaps just to have a view about the debate with the regulator, there are 2 main areas of misalignment in the view of the regulators, the WACC and the allocation key, as you say. Perhaps to start on the regulated WACC, main takeaway from last week's decision is that the regulator clearly stated that the WACC will be higher in case of multiyear agreements. And we will have more insight when this -- issue their nonbinding opinion of the economic regulation proposal, which is expected in -- by April. So it's not possible to give you a minimum of WACC. The key element is to have a global balance and a fair remuneration at the end of the day for our Economic Regulation Agreement, but also if we don't have an Economic Regulation Agreement. We are very confident that Economic Regulation Agreement, it's a good vehicle to find a very fair remuneration for us due to the fact that the head of ART said clearly that we can discuss about that through this process, and the fact that in the methodology of the French regulator, we can have a higher WACC when we have a multiyear agreement. So, in line with this element, we are convinced that in the process, we can find a good balance. On allocation keys, in fact, the regulator estimates that we should implement analytical accounting correction that could increase the ROCE, the regulated ROCE by around 0.5 to 1 point. Among the pushbacks from the regulator on allocation keys, the most material are the space allocation key to allocate costs between scope regulated to share space in our terminals, in the boarding area, near the shops and so on. The key related to access to allocate the cost related to our airport shuttle system -- airport shuttle is a key element also -- we will resume discussion with airline and work through the regulatory process constructively, while protecting the interest of the company and its shareholders. That is very important for us and very clear. It's the fact that the French State, the decision of the government is to have a dual-till system with a regulated scope and a nonregulated scope. So we can obviously discuss about the cost allocation key if we respect this dual-till system. So we have -- obviously, we have to find the good rules and the good [ team ]. We have to work with the airlines. We have to work with the French regulator, and this work is on track with both airlines and the regulator. But at the end of the day, you have to respect the dual-till system. And I know that for the French State, it's vital because it's at the end of the French State, not at the end of the regulators. So globally, to answer your question, in fact, we have this key question of WACC and of allocation key, but we are very confident that the Economic Regulation Agreement and the process to elaborate this agreement, it's a good process to success, and we are confident to do that. It's the reason why we are not so worried about the decision of 2026 tariff. Operator: The next question comes from Tobias Fromme from Bernstein. Tobias Fromme: I'm trying to understand your traffic growth guidance in a little bit more detail. On Slide 7, you elaborate on the 2026 investment projects. What's the estimated impact of those projects on traffic growth, especially looking at sort of the runway renovation at CDG and capacity extension at Orly. If you will sort of not have to implement those projects, would the sort of guidance be very similar? Like, can you effectively shift the impact a little bit by having more aircraft flying into CDG, for instance? And then, on retail, when I look specifically at the different quarters, the performance of the businesses in the different quarters, I see that duty free has obviously gotten a lot worse over the quarters, about 8% Q1, Q2, flat in Q3, and then minus 2% in Q4. Is that the trajectory we should keep in mind for 2026 as well? And have you maybe seen anything on duty free in the first 2 months -- first 1.5 months of 2026? And that's it. Christelle Robillard: Thank you for your question. So regarding the first one in terms of traffic, so as you've seen, we've posted a guidance of traffic expected growth between 1.5% to 2.5% in Paris, mostly driven by international. Just to remind you that it's totally in line with the assumption taken in the Economic Regulation Agreement, and there have been no change since then. So globally, we expect in 2026 to see similar trends as in 2025, continued dynamic growth of international traffic with Middle East and Asia notably, as other destinations have already more than recovered, but also a steady and lower growth for the Schengen area traffic, where traffic is now [ mature ] and above 2019 levels, and finally, French domestic traffic to remain structurally lower. Regarding your specific question between CDG and Orly, indeed, the traffic in 2026 will be affected by temporary airside works at Orly that will constrain operations from April to December 2026. There will be, to be very precise, 2 work phases impact operation: April to early August, works on some taxiway; and from mid-August to early December, works on the runway itself. Some airlines can have chosen to proactively adjust their programs, reducing flights, transferring some activity to CDG and to reshape schedule. Some indeed chose to frontload reduction early in the season to smooth operational adjustments. But crucially, what you have to have in mind is that airlines will keep their early slots. And so, these cuts are just tactical, not structural. And all these elements of traffic in Orly are fully embedded in our 2026 traffic assumption. Regarding your second question in terms of retail performance, so indeed, the performance was quite different quarter-by-quarter. There was more an outstanding performance in Q1, and then a gradual decrease. Clearly, that began when the euro appreciated a lot. So, as you understand, our performance has been impacted by all those FX tailwinds. Regarding 2026, our assumption is broadly a stable FX rate with no reversal of the 2025 currency impact. There was also this trend regarding the slowdown on luxury categories, which have also affected once again due to this sensitive FX competitiveness. So this is something on which we will pay attention for sure. But our assumption takes into account, as I said, a broadly stable FX. You saw that we posted a hypothesis above EUR 32 in 2026. We have some levers to drive this [indiscernible] in 2026 and the [indiscernible] strength, the traffic mix improvement, so all this should contribute to stabilize our retail performance. Operator: [Operator Instructions] The next question comes from Dario Maglione from BNP Paribas. Dario Maglione: Two questions around the long-term regulatory agreement. I'm quite intrigued. You mentioned that you have support by the airlines for this agreement. Can you elaborate? And then, second question on this OpEx allocation and projection on regulated revenue. To what extent you're trying to find a compromise with ART or actually try to bring on board what ART said and just implement it? Philippe Pascal: Thank you for your first question about the support of airlines. In the formal process of the negotiation of an Economic Regulation Agreement, the starting point is the publication of the proposal in December. And the first step is a dedicated vote in a specific committee that we -- all the main airlines and representative organizations of airlines. So we executed this first step at the end of January in 2 elements. The first element, it's a specific for duration, and we obtained the full support of the main part of the airlines. And the second vote, it's about the proposal. That is clear. It's the fact that we have a favorable vote, positive vote due to the fact that all the airlines, and in particular, the main airlines in Paris support the industrial plan, the fact that we can develop and we have to develop the platform in Paris-Orly, but mainly in Paris-Charles de Gaulle. We have to develop the hub of SkyTeam. And we manage well this process because it's the industrial process. It's the result of a strong discussion with airlines and also the consultation of our main stakeholders during the consultation in 2025. So our proposal, it's a result of the first informal consultation and negotiation with the airlines. So -- but the good success is the fact that officially, when you consult the airlines, all the airlines adopt this project with a favorable vote. It's a good thing to try to convince the French regulator that it's a good Economic Regulation Agreement and well balanced. That is -- for your second question about the allocation keys, the ART requested an analytical accounting adjustment, but we have just said, it's to increase the [indiscernible]. The main pushback related to space allocation key, as I say, it's the number of square meter in the regulated and in the nonregulated scope, and also the key related to access. These topics require structural formalized work with airline, which are resuming immediately. So we work a lot, and the ERA is precisely the appropriate framework to solve this technical point. We have -- with the French regulator, we have a discussion, regular discussion, technical discussion, professional discussion. The regulator demonstrates a good understanding of airport infrastructure constraints. But we do not prejudge decision, but the tone is forward-looking. And ART confirmed that the ERA is the right avenue to [ track ] long-term topics. So, for the moment, we have a positive discussion. In fact, we are a little bit surprised about the decision of -- in December that is not in line with all the work that we executed with airlines and also with the regulators. So, a little bit surprised, but it's not the same tone before than after the decision, perhaps due to some claims about some airlines. But all in all, we have to continue the discussion and remind that the question of cost allocation key, it's also the question of the dual-till system. So it's not just the regulator, but it's also the French State. And we are very confident about that because our industrial project is vital for the development of the airport sector in France. So it's -- we have the full support of the French State. Operator: The next question comes from Jose Arroyas from Santander. José Arroyas: I wanted to ask you about your plans to review the company's portfolio. I think this is also something you talked about in December. But what do you exactly mean by a strategic review of nonregulated assets? Are you looking to sell some of the assets you already own partially or fully? Or are you looking to buy more of the assets you own? And if it is the latter, what type of businesses would you be considering adding? Christelle Robillard: Thank you for your question. So indeed, we announced in mid-December last time that we were going to conduct a portfolio review. So this is, of course, still our expectation. So the 2026 portfolio review will cover all nonregulated activities with the aim of clarifying long-term value drivers and the strategic role of each asset. We assess indeed every asset based on long-term value creation, strategic relevance and capital efficiency. At the end of the day, this review is not designed to trigger a major disposal. Having said that, we apply a clear discipline to cost allocation. We consider both disposal or acquisition only when they reinforce our long-term industrial and financial profile. So this is the way we will conduct this work. Thank you. Operator: The next question comes from Cristian Nedelcu from UBS. Cristian Nedelcu: Could I kindly ask on the OpEx side? You talked about the new compensation structure reform. Could you give a bit more detail on the actual wage increases in '26 and then the long-term savings associated with this new compensation structure? And maybe on this topic, could you talk, for ADP SA, the other OpEx components, what type of inflationary pressure would you expect in '26 versus '25? And the second one, if I may, coming back to the allowed return, I think ART proposed a 5.3%, 5.4% WACC for Toulouse and Marseille airports. And I know these are different assets with different considerations. But I'm just trying to take a step back if, at the end of the day, ART believes today, you're earning somewhere between 4.5% to 5.5% regulated return, you're not too far away from this 5.3%, 5.4% WACC. So what I'm trying to think conceptually, in my eyes, from here to grow your tariff, effectively, it's all underpinned by your regulated asset base growth or by your CapEx because if the WACC indeed ends up being 5.3%, there doesn't seem to be a lot of tariff increase. So could you help us a bit -- am I missing something? Are you still confident in a healthy tariff increase above the inflation levels in France over the next years? And what are the arguments in that regard? Christelle Robillard: So I'll comment on your first question regarding the staff cost reform. So, as you have understood during the presentation, this is a comprehensive renovation of ADP SA remuneration structure for both nonexecutive and executive, aimed at making salary progression more predictable, more individualized and structurally more sustainable. As mentioned, this reform will generate a significant impact in 2026 as we implement salary increases to compensate for the withdrawal of certain future benefits, especially the automaticity of salary increases. This will create a onetime larger step-up compared to our usual staff cost trajectory. In practical terms, the 2026 wage increase will be roughly twice the normal annual run rate. But clearly, all this impact is fully included in our 2026 guidance for recurring EBITDA above EUR 2.350 billion. Clearly, this will -- the aim of this reform is to rebalance the compensation structure and to make it more sustainable over the long-term period. So it will also help secure the assumption we took in the Economic Regulation Agreement of wage inflation at CPI plus 0.6 points. Regarding other OpEx evolution assumptions, so on your question about the inflation, we are expecting some classical inflation hypothesis, so between -- I would say, close to 1.5%. So, no specific element on that. Maybe just keep in mind that our OpEx base will be impacted, but like usual -- as usual, on consumable, by the trends with our level of activity and sales; on external services, as I mentioned in my presentation, by the deployment of Exit/Entry System, which was postponed in 2025; and on staff expenses, by this wage reform. And maybe just worth to say that, as you saw also, there was no significant move on the tax front. Philippe Pascal: So about the WACC, so what is clear for us is the fact that it's not possible to sign an Economic Regulation Agreement if we don't have a fair remuneration. The fair remuneration, we have 2 aspects of the fair remuneration. It's a level of WACC, but it's also the fact that we have to assume a pure convergence between the regulated ROCE and the regulated WACC. So about the regulated WACC, in fact, we can compare the situation of ADP with the situation of a regional airport. It's, as you say, not really the same airport, the same risk. That is a key element. the specificity of ADP, the fact that we propose an Economic Regulation Agreement for 8 years with EUR 8 billion. When you compare with Toulouse, it's not comparable because we have just a CapEx plan for EUR 130 million for 5 years, and we propose in ADP EUR 8 billion for 8 years. So globally, in terms of risk, we have a higher risk in ADP compared to the regional airport. And we are very optimistic for this real environmental economic view and the fact that, in the methodology of the French regulator, we have in line -- the fact that we have to assume a part of risk. We are globally confident at the methodology of the regulator that is -- it seems the level of regulated WACC is higher in case of this multiyear agreement, higher so probably in the high part of the range, perhaps a little bit higher. We have to assume that. So, in terms of CapEx program, for me, the question of the level of CapEx, it's not in line with the level of WACC. We have to -- we need a fair remuneration for a low CapEx program or high CapEx program. It's the same thing. So in fact, if we don't have an Economic Regulation Agreement, mechanically, we -- it's not possible to deliver an industrial project as we plan. But we are globally confident due to the fact that it's vital to launch this plan and to compete with our main competitors like Istanbul, [indiscernible] and so on. Operator: There are no more questions at this time. So I hand the conference back to the speakers for any closing comments. The next question comes from Nicolas Mora from Morgan Stanley. Nicolas Mora: Just wanted to come back on the cost allocation and just the support of airlines. Obviously, they are on board on the industrial plan. I don't think anybody questions that. From the ART documents, they're not really on board on the cost allocation. I mean, they're talking about north of EUR 200 million of cost they would like to be put into the unregulated perimeter. They would like a cut in RAB. So is there for you a point where you just walk away because you just can't -- just basically can't [indiscernible] a 3-digit number of costs being switched into the unregulated perimeter? That's the first question. Then on -- if we can come back on the results and just on the retail, just in '25, can you explain a bit why the operating leverage is so good? I mean, the step-up in EBITDA is quite impressive versus the revenue rise. Just wanted to know if there were any special elements there or what you're doing to actually squeeze a little bit more from the revenue? And thinking about retail in '26, just a confirmation. So we're going to start the year with tough comps, still some FX headwinds, still some construction headwind. So the year is pretty dramatically back-end loaded in terms of improvement in performance and spend per pax. And last one, sorry, on '26 guidance. Can you help us understand what you've put for TAV in your EUR 2.350 billion EBITDA kind of minimum guidance? Are you at the midpoint? Are you at the low point, the high point? Because TAV range is quite wide. Just trying to understand what you've got in there for TAV and imply what you've got for Paris Airport. Philippe Pascal: So thank you, Nicolas. So about your first question and the fact that we have to discuss with the airlines about the cost allocation key, in fact, we have the support of the airlines to execute the industrial project but also to execute this project through an Economic Regulation Agreement. It's support in principle, but we have to discuss about the details. We have to discuss about the global economic balance. So it includes the cost allocation key. It includes also the level of WACC. It includes the level of CapEx, of OpEx and so on. So -- but in principle, it's a result of first discussion that is appreciated from the airlines. In terms of cost allocation key, we discuss a lot with the airlines. We execute all the guidelines of the French regulator. And it's quite a surprise for us to have a negative decision of the French regulator due to the we take account for all the elements that the French regulator wants to study. So, after that, in terms of cost allocation key, as I say, it's a global balance with all the other factors, first. And the second point, specifically for the allocation key, the question is perhaps to discuss about the key in terms of square meter for the regulated scope or not. But it's also the fact that we have some red line, and the red line is to assume the fact that the decision of the French State is the dual-till system of ADP. So, that is the red line, and it's red line for ADP, but it's mainly a red line for the French State. For the other question, Christelle? Christelle Robillard: Yes. So regarding your second question in terms of retail performance, so indeed, Retail and Services outperformed despite the SPP headwinds we just mentioned in our presentation. So this solid growth was attributable to 2 main elements. First, a solid cost discipline. This was the case at all the group level, as you can see, because we outperformed on every segment, but this was particularly the case on the retail segment. We also had a cautious stock management and purchasing policy. So this is the first reason. And the second reason is the Extime model, which clearly continues to drive higher-margin categories such as beauty. Maybe just to mention one figure, interesting figure, on Beauty, we made a plus 6% performance compared to a minus 2.6% on the national market. So it shows the robustness of our strategy and model. So this performance is partly structural, as you can understand. Extime has clearly raised the operational and commercial productivity of our retail ecosystem despite the FX and luxury cycle headwinds that remain in the near term. More generally, once again, when you look at our 2025 financial performance, we were well above our guided at least plus 7% EBITDA, but with strong double-digit increase all across our segments, both in aviation, retail and international. Maybe concerning your third question, the assumption we are taking in our EBITDA guidance for TAV, so the guidance we take at the group level above EUR 2.350 billion is totally in line with the EBITDA guidance disclosed by TAV, which is guiding for EUR 590 million -- for a range between, sorry, EUR 590 million and EUR 650 million EBITDA in 2026. That means EUR 30 million to EUR 90 million EBITDA growth. So this is the underlying assumption for TAV. And bear in mind that the rest of the performance of the group will be impacted by flat regulated tariff in Paris, by the higher-than-usual staff cost increase that I mentioned previously, and this retail revenue dynamics in a still challenging context and the continuing works in Terminal 2E Hall K. Thank you. Operator: There are no more questions at this time. So I hand the conference back to the speakers for any closing comments. Cecile Combeau: Yes. No more questions this time indeed. And so, it's time to close today's call. Thank you, everyone, for having logged into this conference. The next planned quarterly publication will be on April 28 with the 2026 first quarter [ review ]. And in the meantime, of course, feel free to get in touch with Eliott or myself in the Investor Relations team for any follow-up questions. Enjoy the rest of the day. Thank you. Operator: Thank you for your participation. You may now disconnect.
Debra A. Wasser: Hi, everyone, and welcome to Etsy's Fourth Quarter and Full Year 2025 Earnings Conference Call. I'm Deb Wasser, VP of Investor Relations. Today's prepared remarks have been prerecorded. It's my pleasure to introduce Kruti Patel Goyal for her first call as CEO, and of course, to have our CFO, Lanny Baker here as well. Once we are finished with the presentation, Kruti and Lanny will take questions from our publishing sell-side analysts on video. Please keep in mind that our remarks today include forward-looking statements related to our financial guidance, our business and our operating results, as noted in the slide deck posted to our website for your reference. Our actual results may differ materially. Forward-looking statements involve risks and uncertainties, some of which are described in today's earnings release and our most recent Form 10-Q and which will be updated in future periodic reports that we file with the SEC. Any forward-looking statements that we make on this call are based on our beliefs and assumptions today, and we disclaim any obligation to update them. Also during the call, we'll present both GAAP and non-GAAP financial measures, which are reconciled to GAAP financial measures in today's earnings press release or slide deck posted on our website, along with the replay of this call. With that, I'll turn it over to Kruti. Kruti Goyal: Thanks, Deb, and hello, everyone. I'm excited to be here with you today, 50 days into my role as Etsy's new CEO. This morning, I want to primarily focus on three things: what we're doing to improve the performance of our core marketplace, why I'm confident in these actions, and what you can expect as we go forward. But first, I'll take a few minutes to review yesterday's announcement of the definitive agreement we signed to sell Depop to eBay for $1.2 billion in cash. This transaction will allow us to focus exclusively on the compelling opportunity we see in front of us to grow the Etsy marketplace in ways that matter most to our buyers and sellers. We believe it's a great outcome for Etsy's shareholders and a positive next step for all involved. Of course, it's also a bittersweet moment for me personally given my time as Depop CEO. I am incredibly proud of what the Depop team has built, a truly differentiated brand and product grounded in clear purpose and strong community. We've been proud to support Depop's evolution, helping it reach the next generation of shoppers and become the fastest-growing fashion resale marketplace in the U.S. And we believe that eBay's desire to invest in Depop will further strengthen its position in the circular economy. Lenny will cover more specifics on the transaction a bit later. Now back to Etsy. When I returned last year as Chief Growth Officer, I conducted a deep diagnostic of the business to better understand the root causes of recent growth challenges and where our biggest opportunities are. I spent time speaking directly with buyers and sellers, listening closely to our teams and pressure testing what I was hearing with customer research, data insights and trend analysis. The #1 takeaway for me was that Etsy's value proposition for buyers and sellers remains differentiated and deeply resonant. At the same time, the diagnostic made clear that we hadn't translated that strength consistently through our customer experience. For instance, we saw that buyer appreciation for what makes Etsy special remains high, but perceptions of differentiation have softened over time. As our sellers' inventory has grown significantly in both scale and breadth, we haven't reliably help buyers understand what they're seeing, why it belongs on Etsy or how to find the right item for their intent. That clarified a major opportunity. If we get better at how we match buyers to the right items and make the human story behind our sellers more visible, we can turn our scale back into an advantage and reassert what makes Etsy distinct. As another example, we've seen our buyer demographics aging with older users growing faster than younger ones. Our research shows that's not an appeal problem, it's a presence gap. Hence, our work to improve our app and shift our marketing mix to more intentionally engage and acquire younger shoppers. We've been weighted toward lower funnel moments, showing up once a buyer already has something specific in mind. The opportunity is to move earlier and in some cases, before a mission even begins using inspirational content to spark shopping journeys, not just respond to them, in the places and formats where discovery increasingly happens, especially for younger buyers. On top of that, frequency and retention, even among our most valuable buyers have not been where we want them to be. We've become much more effective at closing a transaction but under-invested in creating reasons to return. Optimizing for conversion alone isn't enough. Long-term growth requires making Etsy a destination for inspiration, discovery and ongoing engagement. Finally, it was clear that as Etsy grew, a disproportionate share of our investment went toward improving core e-commerce table stakes, things like conversion, price competitiveness, reliability and shipping. Those investments were necessary but not sufficient. And we didn't invest enough in the aspects of Etsy that make Etsy feel special and different. I believe that trade-off helped us compete more effectively on fundamentals, but it has also limited our ability to fully capture demand for unique, meaningful commerce and unlock more of the e-commerce TAM. These learnings directly shape the strategic priorities we introduced last spring, designed to turn Etsy's strengths into more durable long-term growth. As a reminder, these 4 priorities are: showing up earlier in the shopping journey, increasingly meeting customers at the start of their missions wherever they begin; working to get much better at using machine learning to match buyers with the right items, mirroring their interests and their intent so we can turn the abundance of our marketplace into a clear advantage; deepening loyalty with our most valuable customers, so they feel seen, appreciated and genuinely valued; and leaning into the human connection that differentiates Etsy, so shoppers experience the stories, creativity and passion that make every item and every purchase feels special. Alongside these priorities, we've made important changes to how we operate to drive clearer focus and better execution. At a high level, we've reorganized the company around customer outcomes rather than functional silos. We consolidated product and engineering so that teams own end-to-end experiences and can move faster and with clear accountability. We unified the teams responsible for trust and safety and customer support under one leader, protecting our community while delivering fast, thoughtful help when it matters most. And we realigned marketing from a channel-first model to a customer-first one with teams anchored to outcomes like frequency, trust and lifetime value rather than optimizing individual channels in isolation. The result is an organization with clear ownership of customer outcomes and fewer handoffs, built to move faster and execute more consistently against our priorities. That increased focus and execution is beginning to show up in our results. Our goal last year was to return our core marketplace to growth, and we achieved that in the fourth quarter. While we still have work ahead, the trajectory is clearly improving. From the first to the fourth quarter of last year, Etsy's marketplace GMS comparisons improved by 9 percentage points. And Q4 U.S. buyer GMS grew for the first time in 4 years. As Lanny will cover in more detail, our consolidated Q4 performance met or exceeded our expectations across the board. We delivered record revenue and we did so while continuing to invest for growth at both Etsy and Depop, all while maintaining very healthy profitability. This performance reinforces our confidence that the changes we've made so far are working and that we are headed in the right direction. For example, the work we've done on our app is making it our most personalized and engaging platform with year-over-year GMS growth accelerating to 6.6% in Q4, and homepage clicks per visit increasing 14% year-over-year and GMS share continuing to grow. Our personalized own marketing programs are doing a better job engaging buyers with push and e-mail clicks up more than 25% while message volumes stayed disciplined. And satisfaction with our customer support is improving for both buyers and sellers with particularly strong gains on the seller side, up 15.5% since last year. These are all indicators that we are on the right track, which is why we're doubling down on our priorities for 2026. We have a clear plan to drive more visits, better engagement, higher conversion and spend and healthier retention. What matters now is continued discipline and execution quarter after quarter. When we do that well, we feel confident that those investments will compound into the kind of sustainable growth we all believe Etsy is capable of: growth rooted in Etsy's differentiation and unique value to our customers. Etsy began with a simple belief that technology should empower creative entrepreneurs, not replace them. Just over 20 years later, we're at an inflection point, one where the power of AI technology has the potential to make commerce on Etsy more human than ever, enhancing our differentiation and strengthening our unique customer value. On the seller side, AI is already helping to automate routine tasks. So sellers can spend more time on what only humans can do, creating, designing and connecting with customers around the globe. On the buyer side, it's making discovery easier and more relevant, helping Etsy show up in more of the moments where inspiration begins. At the same time, AI-powered and agentic shopping presents meaningful opportunities for the unique items on Etsy to shine. These tools offer deeper insights into our listings, enabling our sellers' items to starkly stand out against the sea of and personal undifferentiated mass produced goods. So we're moving fast to stay at the forefront of this inflection point. Since our last call, we've expanded our agentic shopping partnerships, adding integrations with Microsoft Copilot and Google as well as an agentic payments agreement with Stripe. While still a very small part of our overall traffic in GMS, agentic traffic to Etsy in Q4 was about 15x what it was last year, underscoring just how rapidly this channel is emerging. And early indicators support our hypothesis that agentic discovery can be additive to our ecosystem. Using ChatGPT as an example, we're seeing evidence that in addition to bringing new buyers to Etsy, a meaningful share of buyers engaging through ChatGPT have a prior relationship with us, including lapsed buyers, indicating that a genetic shopping could be a great unlock for retention and better lifetime value. Orders originating from ChatGPT also tend to skew higher value compared to some of our more mature acquisition channels. And in addition to instant checkout sales, we're seeing strong engagement with listings on Etsy resulting from ChatGPT discovery. There's a lot on our AI and agentic commerce road map. With these important partnerships as well as through the development of product experiences on Etsy and we'll keep you informed of our progress. Wrapping up, I want to be clear about what you should expect from me. We have more work to do to return Etsy to sustained durable growth. My intention is to earn your confidence over time with clear priorities and transparency about what we're learning along the way. At the same time, we'll continue to shape Etsy's longer-term direction by leaning into what makes this marketplace truly distinctive: human creativity and meaningful connection. I've been a part of two significant Etsy turnarounds already. First, starting in 2018 as Chief Product Officer, when we began to significantly up-level our shopping experiences that enable tremendous growth. And more recently running Depop, where we identified and deepen the platform's core differentiation and value proposition through improved personalization and discovery. In both cases, the biggest unlock wasn't a single bold idea or strategic initiative. It was sharp focus and strong execution, pinpointing what matters most to customers and building the operating discipline to deliver consistently. That's the muscle we've been strengthening to deliver another turnaround, one which propels Etsy to our next great chapter. With that, I'll turn it over to Lanny. Charles Baker: Thank you, Kruti. We have a lot of ground to cover today, so I'll dive right in. As we review our results, please keep in mind that we completed the sale of Reverb on June 2. We've provided Reverb's GMS and revenue for Q4 2025, so you can separate the impact of that sale from the results of our ongoing business. Fourth quarter consolidated GMS was $3.6 billion, up 2.4% year-over-year, excluding Reverb. This was above the midpoint of our guidance range and up 1.3% year-over-year on a currency-neutral basis. Consolidated revenue was $882 million, up 6.6%, excluding Reverb, a new quarterly record. Adjusted EBITDA was $222 million, representing a consolidated adjusted EBITDA margin of 25.2%. Our decision to accelerate brand marketing investment at Depop was the largest factor behind the year-to-year contraction in consolidated adjusted EBITDA margin. Etsy marketplace, adjusted EBITDA margin was slightly above 30% in the fourth quarter, our high point for the year, though slightly lower year-over-year, primarily due to higher cost of revenue as well as higher G&A expense. Etsy marketplace GMS was up 0.1% year-over-year in the fourth quarter, our first positive comparison since Q3 2023. On a currency-neutral basis, Etsy GMS was down 1% year-to-year, which is a 220 basis point improvement from the third quarter's currency-neutral comparison and extends the positive momentum established earlier in 2025. While several factors have contributed to that sequential improvement, including easier comparisons, FX tailwinds and beneficial competitive dynamics in the U.S. PLA auctions, we believe that progress on the 4 priorities Kruti described earlier is also contributing to better marketplace results. Notably, our trailing 12-month active buyer count in the United States increased slightly from Q3 to Q4 and U.S. buyer GMS grew 0.3% year-over-year, marking the first quarter positive growth in 4 years. In the details of Q4, we see further validation of the notion that when Etsy leans into its strongest points of differentiation, we win, with GMS strength concentrated in areas where we already stand apart. Etsy buyer engagement skewed toward personalized and sentiment-driven items with personalized gifts, artisanal finds, and milestone categories resonating the most with buyers. Home and Living, our largest category returned to positive year-over-year GMS growth led by strength in high average order value subcategories where Etsy has high-quality differentiated items, such as vintage home decor, rugs and lighting. Mobile app downloads grew 4% year-to-year and app GMS growth continued to accelerate in Q4. App users consistently visit more often, engage more deeply and convert at higher rates than non-app users on average. And the app's contribution to total GMS reached 46% in Q4. That's 5 percentage points higher than at the end of 2023. Importantly, as Kruti discussed, our app strategy is central to showing up earlier in the shopping journey, particularly with younger buyers. More broadly, Etsy marketplace customer metrics are also beginning to move in a healthier direction. The year-to-year rate of decline in active buyers improved for the first time in over a year with active buyers largely flat sequentially at $86.5 million. Our active buyer base benefited from improved acquisition and reactivation. We added 6.8 million new buyers and reactivated 10.4 million lapsed buyers for a combined total of 17.2 million gross additions, which is up 2.7% year-over-year and growing again for the first time in over 2 years. We had 5.9 million habitual buyers, down 8.6% year-to-year, though the sequential quarter-to-quarter decline was a more modest 1.4%. Trailing 12-month GMS per active buyer was $121, marking the third consecutive quarter of stable to improving trends and moving above the trough that we hit in the first quarter of 2025. The stabilization in GMS per buyer continues to be driven by higher average order value, while purchase frequency remained slightly lower than a year ago. On the seller side, we've begun to see healthier trends as well. We ended the period with 5.6 million active sellers, up 1.5% sequentially, reflecting an increase in both U.S. and international sellers. Additionally, the retention of active sellers improved throughout the year. Turning to Depop, we delivered another quarter of excellent growth, with Q4 2025 GMS, up nearly 38% year-over-year to a new record of $300 million. In the U.S., which is Depop's largest market, GMS grew 60% year-over-year. We saw initial wins from our surge marketing investment including Depop's Taste Recognizes Taste campaign with U.S. brand awareness accelerating even at this early stage of investment. I'll take a couple of minutes to provide additional information about our agreement to sell Depop to eBay. The sale is currently expected to close in the second quarter of 2026, subject to regulatory approval and certain closing conditions. The cash consideration to Etsy is to be paid at closing. And in keeping with our capital allocation approach, we plan to use the proceeds of the transaction for general corporate purposes, continued share repurchases and investment in the Etsy marketplace. Etsy will continue to own and operate Depop through the completion of the transaction. However, Depop will be classified as a discontinued operation and its results will be separated from those of Etsy's continuing operations in our future financial statements. For historical reference, we've provided Etsy stand-alone GMS and revenue in the appendix to today's slides. For the full year 2025, Depop generated $1.1 billion in GMS and $187 million in revenue. Depop's lower take rate and negative adjusted EBITDA margins represented a drag of 80 basis points on our consolidated take rate and 350 basis points to consolidated adjusted EBITDA margins in 2025. With the excellent offer presented to us by eBay and in light of the significant opportunity we see at Etsy, we made the decision to sell Depop and fully prioritize our core marketplace. We believe that obtaining a strong value for Depop now and focusing on Etsy, where we believe we can achieve a higher rate of return on invested capital will best enable us to maximize shareholder value in the long term. Circling back to fourth quarter consolidated financial performance. Services revenue grew 9.9% year-over-year, while Marketplace revenue grew 0.8%. Consolidated fourth quarter take rate was 24.5%, in line with our guidance. Compared to one year ago, take rate expanded by 170 basis points. As outlined on the slide, the year-over-year consolidated take rate expansion reflects a step-up from the Reverb divestiture, continued momentum in on-site advertising across Etsy and Depop and broader gains at Depop overall. Turning to fourth quarter operating expenses. I'll start with product development, where spend was largely flat as a percentage of revenue. Higher employee costs were offset by leverage in other areas. In marketing, the increase in brand spending at Depop shows up as a key driver of the deleverage you see in our consolidated marketing line. At the same time, the Etsy marketplace delivered meaningful year-over-year leverage on the marketing front. That improvement is reflective of targeted shifts in portfolio mix and efficiency, cornerstones of our priorities. We leaned into favorable paid search dynamics, shifted linear TV spending towards OTT, YouTube and TikTok and targeted our paid social spend to new and lapsed buyers to drive incrementality and higher returns. Our investment into TikTok has been very effective, both from an ROI perspective and also in targeting younger consumers. Last and definitely not least, we continue to drive stronger retention and engagement via our highly personalized owned marketing channels, which delivered meaningful incremental GMS and reinforced the effectiveness of these levers when used alongside paid channels. We plan to further these efforts with an expansion of new marketing channels in 2026. As of December 31, Etsy held $1.8 billion in cash, cash equivalents and short and long-term investments. In 2025, we generated $735 million in adjusted EBITDA converting approximately 87% of that to free cash flow and returning more than 100% of free cash flow to shareholders. During the fourth quarter, Etsy repurchased a total of $133 million in stock, bringing total share repurchases for the year to $777 million, which reduced the outstanding share count by approximately 14.4 million shares over the course of the year. Now for our outlook. As we've described, we believe that the priorities we've been executing against are beginning to turn the Etsy marketplace in the right direction. As we enter 2026, we have a focused set of product and marketing initiatives in flight and several early indicators of progress. However, we expect that the full impact of these efforts will take time to translate into stronger sustainable growth. And all of this is reflected in the outlook we are providing today. With the anticipated sale of Depop and its classification as discontinued operations in our financials as of January 1, 2026, the guidance we're providing today relates only to continuing operations or in other words, the core Etsy marketplace. We currently anticipate that first quarter 2026 GMS will be in the range of $2.38 billion to $2.43 billion, representing year-over-year growth of approximately 2% to 4% for the quarter. The anticipated step-up in Etsy GMS growth in Q1 2026 reflects the contribution of our 4 priority areas as, well as the effect of strong FX tailwinds and comparing against a particularly weak start to 2025. We expect the first quarter of 2026 take rate to be approximately 25.5%, and adjusted EBITDA margin between 28% and 30%. Looking beyond the first quarter, with a singular focus on the Etsy business, growing confidence in our operating priorities, and ongoing stabilization in customer metrics, we feel more comfortable to provide high-level commentary for the year. We've improved the Etsy marketplace's annual GMS performance from down 6% in 2024 to down 4% last year, and we expect to further improve our performance this year, achieving slight growth for 2026, with positive year-over-year GMS comparisons in each quarter of the year. We currently anticipate that Q1 2026 GMS growth may be the strongest of the year due to currency tailwinds that are likely to moderate and comparisons that get less favorable beyond the first quarter. We expect that full year take rate and adjusted EBITDA margin will be roughly consistent with the first quarter view. We've assumed that macroeconomic conditions, particularly those impacting consumer discretionary spending remained stable relative to where they are at present. Thank you all for your time today. We'll now take your questions. Operator: [Operator Instructions] Our first question will come from Trevor Young with Barclays. Trevor Young: I guess starting with the improvement in gross buyer adds, the reactivated buyers accelerating and the declines in new buyers kind of improving meaningfully. I appreciate some of that as comparison dynamics, but could you maybe unpack a little bit what changed in 4Q? And similarly, some of the actions that you alluded to here in 1Q that are driving an improvement? And just relatedly, like how durable will this improvement be? Charles Baker: Sure. Thanks for the question. Remember that the trailing 12-month buyer account is a trailing 12-month buyer view. So part of what we're looking at is trends from 12 and even 24 months ago in those comparisons. But over that period of time, we have been investing in the product experience. We've been investing in driving our app usage. We've been investing in our personalized marketing. We've been investing in the social media channel. And I think what you're seeing in those comparisons gradually getting better is the cumulative effect of all of those investments, all those product moves and marketing moves that we made. And so in our outlook and sort of where we are today, we think that those trends are sustainable. They've been building gradually over time. I think on specifics with your questions around reactivated buyers, we found the social media channels to be particularly effective for us in reactivating, reaching back out to buyers who have had great experiences with Etsy in the past. I haven't had Etsy top of mind for consideration as much as we want them to be, and using social media to get them at that moment where they're just starting their journeys and reactivate them and bring them back in. Then we try to follow up with bringing them into our app experience where we really get that strongly personalized opportunity to reach out to them through our owned media channels and keep in front of them with product suggestions, with shopping mission recommendations that are really what -- in the long term, we believe, can help drive frequency and retention. Operator: Your next question will come from Bryan Smilek with JPMorgan. Bryan Smilek: Good to see the GMS improvements. Can you just talk about the key drivers of sustaining GMS growth each quarter through 2026. And I think, like more importantly, too, how are you driving better marketplace dynamics more across sellers and buyers as well into 2026? And conversely, Lanny, I know you mentioned positive growth each quarter in 2026. 1Q could be the high point. Can you just elaborate a bit more on when we'll start to see some of these product and marketing flywheels start to impact GMS growth deeper throughout -- beyond 1Q? Charles Baker: Sure. There's a lot to go through that. Kruti Goyal: Yes. Let me start with the drivers of durable GMS growth. What you heard us say in the prepared remarks is that our entire strategy or the 4 strategic priorities that we shared are designed to work as a system to really improve the entire ecosystem to do exactly that, to drive durable growth. So we're focused on discovery, matching, loyalty and differentiation to drive visits, engagement, conversion and retention. And so I would really urge everybody to think about these priorities as a system that works together rather than one thing that's going to work -- one thing that's going to contribute more than any other. Then when you dig into that, as Lanny was saying, where we've been seeing the most traction and impact so far has been really in these first two priorities around discovery and matching. And the places that there's -- so showing up where shoppers discover, making Etsy a place, a destination for discovery through greater personalization driven by machine learning-driven matching. And there, I think it's really critical to understand that we're really leveraging the capabilities, new capabilities of AI and the advancement in LLMs to really do things that were very, very much harder to do in the past, really deeply understand our inventory, which is incredibly unique and broad-based, much more deeply understand our buyers, their interest and their taste and match that with a stronger understanding more quickly of their intent to deliver a much more personalized content, really at every touch point off Etsy and on Etsy. And so where we're seeing that show up the most right now is in our app and in our owned marketing channels, right? So in our app, what you've seen us do is really make the home screen experience much more discovery focused. We've really redesigned that experience to give you more windows and doorways into Etsy based on what we know about you. And create an entire discovery feed that is much more personalized to your interest in taste. And we're seeing that work really well with app home screen, clicks up over 14% year-over-year. And then in our owned marketing channels, what you've seen is we've made the recommendations that get you to come back to Etsy much more personalized. And not only have we done that, we've increased the coverage of those personalized recommendations, so that our push notifications and e-mails have gone from less than 1/4 of them being personalized to now over 3/4 of them being personalized. And all of that is driven by the advancements and investments that we've made in our machine learning-driven models. And so these are really durable sources of growth that we expect to continue to invest in and build on. Now loyalty and human connection are two areas that we're earlier on in our journey with and they're areas where we're starting to see encouraging signs, but I would expect those to build more over time. And particularly, you asked about the seller and buyer ecosystem. Loyalty is a really great place to think about that. We talk about recognizing, retaining and rewarding our very best customers. And that really is about, for the first time for us, focusing on both the buyers and sellers who disproportionately contribute to our marketplace and our marketplace growth. And so that's something that we're really early -- that's new for us, and we're earlier on in the journey, but we're really encouraged by, and we're really excited about. Charles Baker: And I think as you take those 4 priorities, and Kruti talked about connecting them to engagement and conversion and retention, I think you could also then think about where they come into our financial model. And the financial model is really -- it's a number of buyers, the average order value and the purchase frequency. And as you had a question about like the longer-term durable kind of growth, We've, I think, stabilized the number of buyers. You've seen U.S. buyers grow sequentially quarter-over-quarter. The grand total is down about 100,000 quarter-to-quarter. We're still down year-to-year by 3-plus percent. So there's some way to go to get to the total buyer count growing year-to-year, but we're stable. Average order value has been stronger. Average order value has been up with inflation, with probably some tariff input, certainly, FX input has lifted the average order value. And on frequency, we're also stable, still down a little bit year-to-year, but all things that Kruti just described are the efforts that we're undertaking to start to turn that frequency level as well. So where the growth formula really comes together is where there is growth across each of those. We've gone from shrinkage across each of those to stability across two and growth on one, and we're working for the other. Operator: Our next question will come from Michael Morton with MoffettNathanson. Michael Morton: Thank you for the question. a lot of really exciting things about the fundamentals this quarter. I wanted to ask Kruti about the traffic coming from the AI platforms and how these consumers are behaving, what it means for Etsy's relationship with these consumers. And it's the #1 investor question regarding marketplaces. And it's -- what does it mean for on-site ads and on-site ads are sold on a cost per click basis and as consumers get smarter, or better answers faster, there's the -- it could lead to compression in the funnel. And Etsy is really leading everybody in your adoption of working with these platforms, you're pretty much first for everything. So I know it's early, but we would love to learn what you're seeing with this consumer behavior. And then are we wrong in thinking that it could be risk to the on-site ads business? And if so, maybe some levers to offset any type of headwinds to on-site ads would be great. Kruti Goyal: Yes, it's a great question. You're right. It's the one that lots of people are talking about. And we are really excited to be proactive early movers in this space. The first thing I would say, touching on a point that you made is that it is still very, very early days in agentic platforms as they relate to commerce. I will say that we are seeing really encouraging signs that support our hypothesis that agentic can be a really valuable and incremental discovery channel for a business like Etsy. So while it's early days, we're seeing really significant increases, growth in agentic traffic. We're seeing 15x what we saw last year at this time, but it's still very, very, very small. So less than 1% of our total traffic. So what that tells us is that consumers are interested in engaging and find some value in this platform. Second, we're seeing that -- or find some value in agentic search. The second thing that we're seeing is early signals that these are really valuable customers. So higher intent, higher average order value, we're seeing engagement across both new and existing buyers, which tells us it can be both an acquisition channel and a reengagement and retention channel for us. But most importantly, what we're seeing is a lot of great flow-through. And what I mean by that is that we see a lot of that traffic that's where people are discovering Etsy items on agentic platforms flowing through to Etsy where they continue to look more and then transact. And this makes sense to us, right? Because shopping doesn't happen in all one flavor. When you're looking to buy something and you've got a very simple set of criteria around purchasing it, it's just about price or just about speed and the items are largely replaceable, giving the ability to purchase that to a third party, it's really easy to see how you do that. But the items on Etsy are higher consideration higher value in terms of meaning. And what that means is that you tend to want to -- firstly, when you're buying a gift for your mom for Mother's Day, you're more likely to want to dig in and see more about that item, understand the story behind it before you make that purchase. And so that flow-through that we're seeing, I think, is a really good indication that, that hypothesis is true. Now you mentioned being early movers. And we think this is really, really important. The world is moving quickly. And we don't think you win by sitting on the sidelines. Being an early participant, and this means a couple of things. We're able to really -- in partnership with these platforms help shape the experience in ways that we think is really helpful to buyers being able -- shoppers being able to understand what differentiates the products that they're going to be seeing on different platforms. We think that really plays to Etsy's strengths because of the differentiation of our inventory, the fact that everything has a story behind it comes from a real person. And second, it allows us to be in there really early observing and learning from shopper behavior. And this is what I think is so critically important. One of the priorities that I stated, the strategic priorities for the long term that we have is showing up where shoppers discover. So as we see this new emerging discovery platform, it is really critical for us to be there with these shoppers, learning and evolving with them as their behavior evolves. Charles Baker: Yes. And I think to the question about -- sort of the last pair of question is about what do we do with Etsy Ads while this sort of transition and learning period is going on? First, I'd go back to something we've said many times, which is right now, we are recognizing only a very small portion of what our sellers have said they would be willing to spend to on advertising to win incremental GMS. And it's on Etsy and our machine learning and our match and our ad system to do a better job of delivering customers to those folks who are willing to advertise to be at the top of the stack in the search results. So there's more opportunity for us to continue to optimize the Etsy Ads performance internally. Secondly, as Kruti indicated, the behavior that we're seeing in the agentic shopping world is a combination of sometimes hey, this convenience of being able to check out right in the midst of the agentic experience, that's wonderful. Other times, like Kruti just said, hey, that's a great idea. I hadn't really thought of that. Let me go to that source and learn more about that high considered purchase. And that bringing them on to the Etsy product services where our ads model is designed to help them navigate that journey to what arguably will be the best fit in products for them. The third thing I would say is that it's really interesting to see at a relatively early stage of the development of the agentic world, the people who operate those models starting to include advertising and trying to figure out how to bring advertising into their ecosystem. And I think that as we think about the paid search world, sort of inclusion of an advertising-driven component of the search world, has been really favorable for Etsy over time. So I think there are on-site things that we can do. There are interface things that we can do. And then there's sort of structural ecosystem things that are evolving right now. It's very early days, but we feel like we're about a very defensible position with Etsy advertising product. Kruti Goyal: There's one other thing that I just want to add on here, which is a lot of the focus is on agentic commerce, like commerce that's happening on those platforms. What we're talking about in addition to the commerce is agentic discovery. And then the third piece that we're not talking about here is agentic capabilities. And those capabilities are not proprietary or owned by those platforms. There are capabilities that any company can use. And so I think a lot of what we are thinking about where we're spending our energy today is on applying those advancements and capabilities to the experience on Etsy across the platform. So we've talked a lot about how we're using ML to power much more personalized user-aware recommendations. We're also using that to make our selling experience much better, much more efficient so that our sellers can spend their time doing what only they can do and really enhancing and amplifying the differentiation of Etsy and using it behind the scenes to make how we operate more effective, to make our support and trust and safety better, to make how we all operate day-to-day much more effective and efficient. And I think that's a really big part of the agentic story and maybe one that we should be talking about more. Debra A. Wasser: Great. Exciting topic. Operator: Our next question will come from Rick Patel with Raymond James. Rakesh Patel: Congrats on the progress. A couple of questions around buyer acquisition. First, can you talk about the commentary around acquiring younger buyers, which channels do you see as having the biggest opportunity? And what are you going to do differently in 2026 to capture that? And as a follow-up, how much room do you see to reengage lapsed buyers? You touched on social being an effective tool there, but just curious how big that opportunity is. Charles Baker: Sure. On the second point on lapsed buyers, I think there are over 100 million lapsed buyers of Etsy. And remember that about 50% of our buyers buy one time a year and so the opportunity to bring people back two times a year, that really starts to feed in not just the frequency numbers, but that actually will feed quickly into the buyer count numbers. So those are some levers that we're pulling there. You had a really specific question about where we're getting younger -- how we're going after younger audiences. Kruti, in her prepared remarks, talked about the importance of the mobile app for engaging with them. The demographics of Depop are quite a bit younger, and the GMS mix of Depop is 90% mobile app. And so we know from first-hand experience that the mobile app really is where that customer base is. So the mobile is really key to this. But there are also the social channels that we're using much -- we're really working to use the social channels to introduce Etsy more frequently to that younger bio demographic. This quarter, we -- frankly, we doubled the amount of spending that we do on TikTok to go after that audience from last quarter. And what was terrific about that is we were able to double the spending while keeping the return on spending as good or in line with where it was last quarter. It's hard to -- sometimes it's hard to take a channel like that and spend that much more into it and not have or at least for a short run, your efficiency -- lose some efficiency. That's -- and the buyers that are coming through that channel are younger. That's true, at Pinterest, that's true, of some of the other social platforms. And so I think social will be, along with the app, are probably the two biggest levers. On agentic is -- the numbers are so small that it doesn't make a difference today in terms of shifting the demographics. But those are the places in particular where we're focused. And we'll do more there in 2026. Kruti Goyal: Yes. I want to also just add to that and zooming out for a second. I talked about how this isn't an appeal gap, it's a presence gap. And so the channels that we show up on really matters. The other thing that I would add is I think there's an opportunity to really leverage our sellers and leverage influencers to really speak more directly to those younger buyers. And the content matters as well. So this is where we're focusing on more discovery-oriented content also really matters. So I just wanted to add on that it's both where we're present and what we're showing and making sure that it's more personalized and relevant to this audience. But we're really excited about all these efforts. Operator: Your next question will come from Ken Gawrelski with Wells Fargo. Kenneth Gawrelski: Could you talk -- maybe two, please, if I may. First, maybe reframing the agentic discussion. It seems to me that maybe this is a race for search and discovery on site versus in the agent, right? You have unstructured data, unstructured listings, how are you -- how do you make sure that the on-site or on app experience for search and discovery is ultimately better than the offsite, meaning the agent or search can -- externally can find the item faster or better than you can. And then one second one, too, and I realize that there's only maybe so much you can say about this, but cash uses. I mean, $1.2 billion relative to your market cap is very substantial. You're already well capitalized. How should we think about the opportunities to effectively use that cash that's coming in? And is there any kind of time frame you can give us as to when you might maybe give us a little bit more color on cash uses? Kruti Goyal: Thanks for the question, Ken. I'll take the first one, and Lanny you can take the second. I think this is exactly the right question. The insight and the data that we have should enable us to always offer a much richer and better experience when you know that you want something that Etsy can offer. And this is exactly one of the reasons that I think agentic can be a really great discovery platform. But what makes it such an appealing platform right now is they've really tapped into this conversational interface that allows us to get much deeper and richer insight into intent. And so when you look at what we are doing at Etsy, our first step is leveraging AI capabilities to pull that deeper understanding of our buyers' interests and of our inventory and to get signals of intent. But then the next step is to bring that same kind of interface to be able to capture even richer understanding of intent. And as we do that as we progress there, we should be able to do that much more effectively because we have more data points. I think for people who don't know what they're looking for or don't know they're looking for something that is available on Etsy. These third-party platforms are great to understand the world of your options, and that's where us providing really rich insight into our inventory and what buyers care about in that inventory is really important in the near term. It's a great question, and I think the right one. Charles Baker: And from a capital allocation standpoint, I think we start out with the thought that we have $1.8 billion in cash and $3 billion of debt and $650 million of free cash flow per year. And those are the those are like the raw materials of how we think about returning cash to shareholders and managing what's on our balance sheet. Now with the addition of proceeds from Depop, that will refactor that whole equation. What you've seen over the last couple of years is Etsy say, we can invest in the business through the P&L, and there aren't big acquisitions that we have thought of, there aren't big sort of capital outlays that we have been making. And so with the excess cash that we have relative to the future needs that we see from the balance sheet perspective, we've been returning that really aggressively to shareholders. I don't -- I think the amount by which the share count has come down over the last 1, 2 or 3 years is pretty striking. And that speaks to the sort of inherent profitability, scalability and capital-light nature of the core Etsy business. And that those things all remain. So as we're looking forward, I think you should expect us to run that same set of analysis, look at the cash that we hold, look at the right amount of leverage on the business, looking at returning excess cash to shareholders. And if there were to become an attractive investment opportunity that we looked at and said, hey, that is going to be a really high return on capital, we'd be open to that. But right now, the best returns that we see are investing internally in the Etsy business, and we'll continue to do that. It generates a lot of cash and where there's excess cash flow, we'll return that. Operator: Your next question will come from Jason Helfstein with Oppenheimer. Jason Helfstein: So now that you don't have to decide between allocating marketing between Depop and the core marketplace, how does that impact your strategy and outlook for '26 and beyond and maybe kind of connect that back to the prior question around new customer acquisition, reactivation and investment in technology, LLM, et cetera. Charles Baker: Let me start and say, I think it's really important to point out that while similar in nature, the conditions around Depop and the condition around Etsy are quite different. Depop had and has a tremendous product experience, the best in the business. It did not have the level of awareness across all the different audience opportunities that we saw that we thought it needed and we thought it could benefit from. And so when you want to drive awareness, the brand activity and is exactly what I think we believe one should do. And the early results from that are really encouraging. We are expanding the awareness of that product. Etsy's situation is quite different. Awareness of Etsy is very, very high. Most people have heard of Etsy, most people have bought on Etsy. The product experience, you've heard us talk about, is not where we think it should be in terms of personalization, in terms of retention. in terms of rewards for loyalty, in terms of discovery, all of those things. And so the comparison is Etsy, the investment need is more on the product side. Now we spent over $400 million last year in product development, improving that. We have some early indications of the progress and the fruits of that investment. And we will continue -- that's a lot of money to invest in that product experience. We will continue to invest in that, and we think we will continue to make progress on that product experience. So I don't think it's -- I was -- it's not -- I don't think it's currently an accurate idea to say, well, because they spend money on Depop marketing, now they're going to spend money on Etsy marketing. That just doesn't really follow. And I think the Etsy business is a position where we're making really strong product investments, they're starting to bear fruit. This whole opportunity around agentic and our internal use of ML is a whole new frontier for us to continue to move investments into that area. And right now, we feel like we're able to do that within the margin outlook that we gave to and being able to deliver this sort of combination of improving sustainable, durable growth with healthy EBITDA margins as we do that. Operator: Your next question will come from Deepak Mathivanan with Cantor. Deepak Mathivanan: Great. Just wanted to ask a follow-up to Ken's question. Kruti, can you talk about the learnings from the traffic you're seeing from agents as it pertains to potentially building the experience on Etsy with the native and conversational experiences? What signals are you watching to integrate AI native experiences in the platform? And also broadly, how should we think about Etsy's technical approach here using our own models built on top of open source to power the business logic or perhaps using all those like Gemini and GPT models? Kruti Goyal: Some of the early signals that we're seeing, like I said, are really related to these channels as strong discovery channel. So higher intent higher order value, really good engagement, really good flow-through. And so those are the biggest learnings that we're seeing that there is interest and excitement about the differentiation of our inventory as people discover it in the context of other inventory. So that's where the greatest learnings are, which they think a little bit of a different category than the learnings are more generally from these AI platforms around the value of conversational interfaces to really more deeply understand intent. And those are things that we're playing with across all parts of the experience. And really the deepest learnings are coming from those on-site experiences rather than off-site experiences. Charles Baker: I would just add one thing we're learning with our partners is that the consumers who engage with agentic shopping come back and do more agentic shopping. So there's like implicit satisfaction in that I think these services are delivering. The implicit part is that their increased usage after they try it once, they come back a second time after they do it 2 times, they keep coming back. It's -- the early indications are also that this is an experience that is working really well for customers. That's one of the reasons why when we see that from our partners, we're also really convinced that we can use agentic on Etsy to improve our experiences. And as we bring those things that Kruti has been talking to light, it will help us with retention and help us with our own product experience. Operator: Your next question will come from John Colantuoni with Jefferies. John Colantuoni: Okay. Great. I wanted to ask about channel trends. With the app up nearly 7%, it implies GMS on the website was down around 5%. And I'm curious if you see an opportunity to accelerate growth on the website and how a normalization and competition across performance marketing channels in a year ago period could impact your approach to driving this potential acceleration? Kruti Goyal: Maybe I'll start. And then Lanny can continue. Okay. Look, our app is our most valuable platform. We see that app users have a 40% higher LTV than non-app users. And that's because as Lanny was saying before, user -- when users engage with the app, they visit more, they engage more deeply and they convert more. And we think that it's really attractive to a younger audience. As we have grown app share of GMS, we have continued to see that higher level of value and engagement. So we think that there is a lot of runway to continuing to both invest in making the app more personalized, more discovery-oriented, more engaging and leveraging our own channels to drive more people to the app, and to invest in all of the channels and opportunities that we have to drive more people to the app. Remember, only 46% of our app -- our GMS comes through the app right now. And as Lanny mentioned, we know of another marketplace that has almost 90% of their GMS coming through the app. So we just think that there's a lot of headroom there to grow. Debra A. Wasser: We'll take one more question here before the bill rings. Operator: Your final question will come from Shweta Khajuria with Wolfe Research. Shweta Khajuria: I've got two, please. One is -- both are on the longer-term side, on agentic commerce, a follow-up, much of the drawdown that we've seen in Internet stocks year-to-date is in part because of this concern that some of these business models could be disrupted with the AI agents and what they can do. So for anyone who is wondering or debating about Etsy's value proposition as we think longer term, is there -- how do you think about the risk that maybe an AI agent could disrupt take rates or perhaps a seller could go directly to an AI agent, pressuring your take rates or your business model outside of advertising. This is a transaction that can happen on an AI agents platform versus on Etsy. So that's question one. And then second is how do you think about the durability or where frequency can go as the -- as you make more improvements around your app and the product and marketing investments that you do, is there any structural reason why Etsy's frequency cannot be higher than what we have seen in the past? So how do you think of that trend line? Kruti Goyal: I'll take the first one. So Shweta, like you said, we're in very early days in agentic. And what I would say is the early indicators that we're seeing are really encouraging in terms of supporting our hypothesis that this can be an incremental and powerful discovery channel. And because it's so early, no one knows at this moment in time what aspect of how things are going to evolve or what aspect of the businesses might come under pressure. What I do know is that being in there early, we have proven that as the world changes, we have been really capable and effective at adjusting really adjusting to things that are unknown and unexpected that come our way. So we're really confident that as the world evolves, we will evolve with it. But it's impossible to predict right now for every one of those situations, what might happen. Debra A. Wasser: Good. All right. That's it for today. Thank you all for joining.
Operator: Good morning, and welcome to Alight's Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] There is a presentation accompanying today's presentation available on Alight Investor Relations website. I will now read the safe harbor statement. Today's discussion includes forward-looking statements within the meaning of the federal securities laws. These statements reflect management's current views and expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Factors that may cause such differences are described in today's earnings release and in Alight's filings with the Securities and Exchange Commission, including in the Risk Factors section of its most recent annual report on Form 10-K. The company undertakes no obligation to update any forward-looking statements, except as required by law. In addition, during today's call, the company may reference certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures can be found in the earnings release available on the company's website. I will now turn the call over to Rohit Verma, Chief Executive Officer of Alight. Please go ahead. Rohit Verma: Good morning, and welcome to Alight's Fourth Quarter 2025 Earnings Call. Joining me today is Gregory Giometti, our Interim Chief Financial Officer. This is my first earnings call as Alight's CEO, and I'm pleased to have this opportunity to speak with you so early in my tenure. I joined Alight at the start of the year and over the past 30 working days, have focused on meeting with our colleagues and clients and diving into our operations. I'm extremely pleased with the very warm welcome from our colleagues as well as the support I have received from the Board and the connections I've already created with our clients. I'd like to take this moment to share why I chose to join Alight. And over the last 6 weeks have only strengthened my conviction in the opportunity ahead of our business. Alight has strong underlying DNA. Our scale, client relationships, domain expertise and operational footprint provide a significant competitive advantage and leadership position in the marketplace. We serve a wide spectrum of employers, including the majority of the Fortune 100. We offer essential and unmatched benefit solutions via platform that offers extensive flexibility to accommodate a wide range of client needs from straightforward to the most complex plans in the market. Our midsized clients benefit from simpler platforms, and we also provide specialty solutions such as leave administration to meet our clients where they are. Our vast data lake creates a proprietary advantage that enables predictive end-to-end orchestration when implementing AI, which will allow us to transform employee experiences into proactive life journeys, driving better outcomes for employers, employees and their families. And our top-tier partner network allows us to provide participants a holistic experience, putting us at the center of the benefits ecosystem. More than 30 million people and dependents rely on us in their most important moments when someone is sick and needs access to their insurance, when someone is looking to start a family and wants to better understand their health and wealth benefits or when someone is disabled and needs to understand their leave options. At the end of the day, it is about delivering a frictionless experience with empathy and care that delivers a compelling outcome. The ability to provide benefits is a fundamental offering for most organizations, yet regulatory requirements and rising costs make it challenging for organizations to do this on their own. Most employers do not have the in-house expertise, scale or technology required to manage the complexity effectively, making the outsourced administration of health, wealth and leave an essential purchase. We believe our products and solutions are needed regardless of external economic cycles. And when we execute well, we create sticky relationships with predictable revenue. Our expertise across the benefits administration landscape and our ability to provide effective plan solutions to a wide variety of employee groups is a competitive advantage. The strength of our solutions and our organizational expertise lead us to believe that the market opportunity in front of us is substantial. Not only do we see opportunity in the broader market, we believe there is meaningful white space within our existing client base. With deep penetration among large and midsized employers, we have a solid foundation from which to expand our relationships and grow market share over time. That said, we have work to do. In 2025, we did not meet our internal financial targets and new bookings and renewals did not meet our expectations, leading us to miss our forecast to the market. During my first 6 weeks at the company, I've connected with more than 35 clients, and it is clear to me that clients want to continue working with us as we play a critical role in helping them manage increasingly complex health, wealth and leaves programs. They're also clear in their requests that we bring simplicity to their participants and management by providing cutting-edge solutions. Our clients expect flawless service delivery and continued innovation in products that create better outcomes. The attractiveness of our market, our coveted position and the clarity of the asks from our clients enable us to be clear-eyed about our priorities going forward. As a result, our immediate focus is driving service and operational excellence across our unmatched portfolio of benefit solutions, innovating products enabled by AI to create a cutting-edge user experience, real value and actionable insights for clients and participants, while building relationships that result in enduring trusted partnerships with clients, participants and partners. These priorities are all things within our control, which give me great confidence in our ability to improve as does some of our recent progress. For example, during the fourth quarter, we piloted conversational AI with 2 of our largest clients during the recent annual enrollment cycle. We are very encouraged by the results where we saw a significant reduction in channel jumping, which is when a user moves from digital enrollment to calling the call center. This high reduction rate is indicative of the improved efficiency and participant efficacy experienced with the conversational AI product. Before I turn the call over to Greg, I want to provide some details on our 2025 financial performance. We generated $2.3 billion in revenue with adjusted EBITDA of $561 million and an adjusted EBITDA margin of approximately 25%. With that said, I would reiterate that we believe there is significant opportunity to improve our performance moving forward. Our adjusted EBITDA in the fourth quarter was impacted by an increase in compensation expense driven by our commitment to invest in the business with a focus on promoting service quality, strengthening relationships and positioning the business for growth. Importantly, the business generated $250 million of free cash flow in 2025, which enabled us to maintain a strong liquidity position and positions us well as we head into 2026. With that, I'll turn the call over to Greg to walk through the financials in more detail. Gregory Giometti: Thanks, Rohit, and good morning, everyone. I'll walk you through our fourth quarter and full year 2025 results. Turning to our fourth quarter results. We continue to think about revenue mix across 2 categories: recurring renewable business and nonrecurring project-based work. Revenue for the fourth quarter was $653 million. Recurring revenue of $607 million was down 1.6% compared with the prior year period. Project revenue of $46 million was down 27%. Fourth quarter adjusted gross profit was $272 million, down 9.3% from the prior year period, reflecting an adjusted gross profit margin decline of 240 basis points. Adjusted EBITDA for the fourth quarter was $178 million as compared to $217 million in the prior year period. Fourth quarter 2025 adjusted EBITDA margin was 27.3% compared to 31.9% in the prior year period. Adjusted EBITDA during the fourth quarter of 2025 was adversely impacted by increased compensation expense, which we believe is critical to executing on our priorities. This impacted adjusted EBITDA by approximately $45 million. Excluding this, adjusted EBITDA would have been within our previously communicated guidance range. Adjusted net income in the fourth quarter was $96 million with adjusted EPS of $0.18 compared to $127 million of adjusted net income and adjusted EPS of $0.24 in the fourth quarter of 2024. Looking at the full year, total revenue was approximately $2.3 billion. Recurring revenue of approximately $2.1 billion was down 2.2% compared to the prior year period. Project revenue of $154 million was down 22%. Adjusted gross profit for the full year was $883 million compared to adjusted gross profit of $942 million in 2024. Full year adjusted gross profit margin decreased 100 basis points compared to 2024. Full year adjusted EBITDA was $561 million with adjusted EBITDA margin of 24.8% compared to adjusted EBITDA of $594 million with adjusted EBITDA margin of 25.2% in 2024. Adjusted net income for the full year was $266 million with adjusted EPS of $0.50 compared to $313 million of adjusted net income and adjusted EPS of $0.57 in 2024. In the fourth quarter of 2025, we recognized a noncash goodwill impairment charge of $803 million. We have remaining goodwill of $83 million on the balance sheet. Turning to capital and liquidity. We ended the year with $273 million in cash and equivalents in addition to a $330 million fully undrawn revolving credit facility and free cash flow for the year was $250 million, providing us with significant financial flexibility. With this, we are well positioned to fund our 2026 TRA payment, which is estimated to be $156 million. Importantly, as a result of tax reform related to the one big beautiful bill, we do not expect to make a significant TRA payment in 2027 or 2028, which meaningfully increases our flexibility around capital allocation. After reviewing our capital allocation priorities with the Board, the company has decided to reallocate capital in favor of higher return priorities, including investing in the long-term growth of the business, deleveraging and opportunistic share repurchases, which will replace future dividend payments. With that, I'll turn the call back to Rohit. Rohit Verma: Thanks, Greg. Let me build on that and provide some more detail on our capital allocation. With the support of the Board, we're thinking more holistically about capital allocation. Our goal is to create the best return for our cash deployed. The current structure locks us into dividend and takes away the flexibility to be more thoughtful on our capital allocation. With our strong cash flow and anticipated TRA deferral, we believe it makes sense to take this opportunity to return value to our shareholders through a combination of reducing the company's leverage and through the opportunistic repurchase of stock rather than continuing our quarterly dividend at this time. Our existing repurchase plan has a remaining buyback authorization of $216 million, giving us the ability to reengage our repurchase activities in the near term. At the current levels, we believe our stock is undervalued and that repurposing our capital allocation towards debt reduction and share repurchases is a more efficient and effective use of capital. As I shared with you earlier, we are disappointed with our 2025 results. While we are focused on embracing a disciplined execution plan, we do believe the weakness experienced in 2025 will spill into 2026, and our performance improvement hinges on the successful execution of our priorities over the next 9 to 12 months. We will keep you up to date on our progress. We view 2026 as a launching pad for our performance inflection as we focus on positioning Alight for sustainable long-term growth. We enter 2026 with strong liquidity and a solid cash position and a portfolio of strong client relationships. We are being methodical in our approach with a focus on a small set of key operating priorities and expect to deploy more than $100 million of capital to strengthen the foundations of the business and position Alight for long-term growth. First, we are focused on delivering service and operational excellence. That includes investing in our client-facing teams by adding sales and account management professionals to increase coverage across our client base. Second, we are advancing product innovation by creating a world-class user experience using AI as an enabler to simplify user interactions and improve insight for both clients and participants. Alight's deep and highly differentiated data lake is enriched by decades of domain expertise and scale and are uniquely positioned to deliver more personalized, predictive and outcome-driven experiences that set us apart in the market. Likewise, we plan to more broadly deploy AI internally to assist with routine tasks so that our professionals can focus on providing the thoughtful expertise our clients and their employees expect. Driving innovation in our solutions from the top down is another critical priority for us. To that effect, we recently announced that Karen Frost will lead our Health and Navigation Solution and Kevin Curry will lead our Leaves Solution. We intend to announce a leader for our Wealth Solution shortly. We believe these additions will effectively align our solution strategy and heighten our ability to deliver a high-quality benefits experience for our clients. Third, we are focused on strengthening our existing relationships while adding to our client base. We have proven our ability to provide operating efficiency, consistency, reliability and execution across the complex benefits landscape, and we will leverage this success to expand our relationships with current and new clients and establish partner collaborations that allow us to serve at the front door to a holistic benefit experience. I am confident that we are at the forefront of implementing the right strategy to return the business to long-term growth, but this will take some time. Given that we missed guidance targets several times in 2025, I don't think it's prudent for me to provide full year guidance when I'm just 30 working days into my role. What I can say is that we expect first quarter 2026 revenue to be down by high single-digit percentage range. Likewise, we anticipate that our planned investments in sales, account management and user experience will create short-term adjusted EBITDA margin pressure, resulting in a decline of 500 to 750 basis points as compared to last year's first quarter. We view these investments as critical to executing on our stated priorities and meeting the expectations of our stakeholders. While our business has faced challenges, the attractive market dynamics, our strong leadership position and clear direction from our clients gives us a very achievable road map for driving margin expansion and growth in the midterm. Our strong cash flow provides us the financial flexibility to invest $100 million to drive product innovation, partner expansion and an enhanced experience for our clients and their employees. Our recent service and innovation successes leave us confident that we can further expand our already enviable market position. I'm energized by what I've seen so far and certain that we're putting the right strategy in place. I believe we can put the business back on a path to sustained profitable growth with the expertise and focus of our teams. With that, let me open the call for questions. Operator: [Operator Instructions] The first question is from Peter Christiansen from Citi. Peter Christiansen: So the messaging on the scale, the partner ecosystem, the mission-critical platform capability, this has been quite consistent with the prior execution teams here. But there's been a real gap between this sentiment in the asset value of the company and the core financial performance. It has been regular misses on client retention, pipeline conversion and any stability to growth. Recognize that you've been in the role for 30 days, but I was just -- I had 3 questions. I'm just curious, what's your take on what are -- what have been some of the drivers in some of the financial underperformance in recent periods? Second question, your experience previously CEO at Crawford, what do you bring to the table in terms of being able to turn around the company? Just curious on that perspective. And then final, I understand this is yet another transition year for the company. How should we think about measuring any milestones in the next 12 months? I appreciate it. Rohit Verma: Thank you, Peter. Great set of questions. So let me start from the top, right? What do I think are the drivers for the financial underperformance First and foremost, I had a hypothesis when I was coming into the organization. And that hypothesis was, as you stated, right, we're in a great industry. We've been here for a long time. Our brand is well recognized. We've got an enviable client base. And we have a service that if we execute well, it should be sticky. 30 days in, I have only strengthened that conviction, right, which is that those things are absolutely correct. Obviously, while coming in, I also knew that financially, we had not performed to the expectations of the organization as well as that of the Street and that also I have seen. I would say the biggest challenge for us has been on driving operational excellence, which to me is an execution piece, right? So this is not a change in the strategic direction of the company. This is a change in the execution of the company. So the biggest piece that we need to tighten is around execution. It's execution around operational excellence. It's execution around client management and relationship management, it's execution around technology and it's execution around continuing to innovate our products and services. So that, to me, are the 3 biggest pieces, right, that we have to push on. That leads me into my experience as the CEO at Crawford. When I joined Crawford, right, we had not grown for 10 years. And again, when I was there, what I realized was it was, again, in a market that was that was strong. It had an 80-year legacy. It had the expertise, but again, the execution was what was missing. So I've had several experiences of turning around execution. And turning around execution is a cultural change, a change in leadership philosophy, a leadership rhythm. It's being clear-eyed about what the priorities are and staying focused on what the priorities are continuously and consistently. And that is the experience that I had before, and I've done that 2 or 3 times, once as a CEO before that as more of an operating leader. And that is the experience that I'm going to bring here and drive that execution. In terms of measuring, I want to make sure that -- first, let me start by saying that the investor community is a very important stakeholder for us. So I want to make sure that what I'm giving you is something that is very clear, very definitive and something that I can consistently report on. So that's the reason why I want to hold back. I'm 30 days in. As you know, while Greg is doing a great job as our interim CFO, I'm in the process of appointing a full-time CEO. I want to make sure that appointment is done, and we collectively put our heads together on what are the things that we need to come back to the investor community with that we can share with you consistently and continuously so that you can measure how we're doing against our progress. Peter Christiansen: Good color. Rohit Verma: Thank you. I look forward to meeting with you soon. Operator: The next question is from Scott Schoenhaus from KeyBanc Capital Markets. Scott Schoenhaus: I guess maybe you can dive deeper into the first quarter guidance, all the moving parts, renewals, pipeline, pricing. Just walk us through what you're seeing at the start of the year here, Rohit, how you think you can manage this throughout the year, how we should expect the cadence both in the near term without providing distinct guidance? And then the longer-term targets of approaching mid-single-digit revenue growth at 30% adjusted EBITDA margins, can you recommit to that target? Rohit Verma: Scott, thank you so much for your question. I think what I would say to you is that, as I mentioned before, right, that we did not execute well in 2025, specifically on our renewals, and that's why I said that the financial underperformance of 2025 is expected to spill into 2026. There is a whole bunch of data that I'm analyzing with the team. And right now, that is the reason why I'm projecting to be high single digits lower on the revenue as well as about a 500 to 750 basis points lower on the margin. Because we had a less than stellar renewal season last year, I would say that typically, we want to target our renewals at the mid- to high 90s, we were significantly below that number. We had -- I think we had given you guys last year a revenue under contract, which was about $2.1 billion. Our revenue under contract starting 2026 is about 5% down. So -- and then the level of volatility that we've seen in the project revenue, right now, I'm just not comfortable in giving any more things just because I don't want to put something out there and then have to track back, given I'm 30 days in, there's a lot of work that I'm doing right now with the team. And I can assure you, like I said to Peter, that the investment community is a very important stakeholder for us. So as I get a more full-time CFO in place, as I get a better handle on all of the moving pieces, I will be coming back to something very definitive. Scott Schoenhaus: Great. I guess this is more of a sort of thematic AI industry question here. But are you seeing clients not renewing partly because they're testing their own AI bots and their own products themselves, their own applications internally themselves using these AI platforms? Rohit Verma: Scott, I'm so glad you asked that question because that gets asked to me all the time. Look, I think I mentioned that I have met 35 to 40 clients so far. Our client base typically tends to be on the upper end of middle market, right, and then all the way up to the Fortune 100. The level of complexity that you have in those plans, right, whether it is in terms of the various grandfathered plans that they have, whether it's in terms of the unions that they have, that it's really not possible to do this in-house by coding AI to do this work, right? If we were talking about a company that has 100 people or 200 people or maybe even 1,000 people, I think the conversation is a little bit different than the scale at which we're talking about. And I would tell you that I would put clients in 3 categories. There are clients that already have the governance structure in place in their organizations for AI, they're very open to putting AI in. In fact, I will tell you that there was a large client that I spoke to just a couple of weeks ago who said, "I don't want to enable any AI because we ourselves are trying to figure out how do we manage AI because of all the security and privacy risk that it opens up. So you have a second category of clients who are still figuring out how do they actively manage what AI is doing and what other controls that have in place and they are cautious about that. And then you have a third where they have put the infrastructure in place on AI. They want something with it, but they're still waiting to see what's the best way to deploy AI and where it's going to have the biggest impact. In fact, I think I heard one of the large bank CEOs just a couple of days quote that from their perspective, AI is not delivering what they had expected AI to deliver. So look, there's a lot of promise. I'm a computer engineer by education myself. I started AI 30 years ago in college. And obviously, AI today is very different than what it was at that time. But what I can tell you is that we have not seen a meaningful or any kind of disruption right now from an AI perspective, neither in terms of the employee base that we have. We have -- as I said before, we have about over 30 million participants on our system. We have not seen any major change in the number of employees. Now I would also tell you that several of our large employees have had very public restructuring, but also several of our large clients have had new acquisitions. So we have not seen a meaningful change in the number of employees on the platform. Hope that helps. Operator: [Operator Instructions] The next question is from Kevin McVeigh from UBS. The next question is from Peter Heckmann from D.A. Davidson. Peter Heckmann: Rohit, congrats on the new role. I think it's good to have you as the firm and look forward to working with you. I think the termination of the dividend program right after that was the right decision. And as we look into some of the initiatives here that we've just talked about, the additional comp in the fourth quarter of '25 and then the $100 million of incremental investment spend in certain areas, I guess, what portion of both of those do you view as recurring versus onetime? And in terms of the $100 million recurring, would you expect that to be front-end loaded in 2026? Rohit Verma: Great question, Peter. Thank you so much, and I look forward to meeting you as well. Peter, the way I would think about it is that the $100 million is not an additional investment. It is the CapEx that we have planned for this year. It's the capital investment we've planned for this year. Do I expect it to repeat it? I expect some part of it to repeat, right, because a lot of these things that we're trying to do aren't going to be done in 1 year. But as I had answered to Peter from Citi before that this has been an execution journey for us or this will be an execution journey for us and a large part of that depends on us doing -- bringing about changes in our processes, bringing about changes in our systems and modernizing those things to really meet the needs and asks of our clients. As far as the nature of the compensation, I do expect that to be recurring. And the reason I say that is because we are adding more horsepower from a sales management perspective. I want to make sure that individuals are incentivized for driving execution. And because I want execution to be the way we do business, I expect that part of the expense to be recurring. Peter Heckmann: Okay. Great. I'm glad I clarified that. I must have misheard kind of rushing through the press release here. Great. Great. Just second question. If I remember correctly, is -- does 2026 represent a bit of a lighter renewal cohort versus the last 2 years? Rohit Verma: Yes, you're absolutely right. 2026 is definitely lower compared to 2025, particularly, and it's lower by about 30% -- 30% to 40% compared to what it was last year. Operator: The next question is from Ross Cole from Needham & Company. Ross Cole: I was wondering if you could talk a little bit more about the internal impact of AI and if you're expecting to see any margin improvement related to that through 2026? Or if that's something that's expected in the out years? Rohit Verma: Yes. I would say that right now, there is a lot of work that we need to do on technology within the organization. And I believe that we're making a lot of progress on that. So I would say that I don't see any near-term impact on productivity improvement purely from AI. I think there are a bunch of other things that we're doing that should continue to have productivity improvement. We are leveraging AI across, I would say, 3 parts within the organization. One is -- which is also client-facing. One is on the user experience side, which obviously is going to impact more of the participants that we have from our clients. The second is in how we configure the system. So today, what happens is when we onboard a new client or when we set up a client for annual enrollment, there's a lot of manual work that happens in terms of taking the requirements from the clients, going through them and then actually configuring them in the system. We are exploring using AI to actually configure the system. As I shared before, some of the clients that we work with have 100,000, 150,000 employees and multiple classes of employees. By classes, I mean like you can have unionized, nonunionized, full-time, part-time, and all those require today a significant level of integration that we believe can be managed with AI. And that's something that we will be working on this year. And then the third thing that I would say from an AI perspective is we do a lot of file handling today. So what happens is a client sends us a file of their employees and then we send -- we take that file and then we send that over to, let's say, a carrier, we could be sending that to a financial services provider. And we expect that there is a lot of opportunity there with AI, not just from the standpoint of efficiency, but also accuracy. And then the final thing that I would say is in that, one of the most proven use cases of generative AI has been in call centers. We have a pretty large call center, and that's also something that offers an opportunity for us. But remember, for AI to be effective, the most important piece that you need is data, right? And we have tons of data, but that data has to be organized into a knowledge layer. And unless you organize into a knowledge layer, your ability to actually capitalize on that is very limited. So a big push for us in 2026 is to build that data and knowledge layer. Once we do that, we will be in a much better position to drive the efficiencies that come from AI. And that's why I expect those to be more 2027 opportunities than 2026. So I hope that helps, Ross. I know it was rather elongated answer. Ross Cole: That was very helpful. I appreciate that. Operator: [Operator Instructions] The next question is from Kevin McVeigh from UBS. Kevin McVeigh: Can you help us understand, it sounds like some of the renewals that slipped from a retention perspective. What was driving that? Because obviously, that kind of cascades into 2026 overall. But just maybe help us understand what drove some of that slippage? Was it just churn, consolidation? Like what was the main driver of that? Rohit Verma: Yes. And I think the main driver actually comes through the -- what I said in the ask or the request from the clients, right, which is driving operational excellence, being more modern with our user interface making sure that the relationships that we're building are deep and consistent. So those are the 3 things that the clients have been very clear about, and that's what I'm attributing right now from a retention perspective as the reasons why we underperformed on that. And those are the 3 things, as you heard from me, are very clear priorities that we're working on right now. Kevin McVeigh: Got it. And then just from the dividend perspective, it makes sense. I think that was about $86 million. But maybe help us understand like why are we even paying a TRA in 2026? I mean I think it's $130 million, but like it's a massive use of cash. I get to '27, '28, but is there no way to maybe manage that a little bit better just given how much the dynamics of the business have changed? Rohit Verma: Kevin, first of all, I would love that if we didn't have to. But I'll let Greg explain the mechanics of why we're doing this in 2026. Gregory Giometti: Yes. So the TRA payment in 2026 is for our 2024 tax return. And so what it includes is the gain on the sale of Strada. And so that's why the payment is so elevated. It's really around the divestiture transaction. There's just a 2-year lag in terms of when the payment actually goes out. Kevin McVeigh: Got it. And I guess with the -- I mean because obviously, you had massive impairment charges, things like that, that doesn't impact that calculation at all. Gregory Giometti: No. Because those kind of impact the 2025 tax year, which then will kind of roll into our '27 and '28 payments. Operator: There are no further questions at this time. I would like to turn the floor back over to management for closing comments. Rohit Verma: Thank you, [ Sashi. ] Thank you all for joining. I appreciate your continued interest in Alight, and I look forward to updating you on our progress in the quarters ahead. Thank you, and God bless. 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 Fiscal Year 2025 Laureate Education, Inc. 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, Adam Morse, Senior Vice President of Finance. Please go ahead. Adam Morse: Good morning, and thank you for joining us on today's call to discuss Laureate Education's Fourth Quarter and Year-End 2025 Results. Joining me on the call today are Eilif Serck-Hanssen, President and Chief Executive Officer; and Rick Buskirk, Chief Financial Officer. Our earnings press release is available on the Investor Relations section of our website at laureate.net. We have also posted a supplementary presentation to the website, which we will be referring to during today's call. The call is being webcast and a complete recording will be available after the call. I would like to remind you that some of the information we are providing today, including, but not limited to, our financial and operational guidance, constitutes forward-looking statements within the meaning of applicable U.S. securities laws. Forward-looking statements are subject to risks and uncertainties that may change at any time, and therefore, our actual results may differ materially from those we expected. Important factors that could cause actual results to differ materially from our expectations are disclosed in our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission earlier this morning as well as other filings made with the SEC. In addition, all forward-looking statements are based on current expectations as of the date of this conference call, and we undertake no obligation to update any forward-looking statements. Additionally, non-GAAP measures that we discuss, including and among others, adjusted EBITDA and its related margin, adjusted net income and adjusted earnings per share, total cash and equivalents, net of total debt and free cash flow are also detailed and reconciled to their GAAP counterparts in our press release or supplementary presentation. Let me now turn the call over to Eilif. Eilif Serck-Hanssen: Thank you, Adam, and good morning, everyone. Laureate delivered another strong year of performance in 2025 with sustained revenue growth and expanding margins. Full year revenue reached $1.7 billion, and adjusted EBITDA was $519 million, both exceeding the guidance we provided last October. Throughout 2025, we continue to execute on both our growth agenda and our productivity initiatives, which resulted in top line growth of 9% and a historical high margin of 30.5% for the full year. We maintained strong financial discipline throughout the year and closed 2025 with a net cash position. Our cash accretive business model enabled us to return $217 million of capital to shareholders last year through our stock repurchase program. We remain well positioned to continue to invest in future growth and innovation while maintaining our commitment to returning excess capital to shareholders. Today, we are also pleased to announce that our Board of Directors has authorized an additional $150 million increase to our stock repurchase program, underscoring our focus on long-term value creation for shareholders. With nearly 500,000 students across Mexico and Peru, we have proven that excellence and scale can go hand-in-hand. The scale that we have achieved provides significant competitive advantages in terms of our ability to invest in growth, innovation and academic excellence. In 2025, we continue to strengthen our academic offerings and made further investments in our campus networks, including the opening of 2 new campuses for our value brands, one in Monterrey, Mexico and one in Lima's Ate District. Both projects opened on time and on budget, and they performed as expected during their first year of ramp. We also made further investments in our Health Sciences portfolio last year, including the opening of a new medical school and a new veterinary school. Health Science programs remain a key focus for our institutions given the long-term demand and workforce needs for graduates in that field of study. Laureate also continues to lead the way in innovation, both inside and outside the classroom. The significant investments we have made in online capabilities position us as the leader in online education in both markets. We now serve more than 100,000 students in our fully online programs focused on working adults. Within our back office, our innovation capabilities have been acknowledged by industry leaders such as Google, who recently recognized Laureate Mexico as the most advanced company in digital marketing maturity across all industries in Spanish-speaking Latin America. These type of recognitions highlight Laureate's deep digital expertise, which in turn has put us at a significant competitive advantage when it comes to embedding AI tools into our student life cycle journey. Our investments, combined with innovation mindset continue to drive improvements in our academic quality and student outcomes. Throughout the network, our institutions continue to be recognized as leaders in the sector. We are pleased to share the latest results from QS Stars, one of the world's leading independent university ranking and ratings organizations. For the third consecutive year, all our universities in Mexico and Peru have achieved 5-star rating, the highest rating attainable in employability, online learning and social impact. Our institutions also received strong market recognition for academic excellence and brand leadership. A few examples from this past year include: in Peru, UPC ranked the #1 education brand for the fifth consecutive year by MERCO and received a 5-star global university rating by QS Stars. In Mexico, UVM was ranked the second best private university by Reader's Digest 2025 ranking, second only to Tec de Monterrey. Our value brands in both markets, UPN in Peru and UNITEC in Mexico, were ranked in the top 10 in their respective countries by the same ranking agencies. I extend my deepest gratitude to our faculty and staff for their commitment to academic excellence and congratulate them on these outstanding recognitions. Looking ahead, we remain confident that the demand for quality higher education in both Mexico and Peru will continue to increase. This demand is fueled by rising participation rate, strong wage premiums for graduates and the affordability of our programs. Additionally, the private sector, which accounts for over 55% of the combined university seats in the 2 countries, plays a critical role in the market due to limited public resources. For 2026, our guidance called for U.S. dollar reported revenue growth of 11% to 12%, of which approximately 5 points is attributable to the more favorable FX environment. Further, we expect 50 basis points of margin expansion during 2026, reflecting continued operating leverage from growth initiatives despite some incremental costs associated with the opening of new campus locations. We see sustained growth opportunities in both markets, including building additional new campuses for our value brands in new cities and site locations over the next 5-year period and have already begun to procure land for some of these new sites. Additionally, we are expanding our addressable market through continued AI-enabled investments in digital education with a significant focus on fully online segment for working adults. Many of our AI tools that we have developed for the online portfolio are also being deployed to our face-to-face students and short course upskilling efforts. From a macroeconomic perspective, we expect Mexico's GDP growth for 2026 to be relatively modest, albeit slightly better than 2025. The key upcoming event to watch is the USMCA trade negotiations. President Sheinbaum's pragmatic approach to managing the U.S.-Mexico relationship has helped maintain a constructive tone as discussions are being kicked off. Many economists anticipate a favorable outcome and are projecting an increase in economic activity for Mexico starting in the second half of 2026, setting the stage for a more robust GDP growth in 2027. In Peru, the economy continues to perform solidly with strong domestic demand and a favorable macro environment. Supportive monetary conditions, strong commodity prices and new mining projects should continue to underpin strong economic activity throughout the year, even against the backdrop of a presidential election. From a supply and demand perspective in Peru, we continue to rapidly scale our fully online offerings, but are somewhat capacity constrained in our face-to-face campus operations. We expect that to be alleviated following the launch of our second new campus that opens in March of 2027 in South Lima with additional new campus projects beyond that already in the pipeline. That concludes my prepared remarks, and I will now turn the call over to Rick Buskirk for a more comprehensive financial overview of the fourth quarter and full year 2025 performance as well as further details on our 2026 outlook. Rick? Richard Buskirk: Thank you, Eilif. Before I discuss our financial performance for the quarter, let me provide a few important reminders on seasonality. Campus-based higher education is a seasonal business. Although the fourth quarter is not a large intake period, it represents a strong earnings quarter for the company as classes are in session for much of the period. In addition, the timing of the start of our classes can shift year-over-year depending on various factors such as when public universities begin classes or when holidays occur. This, in turn, affects the timing of enrollments and revenue recognition and quarter-over-quarter comparability. In 2025, the beginning of classes, particularly in Peru, started later versus 2024, extending the enrollment cycle into mid-April and beyond the first quarter cutoff. As a result, we had an intra-year shift in timing that resulted in approximately $25 million of revenue and $21 million in adjusted EBITDA to be shifted from earlier in the year to the fourth quarter. Let's start with Pages 11 and 12 of the supplementary presentation, which highlights our operating and financial performance for the fourth quarter and full year. Revenue in the fourth quarter was $541 million and adjusted EBITDA was $204 million. Both metrics were ahead of the guidance we provided 3 months ago, aided primarily by improved currency rates. On an organic constant currency basis and adjusted for the academic calendar shift discussed earlier, revenue in the fourth quarter was up 10% year-over-year and adjusted EBITDA increased by 14%. Fourth quarter net income was $172 million, resulting in earnings per share of $1.17 per share on a reported basis. Fourth quarter adjusted net income was $112 million, and adjusted earnings per share was $0.76 per share, an increase of 46% as compared to the fourth quarter of prior year. Now moving to full year results. For 2025, new enrollments increased 8% versus prior year, and total enrollments were up 5%. Full year revenue was $1.702 billion and adjusted EBITDA was $519 million. This resulted in an adjusted EBITDA margin of 30.5%, which is a new historic high for Laureate. On an organic constant currency basis, revenue for the year increased by 8% and adjusted EBITDA was up 13%, resulting in a 131 basis point improvement in margins, led by a 164 basis point increase in Mexico. Our continued focus on productivity is yielding strong results. Full year 2025 net income was $284 million, resulting in earnings per share of $1.89 per share on a reported basis. Adjusted net income was $256 million and adjusted earnings per share was $1.72 per share, an increase of 22% as compared to prior year. Let me now provide some additional color on the performance of Mexico and Peru, starting with Page 14. Please note that all comparisons versus prior year are on an organic and constant currency basis. Let's start with Mexico. New enrollments increased 5% for the year, led by growth in fully online programs focused on working adults across both our premium and value brands. Total enrollments in 2025 increased 4% compared to the prior year or 5% same-store. As Eilif referenced earlier, Mexico's macroeconomic environment has recently been characterized by slower growth. Our results underscore the resilience of our operating model and the value proposition we offer to students and their families. Mexico's revenue for the fourth quarter increased 12% compared to the prior year period. Adjusted EBITDA for the fourth quarter was up 10% year-over-year. For full year 2025, revenue growth of 9% was driven by a 6% increase in average total enrollments and 3% of price/mix. Overall, pricing for the year was in line with our cost of inflation for our traditional face-to-face students. Adjusted EBITDA increased 17% in 2025 versus the prior year period, expanding Mexico's margins by 164 basis points to 26.1%, driven by strong operating leverage from revenue growth and productivity gains. Let's now transition to Peru on Slide 15. New enrollments increased 13% for the year, driven by double-digit growth in our fully online programs that serve working adults as we continue to scale in that segment. Total enrollments for the year increased by 7% compared to the prior year. Revenue growth for the fourth quarter was 22% and adjusted EBITDA increased 49% year-over-year, primarily due to the timing of the academic calendar I referenced earlier. When adjusted for the timing of the academic calendar, fourth quarter revenue increased 8%, while adjusted EBITDA was up 16%. For full year 2025, revenue in Peru increased 7% year-over-year, driven by a 6% increase in average total enrollments. Overall, pricing was in line with our cost of inflation for traditional face-to-face students. We are seeing a price/mix impact on average revenue per student due to the higher growth rate of our fully online programs, which are offered at a lower price point. We expect that mix impact to continue in 2026 as we scale up our online segment in Peru. Adjusted EBITDA increased 9% versus the prior year with a margin expansion of 54 basis points. Let me now briefly turn to our balance sheet. Laureate ended the year with $147 million in cash and $129 million in gross debt for a net cash position of $18 million. During 2025, we repurchased $217 million of common stock under our existing authorization. Since 2019, total capital returned to shareholders has exceeded $3 billion through share purchases, cash distributions and cash dividends. Today, we announced that our Board has authorized a $150 million increase to our share repurchase program. This authorization is supported by our strong balance sheet, cash accretive business model and disciplined capital allocation. As a result of this upsizing, a total of $181 million is available under the current authorization as of year-end 2025. We expect to continue returning excess capital to shareholders in 2026. Let's now transition to our discussion on guidance. We remain excited about the growth opportunities in Mexico and Peru and expect continued operating momentum in both markets during 2026. A little context by market before getting into the ranges, reiterating some of what Eilif discussed earlier. In Mexico, the macroeconomic conditions are expected to remain soft for much of 2026, aligned with the operating environment in 2025. We expect improved conditions in the second half of the year and as we head into 2027 following the conclusion of the renegotiated USMCA agreement. In Peru, we intend to continue to rapidly scale our fully online offerings. As we are in the process of building incremental face-to-face capacity with our series of planned new campus launches, strong fully online growth is expected to continue to create a price/mix impact on average revenue per student. Lastly, we are operating in an FX environment where the Mexican peso and the Peruvian sol have appreciated significantly against the U.S. dollar versus the same time last year. This FX environment is currently expected to create some favorable foreign currency translation effects for us as we start the year. With that context, let me now move to our guidance ranges. Based on our assumed FX rates, we expect full year 2026 results to be as follows: total enrollments to be in the range of 516,000 to 521,000 students, reflecting growth of 4% to 5% versus 2025, revenues to be in the range of $1.890 billion to $1.905 billion, reflecting growth of 11% to 12% on an as-reported basis and 6% to 7% on an organic constant currency basis versus 2025. Adjusted EBITDA to be in the range of $583 million to $593 million, reflecting growth of 12% to 14% on an as-reported basis and 7% to 9% on an organic constant currency basis versus 2025. This would result in an increase in adjusted EBITDA margins of approximately 50 basis points at the midpoint of our guidance on a reported basis. For 2026, we expect adjusted EBITDA to unlevered free cash flow conversion of approximately 50% on a reported basis, supporting our continued emphasis on return of capital to shareholders. Lastly, today, we are introducing adjusted earnings per share guidance for 2026 with adjusted earnings per share to be expected to be in the range of $1.95 to $2.03 per share, reflecting growth of 13% to 18% versus 2025 on a reported basis. This non-GAAP measure is intended to provide greater transparency into our underlying profitability and improve comparability across periods. Now turning to our first quarter guidance. As a reminder, Q1 is a seasonally low quarter as classes are largely out of session in January and much of February. In addition, in terms of the seasonality for 2026, we will have some intra-year calendar timing as outlined on Slide 22 of our presentation. For the first quarter specifically, approximately $9 million of revenue and related profitability is expected to shift out of the first quarter to later in the year. With that context, for the first quarter of 2026, we expect revenue between $261 million and $265 million and adjusted EBITDA between negative $20 million to negative $17 million, reflecting growth in fixed costs and investments in our new campuses during a largely out-of-session period. That concludes my prepared remarks. Eilif, I'm handing it back to you for closing comments. Eilif Serck-Hanssen: Thank you, Rick. 2025 was another strong year for Laureate, in which we continue to deliver on our commitments through disciplined execution, focused growth and innovation investments and sustained operational excellence. We see attractive growth opportunities across Mexico and Peru in the years to come and remain committed to executing on our growth agenda. As an established emerging market company with developed market governance, we look forward to another year of value creation for all stakeholders in 2026, guided by our mission to expand access to high-quality, affordable higher education and to positively impact the students and communities we serve. Operator, that concludes our prepared remarks, and we're now happy to take any questions from the participants. Operator: [Operator Instructions] Our first question will be coming from the line of Jeff Silber of BMO Capital Markets. Jeffrey Silber: You mentioned in your prepared remarks potential new campus openings. And I'm just curious, one, how far in advance do you have to make that decision in order to make sure that you've got the capacity? And two, how do you decide whether you're going to create your own versus potentially buying a campus that already exists? Eilif Serck-Hanssen: Jeff, this is Eilif. In terms of timing, it takes about 18 to 24 months to launch a new campus, and that includes the time to find the land, get the licenses, the permits, the zoning, build the campus and then launch [indiscernible] date. In terms of buy versus build, it really is an IRR question. Typically, we have been building, then we get it exactly to the stack. It takes a little longer to ramp versus buying. But typically, it's more economical for us to just build the campus. We have the playbook and then we get the operating model just the way that we want it. Jeffrey Silber: Okay. That's helpful. And then also, you talked about AI and how you're using it in your business. The market is very jittery these days about AI disruption. Do you see any parts of your business that might be at risk from AI disruption? Eilif Serck-Hanssen: I think AI is going to be our friend. AI is going to improve retention. It is going to improve the learning outcomes. It is going to continue for us to expand the quality -- access to quality education in the markets where we are serving. And I think the focus for us is to make sure that we are launching the programs for where tomorrow's jobs reside. And I think that is the #1 priority for us. And then that's followed closely by making sure that we are leveraging AI to continue to improve outcomes and reduce cost of education. Operator: And our next question will be coming from the line of Marcelo Santos of JPMorgan. Marcelo Santos: I have also 2. The first question is on the guidance for 2026. In terms of FX-neutral revenue growth, it implies some deceleration versus what was presented in 2025. Could you just please comment what are the sources, the ups and downs that lead to this slight deceleration in the FX neutral? That's the first question. And the second question is just asking about the expansion of distance learning in Peru. I wanted to ask about the market. Are you noticing a ticket discipline in the market? Or are you noticing like the other players who are launching being more aggressive? Just wanted your comment to see how the market is developing with this new technology. Eilif Serck-Hanssen: Great. Rick, do you want to take the guidance? And I'll take the online. Richard Buskirk: Sure. Marcelo, just to start off, we have shown a consistent ability to continue, as you know, to grow the business in both strong economic times as well as softer macroeconomic times, showing the resiliency of our business model and our ability to expand margins. Specific to 2026, in Mexico, as we noted in our opening remarks, the softer macroeconomic conditions are impacting our outlook. And as a reminder, the primary intake last September for Mexico was up 2% reported, 4% same-store, excluding closures for new enrollments and 4% for total enrollments. The results from that intake carry much of our volume for 2026 in Mexico until we hit the primary intake again in Q3 in the fall. So we do expect macro conditions to be better in the second half of the year following the conclusion of USMCA. That may benefit this year's primary intake, but it happens later in the year and be felt more in 2027. So that's Mexico. In Peru, though the macroeconomic backdrop is stronger, we've been very successful historically of filling up capacity in that market and are more capacity constrained. And as a result, we're addressing that through a series of new campus launches, including one in which we'll launch in March of next year. So those 2 factors are creating a slight deceleration year-over-year, but we're still very, very encouraged about it. And on top of that, we're expanding, as you saw, margins by 50 basis points. That 50 basis point margin expansion is including the netting effect of investments in these new campuses, which creates an offset around 25 basis points. So we're absorbing that 25 basis points within the 50 basis points margin expansion. So again, a little deceleration, but we feel great about this business and our ability to grow in good economic times and slower economic times, and that's some more clarity for you. I'll pause there, and see if you have any more questions. Marcelo Santos: And my next question is on guidance. Eilif Serck-Hanssen: Great, Marcelo. Your second question was on online or distance learning in Peru. That is accelerating really, really well for us. The market is very receptive to the innovative product portfolio that we have launched over the last couple of years. We are growing robustly in that market. And as I think I've mentioned before, it is a product that is designed for the working adult consumer. So it is very distinct and separate for the face-to-face undergraduate programs that we are selling to young students, high school leavers. And for that reason, there's very little cannibalization between these 2 product offerings. In terms of pricing, we have done our price volume elasticity studies. And so we have been a little bit more cautious in taking pricing increases in the working adult segment in favor of rapid growth in that market. So ARPS are flattish in the online segment, but the growth is very, very robust. Operator: And our next question will be coming from the line of Lucas Nagano of Morgan Stanley. Lucas Nagano: The first one is related to the adjusted EPS guidance. So the question is below the EBITDA line, there is any implied change -- material change in your assumptions versus 2025, either in capital structure or taxes? And the second question is about the capacity constraint in Peru. To what extent should it affect new enrollments and price/mix this year based on what you said these drivers should be addressed next year with the new campuses? Richard Buskirk: Yes, sure. And in terms of our adjusted EPS guidance, we're happy to provide that. Number one, it's an important metric for us as we continue to move forward. It's a high-quality company. Relative to last year, I think you'll see a small increase in G&A as we bring new campuses online. I think you will also see that taxes should be generally in line, slightly improved. And then lastly, you'll see a little bit higher interest income because of the funding of our new campuses in Peru. Sorry, I think in your second question, was related to... Eilif Serck-Hanssen: Second question on capacity constraints. We are running higher utilization in Mexico than in Peru. The same-store has a little bit more restrictions. It's not material at this point, but it's one of the reasons why we're adding more capacity with new campus launches still in Lima for our value brand as well as adding more classrooms to existing campuses in Peru. Richard Buskirk: And Lucas, just to follow on to what Eilif said, I think you saw very strong fully online growth last year in Peru. As a result, we had 7% volume growth, 7% revenue growth. If you look at average enrollment, it was 6%. So it's about 1% price/mix. I think you'll see a big impact of price/mix as well this year in Peru as we continue to really provide some leadership position in the fully online segment and go after that. That pattern should recur in 2026. Operator: And our next question will be coming from Eduardo Resende of UBS. Eduardo Resende: I got just one question from my side. Talking about the softer economic activity expected in Peru this year, especially with discussions regarding USMCA, do you see any risk of this potentially impacting the company's ongoing investment plans in the country? And how do you see tuitions evolving the scenario and your capacity to pass through the costs in Mexico this year? So that's all from my side. Eilif Serck-Hanssen: Thank you, Eduardo. So the softer economic conditions in Mexico is really a continuation of what we have seen since the second half of 2024. And it was driven by some uncertainties following the election, the uncertainty around tariffs and the trade situation between Mexico and the United States. And so that softer GDP production in 2025, it was below 1%. In 2026, it's expected to be somewhere between 1.4%, 1.5% GDP. And then the expectation is that post USMCA, there will be an uptick in direct foreign investment again into Mexico as we saw in 2023, that is going to then drive GDP growth up into the 2 to 3 percentage point range. So how I would describe 2026 is a continuation of 2025 was slightly lower. And during 2025, we saw volume production of 3% to 4% growth, and we saw pricing consistent with inflation. And it is that kind of momentum that I expect continuing into 2026 with potentially some upside in the second half of 2026 when there's clarity on USMCA and hence, the level of private investment in the country. Operator: And I am showing no further questions. I thank you for all participating on today's conference call. This concludes today's call. You may now disconnect.
Operator: Welcome, everyone, to the DT Midstream Fourth Quarter and Year-end 2025 Earnings Call. I will now turn the call over to our speaker today, Todd Lohrmann, Director of Investor Relations. Please go ahead, sir. Todd Lohrmann: Good morning, and welcome, everyone. Before we get started, I would like to remind you to read the safe harbor statement on Page 2 of the presentation, including the reference to forward-looking statements. Our presentation also includes references to non-GAAP financial measures. Please refer to the reconciliations to GAAP contained in the appendix. Joining me this morning are David Slater, Executive Chairman and CEO; and Jeff Jewell, Executive Vice President and CFO. With that, I'll go ahead and turn the call over to David. David Slater: Thanks, Todd, and good morning, everyone, and thank you for joining. During today's call, I'll discuss our 2025 accomplishments, recap the strategic milestones DTM has achieved since our spin-off approximately 5 years ago and provide an update on our organic growth project backlog and our outlook for 2026 and beyond. I'll then close with some observations on the current natural gas market fundamentals before turning it over to Jeff to review our financial performance and guidance. So with that, 2025 was another record year for DTM. Our adjusted EBITDA exceeded our increased guidance midpoint and represents a 17% increase from the prior year, driven by significant growth in the Pipeline segment, which has been a strategic focus for the company since we spun. The end of 2025 also marked 1 year since our Midwestp pipeline acquisition, and I'm very pleased to report that we have successfully completed the integration of these assets. And I'd like to take a moment to recognize and thank the team for their hard work on this effort. From a commercial perspective, last year, we advanced more than $1 billion of organic opportunities from our backlog, of which 80% is for pipeline projects. On the construction front, we continued our successful track record of project execution. Most notably, our construction team placed the LEAP Phase 4 expansion into service early and on budget, increasing the capacity of LEAP to 2.1 Bcf per day. Additionally, we placed several gathering projects into service across our footprint, which enabled us to achieve record high throughput in 2025. We also continued our disciplined financial management, prioritizing a strong balance sheet and achieved investment-grade credit ratings across all 3 rating agencies. So I am very pleased with our overall performance last year, which reflects the continued focused execution of our core strategy, pure-play natural gas, leading contribution from the pipeline segment long-term demand-based contracts and a high-quality portfolio of strategically located assets. Since we spun the company nearly 5 years ago, DTM has consistently outperformed the broader market and our midstream peers, delivering total shareholder return of approximately 280%, including 12% compounded annual adjusted EBITDA growth and a consistently growing and durable dividend. Our high-quality natural gas pipeline segment has driven this growth, increasing from 50% of our business to 70% today, the highest among our peer group. Our portfolio continues to be well contracted with 95% demand-based agreements and an average contract tenure of 8 years, which reflects how the market values these assets and our ability to continually replenish the contract tenor. We have also successfully executed focused, strategic bolt-on acquisitions that have increased our ownership in regulated pipeline assets. All of these great accomplishments could not have been achieved without the hard work and dedication from our team to whom I am forever grateful and who continue to be the foundation of our success. Their commitment to safety, performance excellence and customer service are core elements of our exceptional results, and I'm excited for the future and our ability to deliver on the tremendous opportunities ahead. Turning to 2026 and beyond. We are very well positioned within the natural gas ecosystem to serve the increasing demand across our footprint, and continue our track record of premium, high-quality natural gas pipeline growth. Supported by strong fundamentals, we are embarking upon a window of generational investment opportunities and have updated our overall organic project backlog to reflect this, increasing it by approximately 50% to $3.4 billion over the next 5 years, with pipeline projects leading the way, comprising approximately 75% of the backlog. Our growth backlog represents our FID projects and probability-adjusted future organic opportunities that we are committing to execute on and can be fully funded with our strong cash flows and healthy balance sheet. The gross backlog is much larger, which is an indicator of the extraordinary opportunity set that exists. We will continue our prudent capital allocation through this investment cycle and expect to deliver growth above our long-term growth rate guidance in the later part of the decade, driven by sizable projects being placed in service. With that, I'm pleased that 2026 is already off to a great start, and we are announcing that we've reached FID on 2 new projects in our Pipeline segment. The first is an expansion of Viking to serve low growth in Grand Forks, North Dakota, and is anchored by an investment-grade utility customer under a long-term negotiated rate contract and is expected to go into service in Q4 2027. The second is our next phase of Interstate Pipelines modernization program, which will be focused on Midwestern pipeline, and will improve the reliability of this critical capacity serving the market corridor between Chicago and Nashville. With these projects commercialized, we have approximately $1.6 billion committed out of our $3.4 billion backlog. We are also advancing additional pipeline projects towards FID. Vector Pipeline closed a successful binding open season for an expansion to increase westbound capacity into Chicago by approximately 400 million cubic feet per day and has a contractual support needed to move forward subject to final approvals from both owners and is expected to be in service in Q4 2028. Millennium Pipeline has obtained contractual support for the R2R project as the long-term agreements have been executed with 2 utilities and an existing power plant. Subject to final approvals from both owners, the project is expected to be fully in service in Q1 2027. We will provide more updates once these projects are formally approved. Turning to project construction. We placed the Stonewall Mountain Valley pipeline expansion into service early and on budget at the beginning of February, and deliveries are being made to Mountain Valley for multiple customers. In addition, our Phase III Appalachia gathering system expansion has now reached full in service, also early and on budget. All other previously announced growth investment projects remain on track and on budget. Finally, I'd like to take a moment to provide our view on the natural gas market fundamentals. Natural gas has firmly established itself as a core North American fuel, offering unmatched affordability and reliability, lower emissions and the security of a domestic resource base. It underpins the onshoring of manufacturing, rapid data center development and the continued build-out of LNG exports, all key drivers of long-term demand and foundational to America's global competitive posture. With these tailwinds, the stage is set for specific opportunities driving our strategy, and we are seeing these strong structural demand signals across our operating footprint. Demand for natural gas to serve power continues to accelerate across the Upper Midwest with approximately 35 gigawatts of coal plant generation expected to retire in the next 10 to 15 years, and increasing announcements of new large loads and data centers being cited. This demand is largely going to land with utilities in these states who have announced contracted and potential large load opportunities of approximately 50 gigawatts and are planning to invest close to $150 billion in new generation over the next 5 years to keep pace below growth. These are large numbers. And while not all power demand will be served by natural gas, we see an addressable opportunity set of up to 13 Bcf per day and a pathway that could easily result in 5 to 8 Bcf per day of potential incremental gas demand in the upper Midwest. DTM's extensive interstate gas pipeline network is uniquely located across this region and is already serving many of the utilities that will experience this low growth, positioning us to fuel many of these opportunities. On the LNG front, we saw 4 terminals reach FID in 2025 as well as international companies vertically integrating in the Haynesville to extend their natural gas value chain, both of which will support strong and sustained export demand. We expect LNG demand to grow by 11 Bcf through 2030, with 2/3 being served by the Haynesville. In our integrated system with its leading connectivity to both supply and demand markets is exceptionally well positioned to capitalize on the strengthening trends. I'd also like to address the recent cold weather. It has illuminated the tightness that exists today in the North American market, resulting in extreme price volatility across our entire footprint, a signal of capacity constraints driven by demand growth. The natural gas pipeline and storage network performed very well during the cold, demonstrating its reliability to serve its existing firm customers. However, the price volatility is a strong signal that we need to build and expand the pipeline network to bring more natural gas to serve the growing demand. For DTM, this winter, our storage complex recorded all-time high withdrawals, and many of our pipelines experienced record high peak day throughputs. Pulling this all together, today's natural gas market fundamentals makes DTM's natural gas infrastructure critically important and positioned for growth. And with that, I'll pass it over to Jeff to walk you through our financial results and outlook. Jeffrey Jewell: Thanks, David, and good morning, everyone. For 2025, DTM's adjusted EBITDA was $1.138 billion, an increase of 17% over the prior year, supported by our Pipeline segment's 27% growth, which was driven by the Midwest Pipeline acquisition and higher LEAP and storage revenue. For the fourth quarter, we delivered overall adjusted EBITDA of $293 million, a $5 million increase from the prior quarter, which was driven by increased seasonal demand on our JV pipelines and higher LEAP revenue. Our Gathering segment results were in line with the third quarter. Operationally, for the quarter, we achieved a record high in total gathering volumes with the Haynesville averaging above 1.9 Bcf per day, slightly down from the third quarter due to upstream maintenance. Average volumes in the Northeast ramped in the fourth quarter to approximately 1.3 Bcf per day, in line with our expectations of flat entry to exit for the year. In 2026, winter storm Fern drove some production curtailments, which is contemplated in our 2026 guidance range. Moving forward to our financial outlook for 2026 and beyond, as we have done in the past, we are providing the current year guidance as well as an early outlook for the following year. For 2026, our adjusted EBITDA guidance range is $1.155 million to $1.225 billion, with the midpoint representing 6% growth over our 2025 original guidance midpoint. Our 2027 early outlook range for adjusted EBITDA is $1.225 billion to $1.295 billion, with the midpoint representing a 6% increase over the 2026 guidance midpoint. Our adjusted EBITDA guidance for '26 and for '27 is supported by the incremental contribution from our organic growth investments as well as expected activity from our major producer customers. Our 2026 growth capital guidance is $420 million to $480 million, and we've increased our committed capital to reflect the new FID growth projects with approximately $390 million now committed. For 2027, we expect the level of growth investments to be above 2026. And we already have approximately $430 million committed. As David mentioned, we have reached FID on a Viking pipeline expansion, and we expect to invest a total of $30 million to $40 million for the project. We have also FID-ed Phase 2 of our Interstate modernization program, which has a planned investment range of $140 million to $160 million at an expected first half 2028 in service debt. The capital associated with this project will be included in the next rate case. From a balance sheet perspective, we are very pleased with obtaining investment-grade credit rating in 2025, which we are committed to preserving as evidenced by our 2026 year-end forecast for on-balance sheet leverage of 2.9x and proportional leverage of 3.5x. With our cash flows being strong and our healthy balance sheet, we will fully fund our project backlog with significant headroom for additional future growth opportunities. And finally, our Board has declared a quarterly dividend of $0.88 per share, which represents a 7.3% increase from the prior year and continues our track record of providing leading dividend growth. Our approach to delivering a secured dividend has not changed as we plan to grow it in line with adjusted EBITDA and are committed to maintaining a strong coverage ratio above our 2x floor, which was 2.6x for 2025. And with that, I will now pass it back over to David for closing remarks. David Slater: Thanks, Jeff. So in summary, we're highly confident in delivering on our guidance, continuing our track record of strong performance. Looking ahead, the fundamentals supporting our business are exceptionally strong, and our integrated footprint sits in the most advantaged corridors to benefit from this generational investment opportunity. Our sizable organic project backlog with potential for additional opportunities reflects our disciplined focus capital allocation to high-quality natural gas pipeline projects. We will continue our consistent execution of this strategy, which has delivered dependable best-in-class growth and will continue to create significant value for years to come. And with that, we can now open up the line for questions. Operator: [Operator Instructions] We will go first to Theresa Chen from Barclays. Theresa Chen: It's encouraging to see such a robust project backlog, the breadth and depth of the opportunities is impressive. Can you discuss the expected pace and cadence of commercialization from here, the key drivers behind that trajectory? And how it informs your outlook for capital spending beyond 2027? David Slater: Theresa, thanks for the question. And yes, we're extremely excited about the opportunity set that's presenting in our footprint right now. I'll say this. It's a very fluid market. And as we laid out all these utility announcements that have been happening over the last couple of weeks as they talked about their year-end and their outlook, the opportunity set continues to grow. So it's a very fluid market, opportunity-rich market. All of our assets, especially our Upper Midwest assets, these utilities are our current customers. So we're in detailed conversations with them about their growth trajectory and their needs. So again, I think these will move forward in a very disciplined, rational way. Many of these demands are anchored in a state regulatory framework, so they'll go through a very disciplined process with utilities as they go through their approval process. But I think it results in a very strong and durable opportunity set for us to contract into. Very -- I'd say our Guardian project last year is a really good indication of what we expect this to look like going forward. The Vector expansion into Chicago, again, anchored -- utility anchored. So we're just seeing this theme kind of rolling through our asset footprint. And if I turn to the south and talk LNG briefly, again, a really clear line of sight on LNG growth. 2/3 of the hay is expected to meet that growth. And we continue to see that demand pull, and we're in a really good position to participate in that demand growth with LEAP. Theresa Chen: And maybe specifically turning to Midwestern Gas Transmission. The potential expansion of that pipeline, how are conversations progressing at this point? What scale or scope could this ultimately reach, and how are you thinking about the opportunity generally at this stage, knowing that multiple sources of demand as well as optionality for supply connectivity here? David Slater: Yes. That's a really exciting one, Theresa. We're in deep conversations with our existing customers on Midwestern for both a northern expansion and a southern expansion and just if you can visualize the asset, REX cuts right across the [indiscernible] asset. So supply can come in from Appalachia and it can come in from the Rockies. So there's supply diversity through the REX connection and strong demand signals to bring more gas north into the Greater Chicago, Upper Midwest, but we're also seeing strong demand signals to push gas south into, what I'll call that greater Nashville region. It is also experiencing tremendous power demand growth. Operator: Up next, we'll take a question from Julian Dumolin Smith from Jefferies. Robert Mosca: It is Rob Mosca on for Julian. So pick up big update here with the 5-year growth CapEx outlook. But hopefully you could dive into how you arrive at that number, maybe how you're risk adjusting that outlook for the uncommitted CapEx. And how do you characterize the texture, the geography within that uncommitted capital outlook? I'm just hoping you could dig into that gross number a little bit more? David Slater: Sure. I mean it's really increased from our last outlook a year ago. And I think we've talked about that as the year has progressed, and that's the fluidity of the market. The backlog continues to grow. We're highly confident in the increase that we laid out for the investors. About half of that is FID already. The other half is highly probable. We look at our gross backlog, which, by the way, is multiples of this committed backlog that we're committing to execute on. So it's probability adjusted based on our kind of our historical success ratio. So we're highly confident in deploying $3.4 billion. And as I said earlier, this is an extremely fluid market with incremental ways of demand that seems to be showing up every time we talk to our customers. So we're very bullish right now. We're also very disciplined and we tend to have a conservative view on running the business, which delivers these very consistent results. So we're just really in a sweet spot right now in the market. The assets are in the right location, both in the north and in the south, and the fundamentals around our assets are very strong. So our job here is to commercialize this and do it in a really rational and prudent manner. And I expect we're going to continue to deliver great returns for the investors. Robert Mosca: I appreciate that commentary, David. And there's -- it seems like there's a large open season for pipeline right now. I would serve some of that growing Midwest demand, I think you alluded to in your prepared remarks. Just wondering how that expansion or other third-party expansions in the region could impact your ability to execute some of those planned pipeline expansions that you guys have or seeking to have FID-ed? Or should we not think about it as being mutually exclusive? David Slater: Yes, Rob, we're not afraid of competition. The projects that we FID-ed last year also had competitive tension around them, Guardian, Vector. So that's not an issue for us. I think locasionally, our assets are in the right location. It's somewhat like real estate, location matters, connectivity matters, track record matters. The other thing I'd say, in my opening remarks, I kind of laid out the addressable opportunity set of 5 to 8 Bcf a day, which is sizable in the Upper Midwest. There's plenty of room for others to participate in that and for us to have outstanding results. We don't need to get all 5 to 8 Bcf, I mean we get 1 or 2, and that's going to be outstanding results for the company. So I'm not concerned about competition. We're focused on the market right now and on those relationships and working sort of customer by customer to provide the right answer, the right solution for their growth. And talking to these utilities, they're experiencing generational growth as well. And I think that's going to -- the domino effect is going to fall across our assets. And what I'm really excited about with our assets is the connectivity that we have across multiple assets. So you sort of -- you can see it with Vector. Guardian was FID-ed last year. We're on the doorstep of FID-ing Vector. That domino effect is playing out across our asset footprint right now, and I expect that to continue. Operator: Michael Blum from Wells Fargo has the next question. Michael Blum: I wanted to ask on the backlog again. So you mentioned the gross backlog is much larger than the risk-adjusted backlog number that you provided. I'm wondering if you're willing to give us that gross number or some way to size what that is with some of your pipeline competitor peers would call the shadow backlog, so we can get a sense of the total magnitude of the opportunity set? David Slater: Michael, I was expecting someone would ask that question. I'll say it's multiples, and I'm going to leave it at that, and you guys can infer a number or a range. But it's, I use the word generational investment opportunity. It truly is. And I think for us, when I think about the sector and we're focused on -- we're just super focused on our core business right now on our pipelines in our core region and deploying capital in a really -- in a proper fashion so that the returns show up on the other side of these large capital outlays. Certainly, I recall what happened a decade ago in the sector. That didn't end well. we're committed that we will be deploying capital in a very prudent rational way as we approach another super cycle or a generational cycle of capital investment opportunity. So we're super focused on it. The -- a very robust opportunity set is a healthy backdrop for us to work within. It's going to allow us to be selective and very focused and do the right thing for the investors. Michael Blum: Got it. I appreciate that. And then just wanted to ask a question on the growth CapEx. You came in a little light versus your own guidance for '25. And I think you would even reduced that number during this past in 2025 last year. So can you just speak to what's going on there? And is that just capital efficiency on your part? Or is it timing and that CapEx is just going to show up in 2026? David Slater: Yes. Yes, you're bang on. It's performance, capital efficiency, I call it, performance, and it's timing. So it's no more complicated than that. Operator: From Goldman Sachs, John Mackay has the next question. John Mackay: David, you've talked a lot in the past about wanting to stay kind of front to meter with the utilities. We have seen kind of behind the meter pick up some momentum again recently. I'd be curious just to hear a little bit on your view there where it sits now, particularly in the context of a broader focus on affordability for the utilities? David Slater: Yes, John, we're seeing some of the Energy Island load knocking on the pipeline store, so to speak, -- and we're very happy to contract with that on the main lines, long-term contracts on the main lines. So we are seeing some of that demand manifesting across the footprint. The utilities have done an exceptional job here reeling in this market. They're doing it through a regulatory construct. When you monitor their filings. They're being very particular about explaining how it's -- it lowers the cost to their -- the rest of their customers. So there's an all-pro subsidization occurring. And these large load customers data centers really like the fact that the utilities are counterparty because they get a lot of comfort in that. They're connected to the grid. There's diversity, really strong counterparty. So there's a lot of features that the utilities are offering to this segment of the market that seems to be very attractive. And we're very happy to work closely with our existing utility customers to participate in bringing the fuel to these projects. So we like how it's playing out. It's sort of been -- we've been observing this for the last 12 months the utilities being more successful than in the past, and we really like the fact that it's going into a regulated construct, which I believe provides long-term durability to the demand. John Mackay: That's clear. Second one for me is, when you -- a lot of the projects you've been announcing are effectively brownfield expansions of existing assets. I'd be curious your view on the opportunity for anything on the greenfield side, and/or opportunities for you to do incremental kind of bolt-on M&A and try to repeat what you did with the [indiscernible] assets? David Slater: Yes. We are focusing predominantly on what I'll call in the footprint expansions. They're easier. They're typically more economic because he can scale it. and their lower risk from a execution/regulatory perspective. So I think there's a lot of features to addressing this demand through that mechanism, if you can, versus a brand new greenfield. When we did Nexus 10 years ago, that was a heavy, heavy lift to get that through. And then if you remember, there was a 1-year delay or regulatory delay on that project. So it's super big capital that, if you get any delays, can have a pretty material impact on you pretty quickly. So we like the risk profile of the brownfield. In terms of greenfield, where we are seeing greenfield, we continue to pursue greenfield storage opportunities. Some of the fundamentals that we laid out in the deck, where you see the extreme price volatility across our footprint, it's really screaming for more capacity, both pipeline and storage capacity. So that's probably where we see more of a greenfield opportunity in the near term, John? Operator: Next question comes from Jeremy Tonet from JPMorgan. Jeremy Tonet: Just want to come to Slide 10, if we could. And there's been a lot of discussion on the capital side. But just wonder if you could dial in a little bit more in the translation to EBITDA growth. The slide here says elevated organic growth and it points post 2027. I was just wondering if you could expand a bit more on what that looks like, what the quantity of this elevated growth looks like? David Slater: Sure, Jeremy. The -- well, I'll start with the backlog update, right? That's the fuel that goes into the equation that drives the EBITDA growth. And most of that capital, 75% of capital is deploying into the Pipeline segment, which is Bert regulated, which has a longer capital invest EBITDA generation cycle. It's a 2.5- to 3-year cycle, right? So it's really going to supercharge the back end of our 5-year plan. I didn't want to put a number on that. I don't want to cap that because the market is so fluid right now. The opportunity set is robust. And every time we take a fresh look at it, it seems to get more robust. So we're early in the cycle, and I think we want to let it run for a lot this before we start to try to stick the landing, so to speak, at the back of our 5-year plan. But it's green. The arrow is up. We're very bullish on the fundamentals. We laid out what those fundamentals are here in the deck for you. And I think this will be a conversation we can have as the year unfolds, Jeremy as to how we're feeling about this and how this starts to commercialize and sort of the picture will take takes shape for lack of a better word. Jeremy Tonet: Got it. That makes sense. I don't want to put a ceiling on it given all the opportunities there. I was wondering not push too much here, but could we put a floor on it? I mean, if it's 5% to 7%, you say now, and I would assume that, that elevated growth is at least 7% plus or any other way to think about what a floor might look like? David Slater: I think you just said it really well, Jeremy. I won't add anything to your comment there. Operator: Next question will come from Jean Salisbury from Bank of America. Jean Ann Salisbury: It looks like the gathering and the new backlog is up by a couple of hundred million even though several 2025 gathering projects came online. So I guess my question is versus a year ago, is this an increase in expected gathering spend? Is it primarily driven by the Haynesville or Appalachia or both? David Slater: That's a good question. I'd start with just reminding everybody that our gathering assets are all interconnected to our pipelines, right? So they feed our pipelines. The gathering -- I'm going to -- can we get back to you on that, Jean Ann because. I'm not 100% sure of the answer to your question. I don't want to guess at it. But we'll follow up with you. How does that sound to you? Jean Ann Salisbury: Yes, no problem. I'll circle back to what Todd. And then as my follow-up, there's a comment in the deck about future LEAP expansions likely being tied to the next wave of LNG in 2028 to 2030, I kind of wanted to clarify what that meant. I guess my understanding was that most of the LNG projects under construction had already kind of tied up their gas supply. I guess, maybe that's wrong or if you -- basically, if you are expecting a whole wave of new contracting to come as these projects under construction start to come online? David Slater: Yes. I think you've got 2 projects that just came online in the second half of last year, and that's getting absorbed into the market. And I think this next wave is going to be the wave that drives the next round of incremental expansion. We're in detailed conversations with numerous shippers on this topic right now. So it feels very ripe for us. So I would stay tuned. And as we commercialize these, we'll be sharing them. Operator: Keith Stanley from Wolfe Research is up. Keith Stanley: And I'd like to circle back on Slide 10. So David, no, you don't want to put a cap on the 2030 outlook, but that green bar, you can kind of figure out where it's going, if you just extrapolate the chart? I guess I'm curious in that 2030 figure, we're getting to like a 7% to 8% CAGR through 2030. Is that directionally right over a 5-year period? And when you show that green bar, is that only baking in sanctioned projects to date? Or is that including a fair amount of executing on the unsanctioned projects that you've identified as well? David Slater: Keith, that green bar boxes out to the updated backlog, the $3.4 billion. So that's kind of the way to think about it. And what I'll say is exceeding the high end of our -- and again, we're -- at this point, we're just too early in the game, and there's too much fluidity in the market right now in terms of putting a number on it. As I said, I don't want to cap it. I want to let the market unfold a little bit. And we'll be the first people to give you better clarity on that once we're confident in our execution. Keith Stanley: Got it. So just to clarify on that. The green bar is effectively the $3.4 billion divided by EBITDA build multiples that you're assuming in that outlook? David Slater: That would be the back of the envelope math, Keith, what you just said. Keith Stanley: Okay. Great. Second question, just following up on the Midwestern expansion potential any better sense of timing? You said you're in deep conversations. I assume you need an open season there. Just any sense of when you're hoping to get more clarity on that project? Is it next 6 months? Is it beyond that? Just how would you put that? David Slater: Yes, it's definitely in front of us right now, Keith, like right in front of us. So there's clearly a need for more volumes into Chicago. We commercialized the vector piece. We've turned our attention now to Midwestern. We'll turn our attention back to Vector as well for another round there. But Yes, it's front and center, and it's on everyone's mind right now. All of our customers are looking closely at all of this. As I kind of alluded to, we're in deep discussions with a lot of the shippers predominantly the regulated entities on those lines. And we're going to move at their pace. And that's what I'll say right now, but it's a hot topic right now so... Operator: Your next question is from Samantha Banergy from UBS. Unknown Analyst: I was just curious about the additional modernization opportunities that you mentioned in the deck? And is it great to see the Phase 2 interstate pipeline modernization feed. So just curious about that. David Slater: Yes. Thanks for the question. Yes, that Phase 2 is going to be focused on the Western and it's going to be focused on reliability, predominantly compression, replacing some aging end-of-life compression. And yes, that will roll through the next rate case on Midwestern. So really feel good about those investments. They're very much needed. And yes, I think it will be a pretty standard play for us to make those investments and roll them through the next rate case. Unknown Analyst: Got it. That's really helpful. And then the second question I had was just a general one on capital allocation priorities going forward, and how you're looking at balancing dividend growth versus keeping leverage maintained? David Slater: Yes. I mean, we're very focused on capital allocation. If you look at the backlog the majority of the backlog is going to be allocated into our pipeline segment, predominantly the regulated pipeline segment, so those tend to be backed by long-term 10-, 20-year contracts, again, predominantly with utilities, so investment-grade counterparties. So very strong cash flows, security of those cash flows over the long term. We've committed since we spun the company to grow the dividend in line with EBITDA growth. And I think over the last 5 years, you can see us doing that consistently. Our plan is to continue to do that going forward and maybe, Jeff, you can talk about the balance sheet and how our thoughts on managing the balance sheet and the dividend... Jeffrey Jewell: Sure can. Yes. So what our plan is, again, we've been talking about this since the spin as we fund our internal capital allocation plan with our free cash flow, we're going to naturally and have been naturally deleveraging. And so with that, we're able to fund all the projects and everything that David has been talking about and the growing dividend inside of our capital capacity or credit capacity. David Slater: And I'd say we work pretty hard to get to investment grade. And now that we've crossed that rectal, we're firmly staying on that side of the line. Jeffrey Jewell: Yes, we've got plenty of room between -- on the credit metric. So again, we're very confident in our capacity to be able to fund any and everything that we're seeing coming at us. Operator: Moving on to Zach Van Everon from TPH and Co. Zackery Van Everen: Maybe first on the Haynesville. We've continued to see the rig count step up into the beginning of '26. Curious on conversations with producers and just views on overall capacity needs in the basin. David Slater: Sure. Let me tackle that, Zack. So you've seen -- we saw a nice ramp in the Haynesville in Q3 and Q4. We're expecting to see those robust volumes going into this year. Our biggest customer is public, and I think they've just recently shared their thoughts on their ville growth for the year. So that's probably a good yardstick to measure our activity against. We do have a number of other producers that are also under experiencing growth or growing their portfolio. And we certainly are going to participate and see some activity there that will be helpful to the cause as well. But the big shipper the big anchor is [indiscernible]. So I'll point you to [indiscernible] public disclosures. Zackery Van Everen: Perfect. Appreciate that. And then maybe 1 in the Northeast. With the open season on vector and some producers up in the Northeast, talking about more growth coming into the next few years, could you maybe give an update on NEXUS and the ability to expand that? What size that could look like in any conversations going on currently around that pipe? David Slater: Sure. So it's somewhat that domino effect that I spoke of earlier. We're seeing this play out across our portfolio as what I'll call we expand the last-mile pipe. And you got to look at an expansion upstream and it keeps going upstream and eventually falls its way back to where the production is. So as we see Vector expanding pulling 400 million a day of incremental supply out of Michigan, that's going to have to get made up some ways on that. We're obviously working closely with potential shippers to utilize Nexus to do that. Nexus is easily expandable with compression and blocks of a couple of hundred million a day with compression. So that is forefront in our minds right now as this market evolves and the demand grows in the upper Midwest is how do we unlock additional, what I'll call, egress freeways out of Appalachia to sort of ramp up and bring incremental supply into this region. And again, if our fundamental assessment is accurate that there's 5 to 8 Bcf a day that is in-flight -- growth that's in-flight over the next 5 years, that's going to demand some pipelines or multiple pipelines to expand into this region -- out of the supply basins. And Appalachia is the closest basin. Rockies is right there that can come back into the Midwest. So we're really excited to work on these projects, and I really like the domino effect across the portfolio as we work our way back into the basin. Operator: [Operator Instructions] And everyone, at this time, there are no further questions. I'll hand the conference back to the company for any additional or closing remarks. David Slater: Well, thank you. I just want to thank everyone for joining us today. Thank you for your interest and support of the company, and I look forward to seeing everybody in person at one of the next conferences. Have a great day. Operator: And once again, everyone, that does conclude today's conference. We would like to thank you all for your participation today. You may now disconnect.
Operator: Thank you for standing by, ladies and gentlemen, and welcome to Safe Bulker's Conference Call for the Fourth Quarter 2025 Financial Results. We have with us Mr. Polys Hajioannou, Chairman and Chief Executive Officer; Dr. Loukas Barmparis, President; and Mr. Konstantinos Adamopoulos, Chief Financial Officer of the company. Following this conference call, if you need further information on the conference call or on the presentation, please contact Capital Link at (212) 661-7566. I must advise you that this conference call is being recorded today. The archived webcast of the conference will soon be made available on Safe Bulker's website, www.safebulkers.com. Many of the remarks today contain forward-looking statements based on current expectations. Actual results may differ materially from results projected from those forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in the fourth quarter 2025 earnings release, which is available on the Safe Bulkers website, again, www.saferokers.com. I would now like to turn the conference over to one of our speakers today, the Chairman and CEO of the company, Mr. Polys Hajioannou. Please go ahead, sir. Dr. Loukas Barmparis: Good morning to all. I'm Lucas Para, President of Safe Bulkers, and I'm welcoming you at our quarterly results. During 2025, the dry bulk market witnessed increased market volatility, mainly due to geopolitical reasons. In the fourth quarter of 2025, we achieved $0.14 of adjusted earnings per share, and our Board has declared a $0.05 per share dividend, rewarding our common shareholders. The company maintains a prudent balance between spot and time charter exposure, allowing it to capture market opportunities while preserving cash flow and a strong capital structure, providing flexibility in our capital allocation. Following a comprehensive review of the forward-looking statements language, which is presented on Slide 2, let's proceed to examine the supply side dynamics in Slide 4. bulk fleet is projected to grow by about 3% in 2026 deliveries with fleet growth estimated to be the highest for the Panamax and Supramax segments. The order book now stands at about 11.4% of the current fleet. The forecast for dry bulk supply to grow by 2.5% in 2026 and by 3% in 2027 as adjusted for the sailing. Asset prices remain elevated in line with the current market. Recycling volumes are anticipated to rise but still remain low compared to historical levels. 1 dry bulk order book alnuelipsan LNG and the remaining ammonia and hydrogen. However, the dual fuel order book remains small in the dry bulk segment. The postpone of the adoption of the global fuel standard by IMO on pragmatic. In total order book of 20 Phase vessels placed in 2020, we do have duelbserver1 2027 to operate with fossil fuels until alternative fuels become available and economic viable hedging more carbon intensity limits of the fuel regulation up to 2030 and the potential adoption of new regional or global reguls.afleet now counts 2 Phase 3 vessels in the water, all delivered from 2022 onwards. In addition, 26 vessels have ugmentalgrad or fuel character App 80% of our fleet is Japanese built compared to the global average of roughly 40%, underscoring our focus on quality and asset under the improved quality of our ships, which incorporate improvements in fuel effy.verleet age1.5s2.5snger than the global fleet average, which is 2.6sgetli.etitess will strengthen as we will be taking delivery of our remaining order book of 8 Phase II vessels. By Q1 2029leetred position us favorably to compete based on the fuel efficiency of our vessels while the ship leading to longer terms. When we speak about supply, we need also to highlight not only the scrapping rate but also the aging dry bulk fleet, 5 of which exceeds 15 years of age and the increasing expectation of older vessels, which will be reflected on the increasing inspection of older vessels, which will be reflected on the OpEx. Moving on to Slide 5, we present an overview of the demand -- the global GDP growth expectations for 2026 and 2027 as reflected in the IMF January forecast call for a growth around 3% in the coming years, accompanied by gradual control of inflationary pressures. BIMCO forecasts global dry bulk demand growth of 2% to 3% in 2026. To volumes are to expand by 1% to 2% in 2026 with average sailing distances increasing by 0.5% to 1.5% annually, supporting ton-mile demand. Iron ore shipments expected to grow up to 1% in 2026 and similarly in 2027. Lower prices driven by increased exports of output and enhance competitiveness versus lower grade domestic Chinese supply. However, high Chinese port inventories plus 11% year-on-year may soften import demand in first half of 2026. Coal shipments are projected to decline by 1% to 2% in 2026. The International Energy Agency expects global coal demand to fall by 1.4% between 2025 and 2027 with coal imports declining by 4%. Chinese demand is projected to fall by 1.5%, while India and Asian regions remain growth. Thermal coal trade is weakening. -- coking coal remains relatively resilient. Grains remain the strongest performing major bulk with shipments estimated to grow by 5% to 6% in 2026. Strong harvest in the U.S. and EU, Argentina, Russia and Brazil under supply. However, China's policy push towards greater selfufficiency and soy a dow risk. Minor bulk growth is expected at 3.5% to 4.5% in 2026. Energy transition related remain supportive, though bauxite trade growth may moderate due to China's aluminum production. Fertilizer demand continues to expand but at a slower pace. China remains a central swing factor for dry bulk. The broader economy continues to face headwinds from a weak property sector, elevated inventories in key commodities, iron ore, coal policy industrial adjustment and increasing trade barriers and the export license controls. Steel demand in China is expected to weaken though exports remain elevated despite tighter regulation. Domestic production policy and import substitution strategies, particularly in coal and grains represent key downside risk to seaborne trade. Trade tensions between the U.S. and China, although has been reached, remain a key source of global economic uncertainty. India continues to perform and is projected to experience the fastest growth among major economies with a forecast of 6.4% in GDP increasing in 2026. This expanding domestic market and manufacturing sector may continue to contribute positively to the dry bulk demand with infrastructure investments playing a vital role. In Japan, following a decisive superjorityict in February Snap elect, Japanese government now holds significant political capital to advance a responsible and proactive fiscal policy aimed at transitioning the economy from prolonged deflation towards a phase of sustainable growth widely referred to as economics, emphasizing aggressive fiscal stimulus toalzomestic demand and reinforce economic momentum. Summing up the supply equilibrium Slide supply growth is expected to match demand for 2026. The freight market has shown strength during the fourth quarter of 2025 and continues to be healthy in early 2026. In relation to our Capesize class vessels, 7 were chartered under period time charters with an average remaining charter duration of 1.8 years and an average daily charter hire of $24,000, topping $130 million in contracted revenue backlog from Capes alone. Moving to Slide 8, we present an overview of our quarterly highlights. Looking at our 17th consecutive quarter our free cash flow new [indiscernible], we present return $89 million paid in common dividends and $75 million paid in common reflecting our consistency in generating sustainable returns across in sustainable events across market fluctuations because of our track record, as management and our overall business model. . Concluding the company update on Slide 10, will be seen strong fundamentals. Safe Bulkers company with $628 million market cap as water, 274 million value. SP1 We maintain significant fire power with EUR 163 million cash, EUR 220 million in undrawn RCF and EUR 182 million borrowing capacity against our significant order book of 8 new builds, mainly in Japanese CPS. . We focus on our maturity Japanese book other branded, complete energy efficiency and lower shetaxation reflected in our CII rating share of vessels on the bottom that egos. We maintain a young technologically advanced fleet, strong balance sheet, comfortable leverage and low net debt per vessel of EUR 8.4 million for a 10.4-year fleet. We have a big a resilient business model with cash flow visibility EUR 164 million in revenue but healthy expansion for a sizable fleet that achieves stay in the meaningful 3.3% annualized dividend position lower on HL efficiency. I now pass the flat our CFO Cuadradamopulos, for to your financial the Trish lows. Konstantinos Adamopoulos: Thank you, Lucas, and good morning to everyone. During the fourth quarter of 2025, we operated in a slightly improved charter market environment compared to the same period in 2024 with increased revenues due to higher charter hires and slightly increased earnings from stratified vessels. Moving on to Slide 12 with our quarterly financial highlights for the fourth quarter of 2025 compared to the same period of 2024. Our adjusted EBITDA for the fourth quarter of 2025 stood at $37.4 million compared to $40.7 million for the same period in 2024. Our adjusted earnings per share for the third quarter of 2025 was $0.14 calculated on a weighted average number of $102.3 million compared to $0.15 during the same period in 2024, calculated on a weighted average number of 106.4 million shares. On the top graph, during the fourth quarter of 2025 were operating 45 vessels on average, ending an average time target with [ $750 ] compared to 45.9 meters on average, earning a TCE of $6,521 during the same period in 2024. We -- our daily vessel operating expenses increased by 13% to $5,686 for the fourth quarter of 2025 compared to $5.047 for the same period in 2024. Daily vessel OpEx, excluding write-off delivery expenses, increased by 6% to $557 an for the fourth quarter of 2025 compared to $4,787for the same period in 2024. Slide 13 with a quick overview of our quarterly operational highlights for the fourth quarter of 2025, which compared to the same period of 2024. Now let's continue to Slide 14, where we present our balance sheet analysis, noting that assets are presented in their book value. Slow liquidity and double cash reserves provide significant financial flexibility to navigate market volatility -- the company maintains a healthy balance sheet supported by a robust equity base and conservative leverage levels. Our capital structure positions the company for sustainable long-term growth in Brazilians. We'll conclude our presentation in Slide 13, where we present our daily free cash flow for the 12 months of 2025 illustrating the company's ability to generate free cash flow, highlighting disciplined cost control and efficient vessel operations. We'd like to highlight that based on financial performance, the company's Board of Directors declared a $0.05 dividend per common share -- the company is maintaining a healthy cash position of about $167 million as of February 13, another $218 million available in the revolving credit facilities giving a combined liquidity and capital resources of $385 million -- we also we should also add the contracted revenue of $178 million. This underscores our capacity to support their service, investment and shareholder returns at the same time we enable to expand the fleet to reline company and create long-term prostate for our shareholders. Thank you, and we are now ready for your questions. Operator: [Operator Instructions] Our first question is from Kam Moylan with Value Investors Edge. Unknown Analyst: You've made a lot of way on the fleet renewal front in recent years, putting special emphasis on Kamsarmax newbuilds. -- when looking at your overall fleet pro forma for the newbuild additions, the Cape side does smatter, -- is there any appetite for new going forward? Or is now well on secondhand pricing difficult to justify based on your expectations? Dr. Loukas Barmparis: Yes. to you. The second branches right now, they are getting higher, but the problem is that lack of setup available tenets for sale. So there is no quality tonnage in secondhand market available for sale on Japan is built vessels or even Chinese more than vessels available for sales. And the reason being that market prospects look quite positive. We have a very sort and now very strong Q1. And people are getting hold of their assets to drive the improved market. So the only option you have a company, at least like ours that we need to have quality tonnage, and we need to have a sustainable program for the future is to look into shipyards. Also there, the task is not easy, but because most of the shipyards are fully booked for 2028. So we have to go into 2029 for deliveries. And basically, this is what we have done in the last quarter. Unknown Analyst: Yes, that's helpful. I also wanted to ask about the time charter market. Have you seen increasing appetite from charterers for 2 to 3-year contracts on cancer maxes -- and secondly, based on current quotes, would you favor index-linked exposure or fixed coverage? Unknown Executive: Yes. There is no interest for 2- or 3-year contracts. The market is just starting its improvement over the last couple of quarters. You have to remember last year was a very difficult year, especially in the first half, which was all the talk of tariffs and it started from September '24, ended last up to July of 2025, when we show up from administration was starting settling some of those issues within a few countries. So there were a good 10 months of depression in the market, stories start changing from second half of 2025, when we start seeing improvement. I mean, the momentum has to gather pace, which is doing right now. We started now seeing better freight rates. And right now, we could say that many charters can take 12-month period charters. In order to see 2 or 3 years, we need to have more of this visibility we have to have this going to 2 or 3 quarters before charters appear for longer term. So at the moment, I would say that you could easily fix 6 to 12 months after, but the longer charters would come only after we see sustained strength of the market. So the inflation about the index of fixed rate, aisle prefer a fixed rate. And sometimes we do index use on a rising market, charters try to avoid index, referred fixed rate. We don't mind securing a good return with the fixed rates. Right now, there are 1-year deal, so 1-year deals in the market approaching $18,000 or $19,000 a day. So -- this is a group of a good level to start looking in a few ships. Unknown Analyst: The '18 201,000 per day would be for ECO and scrubber, right? Unknown Executive: No, no club. It will be for cameras for Casas they don't use any acutes. The scrubber, you find us on Capesize bulk carry on vessels they are bending over 25 tonnes to make Welten the investment. So again, 1 of the 14 or 15 tons, they don't you-- it's not viable to fit scrubber on both and very small consumption. Operator: [Operator Instructions] With no further questions, I would like to hand the conference back over to management for closing remarks. Dr. Loukas Barmparis: Thank you very much for attending this conference call above the first -- the last quarter of financial results of 2025, and we are looking forward to discuss again with you in our next quarter results. Thank you very much, and have a good day. Operator: Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.
Operator: Good morning, and welcome to American Water's Fourth Quarter 2025 Earnings Conference Call. As a reminder, this call is being recorded and is also being webcast with an accompanying slide presentation through the company's Investor Relations website. The audio webcast archive will be available for 1 year on American websites -- Investor Relations website. I would now like to introduce your host for today's call, Aaron Musgrave, Vice President of Investor Relations. Mr. Musgrave, you may begin. Aaron Musgrave: Good morning, everyone, and thank you for joining us for today's call. At the end of our prepared remarks, we will open up the call for your questions. Let me first go over some safe harbor language. Today, we will be making forward-looking statements that represent our expectations regarding our future performance or other future events. These statements are predictions based on our current expectations, estimates and assumptions. However, since these statements deal with future events, they are subject to numerous known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results indicated or implied by such statements. Additional information regarding these risks, uncertainties and factors as well as a more detailed analysis of our financials and other important information is provided in the fourth quarter earnings release and Form 10-K, each filed yesterday with the SEC. This call will include a discussion of non-GAAP financial information. A reconciliation of our historical adjusted earnings per share to GAAP earnings per share can be found in the appendix of the slides for this call. And finally, all statements during this presentation related to earnings and earnings per share are meant to refer to diluted adjusted earnings and earnings per share. With that, I'll turn the call over to American Water's President and CEO, John Griffith. John Griffith: Thank you, Aaron, and good morning, everyone. Let's turn to Slide 5, and I'll start by covering some highlights of 2025. You can see here an abbreviated list of some of our key financial and other accomplishments for the year and David and Cheryl will add to these in their remarks. As we announced yesterday, we achieved 2025 financial results near the upper end of our expectations. Adjusted earnings were $5.64 per share for the year compared to $5.18 per share in 2024. Our results reflect the clear execution of our plan in 2025 and which delivered EPS growth of 8.9%. Our regulatory and state teams were very active this past year, completing and initiating several significant general rate cases in 2025 while enhancing our ongoing communications with key stakeholders. These cases are driven by infrastructure investments needed to serve our customers. They punctuate the focus we have on providing safe, clean, reliable and affordable service to approximately 14 million people across our footprint. And as you can see, we invested over $3 billion in 2025 to help achieve that mission. I'm proud to say that we again achieved our goal of keeping residential water bills well under 1% of median household income on average across our footprint. Given the national and state level dialogue on affordability including utility bills, our focus on high-quality, affordable service remains very important. This is also why we strive to continue adding new customers to the American Water System as a core piece of our business model. We know through 140 years of experience that scale and regionalization will translate into more affordable and efficient operations for customers we're privileged to serve. With over 104,000 customer connections under agreement heading into 2026, we're pleased to be executing on that aspect of our long-term plan. Finally, our company's ability to stay focused on serving our customers safely and reliably this past year was tremendous. As you'll see in this year's 10-K and proxy statement, we had an outstanding year in 2025 in terms of performance based on several key safety and water quality metrics. And of course, as I'll talk about more in a few minutes, we ended the year with the announcement that we entered into a definitive merger agreement with Essential Utilities. We look forward to sharing with many of our states, including through the regulatory approval process, the benefits this merger will bring to customers and other stakeholders over the near and long term. I believe the overall takeaway today for investors is that our strong execution in 2025, coupled with our low-risk top-tier capital growth plan demonstrates American Water's ability to deliver on its long-term plan. I'm confident we will execute on our plans for 2026 and beyond, building on the momentum we have from 2025. Turning to Slide 6. We are affirming our 2026 earnings guidance of $6.02 to $6.12 per share. This represents our expectation of 8% EPS growth in 2026 compared to our adjusted 2025 EPS consistent with what we laid out last fall and aligned with our expectation to achieve consistent EPS and dividend growth well within the 7% to 9% range through 2030 and beyond. We have demonstrated during these last few years and with our guidance for 2026 that our business plan is strong and compelling. On Slide 7, we are again affirming our long-term targets and drivers of growth in the business. Our commitment to solving problems for our customers remains steadfast, including addressing aging infrastructure and water quality challenges and doing so with a keen eye towards customer affordability. We believe this foundation, coupled with the capital investment needs that lie ahead, uniquely positions American Water to achieve consistently strong earnings and dividend growth for many years to come. In closing on Slide 8, I'm pleased to share that we've already achieved a few milestones on the path to closing our merger with essential utilities since the October announcement. I want to thank our respective company's legal, regulatory and financial teams for their excellent work over the last few months to timely file for all of the necessary state regulatory and shareholder approvals. As I mentioned earlier, we are eager to demonstrate to commissions and other important stakeholders in the months ahead, the positive elements this merger will bring to the mission of serving our customers. On the shareholder front, we were pleased to announce last week that shareholders of American Water and Essential overwhelmingly voted in favor of the respective merger-related proposals during the special meetings on February 10. On behalf of American Water's Board, I want to thank our shareholders for their time, attention and support of the proposed merger, which we expect to close by the end of the first quarter of 2027. We are very excited about the opportunity to bring together our 2 great companies to form a leading water and wastewater utility company in the country for the benefit of our combined customers and shareholders. With that, I'll hand it over to David to cover our financial results rate case updates and balance sheet strength in further detail. David? David Bowler: Thanks, John, and good morning, everyone. Starting on Slide 10, I'll add a few remarks on our full year results. Before I begin, though, I want to note that going forward, we'll be discussing our EPS results on an adjusted basis, which you heard John reference in his remarks. We believe communicating adjusted earnings for share which will remove the impact of items such as merger-related transaction costs will allow the company to more accurately reflect and compare its ongoing performance across periods. As Aaron mentioned, a reconciliation of historical GAAP earnings per share to adjusted earnings per share is included in the appendix of the presentation. So with that said, consolidated earnings were $5.64 per share, up $0.46 per share versus the same period in 2025. Revenues were higher by $1.70 per share, driven by authorized rate increases to recover investment across our states. Revenues were also higher from recently completed water and wastewater acquisitions and organic customer growth. And looking at operating cost, O&M expense was higher by $0.42 per share, driven primarily by employee-related costs and increased production costs, mainly higher pricing on purchase power. Depreciation increased $0.41 per share and financing costs increased $0.35 per share, both as we expected in support of our investment growth. Slide 11 summarizes the 6 rate cases we successfully completed in 2025, 5 of which we covered on prior calls. In December, we received a final order in Kentucky, where we're authorized and analyzed revenue increase of $18 million based on an ROE of 9.7% and an equity layer just north of 52%. All of our rate cases are built upon the recovery of significant capital expenditures that our systems and systems we acquire very much need. Apart from the general rate cases, we received a further 1-year extension of the California cost of capital filing to May 1, 2027 and to set its authorized cost of capital beginning January 1, 2028. Our ROE will remain 10.2% through December 31, 2027, unless the water cost of capital mechanism is triggered when the next measurement date is later this year. Slide 12 covers the latest regulatory activity in our states. On active cases, you can see we have general rate cases and progress in 7 jurisdictions. Our cases in West Virginia and Maryland are furthest along, we expect to receive final orders in both cases in the coming weeks. Our cases in Virginia and California are progressing as expected, and we have upcoming milestones in those cases, as you can see on the slide. On November 14, we filed a general rate case in Pennsylvania, reflecting $1.2 billion in system investments through mid-2027. We are seeking $169 million of annual revenue, and we expect new rates if approved to take effect in August 2026. On January 16, we filed a general rate case in New Jersey, reflecting $1.4 billion in system investments through December 2026. We are seeking $146 million of additional annual revenue, and we expect new rates if approved to take effect in the fall of 2026. On January 27, we filed a general rate case in Illinois, reflecting $577 million in system investments through December 2027. We are seeking a 2-step increase totaling $134 million of additional annual revenue, and we expect step 1 of new rates, if approved, to take effect in January 2027. In all of our states, we are taking great care to provide detailed information in our rate cases about the important investments we are making on behalf of our customers. And we are, as always, providing a thorough review of our strategies to enable all customers to afford their water and wastewater service. Turning to Slide 13 for a brief review of considerations we shared last fall regarding our outlook for 2026 results. As John mentioned, we affirmed our 2026 adjusted EPS guidance range of $6.02 to $6.12 per share, which again represents 8% annual growth. At the heart of our plan is a commitment to invest responsibly for our customers, while prudently managing operating costs to support customer affordability and earn our allowed returns. The central part of this discipline is our ongoing focus on operational efficiencies, identifying areas that we can control to help moderate O&M growth over time. This focus aligns with the interest of our regulators, customers and investors and support service affordability. We are also affirming the financing plan we shared last fall, covering 2026 to 2030. The plan includes an estimated total of $2.5 billion of external equity issuances with approximately $1 billion to be settled in midyear 2026 from the equity forward from last August. No other equity issuances are in the plan until 2029. The level and timing of external equity is tied very simply to our need to fund growth and maintain our strong financial position. Finally, as slide in the release last night, the $795 million secured seller note due from the sale of HOS was repaid in full on February 13, which align with our 2026 guidance assumption of repayment around year-end 2025. And while not called out on this slide, I'd like to again note that our Military Services Group, which proudly serves 18 military installations across our country continues to add incrementally to our earnings growth expectation in 2026. And finally, Slide 14 provides a look at our balance sheet and liquidity profile. Our total debt-to-capital ratio as of December 31, net of the $98 million of cash on hand was 59%. As I just mentioned, we received payment in full of the HOS note last week and still expect to settle the roughly $1 billion of proceeds from our equity forward in the middle of this year. We anticipate these proceeds along with our planned long-term debt financing in 2026 will keep us well within our target of less than 60% debt to total capital. We will remain A rated at S&P with a stable outlook. And just last month, Moody's affirmed our solid Baa1 investment-grade credit rating and stable outlook. Both agencies know our trend of credit supportive regulatory outcomes and expected sustained FFO to debt ratios well within the current rating thresholds. We are confident our business and financial profile, including FFO to debt will continue to support our current investment-grade credit ratings. With that, I'll turn it over to Cheryl to talk more about our capital program, affordability and our recent acquisition activity. Cheryl? Cheryl Norton: Thank you, David, and good morning, everyone. Starting on Slide 16, we successfully invested approximately $3.2 billion of capital into our systems in 2025, which is right on our expected amount. Our low-risk annual capital plan is made up of hundreds of individual projects, which our teams do a great job of executing. These projects are mostly focused on pipe replacement, but we also are upgrading our above ground treatment facilities, putting in PFAS remediation, removing lead service lines and investing in updated technologies like smart meters. We continue to expect that these capital investments in infrastructure and acquisitions will grow a regulated rate base at a long-term rate of 8% to 9%. Investing in needed infrastructure on a continuous basis drives consistent reliability of our services and water quality. These investments are crucial for us to deliver on our core mission of providing safe, clean and reliable water and wastewater services, but we are also laser-focused on doing this affordably for our customers. As John mentioned and we continue to show here, our residential water bills are meeting our target and are projected to remain under 1% of our customers' median household income over the long term. And lastly, on Slide 17, we continue to be well positioned for growth through acquisitions across many states with 104,000 customer connections under agreement from deals totaling $582 million. The size and breadth of our acquisition program at American Water continues to improve as we invest in dedicated resources and center-led strategies to accomplish our 2% goal for customer additions. The regulatory approval process for the Nexus Water Group systems is progressing well. Early termination of the waiting period was granted last week under the Hart-Scott-Rodino Act, and we also have received approval from the regulatory commissions in several states. Our progress to date leads us to believe that the closing date remains favorable to occur by August 2026. In addition to the Nexus systems, we currently have 19 acquisitions in 6 states under agreement for $267 million that would add about 58,000 customer connections, not including our proposed merger with essential utilities. The need for system consolidation across our footprint is as strong as it's ever been. This is driven by the need for infrastructure upgrades, regulatory and health-based compliance and operational enhancements. Our business development organization has been strengthened over the past few years to support the continued development, execution and closing of municipal deals. With that, I'll turn it back over to our operator to begin Q&A and take any questions you may have. Operator: [Operator Instructions] The first question today comes from Julien Dumoulin Smith from Jefferies. Spark Li: This is Spark on for Julien. I have a question on the portfolio positioning, maybe post close. So what is your latest expectations or plans for the Peoples Gas business use of proceeds to the extent that you opt for a sale? And is your plan to still dedicate proceeds primarily to debt paydown? John Griffith: Thanks for the question. Just to reiterate, we'll be making decisions on people after closing of the merger when we'll begin a review of strategic alternatives. At that point in time, if we were to proceed down a path of sale, then proceeds would be used for -- to reinvest into the business. Certainly, a portion would be for debt repayment and a portion would be for continued rate base investment. Spark Li: Understood. And maybe just a follow-up. What was your 2025 realized FFO to debt? And how do you forecast that over the period pro forma for the Essential Utilities transactions? David Bowler: This is David. Yes, we typically don't disclose what our FFO to debt is. You can generally calculate close to it from the financial statements. Spark Li: Got it. One last one very quickly. So do you expect to reach settlements in Pennsylvania New Jersey and Illinois rate cases pending? David Bowler: Look, so the cases are progressing as we expect at this point. We're always open to settlements if we can reach a constructive settlement, but it's going to be on terms that are constructive for us and beneficial and provide a fair return. Operator: The next question comes from Gregg Orrill with UBS. Gregg Orrill: Thank you for the update. Appreciate it. With regard to Nexus, what are the key approvals that are remaining to close there? And also the PFAS settlement monies that are coming in. Have you received all of those at this point? Or are there incremental dollars to come in going forward? Cheryl Norton: Yes. Thanks, Gregg. This is Cheryl. As far as the Nexus approvals, we've approved -- we've received approvals in a few states, but still have about 5 states left. All those states are progressing very well. I think we're close on several states of getting additional approval. And right now, everything seems to be progressing as we would expect on the normal time line. So no challenges or concerns there from our perspective. As far as the proceeds for the PFAS payback, we have gotten some proceeds and have been giving them back to our customers as our commissions have allowed us to do that. We're still working through the regulatory process on some of those paybacks to the customers at this point. But there will be future payments. Some of the payments were structured in a way that we'll get additional payments next year and the year after that. So... Operator: The next question comes from [indiscernible] with Mizuho. Unknown Analyst: This is [indiscernible] from Mizuho on behalf of Anthony Crowdell. Going back to Pennsylvania for a second. With the increased affordability scrutiny on the Shapiro, how does that affect the likelihood and pace of your ongoing rate cases in Pennsylvania. I'm curious to see how you would characterize your approach to proceedings in Pennsylvania in general going forward? David Bowler: We'd say that, generally, all of our rate cases are driven by the investment that we're making in our systems. And that really dictates when we go in for rates when -- to ensure we get recovery of those investments. So as far as the current -- the pace, we were generally on a 2-year cycle in Pennsylvania and across all of our states, and we don't see that changing at this point. Unknown Analyst: Okay. And just a follow-up on that, same question, for New Jersey. As we all know, affordability is also very salient these days under new Governor, Sherrill. You filed the rate case earlier this year with testimony expected in summer. But how does this timing interplay with the 180-day BPU study initiated after inauguration, where the governor direct BPU to decide on affordability levers as we speak. David Bowler: Yes. I'll try to make sure I answer your question, if I understood it correctly, about filing our case related to the governor's comments. And I'll revert back to what I said for Pennsylvania that all of our cases in the New Jersey case is driven by the investment that we're making in the systems. When you look at affordability for us, as compared to other utilities, our bills are less than 1% of median household income, which we view as very affordable and we're forecasted to be below 1% through 2035 across our system. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Penny Himlok: Thank you. Good morning, everyone, and thanks for joining us this morning. On behalf of Kumba's executive team, a very warm welcome to those of you here in the room with us and to everyone joining us on the line. I'm Penny Himlok, Head of Investor Relations, and I'm pleased to be joined by our CEO, Mpumi Zikalala; and our CFO, Xolani Mbambo, who will take you through our annual results shortly. Before we get started, just a quick safety note. As you know, safety is our first study. There are no safety drills today. So, if you do hear an alarm, please follow the instructions and calmly make your way back through the exit through which you entered and please meet in the front where safety Marshalls will give you further instructions. [Operator Instructions] And of course, please take and note the disclaimer, especially with going the forward-looking statements. Turning to today's agenda. We'd like to -- we'll be keeping to the usual flow. Mpumi and Xolani will walk you through our performance for the year, and then we'll open the floor for Q&A's. We also have members of our executive team today with us, and they will be available to address any questions at the end. Thank you. I'll now hand over to Mpumi. Nompumelelo Zikalala: Thank you, Penny. Good morning, everyone. It's great to see all of you again. And as Penny said, thank you for joining us this morning. 2025 was another year marked by macro volatility with geopolitical tension and trade policy uncertainty that have become, as you all know, for now at least, the new norm. Our priority has again been to limit the impact of that volatility by focusing on operational excellence to be as competitive as possible, whilst we market our product to fully realize the full value of its quality. The business reset in 2024 laid a firm foundation and disciplined execution in 2025, resulted in consistent output and reduced costs despite an increase in waste mining and thus bringing back the mining fleet that we previously parked. We also made steady progress on our UHDMS technology project, a key investment that unlocks more value from our resource base, optimizes rail capacity and strengthens our position in the premium high-grade iron ore market. I'm pleased to say that logistics performance has certainly remained stable. I know that, that question keeps coming up. There's still more work to do, but we are seeing real progress as a result of the collaboration between the National Logistics Crisis Committee, the Ore User's Forum, which Kumba is part of, Transnet and indeed our government. As we move into 2026, I believe we remain well positioned to deliver long-term value for all our stakeholders. Now moving into the results. Let me begin, as I always do, with safety, which, as you know, by now, is our first value. This year, we achieved 9 consecutive fatality 3 years of production at Sishen and as of last week Friday, 3 years at Kolomela. These are important milestones and a testament to the dedication and vigilance of our workforce shift after shift. But success can bring the risk of complacency. So, we know that we still have more work to do, particularly as the UHDMS project changes our risk profile with an increasing number of service partners, particularly at Sishen Mine. While our total recordable injury frequency rate of 0.95 remains well below the ICMM industry average of 2.29 for 2024, we must remain fully focused on our first value, which, as I said, is safety. And we made good progress embedding Kumba's safe way of work through constructive collaboration with our service partners and the implementation of our fatal risk management program, which is a program that encourages our teams to know what it is that can cause them significant harm in a simple and focused manner. On the health and wellness front, we have now passed 9 years with no significant health incidents, and this reflects the high standard of care we apply to occupational health and the safeguards we put in place across all our operations. Turning to our business overview. We benefited from a more cost-efficient base and delivered on our sales, production, as well as our cost guidance. Production was driven by strong growth from Kolomela, whilst improved rail performance helped us with slight improvement in our sales. Higher iron ore prices, lower operating expenses and a stronger exchange rate contributed to a 14% increase in our adjusted EBITDA. In addition, return on capital employed improved by 5 percentage points to 46%, reflecting more efficient use of our capital to generate earnings. On the back of the solid financial performance, we declared a final cash dividend of ZAR 5 billion. And in addition to this, ZAR 1.6 billion will go to our empowerment owners, which include the Sishen Iron Ore Company Community Development Trust and as you know, our frontline employees. This brings the total full year dividend to ZAR 10.3 billion to Kumba shareholders, and this number excludes the ZAR 3.3 billion that's the dividend towards our empowerment owners. We have a strong track record of delivering stakeholder value, and we delivered again bringing ZAR 58 billion of enduring stakeholder value, and this covers the whole range of our stakeholders. With that, moving on to sustainability. Our purpose remains for us to reimagine mining to improve people's lives. And through our sustainable mine plan, we've done exactly that. Water is a vital resource. And although we operate in a water scarce region, both of our mines are water positive, and we share this excess water that we intercept with our local communities, as well as other local businesses as well. We supplied over 16.5 billion liters of water to our communities, providing drinking water to around 200,000 people in our local communities. We also reduced our freshwater withdrawals by 4% to below 7 billion liters, contributing to an overall 19% reduction from our 2015 baseline. We've created over 800 employment opportunities outside of our mines. You know that we need to drive for efficiencies within our own mines. But when you look at the number of 800 jobs, this brings us to a cumulative number of jobs supported outside of our mines since 2018 when we started measuring this to well over 42,000 jobs. In 2024, Kumba became the first African iron ore miner to achieve the IRMA 75 standard and IRMA stands for the Initiative for Responsible Mining Assurance. And as we've said before, not everyone from the mining industry subjects themselves to this level of assurance. You do it because you want to do it. Well, I'm pleased to say that during 2025, both operations maintained IRMA 75, solidifying our position as a supplier of responsibly mined iron ore. Tomorrow, together with the rest of the Anglo American Group, we will be updating the market on our sustainability strategy. I've got to say that over the years, we have made significant progress. And we also, however, recognize that a lot has changed, both within our business as well as broader stakeholder expectations. I am very proud of the work we have done over the years and the milestones that we've achieved and look forward to sharing more details just around our refreshed strategy with you tomorrow. Now moving on to stakeholder value creation. We continue to deliver meaningful impact to our various stakeholders, as I said, through the ZAR 58 billion in shared value. We contributed ZAR 7.4 billion to the national fiscus through income taxes and mineral royalties, helping our government provide essential services and infrastructure to our fellow South Africans. Closer to home, 84% of our employees are from our mine communities, and this is in the Northern Cape province, a province that we call home, and their salaries and benefits, which they get directly benefit the local communities. We also support the local economy by ensuring resilient local supply chains. We spent ZAR 19 billion on BEE suppliers, of which ZAR 3.5 billion was with our local host community suppliers. And here, we focus significantly more on youth and women-owned businesses. For the community more broadly, we invested ZAR 485 million in direct social investment, focusing on the areas that matters the most, and that's health, education, as well as community development. Now I will take you through our operational performance. As I said earlier, it was a solid operating performance. Waste mining rose 6% with both operations gaining momentum over the year. Production was up 1% compared to 2024 and in line with our guidance of delivering between 35 million and 37 million tonnes. We took advantage of improved grade performance to reduce stocks at the mine and return our Saldanha Bay port stocks to more optimum levels of 1.8 million tonnes. And for those who followed us for some time, you know we haven't been at these levels for quite some time. The increased volumes also supported a 2% increase in sales to 37 million tonnes at the top end of our guidance. Next, looking at production in a bit more detail. The overall focus for 2025 was getting the basics right, which for us is operational excellence and cost discipline. While waste mining was at the lower end of guidance, we importantly gained operational momentum through the year, with a 6% step-up in the second half, if you just compare H1 and H2. Waste volumes are driven by Kolomela's 30% increase, while Sishen was hampered by asset reliability challenges and only increased by 2%. As we move through 2026, we continue ramping up waste mining and we will need to invest further in our mining equipment to improve asset reliability, as well as operational efficiencies, and Xolani will touch a little bit on this a little bit later in the presentation. Looking at production, Sishen was marginally lower as a result of the planned drawdown of high levels of finished stock and plant maintenance that we did in preparation for the UHDMS main tie-in that will take place in the second half of this year. This was offset by a 7% increase from Kolomela, in line with our flexible approach to production. Cost discipline remained an important focus, and we realized over ZAR 600 million in cost savings during the year, bringing our cumulative savings since we started our reconfiguration back in 2024 to now ZAR 5.1 billion. And this important work just around the drive for cost efficiencies will continue. Now turning to Transnet's logistics performance. Ore railed to the port rose by 6%, and this was despite the 4 derailments that took place during the year. And I should tell you that the rate that we are seeing outside of the derailments should tell you that, that's actually increasing. Rail performance improved to 84% of contracted volumes, which together with improved equipment availability at Saldanha Bay Port resulted in a 2% increase in our sales. It's encouraging to see the improvement in Transnet's rail performance, and this is a direct result of the joint collaboration between Transnet and the Ore User's Forum. And as you know, Kumba is very much part of the OUF or the Ore User's Forum. The Ore Corridor Restoration program and the mutual cooperation agreement have enabled edge and maintenance to be done more timelessly and also efficiently. The planned 10-day annual maintenance shut, as well as a 26-day shut to refurbish stacker reclaimer #3 in the second half of the year were all completed successfully. The recovery of the logistics network is key to unlocking value, and we are certainly moving in the right direction. However, as we've said before, there's definitely still more work that needs to be done to restore the network to previous performance levels, and this will take some time. In terms of private sector partnerships, also called PSPs, the Ore User's Forum submitted a follow-up response to the request for information in November. As you may remember, we gave our initial response in May, and this was a follow-up response requested by government. So, they played back what they had from all the submissions in May and asked people to comment on that document, and that's what we submitted in November. As we consider the way forward, our key principles for participating in the PSP are essentially as follows. Number one, government needs to retain ownership of the assets with a private consortium using, maintaining and operating the OEC. Secondly, and here, I must add, Kumba is first and foremost, a mining company. We do not have the skills to manage a logistics system. And therefore, we need to partner with the concessionaire who can deliver the right services for us, as well as other users of the line for the benefit of not just Kumba, but clearly for the benefit of other users and ultimately, the country as a whole. Number three, for the concession to work, this should cover the full integrated system. It's the rail, the port as well as freight. And this should be over an extended period to unlock Kumba's life of mine ambitions. And then last but definitely not least, and very importantly, we would want to secure a viable commercial pathway, including the syndication of capital with partners. We certainly look forward to the release of the commercial request for proposal, which is the next phase, simply because this will be a key milestone in the PSP process for the OEC or the Ore Export Corridor. Notably, we've commenced with the work to renegotiate the Sishen logistics contract, which expires at the end of 2027. We aim to substantially conclude the renegotiations by the beginning of next year, which will be well ahead of the expiry of the Sishen contract. And now it's my great pleasure to hand over to Xolani to take us through the financials. Xolani, it's certainly great to have you on board. And I don't feel like Xolani is new anymore because he's certainly already adding value. And I'm sure that this marks the first of many presentations that we'll be doing together. Thank you. Please give him a hand. Xolani Mbambo: I'm not sure if Bothwell will be pleased when he hears this, because it appears that the numbers we put into the market are positive. And I only joined in January, and I'm graving the credit. So, thank you, Mpumi, for the kind words. It's really a privilege to be here today and for you to be listening to me to present these results. Last year, I had the opportunity to spend time with the Kumba leadership team when they were launching the culture. This gave me meaningful insight into the organization. I got to understand our people, the culture and the values that actually drive us as an organization. I've also been fortunate to visit both our Sishen and Kolomela operations. Seeing the dedication of our teams on the ground has been invaluable and has reinforced my confidence in the strength of this business. So, there is no turning back as Mpumi. So, now let's take a look at the market environment. As Mpumi mentioned, the period under review reflects a complex global operating environment, I'm sure you know of that. It's one that's characterized by elevated geopolitical risks and evolving trade dynamics. This has placed pressure on regional economic conditions, resulting in shifting demands for steel and iron ore products. So, if you look at the 3 regions where we send our product, in Europe, their GDP growth was 1.6% with crude steel output falling by 2%. And that was on the back of weak demand. However, the implementation of import tariffs, CBAM and CBAM is expected to fuel recovery in steel prices in the region. China achieved its GDP growth target of 5% for 2025, although steel output fell by 4.6%. This is because property remained sluggish and infrastructure investment declined. The bright spot was industrial production up 6%, and this is linked to exports, which remained robust. If you look at Asia, their GDP grew by 3.8% and steel output rose 3.2%. Growth was driven by urbanization, infrastructure, manufacturing in countries such as India, Vietnam and Indonesia. So, on the next slide, we look at the iron ore supply and demand impact on prices and premium. Following a strong start to the year, Chinese steel mill profitability came under pressure, as raw material input prices increased. We certainly got a lot of questions in our sessions this morning on that. Additional output from Australia and Brazil resulted in lump premium dropping to record lows. I'm told that we've now put [Technical Difficulty] from Brazil and Australia. Despite the tariff uncertainty and market volatility last year, our high-quality product attracted a quality premium of $10 per ton. Price increases in the latter part of the year yielded positive timing effects and marketing premium of $1 per tonne, a sharp reversal from negative $7 per tonne that we achieved in 2024. This is all good work that's been done by the marketing team. I can see them in front of us here, and I'm hoping they will continue to deliver on that as we focus on production going forward. Consequently, our average realized iron ore price at $95 per tonne was 12% above the benchmark price. What's important is that this is ahead of what our peers have achieved in the market, and it really enforces our strategy of focusing on premium product. So, let's look at the financials in terms of what all of this means. Kumba delivered a resilient set of results. I've discussed our average realized prices on previous slide, which contributed to this uplift in our earnings. If you look at our costs, particularly on C1, they reflect the stronger rand-dollar exchange rate. We delivered solid EBITDA, and I'll talk about this in more detail later. The headline earnings per share increased by 18% to ZAR 45.97, translating into dividends that offer shareholder value, real shareholder value. If you take a look at EBITDA, we achieved ZAR 31.9 billion, which was underpinned by revenue growth, lower costs, as well as positive stock movement. This was partly offset by a stronger rand, cost inflation and lower shipping revenue. We also received a boost from other operating income for logistics underperformance, which we reported on at interim last year. I'm sure you'll recall that number over ZAR 900 million. In total, EBITDA rose by 14%, giving our EBITDA margin a positive uplift of 46%, to 46%, I wish it was 46%. Last year, we were at 41%. What's even more encouraging for me is that our EBITDA cash conversion of 102% reinforced the quality of these earnings that we've achieved. So, not only do you see EBITDA, which in some instances can be removed from cash, we actually converted it to cash for every rand of EBITDA we generated, we generated cash of over ZAR 1, which is excellent. Now let's take a closer look at our C1 unit costs. Our C1 unit cost increased to $40 per tonne, and that's really a function of a stronger rand. In the absence of that, we would be retaining the similar level. In fact, at a constant rate of $18.60, which is what we guided on to the dollar, our C1 cost would be $38 per tonne, coming in just below the guidance of $39 per tonne. So, the strengthening rand isn't helping in this instance. Benefit from positive WIP stock movements and deferred stripping costs were outweighed by stronger rand and inflationary cost increases, as you can see in the chart. We continue to focus on cost optimization to preserve and grow our margins. Now let's move on to our unit costs at the mine level. If you look at Sishen, their cash unit costs remained broadly flat at ZAR 530 per tonne, and that's within the guidance that we provided last year. Sishen's cost inflation increase was offset by lower contractor mining volumes, capitalized deferred stripping costs and positive WIP stock movement. For 2026, we are guiding slightly higher unit cost of between ZAR 530 and ZAR 560 per tonne to reflect lower production later in the year when we actually implement our UHDMS main tie-in. Kolomela's cash unit cost, on the other hand, improved by 7% to ZAR 374 per tonne, and it outperformed the guidance that we gave to the market, which is excellent. Performance was on the back of deferred stripping cost capitalization, positive stock movement and production volume uplift. I'm pleased to say that cost inflation was more than offset by our cost optimization at Kolomela. So, they did a splendid job there. For 2026, we are keeping the unit cost guidance at between ZAR 430 and ZAR 460 per tonne. Now let's turn to our cash breakeven price. As mentioned, our breakeven price reflects our all-in costs. So, when you look at, this is all-in cost -- and this includes sustaining capital net of premium and above plus 62 index. This is where I expect my colleagues on the project side to reduce the CapEx and still deliver the same and then the marketing guys to pump the premium and make sure that they reinforce our exposure to premium product. And as long as we continue to do that, of course, in conjunction with the cost reduction going forward and driving efficiencies, we will maintain that breakeven price at an acceptable level. And all it means for us is at what level as a business should the iron ore price drop before things start to fall apart. So, the lower the price, the higher the -- what I call the safety margin. Improved breakeven price was underpinned by market premium and lower freight costs. Our goal remains to enhance margins by improving breakeven price through cost reduction and improving product premium. I'm saying that product premium improvement. Now let's move on to CapEx. If you look at our capital expenditure for 2025, it was ZAR 10.4 billion. And the key driver for that was ZAR 1.7 billion, which we spent on our UHDMS project. CapEx for this project will be phased in line with implementation sequence, and Mpumi will talk about that later in her closing slides. Our stay-in business, which is key for sustaining our business operationally going forward was flat, and it was in line with our guidance. Again, that's a reflection of our discipline. If you look at our deferred waste stripping, which was mainly driven by higher stripping ratio at Kapstevel, it was relatively high in Kolomela. Over the past months, our teams have undertaken a thorough review of our operating environment, the growth pipeline and the long-term strategic positioning of this business. So, what has emerged is that our mine optimization has given us cost efficiencies and the team that I found have delivered on that. I can't claim it at the moment. As we ramp up activities, we need to drive further cost improvements. These improvements must come through operational efficiency and better supply management. We wanted to fully capture these opportunities. We also want to ensure that we remain competitive and well positioned for the next phase of growth. And for me, competition means we far from the market. Australians are closer to the market. We need to be consciously aware of our cost position all the time. To achieve this, we are stepping up our capital investment program. This will help improve productivity and strengthen our long-term value creation. So, as a result of all of this, our CapEx guidance for this year is between ZAR 13.2 billion and ZAR 14.2 billion. Expansion CapEx is largely driven by our UHDMS, which we've mentioned several times now, is an exciting project, and the balance is on the exploration and technical studies. All of this is for growth. We are refocusing this business on growth. Between ZAR 3 billion and ZAR 3.2 billion has been allocated for this year. We are investing in work to support our future pipeline of life extension projects. And again, Mpumi will talk about this in her closing presentation. The total stay-in business CapEx is between ZAR 6.6 billion and ZAR 7 billion. About 2/3 of that relates to safety, capital spares, plant and infrastructure project or upgrades. Approximately 1/3 is allocated to heavy mobile equipment, which we are recapitalizing. In fact, our equipment in some of our equipment are beyond life and therefore, the agent needs to be replaced and that replacement will result in cost efficiencies going forward, as well as operational efficiency. So, it's quite key that we do that. And as an example, some of our trucks in many cases, are now close to 120,000 hours of operations. And typically, we normally replace at 80,000 hours. And that makes them less cost efficient to operate. The deferred stripping CapEx is expected to be between ZAR 3.6 billion and ZAR 4 billion. That's critical for us to continue to ensure that we open-up enough surfaces going forward for us to continue mining. This is due to mining higher stripping ratio in some instances as well, particularly at Sishen as we access the sections that have got a higher mining stripping ratio. In the medium term, CapEx will remain at similar levels. As you know, our UHDMS CapEx will peak this year and will then continue to reduce until the project is completed in 2029. Our baseline stay-in business, which is run of the mill business as usual, will be approximately ZAR 5 billion per annum on average in the medium term. Heavy mobile equipment, replacement CapEx is about ZAR 2.5 billion per annum on average going forward. Lastly, deferred stripping CapEx will remain at around ZAR 4 billion per annum on average. Now let's look at how we've allocated our capital. Our disciplined approach to capital allocation remains unchanged as a principle. Sustaining CapEx, value-accretive expansion projects and sustainable returns to shareholders remains our priority. For the year under review, we generated cash of ZAR 17.2 billion after paying for sustaining capital. That's a good achievement. ZAR 12.2 billion was used to pay base dividends to our shareholders. That was before allocating ZAR 4.8 billion to discretionary capital. This was largely focused on the UHDMS project together with additional dividends that would have been carried over from 2024 paid in 2025. Our dividend policy remains unchanged, and that's between 50% and 75% of headline earnings that we generate. It's very important that we understand that. We delivered ZAR 12 billion of attributable free cash flow. This has underpinned our Board's decision to declare a dividend of ZAR 15.43 per share for the second half of last year. Together with ZAR 16.60 per share that was declared at interim, our total dividend is ZAR 32.3 per share. And this means 70% payout of our headline earnings for the year. And this is at a yield of 9%, which remains a respectable yield. Maintaining a resilient and efficient balance sheet, especially in this volatile environment is extremely essential. And before I hand back to Mpumi, let me take you through my key focus area as I joined the organization. So, my priorities are very clear. First is to strengthen on cost efficiency. Good discipline over the past 2 years has delivered over ZAR 5 billion in cost optimization across 2024 and 2025, which Mpumi touched on earlier. It's important to continue that focus moving forward. And I will apply a fresh perspective on the ways in which we can be more efficient, and I cannot do it alone. I will do it with the support of the team. Second, is to enhance capital discipline. Cash flow performance need to be a critical focus for this business and every rand spend needs to be strongly challenged. In that context, we clearly have important investment programs in key phases. And these are notably our UHDMS project and HME program. So, going forward, there will be an increased capital intensity in this business. So, it's quite key that we focus on that spend. There will be strong discipline and tight governance on all decisions to ensure that money is well spent. Lastly, we remain committed to paying dividends through the cycle and maintaining our strong policy as it is. A payout of 50% to 75% as a dividend policy is quite strong. On that note, I'd like to thank you for listening to me. And now back to you Mpumi. Nompumelelo Zikalala: Thank you, Xolani. It's certainly great to have you on board. You've certainly hit the ground running, and it doesn't feel like you've only been here for a couple of weeks. And I'm looking forward to us working this journey together with the rest of our Kumba team. And then back to the room, ladies and gentlemen, before we wrap up, I would like to spend a few minutes running through how we see the picture of iron ore going forward and then make some specific comments around Kumba's future and our next steps to creating value. Turning first to the iron ore market. Our long-term view on global steel demand remains positive. Structural forces including economic development, population growth and the global shift to cleaner technologies will continue to shape and support demand over time. At the same time, the steel industry is becoming more fragmented and multipolar. While Chinese demand is expected to moderate, rising demand from India and other developing regions will more than offset this. And importantly, there's simply just isn't enough scrap in the system to meet this growing requirement. That reinforces strong fundamentals for iron ore as the primary source of iron units. If we focus on lump ore, which, as you know, is our core market, we are seeing interesting dynamics. The lump premium has been under pressure due to margin compression and increased supply. But as this excess supply works its way through the system and profitability improves, we anticipate much tighter markets emerging. The data already shows how lump supply is nearing its peak with most new volumes coming only from costly replacement projects in Australia. With 2/3 of our portfolio in lump, Kumba is well positioned for the shift that we see. Additionally, our product properties are well suited for blast furnace applications. As seen on the chart on the right, our products combined alumina and silica is within the ideal blast furnace zone. And this is the sweet spot that steelmakers operators aim for. Steelmakers blend different ores to reach this zone and many mainstream ores fall outside of this zone. And as a result, our ores are used strategically to optimize these blends. So, this is beneficial for our customers. We also serve a diversified customer base. Our premium lump goes into traditional markets where steelmakers prioritize high-grade ores, while our standard products are sold largely into China where demand is more price elastic. Across the range, our products consistently offer higher iron ore content, supporting stronger blast furnace performance. And with our UHDMS technology set to triple our premium grade supply, we gained the scale and flexibility to support this growing market demand for higher quality iron ore. This is where our product, quality, our technology, as well as our long-term strategy converge. And it is a key differentiator for Kumba as the industry evolves. Now let me give you an update on the progress made on our UHDMS project. We've received quite a few questions around the project. So, 2025 has been an important and productive year for our UHDMS project at Sishen. We've now completed 37% of the overall project, with 90% of the engineering work behind us. For those who may remember, previously, we paused the project because we are not happy with where we were from an engineering design perspective. So, it's pleasing to be sitting in this position at this point of the project. All major procurement has been completed. And because we are following a modular build approach, our Jig plant will continue running during the main tie-in, which will take place later on in the year. I know people have been asking when exactly. It's in the second half of the year, in August to be specific. And during this time, we will use stockpiled material to support consistent sales as we execute the main tie-in. And that's where when we talk about guidance, you'll see the differentiator, but we've essentially said that our sales guidance will remain going forward. On capital, we remain on track to complete the project within our overall capital budget. And as a reminder, we are phasing our investment in line with the execution of the project, which follows a modular approach. Our total capital spend on the project will be ZAR 11.2 billion and in line with the overall project progress, we've invested ZAR 4 billion to date. The construction of our first coarse and fines modules has progressed steadily. In parallel, the new coarse and fines modular substations has been completed. The bulk of the construction was actually done offsite, and we then moved the constructed modular substations to the site. And these are in the process of being connected to the first modules. The construction of the first modules has been slightly slower, but this has allowed us to learn the lessons, and we will apply these into subsequent modules. We anticipated this and planned for the modular approach simply because we knew that constructing within an existing plant was going to allow us to land. So, it's great to see these lessons coming through. These lessons will also position us well as we move into the main tie-in later this year. We are on track for the main tie-in with critical milestones achieved. And what's good for us is that a portion of the work originally planned to take place during the tie-in was actually brought forward for execution ahead of the main tie-in in order to derisk the scope of the main shut where possible. So, we wanted to limit the amount of work that we'll do in the second half of this year. Our UHDMS project certainly remains one of the most exciting projects in our pipeline. The technology not only enables us to increase the volume of premium grade products, it also allows us to use low-grade material more effectively, cutting waste and improving our overall cost efficiencies. And I've spoken about this before to say we are reducing our cutoff grade from 48% to 40%. And the economics around the project speak for themselves. EBITDA margins above 50% and an IRR of over 30% means that payback from full production is just 3 years. But for me, what matters most is the long-term benefit. UHDMS gives Sishen meaningful life extension and strategic flexibility for years to come, fundamentally delivering long-term sustainable value for all our stakeholders. Next, I would like to talk about the strength of our mineral endowment. Now quite a few of you have been asking us about the future of our business. And now I'm delighted to share some exciting news around this because you've been asking us to share a little bit more. Right now, we have approximately 764 million tonnes of exclusive mineral resources, and that's a powerful foundation. 471 million tonnes of that is already confirmed from our 2024 resource cycle. And we've added another 293 million tonnes, 2/3 at Sishen and 1/3 at Kolomela, which really shows that our exploration program is doing exactly what it's meant to do. We are not slowing down. Our exploration teams are actively expanding our understanding of the ore body and building options for the future. As I've said before, the Northern Cape province is a very interesting province when it comes to iron ore. At the same time, our mine planning engineers are enhancing pit designs to optimize the extraction of the ore body. Our ore reserves now stand at around 802 million tonnes. And since 2022, we've added 175 million tonnes before depletion. Now that's a big step forward and speaks to the long-term resilience of our business. We've just added another year to both Sishen and Kolomela's life, taking their life of mine to 2041. Our ambition is to, however, increase life of mine, and we are working towards a value-accretive pathway to improve or increase or extend Kumba's life of mine. I've already spoken about our UHDMS project at Sishen, which is exciting. I'd like to zoom into Kolomela. Here, we are building on a strong foundation. We are making real progress on 2 important resource areas. Firstly, Ploegfontein, already part of our resource base is moving through further studies and additional drilling to further increase our confidence around this great resource. I'm also pleased to announce that Heuningkranz has now also been added as a new resource area and it's progressing along the same track to convert its resources into reserves. Both areas make smart use of Kolomela's existing infrastructure, which will keep capital cost down and speed up future development timelines. So, in summary, our asset base is stronger today. We're investing in the right work, the studies, the technology, the exploration, as well as the increase in our asset base through the recapitalization of our HME fleet, which Xolani spoke about earlier. All of this is aimed at unlocking high-quality iron ore tonnes, improving margins and extending the life of our mines. And key to this is that it needs to be value accretive. And we are doing this in a disciplined way that ensures long-term value for all our shareholders. And that then brings me to our full year guidance. For 2026, we expect total production of between 31 million and 33 million tonnes, reflecting the main tie-in of the UHDMS project. As you recall, we guided the same number last year, so this hasn't changed. This is linked to 22 million tonnes from Sishen and 10 million tonnes from Kolomela. We have also maintained our sales guidance of between 35 million and 37 million tonnes, as we plan to supplement production with finished stock. Our C1 unit cost guidance is $45 per tonne and remains unchanged in real terms. The move from $40 to $45 per tonne is purely an exchange rate translation effect. Previously, our guidance was based on an exchange rate of ZAR 18.60 to the dollar and using a stronger exchange rate of ZAR 16 to the dollar naturally lifts the dollar reported cost. As you've heard from Xolani, capital expenditure is expected to be between ZAR 13.2 billion and ZAR 14.2 billion for the full year. Now before moving to Q&A, I would like to remind you, as I always do, of our value proposition. As we look ahead, the message is simple. While the macro backdrop will remain uncertain, we are clear on what matters most and executing well on what we can control. My priorities and my team's priorities for 2026 are very clear. Firstly, to continue lifting and improving on operational excellence because you can never stop on that, as well as driving cost efficiencies, Xolani spoke about this and the great execution on both our UHDMS project, as well as HME investment. Secondly, working towards logistics stability and optimizing risk-adjusted returns with long-term logistics capacity through the right partnerships. And last but definitely not least, understanding and advancing our potential value-accretive pipeline of life extension options, and I've spoken about them. And these will all be aimed at meeting market demand. Now across all of these initiatives, we will keep really tight control of capital and a strong focus on cash flow performance. That stands to ultimately benefit all of our stakeholders with Kumba in the best shape it can be to deliver results today, tomorrow and beyond. I'm exceptionally grateful that we have strong teams, and these are across all the various areas of our business. We also have a very supportive Board and committed partners across our stakeholder base to achieve this. And of course, we have the privilege of working with world-class assets. And that gives me absolute confidence in our ability to deliver sustainable value for all our stakeholders. With that, I will now hand over back to Penny, who will lead the Q&A session. Penny Himlok: Thank you, Mpumi. We'll now open for questions firstly in the room. I see already a hand up. And then we'll move to the questions on the webcast line and the conference call. Thanks. I see Tim has his hand up. Unknown Analyst: Congratulations on the results. I thought the received pricing was very good and operationally very solid, so well done. I'm just interested in -- I've got 2 quick questions. The first one, just on your resource and your reserve increase and resource change or your reserve and resource change. Just wonder if there's a change to the life of mine stripping ratio, just how you see the pit shell, how we should think about stripping over the course of life out to 2041. And then you've sort of indicated that you see potential for life beyond and you've declared this big resource. Perhaps you could just speak about the process of the sort of the ore body and what that means in terms of what it would take to convert that resource into reserve? Do we need higher prices? Or is it just a drilling issue? And then lastly, just a quick one. Kolomela, the cost was a really good cost result, but a bit of a step-up in costs for this year. If you could just give us a bit more color, that would be appreciated. Nompumelelo Zikalala: Thanks, Tim. Do you want us to answer, Tim or do you want us to take a few more questions, Penny? Penny Himlok: I think we should as Tim has asked quite a few questions, let's address those. Nompumelelo Zikalala: Okay. Thank you and it seems we will not remember all the questions. Tim, starting with the first question, and I'm going to ask our Executive Head of Technical and Strategy, Gerrie, to add to this. So, in our guidance slide, you would have seen that we talk about both this year's strip ratio, as well as the life of mine strip ratio, which essentially caters for the endowment that's already been converted into reserves, and that forms part of our life of mine plans. So, when we guide on those figures, that's already, I guess, built in. And as we've said before, clearly, Sishen's strip ratio reduces if you just look at this year and the future years. And if you look at Kolomela, it's fairly flat. I mean it's a slight difference. I'm going to ask Gerrie to talk a little bit just about the phasing and to also talk about the process that will now follow for both Ploegfontein as well as Heuningkranz, just the move from resources to reserves. Thanks, Tim. Gerrie Nortje: Yes, thank you, Mpumi. Tim, some really good questions, as always. Look, I think, firstly, just on the strip ratio after 2041. Of course, we can't guide on that at this point in time. We've only declared resource. we have not yet declared a reserve and as such, it's not included in the life of mine plan yet. So, maybe I'll start with the approach that we follow in terms of how we optimize our business. So, you will see in the resource reserve statement that we apply a 0.7 revenue factor for reserves. The reason we do that is to ensure that we always have a healthy margin throughout the life of mine. Now of course, you can follow different approaches and will impact the margin. What we have changed fundamentally last year as part of the business reconfiguration is to take a cost approach. So, not to only respond to prices, but to make sure that we target the right cost position. Now if we look at the current guidance and the cost position, essentially, if you look at CBEP, we are attempting to remain within those ranges over the life of mine and even when we extend the life to maintain a similar cost position. So, our objective is to remain below the $70 per tonne. And as such, when we optimize the mine, enhance the life, we target that, and that's why we then derive the revenue factor, which will then obviously declare the reserves. Now, Ploegfontein and Heuningkranz has been in the portfolio for a number of years. Ploegfontein previously declared as a resource, Heuningkranz only declared now. The reason we declared it now is we do meet the requirements from an RRPEEE perspective, and we are comfortable that it meets the requirements to declare resource. Now it forms a really important part of the life extension of our business. What we are doing at the moment is improving the geological confidence and the study work. As soon as we get to a pre-feasibility level and the geological confidence at the required levels, we can then declare a reserve. Now typically, it takes us about 2 to 3 years to work through the study phases. It could be a bit longer, but we have time if you consider by when we have to respond to extend the life of mine. So, immediate focus now is to drill additional holes at both Ploegfontein and Heuningkranz, as well as other areas of Sishen to complete the studies, put it through the different stage gates and then, of course, declare a reserve. At that point, we will then be able to update the life of mine and we'll also then guide on the life of mine strip ratio. But we are attempting to remain at similar levels over the life of mine in terms of strip ratio. And of course, it will give us optionality of extending the life quite significantly. Now if we just look at Heuningkranz quickly, I'll just say one more thing for me. So, Heuningkranz is about 20 kilometers away from Kolomela. Ploegfontein is located on the Kolomela mining reserve, as well as Heuningkranz actually. So, we don't anticipate massive capital investment to unlock the resources and reserves in time. Reason for that being we can leverage the Kolomela infrastructure and the hub to essentially mine those areas. So, that's why we really like this. Secondly, if we look at the cutoff grade that we've applied for Heuningkranz, 61% Fe, the bulk of that will essentially be DSO. So, we will not require extensive beneficiation. Again, lots of benefits in terms of tailings requirements, as well as beneficiation requirements. So, it is essentially part of our strategy to extend the life without increasing the cost and making sure that the margins can potentially increase. So, I added quite a bit there, Tim, but... Nompumelelo Zikalala: Yes. So, Tim, as you can see, we're very sensitive not just to the excitement around the resource, but essentially how we'll ensure that whatever it is that we look at will be value accretive. And then coming back to Kolomela cost. Thanks, Xolani. Xolani Mbambo: Yes, if you look at the performance of Kolomela in 2025, there was a benefit of uplift in volume in terms of the tonnage. They actually overperformed, and that would then be a function of a lower cost per tonne. The expectation going forward is that the volumes will normalize, of course, at a similar fixed cost. And the other thing that we're addressing now through our colleagues is, if you look at the drilling machines, they're quite old. And therefore, the cost of maintaining those and operating them is becoming a challenge. And that's one of the reasons why we've now have got that replacement program going forward, which will assist in ensuring that those machines are replaced and therefore, start running efficiently, both from operational perspective, as well as from cost perspective. So that's what guided our view going forward. Nompumelelo Zikalala: Yes. And Tim, to close off on this, we actually spoke about this during the period of the reconfiguration that -- so, you would have seen a higher differential between what we said around the strip pressure for the year and the life of mine strip ratio. So, we spoke about the fact that we would see an increase in terms of the stripping that we need to do at Kolomela, still very much part of the plan that we've spoken about before, which is linked to Kapstevel South. So, we still remain on track. Penny Himlok: Brian? Nompumelelo Zikalala: Brian? Brian Morgan: It's Brian Morgan, RMB Morgan Stanley. Just a question -- 2 questions, actually. So, on the HME replacement that you've spoken about, can you just tell us, is it the '26, '27 story? Does it begin to roll off later on? Or is this a new normal? I think in the past, we've seen these sort of cycles and they last for 2 or 3 years and then they roll off. Just if you could just give us a bit of color on that. And then, just on the rail contract, I think I've asked this before, but I'm still not sure in the answer. If we're aligned third-party access onto the rail and you've got the PSP on the maintenance and everything like that, who would you be contracting with? Who are you negotiating your new rail contract with? Nompumelelo Zikalala: Thanks, Brian. Two interesting questions. I'll take the first one just for the HME replacement. Firstly, I think our teams have done a good job. So, if you consider that effect, I'll use a trucks example, and I'll talk about drills as well, Xolani spoke about that. Typically, other miners would do their replacement at around 80,000 hours, but our teams had a look at saying, could we actually extend the hours on a truck without spending significantly more because as you can imagine, it's more of an OpEx issue. But you get into a space where it becomes more expensive to run the fleet and your efficiency start reducing. So, we've stretched it, and that's why Xolani spoke about the fact that some of our trucks are now sitting at close to 120,000 hours. But clearly, we are not just opening the pockets from a capital perspective. We are still following a logical approach to say, how do we do condition monitoring, what do we replace, et cetera. Now if I use the example of drills that Xolani spoke about from a Kolomela perspective, this one is a simple one. The drills are there, the spares are obsolete, so you can no longer get them. So, what does that mean? It means that you can't maintain that fleet. And with the replacement, we are trying to do a like-for-like, which will help us with the balance of our spares that we essentially keep. So, we're following, I guess, a logical approach that ultimately says that as you replace the fleet at the right time, you get a swing in between the OpEx, which would have started going up and your CapEx clearly because you do the investment and that essentially then drops your OpEx on a go-forward basis. And then the second thing that you get is just around productivity of the fleet itself. So, what's the timing, which is your question? So, you would have seen that we guided for next year, but we essentially gave you guidance for the medium term, which is typically 3 years. And we will continue doing further optimization work. But as you can imagine, it's not as if the entire fleet is sitting with the same number of hours because we typically would have bought the fleet at different intervals. So, we'll definitely keep you updated on that part. The key is, we are following a very logical approach with regards to the replacement of the kit, and we essentially think about the life cycle cost and balancing both OpEx and CapEx. Let me just check if Xolani or Gerrie you want to add anything? Xolani Mbambo: No, go ahead, yeah. Nompumelelo Zikalala: And then on the rail contract, it's an interesting one, Brian, because as you say, there are multiple things that are taking shape. So, the reforms are taking place. And this is where you see the doors being opened around PSPs, and we are tracking that through Vempi, who heads up the space exceptionally well for us. The work around PSPs with us being clear that when we talk about PSPs, we don't necessarily want to be a concessionaire because people started saying, do you want to be a rail company? And we said, no, no, no. We just want to partner with the right people. And then secondly, what's also taking place within the reform space is exactly what you've spoken about, the train operating companies. So, we're keeping track in terms of what's happening in that space because ultimately, this is all about, I guess, the liberalization of this space. But it's just that the multiple things are taking place at the same time. At the same time, we've still got a contract. So, the other elements are maturing, but they are not yet finished. So, it is just right that we continue with the renegotiation of our contract. For us, what's been pleasing is that in engaging with Transnet, they also want to go through the renegotiation because if you think about them, they are also thinking about the fact that they want security. Clearly, the different things are happening at different timelines, but we are moving them in parallel and making sure that we are very much mindful of what's happening in the various spaces. The key, however, is that as various things taking place at the right time for the right reasons. It's just that we need to make sure that we remain on track just in terms of the various monitorings. Vempi, do you want to add anything, go for it. Unknown Executive: Good morning. Hi, Brian. Nompumelelo Zikalala: Head of Logistics. Thanks, Vempi. Unknown Executive: Brian, just a quick comment. I think there's 2 things that you need to understand. The first one is, we always thought that the PSP work will happen before the contract renegotiation takes place. We've now seen that, that is slowing down a little bit, which means that we need to renegotiate the contract now before it expires at the end of 2027. So, that's the first thing. The second thing is the regulatory reform that's happening at the moment means that we are going to renegotiate the contract with Transnet from a freight rail and a port perspective. So, our new contract is likely going to be with freight rail and ports, but it's going to exclude the infrastructure manager because Transnet is now being split up in the infrastructure manager and also the rail and port operations. What we are considering at the moment is to see whether we can move closer to TRIM, which is the infrastructure manager because the infrastructure management is going to be the critical part that takes us back from the levels that we are seeing at the moment to the design capacity that we all want to see in a couple of years' time. So, although we're contracting or potentially going to contract with Transnet freight rail and port terminals, we're also keeping the options open through the network statement to see what options there are to apply directly from slots or for slots directly from TRIM. Nompumelelo Zikalala: So, we'll stay close to all the various aspects that are moving, Brian, yes. Penny Himlok: Okay. I don't see any more hands in the room. If there are no further hands, I'll go to Chorus Call. The first question is from Shashi from Citi. He's asked, how much of the operating cost benefit can we expect from the mining fleet recapitalization program? That would be for you, Xolani. Xolani Mbambo: Yes. That's a very good question. So essentially, what we -- the way the process is going to run is that as the, as the equipment gets replaced or just before it gets replaced, there will be a business case for each of the equipment in terms of what it does on the maintenance cost in relation to its replacement. And that will start coming along as we actually execute on implementation. So -- and also because we're going to be dynamic around a choice whether we stretch some of the machines so that we've got the staggering. It's not a question of having a view at this point in time in terms of how it's going to shape the maintenance cost going forward. But certainly, as we run through the business plan, it's one of the things that I'll be looking at in terms of if you execute on a particular replacement of, let's say, the truck what are the maintenance cost of the existing truck that is being replaced and what then happens on the business plan to make sure that those savings are actually captured. And if you don't see that coming through our EBITDA going forward, then I'll be here to be challenged on it. So, we don't have a -- I wouldn't say here and say I actually do have a view of what that looks like, but I certainly will have a view as each equipment piece gets replaced. Penny Himlok: Thanks, Xolani. Nompumelelo Zikalala: Do you want to add... Gerrie Nortje: I'll just add one more thing. So, remember, there is a bit of a lag. Now of course, there's a clear cost benefit in the recapitalizing fleet. If you consider the capital required to essentially continuously replace components versus a new equipment, you have a number of years where you don't spend anything on components. So, there's a huge cost benefit. The fleet is quite large. So, it does take a bit of time to get through it. And when you start getting through it and the lag starts coming through, the cost benefit will be clear. And I think the cost benefit will be in both the CapEx as well as the OpEx. But I think just be mindful that the fleet is large. It takes time and it's got a bit of a lag, but when it comes through, it will be clear. Penny Himlok: Thanks, Gerrie. Well, maybe we should give Timo a chance. There's a question on CMRG that's also come through. That's from Anton Nolo. He's asked, how much of an impact is the dispute between the major miners and CMRG going to have in the iron ore price and the lump premium? Unknown Executive: Thank you. I was feeling a bit left out, so I'm happy to get a question. How much about the impact on the iron ore price from the CMR dispute? Well, when you talk about the dispute, I think you're referring to BSP's dispute with CMR. I should add that we are engaged in discussions with CMR. We have been for much of 2025. They are not easy discussions. They have accelerated late in 2025. They have intensified, but they are very constructive discussions, I must say. There is a bit of a shift in the power balance between buyers and sellers in the iron ore market, given that CMR represents probably 2/3 to 3/4 of overall iron ore imports into China. So, they are forced to be reckoned with. It's too early to speculate what the outcome of our discussion with CMR is going to be. We continue those discussions. In fact, Ibrahim and myself, we're on our way to Beijing next week. We were there in January. We've got our next meeting lined up for March also. So, we are in those discussions. They are in a very positive spirit being conducted, and they span many elements, the use of index. I mean, many elements are included in those discussions. So, it's too early to speculate where we're going to land with CMR. Impact on the lump premium specifically, I really don't expect much of an impact on the lump premium at all from the CMR discussions. The lump premium that you've seen for the past year, a lot of people focus on the low lump premium that we've seen recently. But keep in mind that for the year as a whole, the lump premium was pretty much in line with what it was in 2024. We've started seeing a recovery in the lump premium. It's got nothing to do with CMR. It's got to do with the fact that the lump premium was really low, mills have started using more lump. The share of lump in that burden has gone up by about 1 percentage point already. I think we would have seen a stronger recovery in the lump premium had it not been for the very strong metallurgical coal prices. So, the lump premium is on its way back, I believe, to a level of $0.15 to $0.20 per dmtu where it has been. But keep in mind, the lump premium tends to be extremely variable. So, we are starting from a low base now back to that $0.15 to $0.20 level. Longer-term, we continue to be very positive on the lump premium. And the slide that we showed indicates that we think we are nearing peak supply in lump and that from a couple of years out, we're going to see a steady reduction in the availability of lump, coupled with a continued increase in the use of lump in blast furnaces, I think that's a very, very positive picture for the lump premium. Penny Himlok: Thanks, Timo. And we have a question from Andrew Snowden from [indiscernible]. He's asked, and this would possibly be for you, Xolani, to speak about the impact on cash flow from potential working capital release in 2026 as we draw down inventory. Can we give any color on this by way of guidance? Andrew likes to ask for more information and we will have a chat with Andrew when we're down in Cape Town, but maybe we can just give him some highlights. Xolani Mbambo: Yes. Look, it's a tricky one. So, essentially, you'd have seen an uplift in our volumes on the stock side, both from WIP and to an extent from last year, you'd have seen finished goods or the saleable tonnes in terms of the mix more on the port than what we'd have seen in the prior year. And of course, all of those will wash through the income statement. And what will then happen is unless we stick to the mine plan that calls for more, we should see no impact in working capital in terms of the stock movement. But if at the moment to deviate from that, then of course, you'll see a negative effect on your income statement, as well as on your cash flow in terms of the movement. So, it's a function of us making sure that as we mine, we stick to the mine plan, so that the flow of WIP movement remains constant in terms of the cash flows. That's how I can give as a guidance in terms of what you're looking for. But on the one on one, we can perhaps go a bit more detail to understand specifically what is it that you'd be looking for on that cash flow. Penny Himlok: Thanks, Xolani. We've got a question from Katekar from Investec Bank. She's asked about the UHDMS tie-in in August, if it's been fully derisked? And if not, what are some of the aspects that could still surprise? Nompumelelo Zikalala: Yes. Thanks, Katekar. So, I guess a couple of things around the tie-in. One is the planning of the actual tie-in has been completed. And that's fundamental because we wanted to conclude the planning and also do assurance on the plan because you typically have our own team, and we bring in additional experts to say, is there anything else that we should think about? But we're in a good place. The second thing is we spoke about where we are with regards to the procurement and also the selection of the company that will be leading the tie-in. The good thing is that we are not taking one of the companies that are working on the modules and asking them to work on the tie-in. We're going with a separate company because we don't want them juggling balls between what they are doing on the modules and what they are doing on the tie-in. We want them fully dedicated to the tie-in. We've already onboarded them, a solid company. We've had to pay slightly more, but it's okay because we want the right skills to come in and execute the tie-in. The third thing is that, our teams looked at the scope of the tie-in and looked at work that they could do -- that they could essentially do upfront, and we supported that. They started this work in 2025, and it will continue, because we want to execute as much as we can before the main tie-in because with the main tie-in, clearly, you stop everything. But if you can try and do some of the work upfront, it just reduces the level of complexity, clearly, not completely, but we've aimed at doing our best around this. And then I mean, last but definitely not least, we are also thinking about, I guess, all the various aspects around the tie-in, not just looking at work that will be happening within the project, but also the interface just around work that will be done by our own other Kumba team, so our stay-in business capital team because we want to do opportunistic maintenance. If the plant stops for a couple of months, it makes sense to try and do as much maintenance as possible because the plant is there and it's available. So, the interface of the various pieces of work has been well thought through. We've brought in a plan who's looking at all the various interfaces and how all the aspects will integrate. So, I guess that go. In terms of just front-end loading, think about it like this, it's February. We are already talking in detail on the tie-in. We will assure this plan at the end of March, rolling into the beginning of April because we want to land as much as possible. So, we're not leaving it and saying, let's just conclude the plan in June or July. No, it's a major one for us. I guess then what are the risks? I'm a realist when it comes to projects because sometimes there are some unknowns that may take place. So, how have we thought about dealing with these risks? We've thought about the level of stock that we have ahead of the tie-in. And I know people used to ask us why are you carrying these volumes of stock, so 7.5 million tonnes last year. Well, it's there not just for us to meet our production guidance this year, but it's also saying if for whatever reason something happens and the tie-in takes slightly longer, we could just continue selling out of stock. The other thing that we've also thought about is that during the tie-in, the only section that will be on full stock is the dense medium separation processes linked to our coarse and fines DMS. But the rest of Sishen actually has a jig plant. That jig plant will continue running and Kolomela will continue running as well. And that's to cater for any other eventualities that may take place, either with the tie-in itself or the commissioning phase or the ramp-up post the tie-in. So, we've had lots of thinking around this. And Gerrie, I'll check if you want to add anything? Gerrie Nortje: One thing, Katekar, so, I think Mpumi covered the front-end loading piece. What we've also done as part of the main shut is we've gone with the P90 schedule. So, we have built in contingency allowance for any sort of delays or slippages. Can it be longer than that? Yes, it's possible, probably not likely, but it's possible. And I think Mpumi covered the contingency plans that we have in place. Maybe last comment, we also have Kolomela mine, and we always consider how we can use Kolomela mine to further derisk in the event that we have to. So, essentially, again, looking at this from a portfolio point of view. So, both production as well as stockpiles, as well as additional processing capacity like the Ultra DMS at Kolomela, for example. Nompumelelo Zikalala: Maybe Gerrie, let me just add one more. So, the P50 schedule said 75 days. The P90 schedule said over 100 days. We have planned for the longer schedule. So, typically, you would go for the shortest ever possible schedule. We are saying, let's plan for the longer schedule, which assists us with derisking any eventualities that may take place. What's good is that, as I've said, we've selected the contractor that will work on this. Their days because clearly, they've got the plan, which we've then integrated into our broader plan has a shorter duration. But still, we've planned on the P90 schedule. So, Gerrie and I normally have this discussion. We talk about both sides of the risk. So, either it may take longer, but it may also take a shorter period because we may be closer to the P50 and closer to the dates that have come through from our contractors. But we are taking a very, I guess, I mean, I've never seen our teams looking at this level of detail hour-by-hour, what will be done where in which section of the plant and who will be doing it. And that's the right to do -- the right way to do it, yes. Penny Himlok: Thanks, Mpumi. Thank you. Back to our favorite topic, Transnet. We've got a question from Thobela Bixa from Nedbank. He's asked, rail to port has been up 6%, but sales only up 2%. Is there a bottleneck at the port? So that's the operational question, and we have a strategic question on logistics after this. Nompumelelo Zikalala: Yes. So, Thobela, maybe let me just take this one. So, when we spoke about the independent technical assessment, we looked at everything. We looked at rail and we looked at the port. And in as much as there's work that needs to be done on the rail side, there's also work that needs to be done on the port side. And the approach to the ore corridor restoration program takes a holistic approach because to the question, you don't want to have one section running and another not running. And then we spoke briefly about the 26-day additional maintenance that needed to be done as part of the refurbishment of stacker reclaimer #3. All that I'll say is that when Vempi and the team work with Transnet, they take a holistic approach. It's the whole integrated system. Penny Himlok: Thanks, Mpumi. Katekar, just made a small -- another little add-on to that Transnet question also from an operational perspective, and that is just that your production guidance has been actually unchanged and will certainly change in 2027, 2028, it says 35 million to 37 million tonnes. Does that mean you don't really have that much confidence in the recovery of the rail and port, I guess, in the short term? Nompumelelo Zikalala: Yes. Thanks, Katekar. So, we've taken a balanced approach to this. The independent technical assessment identified things that need to be done. And there were 2 pathways. It was either stopping the entire infrastructure and fixing everything in a couple of months. And clearly, that wasn't ideal. It would have had a significant impact, not just to our business, but to Transnet as well. And secondly, one would have needed a lot of money to do all that work. And then the second pathway was actually phasing the work, and that's exactly what the Ore Corridor Restoration program work face. We just need to be mindful that the things that are broken still need to be fixed. So, if I look at this year, they've actually added a second shut, and we support this. So, this is the annual maintenance shut. We typically talk about the maintenance shut that's normally a 10-day shut that takes place in the second half. Well, this year, we will have 2 shuts, one in the first half and one in the second half. And the good thing is that during this period, they will actually be doing catch-up on the backlog maintenance. So, Vempi, I don't know if you want to add anything to that? Unknown Executive: I think you've covered it well. Just what's standing between us or the system from where it is at the moment and getting back to the 60 million tonnes per annum that is seen before is again what you've spoken about the capital replacement. And there's 2 things that need to happen. Firstly, we need to help Transnet with the planning and the procurement that needs to take place to get all of the orders done, so that the work can take place, firstly. But secondly, we also need to find the right commercial vehicle for the money to be spent. So, we know that there's this budget facility for infrastructure that governments made available to Transnet, but they also need the vehicle for that money to be spent. So, those are the 2 things that are standing between us and getting back to 60 million tonnes per annum for the ore corridor. And that's why we're comfortable with the levels that we've guided over the next year. Nompumelelo Zikalala: And then the longer-term, it's just a recognition of the fact that this is not a quick fix and the allowance for the time to actually do the work because you run the system outside of that time. I guess maybe just one last thing. If you think about it, last one is this double the amount of the annual shut period, but we've kept the guidance the same. That actually talks about the fact that we expect to see a higher operating rate when the system is running. It's just that you'll still stop it for, I guess, 2 separate durations. And we would also support this being repeated next year simply because the work needs to be executed. Penny Himlok: Thanks, Mpumi. One question also on Transnet or the actually the PSP reform process from Thlaku from SBG Securities. He's asked that you've mentioned the PSP info reform process has somewhat slowed. Should we assume a longer time line before private operators meaningfully increase rail throughput in general? Sorry, what -- could you expand what these key bottlenecks are that's holding back the process? Nompumelelo Zikalala: Yes. I think let me take this one. So, Thlaku, if you think about it, there was the initial RFI period, then the PSP unit came to play back what they had, and this was over 700 pages. And I've got a wonderful team. So, they looked at these pages together with the rest of the Ore User's Forum, and we provided feedback. And the reason why we did that is because the last thing that any of us want is to see a release of the next phase or the RFP phase that's not bankable. So, it taking longer shouldn't be seen as a negative thing for as long as it will assist in terms of improving the quality of the output of that commercial RFP that will essentially come out. Clearly, if you track what's happening within the country as a whole, you may have seen that there's been a schedule that's been released for 3 other RFPs in other corridors. We, from our side, are waiting for the release of our RFP. But clearly, to Vempi's point, we are mindful of the fact that with that taking place at a -- within a slightly longer time frame, the work that still needs to be done needs to be done and that's why we've got the Ore Corridor Restoration program, and we continue working with Transnet. Penny Himlok: Okay. We've got another question on the Ploegfontein, Heuningkranz. There's been a question from Bruce Williamson from Integral Asset Management. He's asked, what is the early indication of the FE average grades that we are seeing at Ploegfontein and Heuningkranz and also lumpy ratios? That's from Bruce Williamson. Gerrie Nortje: So, just on Heuningkranz, firstly Heuningkranz-Kolomela combine 150 million tonnes of resources. Cutoff grade applied at Heuningkranz 61% FE doesn't speak to the average. It speaks to the cutoff grade. The average grade is about 65%. So, it's fantastic, I mean it's what we like to see, and it's actually higher than what we have at Kolomela mine. At Ploegfontein, we apply a 50% cutoff. The reason we do that is because we still have an ultra DMS at Kolomela mine that we can use to beneficiate some of the medium-grade ores. The average grade again is higher than that. Our thinking is that when we -- as we sort of progress the exploration and the studies work and we get closer to declaring reserves, we'll be able to specifically guide on that. But our thinking at the moment is that we have to come up with a blend. So, whilst Kolomela is still mining the current pits, we start mining Ploegfontein and Heuningkranz and essentially have a complex approach to it rather than depleting Kolomela mine then going to Ploegfontein then going to Heuningkranz. Now of course, that also gives us fantastic optionality at Sishen mine because, again, we look at it from an integrated perspective. So, we will now be able to rebalance the entire portfolio to ensure the life extension is material as opposed to just sort of extending by a few years every time we've done a study. Now the timeline is about 2 to 3 years to do the study work. The confidence is actually quite high for Heuningkranz, the bulk of it is already at an indicated level. So, the drilling now is focusing on essentially getting that up to a measured level. So, a few things we have to understand just in terms of permitting. It is part of the Kolomela mining right. But of course, there's a number of additional permits that we just have to revisit, make sure that we're not seeing a material change and get the drilling and confidence up. But our intention is to maintain the lump fine ratio, as well as maintain the average FE spec or improve going forward. Penny Himlok: Thanks, Gerrie. Anything to add, Mpumi? Nompumelelo Zikalala: No, I think he has covered it exceptionally well. I have to say I'm excited. I mean I look at the level of passion from all our various teams. And in this space, it's our geologists and our miners. It's good work that's been progressed. Penny Himlok: I'm mindful that we're reaching the close of our time. I just wanted to check if there's any questions on the webcast link? I see there are none. Okay. There's just one last question that we now have, and that's essentially regarding the fleet in terms of the recapitalization. That's basically from Bruce Williamson again. He's asked, with the next range of fleet purchases, will that move into the autonomous space? And what impact could that have on employment? Nompumelelo Zikalala: Yes. I think I'll take that. So, Bruce, interesting. People look at autonomous as if it's something that's far, but I'm not mindful of the fact that we've actually got a portion of our fleet that's already autonomous. So, if you go to both Sishen and Kolomela and look at our drill fleet, you'll see 2 patterns, one with blue cones, which means autonomous, fully autonomous, somebody sits at the control room and runs that fleet. And then you'll see one with normal cones, which essentially means that there's still the person that's sitting and operating that machine. So, we should never see it as something that we should be scared of looking at. And I can certainly say that we will, on a continuous basis, particularly as we look at the next wave of replacement, consider autonomous because ultimately, what you do is you look at the business case of everything. And then you look at the implications of that. But I don't ever want us to see the move towards autonomous as a negative thing. And because it's not, I mean if I look at our teams at Sishen and Kolomela just around the drill fleet, it's interesting. All of a sudden, if we have an operator who's a pregnant female, as soon as they find out they can't operate the drill. But now guess what, they continue doing their job from the control room. So, yes, I can definitely say that as we look at the next wave, we will always consider all the various options and clearly consider the implications, yes. Penny Himlok: Thanks, Mpumi. And that concludes our Q&A's for today. Thank you, everyone, for joining us today, and please stay for some refreshments. We always look forward to catching up with you. Thank you. Nompumelelo Zikalala: Thank you, Penny.
Operator: Greetings, and welcome to Nutrien 2025 Fourth Quarter Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference call over to Jeff Holzman, Senior Vice President of Investor Relations and FP&A. Jeff Holzman: Thank you, operator. Good morning, and welcome to Nutrien's fourth quarter 2021 earnings call. As we conduct this call, various statements that we make about future expectations, plans and prospects contain forward-looking information. Certain assumptions were applied in making these conclusions and forecasts. Therefore, actual results could differ materially from those contained in our forward-looking information. Additional information about these factors and assumptions is contained in our quarterly report to shareholders as well as our most recent annual report, MD&A and annual information form. I'll now turn the call over to Ken Seitz, Nutrien's President and CEO; and Mark Thompson, our CFO, for opening comments. Kenneth Seitz: Good morning, and thank you for joining us today to review Nutrien's 2025 results and the outlook for the year ahead. At our Investor Day in 2024, we outlined an ambitious 3-year plan with clear performance targets that included increasing upstream fertilizer sales volumes growing downstream retail earnings, reducing operating costs and optimizing capital expenditures. Our results reflect the strong execution of this plan, contributing to higher earnings and free cash flow lower net debt and increased cash returned to shareholders. In 2025, we generated adjusted EBITDA of $6.05 billion, up 13% from the prior year. We delivered record fertilizer sales volumes of 27.5 million tonnes, utilizing the strength of our end-to-end supply chain to efficiently serve our customers. We raised our potash sales volume guidance twice during the year as strong offshore demand offset a shortened fall location window in North America. We achieved 49% potash mine automation, a significant accomplishment that provides safety benefits and further strengthens our low-cost advantage. Our Potash controllable cash cost averaged $58 per tonne for the year, below our $60 per tonne goal. We increased nitrogen sales volumes to 10.9 million tonnes and achieved a 4 percentage point improvement in ammonia operating rates supported by reliability initiatives and the completion of low-cost debottlenecks. Excellent performance from our North American nitrogen plants helped offset the impact of a controlled shutdown of our Trinidad operations in the fourth quarter. In phosphate, our operating rate averaged 87% in the second half of reliability improvements and a strong commercial footprint enabled us to deliver within our guidance range despite lower North American demand in the fourth quarter. Our downstream retail adjusted EBITDA increased to $1.74 billion through decisive cost reductions, strong proprietary margins and solid execution of our Brazil margin improvement plan. Our unwavering focus on controllables allowed us to manage through weaker agricultural commodity markets and persistent geopolitical volatility and ultimately delivering results consistent with our guidance set at the beginning of the year. We surpassed our $200 million annual cost savings target and reduced capital expenditures to $2 billion, well below our Investor Day target of $2.2 billion to $2.3 billion. As a result of these efforts, we have structurally grown free cash flow strengthening the company today and providing significant headroom for capital deployment going forward. At our Investor Day, we also communicated a plan to simplify our portfolio. With the goal of concentrating our capital on assets with the highest quality earnings and cash flow streams. We initiated this journey in 2024 by canceling our Geismar clean ammonia project and divesting smaller noncore assets. In 2025, we put further rigor to the analysis of our portfolio by comprehensively evaluating each asset on the merits of free cash flow contribution return on invested capital and relative competitive position. This review highlighted assets that could be optimized or monetized while sharpening our focus on improving capital efficiency. Where an asset did not meet our threshold was not a strategic fit, we took action and generated approximately $900 million in gross proceeds from divestitures. We utilized the increased free cash flow and proceeds from noncore asset divestitures to progress two key capital allocation priorities. We reduced short-term debt by over $600 million compared to the prior year and continue to position the balance sheet as a strategic asset that provides flexibility to act countercyclically. We also delivered a 30% increase in cash returned to shareholders in 2025. This was achieved through the execution of a ratable share repurchases throughout the year, an approach that is aligned with our focus on driving growth and free cash flow per share. The reduction in share count also supports our long-standing track record of providing shareholders with a reliable and growing dividend per share while keeping total dividend expense broadly stable. To summarize, our performance in 2025 demonstrated resilience and consistency in an evolving environment. We expect to build on this momentum in 2026 with a focus on delivering growth from our core businesses and maintaining capital allocation discipline. In addition, we will continue to advance portfolio initiatives in three key areas. First, as previously announced, we launched a review of strategic alternatives for our phosphate business in the fourth quarter of 2025 and are on track to solidify the optimal path in 2026. Second, we continue to assess options for our Trinidad nitrogen operations and focus on enhancing our core North American assets, improving the margin profile of our nitrogen business. Lastly, we made significant progress on our retail margin improvement plan in Brazil over the past year. However, macroeconomic headwinds have kept returns below what we would view as appropriate to support the capital deployed there. We will continue to take actions to drive improved performance in 2026, while actively reviewing alternatives for each component of our Brazilian business and the optimal way to participate in the long-term growth in this market. I will now turn it over to Mark to speak in more detail on our 2026 outlook and capital allocation plans. Mark Thompson: Thanks, Ken. As Ken highlighted, our 2025 results reflect excellent operating performance paired with prudent cost management and capital optimization across the company. As we look ahead to 2026, we see constructive fundamentals for our business. Potash demand is projected to grow for the fourth consecutive year in 2026, supported by strong relative affordability, large nitrate removal and low channel inventories. We've seen good engagement across all major markets with most benchmark prices approximately 20% higher compared to 12 months ago. We anticipate relatively tight fundamentals through 2026 as trend line demand growth is testing existing global operating and supply chain capabilities. Our potash sales volume guidance of 14.1 million to 14.8 million tonnes is consistent with our global demand projection. Canpotex was committed through the first quarter much earlier compared to the past several years, and our domestic winter fill program was very well subscribed. As a result, we expect first quarter sales volumes similar to the same period of 2025 and selling prices that reflect the year-over-year increase in benchmark values. On a full year basis, we expect controllable cash cost per tonne at or below our goal of $60 per tonne. Global nitrogen markets are currently being influenced by supply issues, while demand is expected to grow in line with historical rates driven by increasing use in agricultural markets such as Asia and Latin America. Global ammonia markets remained tight due to project delays in plant outages, while strong seasonal urea demand and geopolitical uncertainty have pushed urea values higher. Our nitrogen sales volumes guidance of 9.2 million to 9.7 million tonnes is supported by reliability initiatives and low-cost debottleneck projects and assumes no production from Trinidad and New Madrid in 2026. These facilities accounted for approximately 1.6 million tonnes in 2025 or approximately 15% of our nitrogen segment sales volumes. However, they contributed minimal free cash flow. Our cost structure in nitrogen now reflects production tied entirely to AECO and Henry Hub gas, raising the margin profile of our business and providing greater stability to our cash flow. In phosphate, we expect continued reliability benefits to support higher sales volumes with guidance of 2.4 million to 2.6 million tonnes. The majority of the year-over-year volume growth is projected in the first half. However, we also anticipate elevated input costs to pressure margins in the near term. Retail adjusted EBITDA of $1.75 billion to $1.95 billion represents continued growth in our downstream business consistent with historical rates. The midpoint of our range is underpinned by four key items. First, we expect high single-digit growth in our proprietary products gross margin in 2026, supported by the launch of new products, organic growth in our core retail geographies and the continued expansion of our international business. Second, we expect a mid-single-digit increase in our North American crop Nutrien sales volumes with margin rates similar to 2025. The recovery in volumes is driven by the need to replenish soil nutrients following a record crop and a shortened fall application window. Third, we assume improved weather conditions in Australia that are expected to drive higher crop input demand compared to the first half of 2025. And finally, we continue to drive cost management efforts across all of our geographies, which is expected to support incremental EBITDA margin improvement. We see the majority of these drivers being structural and supportive of growth in retail earnings beyond 2026. Now turning to capital allocation. For 2026, our priorities remain unchanged. We expect cash from operations to be supported by constructive fertilizer market fundamentals and organic growth drivers that I highlighted in each of our operating segments. Further, we ended 2025 with a working capital build due to the delayed timing of customer purchases. We expect the majority of this to unwind in 2026, supporting a meaningful improvement in cash conversion. Our capital expenditures guidance of $2 billion to $2.1 billion is consistent with 2025 and approximately $200 million below our Investor Day target. We've committed capital to sustain safe and reliable operations and to progress a set of targeted growth investments that have a strong fit with our strategy, provide returns in excess of our hurdle rates and have a relatively low degree of execution risk. Our most recent dividend declared yesterday marks the eighth consecutive year we've raised the dividend per share and Nutrien's Board of Directors has also authorized the repurchase of up to 5% of our outstanding common shares over the next 12 months. We've repurchased shares at a pace of approximately $50 million per month year-to-date and shareholders should continue to expect that ratable repurchases will be a consistent staple in our capital allocation framework going forward. I'll now turn it back to Ken for closing remarks. Kenneth Seitz: Thanks, Mark. Over the past 18 months, we have taken purposeful steps to position our organization as one that is committed to excellence and determined to deliver industry-leading results. We have streamlined the leadership structures, established clear accountabilities and centralized functions and decision-making. As a result, Nutrien today is an organization that is leaner, more disciplined and better positioned than ever to deliver on its potential. We have aligned the company around a proven set of strategic priorities, simplifying our business driving operational improvements and maintaining a disciplined approach to capital allocation. I believe our unrelenting focus on these strategic priorities is delivering clear results and positioning Nutrien for long-term success. I'm proud of what we have achieved and excited about the extraordinary potential to build on this momentum. In closing, 2025 has been a defining year, and our focus in 2026 remains unchanged. I want to express my sincere appreciation to our 25,000 employees for their focus, hard work and dedication. Thank you all for your time, and we would be happy to take your questions. Operator: [Operator Instructions] The first question comes from Joel Jackson from BMO Capital Markets. Joel Jackson: Wonder if you could bridge us. I know you for a couple of years, held the guidance range for this year for retail to $1.9 billion to $2.1 billion. So let's call it about $2 billion, you're planning to deliver $1.85 this year. It's a $150 million, could you bridge us when you think about the last couple of years, the differences there? And maybe when you do that, would you please highlight proprietary products, Brazil, North America, retail tuck-ins that got you to $1.85 for this year. Kenneth Seitz: Yes, Joel, thank you. So the 2026 target is about $150 million above where we are midpoint for sits today in our guidance. And then there's a few reasons owing to that. One -- the main driver is is we had assumed the macro fundamentals would be modestly better than they are today. And I think that would be most of it. So that the result is a bit slower proprietary product growth, and we've been a bit more selective on tuck-ins. And because of a modestly sort of modestly lower ag fundamentals or fundamentals. We have taken action in service of 2020 EBITDA. And so what have we done, we've paired growth of the market with what we've seen in the market, and that is accelerating our cost reductions. We talked about that, that's Latin American restructuring and the Brazil margin improvement plan. We've closed underperforming assets that's 50-plus locations both in North America and in Australia, we've reduced headcount by over 400 positions. We've restructured noncore and unprofitable businesses. So we've really taken action on the cost reduction side. We've optimized our capital expenditures. We've increased the contributions from Nutrien Financial and certainly better working capital management. We see additional opportunity on the working capital front as well. So that since 2023, we have increased earnings in our retail business by $400 million. And I think an important point there is that we believe that, that's structural. So that's a 6% growth rate beyond -- up until 2026 and beyond. So we look at the business, and we say, yes, ag fundamentals modestly sort of not where we had thought that they would be. We react with cost reductions and business improvement. And through all that, we've increased EBITDA in our retail business by $400 million structurally since 2023. Operator: Your next question comes from Chris Parkinson from Wolfe Research. Christopher Parkinson: Could we just go over real quick the demand dynamics that you're seeing in potash markets? I think most people are pretty decent on the supply. But just what surprised you? What's been in line with your expectations where you think inventories are? It seems like there are a couple of moving parts, which we did to keep track on. So any color there would be very helpful. Kenneth Seitz: Yes. Thanks, Chris. So we're projecting 74 million, 77 million tonnes this year. So up about 1 million tonnes from what actually happened last year. And at that level, we're starting to reach sort of thresholds where it tests operations and supply chain capabilities. We do believe that underlying consumption is meeting shipments so that there hasn't been a large inventory build. If you look at that sort of record early settlement in China, very strong evidence of depleted inventories. And same thing in Brazil where domestic inventories are at multiyear lows. So we -- again, we see that shipments is equal to consumption when we say 74 million to 77 million tonnes because we don't see inventory building. As a result, we've seen good prices. Brazil at $375, and again, low inventory. Our U.S. winter fill program, we were fully subscribed the price there now $355 per short tonne. Southeast Asia's firm at $375, albeit there's some inventory there on a strong program purchasing program last year. India, $349, and we do expect India to come forward with an earlier settlement given that there's a lot of volume now going to China and the Indians are going to have to step in as well. So that Canpotex with the volume moving offshore is also now committed through Q1. So Chris, I think for the fourth year in a row now, we've seen demand growth, and it's getting from sort demand destruction of 2022 to 2023 right back on to trend level demand here into 2026, fourth year in a row, 74 million to 77 million tonnes, where inventories aren't building. In other words, consumptions equaling shipments and probably reaching a point where you're -- again, you're starting to test supply chain and operating capabilities, hence some of the firming that we've seen in price. Operator: Your next question comes from Hamir Patel from CIBC. Hamir Patel: Ken, given the high end of your production -- potash production guidance range would be close to your current capacity, how do you think about how quickly you could bring on additional potash brownfield capacity in your system? And when might you look to action further capital projects there? Kenneth Seitz: Yes. Thanks, Hamir. Yes, the beauty of having six mines is that we have just a solid understanding of where that next tonne is going to come from and certainly at what cost. And so as we map out our trajectory of volumes, not just this year and next, but over the medium term, we have a very strong sense of where they're going to come from, when we can bring them on and at what cost. And so yes, Hamir, this year, we have 15 million tonnes of capability. And as the market grows, we have line of sight today to just continue to grow with it. When we say 19% to 20% market share in a growing market, again, we have line of sight to continue to expand our volumes as the market grows six mines, these investments are rather granular. It's conveyance underground, it's mining machines. And so we can do those as long as we get the purchase orders in for those mining machines in time turnaround and installation of those things, we can move that relatively quickly. Incredibly low capital costs. Again, we talked about that $150 to $200 per tonne. That would be, what, 10% of what a greenfield investment would be. The last thing I'll say is not to underestimate the benefits of mine automation as we expand our production volume. As we said in the comments, we cut half of our ore in either fully autonomous or tele remote mode. And the safety benefits, absolutely. But the productivity benefits and the flexibility benefits associated with automating these mines it's really proving out so that when we talk about, as you say, we're expanding volume consistent with the way the market is growing and our maintenance and market share, our ability to do that pace it a low capital and maintaining our $60 cash cost per tonne. We see that all coming together really very nicely as we sort of innovate on mine automation. Operator: Your next question comes from Ben Isaacson from Scotiabank. Ben Isaacson: Just a quick question on Brazil. You generated a loss, I believe, in '24, and you were close to breakeven in '25. Can you talk about the expectations for '26. What is the upside case, or what are the swing factors there? What should we expect out of Brazil? Kenneth Seitz: Yes. Thank you for the question, Ben. The Brazilian market continues to be challenged, I would say, yes, we have been making great progress on our margin improvement plan. We've talked about idling blenders and closing on productive locations and rationalizing workforce and focus on collections. And that's all yielded results that, as you say, Ben, took us from a loss-making position in 2024 to making a bit of money in 2025. And if we look into 2026, again, given the ongoing challenges in that country, I would describe it as sort of modest improvement over what we did in 2025. And in light of some of those modest improvements and in light of the ongoing challenges in Brazilian agriculture, we continue to assess and reassess our presence there, whether it be with seeds, certainly with proprietary products where we see opportunities to grow. But on the retail front as well, what is the best what is the best way to approach the Brazilian market. We know we're going to be supplying potash there forever, and we're going to be a meaningful supplier there. So when we put that all together, I suspect there will be changes to sort of how we operate in Brazil in 2026, and we're just working through that now. Operator: Your next question comes from Vincent Andrews of Morgan Stanley. Unknown Analyst: This is Justin Pellegrino on for Vincent. I was just hoping you could kind of discuss the proprietary product mix in retail again. Is there a level that you're looking to achieve at some point in the distant future? Is there a target percentage mix? And then can you kind of just for 2026 and beyond what the drivers of below or above expectations would be for that percentage mix. Kenneth Seitz: Yes. So thank you for the question, Justin. And yes, we do have growth aspirations as it relates to proprietary products. I mean it's growing to a gross margin of about 1.2 billion to date. And that's been -- we've been experiencing sort of high single-digit growth rates over the last 5 years. And we expect that to continue for all kinds of reasons. So yes, we do have growth aspirations, and that's true for the shelves that we currently put those products on the innovations associated with new products, and we are introducing new products this year and then looking abroad as well, international markets where we're seeing some green shoots in terms of our ability to supply in different agricultural regions. But Chris, did you want to say any more about proprietary. Christopher Reynolds: Yes. Justin, thanks for the question. Part of that growth story also is that, for example, we're going to be introducing 26 new products here in 2026 as part of the proprietary products range. And as we look across the health of the grower today, their focus is very much on yield. And when you think about sort of the average to maybe a little below average commodity prices today, that's where their focus is. And they're growing confidence in this proprietary products to help that yield outcome just continues to grow, as we said, not just domestically in North America, but also growing internationally as well. So a big component of our growth, as we've mentioned this morning is around the proprietary products range, and we feel very good about that long into the future. Operator: Your next question comes from Andrew Wong of RBC. Andrew Wong: So in the retail guidance, you're assuming a mid-single-digit growth in crop nutrient volumes in North America. Just curious, how does that in your view across like nitrogen, potash and phosphate? And how does that take into factors such as crop switching between corn and soybean and versus the need for net replenishment after the really strong yields last year? Kenneth Seitz: Yes. Thank you, Andrew, and yes, we're saying for core 94 million to 96 million acres and for soybeans 84 million, 86 million acres. So -- and then we're now staring down at some catch-up with crop nutrients going down on the ground from a wet fall or weather challenge fault. Indeed, we had about a $300 million working capital build in the fourth quarter, which we expect to be released onto the ground here in the first half of the year. In terms of fertilizer mix. I wouldn't say that it's going to be different than what we've seen in previous years. I think thing would be a balanced fertilizer mix, I mean it's true that that North America took a record crop out of the ground last year right across the [indiscernible]. So there was a lot of crop nutrients removed out of the ground last year. and those need to be really in place. So I wouldn't say that we're looking at a mix that's anything different than we've seen in historical years. So that we expect that the gross margin contribution from fertilizer in our retail business this year, should be about $1.5 billion. Operator: Your next question comes from Steve Hansen of Raymond James. Steven Hansen: I recognize it's still early here, but any incremental thoughts on the optimal path for the phosphate strategic review? And maybe just give us an update where you're at and time lines that you might be starting to put together. Again, recognizing it's still early. Kenneth Seitz: Yes. Thanks, Steve. No, no conclusions on optimal path. We are -- and you phrased it well. We are still in the midst of a strategic review. And when we announced it last quarter, we said that, that could be anything from sort of revised operations all the way through to a sale. We are preparing our team is preparing for the typical market testing process to gauge interest in those assets. I can tell you at this stage, we have had significant inbound, significant interest in entering a discussion around those assets. But we're not in a position to do that until we have all of our ducks in a row as it relates to data information and characterizing -- clearly characterizing the assets. So people can understand what the business is and the state of the assets and all those things that you go through. So we're in a -- we expect to be in a position in the next quarter where we'll be out in the market doing exactly that market testing and engaging what may be done there. In the meantime, parallel bodies have worked to understand when we say it revised operations. What do we mean by that? We have different assets here. There's aurora with an extended life of mine white springs with a life of mine that's just early into the next decade. But with additional resources in the area that we're having a look at, and then there is our fee line. So when we save revised operations, might we do with those assets and everything in between that then, Steve, in terms of sale assets and is operations. So certainly, we want to have conclusions. We want to be able to tell you here in 2026, what's the plan, but we're just working through that at the moment. Operator: Your next question comes from Lucas Beaumont of UBC -- UBS. Lucas Beaumont: So I just wanted to follow up on the potash costs. So on the controllable costs kind of came in at $58 a tonne this year. I mean it was a bit up year-on-year, but similar to sort of what you've done couple of years before that. So I mean just going forward with increasing production profile sort of what you're doing on the automation front. How do you sort of see those costs trending into 2026 and beyond. Kenneth Seitz: Lucas, it is our goal to keep that number at $60 per ton and cash cost per tonne. And we find that as controllable cash stock costs. But yes, per time for the foreseeable future. And why do we say that? It's -- we're in an inflationary environment. We've been successful fighting back inflation with the things that you just described with mine automation, which is our mining machines get further and further away from our conveyance shafts, we were able to put our machines either in teller mode where -- you don't have operators traveling, many kilometers underground to get to the equipment. They're testing on surface as or in the [indiscernible] fully autonomous machines just tolling around underground on their own, let the switch. Those -- that yields obvious productivity benefits, which goes right to that $60 or less, cash cost per tonne. And yes, we're absolutely -- we talked earlier about our market share in a growing market where we'll expand volumes, and we're expanding more volumes over a fixed cost base, which, of course, contributes to helping us fight back inflation for that $60 target. So great question, Lucas. We've been proud of our ability to be at that [ 6 ] year less, and the plan is to keep it there. Operator: Your next question comes from Matthew DeYoe of Bank of America. Matthew DeYoe: I have two for you. So I wanted to gauge your thoughts on the Trinidad asset, and particularly, given the changeover we've seen in Venezuela. I know the Dragon pipeline could have a potential implication on Trinidadian gas supply, but I also don't know how much stock you want to put into something like that? And then on the retail business, if I look on a 2-year stack, seed sales are down like 7.5%. And maybe this is overly simplistic, but if I were to assume prices in there, too, maybe volume is down 10%, that's not right. But why do we seek to this kind of headwind on the seed side, specifically for revenues in retail? Kenneth Seitz: Good. Well, I will share a few thoughts on Trinidad and then I'll hand it over to Mark and Chris to provide some thoughts on seed. So Trinidad, gas availability. I mean, Matthew, it's a great question. Obviously, a lot of activity in the Caribbean there. But I would also say a lot of uncertainty. And I think that -- maybe that's an obvious statement. Yes, the ability for Trinidad to operate those industrial plants on the coast and certainly apply domestically for energy. And then LNG as well requires full gas, full complement of gas, and that has to come from Venezuelan. As you know, those discussions have been taking place over years now where you sort of unlock what was on sanctioned by oil and gas, build the pipeline over to the industrial complex and Trinidad and liberate Venezuelan gas, either for LNG or for the industrial complex along the coast there. And one of those is our plant. I don't have significant confidence for the near to medium term given that there will be ample gas supply over to the island of Trinidad from Venezuela, and it's just owing to that sort of level of uncertainty as it relates to the region. So as we have looked at -- there's a number of factors in play here. Obviously, our plant has been throttled at 80% because of lack of gas for some period of time. In addition to that, now we're facing increased costs for the gas the national gas company has been very clear that gas prices are going up in an environment where we really don't make any money for Trinidad plant. It's 3% of earnings and 1% of cash flow. And so for us, that was and is untenable, and it's our plan to shut down. We are working with -- we continue to talk to the Trinidad Government about whether there's a path forward here on affordable gas access to ports at affordable fees and 1 that would allow us to operate at some, albeit slim margin. In the meantime, we have moved to sort of revised operations where we're taking care of our idle plant with a core workforce. Over the coming months, we will look at the -- continue to look at these alternatives and try to seek an arrangement where we can run this plant, but we'll see. So more to come on that front. Mark Thompson: Matthew, it's Mark speaking. So on your second question on retail seed sales, yes, I think there's two primary drivers of that. One of them would be intentional and strategic and within our control and the second, probably more out of our control and weather related. So on the first factor, as we've implemented the margin improvement plan that Ken spoke to in Brazil, some of that has involved moving away from lower-margin seed business, managing our expense profile. -- which, while seed sales have declined, it's made the overall business healthier as you've seen, and generated significant improvement in Brazil, and that was a very intentional choice to improve the nature of our business operations there. The second would be the historic weather events that we saw in the U.S. South, in the first half of 2025, which really resulted in a complete washout of some of the areas of the Delta and other places where we tend to have very high seed share and strong proprietary cotton and rice businesses. And as we spoke about that in the first half of last year, that clearly had an impact on seat sales, and we would expect some of that to reverse this year on that second factor. If we step back from seed, and we go back to some of the comments that Ken made this morning, over the past two years, notwithstanding those challenges, we look at the broader retail business, earnings have grown $300 million of EBITDA despite those challenges. And when we look at the broader proprietary business, we grew by about 5% in 2025. And as we've said, we think that business will grow again by high single digits in 2026. So again, we think some of the seed sales related to weather will reverse themselves. And from a broader retail standpoint, for those items within our control, we continue to drive strong business performance and growth. Operator: Your next question comes from Edlain Rodriguez of Mizuho. Edlain Rodriguez: Ken and Mark, I mean, we've seen what happened with flotate when prices were too high. There was a pullback in demand in 4Q. Any concerns that something like that could happen in potash? Or is it that potash supply demand is balanced enough that we are unlikely to see a fly up in prices. Kenneth Seitz: Yes. Thanks, Edlain. And yes, I mean, I think you're absolutely right. We saw that in the fourth quarter as it related to phosphate Indeed, for our phosphate business, we felt that as well. We were able to manage through that with some -- with our commercial team and still within our guidance range. But it is true that there farmers pulled back on phosphate. On potash, it continues to be the most affordable crop nutrient. And if we look at the supply and demand balance for 2026, we do see some demand growth, and you can see that as we look to the -- our estimate of shipments, 74 million to 77 million, up from the midpoint -- sorry, the numbers from last year at 74% to 75%. So demand growth, but we also see some new tonnes coming into the market from various places. I mean some would be our own but we see some additional tonnes coming in from FSU countries, maybe a little bit of from lows. Some of that's offset by declines in China and Chile. But we expect that, that combination of sort of smaller times from these places, including our own when we talk about increasing production by 200,000 tonnes from last year, that we find ourselves in a somewhat balanced market. Let's see if we get into the higher end of that demand range, what the supply chains are able to handle, we do believe we're getting up to some of those more challenged numbers when you're at the top of the range for supply chains and maybe even for operating rates. But in the meantime, we're experiencing what we'd call a balanced market, and you see that reflected in the price $375 in Brazil, $348 in China, $375 Southeast Asia and a relatively stable market. So I think it is a different story than the phosphate story. Operator: Your next question comes from Kristen Owen of Oppenheimer. Kristen Owen: I wanted to come back to the topic of your Brazil retail channel. And just sort of ask you with the long-term strategic value is there. just given some of the previously discussed market challenges. And I think, Ken, you've alluded that, that business doesn't meet your internal hurdle rates is there some action that you could take to further narrow the gap versus your initial 2024 Investor Day guidance or maybe even recap those targets ex Brazil, so we can understand what that stand-alone business looks like. Kenneth Seitz: Yes. Thank you, Kristen. And I would say that given that Brazil is really not contributing anything in terms of earnings or cash that the retail number is is 1 ex Brazil. But at the same time, yes, I take your point about our future there and whether everything we're doing in Brazil makes sense for us. And so that's, again, the work of 2026. We've been pleased with our Brazil improvement plan. We've talked about that. And that met expectations for last year, it certainly did. It's a lot of heavy lifting, but we got there. And we're on a similar path in 2026, but we are reviewing our seeds business and whether that's appropriate, that that's within Nutrien or maybe better off in someone else's hands. We do have conclusions on our proprietary product business in Agricen down there, where we do see opportunity to grow, and it is certainly synergistic with everything we're doing, everything else we're doing with Loveland products. And we can sell those products on shelves all over Brazil, not just necessarily our own. We know that we will be a large supplier of potash into Brazil and a growing supplier and that, that will continue. That leaves really the retail business, and yes, we're struggling with how to think about our retail presence in Brazil, whether that business can meet our financial thresholds that we expect when we deploy capital, whether there's better places to deploy capital. And if we come to that conclusion, what we might do with those retail assets. That's the work underway at the moment, and we'll have more to talk about that through 2026. And certainly, some conclusions on those answers in 2026. Operator: Your next question comes from Duffy Fisher of Goldman Sachs. Unknown Analyst: Just a question around your U.S. retail business. Investors have quite a lot of concern about the increase in Chinese generics in ag chem. We've seen a lot of pressure in Asia and Latin America so far. Do you see them trying to come direct in the U.S. trying to get labels one? And then two, if they're not doing that, do you see them just kind of putting more pressure with lower price generics running through the retail chain here, but kind of dragging down ag chem? Is there a structural change happening there in your view? Kenneth Seitz: Yes. Thank you, Duffy. And yes, we do see some generic pressure, not the likes of what we see in some other parts of the world like Brazil, but we do see some. But I'll hand it over to Chris. Christopher Reynolds: Thanks for the question. And as Ken said, we are seeing a little bit of that into the market today, some of that direct to grow a model. But what we really like there, as we think about the future is, again, our proprietary products range. And like the -- as I said, the introduction of 26 new products this year, we've got a pipeline there. We're going to continue to develop going forward with our current supply partners. And so we like our position. We like the breadth of our network. We like the relationship we have with our growers as we continue to move those products. And so don't see that sort of direct model today is a significant threat, and we really like the position we have with our proprietary product range. Operator: Your next question is from Ben Theurer of Barclays. Benjamin Theurer: I wanted to follow up on broader capital allocation and specifically on the share buyback. So over the last two years, we bought back 5% of shares outstanding, and you basically saying now you could do up to 5% this year, which seems to be a decent increase. What are like -- what we internally maybe alternative raising maybe the dividend more or going more towards per share buyback? What would like the thought processes behind particularly where the stock price is right now? Kenneth Seitz: Yes. Thank you, Ben. Yes, so we did renew the NCIB. The Board approved that yesterday at a level of 5%. Last year, we were buying back our stock at a rate of about $50 million a month. And here in 2026 is -- depending on how the year unfolds, but I think it's probably a good number to use for 2026 as we watch the year unfold. How we think about the buying back return of cash to shareholders via the buyback versus the dividend. We continue to use the word stable and growing on the dividend, but of course, buying back our stock, actually has allowed us to -- in total [indiscernible] as to buy down the dividend. But Mark, maybe you want to say -- provide some additional color there? Mark Thompson: Sure. Good morning, Ben. So yes, I'll just add a few points to what Ken mentioned. I think first and foremost and most importantly, our approach to capital allocation in 2026 will be entirely consistent with what shareholders have seen from us in 2025. So if we go through the high-level components of our capital allocation stack, we'll have total CapEx once again of $2 billion to $2.1 billion. That will be comprised of roughly $1.65 billion of sustaining CapEx and roughly $400 million of investments and growth CapEx. Capital leases, we expect to be consistent at about $0.5 billion. as Ken said, keeping dividend expense roughly stable at about $1 billion, and that leaves share repurchases. And so a real focus for us since the latter part of 2024 has been introducing ratability in that share repurchase program. And as Ken said, the 5% authorization is really just our authorization to be in the market. Last year, we bought back about 2% of the stock. And when we look at our run rate so far in 2026, we've been doing about $50 million a month in repurchases. And we think that level of ratability makes sense for us. So those would be the major capital allocation priorities. I think it's worth noting that this is all anchored by a very strong balance sheet and through strong performance in asset sales in 2025. We were able to tune up the balance sheet and put ourselves in an even stronger position by paying down over $600 million in debt. So we feel good about where that sits right now and that will support our ability to make good on these capital allocation priorities all through the cycle in all types of market environments. So I'd say the punchline here is just continue to expect from us, what you've seen from us so far over the last year. Operator: Your next question comes from Jeff Zekauskas of JPMorgan. Jeffrey Zekauskas: It looks like your inventories were, I don't know, $500 million higher in the fourth quarter than you wanted them to be. What is it that happened at the end of the year that led to that inventory build, and are there implications for the first quarter? Kenneth Seitz: Yes. The big one Jeff would be weather. And so farmers just weren't able to get out and put down a normal fall application season. So it wasn't normal. And as a result of that -- those inventories working capital carried through into 2026. So that would be one. Two is proprietary products. We held some proprietary product inventory that is still on the books that again, we expect in 2026 that we'll release those products, and that will be released working capital. Those would be the big ones. Operator: Your next question comes from Mike Sison of Wells Fargo. Michael Sison: Just curious, I appreciate the EBITDA sensitivity for potash and nitrogen. It feels like the base case is somewhere in the middle of those charts. But is that the case? And then what sort of gets you since you've given the wider range? What do you think drives it to the higher end of the charts and to the lower end of the start this year, if at all? Kenneth Seitz: Yes. I mean as we look at our guidance ranges, when we talk about volume on potash, it really is good weather, at least a strong demand in the regions that we serve and outgoes more crop nutrients. And the lower end of that range would be the opposite of that would be challenged whether an inability to get on the land. So it's on the volume side on the price side of potash, it's the classic supply and demand discussion. And we just talked about 74 million to 77 million tonnes. Weather, if you get into the higher end of that range, that puts pressure on on supply chain and operating rates and whether the market can actually supply those volumes, which, of course, would put pressure on price and hence, again, be at the top of that range. If you go over to nitrogen for us, it's at our plants, it's operating rates. So higher operating rates, higher volumes and lower operating rates, lower volumes. It's true that we have three turnarounds this year, which we're going to be executing. That's a heavy turnaround year for us. And so when we talk about operating rates, it requires strong execution across those turnarounds. We planned well for those so that we expect we will have operating rates that would be analogous to what we saw last year, which was very strong. So that's on the volume side of nitrogen pricing, when you go over to urea, you've got strong Indian demand, strong demand across the table, actually, but you also have some supply uncertainty, particularly as it relates to what's happening in the geopolitical uncertainty. So urea prices are tight at the moment given those supply and demand dynamics, and we see a world where that could persist for a bit longer here in 2026. On ammonia, seasonally lower volume in ammonia right now. We've had some production come back online. Gulf Coast, although going for a planned shutdown, so ammonia, yes, ammonia have prices have been strong, but with some seasonal weakness, we see ammonia prices weakening a little bit. But over the course Six yes, you're looking at the right bar, the right charts and as volume and price, we think we would say we're constructive across the board. Operator: Your next question comes from Dave Symonds of BNP Paribas. David Symonds: Just a bit of a conceptual one. I noticed that LNG Canada is ramping up. Are you expecting any impact on AECO gas prices from that? And is there anything you can do to mitigate the impact? Kenneth Seitz: We -- with the shift of Trinidad coming down, we were enjoying now 50% of our fleet being exposed to AECO gas and our fleet being exposed to Henry Hub. With Trinidad running, it was about [ 20% ] Trinidad, which is indexed Tampa ammonia. And they're 80% divided between between Henry Hub and AECO. The effect of Trinidad coming down and now just being exposed to North American natural gas has been to reduce sort of effective gas price quite dramatically. So we like given that North America continues to be structurally advantaged on cash costs compared to places like Europe, we really, really like where our high-quality assets are sitting and running at the moment. As it relates to LNG and LNG Canada, we've talked about sort of the flattening world as it relates to natural gas pricing and LNG moving over the planet. And what that means that structural advantage in North America. We believe that the North American structural advantage persists mostly because there are almost infinite volumes sitting on the continent and a very, very cost effectively to extract those. So we believe that there is that structural delta that persists LNG Canada or other LNG, yes, might work to flatten that, but we're very pleased with sort of the structural advantage we have. Operator: There are no further questions at this time. I will now turn the call back to Jeff Holzman for closing remarks. Jeff Holzman: Okay. Thank you for joining us. The Investor Relations team is available if you have follow-up questions. Have a great day. Operator: Thank you, ladies and gentlemen. This concludes today's conference call. Thank you for your participation, and you may now disconnect.
Operator: Good day, and thank you for standing by. Welcome to the C3is Q4 2025 Financial and Operating Results Webcast and 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, Dr. Diamantis Andriotis. Please go ahead. Diamantis Andriotis: Good morning, everyone, and welcome to the C3is Fourth Quarter of 2025 Earnings Conference Call and Webcast. This is Dr. Diamantis Andriotis, CEO of the company. Joining me on the call today is our CFO, Nina Pyndiah. Before we commence our presentation, I would like to remind you that we will be discussing forward-looking statements, which reflect current views with respect to future events and financial performance and are based on current expectations and assumptions, which by nature are inherently uncertain and outside of the company's control. At this stage, if you could all take a moment to read our disclaimer on Slide 2 of this presentation. I would like to point out that all amounts quoted, unless otherwise clarified, are implicitly stated in U.S. dollars. We have today released our earnings results for the fourth quarter of 2025. So let's proceed to discuss these results and update you on the company's strategy and the market in general. Please turn to Slide 3, where we summarize and highlight the company's performances, starting with our financial highlights. For the first 12 months of 2025, we achieved a net income of $10.5 million compared to a net loss of $3 million for the same period 2024, an increase of 481%. Our voyage revenues decreased by 18% compared to the same period in 2024, mainly due to the dry docking of our Aframax tanker, which resulted in a loss in revenue from our highest earning vessel over a period of 28 days for the dry docking, combined with 46 idle days, a total of 74 days. Our TCE rates was also impacted with a drop of 28% for the year. In April 2025, we settled the final outstanding balance of $15 million that was due on the Eco Spitfire. We reported an EBITDA of $17 million compared to $7 million for 2024, an increase of 244%. On Slide 4, we look at the dry bulk market for the year 2025. We entered 2025 in a very different phase of the cycle from the sharp post-pandemic rebound. After 3 years of strong shrinks in volumes, seaborne growth downshifted to a slower but still positive pace. Despite global economic fluctuations, the market demonstrated the resilience, particularly in the second half of the year. Iron ore and coal trade continue to have the lion's share in dry bulk trade, but iron ore remains the anchor of the dry bulk complex. The iron ore market is currently navigating transitional phase with shifting dynamics influenced by economic trends, structural changes and environmental pressures. Despite subdued demand, iron ore production remains robust with major miners maintaining or increasing output levels. Australia and Brazil continue to dominate export supply, yet Brazil is regaining share as weather disruptions ease and incremental capacity is brought back. In addition, the Simandou project in Guinea, which is the world's largest higher-grade greenfield integrated mine and infrastructure development, introduced a significantly new long-haul leg from West Africa to China. The project commenced operations in late 2025 and set substantially structured global shipping, driving up freight rates due to increased tonne-mile demand. With reserves exceeding 2 billion tonnes, Simandou represents one of the world's richest undeveloped iron ore deposits. This project is forecasted to mark a structural turning point in both commodity markets and seaborne logistics. Coal is on a different trajectory compared to iron ore. Aggregate coal shipments were slightly lower in 2025 and forecast to add down further in 2026. Structural decarbonization policies, expanding renewable generation and improving domestic coal supply in key consumer regions are gradually capping import requirements. From a shipping perspective, coal is no longer a reliable engine of growth. Grain and oilseed trades provide a more positive narrative. Food demand is relatively inelastic, but the way it is applied is highly sensitive to weather and policy. Crop yields and export availability in the Americas, the Black Sea and Australia, together with import demand in North Africa and Middle East and Asia continue to reshape routes and lift tonne miles. The partial normalization of Black Sea exports has added flexibility back into the system, yet frequent weather-related disruptions and policy interventions on export corridors keep trade pattern fluid and support longer-haul substitutions when specific origin underperform. Minor bulk stand out as the main growth engine. Taken together, this heterogeneous basket, including bauxite, nickel and manganese ore, cement, steel products fertilizers and a range of industrial minerals grew by around 4% in 2025 and a further 3% increase is expected in 2026. The net result is a dry bulk market where although growth in tonnes is modest and gradually slowing, but growth in tonne miles remains robust, thanks to the lengthening of trade routes and the rising weight of minor bulks. Total dry bulk cargo volumes are expected to increase by less than 1% in 2026, yet seaborne demand measured in transport works should expand by around 2% annually. This asymmetry is crucial for freight. It means that even in the world of subdued headline trade growth, the underlying demand for ship days can still outpace the increasing fleet capacity. On Slide 5, we move to the specific market of part of our fleet, the Handysize category and the fleet age and growth. The market outlook shows that for the period January, December 2025, global experts of all dry bulk commodities loaded on handy super tonnage reached 1,798 million tonnes according to the AXSMarine vessel-tracking data. This is an increase of 2% year-over-year. 15% of exports loaded were coal with grains falling at 13% and steel at 9%. On the Handysize fleet age, the small Handy fleet is pretty old with plenty of demolition potential. The global Handysize fleet now stands at 3,202 vessels, of which 38% is over 15 years of age. The average age of the C3is Handy fleet was 14.9 years at the end of December 2025. At year-end 2025, the global Handy fleet has increased by 3% in investment numbers compared to year-end 2024. The order book stands at 189 vessels from the start of 2026 with deliveries expected to be 111 for the year. Slide 6 shows the Aframax/LR2 spot rates and age. As of the end year, the Aframax sector has exhibited significant improvements across major trading routes. Notably, the Caribbean-U.S. Gulf route experienced the highest percentage increase in spot rates, soaring by 88.7% to reach day rates of $66,426, followed by the Med-Med routes with an 85.3% increase to $65,808, and the North Sea-Cont route showing a 65.8% rise to $71,022. Conversely, the MEG-Singapore route displayed a more moderate growth of 15.8%, with rates at $47,167. Comparing these figures against the year-to-date and 5-year averages, current rates generally surpass the 2025 averages, indicating a robust year for 2026. Aframax market showed the regional differences at year-end 2025. The Atlantic short-haul root strengthened and tighter availability supported sentiment, particularly in the U.S. Gulf, while European benchmarks were steadier. Pacific routes remained under pressure amidst ongoing weakness in export activity. On the fleet age, the global Aframax fleet now stands at 1,198 ships. Of these, 293 vessels are over 20 years of age, accounting for 25% of the total number of vessels. The highest number of vessels is in the 15 to 20 years category, in which our Aframax tanker falls with an age of 15.4 years at December 31, 2025. Slide 7 summarizes how the tanker market goes into 2026 on strong footing against the complex geopolitical backdrop, rising production and fleet growth. Iran, stricter sanctions enforcement, potentially triggered by Washington imposing tariffs on Iran's trading partners with shift in volumes from shadow fleet to mainstream vessels. Chinese refiners, who purchase all of Iran's 1.6 million to 1.8 million barrels per day of crude exports, could be forced to seek alternatives from other Middle Eastern producers. Alternatively, a regime change could eventually see production rise towards above 4 million barrel per day given the upstream investment the National Iranian Company understood to have made over the past few years. Russia, sanctions on Russian crude and refined products have redirected flows away from traditional short-haul routes creating longer voyages and tightening oil and vessel supply. Changing trading patterns, most notably increased imports to China and India from the Middle East and the Atlantic basin instead of Russia have resulted in vessels covering much longer distances, pushing tonne-mile demand to record highs. Venezuela, the U.S. military intervention in Venezuela thrusted the heavy crude sector into a period of enforced transparency. The immediate fallout was characterized by a significant departure bottleneck rather than a collapse in demand. China's appetite for Venezuelan grades remains intact and the ability to physically move barrels has hit the logistical world. As the U.S. government moves to market between 30 million and 50 million barrels of seized Venezuelan oil through authorized channels, the trade is poised for a massive structural reconfiguration. For Aframaxes, this transition from dark to transparent trade creates a premium on compliant tonnage that can beat the heavy crude gap. Most Venezuelan crude delivered to the U.S. has historically been transported on Aframax/LR2 vessels. The potential incremental demand depends on export volume from Venezuela, but at 1 million barrels per day of Venezuelan crude going to U.S., demand has been estimated for approximately 23 additional Aframax/LR2 vessels. Currently, the Aframax/LR2 flows from the U.S. to Europe has almost doubled. India, the 2026 EU-India free trade agreement will significantly boost oil and refined product shipping by removing tariffs, lowering trade barriers and fostering infrastructure investments. Key impacts include increased tanker demand for EU-India routes, enhanced logistical cooperation and maritime services, promoting shipping partnerships and reducing logistical hurdles. India is also expanding its import footprint, further strengthening tonne-mile demand and sustaining high utilization rates across the fleet. China, most of China's imports arrive via seaborne trade, reinforcing the critical role of tankers in global energy logistics. China stands out as a major driving force with over 1 million barrels per day of new refinery capacity added since 2020 and a further of 1.3 million to 1.5 million barrels per day set to come online before the end of the decade. Canada, the Canadian government's push to diversify the country's crude oil customer base in response to belligerent overtures from President Donald Trump led to a surge in the country's seaborne oil exports in 2025. As Canada decoupled from the U.S. economy, Aframaxes were the main beneficiary as exports to China alone have grown from 0 to 12.3 million tonnes in just 2 years. Saudi Arabia, Saudi Arabia, Iraq, Kuwait have increased supplies to India in December 2025. Middle Eastern producers, Saudi Arabia, Iraq and Kuwait, will raise crude oil supplies to India from December as Indian refiners seek alternatives to Russian barrels. The rise in Middle Eastern crude demand comes as many Indian refiners paused purchases from Russia due to tightening of Western sanctions, enabling OPEC producers to regain the market share in the world's third largest oil consumer and importer. Slide 8 shows the product tanker market in which 2 acquisitions due to be delivered in 2026 belong to. Refined product tanker tonne-mile demand has experienced significant growth, driven by shift in global trade patterns, particularly following the restructuring of European energy imports away from Russia. The surge is largely attributed to longer average voyage businesses with European imports of refined products switching to more distant suppliers like Middle East and U.S. Change in sanctions regimes and new refining capacities in Asia and Middle East have also boosted tonne-mile demand as oil and product shipments travel longer distances. Cash flows for product tankers remain quite healthy, and this trend is expected to continue well in 2026. The product tanker fleet order book has rebounded sharply from the historic lows witnessed over 2020-2021. Global tanker order book to existing fleet above 20 years ratio has climbed from under 5% to roughly 18% in 2025 and set to climb to 30% by 2028. This indicates renewed confidence from owners. Several factors drive this trend, including major shifts in trade flows, an aging global fleet and the strong appeal of modern tonnage equipped for future regulatory compliance. Slide 9 shows the fleet of C3is. C3is currently owns and operates a fleet of 3 Handysize dry bulk carriers and 1 Aframax oil tanker. As previously announced, the company has acquired 2 product tankers due to be delivered between Q1 and Q3 2026. With these additions, the fleet will increase its capacity to 311,000 deadweight, an increase of 387% from inception. All vessels have had their ballast water management systems already installed. All the vessels are unencumbered and currently employed on short- to medium-term period charters and spot voyages. None of the vessels were Chinese-built, hence not affected by the ongoing threat of tariffs. Slide 10 shows a sample of the international charters with whom the management company has developed strategic relationships and had experienced repeat business. Repeat business highlights the confidence our customers have for our operations and satisfaction of the services we provide. The key to maintaining our relationships with these companies are high standards of safety and reliability of service. I will now turn over the call to Nina Pyndiah for our financial performance. Nina Pyndiah: Thank you, Diamantis, and good morning to everyone. Please turn to Slide 11, and I will go through our financial performance for the 12 months of 2025. We reported voyage revenues of $34.8 million for the year '25 compared to $42 million in '24, a reduction of 18%, primarily due to the dry docking of our Aframax tanker, which resulted in 28 nonrevenue days combined with 46 idle days, a total of 74 days. The time chart equivalent rates of our vessels were also impacted with a decrease of 28% compared to year '24. Voyage costs for '25 were $12.8 million compared to $14.1 million in '24. This decrease was attributed to the decrease in voyage days due to the dry docking of the Aframax tanker. Voyage costs for '25 of $12.8 million, mainly included bunker costs of $6.4 million, corresponding to 50% of total voyage expenses and port expenses of $4.9 million, corresponding to 38% of total voyage expenses. Operating expenses for the 12 months of 2025 were $9.2 million and mainly included crew expenses of $4.7 million, corresponding to 50% of total operating expenses, spares and consumable cost of $2 million, and maintenance expenses of $1.2 million, representing works and repairs on the vessels. Dry docking costs for the Afrapearl II were $1.9 million. General and admin costs for the 12 months ended December 31, '25 and '24 were $2.4 million and $3 million, respectively. The $600,000 decrease was due to additional expenses incurred in '24 relating to the 2 public offerings. Depreciation for the 12 months ended 31st of December '25, was $6.5 million a $300,000 increase from $6.2 million for the same period of last year due to the increase in the average number of our vessels. Interest and finance cost for the year '25 and '24 was $400,000 and $2.5 million, respectively. The $2.1 million decrease is related to the accrued interest expense related partly in connection with $53.3 million, part of the acquisition prices of our Aframax tanker, the Afrapearl II, which was completely repaid in July '24 and our bulk carrier, the Eco Spitfire, which was completely repaid in '25. Although no interest was charged on these acquisitions, for accounting purposes, these balances should be shown as accrued interest. The total paid did not change. Gain on warrants for the 12 months ended December 31, '25 was $9.2 million as compared with a loss on warrants of $11.1 million for the 12 months ended December 31, 2024, and mainly related to the net fair value changes on our warrants. For the 12 months of '25, the company reported a net income of $10.5 million and an EBITDA of $17 million, increases of 481% and 244%, respectively. Turning to Slide 12 for the balance sheet. We had a cash balance of $14.9 million compared to $12.6 million at the end of '24, an increase of 19% in spite of the full payment of the 90% purchase price of the Eco Spitfire in Q2 '25 that amounted to $15.1 million. Other current assets mainly include charterers receivables of $4.3 million compared to $2.8 million at December '24 as well as inventories of $1.3 million compared to $900,000 at December '24. The vessels to net value of $78 million are for the 4 vessels less depreciation. The vessels market values were $75 million in January '26. Trade accounts payables of $1.8 million are balances due to suppliers and brokers, payable to related party of $382,000 represents the balance due to the management company, Brave Maritime. Our related party financial liability was $16.3 million at year-end '24, and consisted mainly of the balance that was due on the Eco Spitfire, and that was eventually paid in Q2 '25. Concluding the presentation on Slide 13, we outlined the key variables that will assist us progress with our company's growth. Owning a high-quality fleet reduces operating costs, improves safety and provides a competitive advantage in securing favorable charters. We maintain the quality of the vessels by carrying out regular inspections, both while imports and at sea, and adopting a comprehensive maintenance program for each vessel. None of our vessels were built from Chinese shipyards, hence the ongoing tariff threats by the U.S. to China will be of no consequence to our fleet. The company's strategy is to follow a disciplined growth with in-depth technical and condition assessment review. Equity issuances will continue as management is continuously seeking a timely and selective acquisitions of quality non-Chinese built vessels with current focus on short- to medium-term charters and spot voyages. Following on with this strategy, the company has added 2 product tankers to the fleet, and these will be delivered by Q3 '26. We always charter to high-quality charterers, such as commodity traders, industrial companies and oil producers and refineries. Despite having increased our fleet by 387%. since inception, the company has no bank debt. No interest was charged by the affiliated sellers on the purchase prices of the Afrapearl II, the Eco Spitfire and the 2 product tankers due to be delivered in '26. From July '23 to date, we have repaid all of our CapEx obligations totaling $59.2 million without resorting to any back loans. At this stage, our CEO, Dr. Diamantis Andriotis, will summarize the concluding remarks for the period examined. Diamantis Andriotis: For the 12 months of 2025, we reported a net income of $10.5 million, an increase of 481% from '24. An EBITDA of $17 million, an increase of 244%. And a cash balance of $14.9 million, despite paying off the remaining balance of $15.1 million that was due on Eco Spitfire. In August 2025, we successfully completed the dry docking of our Aframax tanker, the Afrapearl II. We are fully delevered, thus significantly enhancing our financial flexibility. Politics and climate changes are continued sources of volatility, but elevated freight rates, resilient oil demand and shifting trade patterns continue to underpin the bullish outlook. Global seaborne trades are projected to edge higher again, driven by population growth, geopolitics, sanctions and steady biofuel demand, all signs denoting another firm year for 2026. We have announced the acquisition of 2 product tankers that will join our fleet in 2026. This will increase our fleet capacity by 387% from inception, thus allowing us to fully harvest on the strong and positive fundamentals expected in 2026. We would like to thank you for joining us today and look forward to having you with us again at our next call for the results of the first quarter of 2026. Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.