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Operator: Good morning, ladies and gentlemen, and welcome to the OceanaGold Corporation Q4 2025 Earnings Call. [Operator Instructions] This call is being recorded on Thursday, February 19, 2026. I would now like to turn the conference over to Rebecca Henare, Vice President, Investor Relations. Please go ahead. Rebecca Harris: Good morning, and welcome to OceanaGold's Fourth Quarter and Full Year 2025 Operating and Financial Results Webcast and Conference Call. I'm Rebecca Henare, Vice President of Investor Relations. We are joined today by Gerard Bond, President and Chief Executive Officer; Marius Niekerk, Chief Financial Officer; Bhuvanesh Malhotra, Chief Operating Officer; and for the first time, Keenan Jennings, Chief Exploration Officer. The presentation that we will be referencing during the conference call is available through the webcast and on our website. As we will be making forward-looking statements during the call, please refer to the cautionary notes included in the MD&A and annual information form. All dollar amounts discussed in this conference call are in U.S. dollars. I will now turn the call over to Gerard for opening remarks. Gerard Bond: Thank you, Rebecca, and good morning, everyone. 2025 was a truly stellar year for OceanaGold with numerous achievements across the board. There's a lot on this slide because there's a lot to be celebrated. Firstly, we safely and responsibly delivered on our guidance for each of production, all-in sustaining costs and capital. Our strong operational performance supported by a favorable gold price environment has led to record financial success and significant value creation for OceanaGold shareholders. We set numerous financial records this year, including record annual EBITDA, EBITDA margins, net profit, earnings per share operating cash flow and free cash flow. The profitability metrics were also records even when adjusted for the after-tax impairment reversal at Haile, which is itself a great confirmation of the value that Haile now represents. Importantly, these annual financial records in 2025 were achieved at an average realized gold price for the year of around $3,500 an ounce, which sits significantly below today's gold price. We also progressed our organic growth options in the year. We received all the permits necessary for the world-class Waihi North Project, and the early works spend advanced as planned. We also continue to add value, life and optionality through exploration programs at all sites this year. We were able to invest in sustaining and growing our business and we strengthened the balance sheet by increasing our cash holdings substantially. We have no debt, no gold hedges, no prepays or financing royalties. And today, we have the strongest balance sheet in the company's 37-year history. Very pleasingly, we returned a record amount of capital to shareholders in 2025, with our doubled quarterly dividend and our increased share buyback we returned just over $200 million in the 2025 year. Operating our assets well, converting most of the price gains to the bottom line and being disciplined with capital resulted in our 2025 return on capital employed being a very attractive 18%, which is double that of 2024. In delivering our record $543 million of free cash flow we generated a free cash flow yield of 15% on our average 2025 market capitalization. I think that's a great number, a real net 15% free cash flow return for shareholders on the average market value of OceanaGold shares in a year when the market value of the company rose by 225%. Again, these return on capital and return on equity metrics reflect our ability to translate the favorable gold price environment into strong bottom line performance, meaningful cash generation and effective capital deployment. Looking ahead to 2026 guidance, we are expecting another year of strong operational delivery with guidance projecting higher production, lower all-in sustaining costs and increased investment in value-accretive capital projects. Using the midpoint of 2026 guidance, we expect to produce 12% more gold than we did in 2025 at a 7% lower all-in sustaining cost. The gold production growth is driven by a 35% increase at Haile, where the investment we made in open pit waste stripping in 2025 gives us good access to high-grade ore in 2026. This significant increase in gold production and an expected 25% decrease in its unit cost sets Haile up for another record year. Macraes production is expected to be broadly consistent with 2025 with good access to open pit ore throughout the year. At Waihi, I'm very pleased with the improvement work done by the team in 2025, and we expect the improved mine performance to be sustained in 2026. At Didipio, we also anticipate around the same level of gold production with a slight improvement in all-in sustaining costs, largely due to higher copper byproduct credits. Our growth in exploration capital is planned to increase substantially compared to 2025, up 2.5x to $340 million. This is great news for shareholders as it reflects us accelerating development of the recently permitted Waihi North Project, commencing development of Palomino underground at Haile, and meaningfully stepping up exploration activity across all sites, which Keenan will touch on in a moment. Overall, we see 2026 as a year where we are expecting to generate a bucket load of cash in a year where gold prices are significantly higher than they were in 2025. This graph shows how we deployed our operating cash flow in 2025 and how our guidance and capital return announcements are illustrating what could occur in 2026. On the left-hand pie chart, you see that in 2025, we invested in the business advanced our growth and exploration projects, strengthened the balance sheet and returned over $200 million or just under 40% of free cash flow to shareholders. On the right-hand side, you can see how we plan to allocate capital in 2026. In the sustaining capital wedge, you can see we are spending less overall year-on-year. This is a combination of two things. We're actually spending more in 2026 on improving the integrity and availability of fixed plant and mobile equipment, which provides a strong payback at high gold prices. However, this is offset by spending much less than open pit waste stripping this year following the completion of last year's campaigns. We are substantially increasing the investment in growth and exploration. This is primarily the development of the world-class Waihi North project commencing the build of Palomino underground at Haile and increasing exploration spend by 50%. All this makes for a stronger future. And we are materially lifting returns to shareholders. The OceanaGold Board has approved a tripling of the quarterly dividend and a doubling of the share buyback in 2026, resulting in up to $432 million of capital returns to shareholders. This is a 112% increase year-over-year. We can do all this and still add a lot of cash to the balance sheet, making OceanaGold even financially stronger and giving us plenty of optionality for future growth. I'll now turn the call over to Marius, who will discuss our quarterly financial results in more detail. Marius van Niekerk: Thank you, Gerard, and good morning, everyone. Looking at our Q4 results, we delivered on the strongest production quarter of the year, and it was especially pleasing to see increased production from all four of our sites. We continue to invest in our exciting organic growth pipeline this quarter, including the world-class Waihi North project, which remains a key focus for us. Strong operating performance across the business in the quarter, and a record average realized gold price of just over $4,200 per ounce resulted in our best ever financial results with a record free cash flow generated. During the fourth quarter, we adjusted for the after-tax impairment reversal of $133 million at Haile. This increased the value of Haile after considering the lift in long-term gold price assumptions as well as improved performance. We are now in the strongest net cash position ever with 0 debt and cash of $477 million, up 42% from last quarter. This cash increase is after investing in our business and also after returning over $100 million of capital in both dividends and buybacks during the quarter. In the fourth quarter, we delivered record-breaking results across all key financial metrics, reflecting strong operational execution, disciplined cost management and translating to higher gold price to the bottom line. At a high level and comparing the fourth quarter versus the same period last year, we had several notable achievements. Adjusted EBITDA surged 49% with adjusted margins expanding to 57%. As many of our peers have reported and with the strong price rise in our share price, we've incurred an increase in share-based compensation expense in Q4. A portion of this expense is accounted for in G&A and the rest in cost of sales. Further information on this is set out in our financial statements. As a whole, our Q4 adjusted EPS includes roughly a $0.26 per share impact from share-based compensation. So with that in mind, adjusted net profit and earnings per share roughly doubled from the prior year while operating cash flow per share increased to $1.21. Free cash flow hit a record $259 million, exceeding the total free cash flow generated in all of 2024, and that is in just 1 quarter. When considering the full year picture, it very much tells the same story. These achievements underscore our strict cost and capital discipline and demonstrate our ability to capitalize on a strong gold price environment. And as a reminder, cash costs and EBITDA in 2025 included accounting allocations from capitalized sustaining into operating costs related to the waste stripping at both Haile and Macraes. This translates to around a $70 per ounce increase in cash costs in the year, but did not impact AISC or free cash flow nor did it change how we operate. And as a result, deferred stripping is well below guidance. With an annual adjusted EBITDA of around $1 billion in 2025 and landmark per share performance, we remain focused and well positioned to increase returns to our shareholders through 2026. I'll now pass it over to Bhuvanesh to discuss our operating performance. Bhuvanesh Malhotra: Thank you, Marius, and hello, everyone. I would like to start by saying just how pleased I am with the outcome at all four of our sites this year. In quarter 4, all sites increased the number of gold ounces they produced every site met its production guidance, and most importantly, we delivered these results safely. Haile had an excellent year delivering on production and cost guidance. Gold production at Haile was 56,000 ounces in the fourth quarter, which was our planned highest production quarter of the year. There were three main contributors to the strength. First, we very importantly reached ore in Ledbetter open pit which not only contributed to a strong fourth quarter, but also is the main driver of production growth in 2026. Second, Horseshoe underground also performed well in the quarter, throughout 2025, we focused on getting ahead on development, and I'm pleased that today, we are in a position where our decline advance is a full year ahead of mine sequence. And third, we completed some prudent upgrades to the crusher to remove bottlenecks and in doing so, sustainably increase the mill throughput during the quarter. This also contributed to a strong quarter 4. In line with production achievement for the year, all-in sustaining costs was also in line with the guidance. An updated technical report is on schedule to be released at the end of March that will show how the next phase of [ flood ] data will be mined from underground. The change in mining method improves the margins and overall NPV of the mine. This technical report will show a mine plan at Haile that is expected to produce above 200,000 ounces of gold per year from 2026 through 2031 and providing the mine a more consistent production profile. Macraes also had a strong year in 2025. A meeting both production and cost guidance with 56,000 ounces delivered in the fourth quarter. Similar to Haile, the major driver of production in the fourth quarter at Macraes was access to higher grade ore from the open pit. The investment in waste stripping at in mills through the first 3 quarters of 2025 allowed access to higher-grade ore in the fourth quarter. And will continue to contribute to the production profile in 2026. Production strength during the quarter drove an improvement in unit cost with all-in sustaining cost of under $1,300 per ounce, down materially from quarter 3. What's really exciting at Macraes is the leverage the site has to the rising gold price. The updated technical report scheduled to be released at the end of March will show an attractive 5-year mine life extension to 2032 at a prudent $2,200 gold price. Beyond the current reserve life, total mine life extension opportunities are being evaluated that could potentially extend mine life even further given the higher gold price environment and the inherent optionality at Macraes. Moving on to Waihi, I'm very pleased to say that Waihi exceeded its production guidance and met its all-in sustaining cost guidance for the year. In the fourth quarter, Waihi delivered its strongest production quarter of the year, just under 22,000 ounces of gold, maintaining the progress achieved to the underground improvement plan initiated in 2024. This great turnaround at Waihi, in recent quarters is a testament to all the hard work done by the team there. At our Waihi North project, I'm thrilled that we received final permits in the fourth quarter and expect to start the underground decline towards Wharekirauponga by mid this year. Early works such as detailed design, bulk earthwork and construction activities continued to advance in the fourth quarter and will continue throughout 2026. I look forward to keeping you updated on the progress this year. Didipio met its production guidance for the year and produced approximately 24,000 ounces of gold and 3,200 tonnes of copper in the fourth quarter. Our investments in mine resilience such as underground pumping infrastructure paid off in the fourth quarter, the numerous extreme weather events did not disrupt production. On the back of this investment, all-in sustaining cost for the full year was around the top end of the guided range. Underground activity in 2026 is focused on increasing development rates and improving stope availability. We will be releasing an updated technical report in the first half of the year that will detail the remaining work required to reach a sustained mining rate and provide an updated life of mine plan. I will now turn the call over to Keenan to discuss exploration in more detail. Unknown Executive: Thank you, Bhuvanesh. It's great to be with you all for my first quarterly updates to the market. Joining in the last quarter of 2025, I'm really fortunate to have inherited a high-caliber team an opportunity set here at OceanaGold. I look forward to contributing to the legacy of growth and adding even more value through the drill bit. This is supported by the highest ever exploration budget in 2026 and increasing at all four sites and with a renewed focus on our greenfield activity. Our exploration strategy comprises three pillars as pathways to success. The first is conversion of existing resources to reserves. This underpins our production. Here, we have an ambitious program across all of our sites with the goal to replace ounces due to mining depletion. The second pillar, brownfields exploration creates optionality for our business. We will assess opportunities along strike and down dip of our known resources to target additional mineralization that increases the life of our assets. And our third pillar is strengthening greenfield exploration. In 2025, we signed earn-in agreements with Headwater Gold in Nevada and Carolina Rush in South Carolina to test targets that we think are scalable, complementary to our existing business and play to the expertise of our teams. This year, we're also committing to following up targets we fully control in New Zealand and in the Philippines and continue to hunt quality opportunities in the U.S., Canada and Australia. This uplift in our capacity and capability will deliver OceanaGold new discoveries and further diversify our portfolio. I would like to talk specifically about Wharekirauponga, our flagship development program, where we are executing on both the conversion and brownfields exploration pillars of our strategy. With New Zealand government approval of our planned growth, we will double the number of rigs operating to continue to build our ore body knowledge and grow the resource. The first half of this year will focus on converting resources to reserves. We aim to complete more than 30 drill holes, targeting more than 300,000 ounces of reserves. In the second half, we will pivot to follow up what appears to be a new higher-grade zone opening to the south. Here, we're adding a further eight holes to target growth of 150,000 ounces of inferred resources. This is a tremendous time at OceanaGold and a great opportunity for our exploration teams to further shine. I'm really looking forward to 2026 and beyond. And with that, I'll turn the call back to Gerard. Gerard Bond: Thank you, Keenan. In summary, the fourth quarter was an incredibly strong quarter to cap off a successful year where we met production and cost guidance and delivered record financial returns. Going forward, we will continue to focus on safe and responsible mining and delivering on our guidance commitments. We expect to generate significant free cash flow and add to our strong balance sheet. 2025 was an outstanding year, and we expect 2026 to be even better. We will advance our attractive growth and exploration projects while delivering increased returns to shareholders with a tripling of the dividend and a doubling of our share buyback. And we look forward to completing our listing on the New York Stock Exchange in April in support of our strategy of increasing value for shareholders. I do want to acknowledge that our stellar 2025 results were only possible through the dedicated efforts of the many tremendous people who work at OceanaGold and a big call out of thanks to them for that. It's a great time to be in the gold industry, and I'm incredibly excited about the year ahead for OceanaGold. I'll now turn the call over to the operator and open up the line for any questions. Operator: [Operator Instructions] Your first question comes from Ovais Habib with Scotiabank. Ovais Habib: Congrats to you and your team. Solid quarter and 2026 guidance. And really great to see a significant increase in the share buyback. A couple of questions for me. Just starting off with Haile. It looks like -- and based on the reserve update, it looks like you're leaning towards going underground at led better. Assuming you do give the green light, what permits would be required to move from the open pit to underground. And then assuming you do move forward, with the underground option. When will we start seeing any sort of development commence there? Gerard Bond: Thanks, Ovais. I'll hand the ball over to Bhuvanesh to answer that question. Bhuvanesh Malhotra: Thanks, Ovais. The permit change required is a minor permit modification from moving from an open pit to an underground which was similar to the Palomino pieces that we have done before. In relation to the work, we commencing the front-end engineering work now as there will be some modifications to the plant that we need to make as a result of some ore characterization work that was completed and then the development is a good 2-year period. I will start the development sometimes next year. We'll have the first development over towards the back end of '29 and then into the full sustainable ore production from 2020 onwards. Ovais Habib: Excellent. And just then moving to the Waihi North project, more towards the exploration side. Keenan, welcome to the team. Now that you have the permits in hand, looks like development is aggressively moving forward. But you talked a little bit about focusing on the [indiscernible] deposit just its own and towards the South, is there any plans of setting up some drill stations along the corridor between Waihi and the Waihi North Project as well. Unknown Executive: Thank you for your kind words. We are working to a very specific schedule. We have some constraints in terms of the number of rigs that we are able to put into the area of interest. Our focus for the first half of the year is a resource to reserve conversion program. And yes, then we will be pursuing further south. The trajectory of the development tunnel remains an area of interest to us. and we will be planning additional exploration effort along that trajectory in due course. Ovais Habib: And based on the drilling or the drilling that you're going to start commencing that, when do you start expecting some sort of results from that -- those areas? Unknown Executive: We are already drilling. We have the three rigs that we had from last year. We'll be adding additional rigs through the course of the next couple of months. We expect initial results to be coming out midyear, and these will be furnishing a technical report update, which will be issued later in 2027. Operator: Your next question comes from Fahad Tariq with Jefferies. Fahad Tariq: For the upcoming studies for just the different mines, can you just remind us what the gold price assumption you're considering? Gerard Bond: Gold price assumption for our studies upcoming. I think we're using about $2,200 an ounce for each. Fahad Tariq: Okay. Okay. So that's consistent with the reserve pricing? Gerard Bond: Yes. So that's consistent with our reserves and resources that we put out today. We're using $2,200. So they're still very conservative have in regard to current market prices. Fahad Tariq: Got it. That's clear. And then just thinking about maybe on the cost side of things, obviously, costs are getting better year-over-year, which is great. But can you just talk about any underlying cost inflation that you're seeing, any pressures, whether it's labor or consumables, probably not fuel, maybe that's a tailwind. But yes, maybe on the labor consumables side? Gerard Bond: I'll hand it over to the CFO. Marius van Niekerk: Look, we've been saying throughout the year, a big part of our cost base is labor. Cost labor cost inflation is real. So we're seeing in the region of single-digit increases from that perspective. But other than that, there's some variable changes from a consumables perspective. We did see a higher spend on maintenance, but that was just to improve reliability throughout the year. Other than that, there's really nothing else that we see. Fahad Tariq: Okay. Great. And then maybe just a last one. Just given how strong the free cash flow profile is thoughts on and how quickly the cash balance is growing, just thoughts on M&A would be great. Gerard Bond: Yes. Thanks, Fahad. I mean it's -- I mean we put in that allocation slide, you can see that we're primarily investing back into the business into growth, giving cash back to shareholders, $432 million is the combination of the dividend and the buyback. That you're right. That will result in still if prices stay out or any near these levels still result in the cash build and that gives us the buyer power to consider a lot of things. in the inorganic space. But our strategy as it relates to M&A hasn't changed, either geographically or the type of thing that we're looking at. So it does remain an option, not a priority focus, but we do look. Operator: [Operator Instructions] Your next question comes from Harrison Reynolds with RBC Capital Markets. Harrison Reynolds: Good morning Ocean and Gold team, and congratulations on another great quarter and full year. I wanted to start off at Macraes, great to see the mine life extension formalized due to increased reserves. But wondering if you could talk a little bit about your expectations for the life of this asset going forward beyond that? And what sort of investments you're making now to have this run beyond 2032. Gerard Bond: Yes. Great question, Harrison. I'll hand it over to Bhuvanesh in a minute for more color, but this is a fabulous area. It's been, as you know, running for -- coming up to a 36th year. And I think the -- what the study shows -- sorry, what the work that we've done shows is that particularly at an elevated gold price from reserve from what we had, which was $1,750 out of $2,200, we have considerable mine life extension. And if you were to play an even closer to spot price, you'd have more of those resources coming into reserves. And we're doing a lot of study work to unlock that. There's a lot of optionality around it. And perhaps, Bhuvanesh, that's where you can pick up and answer the question. Bhuvanesh Malhotra: Thanks, Harrison. I think as Gerard alluded to as well, our first price probably is to extend the inner mill spits, that's where the pits extending from 10 to 11 comes into play. And at a $5,000 gold price, this offers an exceptional leverage and the optionality that we could probably undertake as well. So that's our first price and that's what we're evaluating now. And then the northern corridor of the Macraes mine just past the Coronation North pits are the second price that we have basically been evaluating and that's where Keenan would basically be planning to drill as well. So those are the two primary areas where we think the immediate growth can basically come from in Macraes from 2032 onwards. Harrison Reynolds: Great. That's good color. And then one more for me. Could you talk a little bit about the decision for the buyback number. It's great to see it increase, but wondering if you could talk about the assumptions that are baked into that, including any gold price assumptions. And by the middle of the year, that seems like would you consider upsizing it? Or would you look at other things like a variable dividend? Or how would you think about excess free cash if gold prices stay stronger? Gerard Bond: Thanks, Harrison. Yes, that would be a favorable circa I mean we're approaching this year much as we did last year, increasing the dividend increasing -- well, last year, we established the buyback but actually really executed strongly against them. To your point, we -- last year, we started with a $100 million target, and we upsized and executed $175 million. So subject to operating performance and prices, there is always that option. But we start this year with -- as you said, how do we size that, just by reference to balance. And if I look at the inferred percentage of what the buybacks and dividends represent as a projected allocation of our operating cash flow, if you would just use the midpoint of our guidance range and a reasonable price assumption you'd have about 40% payout ratio. In that graph in our slide deck, we assume a $4,700 gold price for illustrative purposes. So you can see that, of course, if the gold price was to stay above that, then the opportunity for more cash build is higher, and therefore, the opportunity for an increase in buyback is possible. But as we did last year, we're setting out to execute or do what we say we're going to do. And if performance and price allows it to be upsized, great. Operator: I will now turn the call to Rebecca for additional webcast questions. Rebecca Harris: Thank you, operator. The question reads, congratulations on your results. do you think your 2026 guidance for Didipio mine is conservative given the plan to increase mining rates through the year and the availability of lower areas of the mine after the dewatering was completed. Gerard Bond: Yes. I mean I'll lead off with that and perhaps Butanes can answer as well. We set guidance to a level that we plan to deliver on. And there are a lot of variables in relation to any mine. We did have some rainfall at the end of last year. As Bhuvanesh has said in the call, it didn't impact operations, but it does alter our starting point for this year. But yes, we have a plan over a number of years to increase the underground mining rate. There are a lot of variables in mining, and we set a guidance amount that we expect to be able to deliver on. I don't think I left you much to say there, Bhuvanesh Malhotra, so we might call that the answer to that question. Operator, are there any other questions? Operator: There are no further questions at this time. I will now turn the call over to Gerard Bond for closing remarks. Gerard Bond: Well, thank you, everyone, for listening in, and thanks to everyone at OceanaGold for delivering these great results. On behalf of everyone at OceanaGold, we appreciate you joining us and wish you a very pleasant rest of the day. Bye for now. Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
Operator: Good morning. I'll now turn the call over to Scott Parsons, Alamos' Senior Vice President of Corporate Development and Investor Relations. Scott Parsons: Thank you, operator, and thanks to everybody for attending Alamos' Fourth Quarter 2025 Conference Call. In addition to myself, we have on the line today John McCluskey, President and Chief Executive Officer; Greg Fisher, Chief Financial Officer; Luc Guimond, Chief Operating Officer; and Scott Parsons, Vice President of Exploration. We will be referring to a presentation during the conference call that is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q&A session. As we will be making forward-looking statements during the call, please refer to the cautionary notes included in the presentation, news release and MD&A as well as the risk factors set out in our annual information form. Technical information in this presentation has been reviewed and approved by Chris Boswick, our Senior VP of Technical Services and a qualified person. Also, please bear in mind that all of the dollar amounts mentioned in this conference call are in U.S. dollars unless otherwise noted. Now John will provide you with an overview. John McCluskey: Thank you, Scott. So I'm going to start with Slide 3. Production for 2025 was 545,000 ounces, below our guidance as a result of severe weather in late December and other challenges at the Canadian operations. Our costs were above annual guidance, reflecting the same factors. Despite the setbacks, we delivered a number of financial records, including revenue of $1.8 billion and record free cash flow of over $350 million, while funding our high-return growth projects. Supported by strong free cash flow generation, we doubled our shareholder returns, further strengthened our balance sheet by reducing our debt and eliminated more of the hedges inherited from the Argonaut Gold transaction, giving us increased exposure to higher gold price. Looking ahead to 2026, we expect a meaningful improvement in operational performance to drive a 12% increase in production. This will be driven by ramp-up of mining rates at Island Gold as part of the Phase 3+ Expansion as well as higher mining rates at Young-Davidson. We expect further growth in production at lower costs in the coming years as we deliver on the larger Island Gold District expansion by 2028 and bring Lynn Lake into production by 2029. Our longer-term outlook remains firmly on track to nearly double our annual production of approximately over 1 million ounces a year at lower costs. Now turning to Slide 4. Over the past month, we outlined the key drivers of our strong outlook. As detailed in our updated 3-year guidance, we expect to deliver a 46% increase in production at approximately 20% lower all-in sustaining costs by 2028. We also provided exploration updates on our mines and exploration projects, highlighting significant upside potential across our portfolio. Our successful exploration program in 2025 contributed to a 32% increase in year-end mineral reserves to 16 million ounces, making the seventh consecutive year of growth. This included a near doubling of reserves at Island Gold District to over 8 million ounces. As announced earlier this month, this growth is being incorporated into a larger expansion of the district, which is expected to create one of the largest, longest life and most profitable gold operations in Canada. This is a high-return expansion that the Island Gold District can fund on its own while contributing to our increasing free cash flow. Reflecting this strong outlook and growing free cash flow, we are pleased to announce a 60% increase in our dividend commencing this quarter. As outlined in the expansion study, we will be expanding milling rates to 20,000 tonnes per day. The higher rate is supported by increased mining rates of 3,000 tonnes per day from underground and 17,000 tonnes per day from the open pit. With the completion of the expansion in 2028, annual production from the Island Gold District is expected to average 534,000 ounces of gold for the initial 10 years at lower mine site all-in sustaining costs of $1,025 per ounce. This is more than double the 2025 production and at 30% lower costs. At a conservative $3,200 per ounce gold price, the operation will generate in excess of $800 million of annual free cash flow and have an after-tax net present value of $8.2 billion. At a gold price of $4,500 per ounce, the after-tax NPV increases to $12 billion, making the Island Gold District one of the largest and most valuable gold operations in Canada. Now turning to Slide 6. Our 3-year guidance outlined a clear path to reach 800,000 ounces of gold production by 2028 at nearly 20% lower all-in sustaining costs of approximately $1,250 per ounce. Longer term, the completion of the Island Gold District expansion in 2028 and initial production from Lynn Lake in 2029 is expected to drive our production to approximately 1 million ounces per year by the end of the decade with a further decrease in costs. We have one of the best growth profiles in the sector, and we can fund all our growth internally while we continue to generate increasing free cash flow. So I'll now turn the call over to our CFO, Greg Fisher, who will review our financial performance. Greg? Greg Fisher: Thank you, John. Moving to Slide 7. We sold 142,000 ounces of gold in the fourth quarter at an average realized price of $3,998 per ounce for record quarterly revenues of $575 million. For the full year, we sold 531,000 ounces at a realized price of $3,372 per ounce for record annual revenues of $1.8 billion, up 34% from 2024. Our full year total cash cost of $1,077 per ounce and all-in sustaining costs of $1,524 per ounce were above annual guidance, driven by higher costs in the fourth quarter and the temporary challenges at our Canadian operations. Operating cash flow before changes in noncash working capital was $285 million in the fourth quarter or $0.68 per share. This was reduced by $63 million or $0.15 per share, reflecting the cash utilized to eliminate the legacy Argonaut Gold hedges prior to maturity. For the full year, operating cash flow before changes in noncash working capital increased 27% to a record $924 million or $2.20 per share. Our reported net earnings were $435 million in the fourth quarter or $1.03 per share. This included $227 million after-tax gain on the sale of noncore assets, loss on commodity hedge derivatives of $35 million and other adjustments of $16 million. Excluding these items, our adjusted net earnings were $228 million or $0.54 per share. Our full year adjusted net earnings were $587 million or $1.40 per share. Capital spending in the quarter totaled $158 million and include $50 million of sustaining capital, $97 million of growth capital and $11 million of capitalized exploration. For the full year, total capital expenditures were $507 million, including growth capital of $318 million. We continue to fund our high-return growth internally while generating strong free cash flow. This included a record $157 million of free cash flow generated in the fourth quarter and a record $352 million for the full year. Reflecting our growing free cash flow and strong financial position, we returned $81 million to shareholders in 2025, double the amount returned in 2024. This includes the repurchase of 1.3 million shares at a cost of $39 million and dividend payments totaling $42 million. With additional free cash flow growth ahead, we expect further increases in our shareholder returns, starting with a 60% increase in our dividend this quarter. We also paid down $50 million of debt and eliminated half the 2026 legacy hedges inherited from Argonaut Gold. To date, we have now repurchased and eliminated 230,000 out of the 330,000 ounces hedged by Argonaut prior to maturity, providing increased exposure to the rising gold price. We will continue to look for opportunities to eliminate the remaining 100,000 ounces subject to hedges across the second half of 2026 and first half of 2027. Given our strong free cash flow, our cash position grew 90% from the end of 2024 to $623 million, while reducing our debt to $200 million. We expect growing production and declining costs to drive increasing free cash flow over the next several years, while we continue to fund our organic growth plans. With that, I'll turn the call over to our COO, Luc Guimond, to provide an overview of our operations. Luc? Luc Guimond: Thank you, Greg. Over to Slide 8. Fourth quarter production from the Island Gold District totaled 60,000 ounces, a 10% decline over the previous quarter due to lower underground mining rates as well as reduced mill throughput. For the full year, production totaled 250,400 ounces, a 33% increase over the previous year, but slightly below the low end of revised annual guidance. During the fourth quarter, underground mining rates of 1,160 tonnes per day were impacted by additional rehabilitation work related to the seismic event that took place in October as well as downtime in late December due to severe winter weather. This prevented the delivery of supplies and access to site by personnel and emergency services, thus requiring a 3-day standdown of underground operations. The Island Gold mill averaged 1,180 tonnes per day in the fourth quarter, consistent with underground mining rates. The underground rehabilitation work required to ramp up mining rates as part of the Phase 3+ shaft expansion is substantially complete. Mining rates are on track to increase to an average of 1,400 tonnes per day in the first quarter of 2026 and gradually increase to 2,000 tonnes per day in the fourth quarter, driving growing production through the year. The open pit portion of the operation continues to perform well with mining rates averaging 16,600 tonnes per day of ore in the fourth quarter and 15,000 tonnes per day for the full year, in line with guidance. Magino milling rates averaged 8,625 tonnes per day in the fourth quarter, a modest improvement over the third quarter, but below expectations, in part reflecting weather-related disruptions late in the quarter. With a number of initiatives being implemented through the first quarter of 2026, milling rates are expected to improve substantially in the second half of the year. Total cash costs and mine site all-in sustaining costs were above annual guidance, driven by lower mill throughput at Magino and lower mining rates at Island Gold. The Island Gold District generated mine site free cash flow of $61 million in the fourth quarter and a record $205 million for the full year, net of significant capital investment related to the Phase 3+ shaft expansion and exploration. At current gold prices, the Island Gold District is expected to continue generating strong free cash flow while funding its expansion plans and a robust exploration program. We are expecting a significant improvement from the Island Gold District in 2026 with production expected to increase 24% to between 290,000 and 330,000 ounces, driven by the ramp-up of underground mining rates and improved milling rates at Magino. Moving to Slide 9. To improve processing rates within the Magino mill, we have added a temporary crusher to provide supplemental crushed ore feed downstream from the existing secondary crusher. This is expected to help sustain the flow of crushed ore into the mill and support higher milling rates of 10,000 tonnes per day by the end of the second quarter. Additional improvements we are implementing include ongoing work with third-party specialists to optimize and improve the reliability of the circuit and the restructuring of maintenance and mill operating management teams, which will ensure constant senior level oversight. Longer term, the addition of the gyratory crusher, new truck dump configuration and ore bins as part of the larger expansion of 20,000 tonnes per day will support further improvements to the performance of the existing circuit. Moving to Slide 10. Substantially, all the capital related to the Phase 3+ expansion has been spent or committed with the shaft infrastructure and paste plant commissioning expected in the fourth quarter. This will be the catalyst to increase mining rates to 2,400 tonnes per day in 2027 and ultimately, 3,000 tonnes per day in 2029 as part of the larger expansion. The photo on the right highlights the progress on the 1,350 shaft station. Once the station is completed, the remaining 29 meters to shaft bottom will be sunk by the end of the first quarter. Over to Slide 11. As John previously noted, the Island Gold District expansion to 20,000 tonnes per day is expected to create one of the largest, lowest cost and most valuable gold mines in Canada. Following the completion of the expansion in 2028, production is expected to increase to average 534,000 ounces per year over the initial 10 years at mine site all-in sustaining cost of $1,025 per ounce. This represents more than double the production from the district in 2025 at 30% lower all-in sustaining costs. At a $4,500 per ounce gold price, the expansion has an after-tax IRR of 69% and net present value of $12 billion. The Island Gold District is quickly evolving into one of Canada's largest, most profitable and valuable operations. And as Scott will touch on later, we believe there is more upside to come given the significant exploration potential. Over to Slide 12. As detailed in the photos, the expansion to 20,000 tonnes per day is well underway. As part of the Phase 3+ shaft expansion, we already started construction on a new mill building that was sized to accommodate the larger expansion. The new circuit will blend -- we'll process a blend of high-grade underground ore as well as open pit ore at a rate of 10,000 tonnes per day, while the existing circuit will process only open pit ore at only -- at also 10,000 tonnes per day. Construction of the open pit truck shop is well underway, which will follow for timely and cost-effective maintenance of the mobile fleet. With all the earthworks and concrete foundations complete and structural steel already erected, the larger expansion of the operation has already been significantly derisked. Over to Slide 13. Young-Davidson produced 41,400 ounces in the fourth quarter, a 9% increase over the previous quarter, but below expectations. Mining rates were impacted by severe weather conditions in late December, rehabilitation work required on 1 of 3 ore passes and the failure of a small portion of a paste plug underground. Production for the full year totaled 153,400 ounces, below revised guidance due to lower-than-expected mining rates and grades. With rehabilitation work completed on the impacted ore pass and an additional ore pass being commissioned this quarter, the total number of ore passes will increase to 4, providing additional operational flexibility. This is expected to support improved mining rates of approximately 7,600 tonnes per day in the first quarter and 8,000 tonnes per day in the second quarter and through the rest of the year. Cost per ounce were above guidance for the full year due to lower mining rates and grades processed. Despite the temporary challenges, Young-Davidson generated record mine site free cash flow of $250 million in 2025. In 2026, improved mining rates are expected to drive an increase in production from Young-Davidson to between 155,000 and 175,000 ounces, supporting strong ongoing free cash flow at current gold prices. Over to Slide 14. Production from the Mulatos District totaled 40,100 ounces in the fourth quarter, an 8% increase over the previous quarter, reflecting higher stacking rates and the recovery of previously stacked ounces on the leach pad. Production for the full year was 141,600 ounces, in line with annual guidance, which was revised higher in October. For the full year, costs were also in line with guidance. The Mulatos District generated record quarterly mine site free cash flow of $92 million and $222 million for the full year, net of $100 million in cash tax payments. The district remains well positioned to continue generating strong free cash flow while fully funding construction of the PDA project. For 2026, production from the Mulatos District is expected to be between 125,000 and 145,000 ounces at similar costs to 2025. I will now turn the call over to our VP of Exploration, Scott Parsons. Scott R. Parsons: Thank you, Luc. Over to Slide 15. We continued our track record of growth with a 32% increase in mineral reserves to 16 million ounces at the end of 2025. This marked the seventh consecutive year of growth over which reserves have increased 64% with grades also increasing 24% as our reserve base continues to grow in both size and quality. This year's growth was mainly driven by the Island Gold District, which added nearly 4 million ounces to reserves in 2025. Measured and indicated resources increased 6% with growth at Young-Davidson, the Mulatos District and Lynn Lake more than offsetting resource conversion at Magino. Inferred resources decreased 63%, reflecting the successful conversion of Island Gold District resources to reserves. We recently announced exploration updates for all of our mines and projects, highlighting the significant upside potential across our asset base. This led to an increase in our 2026 exploration budget to nearly $100 million, 37% higher than in 2025. Over to Slide 16. The big driver of the year-over-year increase in reserves was the impressive growth at the Island Gold District. Underground reserves more than doubled, increasing 125% to 5.1 million ounces, while open pit reserves increased 56% to 3.1 million ounces. The increase was driven by a successful delineation drilling program at both deposits, which resulted in the conversion of a large portion of mineral resources into mineral reserves. Despite the focus on delineation drilling, we are successful in increasing our overall mineral inventory at Island Gold for the 10th consecutive year with mineral reserves and resources increasing to 6.8 million ounces. Over to Slide 17. Drilling continues to extend high-grade mineralization across the Main Island Gold structure as well as within several hanging wall and footwall structures. This includes in the Lower Island East area, where reserves have grown to include 1.6 million ounces, grading 15 grams per tonne of gold. This represents one of the highest grade portions of the ore body, containing some of the deepest and best drill hole intersections to date. Based on our ongoing success and with the deposit open laterally and at depth, we expect the Main Island Gold deposit will continue to grow well into the future. Over to Slide 18. At the regional scale, drilling at the past producing Cline-Pick and Edwards Mines continues to extend high-grade mineralization beyond the limits of historic drilling. This included intersecting the highest grade hole ever drilled at Cline-Pick at 178 grams per tonne over 3.5 meters. These regional targets are located within 7 kilometers of the Magino mill and represent potential future sources of higher-grade supplemental feed as part of a larger district expansion. Over to Slide 19. The deepest holes drilled to date at Cline-Pick have intersected high-grade mineralization at depth of 540 meters. By comparison, drilling at Island Gold has intersected high-grade mineralization down to depths of over 1,600 meters. Both deposits remain open at depth and with similar deposits in the Canadian shield extending well beyond depth of 3,000 meters, there's significant potential for further growth and upside to the Island Gold District expansion study. Additionally, limited drilling has been completed within the 7-kilometer gap between Island Gold and Quin Pick and further along strike to the Northeast across our broader 60,000-hectare land package, highlighting the district scale potential. With that, I'll turn the call back to John. John McCluskey: Thank you, Scott. And I'll turn the call over to the operator who will open up for your questions. Operator: [Operator Instructions] Your first question comes from Cosmos Chiu with CIBC. Cosmos Chiu: Maybe my first question is on exploration here. Good to see that you're targeting some of the higher-grade mineralization at Young-Davidson and some of the newly defined hanging wall zones. I guess my question is, some of these new targets, are they still associated with the historic kind of cyanide intrusive rock? Or are you actually finding stuff in some of the sediments and ultramafic stratigraphy? And if it is still associated with cyanide, what makes it so that this is potentially higher grade? Scott R. Parsons: Thanks for the question, Cosmos, this is Scott. So to start, I guess, what got us really excited initially about the hanging wall mineralization that we're intersecting at YD in 2024 initially was that it was a different style of mineralization. So it was in the hanging wall in a different lithologies. So we're seeing this in conglomerates, volcanics and the cyanides out there as well, but the higher grades we were seeing were associated with the conglomerate units. And that's what we've been focusing on drilling with our hanging wall drift and do see potential for higher grade mineralization in that conglomerate. The second hanging wall target that we had highlighted in our press release on exploration for 2025 was something called the South cyanide. So it's a similar lithology to what hosts the main reserves at Young-Davidson, but this is offset 300 meters south. So it's a different cyanide body, we think, at this time. And we are seeing locally higher grades within that and we are working as we speak on drilling that to understand what's controlling the higher grade in that south cyanide body. Cosmos Chiu: That's good to hear. And then I guess, another sort of deposit we don't talk enough about the PDA. And I know you talked about that a little bit -- quite a bit actually at the Investor Day. But can you remind me, as you mentioned, initial production is targeted for mid-2027. What kind of key deliverables are there in 2026? What are some of the kind of critical path items that you need to target in 2026 in order to get to your mid-2027 initial production? Luc Guimond: Cosmos, it's Luc here. I'll take that question. So I mean, there's 2 key components there. Obviously, one is on the mining side, establishing the port entrances, which is what we're currently working on right now. So there'll be 2 port entrances into the PDA underground workings. And then obviously, over the next -- over the life of the mine, but certainly over the next 12 months as we're looking to prepare for -- sorry, for the next 18 months to be able to prepare for commissioning of the mill complex to bring that online will be development work and still preparation as far as being able to maintain and sustain our mining rates at 2,000 tonnes per day. So that's the key aspect is really get the portals commissioned this year, established and start on the development work over the next 18 months and the rest of that life of the mine of that operation. The other key component is related to the processing plant. So we've already -- we're well advanced on that as well. Most of the earthworks have been completed for the crushing station locations as well as the -- where the -- sorry, where the ball mill is going to be located for the mill complex. And we've already procured the long lead items that we need with regards to that construction schedule. And everything is well advanced to be able to have most of the work will get completed through the 2026 period. And then by mid-2027, we'll be wrapping up some of the construction-related activities related to the processing plant itself. But everything is tracking online, on schedule and certainly on budget for mid-2027. Cosmos Chiu: Great. And then maybe one last question, bigger picture here. And it was certainly good to see that you've increased your dividend by 60%. But I guess my question is, do you feel like you're getting fully rewarded for this dividend by the market? Or do you think you need to target a higher yield before you can get fully rewarded by the market for this dividend? And maybe broader, John, if you can talk about kind of your capital return strategy. John McCluskey: We've done -- historically, we've paid this dividend going back to 2010. We've always done a combination of dividends and share buybacks. Last year, we almost returned as much by way of share buybacks as we did through the dividend. And we're always going to keep that in balance. We're very opportunistic with respect with the share buyback. But the dividend itself, I think there's further room for growth, but this is a good indicator of our intentions. And despite the fact that we're going through a heavy capital spend schedule over the next couple of years as we effectively double our production between now and the end of the decade, the gold prices are strong. We're generating phenomenal free cash flow. There is -- there was room to increase the dividend, and we did so. But I think investors should expect more dividends to come. Operator: There are no further questions at this time. This concludes this morning's call. If you have any further questions that have not been answered, please feel free to contact Mr. Scott Parsons at 416-368-9932, extension 5439.
Operator: Greetings, and welcome to the Polaris Renewable Energy Inc. Fourth Quarter 2025 Conference Call. [Operator Instructions] And please note, this conference is being recorded. I will now turn the conference over to your host, Alba Ballesteros, Chief Financial Officer with Polaris Renewable Energy. Ma'am, the floor is yours. Alba Ballesteros: Thank you, Ali. Good morning, everyone, and thank you for joining us for our 2025 fourth quarter earnings call for Polaris Renewable Energy, Inc. Before we begin, we would like to remind you that in addition to our press release issued earlier today, you can find our financial statements and MD&A on both SEDAR+ and our corporate website at polarisrei.com. Unless noted otherwise, all amounts referred to are denominated in U.S. dollars. We will also like to remind you that comments made during this call may include forward-looking statements within the meaning of applicable Canadian securities legislation regarding the future performance of Polaris Renewable Energy Inc. and its subsidiaries. These statements are current expectations and as such, are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations. These risks and uncertainties include the factors discussed in the company's annual information form for the year ended December 31, 2025. On today's call, I will walk through our operating and financial results for the fourth quarter 2025 and full 2025 year. We will then turn the call over to Marc, who will provide a review of our 2025 performance and discuss the outlook for our business and growth prospects. Following our comments, we look forward to taking your questions. Overall, 2025 was a year of measurable progress for Polaris. We delivered year-over-year growth in energy production, revenue and adjusted EBITDA. Solid operational execution and disciplined cost management, a strong operating cash flow generation, materially simplified and optimized capital structure and continued capital returns to shareholders. Importantly, we achieved this while maintaining balance sheet strength and financial flexibility, which remains central to our long-term strategy. Starting with operations, for the full year 2025, consolidated energy production totaled 810,731 megawatts hour compared to 764,756-megawatt hour in 2024, representing a 6% year-over-year increase. This increase reflects the addition of the 26-megawatt Punta Lima Wind Farm in Puerto Rico, a strong hydrology in Peru and Ecuador and solid plant availability across our portfolio. The strongest performance over the year was achieved by our hydroelectric projects in Peru and Ecuador. In Peru, favorable hydrology and excellent plant availability led to a 12% increase year-to-date in hydro output for the Peruvian project, following what had been a historically dry year in 2024. Our hydroelectric facility in Ecuador also had an exceptional year, producing 19% more energy year-to-date versus 2024 and 26% more energy in the fourth quarter of 2025 versus the comparative period in 2024, thanks to a strong rainfall and an excellent technical performance, resulting in the highest resource availability since operations began. In Puerto Rico, 2025 marked the first year of contribution from Punta Lima, adding 42,056 megawatts hour post acquisition and strengthening our technology diversification. In Panama, solar generation in the quarter was 5% higher than in the 2024 comparative period. These increases offset lower output from Nicaragua where expected geothermal normalization and natural streams declined, reducing generation by about 5% in 2025 versus 2024. Production at our Dominican Republic Canoa 1 Solar Facility decreased slightly 2% year-to-date reflecting efficiency gains from the new panels installed in 2024, which allowed setting grid wide curtailments, which were 3,500 megawatt hours in the quarter and 5,900 megawatts hours for the year. Overall, our diversified portfolio, spanning geothermal, hydro, solar and wind across 6 jurisdictions continues to demonstrate resilience and stability and remains one of Polaris' structural strength. From a financial perspective, adjusted EBITDA increased up to $56.5 million, reflecting a 3% increase year-over-year. Despite inflationary pressures and the onboarding of new assets, operating margins continued to perform strongly, benefiting from disciplined cost management. I would like to highlight that we have already announced that we will be paying a quarterly dividend on February 27 of $0.15 per share to shareholders of record on February 17. Polaris now has a 10-year track record of consistent dividends, having returned approximately $105 million to shareholders in that period. Also during 2025, under our Renew NCIB program, we repurchased and canceled 169,800 common shares for approximately $1.5 million during the year, of which 80,000 were purchased in Q4 for approximately $0.8 million. Today, following debt repayments in Q1 2025, and Punta Lima Wind Farm integration, Polaris has a simplified structure, ample liquidity and the year 2025 with a consolidated cash position of $93.2 million, including restricted cash and an optimized and energy diversified platform for further growth. This positions the company well to deploy capital into expansion opportunities. With that, I will turn the call over to Marc. Thank you. Marc Murnaghan: Thanks, Alba. So just a few comments about sort of production and guidance on that front for this year. So we did -- as we messaged, we moved the major maintenance at San Jacinto from end of last year to this year. It has been completed and executed. As expected, no issues with the turbines, which is great. What that means in terms of, call it, total production on a consolidated basis for our budget for this year without any new plans, without any acquisitions, so we just take the existing plants in operation, with that, with the major maintenance there and some curtailment in the Dominican, our consolidated range for the year would be around 775 to 790 gigawatt hours for the year. In terms of what we are working on, on the growth side, as people know, we really focused on the ASAP project last year because of the size of it, which was -- which is very well matched with the excess cash we have on the balance sheet and the profitability of that project. And so we're very focused on that. And what I would say that given the delays in the approval, which I'll get to in a second, we, 3, 6 months ago, really started to, call it, diversify our development opportunities in some existing jurisdictions as well as some new ones. So -- and I think we're going to start to see the fruits of that very shortly. In terms of the actual ASAP program, the -- we received approval back in August for -- from the Energy Bureau and then moved to PREPA, which is the actual contracting agent. It turns out that in Q4, they did -- the Board was basically not properly constituted to approve it. It is now properly constituted. They do now have a quorum. And our understanding is that the meeting or basically the first board meeting of PREPA with properly constituted call it quorum will be taking place within the week. And we do know that our ASAP project is on the docket for such board meeting amongst other projects. So we're not the only one, there's numerous projects that they need to get to, given that there's, I would say, been a pause in terms of their approval of projects. So we are expecting that board meeting to happen in the short term now that they have the quorum. And then -- so in addition to that, we do have nonbinding LOI that we signed regarding the acquisition of the small solar project in one of our current jurisdictions. It's not big, but it's strategic. And we would look to be going binding on that by the end of March. So that's on the acquisition front. In terms of other development activities, we are participating in an RFP process in Puerto Rico as well that came out in the end Q4. There was a request for qualifications in December, which we successfully passed, and we're now in the RFP process. We're going to be submitting a solar plus BESS with a heavy BESS weighting to it, so it's more dispatchable. And interestingly, despite the PREPA, which has been delayed, I would say that the process in this RFP is moving very quickly. The timeline is very aggressive and any sort of correspondence, I would say, responded to very quickly. So -- and the actual formal timeline that they have published is that they're looking to have contracts signed by June. We actually had to submit or comment on contracts yesterday. So that is actually moving. So we're very interested in that in Puerto Rico. Also in the same area, I would say that while the Dominican is having issues with curtailment, we do think that opportunities centered around storage will emerge from it, and we will be looking at being, call it, ready for that, and there are things that we're working on there. And then in terms of importantly, in other markets, big focus going forward now is Mexico for us. We, yesterday signed an exclusivity agreement with a local developer there for -- which gives us access to approximately 1,000 megawatts of projects. The way that -- so we're very happy about that. The way that things are working in Mexico is there's different processes that are going to be happening throughout the year. The first one is something called mixed projects, which is -- we were actually invited given the work that we've done last year, so Polaris was invited to participate in, it's called the convocatoria. It's basically a process to -- for them to some fast-track projects/signing of contracts. But the short-term one, which is we actually have to submit by next Friday. It's for what they call mixed projects, which is where your, I would call it, basically their build-own-operate transfer, 25-year build, own, operate transfer projects with CFE which is -- and they're going to be your contracting entity. So we will -- with this portfolio that we've call it, have exclusive rights to, we will definitely be submitting some of those projects in that portfolio for this short-term mix projects, convocatoria by next Friday. And then still short term, but a little bit later, call it Q2 this year, there's going to be a second process, which will be for more traditional, private company long-term PPAs where they're not build. So that's expected to be happening in April, May of this year. And so the plan would be to submit more projects from this portfolio into that as well as likely some other ones that based on conversations with other local developers that are quite interested in partnering with us for that. So -- and then beyond that, which I would say is more, call it, a medium term is that those are the two most short-term processes, but that doesn't -- that's not going to be the end of it. We don't -- there's going to be more abilities to contract either directly with CFE or with other. There's numerous sort of approved purchasers of power there on a wholesale basis. And so that's -- we think that, that can be back half of the year or sort of early next year in terms of actual contracting. So there's going to be a lot happening on the development side this year in Mexico. In addition, another opportunity that is there that we're looking at is behind the meter. Given the regulation changes as well as the pent-up demand from industrial consumers there. So we do have several acquisitions we're looking at and projects we're looking at that are behind the meter. And there behind the meter can be up to 20 megawatts. So you can get some scale in behind-the-meter projects now in Mexico. So I would say with Mexico, with the, call it, RFP in Puerto Rico and with ASAP, I would say we are now sitting here with a lot more, call it, development shots on the net than we had 3 months ago, and I would anticipate being able to having -- taking a reasonable success rate. Obviously, we're not going to advance all of those, but that we should be having news in the next 3 to 6 months with defining actual projects that were going to be, call it -- starting to build this year and next year and the following year so that the connecting the dots on the 5-year plan will be much clearer in the next 3 to 6 months. So that's it for the formal remarks. We can open up for questions. Operator: [Operator Instructions] Our first question is coming from Melissa Dean with National Bank Capital Markets. Unknown Analyst: Just firstly, I wanted to ask you guys about your M&A pipeline. You mentioned a couple of opportunities in your prepared remarks. Could you just walk us through the pipeline you're seeing in Latin America? And what kind of valuation multiples and IRR you're seeing if anything has changed since the last time we spoke? And then you also mentioned in your prepared remarks a nonbinding LOI that you signed. If you could provide more detail there as well, that would be great? Marc Murnaghan: Yes. Just on that one, given it's not [indiscernible] haven't press released, but it's not a large project. It's -- but it's really strategic in terms of it's essentially colocated with one of our other solar projects. So I think there's a high degree or likelihood we convert that to a mining deal, but it's -- just think of it as about 10 megawatts. So it's not huge, but we quite like the economics. And it's -- there's just synergies there. So it's -- we think it's a good transaction. In terms of the overall pipeline, I would say in terms of multiple things we're generally looking at, it is a range. I would say it's maybe at 6.5 to 7 on the low end, 8.5 to 9 on the high end. But it's -- I don't -- I wouldn't say that it's really increased in terms of our pipeline. And partly, that's just because we are in several processes, but we've seen a lot more of what I would call mid- to late-stage development, which are technically acquisitions, but they're really just us coming in and taking over that's really, really increased. And when we look at those, when you -- whether it's batteries or solar or the combination of the two, the construction risk and the construction timeline being, call it, we think the risk is relatively low. The timelines are relatively low, that you're all in sort of multiple on those is just significantly lower than what we're seeing on the acquisition side that the gap doesn't justify really going for these acquisitions. It justifies going for, call it, the shovel-ready or 6 months shovel-ready type projects, which is what we're seeing in, for sure, Puerto Rico, a couple of the other markets and for sure Mexico now. So I would say that -- we want people to think there's a ton of M&A activity for this year. I think it's going to be much more on the late-stage development activity. Unknown Analyst: Okay. So you're seeing a stronger skew of potential for, I guess, in development assets than operating or better returns, I guess, right now at this point? Marc Murnaghan: Yes. And part of that, too, is I would say there's been a real push by offtakers in all the jurisdictions we're seeing where there's activity to -- that are forcing developers to basically partner with people with a balance sheet, track record and ability to put LCs or guarantees prior to getting contracts. So the developers can't go all the way to having a PPA in hand and then selling it to the top bidder. It's just not possible anymore. So they're being forced to basically to come sooner, which is making the economics more attractive for, call it, companies like ourselves that do have access to capital. Unknown Analyst: Okay. Perfect. That's very helpful. And just on the Mexico opportunity that you mentioned, you said, I think, some 1,000 megawatts of project availability, signed an exclusivity agreement. Can you talk about the PPA structures you're seeing in the Mexico market in terms of contract duration? And what kind of IRR opportunities you're seeing there as well? Marc Murnaghan: Yes. So the duration are, I'd say, low end 15, but 20 to 25 would -- is typical. So good duration. But the way that you are required to have 3 hour -- sorry, 30% coverage with storage for 3 hours, so not 4, which is interesting. But so as long as you have that, you can get capacity. So it's not just -- they're not just energy PPAs. They're sort of energy plus capacity. So -- and I would say that the economics sort of breakdown that it's, call it, set approximately 70% is your energy and 30% is your capacity, but they're both -- you're actually getting contracted for the capacity for the life of it. You are not having to -- it's not as if you get a contracted energy price and then you're going spot on the capacity. If you're getting that, you're getting both for the life of the contract. In terms of IRRs, I would say, for the cleanest sort of CFE, highest credit quality, you are going to be in the 12% to 14% and then IRR and then others, we're seeing -- bring that 13% to 16%. So I'd still say your -- it's mid-teens, maybe 14% is the right number. But strategically for the company, I think what we're really trying to do. So it's not as high as what we see, for instance, Puerto Rico or, call it, Dominican or call it Caribbean. But we do think that bringing on those megawatts is much more, call it, predictable in terms of timeline. It's much bigger in the market, so we don't need a huge win, it's a very small market share that we need to be, call it, material for Polaris. But so the combination, I would say, of, call it, megawatts coming from that market in Mexico on a much more, call it, bankable basis with a much higher impact returns from the Caribbean is the combination we're looking for. Now a lot of that realistically, though, in Mexico is not going to be shovel ready until, call it, Q4 or Q1 of next year. So the timing of it is important, too, which is we get the ASAP, and that's going to become this year's big CapEx project, but then we will have something, I would say, in Mexico on the backs of that, but more for next year. Unknown Analyst: Okay. Understood. And just for the Mexico projects, the construction timeline, I believe, for SO1 and Puerto Rico was 12 months or less. Are you seeing similar construction timelines for Mexico? Or do they differ quite materially? Marc Murnaghan: No, I would say 12, 15 months, similar, very similar. Operator: Our next question is coming from Nicholas Boychuk with ATB Cormark. Nicholas Boychuk: Just coming back to the PR. I'm wondering if you can kind of expand a little bit more on that curtailment issue, specifically how much it might impact this year, if there's anything you can do about it? And I know you mentioned that they are looking to do battery energy storage, but it feels like that absolutely has to happen here. And I'm curious what signals you're getting from the regulators in the Dominican as to the size and urgency of needing battery energy storage on their grid? Marc Murnaghan: Yes. So we were about 6,000 megawatt hours last year. It's hard to gauge exactly where it's going to land this year. I think that's a reasonable number. I think our budget to be conservative as we assume sort of 10,000 for this year and then we think it will drop because we do -- we know that they are taking the storage seriously. I don't want to sort of really promise anything on sort of us doing more storage there, though, but we're -- you know that we're going to try to be in the mix. What I can say is that the -- we do know they're taking it very seriously. And we -- based on what we have heard from them and what we're seeing them do is that they would agree with our assessment, which is the best way sort of forward here is to have numerous sites, call it, storages transmission is to absorb that energy in the middle of the day. I mean they have very expensive cost energy and need at night, so it's not as if they're awash in energy from 6 to 10 p.m., they need it. It's that they just don't [ need ] much during the day. So I don't think there's any disagreement now in terms of the way forward. It's just -- it's going to be hard to [indiscernible] exactly what we can do there. So I think short term, call it more curtailment this year, but I do think they'll get their act together, such that next year, they will have resolved the situation at some point next year in terms of the actual curtailment. We're going see what we can do. We'll see what we can do in terms of -- and I think if we can do that, as long as they do that, I think it is a market you still want to participate in, in some form or fashion, yes. Nicholas Boychuk: Understood. You mentioned there's a couple of new relationships with local developers, and it sounds like the activity in that sphere is really picking up. I'm curious if you can expand a little bit on the drivers behind that. Is it -- is it as much the lack of capital in the local market where you guys need to partner with someone like yourself? You mentioned that, but I'm curious if there's also a bit of a nationalization in energy sovereignty and these regulators are pushing more of this in their market to decouple from things like fossil fuels? And I guess the whole point of the question is trying to figure out, is this the earliest innings of a push like this? And are we going to see a lot more activity in the coming 6, 12 18 months? Marc Murnaghan: So this -- so in terms of actual -- I would say that the dynamic that I was mentioning of developers are being sort of forced to talk to companies like us earlier. I would say we're seeing that in every market that we're in. And that's just I think that the driving factor is more the -- whichever the government entity is that's running a process or that the contracting entity I think have had experiences where they're just [indiscernible] a lot of developers that couldn't get a project to the finish line. And so that just seems to be a threat in all these markets. So it's not specific to anyone. So I think that's the reason why it's happening. And I think we're just in a nice position there with cash on the balance sheet and operating track record in the region that we tick the boxes. And so it was literally just -- we started looking at projects presence in Mexico last January quietly and met with a bunch of the different government entities. And it was only because of that, that we actually got invited to participate. So we didn't even actually have -- when we got the invitation to participate, we didn't have a specific project. We have specific projects now that we're going to be submitting, but we got invited to participate just because of our CV, call it. But no sort of small developers without an operating experience were invited. I don't know if I'm answering because I think there were several questions in your question, so you ask away if I didn't answer them all. Nicholas Boychuk: I guess the only other thing is if you're hearing anything about energy sovereignty and the decoupling of fossil fuels? Marc Murnaghan: Energy, what? I missed that word, Nick. Nicholas Boychuk: Energy sovereignty, like just making sure that these grids are not in any way tied to external markets like the U.S. supply and fossil fuels and natural gas and diesel. Marc Murnaghan: No, I wouldn't -- I'm not hearing that. I think they do want to be self sufficient. I think unfortunately, it started -- on that issue, Nick, I'd say it's almost different for every different market we're looking at. So for instance, obviously, Puerto Rico is part of the United States. So it's got its own -- it's got its own character. Mexico, I would actually say as being a Canadian company is quite helpful there. And DR, I would say it hasn't -- where -- there it has much more to do with, call it, the too much energy in the day, i.e., curtailment issue is absolutely the driving factor. So I would say there's no common thread on that front in the different markets that we're in. Nicholas Boychuk: Makes sense. And then last for me, just on timing and magnitude of CapEx. So if ASAP goes through with this now being quorum board, when do you think that would turn on? And how are you thinking about overall capital availability for that, potentially battery energy storage in the Dominican, these other RFPs in Puerto Rico, your 1,000 megawatts in Mexico, puts a lot of irons in the fire. How are you feeling about the balance sheet? Marc Murnaghan: Yes. So I would also say that we've moved a bit to last year was we had one -- like we had other irons in the fire, as you know, but it was -- we really were focused on the ASAP. So we are -- I'm much more -- we're more on the -- have many more irons in the fire and then to get the optionality for us. I would also say that I am relatively confident that with our cash position, but also still a conservative balance sheet that our ability to raise, I would say, fixed income capital to top up there, is quite significant and at rates that are better than what we did before. And that can really -- and those rates can work in all of these markets we're looking at in terms of the growth opportunities. So we want a lot more irons in fire and I think we can fund what we're looking at. And so the theories of let's get to the point where we have call it, too much to do, and then we have to start paring back and choosing. But I would say this year, it's still most likely, call it, the tiny acquisition, ASAP. And then call it, announcements and dotting the Is, crossing the Ts on CapEx programs that are realistically going to start maybe Q4, but I'd say more likely start in Q1, Q2, Q3 next year for projects that are coming online. So if you call it ASAP is coming online Q1, Q2 next year, the rest of it is, call it, 12 months behind that and I would say 12 and 24 months behind that. So you're going to see sort of some clarity on what '27 is going to look like. The CapEx this year for '27, cash flow, but also then having a line of sight on realistically CapEx for '27 and '28 for revenue, cash flow in '28, '29. And everything we're seeing at least that we're working on is such that it's all, I would say, chunky enough that they call it the numbers that we have in our presentation for where it'd be in 2029, we're definitely -- they're big enough to get there. And one add I would say is that I wouldn't say this, say, for Puerto Rico or Dominican, but what I would say for Mexico is if there's too much. I don't think there's going to be, I think we need to assume there's a certain hit rate, right? But if there was, I would say there's a lot of local capital there that is very interested in participating alongside companies like ours. So I do think that there's possibly -- it's early days, but I do think there's a possibility that you have -- we don't need to be 100% of the local sort of SPV. If there's a lot of megawatts there, I think we can find relatively attractively priced capital, both on the debt and equity side there. Operator: As we have no further questions on the lines at this time, this will conclude today's Q&A session and today's conference. You may disconnect your lines at this time, and have a wonderful day, and we thank you for your participation. Marc Murnaghan: Thank you. Alba Ballesteros: Thank you.
Operator: Good morning. I'll now turn the call over to Scott Parsons, Alamos' Senior Vice President of Corporate Development and Investor Relations. Scott Parsons: Thank you, operator, and thanks to everybody for attending Alamos' Fourth Quarter 2025 Conference Call. In addition to myself, we have on the line today John McCluskey, President and Chief Executive Officer; Greg Fisher, Chief Financial Officer; Luc Guimond, Chief Operating Officer; and Scott Parsons, Vice President of Exploration. We will be referring to a presentation during the conference call that is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q&A session. As we will be making forward-looking statements during the call, please refer to the cautionary notes included in the presentation, news release and MD&A as well as the risk factors set out in our annual information form. Technical information in this presentation has been reviewed and approved by Chris Boswick, our Senior VP of Technical Services and a qualified person. Also, please bear in mind that all of the dollar amounts mentioned in this conference call are in U.S. dollars unless otherwise noted. Now John will provide you with an overview. John McCluskey: Thank you, Scott. So I'm going to start with Slide 3. Production for 2025 was 545,000 ounces, below our guidance as a result of severe weather in late December and other challenges at the Canadian operations. Our costs were above annual guidance, reflecting the same factors. Despite the setbacks, we delivered a number of financial records, including revenue of $1.8 billion and record free cash flow of over $350 million, while funding our high-return growth projects. Supported by strong free cash flow generation, we doubled our shareholder returns, further strengthened our balance sheet by reducing our debt and eliminated more of the hedges inherited from the Argonaut Gold transaction, giving us increased exposure to higher gold price. Looking ahead to 2026, we expect a meaningful improvement in operational performance to drive a 12% increase in production. This will be driven by ramp-up of mining rates at Island Gold as part of the Phase 3+ Expansion as well as higher mining rates at Young-Davidson. We expect further growth in production at lower costs in the coming years as we deliver on the larger Island Gold District expansion by 2028 and bring Lynn Lake into production by 2029. Our longer-term outlook remains firmly on track to nearly double our annual production of approximately over 1 million ounces a year at lower costs. Now turning to Slide 4. Over the past month, we outlined the key drivers of our strong outlook. As detailed in our updated 3-year guidance, we expect to deliver a 46% increase in production at approximately 20% lower all-in sustaining costs by 2028. We also provided exploration updates on our mines and exploration projects, highlighting significant upside potential across our portfolio. Our successful exploration program in 2025 contributed to a 32% increase in year-end mineral reserves to 16 million ounces, making the seventh consecutive year of growth. This included a near doubling of reserves at Island Gold District to over 8 million ounces. As announced earlier this month, this growth is being incorporated into a larger expansion of the district, which is expected to create one of the largest, longest life and most profitable gold operations in Canada. This is a high-return expansion that the Island Gold District can fund on its own while contributing to our increasing free cash flow. Reflecting this strong outlook and growing free cash flow, we are pleased to announce a 60% increase in our dividend commencing this quarter. As outlined in the expansion study, we will be expanding milling rates to 20,000 tonnes per day. The higher rate is supported by increased mining rates of 3,000 tonnes per day from underground and 17,000 tonnes per day from the open pit. With the completion of the expansion in 2028, annual production from the Island Gold District is expected to average 534,000 ounces of gold for the initial 10 years at lower mine site all-in sustaining costs of $1,025 per ounce. This is more than double the 2025 production and at 30% lower costs. At a conservative $3,200 per ounce gold price, the operation will generate in excess of $800 million of annual free cash flow and have an after-tax net present value of $8.2 billion. At a gold price of $4,500 per ounce, the after-tax NPV increases to $12 billion, making the Island Gold District one of the largest and most valuable gold operations in Canada. Now turning to Slide 6. Our 3-year guidance outlined a clear path to reach 800,000 ounces of gold production by 2028 at nearly 20% lower all-in sustaining costs of approximately $1,250 per ounce. Longer term, the completion of the Island Gold District expansion in 2028 and initial production from Lynn Lake in 2029 is expected to drive our production to approximately 1 million ounces per year by the end of the decade with a further decrease in costs. We have one of the best growth profiles in the sector, and we can fund all our growth internally while we continue to generate increasing free cash flow. So I'll now turn the call over to our CFO, Greg Fisher, who will review our financial performance. Greg? Greg Fisher: Thank you, John. Moving to Slide 7. We sold 142,000 ounces of gold in the fourth quarter at an average realized price of $3,998 per ounce for record quarterly revenues of $575 million. For the full year, we sold 531,000 ounces at a realized price of $3,372 per ounce for record annual revenues of $1.8 billion, up 34% from 2024. Our full year total cash cost of $1,077 per ounce and all-in sustaining costs of $1,524 per ounce were above annual guidance, driven by higher costs in the fourth quarter and the temporary challenges at our Canadian operations. Operating cash flow before changes in noncash working capital was $285 million in the fourth quarter or $0.68 per share. This was reduced by $63 million or $0.15 per share, reflecting the cash utilized to eliminate the legacy Argonaut Gold hedges prior to maturity. For the full year, operating cash flow before changes in noncash working capital increased 27% to a record $924 million or $2.20 per share. Our reported net earnings were $435 million in the fourth quarter or $1.03 per share. This included $227 million after-tax gain on the sale of noncore assets, loss on commodity hedge derivatives of $35 million and other adjustments of $16 million. Excluding these items, our adjusted net earnings were $228 million or $0.54 per share. Our full year adjusted net earnings were $587 million or $1.40 per share. Capital spending in the quarter totaled $158 million and include $50 million of sustaining capital, $97 million of growth capital and $11 million of capitalized exploration. For the full year, total capital expenditures were $507 million, including growth capital of $318 million. We continue to fund our high-return growth internally while generating strong free cash flow. This included a record $157 million of free cash flow generated in the fourth quarter and a record $352 million for the full year. Reflecting our growing free cash flow and strong financial position, we returned $81 million to shareholders in 2025, double the amount returned in 2024. This includes the repurchase of 1.3 million shares at a cost of $39 million and dividend payments totaling $42 million. With additional free cash flow growth ahead, we expect further increases in our shareholder returns, starting with a 60% increase in our dividend this quarter. We also paid down $50 million of debt and eliminated half the 2026 legacy hedges inherited from Argonaut Gold. To date, we have now repurchased and eliminated 230,000 out of the 330,000 ounces hedged by Argonaut prior to maturity, providing increased exposure to the rising gold price. We will continue to look for opportunities to eliminate the remaining 100,000 ounces subject to hedges across the second half of 2026 and first half of 2027. Given our strong free cash flow, our cash position grew 90% from the end of 2024 to $623 million, while reducing our debt to $200 million. We expect growing production and declining costs to drive increasing free cash flow over the next several years, while we continue to fund our organic growth plans. With that, I'll turn the call over to our COO, Luc Guimond, to provide an overview of our operations. Luc? Luc Guimond: Thank you, Greg. Over to Slide 8. Fourth quarter production from the Island Gold District totaled 60,000 ounces, a 10% decline over the previous quarter due to lower underground mining rates as well as reduced mill throughput. For the full year, production totaled 250,400 ounces, a 33% increase over the previous year, but slightly below the low end of revised annual guidance. During the fourth quarter, underground mining rates of 1,160 tonnes per day were impacted by additional rehabilitation work related to the seismic event that took place in October as well as downtime in late December due to severe winter weather. This prevented the delivery of supplies and access to site by personnel and emergency services, thus requiring a 3-day standdown of underground operations. The Island Gold mill averaged 1,180 tonnes per day in the fourth quarter, consistent with underground mining rates. The underground rehabilitation work required to ramp up mining rates as part of the Phase 3+ shaft expansion is substantially complete. Mining rates are on track to increase to an average of 1,400 tonnes per day in the first quarter of 2026 and gradually increase to 2,000 tonnes per day in the fourth quarter, driving growing production through the year. The open pit portion of the operation continues to perform well with mining rates averaging 16,600 tonnes per day of ore in the fourth quarter and 15,000 tonnes per day for the full year, in line with guidance. Magino milling rates averaged 8,625 tonnes per day in the fourth quarter, a modest improvement over the third quarter, but below expectations, in part reflecting weather-related disruptions late in the quarter. With a number of initiatives being implemented through the first quarter of 2026, milling rates are expected to improve substantially in the second half of the year. Total cash costs and mine site all-in sustaining costs were above annual guidance, driven by lower mill throughput at Magino and lower mining rates at Island Gold. The Island Gold District generated mine site free cash flow of $61 million in the fourth quarter and a record $205 million for the full year, net of significant capital investment related to the Phase 3+ shaft expansion and exploration. At current gold prices, the Island Gold District is expected to continue generating strong free cash flow while funding its expansion plans and a robust exploration program. We are expecting a significant improvement from the Island Gold District in 2026 with production expected to increase 24% to between 290,000 and 330,000 ounces, driven by the ramp-up of underground mining rates and improved milling rates at Magino. Moving to Slide 9. To improve processing rates within the Magino mill, we have added a temporary crusher to provide supplemental crushed ore feed downstream from the existing secondary crusher. This is expected to help sustain the flow of crushed ore into the mill and support higher milling rates of 10,000 tonnes per day by the end of the second quarter. Additional improvements we are implementing include ongoing work with third-party specialists to optimize and improve the reliability of the circuit and the restructuring of maintenance and mill operating management teams, which will ensure constant senior level oversight. Longer term, the addition of the gyratory crusher, new truck dump configuration and ore bins as part of the larger expansion of 20,000 tonnes per day will support further improvements to the performance of the existing circuit. Moving to Slide 10. Substantially, all the capital related to the Phase 3+ expansion has been spent or committed with the shaft infrastructure and paste plant commissioning expected in the fourth quarter. This will be the catalyst to increase mining rates to 2,400 tonnes per day in 2027 and ultimately, 3,000 tonnes per day in 2029 as part of the larger expansion. The photo on the right highlights the progress on the 1,350 shaft station. Once the station is completed, the remaining 29 meters to shaft bottom will be sunk by the end of the first quarter. Over to Slide 11. As John previously noted, the Island Gold District expansion to 20,000 tonnes per day is expected to create one of the largest, lowest cost and most valuable gold mines in Canada. Following the completion of the expansion in 2028, production is expected to increase to average 534,000 ounces per year over the initial 10 years at mine site all-in sustaining cost of $1,025 per ounce. This represents more than double the production from the district in 2025 at 30% lower all-in sustaining costs. At a $4,500 per ounce gold price, the expansion has an after-tax IRR of 69% and net present value of $12 billion. The Island Gold District is quickly evolving into one of Canada's largest, most profitable and valuable operations. And as Scott will touch on later, we believe there is more upside to come given the significant exploration potential. Over to Slide 12. As detailed in the photos, the expansion to 20,000 tonnes per day is well underway. As part of the Phase 3+ shaft expansion, we already started construction on a new mill building that was sized to accommodate the larger expansion. The new circuit will blend -- we'll process a blend of high-grade underground ore as well as open pit ore at a rate of 10,000 tonnes per day, while the existing circuit will process only open pit ore at only -- at also 10,000 tonnes per day. Construction of the open pit truck shop is well underway, which will follow for timely and cost-effective maintenance of the mobile fleet. With all the earthworks and concrete foundations complete and structural steel already erected, the larger expansion of the operation has already been significantly derisked. Over to Slide 13. Young-Davidson produced 41,400 ounces in the fourth quarter, a 9% increase over the previous quarter, but below expectations. Mining rates were impacted by severe weather conditions in late December, rehabilitation work required on 1 of 3 ore passes and the failure of a small portion of a paste plug underground. Production for the full year totaled 153,400 ounces, below revised guidance due to lower-than-expected mining rates and grades. With rehabilitation work completed on the impacted ore pass and an additional ore pass being commissioned this quarter, the total number of ore passes will increase to 4, providing additional operational flexibility. This is expected to support improved mining rates of approximately 7,600 tonnes per day in the first quarter and 8,000 tonnes per day in the second quarter and through the rest of the year. Cost per ounce were above guidance for the full year due to lower mining rates and grades processed. Despite the temporary challenges, Young-Davidson generated record mine site free cash flow of $250 million in 2025. In 2026, improved mining rates are expected to drive an increase in production from Young-Davidson to between 155,000 and 175,000 ounces, supporting strong ongoing free cash flow at current gold prices. Over to Slide 14. Production from the Mulatos District totaled 40,100 ounces in the fourth quarter, an 8% increase over the previous quarter, reflecting higher stacking rates and the recovery of previously stacked ounces on the leach pad. Production for the full year was 141,600 ounces, in line with annual guidance, which was revised higher in October. For the full year, costs were also in line with guidance. The Mulatos District generated record quarterly mine site free cash flow of $92 million and $222 million for the full year, net of $100 million in cash tax payments. The district remains well positioned to continue generating strong free cash flow while fully funding construction of the PDA project. For 2026, production from the Mulatos District is expected to be between 125,000 and 145,000 ounces at similar costs to 2025. I will now turn the call over to our VP of Exploration, Scott Parsons. Scott R. Parsons: Thank you, Luc. Over to Slide 15. We continued our track record of growth with a 32% increase in mineral reserves to 16 million ounces at the end of 2025. This marked the seventh consecutive year of growth over which reserves have increased 64% with grades also increasing 24% as our reserve base continues to grow in both size and quality. This year's growth was mainly driven by the Island Gold District, which added nearly 4 million ounces to reserves in 2025. Measured and indicated resources increased 6% with growth at Young-Davidson, the Mulatos District and Lynn Lake more than offsetting resource conversion at Magino. Inferred resources decreased 63%, reflecting the successful conversion of Island Gold District resources to reserves. We recently announced exploration updates for all of our mines and projects, highlighting the significant upside potential across our asset base. This led to an increase in our 2026 exploration budget to nearly $100 million, 37% higher than in 2025. Over to Slide 16. The big driver of the year-over-year increase in reserves was the impressive growth at the Island Gold District. Underground reserves more than doubled, increasing 125% to 5.1 million ounces, while open pit reserves increased 56% to 3.1 million ounces. The increase was driven by a successful delineation drilling program at both deposits, which resulted in the conversion of a large portion of mineral resources into mineral reserves. Despite the focus on delineation drilling, we are successful in increasing our overall mineral inventory at Island Gold for the 10th consecutive year with mineral reserves and resources increasing to 6.8 million ounces. Over to Slide 17. Drilling continues to extend high-grade mineralization across the Main Island Gold structure as well as within several hanging wall and footwall structures. This includes in the Lower Island East area, where reserves have grown to include 1.6 million ounces, grading 15 grams per tonne of gold. This represents one of the highest grade portions of the ore body, containing some of the deepest and best drill hole intersections to date. Based on our ongoing success and with the deposit open laterally and at depth, we expect the Main Island Gold deposit will continue to grow well into the future. Over to Slide 18. At the regional scale, drilling at the past producing Cline-Pick and Edwards Mines continues to extend high-grade mineralization beyond the limits of historic drilling. This included intersecting the highest grade hole ever drilled at Cline-Pick at 178 grams per tonne over 3.5 meters. These regional targets are located within 7 kilometers of the Magino mill and represent potential future sources of higher-grade supplemental feed as part of a larger district expansion. Over to Slide 19. The deepest holes drilled to date at Cline-Pick have intersected high-grade mineralization at depth of 540 meters. By comparison, drilling at Island Gold has intersected high-grade mineralization down to depths of over 1,600 meters. Both deposits remain open at depth and with similar deposits in the Canadian shield extending well beyond depth of 3,000 meters, there's significant potential for further growth and upside to the Island Gold District expansion study. Additionally, limited drilling has been completed within the 7-kilometer gap between Island Gold and Quin Pick and further along strike to the Northeast across our broader 60,000-hectare land package, highlighting the district scale potential. With that, I'll turn the call back to John. John McCluskey: Thank you, Scott. And I'll turn the call over to the operator who will open up for your questions. Operator: [Operator Instructions] Your first question comes from Cosmos Chiu with CIBC. Cosmos Chiu: Maybe my first question is on exploration here. Good to see that you're targeting some of the higher-grade mineralization at Young-Davidson and some of the newly defined hanging wall zones. I guess my question is, some of these new targets, are they still associated with the historic kind of cyanide intrusive rock? Or are you actually finding stuff in some of the sediments and ultramafic stratigraphy? And if it is still associated with cyanide, what makes it so that this is potentially higher grade? Scott R. Parsons: Thanks for the question, Cosmos, this is Scott. So to start, I guess, what got us really excited initially about the hanging wall mineralization that we're intersecting at YD in 2024 initially was that it was a different style of mineralization. So it was in the hanging wall in a different lithologies. So we're seeing this in conglomerates, volcanics and the cyanides out there as well, but the higher grades we were seeing were associated with the conglomerate units. And that's what we've been focusing on drilling with our hanging wall drift and do see potential for higher grade mineralization in that conglomerate. The second hanging wall target that we had highlighted in our press release on exploration for 2025 was something called the South cyanide. So it's a similar lithology to what hosts the main reserves at Young-Davidson, but this is offset 300 meters south. So it's a different cyanide body, we think, at this time. And we are seeing locally higher grades within that and we are working as we speak on drilling that to understand what's controlling the higher grade in that south cyanide body. Cosmos Chiu: That's good to hear. And then I guess, another sort of deposit we don't talk enough about the PDA. And I know you talked about that a little bit -- quite a bit actually at the Investor Day. But can you remind me, as you mentioned, initial production is targeted for mid-2027. What kind of key deliverables are there in 2026? What are some of the kind of critical path items that you need to target in 2026 in order to get to your mid-2027 initial production? Luc Guimond: Cosmos, it's Luc here. I'll take that question. So I mean, there's 2 key components there. Obviously, one is on the mining side, establishing the port entrances, which is what we're currently working on right now. So there'll be 2 port entrances into the PDA underground workings. And then obviously, over the next -- over the life of the mine, but certainly over the next 12 months as we're looking to prepare for -- sorry, for the next 18 months to be able to prepare for commissioning of the mill complex to bring that online will be development work and still preparation as far as being able to maintain and sustain our mining rates at 2,000 tonnes per day. So that's the key aspect is really get the portals commissioned this year, established and start on the development work over the next 18 months and the rest of that life of the mine of that operation. The other key component is related to the processing plant. So we've already -- we're well advanced on that as well. Most of the earthworks have been completed for the crushing station locations as well as the -- where the -- sorry, where the ball mill is going to be located for the mill complex. And we've already procured the long lead items that we need with regards to that construction schedule. And everything is well advanced to be able to have most of the work will get completed through the 2026 period. And then by mid-2027, we'll be wrapping up some of the construction-related activities related to the processing plant itself. But everything is tracking online, on schedule and certainly on budget for mid-2027. Cosmos Chiu: Great. And then maybe one last question, bigger picture here. And it was certainly good to see that you've increased your dividend by 60%. But I guess my question is, do you feel like you're getting fully rewarded for this dividend by the market? Or do you think you need to target a higher yield before you can get fully rewarded by the market for this dividend? And maybe broader, John, if you can talk about kind of your capital return strategy. John McCluskey: We've done -- historically, we've paid this dividend going back to 2010. We've always done a combination of dividends and share buybacks. Last year, we almost returned as much by way of share buybacks as we did through the dividend. And we're always going to keep that in balance. We're very opportunistic with respect with the share buyback. But the dividend itself, I think there's further room for growth, but this is a good indicator of our intentions. And despite the fact that we're going through a heavy capital spend schedule over the next couple of years as we effectively double our production between now and the end of the decade, the gold prices are strong. We're generating phenomenal free cash flow. There is -- there was room to increase the dividend, and we did so. But I think investors should expect more dividends to come. Operator: There are no further questions at this time. This concludes this morning's call. If you have any further questions that have not been answered, please feel free to contact Mr. Scott Parsons at 416-368-9932, extension 5439.
Operator: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Supremex 2025 Fourth Quarter and Year-End Earnings Conference Call. [Operator Instructions] Before turning the meeting over to management, please be advised that this conference call will contain statements that are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. I would like to remind everyone that this conference call is being recorded on Thursday, February 19, 2026. I will now turn the call over to Martin Goulet of MBC Capital Markets Advisors. Please go ahead. Martin Goulet: Thank you, operator. Good morning, ladies and gentlemen, and thank you for joining this discussion of Supremex' financial and operating results for the fourth quarter and fiscal year ended December 31, 2025. The press release reporting these results was published earlier this morning via the Globe Newswire News services. It can also be found in the Investors section of the company's website at www.supremex.com, along with the MD&A and financial statements. These documents are available on SEDAR+ as well. A presentation supporting this conference call has also been posted on the website. Let me remind you that all figures expressed on today's call are in Canadian dollars unless otherwise stated. Presenting today will be Stewart Emerson, President and CEO; as well as Norm Macaulay, CFO. With that, I invite you to turn to Slide 37 of the presentation for an overview of the fourth quarter, and I turn the call over to Stewart. Stewart Emerson: Thank you, Martin, and good morning, everyone. Well, although 2025 had its ups and downs, Supremex made significant progress in further expanding its presence in key markets. With 3 acquisitions, the addition of many new customers and multiple successful initiatives to enhance efficiency, it was indeed a busy year. Despite the persistent headwinds from over 12 months of labor unrest, unhelpful press and delivery disruptions, yes, a word was plural, disruptions at Canada Post and the significant volume reduction from a single important U.S. direct mail client, we put our head down, got to work and actually increased our envelope volume in a declining market and grew packaging revenue by more than 8% for the year and 18% in the fourth quarter alone. In parallel, we returned significant value to our shareholders and finished the year with an exceptionally strong, call it, a fortress financial position with less than $1 million in net debt, putting us in the driver's seat to execute our business strategy. Right out of the gate, I want to thank our employees for believing in our plan and for their unwavering dedication to continuous improvement and superior customer service to help us achieve this important growth. Now turning to operations. Let's begin with the envelope business. While fourth quarter revenue held steady year-over-year, it was up 8.5% sequentially from Q3, which in itself was up 3% from Q2 despite those tremendous headwinds that I'll discuss in more detail shortly. Envelope volume grew 5.3%, again, against the backdrop of some tough headwinds driven by the exceptional spade work in the U.S. envelope market and to a lesser extent, the contributions from Enveloppe Laurentide acquired in July and from Elite Envelope acquired in December, which I'll come back to shortly. Clearly, we continue to increase our penetration of the U.S. market with substantial share of wallet growth and impressive organic business development throughout the year, which is a testament to the strength of our envelope sales and operations team. As I said earlier, this yeoman's work allowed us to offset significantly lower volume from 12-plus months of labor, service and delivery uncertainty at Canada Post and the continued substantial volume decline from customer #1 in the U.S. On the latter, the change in mailing patterns and buying habits has persisted for a few quarters now, and we're getting closer to lapping the headwind as evidenced in the decline was significantly less this quarter than earlier in the year. What I think is important is that despite the impact of this 1 customer, we have been able to pivot to the point where we sold more units in the U.S. in 2025 than in the prior year, which again is a reflection of the brand and the sales team. While the U.S. volume decline was offset, the mix in margin is different. New business or replacement business is of a much different profile than the higher value-added volume that it was replacing. It comes with both lower cost and lower selling price, hence, the sales decline. However, this increased replacement volume was critical in maintaining a high level of asset utilization and absorption but it comes with more operating and SG&A expenses than dealing with a single large customer. Despite these additional expenses and lower pricing, we generated an adjusted EBITDA margin of nearly 16% for the quarter. Again, marking a significant sequential increase over the third quarter where margin came in shy of 12%. This is another impressive example of the resiliency of our envelope business, the commitment of our people and the quality of our assets. And as I alluded to earlier, in December, we completed the acquisition of Elite Envelope. With relatively small annual volume of approximately USD 5 million, Elite has been servicing the New England market for over 2 decades out of a facility located in Randolph, Massachusetts, South of Boston. That facility is just less than an hour away from our existing and much larger Douglas, Massachusetts facility, and we completed the transfer of production and several hourly and sales staff to Douglas immediately after Christmas. As part of a 3-month transition services agreement, we are in the process of selling excess equipment and will exit the Randolph facility at the end of February. While it takes effort, we invested the energy because Elite is another perfect tuck-in acquisition for Supremex with a rapid payback of less than a year. The additional volume will improve asset utilization and absorption in Douglas while yielding additional synergies, and importantly, leaves Supremex as one of the very last short-run local manufacturers in all of New England. In a subsequent event, we recently announced the decision to shutter our envelope manufacturing capabilities in Indianapolis, Indiana as part of our rationalization and network optimization initiative. While the Indianapolis location played an important role in the Supremex success in the U.S. envelope market dating back to its acquisition in 2015, the location became significantly less strategic after the 2022 acquisition of the 2 plants in the Chicagoland area, some 2 hours away. In 2025, the facility produced less than 8% of the total Supremex units sold, and we are confident in our ability to retain the sales as we locate production to other facilities in the network. While it's true that the envelope market is in secular decline, let me repeat that despite the gas caused by one, albeit large customer in -- our U.S. volume was up in 2025. And excluding that customer, U.S. volume increased almost 15%. And for all of Supremex units have increased by -- in excess of 5% and revenue by low single digits. I recognize there's a lot of ifs and buts in there, and it's not generally my style but not providing the added color would do a disservice to the listener by underreporting the significant gains we continue to make in envelope. As I said earlier, we've almost lapped the impact of the account and the Canada Post -- and Canada Post ratifying its labor agreements a month ago, I look forward to not having to address these issues again anytime soon. Finally, with respect to envelope, to sustain and accelerate our momentum, we added Andy Schipke as Vice President of Sales for U.S. Envelope. Andy is well known in the envelope and mailing industries for building relationships and delivering results and is responsible for leveraging the entire Supremex envelope platform to drive volume, improve customer reach and strengthen Supremex' position as the third largest envelope manufacturer in North America. Turning to packaging. We had another solid quarter driven by folding cartons' strong performance in the health and beauty and the over-the-counter pharmaceutical segments coupled with impressive new business wins from current and reactivated customers and revenue from the Trans-Graphique acquisition in July, which supports our strategy of enhancing our presence in food-grade packaging where we see superior stable growth. In addition, we sustained our upward trajectory in e-commerce solutions and specialty packaging driven by new customer wins and greater volume from existing customers and looking ahead, we expect the momentum to continue unabated. Unfortunately, again, this quarter and throughout the year, the impressive gains made by the core folding carton and e-commerce packaging solution verticals was partially offset by the commercial printing activities where they too have a meaningful reliance on Canada Post to deliver the coupons, direct mail and its inner components, which we produce. We anticipate some of this volume to come back now that the delivery uncertainty has ebbed with the signing of the new collective agreements in late January, and we continue to push for new opportunities to support absorption while at the same time, managing the cost structure in line with the revenue stream. As for profitability in the overall Packaging segment, we concluded both the quarter and the year with an adjusted EBITDA margin of approximately 13% and approximately 16%, excluding the commercial print activities, marking substantial improvements year -- over the prior year, but still shy of true potential. As I said in the past, potential is a great thing to have, but a bad one to keep. We're actively tackling transitioning potential into results by stimulating revenue and volume growth to improve asset utilization and absorption, continue to push for operational improvements and synergies across the network and evaluate the various business units on their individual merits. With that, I turn the call over to Norm for the financial results. Normand Macaulay: Thank you, Stewart. Good morning, everyone. Please turn to Slide 38 of the presentation. Q4 total revenue amounted to $72.9 million, up 5.6% from $69.1 million last year. Envelope revenue was $48.9 million, up slightly from $48.8 million last year and up sequentially from $45.1 million in the third quarter. The year-over-year variation reflects a 5.3% volume increase driven by the contribution of Enveloppe Laurentide for the entire period and of Elite Envelope over 3 weeks. It also reflects new customer wins and share of wallet growth in the U.S., as Stewart indicated, which offset lower volume from a large U.S. customer and the negative effect of disruptions at Canada Post. Meanwhile, average selling prices decreased 4.8%, reflecting volume reduction from a large U.S. customer and lower average prices on the business acquired from Enveloppe Laurentide. Packaging and specialty products revenue was $24 million, up 18.3% from $20.3 million last year and also up significantly on a sequential basis from $20.6 million in the third quarter. The year-over-year increase is mostly due to higher folding carton revenue, driven by important gains with large multinational consumer packaged goods customers, sustained expansion of our e-commerce packaging activities new business wins from existing customers and the contribution from Trans-Graphique acquired in July. Moving to Slide 39. Adjusted EBITDA totaled $9.1 million or 12.5% of sales compared to $12.9 million or 18.7% of sales in last year's fourth quarter but up sequentially from $6.2 million or 9.4% of sales in the third quarter of 2025. Envelope adjusted EBITDA was $7.8 million or 15.9% of sales versus $9.2 million or 18.8% of sales last year, but up sequentially from $5.3 million or 11.8% of sales in the third quarter. The year-over-year decrease mainly reflects lower selling prices. Packaging and specialty products adjusted EBITDA was $3.2 million or 13.2% of sales up from $2.4 million or 11.6% of sales last year and up sequentially from $2.2 million or 10.5% of sales in the third quarter. The year-over-year increase is essentially due to higher folding carton volume, as mentioned a moment ago. Finally, corporate and unallocated costs totaled $1.9 million compared to a $1.4 million recovery last year. The main driver of that variation was a foreign exchange loss of $1.3 million this quarter on intercompany trade AR [ NVP ] compared to a gain of $0.8 million last year. This is a noncash item related to the revaluation of intercompany balances and does not reflect the underlying operating performance of the business. In fact, this accounting revaluation accounted for most of the year-over-year decline in consolidated adjusted EBITDA. As we look ahead, we are evaluating options to reduce the noise and volatility of the intercompany FX movements on our reported results. The goal is simply to ensure that our reported results more clearly reflect how the business is actively performing without unnecessarily volatility. Turning to Slide 40. Reflecting the reduction in adjusted EBITDA, a Supremex concluded the fourth quarter with net earnings of $1.3 million or $0.05 per share versus $5.8 million or $0.23 per share last year. Adjusted net earnings were $1.5 million or $0.06 per share in Q4 2025 versus $5.2 million or $0.20 per share a year ago. Moving to cash flow on Slide 41. Net cash flows from operating activities totaled $14.1 million versus $9.2 million last year. The increase stems from improved working capital efficiency, partly offset by lower profitability. As a result of higher operating cash flow, free cash flow was $13.4 million in Q4 2025, up from $8.7 million a year ago. For the year, free cash flow totaled $73.2 million. Excluding the $53 million inflow from the sale leaseback completed last July, our free cash flow yield is approximately 22% on a trailing 12-month basis considering our recent share price. Turning to Slide 42. Net debt stood at $1 million as at December 31, 2025, down from $8.9 million 3 months ago, and down significantly from $41.2 million at the end of last year. The decrease reflects a long-term debt repayment of $39 million using proceeds from the sale leaseback and solid free cash flow generation. Our ratio of net debt to adjusted EBITDA was 0.03x versus 0.26x 3 months ago and 1.02x a year ago which is well within our comfort zone of keeping our leverage ratio below 2x. Our strong financial position leaves us with significant flexibility to finance our operations and future investments, including acquisitions as well as to return funds to shareholders. Since initiating a normal course issuer bid program in August, we've repurchased over 171,000 shares for consideration of $0.6 million. Subsequent to year-end, we repurchased an additional 45,000 shares for consideration of $0.2 million. Finally, the Board of Directors declared a quarterly dividend of $0.05 per common share payable on April 2, 2026, to shareholders of record at the close of business on March 19, 2026. I now turn the call back over to Stewart for the outlook. Stewart? Stewart Emerson: Great. Thank you, Norm. I trust you can hear that we're encouraged by the significant improvements achieved in our core business during the late stages of 2025. And the end of the Canada Post disruptions and the lapping of the customer #1 headwind. Entering 2026, our foundation is stronger than ever, both operationally and financially as we continue to methodically build this business for the long term. Operationally, ongoing efforts to improve productivity and optimize our footprint are paying off. In parallel, when we look at the underlying fundamentals, our teams have done a great job in both segments to drive sales by leveraging the brand to grow share of wallet with existing customers and driving new customer wins. Financially, our almost debt-free balance sheet provides us with the considerable flexibility to execute our business plan and sustain long-term profitable growth. We have successfully integrated 3 tuck-in acquisitions in the latter half of 2025, and we will continue sourcing similar opportunities to leverage our existing footprint while simultaneously exploring more substantive M&A opportunities. Finally, we remain committed to optimizing returns to shareholders through regular quarterly dividend payments and timely share repurchases. This concludes our prepared remarks. We are now ready to answer your questions. Operator: [Operator Instructions] Our first question today is from Donangelo Volpe with Beacon. Donangelo Volpe: It's good to see resumption of top line growth in Q4. Just wondering how things are looking now that we're kind of at the halfway point in Q1 in terms of pricing and volumes in both Canada and the United States? Just kind of wondering if we should be expecting year-over-year top line growth to persist throughout Q1? Stewart Emerson: Donangelo, thank you very much for the question. Q1 is off to a good start, reasonable start. As I said, I think the important piece is the lapping of the headwind that we had in 2025. So that's an important element and sort of gives us the opportunity to continue that upward trajectory. Envelope is envelope and the debate on Canada Post and whether there's longer-term effect of the labor disruption is still open for debate. Our penetration in the U.S. continues to be extremely strong. Team has done an amazing job there and less reliance on customer #1 sets us up for that continued growth. Packaging doing extremely well, particularly the folding carton and the e-commerce segments. So yes, Q1 looks solid, and we continue to push forward. Donangelo Volpe: Okay. Just moving over to the Elite Envelope acquisition. Correct me if I'm wrong, trailing 12-month revenue was about $5 million. Could you provide the trailing 12-month EBITDA figure? Stewart Emerson: It was low single digits on a percentage standpoint pre-synergy. Donangelo Volpe: Okay. Stewart Emerson: Sorry, low double digits. Did I say single digit? Donangelo Volpe: Yes, you said double digit, yes. Stewart Emerson: Yes, double digits. Yes. I thought, s*** did I say single. Donangelo Volpe: Double is always better than a single. Stewart Emerson: Yes, indeed. Donangelo Volpe: Okay. And then just pivoting over to, I guess, kind of the capital allocation strategy. So just given the current debt to adjusted EBITDA ratio, I'm just wondering how aggressive you guys are expecting towards M&A on the packaging side. And if you could give an update on the pipeline here and a reminder on which areas you'd be most interested in, it would be appreciated. Stewart Emerson: Yes. I don't think our strategy has changed from what we've done over the last couple of years with respect to tuck-ins. If there are tuck-ins that are accretive very, very quickly, close by existing operations, whether it be envelope or packaging, we're certainly interested in doing those. With the cleaned up balance sheet and my commentary is that we're now in a position to do something more substantive, and we've always indicated that more substantive would be on the packaging side, preferably in Canada. And I would say our pipeline is fairly robust. Donangelo Volpe: Okay. And then final question for me. Just regarding the closure of the envelope facility in Indi. Just wondering if you could provide any insights towards the weighting of nonrecurring charges in Q1 versus Q2. Normand Macaulay: Nonrecurring charges, like we're going to take a provision in the first quarter, and it will probably be somewhere between $1 million to $2 million. That being said, the synergies that we're going to derive from this should be fairly substantial as the year plays out. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Stewart Emerson for any closing remarks. Stewart Emerson: Great. Thank you very much, operator. Thank you to everybody for joining us this morning. I really appreciate you taking time out, and we look forward to speaking to you again at our next quarterly call. Have a great day. Operator: This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
Operator: Good day, and welcome to the Seven Hills Realty Trust Fourth Quarter 2025 Earnings Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Matt Murphy, Manager of Investor Relations. Please go ahead. Matt Murphy: Good morning. Joining me on today's call are Tom Lorenzini, President and Chief Investment Officer; Matt Brown, Chief Financial Officer and Treasurer; and Jared Lewis, Vice President. Today's call includes a presentation by management, followed by a question-and-answer session with analysts. Please note that the recording, retransmission and transcription of today's conference call is prohibited without the prior written consent of the company. Also note that today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on Seven Hill's beliefs and expectations as of today, February 19, 2026, and actual results may differ materially from those that we project. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call. Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission, or SEC, which can be accessed from the SEC's website. Investors are cautioned not to place undue reliance upon any forward-looking statements. In addition, we will be discussing non-GAAP financial numbers during this call, including distributable earnings and distributable earnings per share. A reconciliation of GAAP to non-GAAP financial measures can be found in our earnings release presentation, which can be found on our website at sevnreit.com. With that, I will now turn the call over to Tom. Thomas Lorenzini: Thank you, Matt, and good morning, everyone. On our call today, I will start by providing an update on our fourth quarter performance and an overview of our loan portfolio before turning it over to Jared to discuss current market conditions in our pipeline. Then Matt will discuss our financial results and guidance before we open the call for Q&A. Yesterday, we reported strong fourth quarter results driven by a fully performing loan portfolio and ongoing capital deployment. Distributable earnings for the fourth quarter came in at $4.6 million or $0.28 per share. As previously announced, we successfully completed our rights offering in December, raising $61.5 million in net proceeds. This transaction meaningfully increased our investment capacity by over $200 million, allowing us to accretively deploy capital into compelling opportunities while maintaining a conservative balance sheet. In addition, as part of the rights offering, our manager increased their ownership percentage to just over 20%, further aligning their interest with Seven Hills shareholders. Our increased capacity allowed us to accelerate our activity during the fourth quarter, investing in 3 new loans with total commitments of $101.3 million. These included a $37.3 million loan secured by a student housing property in College Park, Maryland, the acquisition of a $37 million loan secured by a hotel in Boston and the acquisition of a $27 million loan secured by an industrial property in Wayne, Pennsylvania. Following these transactions, we entered the first quarter of 2026 with significant available capacity as a result of the rights offering, positioning us to continue executing on our strategy and selectively deploying capital into attractive opportunities. So far in the first quarter, we have closed one additional loan for $30.5 million on a medical office property in Atlanta, have 2 loans scheduled to close within the next week or so for another $37 million combined and 2 additional loans in diligence for approximately $39 million scheduled to close at the end of Q1 or shortly thereafter. Collectively, these investments reflect the breadth of opportunities in our pipeline with new originations spanning multiple property types and geographies. We also received the full repayment of a $15.3 million loan during the fourth quarter secured by a retail property in Sandy Springs, Georgia, which we were able to redeploy into new originations, consistent with our underwriting and return objectives. Turning to our loan portfolio. As of December 31, 2025, we had total commitments of $724.5 million across 24 floating rate first mortgage loans, including $36.9 million of unfunded commitments. Year-over-year, we were able to increase our portfolio by $83 million or approximately 13%. Our weighted average all-in yield was 7.92%. Our weighted average risk rating improved to 2.8, and our weighted average loan-to-value at origination was 66%. Importantly, all loans were current on debt service and we had no past due or nonaccrual loans at year-end. In addition, all but one of our loans are covered by SOFR floors, which provide support to earnings in a declining rate environment and helped to partially offset the impact of lower base interest rates. Later, Matt will provide additional details on how active SOFR floors are currently providing earnings protection across our portfolio. We expect limited repayments beyond perhaps 1 or 2 loans over the next several months, followed by almost $300 million of maturing loans beginning in the second half of 2026. Many of these loans, particularly those secured by office properties with conservative leverage, will allow for increased investment capacity and further portfolio growth as they roll off. In summary, we believe Seven Hills is well positioned to capitalize on attractive middle market lending opportunities. With enhanced liquidity following the rights offering and improving visibility into near-term repayments and originations, we remain focused on disciplined execution and capital deployment as transaction activity continues to improve. We look forward to providing further updates on our portfolio growth throughout the year. With that, I'll turn the call over to Jared to discuss current market conditions and the opportunity set in our pipeline. Jared Lewis: Thanks, Tom. During the fourth quarter, market conditions continued to improve, supported by abundant debt liquidity and greater visibility around interest rates. As expected, we saw 2 additional 25 basis point rate cuts during the quarter, bringing the target Fed funds rate down to a range of 350 to 375 basis points, which helped to drive an increase in financing activity and investment volume during the quarter. Although refinancing activity continues to be a key driver of new loan originations, we saw a meaningful increase in sales volume across all property types, making it the most active period for the industry since the third quarter of 2019. While multifamily and industrial continue to account for the majority of the investment and financing activity, we also saw growth in retail and hospitality. Most notably, office transaction volume increased 25% year-over-year, signaling that buyers and sellers are increasingly finding common ground on pricing and that debt capital is becoming more available for the asset class. Despite increased acquisition activity, lender demand for our loan collateral continues to exceed supply. Many debt investors continue to view commercial real estate debt at an attractive relative value compared to corporate bonds and certain areas of private credit that have been under increased scrutiny as of late. The competition for quality lending opportunities continues to put downward pressure on credit spreads, particularly in the industrial and multifamily sectors, where certain lenders continue to aggregate loan collateral to sell into future CRE CLO securitizations. We believe that market conditions exist for transaction activity to continue to increase in 2026 as acquisition and refinancing volumes recover and pricing stabilizes across markets. Higher overall transaction volumes across all property sectors should lead to substantial increase in the number of viable lending opportunities available to lenders. As such, we expect to remain disciplined while evaluating a broader range of transactions across property types and geographies. In many cases, we are identifying attractive risk-adjusted opportunities in sectors beyond multifamily and industrial, including medical office, necessity-based retail, self-storage and selectively within the hospitality sector. Overall, demand for short-term, floating-rate bridge loans remains strong as improving fundamentals and expectations for a more accommodative rate environment in the latter half of the year drive borrowers to seek flexibility while they execute their business plans and maximize asset values. Borrower and broker engagement with Seven Hills remains strong, and we are currently evaluating over $1 billion of loan opportunities as we move through the first quarter of 2026. As always, we remain focused on deploying capital into transactions that align with our underwriting standards and leverage our platform's expertise. And with that, I'll turn the call over to Matt to discuss our financial results. Matthew Brown: Thank you, Jared, and good morning, everyone. Yesterday, we reported fourth quarter distributable earnings of $4.6 million or $0.28 per share, which included $0.03 of dilution related to the shares issued in connection with our rights offering completed in December. Last month, our Board declared a regular quarterly dividend of $0.28 per share, which equates to an annualized yield of approximately 14% based on yesterday's closing price. Adjusted for the impact from the rights offering, fourth quarter distributable earnings would have been $0.31 per share, which was at the high end of our guidance range. Loan investments since July 1 contributed $0.03 per share to distributable earnings, whereas loan repayments over the same period negatively impacted results by $0.01 per share. For the full year of 2025, distributable earnings was $1.21 per share. Our run rate annual dividend of $1.12 per share represents a 93% payout ratio based on these full year earnings. During the fourth quarter, interest rate floors became active for 7 of our loans, which limited the impact of rate cuts in the quarter and provided earnings protection of $0.01 for the quarter based on SOFR as of December 31. As Tom mentioned, although one of our loans contain interest rate floors ranging from 25 basis points to 4.34% with a weighted average floor of 2.81%, further declines in SOFR would be mitigated by additional loans becoming subject to these floors. It is important to note that none of our secured financing facilities contain floors. As Tom highlighted, since quarter end, we have closed one loan totaling $30.5 million and have 2 additional loans expected to close in the coming weeks for approximately $37 million combined. We also have 2 loans currently in diligence totaling approximately $39 million that are expected to close at or shortly after the end of the first quarter. Overall, we expect first quarter distributable earnings to be in the range of $0.22 to $0.24 per share. This guidance reflects the impact from our rights offering, which we expect to be temporary. As the proceeds from the rights offering are invested and capital from expected loan repayments in the second half of the year is redeployed, we expect the incremental earnings contribution to offset the impact of the higher share count. Our CECL reserve remains modest at 130 basis points of our total loan commitments, down 20 basis points from last quarter and is supported by a conservative portfolio risk rating of 2.8, which has improved since last quarter. Our portfolio remains well diversified by property type and geography and all loans are current on debt service. We do not have any 5-rated loans, collateral-dependent loans or loans with specific reserves. This highlights the strength in our underwriting and asset management functions, which provide long-term value for shareholders. We ended the quarter with $123 million of cash on hand. Since quarter end, we extended the maturities of 2 of our secured financing facilities and increased the maximum size of one of these facilities by an additional $125 million. Pro forma for this increased facility size, we have $377 million of capacity on our secured financing facilities. This activity demonstrates our strong relationships with our banking partners and positions us to continue to grow our loan investment portfolio with proceeds from our rights offering. That concludes our prepared remarks. Operator, please open the line for questions. Operator: [Operator Instructions] Our first question comes from Jason Weaver with Janney Montgomery Scott (sic) [ JonesTrading ]. Jason Weaver: Actually, it's from JonesTrading. I don't know how that got mixed up. But I wonder if you could talk a bit just given how the portfolio has evolved and how the pipeline is looking today. You mentioned one thing like moving from strict multifamily over to something like student housing and industrial and hospitality as well. How specifically are you thinking about finding pockets of inefficiency across the pipeline given the heightened amount of competition in the space right now? Jared Lewis: Jason, this is Jared. That's a good question. So it's obvious that the multifamily sector contributes to the lion's share of the activity that we see both on our pipeline but also sort of overall in the markets. It's an extremely liquid sector. But what we found is that it's sort of a race to the bottom in terms of yield and pricing. We certainly looked at a lot and we did a lot of those assets and transactions, but given the securitization markets' demand for that paper, we just haven't decided to go there yet. And where we do find opportunities, and I think a big part of that is because of the breadth of the platform that we have here with our manager, we see assets in the pockets, as I mentioned, storage, industrial, medical office. We've got a pretty wide range of property level managers and asset managers that see opportunities across the country. So we don't have to deploy billions of dollars of capital. We can be really selective and find good opportunities that we can get outsized risk-adjusted returns rather than just bidding multifamily assets at the bottom, if that makes sense. Jason Weaver: Got it. That's helpful. And then I wonder, without implying taking risk up to a huge degree, are there any opportunities that you're sort of evaluating outside of the first lien space maybe in a bit more of the junior tranches? Thomas Lorenzini: At this time, we're not really focused on that, Jason. We like to stick with our knitting currently, which is senior secured positions. We've certainly discussed mezzanine and preferred equity and things and we certainly understand that space and have those capabilities. But the focus remains on senior secured positions. Operator: And the next question comes from Christopher Nolan with Ladenburg Thalmann. Christopher Nolan: Matt, on your $0.22 to $0.24 distributable EPS guidance, does that assume that the incremental capital that you raised is fully levered and deployed in the first quarter? Matthew Brown: No. So we talked about in the first quarter, we've closed one loan for $30.5 million. We have 2 loans expected to close in the near term for another about $37 million and then 2 loans under app that will close kind of towards the very end of Q1, if not trickling into the beginning of Q2 for about $39 million. So by the end of Q1, we haven't fully deployed the rights offering capital. But we have increased the weighted shares for the period, and that's really driving down earnings for the first quarter. As I noted in prepared remarks, this is temporary. We expect by the end of the year to get DE back around where it was in the fourth quarter of this year. Christopher Nolan: Understood. Also with the change in the bank facilities, was there any change in the advance rate? Jared Lewis: No, no specific changes to the advance rates. But what I will say is that all of our banking partners have been really supportive of what we've been doing here with the upside of one of the facilities and the extension terms that we've received. They continue to support what we're trying to accomplish here. So it's been super helpful. Christopher Nolan: Great. And then I noticed that your investment spreads widened a little bit in the quarter. Is there a delayed impact from rate change from Fed moves of short-term interest rates? Does it take a quarter or 2 for it to filter down to you guys? Matthew Brown: No, it doesn't take any time to filter down. I think part of what we're seeing is we have 7 active floors. So that's kind of supporting the trends a little bit. In addition to that, on loan investments being made, that's further supporting our total portfolio net spread. Christopher Nolan: Great. And final. Am I correct where, when you guys did the rights offering, the current dividend is secure at least through the end of 2026. Is that still the case? Matthew Brown: That is. We still remain committed to our $0.28 per quarter dividend. We know there's a temporary drag on earnings as we deploy the rights offering capital. In addition, we have a lot of loan repayments in the second half of the year. Some of those have reduced leverage, which should increase our overall investment capacity and get us back to more current levels. So we do remain committed to the dividend for the foreseeable future. Operator: And the next question comes from Chris Muller with Citizens. Christopher Muller: Congrats on a solid quarter here. I guess originations came in really strong in the quarter, and it looks like the first quarter is on a similar pace. Do you guys expect that run rate around $100 million to continue into 2026? And then I guess the flip side of that is, how are you guys thinking about portfolio growth this year following the rights offering? Do you have a target portfolio size that you would like to reach by year-end? Thomas Lorenzini: Yes. So I think from a production standpoint, I think across the industry, everybody is seeing more transaction flow, which is very welcome. We're expecting Q1, depending on timing, it could be about $100 million. We might see one of those trickle into Q2. And then Q2, Q3 and into Q4, we're hopeful about $200 million per quarter of new originations. And part of that will be driven by the repayment that we're going to see in the back half of the year, Chris. As far as where we hope to end at the end of the year or expect to end at the end of the year, it should be close to about $1 billion of total loan portfolio size. And part of that, again, just depends a little bit on some of the repayments that we're expecting into Q3 and Q4. Christopher Muller: Got it. Very helpful. And then I guess just a quick clarifying one. On the 2 loans you guys acquired in the quarter, were those purchased from another lender? Or did that come through the RMR pipeline? Thomas Lorenzini: Those loans were underwritten and were asset managed by our team. They were loans that would have just, under normal circumstances, gone into SEVN as a production. RMR had them on their balance sheet. If you recall, RMR was considering a private financing vehicle. These were going to be seed assets for that. But they were originated by our team here, closed by our team and the asset managed by our team. So they met our approval and credit requirements. So there was really no uncertainty when we acquired those loans as to what we were buying. So they fit very nicely into the portfolio. And given the rights offering, with the excess capacity that we had, it just made sense for us to acquire those loans and put them into the SEVN portfolio. Christopher Muller: Got it. And are there additional loans like that, that could filter through in the coming quarters? Or is that kind of the rest of it? Thomas Lorenzini: Those are the only 2. We don't expect any other loan acquisitions to occur. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Tom Lorenzini, President and Chief Investment Officer, for any closing remarks. Thomas Lorenzini: Thanks, everyone, for joining today's call. Please reach out to Investor Relations if you are interested in scheduling a call with Seven Hills. Operator, that concludes our call. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: Good morning, ladies and gentlemen, and welcome to OR Royalties Q4 and Year 2025 Results Conference Call. [Operator Instructions] Please note, this call is being recorded today, February 19, 2026 at 10:00 a.m. Eastern Time. I would now like to turn the meeting over to your host for today's call, Mr. Jason Attew. [Foreign Language] Jason Attew: Good morning, everybody, and thank you for your attention today. We know that it's a very busy day of earnings, so we appreciate your time. Procedurally, I'll run through a prepared presentation, and then we'll subsequently open up the line for a question-and-answer session. For those participating online via the webcast, you can submit your questions in advance through the webcast platform. Today's presentation will also be available and downloadable online through our corporate website. We will be making forward-looking statements. And as I always say, the future is bright, but it's not guaranteed. So please read the fine print. All amounts are in U.S. dollars, unless otherwise noted. I'm joined on the call this morning by Frederic Ruel, the company's VP Finance and Chief Financial Officer, amongst others, the others indicated on Slide 3. When looking at OR Royalties full year 2025, the company had a remarkable year. OR Royalties earned 21,735 GEOs in the fourth quarter of 2025, which allowed us to end the year at 80,775 GEOs in aggregate. A figure that fell within our annual guidance range of 80,000 to 88,000 gold equivalent ounces and was effectively around the midpoint of our GEO guidance range when normalizing for commodity prices versus our budgeted ratios for 2025. Propelled largely by elevated precious metals prices in 2025, OR Royalties achieved the enviable triple crown of record annual revenues of $277.4 million, record operating cash flow of $246 million and record earnings of $1.10 per share facilitated by our peer-leading cash margins of nearly 97%. OR Royalties ended the 2025 year with $142.1 million in cash and most importantly, the company was completely debt free. Having previously paid off the entirety of our credit facility in the third quarter. With respect to our ongoing commitment to return capital to shareholders, OR Royalties declared and paid is a quarterly dividend of $0.05, marking its 45th consecutive dividend with over $279 million returned to shareholders to date from these distributions. The consistency and predictability of our dividend allowed the company to once again be included in the S&P/TSX Dividend Aristocrats Index as of late January 2026. Subsequent to quarter end, OR Royalties Board of Directors approved a base quarterly dividend of $0.055 per common share payable on April 15, 2026 to the shareholders of record as of close of business on March 31, 2026. Consistent with the past 2 years that I've been in the CEO seat, Fred and I will be making a recommendation to our Board on our dividend with the company's first quarter 2026 financial results, which if you were paying attention, we increased our dividend by 8% and 20%, respectively, in the last two first quarters of 2024 and 2025, respectively. For us, 2025 prove that boring is good. We generated record cash drastically -- we generated record cash, we drastically improved the balance sheet and stayed disciplined. It was these tenants that allowed us to announce in the past 3 weeks, two exciting and accretive transactions, which will provide further details later on in my presentation. 2025 will be remembered as a year of discipline in our capital allocation. OR Royalties transacted on only just $25 million in royalty and stream acquisitions. To put that number into context, over $9.3 billion in transactions were completed across the sector last year, which would include the large corporate consolidations of Sandstorm and Horizon. While we reviewed these opportunities, the rapid movement in commodity prices often created a disconnect on price and value. Furthermore, even where we identified value, we encountered internal red lines regarding structural security and contract terms that were simply -- we were simply unwilling to cross. Our team remained extremely active in 2025, but we prioritize value over volume. When deploying capital and assets with 15- to 25-year mine lives, we simply do not compromise on structural security or settle for NAV destructive investments. Because our near-term growth is already secured and fully funded, we possess a strategic advantage many peers lack, the luxury of walking away from bad deals to wait for the right ones. We'll now pivot to the company's financial performance for the full year of 2025. For those that are interested, quarterly numbers for Q4 '25 can be found in the appendix of today's presentation. As previously noted, annual revenues were a record for the company and effectively track the higher year-over-year precious metals prices. 2025 net earnings of $1.10 per basic common share for the year were a record and represented a substantial increase over 2024. Most importantly, 2025 saw yet another year-over-year improvement in cash flow per share, the eighth consecutive year of cash flow per share increases and yet another record for the company. And finally, positive annual adjusted earnings of $0.88 per basic common share. At the end of 2025, the company had 22 producing assets with the vast majority of our key contributing royalties and streams coming from what we define as Tier 1 mining jurisdictions and just under 75% in aggregate, and that includes gold equivalent ounces from Canada, the U.S. and Australia. If we were to include Chile as Tier 1, we'd be closer to 90%. Looking at the commodity breakdown, 95% of our 2025 GEOs came from precious metals, gold at 65% and silver at roughly 31% with the remainder coming primarily from copper. This percentage breakdown was based on OR's budgeted commodity price ratios for 2025. When applying peak spot prices for gold, silver and copper achieved earlier in 2026 to our 2025, GEOs earned. Our direct revenue exposure from silver would have been 45%. No matter which price deck you're using today, OR Royalties provides investors with material silver exposure. Agnico Eagle's Canadian Malartic Complex delivered a fantastic year for both themselves and ourselves in 2025, once again outperforming our original expectations thanks to better-than-expected grades at the Barnat pit experienced throughout the last calendar year. At Mantos Blancos, we've seen an extended period of stability as it relates to plant throughput. While we've continued to see some quarterly variability of the process silver grades at the mine, we expect that 2026 should prove largely consistent year-over-year versus vis-a-vis 2025. Touching briefly on CSA. After a strong start to the year in 2025, things slowed down in the back half, which can be largely attributed to Harmony's ongoing ownership transition. Harmony's focus right now continues also on maximizing the asset value over the long term as it has a multi-decade view of the asset. Consequently, we expect our new partners to take their time on setting the mine up to form well over this extended period, instead of pushing too hard for increased production in the short term. We'll all have better understanding soon enough as based on public disclosure, we're expecting an updated 2026 CSA copper and silver production guidance for Harmony next month with an updated long-term mine plan to follow in the third quarter of this year. I mentioned previously that at the end of 2025, we had 22 producing assets. However, as of today, that number stands at 23, thanks to the very recent acquisition of a 1.5% NSR royalty at Buenaventura San Gabriel mine. Of note is that our transaction with Gold Fields will actually close later this quarter. but we've still included San Gabriel on the list for today. Buenaventura's newest mine in Peru just poured its first gold in December of 2025. And as such, we're largely expecting San Gabriel to ramp -- to be in a ramp-up phase for this year and the next based on plans outlined by Buenaventura. At the same time, San Gabriel is expected to grow into being a meaningful GEO contributor to/or from 2028 onwards. We'd like to congratulate our new operating partner in Peru on getting the mine developed and into production on time and on budget. In addition, Ramelius Resources announced last night that first Dalgaranga ores were delivered to their Mt Magnet plant. Once those tonnes start getting processed, the number of our producing assets will jump to 24. Similar to San Gabriel, Dalgaranga will be ramping up this year and the next and growing into a material GEO contributor to OR from 2028 onwards. This provides a perfect segue to our other announcement yesterday, the acquisition of the Gold Fields royalty portfolio. While we're excited about the strategic depth of the entire portfolio we purchased, the crown jewel is undoubtedly the addition of Buenaventura's newly commissioned San Gabriel mine. This asset checks every box. It provides immediate additive GEOs in 2026 and possesses a long reserve life with significant embedded growth, driven by Buenaventura's plan to expand throughput to 4,000 tonnes per day by the end of the decade. We're happy to be adding a producing asset in a well-established mining jurisdiction in Peru, and we couldn't ask for a better local operating partner in Buenaventura. A Peruvian-based miner with over 70 years of experience developing, operating and expanding mines in the country. For more on San Gabriel or any of the other new royalty assets acquired from Gold Fields, I would refer you to last night's press release or you can also reach out to my colleague, Grant Moenting, over the phone or e-mail. Flipping to Slide 9. We view the Namdini transaction as a textbook execution of our strategy to double down on a known high-quality asset. By acquiring the additional 1% NSR, we have secured a 2% royalty in total, on a mine that is already producing and ramping up. This transaction removes development risk and adds immediately high-margin gold ounces to our 2026 profile from an established operator in Shandong Gold. While the ramp-up hasn't followed the 2019 technical report to the letter, seeing is believing. Our team was boots on the ground in January, and that visit was a positive tipping point. We didn't just see a mine coming online. We saw operational excellence and community integration that convinced us Namdini will be a cornerstone asset for Shandong for decades, far outliving its initial 15-year reserve life. Once we saw the tangible upside doubling down to 2% royalty wasn't just a choice, it was the easiest decision we made all year. Flipping to Slide 10. And moving back to Canada and a very familiar asset within our portfolio, the Island Gold District. After a bit of an uncharacteristically bumpy year at Island Gold in 2025, our partner, Alamos Gold, rebounded nicely earlier this month by outlining his concrete plans for yet another Island Gold District expansion. And most notably, a 25% increase to the tonnage to be mined from the high-grade Island Gold underground mine. Alamos now expects to eventually be able to ramp up to 3,000 tonnes per day of OR mine from Island underground versus the previous expectation of 2,400 tonnes per day. This is great news. And the great news is that the shaft infrastructure currently under construction is already being built to handle this capacity. So no additional work on this front is required. As noted by our partner, the shaft construction will be complete later this year, meaning that as the underground development ramps up over the time to support 3,000 tonnes per day, the GEOs from our royalties will follow. As a reminder, the real benefits to OR from Island Gold come from what is effectively a triple multiplier effect, higher grades, higher throughput and a higher royalty rate. As noted on the slide, Alamos' expanded and accelerated mine plan is also anticipated to transition on a greater proportion of production toward OR's 2% and 3% NSR royalty. With the blended life of mine royalty at around 2.34%. Long story short, as our partner continues to execute on its plans to expand production at its flagship mine, Island Gold, Island Gold, while at the same time, become one of OR Royalties most important assets from a GEO contribution perspective by the end of this decade and beyond. Late last week, Agnico Eagle provided a comprehensive update as it relates to our cornerstone asset, the Canadian Malartic Complex. As is customary at this time of year, there were certainly some key items of note as it pertains to OR Royalties. First, the asset's 2026 production guidance increased a little bit versus what we had been projected this time last year, but also was in line with our own internal expectations. As a side note, the first quarter of 2026 will now include first production from East Gouldie, over which we have a 5% NSR royalty coverage via the ramp. And this has been advanced forward several times over the past couple of years. More exciting, however, were material increases to Malartic's production guidance for both 2027 and 2028. With 2028 notably expected to realize an increase of approximately 80,000 ounces to 735,000 ounces per annum when compared to 2027, which is anticipated to be driven by growing contributions from East Gouldie at Odyssey. Overall, when we look -- when looking at 2026 to 2028, production is expected to be sourced from the Barnat pit, increasingly supplemented by OR from Odyssey and low-grade stockpiles. Odyssey is expected to contribute approximately 120,000 ounces of gold in 2026, approximately 240,000 ounces of gold in 2027 and approximately 450,000 ounces of gold in 2028 as mining activities ramp up. Second, our operating partner explicitly stated that it is advancing on a technical evaluation of Shaft #2 at the Odyssey mine. With the preferred shaft location now confirmed near Shaft #1 and close to what they believe to be the center of gravity of the deposit. The evaluation, which incorporates the year-end 2025 mineral resource update will assess the potential for producing an incremental 8,000 to 10,000 tonnes per day. The technical evaluation is expected to be completed at the end of 2026, with permitting studies scheduled to begin in the third quarter of 2026 and potential formal permit submission early 2027. Agnico noting that after getting through all the permitting and development of Shaft #2, the project would be positioned for initial production in 2033. 2033 also marks the first year of expected production from Marban, over which OR Royalties has a blended NSR royalty of around 90 basis points. The technical evaluation envisions a 14,000 to 16,000 tonne per day open pit operation, producing between 120,000 to 150,000 ounces of gold annually over a 12-year life of mine with construction we currently anticipated to start in 2031. Exploration at Canadian Malartic remains a massive value driver for OR royalties. Agnico has budgeted $32.6 million for a comprehensive 190,700-meter campaign in 2026, deploying up to 20 rigs to unlock the full potential of the property. Crucially, the drill bit is focused exactly where we want it, exploring the lateral extensions of the massive East Gouldie Deposit and the emerging Eclipse zone. Both of these high priority targets fall under our 5% NSR royalty, offering the highest leverage to exploration success in our entire portfolio. Now on to Slide 12. Where we've outlined both the company's brand-new 2026 GEO delivery guidance, as well as the updated 5-year growth outlook to 2030. Starting with 2026. OR Royalties expects GEOs earned to range between 80,000 and 90,000 GEOs this year at an average cash margin of approximately 97%. The 2026 guidance assumes ramp-ups at both Dalgaranga and San Gabriel, as well as the increased geos from our now 2% NSR royalty at Namdini. As previously noted on the call, we're expecting relatively consistent year-over-year GEOs earned from Capstone Copper's Mantos Blancos mine, while we've taken a more conservative view on CSA as Harmony works through its ownership transition and prior to us getting more complete updates expected from Harmony. Putting it all together, 2026 represents marginal growth over 2025. With a much more significant step changes expected in 2027, thanks to expectations of increasing GEOs to be earned from many of the assets already discussed today, but I'll point a few out, Canadian Malartic, Island Gold, Dalgaranga, San Gabriel and Namdini. In addition to new mines expected to come online, such as Hermosa Taylor. This trend of increasing year-over-year growth should then continue between 2027 and 2030. Our new 2026 guidance reflects the consensus commodity price ratios at the beginning of February for both gold to silver and gold to copper. The former obviously has more influence on our potential GEOs earned for this has been set to 73:1, while the current spot ratio stands at approximately 64:1. We are applying the exact same methodology as we have in all our previous years of the company's existence, and we'll continue to be transparent with respect to how these ratios influence our GEOs earned throughout the coming year. Switching to the updated 5-year outlook to 2030, we're now happy to say that our expected 50% growth over the next 5 years, best what we had outlined last year looking to 2029. Unsurprisingly, expected additional GEOs from brownfield expansions such as Island Gold, as well as large-scale greenfield underground mines, including Hermosa Taylor and Windfall are still being included in the outlook as they had been for the 2029 outlook. So this begs the question, what's new? What a difference a year makes, especially when that year resulted in an incredible performance from precious metals prices coinciding with the intentions of more streamlined project permitting processes, most notably in jurisdictions like Canada and the United States. As a result of the Osisko Development recent success in advancing its flagship Cariboo project in BC, both on the permitting and financing front and is now being included in our 2030 outlook. The same can be said for Solidus Resources Spring Valley project in Nevada, which received its final federal permits in the summer of 2025 and subsequently secured its full financing to move forward. We're expecting first gold from Spring Valley by mid-2028. And while a portion of the payments under OR royalties there don't kick in until the first 500,000 ounces of gold have been recovered, we're confident enough we will see meaningful GEOs from the project in 2030. We're also cautiously optimistic on United Gold's Amulsar project in Armenia, where construction is expected to be complete later this year, enough so to have included in our 2030 outlook. And finally, though much less impactful than the other three have mentioned. We've included South Railroad given Orla expects to see first gold and silver production prior to the end of calendar year 2027. I will once again reiterate as I often do that all this growth you see here out to 2030 is completely bought and paid for. In other words, there is absolutely zero contingent capital associated with OR Royalties realizing its GEO-delivery profile over the next 5 years. Moving to Slide 13. We you'll see we provided some more details on projects that made the cut for our 5-year 2030 outlook versus those that didn't. Some minor comments on those that you see on the slide in the not included section. First, we have full faith and confidence in Agnico Eagle and its plans at Upper Beaver. Agnico noted last week that they are now expected to be ramping up the eventual mine in 2030. Given typical delays in payments versus production, we've elected to push it back by a year. Second, as it relates to Eagle, the process in terms of finding a new owner has slowed down a bit versus the previous public expectations. While we're still expecting the announcement of a new owner sometime in this calendar year, we have elected to wait for more clarity before including this important asset in our outlook. Finally, on Cascabel, we are very pleased with the recent announcement regarding Jiangxi Copper's intention to acquire SolGold in the project. However, we expect Jiangxi to take a different view on project schedules, specifically how it relates to sequencing the high-grade block cave project versus the lower grade TAM open pit. Finally, we'll end the formal part of our presentation on Slide 14, which outlines the current state of OR Royalties balance sheet. At year-end, we were completely debt-free and held just over $140 million on the balance sheet. The cash position is strong even after we bought back and canceled approximately $38 million worth of shares in the fourth quarter of 2025, all completed subsequent to OR Royalties going debt free. The average cost per share of these buybacks was $48 -- approximately $48, inclusive of the 2% Canadian government tax. Our much improved balance sheet is one of the key achievements we are proud of in 2025. And it's something I've been keen on addressing since I joined the company back 2.5 years ago, at which time for context, we held over CAD 300 million in gross debt. Beyond the cash, our balance sheet is also primed and ready to position to allow us to act on potential new and accretive opportunities. Thanks to a completely untapped credit facility of $650 million with an additional uncommitted $200 million accordion. Following a quiet 2025, defined by capital preservation, we have pivoted to active deployment in the first quarter of 2026. With the consolidation of the Namdini royalty and the addition of the Gold Fields portfolio anchored by the producing San Gabriel mine, we have secured immediate cash flow and strengthened our long-term pipeline. Looking ahead, we remain active in the market, targeting assets that contribute to our industry-leading 50% growth trajectory through to 2030. However, our priority remains on accretive value creation. We will not chase growth for growth's sake or compromise our return criteria. And with that, I'd like to thank everyone for listening today. We'll now open up the line for questions, as well as questions posted on the webcast. If we don't get to all the questions on the line, we'll make sure we respond offline to those that we don't get to cover on this webcast. Operator? Operator: [Operator Instructions] Your first question comes from Tanya Jakusconek from Scotiabank. Tanya Jakusconek: Can you hear me? Jason Attew: We can hear you, Tanya. Tanya Jakusconek: Okay. I have a few questions, if I could. I wanted to start just first one is easy, just on guidance. Just wondering how I should think about your year. I understand that this ratio forecast, but if we were to assume constant gold and silver pricing, how should we be thinking about the quarter-over-quarter performance? Again, just high level, not asset by asset. Jason Attew: Thank you for your question, Tanya. And look, we obviously -- our methodology that we're applying for 2026 is consistent with our methodology we've always used for which we use the consensus pricing for the year that -- for 2026, and that consensus price deck is 7:1. Certainly, as we've seen some volatility with respect to silver, in particular, and as I mentioned in my remarks, the silver price is currently about 64:1. So if you were to use the 64:1, the roughly 30% silver revenues would move to close to 45%. We don't look at quarter-over-quarter guidance in terms of the ratios of gold to silver. Again, we will update yourself and the analysts and the investment community as our quarters are reported, but that's our methodology. We certainly do have very good leverage to silver. And if silver does continue around kind of the 64:1 ratio, as I said, there's a significant uptick in our GEOs that would be earned for which, again, just to give you some specific guidance around 2026 would add an incremental, let's just say, 4,000 to 5,000 GEOs over the course of the year, if again, it stayed at 64:1. Tanya Jakusconek: Okay. Maybe another way of asking the same question is do you have any mine ramp-up in the first or second half? Or any new things that are coming on that I should kind of think about just in my production profile? Jason Attew: Not really, apart from what we've disclosed. I mean, obviously, the biggest contributors from a silver perspective are Mantos Blancos CSA followed by Gibraltar. And as I said in my remarks, Mantos, it doesn't correlate in a meaningful way to the copper grades. And obviously, what we've seen at Mantos Blancos is a very stable throughput, but we're still seeing some variability as it relates to the silver grade and the silver reconciliation. And this is why, as we thought when we put our 2026 guidance, we'd essentially look at historically where they were trending and essentially give that reference or instruction for 2026. There certainly could be some upside if, again, the silver variability is less extreme than what we saw in 2025, but that's what we're essentially suggesting for Marketplace. And Mantos Blancos would be, again, the biggest variation with respect to our silver deliveries in 2026. Tanya Jakusconek: Okay. Maybe I'll move on to just the M&A or the transaction environment. You did your buying the royalty portfolio from Gold Fields. Just wondering because the [ Bristow ] the [ Namdini ] one, which you did, which you doubled down on, just wondering if there's other opportunities to double down on other assets that you already know and own? Jason Attew: Yes, great question. Really good question, Tanya. So I would say the opportunity set at what we're looking at is pretty significant. Our corporate development team and our technical team is flat out looking at opportunities similar to what we had in 2025. I would say it crosses the gamut of assets that we already know and understand to brand-new assets to portfolios in senior companies much the same as what we saw in 2025. So to answer your question, yes, there are some opportunities of assets that we're quite familiar with that we might actually have exposure to, as well as new opportunities. But as I've always said and our team has always gone through, one of the major filters that we do have is with respect to geography. We're very, very proud of the fact that -- and we think we differentiate ourselves versus our peers of having a majority of our assets in Canada, the U.S. and Australia. So that certainly is one of our filters that was what we think about acquiring new assets in 2026. Tanya Jakusconek: And what would be your sweet spot where these transactions land? Is that $100 to $500 or $200 million to $500 million range? Just trying to understand. Jason Attew: Yes. I think it really depends on a case-by-case perspective, whether, again, our focus is on either cash flowing royalties or something that will actually impact our 5-year outlook. Look, we've obviously got -- and Fred has done a fantastic job of having lots of capacity with respect to our revolving credit facility. We are seeing opportunities, as you said, $100 million to $200 million, but we're also seeing opportunities from $750 million all the way up to $1 billion. So we're in the midst, and there's a lot of these transactions that are in flight. But what I would say, if it's going to be a big chunky transaction like the $750 million to -- we absolutely understand the return metrics. We have to have these as accretive transactions. And as I said, for these larger transactions, they have to really be contributing GEOs either now or within our 5-year outlook. Operator: [Operator Instructions] Your next question comes from Derick Ma from TD. Derick Ma: I wanted to ask a question on the 2030 number. Guidance came in below expectations and at least certainly below my estimates. You mentioned Cascabel, Eagle and Upper Beaver. What is the quantum of geos that you would expect from those assets in 2031 and beyond, let's say? And does the 2030 number include minimum payments from Cascabel? Jason Attew: So just will answer the first -- last question first. The 2030 would include the minimum payments from Cascabel. I would direct you to our presentation that we just went through in terms of the aggregate upside slide -- Slide 13 in our presentation deck. If you aggregate all this optionality or all these potential GEOs that could fall within our 2030 guidance, we're looking at another 20,000 to 30,000 gold equivalent ounces in aggregate. Operator: Your next question comes from Brian MacArthur from Raymond James. Brian MacArthur: Or same sort of question. 2030, did you just assume basically flat at Mantos? Or what did you do with Mantos out in 2030, just given the reconciliation that we've been seeing or not seeing. Jason Attew: Yes. So with respect to Mantos, Brian, you're absolutely on point. It's effectively flat to what we have seen in 2025 and what we're expecting for 2026. Operator: And there are no further questions over the phone at this time. I will turn the call back over to Jason. Jason Attew: Great. Thank you very much, Julie. We thank you for your time today. Hopefully, we'll see some of you in person in the coming weeks as we run the gauntlet in the upcoming conference circuit. And if not, and you have questions, observations, insights about our business, we'd be very happy to discuss them. Please reach out to Grant, Heather or myself, and we very much look forward to engaging with you. Thank you again for your time today. Operator: Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thank you.
Operator: Welcome to the review of VGP's financial results over full year 2025. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead. Jan Van Geet: Good morning, everybody, and welcome to the presentation of our full year 2025 financial results. My name is Jan Van Geet, and I'm the CEO of VGP, as most of you know, I think. I'll first start with a little executive summary and the highlights of 2025. We recorded a pre-tax profit of EUR 338 million, an increase of EUR 19 million or 6% higher than the full year of 2024. Our net asset value grew 8.3% up to EUR 2.6 billion, and that's -- the EPRA NTA is up 9%. We have an EBITDA growth of 28% to EUR 454.7 million, 13.5% increase. And what makes me happy is the historic record of EUR 106.7 million of new and renewed leases, which I will go to more detail later on. The annualized committed leases at the year-end stand now at EUR 468.3 million. We have 1,052,000 square meters under construction and our development pipeline is 75% pre-let. I can add to that, that we have signed a lot of LOIs, which are in final negotiation. We think that by the end of the first quarter, most of them will translate into new lease agreements. And if they do, and we expect they do because we are finalizing the lease agreements with them, we will have a new record of more than EUR 80 million of signed lease agreements to be started up in the new year. So we are having a solid pipeline to be started up already, which is fully pre-let. We delivered almost 500,000 square meters last year, 99% let. And the last unit has just been agreed upon. It's a small unit in Koblenz with somebody from the defense industry. We have 1.4 million square meters of land acquired and our total secured land bank stands at 10.3 million square meter, which represents a development potential of at least 4.3 million square meters. We did a net cash recycling of EUR 389 million through a transaction with our joint venture partner in the Saga joint venture, and that led to an additional EUR 60.5 million realized profits in 2025. And we target another material closing with the Saga, as we already announced it in August last year. We announced that we were going to do EUR 1 billion. I think we'll do a bit more in the second half of 2026, for which we have already all of the assets aligned. It will be a material closing. We'll go more in detail also later on that. And then finally, VGP and East Capital have agreed to set up at least EUR 1.5 billion of gross asset value of pan-European fund with an emphasis on Central and Eastern Europe. We know East Capital already for 15 years. They are a very reputable boutique fund manager from out of Sweden, which have quite some track record in Eastern European assets and they manage the fund, management thereof. The Board of Directors proposes an ordinary dividend of EUR 92.8 million, which is 3% higher than the ordinary dividend of 2024, or EUR 3.4 per share. If we look at the summary of the financial results, and you see that the steady growth of the total portfolio value goes up from -- for the full year at 100%, including the joint ventures portfolio at 100% with EUR 900 million almost from EUR 7.8 billion to EUR 8.7 billion. We have a continued strong growth in committed annualized rental income. It grew 13.5% year-on-year. So we're getting bigger every year. It's more and more difficult to beat that, but we're going to do our best this year. I think we're going to be able to set another nice year. We have a lot of demand in the pipeline. And the full year of 2024, we had EUR 412.6 million at the end of the year committed annualized rental income, and at the end of 2025, we had EUR 468.3 million. The EBITDA increased 28% -- Piet will go more in detail later on -- which followed actually a very solid performance in all of our business segments. It went up from EUR 354.4 million in 2024 to EUR 454.7 million in 2025. And then I already told you about the dividend, which will grow with 3% to -- we're proposing, anyway, to EUR 3.4 per share. I'll first go a little bit on the market and the market update. These are not our slides. These are slides which we got from Jones Lang LaSalle. And I will compare our own performance a little bit to that. If you look at demand and occupier segments, then you see the take-up share by sector, and then you see that the third-party logistics are still the biggest one. We have very little third-party logistics inside of our own portfolio. We have most end users and also longer-term lease agreements. And we see a very big comeback from e-commerce. It is bigger than what we have in here. And what we have in the pipeline now, what we are working on, is also very e-commerce determined. So we see them coming back, and we see that there is more and more and more demand from out of that sector. It's not only Chinese companies. Also, they are here. But it's mostly Western European and American people who are coming back to the market. We also see a lot more demand now from the defense sector. We have been able to secure some of them, and we are also currently negotiating with some of them for some new manufacturing things in the pipeline. The vacancy rate has come up a lot over the past quarters. It actually doubled from 3% to 6.2%. But that compares in our own portfolio to -- we are a little bit more than 98% let at the moment. And we see healthy demand. And we also see that there is a lot less speculative construction in the market. So the vacancy levels, we expect them to go down in the future. If you compare to all the markets which you see right next them, there where we are in Budapest, we have 0 vacancy; Madrid, we have 0 vacancy. If you look at Bratislava, we have 0 vacancy at the moment. In Milan, we have 0 vacancy. In Prague, we have 0 vacancy. Of course, some of these are also speculative buildings which have been started up over the last quarters. On the supply, you can see that the build-to-suit over the last 3 years is quite flat. The 2023, '24 and '25 levels have remained stable. But you see that the speculative development is coming down quite a lot, which gives us a good view on that there will be soon not so much available anymore in the market because there is quite some take-up over the last year also. We have 16.2 million square meter space under construction, which is the lowest level in the past 5 years now. Capital markets, I don't know if we can say something intelligent on it. Last year started very well, and we did a very large transaction, EUR 509 million, in the second half year. So that also contributes to it. But we saw that the -- overall, over the whole year, the transactions went up both in volume and in size. And -- but mostly in the smaller markets on the major markets, only U.K., the Netherlands and Poland posted a year-on-year growth. The yields have been relatively flat. You can see that very well. We've had a devaluation on some of our German assets because our valuator takes the view that vacancy levels in Germany should go up -- no, not should go up, but the reletting should take a longer period. He has made that from 12 months to 18 months. Pete will go in detail to it. But we have seen that in Germany what has come available over the year, we have been able to relet on average in 2 days, not more, and we have a 21% uptake on the rental income of what we have relet. So we can't really concur to that view, but it is what it is in the market. That's what our valuator thinks of it. But it's not visible in our own portfolio. I will go through the operational performance for the full year. Maybe I'll just go back. This is our park in Arad, which we've just started. And the building which you see on the right side is a building which we constructed for VAT. VAT is a vacuum valve producer for the semiconductor industry, a very specialized product production. It's got 12,000 square meters of clean rooms inside at a very high level. And we have achieved with that building, BREEAM outstanding score of 96.2%, which is the highest of any industrial building in the world last year -- no, over all the years in BREEAM outstanding. And this is our park in Valsamoggia, which is also fully let and which we've transacted last year through our joint venture with Saga, with our friends from Areim. As I already said, we had a record year in committed rental income, including the JVs at 100%. The group has 465 tenants, but that's divided over more than 650 lease agreements, as you can see. So we have a lot of tenants which come multi times back into our buildings. The committed annualized leases as of 31st of December stand at EUR 468.3 million; occupancy rate, 98%; and it's filling up really very well. At the moment, we really have quite some demand in our portfolio. And if we make the bridge, then you see that the committed annualized rental income started with -- and I think it's 13 -- yes, EUR 412 million and a bit. We signed new leases, almost EUR 57 million. We had EUR 6.5 million of indexations. We had some amendments in leases, people who wanted some other space or differentiate their space. And that EUR 8.9 million of terminations. And we sold one building in Riga to its user, to Jysk, which declined also EUR 2.4 million of rental income. And that brought us to the EUR 468 million, which we had at the year-end. But meanwhile, we've signed quite some leases already, and we're looking forward to be able to report to you after the first quarter, because, as I said, we have quite some nice LOIs in the pipeline. The majority of the new contracts which we signed were within the Logistics segment. I have some examples. Logistics was 67.9%. But as I said, we have very little third-party logistics. You don't see many third-party logistics also in the names here. We signed with Studenac, which is one of the largest retailers in the Balkan, a very nice cooled warehouse, which is delivered this week. We signed with Aldi a very nice new warehouse, which we're going to start construction in a couple of weeks in Frankenthal. That's a big one, 60,000 square meters. We signed a very nice lease with Movianto, healthcare dedicated logistics. That's a third-party logistics. But you see Heineken, Eureka, Duomed, Ursus, Farmol, Studenac, they are all end users and they use their own facilities and sometimes use somebody to operate it. This is something which changes all the time. But e-commerce was last year 16.5%, and I expect it to be quite a bit higher this year. Light industrial, 14%, but that's just a move in time because we also had quite some demand from light industrial over the past year. Our portfolio is leased to a very diversified and blue-chip tenant base. The weighted average lease term is already here stable. It's 7.8 years. As we keep on growing and most of the leases are relatively long term signed, we have -- the top 10 tenants represent 29.7% of committed leases. But also there, we have -- these represent 28 different lease agreements in many different jurisdictions. So it's well spread, the risk of it. And yes, if you look in here -- but this is a little bit longer term. The logistics represent 47% in our total portfolio, light industrial, 34% and e-commerce, 17%. And we have some others. We have some -- it's mainly Siemens, yes, where Siemens is in Nuremberg. It's a site where we have offices and which we are going to start rebuilding this year completely. This year, we have some quite iconical projects which are upcoming and about which I will tell a little bit more afterwards in the outlook, because we are going to really have some land plots coming online which are -- from which we expect really a very nice contribution in the coming 12 to 24 months. If you look at VGP at a glance and you look -- we are always looking forward in how can we grow and where can we grow, in which segments can we grow. And of course, the main part -- the main raw material to be able to grow is the land bank because we always grow organically, we develop everything ourselves. We don't buy any standing assets. And if you look at the December '24 net cash generative rental income, so things which were delivered and really generated cash, it was EUR 350 million or EUR 240 million at share. During 2025, we activated EUR 39 million of new leases. So it went up with 11% to EUR 389 million or EUR 236 million at share, so including 50% of the joint ventures, if you look at it. The signed leases, which are still under construction and which will be added on in the next 12 to 18 months, is another EUR 79 million. And so that's another 18%, and that takes us to EUR 468 million of income-generating activities or EUR 310 million at share of income-generating lease agreements, of which EUR 321.7 million sits in the joint ventures. But if you look at our land bank which we have today and the ERV of the vacancy and the development pipeline which we have, that's another roughly EUR 300 million, which takes us -- the potential up to EUR 766 million, or, at this moment, EUR 602 million at share. And we are trying to accelerate our development pace as much as we can now. The development activity, talking about acceleration, drives our second strongest EBITDA in our history. And if you look, there is a couple of notes which I need to say to this. You see very well the division between East and West. In 2021 and in 2020, we had big start-ups in Western Europe because we had these big leases in Giessen and in Munich, which started up at that time. You see also that in 2022, we delivered and then we started up a lot less because of the big inflation. I told you that I was standing very much on the brake at that point because I was afraid about having too much vacancy with buildings for which we paid far too much. Now we have our costs very well under control. Our margins are going up relatively quickly. We have very sound margins again, which you can also see in the revaluation result, because the revaluation result in this year, I think it's EUR 183 million, is pure and only revaluations from new activities from things which we have started up. And whereas, in 2021, it was a little bit a distorted image because there was also a big uptick in valuations, of course, in the standing portfolio as yields were going down with very steep declining interest rates. Out of the EUR 634 million record EBITDA in 2021, only EUR 81 million was cash -- was really cash income, recurrent income. Out of the EUR 455 million EBITDA in 2025, it's EUR 249 million, which says a little bit also about the resilience of our result going forward. It's more and more regenerative income. The net rental and renewable energy income at share has grown a lot year-on-year with 18% in 2025. If you look at it, we are now at EUR 223.384 million in 2025, which we expect a continuous growth in 2026. In the renewable energy, about which Martijn will tell you a lot more later on, we have now a lot diversified also into battery projects, battery projects which have a very high yielding on their investment, and of which we have foreseen to construct quite a lot in 2026 as now we have the permits coming into place to -- in order to be able to do that. We also thanks to the brownfields which we have been buying over the past years -- most of them have been big factories with enormous electrical connections. For example, we bought Hagen. Hagen has 90-megawatt connection of energy, which not only allows us, if we can, to deliver back very nice battery projects, big in size, but it also opens the potential. And it's very congested today to be able to do a more data center exercise. So we are trying to take a look at it, whether we could implement a data center also in Hagen, whether the location is the right one. And at the moment, we have 2 identified together with Sarah, our new employee who came from Microsoft. One is in Russelsheim and one is in Bodenheim. And on both, we are very well advanced on our permitting. On the permitting side, we are advancing very well. It will take a little bit more time. These are complex exercises also, but we are on a good way to be able to realize them soon. And it's our ambition to have something by the year-end to be able to say something more concrete about our data center developments going forward. The portfolio is virtually let on a long-term basis, and you can see there is very little variance. Combined occupancy of the portfolio stood at 98%, WALT at 7.8 years, with the first brick at 7.4 years. Top 10 customers, as I said, that's 28 lease agreements, and the biggest one is still Krauss Maffei. But when we first contracted them, they were 21%. And now thanks to all this growth, it's only 6% left of the total portfolio which is now Krauss Maffei. And Opel is 5.1%, which is a short-term lease, but it will be replaced. And we are going to redevelop, of course, Russelsheim, and we expect to be able to do quite a significant uptake in the leases going forward. Our own weighted average lease term on our own portfolio is 9.6 years at the moment. On the delivery side. And here, you see our park in Vejle under construction in Denmark. We delivered 21 buildings, which represented almost 500,000 square meters in gross lettable area. That was EUR 32.9 million rental income, 39 new contracts, and they were 99% let. And as I said, we've now have -- we have a tentative agreement with somebody from the defense sector to take the last unit in these buildings, and it will be 100% leased. 100% will be rated BREEAM actually excellent, of which 31% is BREEAM outstanding over the last year, which I think in Europe, at least we believe we have done the best performance with the rating of BREEAM outstanding. You see 2 of our buildings, the VGP Park Parma in Italy, which last year, we delivered to Mutti, the tomato producer, and our Park in Keckemet, where, amongst others, we also have Mercedes as a customer. The deliveries in 2025 trending towards logistics, but you see immediately that there is also some quite big productions inside. Hyundai Mobis was a very nice one. We delivered a 50,000 square meter facility in Pamplona. And we delivered to VAT, as I already said, this building for this vacuum valve producer. On the 2 pictures which you see in the -- you see VGP Park Cordoba, which is a production, by the way. And then you see our VGP Park in Montijo, which we delivered last year and which for the biggest part is a cooled and deep cooled warehouse for Logifrio. The portfolio at share has grown organically and completely organically because we only develop everything ourselves and then we place it in our joint ventures. But it has grown at an annual compounded growth rate of 21.9% and it's gone up from EUR 5 billion to EUR 5.6 billion. We offloaded since 2022 EUR 3.4 billion of gross asset value into the joint ventures. And we aim this model works very well. We aim to continue to do that. Yes, it's -- if you look at it, Germany is still the strongest market, although the others are now growing maybe a little bit faster relatively. The Czech Republic is now almost EUR 1 billion in assets. Spain is growing quite well. And in the Netherlands, this year will be a huge uptick because we already leased out 60,000 square meters, which is under construction. But we are working on a very big new lease agreement in the Netherlands, which will take out our entire park in Nijmegen. The investment portfolio on 100% view has grown to EUR 8.7 million, which is up 11% year-on-year. And Western Europe represents 74% of the total portfolio value as of December 2025. You can see the completed is EUR 7 million. Development land is EUR 770 million or 9% of our total investments. And under construction, we have almost EUR 1.930 billion, which is also 11%. On the development side, the portfolio under construction represents EUR 85.3 million of new leases. And as per today, 43 buildings are under construction, which represents 1 million -- just 1 million of square meters. It's 75% pre-let, including pre-lets on development land. When we finalize these LOIs which we have in the pipeline, it will be well over 80%. So I think it's on a very healthy basis at the moment. We have started last year 761,000 square meter of new buildings in 2025, and we aim -- we have to already start up 450,000 square meters if this materializes, which is already pre-let, which is the highest which we ever had at the beginning of the year, pre-let, to be started up in a given year. So that's a very nice forward-looking thing to have. You can see again on the right side, you see our park in Rouen, which is now virtually fully let. We only have one last unit left. And then -- and a small one, 4,500 square meters out of the total more than 100,000 square meters -- total more than 150,000 square meters, which we are constructing there. And then you see our VGP Park in Veijle, Denmark, where we also have one last unit left, also 4,500 square meters. Yes. Again, it's well spread across our geographical footprint. You saw what is the income-generating assets or the assets overall, which are already that Germany in the income is more than 50%. In the -- what is under development, it's only 36%. You will see that the other countries are relatively growing a little bit faster now. They also are becoming more and more mature. France is a big market. Spain is a big market. The United Kingdom, I'm sure, will come up to speed soon. So we think that we will be able to do some very nice developments all over Europe. 2025 was also the first year where we had buildings under construction in literally every country where we're active in. That's never happened before. So that is now -- we have everywhere now buildings under construction. On the landbank, the picture you see is our beautiful park in Nijmegen, where we have Ahold Delhaize and Bol.com in one of these buildings which you see. And the land bank in front, that's only a very small part of it because we still have more than 20 hectares available, where we now have started groundworks already and we are already under construction for one client which we signed at the end of last year, Pragma Trading. And then we are negotiating -- we have signed an LOI for the rest of the land bank. The land bank, of course, it's something I am very much dedicated to because it is our -- it is the source of our future growth as we develop everything ourselves. And the land bank -- Piet likes to make bridges, so we have also this in a nice bridge. We owned in 2024 when we started or beginning of 2025, 7.4 million square meters, which is fully permitted, by the way. We acquired 1.37 million of square meters, which we always acquire subject to having the permit in place. So that's also fully permitted. We deployed 1.6 million square meters last year. We sold a little bit, a couple of square meters, but that's nothing. And then -- so we owned at the end of 2025 7.09 million square meters. But we committed, and in December, we had 3.15 million square meter of committed. So that's land which we have binding agreements on and which we then buy at the moment when we have the permit in order to be able to use it for its intended purpose. So that brings the owned and committed in December 2025 to 10.25 million. And we have another under option and PV contract of 1.51 million square meters. And this means that roughly -- because the 4.3 million is just the ground floor space, you need to calculate mezzanines and offices to it, but at least 4.5 million can be developed on this total land bank versus the 7 and a bit million of buildings which we currently have either finished or under construction. I also try to take a look -- a very pragmatic look at the land bank. And everywhere, we need to have a nice margin, which, of course, makes it -- in Germany, the yields are a bit lower than the exit yields than they are, for example, in Romania. But we try to target everywhere the same margin. So we -- and we have been able to target lands in all of our countries and the land bank is geographically well diversified. We have some specific countries we really need to take a look at going forward, but we were able to secure quite some really nice land plots, and I will talk a little about it also in the outlook later on. This is the first part of our operational results. I'll come later back to the JVs. But I'm now going to first give the word to Martijn to talk a little bit about our renewable energy company and its income. Martijn Vlutters: Thank you, Jan. First, giving a short overview of how our renewable energy business has now actually developed 2 segments. Jan already mentioned it at the beginning. Photovoltaic has continued to grow, and we added a good 50% to the revenues for the photovoltaic business. But something that is still a bit nascent, but for which we see good prospects is on the battery projects. You see there's in total 258 projects on the photovoltaic side. There's a few less on the battery side. But actually, it's -- in terms of investments, we see a good opportunity both to deploy capital. There's around EUR 4 million invested now, but yes, we see that grow substantially over the coming 2 years. And certainly, if you see the megawatt hour deployment that becomes -- with 173, that's a good 30% of the total in renewable energy. So -- and as Jan mentioned also, the profitability of this business is typically much better than for the photovoltaic. So this will start to add to the EBITDA line for renewable energy in 2026, but even more so in 2027 and onwards. The big constituent of renewable energy remains the photovoltaic business. Certainly, in 2025, we've seen a good growth. As I mentioned, the revenue came from EUR 8.3 million, and we've added another EUR 4 million to the total revenue, which was driven by additional production that was now over 130 gigawatt hours. Energy price at which we've been able to sell has remained broadly constant. If you look at the outlook, we've added another 13% in operational photovoltaic this year. So you will start to see that also in the production figures for 2026. And then there's another 35-megawatt peak that is under construction, which we expect to become operational in the course of this year. And I think the last thing to add is that the overall yield for photovoltaic has now popped over 10%. So the overall investment of the projects that are operational is EUR 110 million. And as said, gross revenues was EUR 12 million. So the gross yield has actually for the first time now popped over 10%. Then maybe also briefly on the corporate responsibility. There is one thing here highlighted on the left-hand side, which was something that was recognized at the end of last year by Time Magazine in cooperation with Statista. They've done sort of a science-based and quantitative assessment of all the listed companies across the globe. And based both on our financial revenue growth as well as the sustainability metrics that we have been able to accomplish in 2025, they've highlighted us as one of the top 100 companies globally in terms of realizing sustainable growth. I think one of the big contributing factors to that is the EU taxonomy, which you see on the third on the left in the smaller boxes. We've now achieved 68% of the total portfolio. But certainly, if you look at the new productions or new construction, we've actually been able to verify EU taxonomy for 95% of the buildings that we are currently constructing. That's all under the EU taxonomy new construction regime. So that's quite a strict regime, which we've set ourselves. And yes, with the 95% you hear, that really has become our internal market practice to adhere to across the group. A couple of other metrics that we've highlighted here that I'll leave to you to read at your leisure. I think we can move on to the joint venture update. Jan, back to you. Jan Van Geet: Yes. Our joint venture model is a little bit the cornerstone of our growth model going forward. And so far -- I'll go to the next slide -- we have -- you can see it's been growing consistently. We have done a new transaction last year with Saga, which is our fifth, sixth, whatever you call it, joint venture. And it's now more than 60% invested. And when we are going to do the next transaction, which is planned for the second half of this year, we will be virtually for a big part already fully invested. There will remain some parts of it, but we foresee a very material transaction in the second half year. And we have very positive and constructive talks ongoing also with Saga to continue with the next stage, next vehicle, which we would like to start up in the course of 2027, then going forward after Saga is fully invested. If you look at Saga -- well, as I said, it's 60% deployed. There remains roughly EUR 600 million of gross asset value. And as some of the parks which we have transferred have some little spaces left, which -- where tenants have expansion option, et cetera, we think that we will do a transaction which will exceed EUR 500 million in the end of the year, where actually everything is already identified. And we have been able to go a lot faster than originally foreseen, also thanks to the fact that we have enhanced the scope of countries in which we do our investments. In the beginning, what you see, the original scope, the dark green, it was Germany, France, Czech Republic, Slovakia and Hungary. And we have added to that Denmark, Austria, Italy and the Peninsula, Spain and Portugal. And so we now have a lot of assets which we can do. We have 989,000 square meters or 39 assets already spread over all these countries which are in site, and that's 60% of the total gross asset value which we have foreseen to deploy over the first 5-year period, which will become a 3-year period, I think, because by the end of this year, we should normally be fully invested. We also announced today for the first time that we are working with East Capital, a company which we know already for a very long time. Very nice people out of Sweden. I don't know if they are looking, but hello. VGP and East Capital is to set up a partnership to launch a Luxembourg-based real estate investment fund focused on European industrial logistics real estate with an emphasis on Central and Eastern European countries, not only but mostly. The targeted gross asset value we have agreed upon is at least EUR 1.5 billion. We hope to be able to do a first closing and we trust to be able to do a first closing in 2026 in the second half of the year. VGP intends to keep up to 50% and the remaining equity should come from third-party investors. The management will be shared between parties. There is no difference between the asset management and property management profile, which we had with the former joint ventures. It will become -- it will be the same. It will be East Capital's responsibility to do the fundraising and to do a little bit of investment advisory. And the portfolio will consist of -- what we are going to buy will be income-generating assets, all ESG aligned in the countries which you see. So it will come a little bit from everywhere, but with an emphasis on Central and Eastern European countries. That's it a bit on the JVs, and I will give the word now to my brother, Piet, for -- to explain the financial performance. And by the way, what you see on the picture is our park in Serbia, where the building on the right side is Ahold Delhaize, which we have built brand new, which has taken into operation. And the second building, the main tenant there is the Metro Group. And both buildings have been also delivered and both buildings also are BREEAM excellent awarded. Piet Geet: You stole my intro Jan. Jan Van Geet: Sorry. Piet Geet: As always, I have prepared for you a usual slide deck with P&L, balance sheet, cash flow movements and some further details. And I'm happy to walk you through and also happy to report an increase in our profitability from pre-tax EUR 319 million to EUR 338 million. And as always, there is really a lot playing through our P&L given the fact that we have a hybrid model between own developments and a JV. So I think the best thing is, as also in former formats, to walk you through it in more line by line. We had an issue with some sound, so... So first and foremost, you see that our net rental and renewable energy income, it has increased with 31% to EUR 88.7 million, basically exists out of the gross rental income or the rental income and the renewable income. The gross rental income on our own balance sheet increased 32.7%, which is EUR 86.7 million --- to EUR 86.7 million. But if you look at it on a proportional basis, meaning this EUR 86.7 million and our share in the joint ventures' gross rental income, this effectively grew from EUR 203 million to EUR 235.5 million of gross rental income. Maybe just to make a quick recap to what has Jan been presenting before, is we have in the group on an annualized basis EUR 468 million of contracted rental income. From that EUR 468 million, EUR 146.6 million is on our own balance sheet, of which EUR 78 million is active. That EUR 78 million could compare to this EUR 86.7 million, but it is, in fact, more. That is because, of course, we had done a transaction with Saga at year-end, and that still delivered us EUR 15 million of rental income that portfolio before we transferred it into the JV. And on an annualized basis, that transfer was actually EUR 29 million of rental income. So that's it about the rental income, a good positive increase, all built up organically. In terms of the renewable income, we also see a strong increase, 43% to EUR 11.9 million, coming from EUR 8.3 million on gross renewable income. As Martijn has presented, this was an effective increase in production from 90 gigawatts to 132 gigawatts or a 47% increase. So that brings it down on the net rental and renewable energy income, an increase from EUR 67.7 million to EUR 88.7 million, but also at share from EUR 189 million to EUR 223 million or up 18% in comparison to 2024. The next line in our P&L is the joint venture management fee or the joint venture fee income. It's EUR 32.7 million last year. That grew with 59% to EUR 52 million. Here, there are also some -- quite some particularities. The joint venture fee income basically exists now out of 3 components. One is our property facility or asset management fee, which on a recurring basis grew with EUR 4 million, and then there is also a provision for EUR 18.4 million on a promote. Just as a quick reminder, we have multiple joint ventures. The first joint venture, Rheingold, comes up to maturity in May 2026. It has already been extended for 10 years. But after the 10-year -- or the lapse of the 10-year period, VGP is entitled to a promote based on the net IRR performance of that joint venture. Now the net IRR performance, and we are particularly proud of it, has been very good, and we have a 12.4%. This is really net IRR really on a cash level basis after all asset management fees, taxes and whatsoever. And since we have surpassed the hurdle, we have now at 31st of December booked a provision of EUR 18.4 million. This provision, of course, will be updated in the first half at 31st of May based on the valuation of the portfolio as of then, plus its operational performance. So it is our best estimate based on the track record until 31st of December. And then finally, the remaining part is the development management income. We perform works on behalf of the joint venture. This decreased with EUR 3.2 million to EUR 2.5 million. But overall -- so the joint venture management fee significantly increased to EUR 52 million. And on a recurring basis, we do expect it to increase further in 2026 because we have done a transaction, for instance, in December, where we also have an asset management fee on, which will be accounted for in 2026. Plus then, of course, all of the transactions that we foresee to do, one with Saga and also with the new East Capital fund, which will also lead into increases of our fee income with the JVs. The next line, that's always a strong influencer on our P&L, that's the net valuation gains that we record on the investment properties. These increased from EUR 187.1 million to EUR 243.6 million, and they are actually composed out of 2. Jan has already hinted to it also that we have an unrealized gain of EUR 183 million, which is an increase of EUR 89 million, which is mainly related to our development activities. That's the profit on our developments. Whereas there's also a second component, which is the realized gains. That means that we have sold assets towards the JVs or, for instance, also the disposal of VGP Park Riga at a higher level than it had been recorded for in our books, versus the fair value in our books. This led to a EUR 6.5 million additional profit. And our own portfolio has a weighted average yield of 7.48% versus 7.22%. Of course, the number, sometimes we get a question, is a bit higher than in our JVs. But in JVs, it's 5.22%. That is because it's more skewed to Western European countries in the JVs and fully stabilized assets, whereas here, we are still having assets under construction and also quite some Central and Eastern European assets, which have a higher yield, on which, of course, we have also now the nice opportunity with East Capital. The next line on our P&L is the administration expenses. They are quite, you could say, broadly in line with last year from EUR 61 million to EUR 63 million. In average, the remuneration went up with EUR 1.6 million. But we also had a depreciation increase of EUR 2.2 million. That is mainly related to our renewable energy installations, which are recognized in a cost model, so at acquisition cost and depreciated. We have a general -- I need to move this -- EUR 5 million increase in general admin. Part of that was also the marketing campaign that we launched in 2025. And then since we have more assets under construction in comparison to previous years, we have also higher capitalized expenses on our assets or investment property, which offsets the extra cost of the above with EUR 6.7 million. And at year-end, we have 434 FTE. Next line is the share in the net profit. And there, we actually see a decline from EUR 92.7 million to EUR 41.3 million. But I can actually explain, I think, what has happened there in the bridge versus last year. First and foremost, the -- and I don't know if you see it also what I'm seeing, but there is a line missing. There is a -- but anyway, the net rental income increased from EUR 121 million to EUR 134.7 million. That's an increase of 10.7%. But the big driver or change in the JVs is the net valuation gains, where it was a positive of EUR 54 million, it actually reduced with EUR 65 million to minus EUR 10 million. This was driven by a number of facts. One is we have done a few settlements with the JVs where the JV had to pay us a top-up on previous closings, which was a negative impact on the valuation in the JVs. But the second element was mainly that there was -- and there is a strong German portfolio inside of the JVs, which was negatively impacted by a valuation change. So the average yield went from 5.05% to 5.22% in the JVs and the German part was a devaluation of approximately 2%. The appraiser effectively reviewed its prime yields for the country, and as Jan was referring to before, also had -- updated also his discounted cash flow model, foreseeing rather an 18-month vacancy period than a 12-month vacancy period when contracts would come to an end. Now as we mentioned before, we do not see that trend at all in our German portfolio. In fact, everything what we released last year was at 21% prices, averagely higher, as well as the average term to release something was 2 days. So we didn't really see this. But nonetheless, it did impact a bit our German portfolio and within the joint ventures. Then the other expenses that you see there, it's actually the promote at share. All of these -- what we see on the bottom table is at share. So it's EUR 18.4 million for us. But it's a cost to the JV. And at share, since we own 50% of the JV, it's EUR 9.2 million. Admin expenses were broadly in line. And I think if we disregard once the valuation movements, then we are actually seeing a very strong set of EPRA results on the joint venture, which is a testament to the very strong operational performance of the joint venture because the EPRA earnings are up 25%, but also our cost ratios are down. So in general, we are actually very satisfied with the performance of the joint ventures. Hence, also, for instance, the above 12% net IRR that we could achieve on the Rheingold joint venture. Next point in our P&L is the net financial result, which went from an income to a cost of EUR 24 million. This is -- of course, we raised the EUR 576 million of debt last year at a coupon of 4.25%, which gives already a delta in a higher interest cost. On the other hand, also in 2024, we profited quite a lot, also in 2025, but the interest came down on interest on cash on hand. We usually put quite some money on term loans and try to optimize it maximally as possible. But last year, this was an income for us of EUR 12 million. Now it was EUR 5 million. So it's a decrease of EUR 7 million. We have some higher capitalized interests of EUR 3 million. That is because we -- just like the capitalization on the admin expenses, we have higher amount of volume of assets under construction. So this leads to a high capitalized interest of EUR 3 million. And we have a decrease in our interest income from the JVs. I would say the shareholder loans in the JVs, they effectively increased. But of course, there have been distributions through repayments of shareholders during the year. And only at the end of the year, we created a new shareholder loan with the Saga joint venture because the transaction only materialized in the second half of December. And also, we partly capitalized part of the noncurrent receivables or the shareholder loans on the Deka JV, which also decreased a bit the interest income. And then finally, as you may recall, we raised EUR 576 million of bonds. But we also bought back in 2025 EUR 200 million worth of bonds, for which we paid EUR 195 million. So we made a profit on that of EUR 5 million. Going to the next slide. He doesn't want to go to the next slide. Jan Van Geet: Yes, he did. Unknown Executive: Okay. Where Jan also already referred to, and it's a particularly good performance over EBITDA. So the EBITDA is up EUR 100 million versus 2024. So up to EUR 455 million or an increase of 28%. And the increase is to be noted in all of our segments. So in the Investment segment, where we show the EBITDA of our completed portfolio, excluding any valuation gains, you see an EBITDA going from EUR 204 million to EUR 249 million. This represents, actually, if you look at into our balance sheet, EUR 2.9 billion of our total assets. In terms of Development, as I explained before, net valuation gains of EUR 243 million, composed of the good development profit traction that we have -- something is happening here on the -- with the -- yes, I'm back here. The good traction that we have on the development profits and realized gains. So our EBITDA also increased from EUR 145 million to EUR 199 million. And then the gross renewable energy also has a nice EBITDA increase given also the 47% extra production that we managed to produce in '25 or a 43% increase in its gross renewable energy income. In terms of the balance sheet, we see a strong increase of our total assets and total liabilities from EUR 4.6 billion to EUR 5.2 billion. The investment property is now EUR 2.4 billion, which, of course, composed of a completed portfolio of EUR 915 million, under construction EUR 777 million versus EUR 579 million. So you see here also the increase versus '24. And then development land, as we did buy quite some very attractive land plots, also increased from EUR 645 million to EUR 728 million. We did about a total CapEx of EUR 660 million, which is composed of about EUR 490 million on assets and EUR 150 million roughly on land acquisitions. And I mentioned already the weighted average yield of our investment property, 7.48%. The property, plant and equipment, the EUR 141 million, it's an increase of EUR 18 million versus last year. This is mainly related to our renewable energy installations, where we had a EUR 19 million CapEx. And the completed installations, where also then the EUR 11.9 million of gross renewable energy income is coming from, is generated from a complete installation of EUR 109 million, and what is still under construction is EUR 18.6 million. And our investments in joint ventures increased quite significantly with EUR 109 million. Now we have done quite some transactions with the JVs, not only the Saga closing, but as I mentioned also before, there were some settlements on previous closings which were to the benefit of us, which increased the equity contribution into our joint ventures altogether with roughly EUR 100 million or EUR 98 million. Then we, of course, have -- since it's reported under equity methods, the allocation of our result or our share in the result of the JVs, which is EUR 41 million. And then we received equity repayments from the JVs, so dividends of EUR 30 million. I will come back on the distributions of the joint ventures in the cash flow statement. I already mentioned the other noncurrent receivables. So they increased with EUR 63 million following the transactions with Saga, but we also got EUR 32 million of joint venture loan repayments. These were the 2 main movements, I would say, on the noncurrent receivables. And then we ended the year with a cash position of EUR 523 million, got EUR 31 million more than we had last year. And on the disposal group held for sale, the EUR 27 million, that is the VGP Park Tiraines, which is going to be sold in H1 '26. That is under a call option of its tenant. It's located in Latvia, and the transaction is about to be materialized. Everything is more or less done. The shareholders' equity increased, as already mentioned before, from EUR 2.4 billion to EUR 2.6 billion, very easy movement, EUR 290 million profit, EUR 90 million dividend going out. So that makes the movement there. And then in terms of our financial liabilities, that increased from EUR 2 billion to EUR 2.360 million (sic) [ billion ]. This follows a EUR 576 million bond that we raised in H1. It was actually EUR 500 million with a top-up of EUR 76 million. Then from out of that, we did a tender on our outstanding bonds of January '27 and '29 of EUR 200 million. And '27 was reduced with EUR 179.9 million. The one of '29 was reduced with EUR 20.1 million. But we effectively paid EUR 195 million on that. And then there was also a bond that came to maturity in March of EUR 80 million, which was also repaid. And then we moved to current financial debt at year-end, now the EUR 190 million bond, which is due in March. I'll come back on the debt also in one of the next slides. But our average cost of debt is now at 2.7% as at 31st of December '25. And as you may recall, we have also revolving credit facilities, which are untapped. They amount to EUR 500 million. We increased them during the year, and we also prolonged to them. There are more -- there's more info to that in our press release on what and to what extent it has been prolonged. But in the end, it comes up to a consolidated gearing ratio of 35% or a proportional LTV of 50%. We also have a Fitch, and also since 2025, an S&P Global rating. Both investment grade with BBB- and a stable outlook. I already made a reference to this I think in -- on the previous slide. So our average cost of debt increased to 2.7%. We have a significant liquidity position. And the bond maturities, I've updated it here already, given the January '26 -- in January '26, a few weeks ago, in fact, or 1 month ago, we raised EUR 600 million bond. And from that bond, we also repaid EUR 100 million on the outstanding January '27 bond, which was originally EUR 500 million. We reduced it with EUR 180 million in '25, and we reduced it again in January with EUR 100 million. So it's now still EUR 220 million. And then the remaining bonds to be paid are listed there. But you can see the one in 2025 has a maturity, the EUR 576 million, in '31, and the new one, which was raised in January, has a maturity in 2032. Speaking of the cash flow statement, we started the year with EUR 492 million. The net cash generated from operating activities is EUR 51 million. Just as a side note, we did an update to our cash flow this year, where interest paid, as you can see now in financing activities, has been moved from operating to financing activities. We felt it's more correct there. It has also been restated in '24. So we go from EUR 33 million to EUR 51 million. I have a bridge on the left. But in essence, we have spent EUR 171 million in investing activities. The proceeds from disposal, the EUR 389 million, is related to the Saga JV and the disposal of Riga, plus some settlements with the joint ventures. From the EUR 660 million of CapEx that we see on investment property, an effective EUR 642 million has been spent. The remaining will move through our working capital on CapEx payables. Loans to JVs is a loan to one of our development joint ventures. And then distributions by joint venture, what I referred to before, EUR 82.7 million, broadly in line with last year. The EUR 82.7 million is a combination of interest payments of EUR 20 million, shareholder repayments of EUR 32 million and equity distributions of EUR 30 million. It depends a bit joint venture-by-joint venture, how we take out the excess cash that is inside. That's why I also group it here for simplification purposes. But we all consider this as distributions. There were no investments in joint ventures. That's mainly then related to development joint ventures. And then in our financing activities, so we paid an interest of EUR 48 million. We paid out a dividend in May of EUR 90 million, which we now propose to increase from EUR 3.3 to EUR 3.4 in '26. So that will go to EUR 93 million as cash out in '26. Then we had proceeds from loans, which is the bond raise of EUR 576 million. After costs and deductions, it's EUR 565 million net cash in. And then the loan repayments, it was a bond that we paid back of EUR 80 million. And then the EUR 200 million that we paid back for EUR 195 million. So EUR 195 million plus EUR 80 million is EUR 275 million that we actually repaid. So that means that we end the year with EUR 523 million of cash. I think I maybe explained all of this already, but maybe there's one more nice thing to note that is that we raised the bond in April of EUR 576 million at a coupon of 4.25%. We did one in January at 4%. But underlying, there is quite a big difference, because the EUR 600 million bond that we raised in January was at our historic lowest spread ever, 150 basis points. Of course, it was a bit upset and offset with the increase of interest versus the previous bond. But nonetheless, it was still at a cheaper and it was a very successful transaction that we've done. And now the maturity profile of our bonds are as follows. I believe this was, I think, my last slide. So I hand it over back to Jan. Jan Van Geet: Yes. Thank you all for listening until now. A summary and the outlook. I am personally very happy that our result is even more and more cash generative and that the profitability of our new developments going forward is going up again. With all that we are going to start up this year, and we are quite bullish on it, we think that we are having a good year in front of us in 2026. On the relettings, as we have seen, our portfolio is -- we've never had to transact something to the joint ventures with a loss. And if you look at our relettings, they were during 2025, 14% higher than the rental price which they were let at before. And as Piet already said, on average, it took us 2 days to relet in Germany, where our reletting was 21% higher than the one before. And we have heard through the former reporting periods a lot of concerns about the German market, where we have a big exposure to. But we feel very confident in site, and we also see a lot of activity. We have a lot of new things going on. So we feel really very confident on that. The margins on our new developments, they are EUR 103 million. But there is really a lot in the pipeline, and I already talked about it. There are a couple of LOIs on which we are now finalizing. So cost reimbursement agreements is a better term for it, where we have agreed with tenants mainly out of the e-commerce sector that we're already going to line up everything so we can negotiate the relatively complex lease agreements because they are also relatively complex buildings. But we are on track to close them all before the end of the first quarter, some of them even in this month. So we're really in final negotiations. We already signed one with [ PE ] Capital last week in Bucharest. And if we look at it, we see that e-commerce is back on track and starting to look really again -- what they had over rented in 2021 and '22 has now been consumed, and they are back on track with growth, which is I think a very positive for us. So if these things materialize, we will at least start 450,000 square meters now in 2026, EUR 80 million which we need to start of rental income, which is already contracted, which is the best position I think we've ever had in our history. So looking forward. And that's very much supported also by the unlocking of some of the historical iconical parks which we have bought and which are mainly brownfields. And brownfields always take a little bit of a longer time to develop. But if I look at it, we're going to start construction this year on La Naval in Bilbao. We are going to start demolishing Nuremberg, for which we have a lot of demand. It's a super location, and we're going to start construction. We also are talking to some people out of the defense industry. We have already paid a visit to Hagen, which we bought just after the year-end with a very big tenant and which has been welcomed. Hagen is Dortmund, right next to Dortmund. It's a very nice site, which disposes of a 90-megawatt peak capacity of electricity, which is active. And so which opens a lot of opportunities for us. We're well proceeding on our Russelsheim development, and we're also very well proceeding on our permitting there because we needed to do a new B plan in Russelsheim, in which we also incorporated our data center and development which we aim to do. And I was puzzled by the presentation which Sarah gave to me about data centers coming from Microsoft. If you look at the actual installed capacities in the big conurbations of Europe where it is -- where everybody talks about, it's actually not that much as you would think. London is 1.7 gigawatts, Frankfurt also. And if you think about us in Russelsheim probably being able to do quite a bit more than 100 megawatts, that gives a total different perspective about the possibilities of our land plots. And we also have a very nice opportunity in Italy, and we're looking at other land plots in Germany. We think that, that would be nice. We also are going to have Verona coming online this year, our new land plot in Velizy, Paris, which is now -- for which we have also received the building permit and for which we're going to sign our first lease in the next couple of weeks. So all-in-all, we think that we have a very sunny future in front of us, as you can see on this picture, which is our park in Montijo, which is in Portugal. And then, of course, we are looking very much forward to the further diversification of our joint venture model. We are in continuous talks with our friends from Areim to do the follow-up of our Saga transaction. And also now we have announced it now publicly and we're very much looking forward to our cooperation with East Capital. And we have 2 legs to stand on them going forward and we hope it's going to be a big success. That's a bit, I think, the summary and the outlook for the next year. And I think that we can now move to questions from your side. Operator: [Operator Instructions] The next question comes from Marios Pastou from Bernstein. Marios Pastou: I've got a question mainly around the new partnership with East Capital. I think on the slide, you mentioned the potential for at least EUR 1.5 billion of gross asset value in scope. So I'm just thinking maybe part of the agreement, if you could give some more details on kind of what that total investment volume could scale to, if you've agreed a time frame or a target to reach that fully invested level? And whether the structure is broadly similar to what you've agreed in your prior partnership? Jan Van Geet: Yes. Shall I take it? We can develop on our total -- on the total land bank at the moment, roughly something between EUR 6.5 billion to EUR 7 billion of new assets, which we are -- including what we have already -- which we still have on our balance sheet. So that is all possible to transfer into new joint ventures going forward. And we have already envisaged and we've already defined quite a large portfolio, which we could transact because it's already income generating and delivered in this year. So we have said we want to do at least EUR 1.5 billion. I think we're targeting more, something like EUR 2 billion. But that is a momentarily view at the moment. When we start, it can also grow bigger. We're very confident on the fact that we are going to be able to deliver -- well, VGP is delivering all the time new assets and all the time starts up new assets. So it will keep on growing in the future. Piet Geet: I think in general, it's indeed more or less a copy of our current joint venture model with an investment period, 3, 4, 5 years. And what we develop, we will offer. And it's broadly similar. We will retain the asset management services on the -- as it is in the current joint venture basically. Jan Van Geet: Yes. Structurally, it's actually the same. What is different is that we are not targeting one single partner per JV, that we are targeting multiple partners at the other side. More something like a fund structure than just a single JV with one single investor at the other side. Operator: The next question comes from Vivien Maquet from Degroof Petercam. Vivien Maquet: I hope you can hear me. I had a follow-up question also on the JV. Just to understand from the fundraising perspective, what kind of precommitment do you have on the third-party investor because I just wanted to see because you mentioned a closing in the course of the year. But do you have the -- I would say, the equity already being raised within the fund? Or what [ commitments ] you have on that fund? And also on the structure. Is it closed-ended or open-ended fund? Jan Van Geet: It's foreseen to be a closed-end fund. And the raising of the funds is an ongoing exercise, which East Capital is predominantly occupied with, knowing that, of course, East Capital has a solid investor base inside of their existing funds. And this is an addition, more of a unique product that they can offer. But it is an addition to what they have in their current fund business. And the exercise is currently ongoing. We are targeting a closing by the end of the year. I think that's about it what we can say today. Martijn Vlutters: Yes. It's a regulated business, Vivien, raising capital. So we can't really say what's been committed already. It's prescribed quite precisely what can and cannot be set in such exercises. Vivien Maquet: Okay. And then just on the shares management agreement. I understand that deviate a bit from the previous joint venture. What does it mean for you in terms of recurring income you're going to drive from that joint venture? Jan Van Geet: We expect a similar income model that we have with our current joint ventures also. There is indeed a sharing of services with East Capital, but it's somewhat similar, for instance, with what an Areim or an Allianz also does with their investors behind who are invested into our joint ventures. So East Capital will mainly look into gathering the funds and also doing the investor relations with the investors that they have been able to target. But other than that, our services remain the same. And we expect broadly the same revenues to be incurred from all of the disposals into the JVs. Operator: The next question comes from Wim Lewi from KBCS. Wim Lewi: I've got 2 questions. One is a small one on East Capital, if I can bother you with, is does the new fund also allow for countries that were not eligible for the other joint ventures to be transferred? I'm thinking, for instance, on Serbia or maybe other countries that you can now offload more into the future? Jan Van Geet: The East Capital fund is a Pan-European fund. So every country where we are active in is, in fact, targeted. But it will be skewed more to the Central and Eastern European countries. But in essence, everything -- all countries are on the target list of the fund. Wim Lewi: Okay. And then a follow-up, if I may. It's really on these valuators increasing yield in Germany and then especially in the JVs to 5.22%, which you explained that it's based on vacancy. Now you obviously have good leasing activity, which you explained many times. But could there be like a timing difference, because they do that at the end of the year, whereas you have done the re-leasing over the year. Can you give an indication of the amount of re-leasing you have to do in '26 and what you expect from that? Jan Van Geet: We have very little re-leasing to be done in 2026. And so far, what we see is that, again, also for the things in 2026, which are coming available, we already know on beforehand and mostly months on beforehand that we are going to have a follow-up tenant. So what the valuators have taken as an assumption from a 12-month vacancy period, which we never had in Germany, to an 18-month vacancy period, we find it -- and we've tried to argue about it, but they take a view of the market. We find -- we can't say that we see that reflected in our own portfolio. I don't know what it is about. Maybe it's about older buildings or maybe it's about the total market view. But in our own portfolio, Wim, we are very confident and very -- that we have solid demand for everything. So we don't see, neither expect any deterioration of that in the months going forward. On the contrary, we have a lot of new lease negotiations ongoing also for new buildings. Wim Lewi: Maybe if I may, because what we see or what we hear from WDP and Montea is that they can't find anything to buy above 5%. So could there be deals maybe in the near future that could review their case, that if we see that yields come down in deals. Is that something that you expect? Jan Van Geet: Well, we hope so. We certainly hope so. Also the promote calculation which we have done is based on our risk valuation at the year-end. So it's just our current valuation, where okay --when we are going to have the valuation in May that's going to be based on the capital markets valuation, where the valuator really looks at the transactions as if we were to really sell -- and that's probably going to be a little bit different. We don't know north or south. But we think it's going to be different than what is our risk valuation. Until now, every transaction which we have done with our joint venture partners when we had a real discussion about the valuation, we always had a better exit yield or we always achieved a better exit yield than what we had it in our books for. So we're trying, of course -- we want to be a fair partner, but we are trying, of course, to defend our position also. That is more than normal, I think, in business. And I don't... Operator: [Operator Instructions] The next question comes from John Vuong from Van Lanschot Kempen. John Vuong: At the end of last year, you had 780,000 square meters under construction. Deliveries came to just short of 500,000 square meters. Were there some delays in the deliveries? And if so, what has been the reason for these delays? And looking at your pipeline going forward, it's currently sitting at a pre-let ratio of 75%, and you're saying that you're seeing quite some strong demand. So how do you think about the size of the pipeline under construction? And what are your thoughts about more speculative developments over the next 12 months? Jan Van Geet: Yes. Yes, when you report, you always have a cutoff, which is at the 31st of December, and you need to take a look at it. Whereas in development, it's not always really linear. You have sometimes customers which have demands for changes in the building, which entail relatively complicated situations and which makes the delivery going over the reporting period. That's one of the things where we are. So I think you need to look over a period of -- a longer period of time to see really the tendency and not just in the cutoff of 1, 6 months period. That's the thing. We -- I want it to be -- although we have a big incentive to construct more because we now have our costs really back under control as inflation has come down tremendously. And in the construction industry, in every country at the moment, we can achieve attractive pricing. At the same time, we're also trying to manage our portfolio, so not to create too many vacancy or too many speculative buildings. So we look at on a country-by-country basis, but we try to limit really our speculative buildings to an acceptable level, which for us is -- it should be -- we should be pre-let above 70%. And ideally, by 8 months under construction, we should be above 80% -- above -- after 6 months under construction, above 80%, which we currently also are. So that's the parameters in which we make the decision internally, do we do speculative developments, yes or no. And it's also depending on the demand which we see in the locations, because not all countries run at the same pace at the moment. So we are also a bit careful in starting up too much square meters where we don't see the demand for it. And on the contrary, where we see a lot of demand, we start up a little bit more. But as I already said, and I hope I was -- it came across enough, at the moment, we really have a very strong pipeline in demand. We divide up our demand, we categorize it in a first contact, a second where we already have commercial negotiations, a third where we have virtually an LOI agreed, and a fourth where we started the negotiations on the lease agreement. And if I take the 2 last things, we have roughly EUR 50 million of negotiations ongoing, which I don't say we're going to sign all of it, but it's a very healthy indication that there is really demand which wants to contract at some point, because people don't engage with teams and with lawyers and with things if they have no intention to close the lease agreement. So from that point of view, we, at VGP, with our current portfolio and our land bank and the quality of what we offer, we feel comfortable to start a bit more construction over the year. But I can't tell you a number. As I already said, we have roughly 450,000 which we need to start up anyway because it's already pre-let if these LOIs also materialize. And then, of course, we'll do a bit more because it will bring our vacancy levels -- our pre-let levels up. And then we have a bit more room to also start a bit of speculative buildings in those jurisdictions where we feel demand is strong and supply is very low. Operator: The next question comes from Francesca Ferragina from ING. Francesca Ferragina: I have 2 questions. The first one is about guidance. I understand that you never disclose the guidance. But can you just give at least some qualitative type of comments on 2026? Consensus is pretty dispersed and it doesn't help. And then the second question is on data centers. You managed to hire a dedicated person. Can you provide an update about the opportunities you see here? Jan Van Geet: We -- indeed, it's a bit difficult for us to give a guidance because we are not a REIT. Our VGP is a multiline model, where we have the development portfolio, where we have the rental income and we have -- it's different than a REIT. If you would only look at a REIT, it would be a little bit more easy to say what it's going to do. And going forward, we can also maybe make a projection of the rental income, what we expect for the year, because there we -- but also there, because we always transact between our own balance sheet and the JVs, it's not so easy to give you a reasonable view because we -- there is always movements from rental income, which is either on our own balance sheet and then it goes into the JVs and then it only accounts for 50%. So we'd rather not say something which we then cannot fulfill. We always give guidance on things where we think that they are achievable and where we feel ourselves also comfortable that we can achieve. And so far, I think, we've never promised something which we haven't delivered. That's something which we are proud of. On the data center things, so we are not actively buying land plots with the aim of developing really a data center. I see too many accidents in the market. Just last week, there was a big announcement in the press in Germany where a EUR 2.7 billion investment in [indiscernible] was stopped by the local authorities. People had paid a tremendous land price for it and done all the efforts and then it was stopped. So it is really a very risky business because we have a huge congestion in electric energy. And starting to build a land plot and then going for it, it is a very difficult business going forward. But VGP has a very big land bank, in the very big land bank, has some brownfields. Those brownfields come with a very big historical electric connection, which is there and available. And that's already a very big part of the transaction. And by coincidence, we are also 10 minutes away from Frankfurt Airport in Russelsheim. We've signed an agreement with Stellantis. That's the only one who can develop a data center on that land plot. They also still have a big reserve. But we have an exclusivity on data centers. And we have an agreement with the city on where the data center will come. And that it is going to be incorporated. It's currently part of the new B plan. And Sarah is working on that one and another one in Milan, where we also have a similar constitution, and where we think that -- and where we also have very intensive negotiations ongoing with most of the hyperscalers and some of the colocation investors, and where she is trying to manage that. And we are trying to take a look at where in the value scale of from just selling the land to core and shell to power shell to completely finished, build-to-suit, and then to completely finished and operational, what we are going to offer and whether we should do that alone or whether we should do that with a partner who has already all the accreditee to -- because he already has done it, something. And as you can hear from me, we are in a very intense process of aligning ourselves in order to be able to bring the best result. But this is a work which is not just -- it's not like developing a logistic warehouse. There are so many parts running around that it really -- it doesn't go so quick. So also the energy connection, it's not from today and tomorrow. Yes, in our case, it is. And then there is also the connectivity, the grid, et cetera, which you need to do for. And then we still have also to demolish in Russelsheim because now there is building standing on it. So it is not for tomorrow. But we're well on track. And that's everything which I can describe about it and disclose about it. Paul? Unknown Analyst: A couple of questions from me. Just wanted to check. Coming back on the pre-letting point, because I think that's been declining since 2022. I think you had a high of 89%. Now you're down at 69%. Just wonder what level are you comfortable going to in terms of pre-letting level? And what gives you the comfort in starting more and more speculative schemes as you have been over the last few years? And second question is, linked to that, is just looking at the yield on cost on completed developments. Did you have to give any rent concessions to lease these up? I think in the past you talked to tenant incentives or rent-free periods. Just to get a sense on that. And if you could quantify those, it would be great. And then I do have a very quick third question, but let's see if you let me ask that one. Jan Van Geet: Paul, on the first one, I think I already answered quite a lot of it. So yes, we've done a bit more speculative construction last year because our construction price came so much down. And we are currently -- after 6 months period, if you look at it, we are 80% pre-let. And we also have a lot of things in the pipeline where we feel very comfortable that we're going to sign it, which will take our pre-lets even more up. So we feel comfortable with today's level of pre-lets of speculative buildings under construction because we also see good activity and good demand on that pipeline going forward. So -- and we've built it for a very good price. On the activity for the -- from the tenants, we are always -- because we did not buy land at excessive prices and because -- at the time when the land was so expensive, I told you all, I don't find this thing sustainable. In 2022, we really stopped. We didn't buy anything, if you look at it going backwards. We only bought Russelsheim, which we bought for a very good price. But the rest, we couldn't make working. So today, we are in a very good position because we can be aggressive on the rental price but still make a very beautiful margin. Our margin is actually going up instead of going down because we have so good control of our construction cost. So we don't see anywhere where we need to give excessive rental incentives more than what we have been doing over the last 5 years. It's still the same. So we are -- it's a healthy market, I would say. Also the vacancy level which we see today in the market, 6%, it's not like we haven't had before, a lot more even than that. And I find it still very healthy that people finally have something they can look at, take a look at. And it's an advantage for us as a developer offering new things, where we can be aggressive on the price, that we can grow in a healthy way going forward. And yes, we can be maybe more aggressive than somebody else on some of our land plots because also we act as a general contractor in every country nowadays. And I think we have our -- I wanted to use the word shit, but it's our things very well under control. So it's really going well. Did you have another question? Unknown Executive: Rent incentive wise? Jan Van Geet: That's what I said, just answered, [ Tom ]. So no special rent incentives, yes. And you had a third question, Paul. No. Operator: The next question comes from Steven Boumans from ABN AMRO, ODDO BHF. Steven Boumans: So I have some questions on what to expect for signing new leases. So on the LOIs that you mentioned, could you please remind me how much in annualized rental income you expect to sign in Q1? And second, to respond to John's earlier question, how does the EUR 50 million in lease discussions you talked about compare to 6 months ago? Jan Van Geet: As we said, we don't give guidance. So you've asked me to give a guidance on the first quarter. Well, we have really, let's say, EUR 25 million of lease agreements in final negotiations at the moment ongoing. Whether it will all be signed in the first quarter? I do think so that there is quite some nice things which are in final negotiations. And that's about the guidance which I can give. And if I look at going backwards, I think that the market today, it's -- last year, we signed a lot of lease agreements, really a tremendous amount of lease agreements, but they were all relatively small to the years before when we always had these 1 or 2 big ones standing out, which were really very big lease agreements. Last year, it was a lot more spread over many, many little -- or not little, but smaller lease agreements. On average, before, we signed 22,000 square meters. I think last year, on average, it was below 20,000 square meters. So that was a bit different in demand than it is maybe today, because today, again, we are looking at some very big leases which we are negotiating on. Yes, the one in the Netherlands is huge. There are a couple of very huge ones in Germany ongoing. There is a very big one in Spain ongoing at the moment in final negotiations, I would say. So that's about what we can say about it. Operator: The next question comes from Thomas Rothaeusler from Deutsche Bank. Thomas Rothaeusler: Just one question on data centers. I understand you plan to provide concrete plans by the year-end, yes. But maybe you could provide a rough idea about the capacity for Milan and Hagen already. And any indications if it will be powered cell or fully fitted? I mean, considering the high-profile recruitment you have announced, I assume it won't be gas powered land. Jan Van Geet: You're asking me difficult questions to answer, Thomas. Yes, we hired a high-profile person, and she's a very lovely lady if you meet her with a lot of ambitions. And that's good because that's why we hired her for. We can do quite big -- I don't want to say anything about numbers because I'm going to say something and then it's going to be different, because we actually don't really know yet. But we have -- at the moment, we have a 50-megawatt connection available in Russelsheim from the grid. There is a power plant on our land plot, which is another 100-megawatt available. The question is, can we use it, yes or no, because it's a gas-powered power plant, and we are looking into it. We can expand that power plant quite significantly with gas turbines, and the gas can come from several ways. And that's an exercise which is ongoing. So it's quite complex to give an answer to your question, as you understand yourself because we are still looking and puzzling the pieces together. And we need to take a look also at what is acceptable for a hyperscaler, which risk he wants to go because he needs to have absolute reliability and the Tier 2 at least supply of energy, which we don't have our things all aligned yet because it's really complex. And the same is ongoing for our land plot in Milan, where, yes, we do have an agreement on the power supply. We know, plus/minus, when the power supply also will be available. But it's -- we are dependent on a third party. And yes, it's a very big capacity which we have been awarded. And the land plot is perfectly suited for it because it lies really on the super location for it. But as I said, there is a bit of work to be done on it. And we are going to disclose in the right time when it's ready to disclose where we are and what we do. And I don't want to overpromise. I just wanted to give you an update on where we stand today. And that's in all honesty what I can tell you today. Frederic. Operator: The next question comes from Frederic Renard from Kepler. Frederic Renard: A lot of questions already been answered, too, on it. Maybe to have a view on Allianz and the intention from here? And anything new with regard to potentially new JV? And then maybe another question. If I look at the sequential increase in H2 from new construction activity, and you mentioned already a good LOI of demand, so should we expect H1 2026 to actually be sequentially even more bigger than H2 '25? Jan Van Geet: I will answer first on your last question, whether it's going to be more in H2... Piet Van Geet: Which one? Jan Van Geet: In H1 versus H2 last year is -- I don't have immediately in my mind. But we are going to start up roughly -- we have to start up quite some buildings in the first half year of 2026 because they are pre-let and we need to deliver within a certain time frame. So we need to start up. But I would need to calculate how much that is that is going to be for sure in the first half of 2026. On general, I expect somewhere between the same amount as last year and a bit more to be started up during the year. I think we feel confident that we are going to start up a bit more than last year. So that's the answer on your last question. And then on the first question regarding the JVs, I think we disclosed -- because it's a regulated business, so we've disclosed on the new JVs where we could. We can't say anything more than what it is. In the current JVs running, actually, everything is running well. There are no divestment plans immediately there. And all partners seem to be very happy with the performance of the things. As Piet said also, the EPRA results of the JVs are outstanding. The relationship -- the day-to-day relationship with Allianz but also with Deka and all the others is going very well. And the only real discussion which is ongoing at the moment is about our promote, where we have now tentatively agreed on the metrics of how we are going to do it. Because originally, it was, of course, foreseen that there would be after 10 years a liquidation of the JV. But that is not going to happen. So now it's an exercise on which we need to agree. And that will crystallize by -- in the next few weeks. But I'm sure we will find an agreement with Allianz about what it is about. And for the rest, operational-wise, everything is running well. We are going to -- we have also a refinancing upcoming in the Rheingold joint venture. That's all agreed. We have the term sheet signed. So there is no -- everything is aligned. So there is no clause on the horizon as far as I can see. Everything is good. I think I answered on your questions. Operator: There are no more questions at this time. So I hand the conference back to the speakers for any closing comments. Jan Van Geet: Yes. I want to thank you all first in the first place for being here, both my colleagues and analysts and investors. Thank you very much for listening to what we had to say. I'm looking forward to speaking to you again on our Annual Shareholder Meeting maybe or then in August with the update of our half year results and then we have this year or maybe before on some conference. I hope that I can see all of you soon. As you could have heard from our side, it was a very busy year because we've done so many things and going forward, and it's grown all the time. But all-in-all, I have a good confidence in our sector that it has still a lot of growth capacity and growth possibilities and that VGP can play a significant role in that. And I hope all the others too, there is room enough on the market. Thank you for listening, and goodbye. Unknown Executive: Goodbye. Thank you. Piet Geet: Thank you. Operator: Thanks for participating. You may now disconnect.
Operator: Good day, and thank you for standing by. Welcome to the Zealand Pharma Results Full Year 2025 Conference Call. [Operator Instructions] Please be advised that, today's conference is being recorded. I would now like to hand the conference over to your speaker today, Adam Lange, Vice President, Investor Relations. Please go ahead. Adam Lange: Thank you, operator, and thank you to everyone for joining us today to discuss Zealand Pharma's results for the full year 2025. The related company announcement is available on our website at zealandpharma.com. As outlined on Slide 2, I would like to remind listeners that during today's call, we will be making forward-looking statements that are subject to risks and uncertainties. Turning to Slide 3 and today's agenda. I have with me on the call the following members of Zealand Pharma's management team: Adam Steensberg, President and Chief Executive Officer; Henriette Wennicke, Chief Financial Officer; and David Kendall, Chief Medical Officer. All speakers will be available for the Q&A session. Turning to Slide 4. I will now hand the call over to Adam Steensberg, President and Chief Executive Officer. Adam? Adam Steensberg: Thank you, Adam, and welcome, everyone. 2025 was a breakthrough year for Zealand Pharma, especially considering the landmark partnership petrelintide with Roche. As we enter 2026, we are moving into the most defining and catalyst risk year for Zealand Pharma's history, which includes Phase II petrelintide data and multiple key readouts from the Phase III program in obesity with survodutide. Moving to Slide 5. Obesity represents one of the greatest health care challenges of our time, not only because of its high and growing prevalence, but because of the long-term consequences of living with the disease. The longer people live with obesity, the greater the burden and the higher the risk of serious complications. Real-world data clearly shows that treatment persistence with GLP-1-based therapies remains a major challenge. To date, up to 12% of Americans have been exposed to a GLP-1-based therapy, yet only a small fraction remains in treatment. Approximately half of patients who discontinue GLP-1 therapies cite gastrointestinal adverse events as the primary reason. As a result, the key to unlocking the full value of this market is to develop therapies that deliver weight loss that patients desire, but with a better treatment experience that support long-term use in a real world. This leads me to Slide 6. In many other chronic diseases, physicians typically have access to a broad range of therapeutic options that can be tailored to the needs of the individual patients. In obesity, the treatment landscape remains comparatively narrow where we today rely on a single therapeutic category. While the GLP-1-based therapies clearly have advanced the field, they have not yet delivered what ultimately matters the most long-term treatment persistence, durable weight maintenance and sustained improvements in health outcomes. With petrelintide, we see the potential to expand and strengthen the treatment paradigm for weight management. Moving to Slide 7. The partnership we announced last year with us has delivered on everything we had hoped for. And our teams are currently moving full steam ahead and focused on finalizing the design of the Phase III program that we expect to initiate later this year to position petrelintide as a future foundational and first choice therapy for people living with overweight and obesity. I want to emphasize that, this is a true balanced partnership. This is reflected not only in the financial structure where we share profits in the U.S. and Europe, but also at the strategic level with shared development and commercialization rights for petrelintide and petrelintide-based combinations. This structure allows us to retain significant long-term value of the franchise while preserving the strategic rights needed to support our ambition over the long term. Moving to Slide 8 from one strong partner to another. Boehringer Ingelheim is positioned to lead the next wave of GLP-1-based innovation with survodutide, and we are very excited about the potential of survodutide to emerge as the preferred therapy for a large population of people with obesity and MASH. Liver disease is one of the most prevalent comorbidities associated with obesity. As Boehringer highlighted at Obesity Week last year, when you see obesity, think liver. And as one of our external speakers and the principal investigator in SYNCHRONIZE-1 noted at our Capital Markets Day, see obesity, think liver, treat the heart. This framing highlights the excitement for the upcoming Phase III obesity data with survodutide, including data from the cardiovascular outcome trial. Switching gears to our research efforts on Slide 9. Our ambition extends beyond refining the near-term future of weight management. Over the coming period, we aim to build the most valuable metabolic health pipeline, supported by our competitive advantage with more than 25 years of expertise in peptides and metabolic health, proprietary know-how and high-quality in-house data. Combined with rapid advancements in AI and machine learning, this strong foundation position us to remain at the forefront of innovation. While AI will improve efficiency across the industry, true differentiation comes from the quality and scale of proprietary data used to train these models. This is where we intend to focus our efforts. Our goal over the next 5 years is to advance more than 10 candidates into the clinic and set industry-leading cycle times from idea to the clinic. In a field historically characterized by long and complex development cycles, the pace of innovation is accelerating, and we intend to lead that. With that, I will turn over to David. David Kendall: Thank you, Adam. I will begin with an overview of our pipeline shown on Slide 10. Zealand Pharma is in a unique position today with the potential to achieve 5 product launches over the next 5 years. We are also embarking upon a data-rich period ahead with important results from many of our clinical programs. All told, this represents an incredibly exciting and highly compelling path forward for our company. Let's turn to Slide 11 and the ZUPREME-1 trial with petrelintide. We look forward to reporting top line data from the Phase II ZUPREME-1 trial this quarter. This trial is evaluating the efficacy and safety of petrelintide in participants with overweight or obesity without coexisting type 2 diabetes. ZUPREME-1 is a dose-finding trial assessing 5 dose levels of petrelintide administered weekly versus placebo over 42 weeks of active treatment. The trial includes monthly dose escalation over a period of up to 16 weeks, followed by maintenance doses of up to 9 milligrams. The study's primary endpoint assesses change in body weight at week 28. However, top line readout will also include important efficacy and safety measures at week 42. As previously shared, ZUPREME-1 enrolled a population of 494 participants with a mean baseline BMI of approximately 37 kilograms per meter squared and includes a balanced distribution of females and males. This population differs meaningfully from those studied in our Phase I trials, and also from populations enrolled in recent Phase II and Phase III clinical trials of other amylin analogs. Moving to Slide 12 for a reminder of our ongoing plans for petrelintide. Together with our partner, Roche, we are looking forward to leveraging insights from the ZUPREME-1 trial to inform the final design of a comprehensive and ambitious Phase III development program for petrelintide in weight management. We expect to initiate the Phase IIIa registrational trials for petrelintide monotherapy later this year, which will be followed by a comprehensive Phase IIIb program designed to further expand and unlock the full value of petrelintide. With Phase II data approaching, I would like to briefly revisit our target product profile for petrelintide. Our goal with petrelintide is to deliver the level of weight loss that the vast majority of people living with overweight and obesity are seeking, while also providing an improved patient experience to further enhance the use of petrelintide for long-term treatment. Accordingly, a successful outcome for us would be data that reinforces our confidence in petrelintide's potential to achieve approximately 15% to 20% body weight reduction in longer-term Phase III trials, together with a safety and tolerability profile that represents a significantly better experience relative to incretin-based therapies, firmly establishing petrelintide as a foundational therapy for the management of overweight and obesity. In parallel, we are excited about the opportunity to explore petrelintide as a backbone for future combination therapies. Petrelintide in combination with the dual GLP-1 GIP receptor agonist, CT-388, is the first combination being developed in our alliance with Roche. Zealand Pharma and Roche remain on track to initiate the Phase II trial of the petrelintideCT-388 combination in the first half of this year. Now turning to Slide 13 and survodutide, a glucagon GLP-1 receptor dual agonist that we believe has the potential to play an important role in the next phase of innovation in obesity and metabolic disease. In the first half of 2026, we look forward to the results from the 76-week SYNCHRONIZE-1 trial, which is evaluating the safety and efficacy of survodutide in people with overweight or obesity without type 2 diabetes. In the prior 46-week Phase II obesity trial, survodutide demonstrated very compelling and competitive weight loss of up to 19%. Beyond SYNCHRONIZE-1, we expect additional readouts from the broader Phase III obesity program over the course of 2026. Together, these data are expected to support the first regulatory submissions for survodutide. We are also excited and extremely encouraged by the ongoing Phase III program evaluating survodutide in people with metabolic dysfunction-associated steatohepatitis or MASH. This program includes 2 trials assessing safety and efficacy in patients with moderate to advanced fibrosis as well as in those with cirrhosis. Given the high unmet medical need and limited treatment options for this population, we believe survodutide has the potential to become a key therapeutic option for people living with overweight or obesity and coexisting MASH. Let's now turn to Slide 14 and our novel Kv1.3 inhibitor. Yesterday, we announced positive top line results from the first-in-human randomized double-blind, placebo-controlled Phase I trial evaluating the safety, tolerability, pharmacokinetics and pharmacodynamics of ZP9830 following a single administration to healthy male subjects. ZP9830 was very well tolerated with no serious or severe AEs or dose-limiting safety findings at any of the dose levels tested. PK parameters increased in a dose proportional manner across the investigated dose range, in line with predictions based on preclinical data. We are very pleased with the results of this trial that are very well aligned with our expectations, reinforcing our confidence in our Kv1.3 channel blocker as a very promising drug candidate with the potential to target multiple autoimmune and inflammatory diseases. We look forward to reporting top line results from the multiple ascending dose portion of this trial and progress ZP9830 into Phase Ib/IIa development in the second half of 2026. With that, thank you very much for your attention. I would now like to turn the call over to our Chief Financial Officer, Henriette Wennicke, who will review our financial results for 2025. Henriette? Henriette Wennicke: Thanks, David, and hello, everyone. Let's turn to Slide 15 and the income statement. Revenue for the full year of 2025 was DKK 9.2 billion, driven by the initial upfront payment received under the collaboration and license agreement with Roche. The net operating expenses, excluding other operating items, totaled DKK 2.1 billion in 2025 and was within the guidance range of DKK 2 billion to DKK 2.3 billion. 76% of the net operating expenses in 2025 were dedicated to research and development, mainly driven by the clinical advancement of the petrelintide program, including the 2 Phase II trials and the preparation for Phase III. The S&M expenses are driven by the pre-commercial activities associated with mainly petrelintide, while G&A expenses reflect a strengthening of organizational capabilities, investments in IT infrastructure and legal expenses related to the patent portfolio. This resulted in a net positive result of DKK 6.5 billion for the year. Let's move to Slide 16 and the financial position. We ended the year of 2025 with a strong cash position of DKK 15.1 billion. Our cash position was strengthened during the year by the initial upfront payment of DKK 9.2 billion from Roche, partly offset by the operating expenses during the period. Our strong capital preparedness enabled us to meet all obligations under the collaboration with Roche for petrelintide, including the comprehensive Phase III program. It will also allow us to intensify our efforts in building a leading metabolic health pipeline and deliver on our Metabolic Frontier 2030 strategy. Let's turn to Slide 17 and the outlook for the year. For 2026, we guide for net operating expenses to be in the range of DKK 2.7 billion to DKK 3.3 billion, mainly driven by research and development activities. On the development side, key cost drivers include the expected initiation of a Phase IIIa program with petrelintide monotherapy and the initiation of a Phase II trial, the petrelintide CT-388 combination. In addition, strengthening our research engine is critical to realizing our vision of building a leading metabolic pipeline and the guidance, therefore, also reflects a step-up in research costs. Overall, the anticipated OpEx spend reflects the momentum we have built into 2026 and position Zealand Pharma to leverage the future growth opportunities. And even though, we only provide guidance on operating expenses, I would like to take the opportunity to remind you that Zealand Pharma is eligible for potential milestone payments for Roche of USD 700 million in 2026. This includes an anniversary payment of USD 125 million and a potential development milestone payment of USD 575 million, which is subject to initiation of a Phase IIIa program with petrelintide monotherapy. Finally, let's move to Slide 18 and our sustainability efforts. As a biotech company, we place the health and well-being of patients at the center of everything we do. And our ability to ensure advance our pipeline and ultimately serve patients rest on our people. We are extremely proud that while we increased our headcount by 41% in 2025, we maintained a very high engagement -- employee engagement score of 8.9 on a 10-point scale. And at the same time, we maintained our employee turnover rate at just 7.8%. We believe this is a testament to our unique company culture and our continued dedication to fostering an engaging and enriching workplace. This makes us confident that we have built a sustainable organization setup capable of supporting our long-term aspirations. We are also committed to taking responsibility for the environmental impact of our operations. In 2025, we committed to the science-based targets initiative and joined the UN Global Compact. In 2026, we will continue our work to transition our company and collaborate closely with our business partner to mitigate climate change. And with that, I will move to Slide 19 and turn the call back to Adam for closing remarks. Adam Steensberg: Thank you, Henriette. Building on the momentum we created in 2025, we have entered the most catalyst-rich year in Zealand Pharma's history with defining data readouts expected for both of our leading obesity programs, petrelintide and survodutide. As we execute on our Metabolic Frontier 2030 strategy, we are also highly energized to open our new research site in Boston this year and to pursue additional partnerships that further strengthen and expand our pipeline. I will now turn over the call to the operator, and we will be happy to address your questions. Operator: [Operator Instructions] We will take our first question, and the question comes from the line of Hakon Hemme from Danske Bank. Hakon Hemme Jørgensen: In regards to the upcoming Phase II readout on petrelintide Phase II, the ZUPREME-1, what level of details are you able to share with us on the day of the announcement? Apart from the weight loss, will you include data on petrelintide's tolerability profile in the announcement? Adam Steensberg: Thank you, Hakon, for that question. So we can confirm that the data are anticipated this quarter, which, of course, means also in the coming weeks, and we are highly anticipating being able to share the data broadly. We will, as we always do when we share top line results, provide a balanced presentation of the data while also reserving data that can be presented at scientific conferences later in the year. So you should expect a balanced view, which will discuss both top line efficacy and safety tolerability. Operator: We will take our next question. Your next question comes from the line of Rajan Sharma from Goldman Sachs. Rajan Sharma: I just wanted to get your latest perspectives on competitive dynamics in the obesity market following the first oral launch. I know, you've always been clear in the view that injectables will be the largest segment of the market. Has anything changed given the launch trajectory of or Wegovy? And then maybe just to add on that, where do you expect net price to be in obesity by the time petrelintide launches? Adam Steensberg: Thank you for your question, Rajan. And I think it's -- we have not -- our minds around the oral versus injectables have not changed due to the recent launches. It's very important, and we remain you can say, focused on the fact that all GLP-1s that are launching right now do not address the biggest -- what we consider the biggest issues with the GLP-1s, which is tolerability. As we discussed in the prepared remarks, we have 50% of the patients who stop taking these medicines is due to adverse events related to the gastrointestinal tract. So while we do expect the all options to expand the GLP-1 market, we do not think it will -- it's actually addressing the main issue around the current therapies that are around. And that's why we are so excited about being able to lead in a novel category, which we think have the potential to provide patients, as David discussed, the weight loss they are looking for, but a more pleasant weight loss experience. And it's really back to the thing which we have also advocated for, for a long time. Instead of having such a keen focus on prices as an industry, we need to move the focus into how we help patients stay on therapy. The key to unlock the value of the obesity market is to make sure that obesity medications are used as chronic therapies rather than event-based weight loss agents. And that's where we think petrelintide and the amylin category has the potential to unlock the market value for obesity. When it comes to prices and which, of course, has a lot of focus right now in the current competitive environment also with having had compounders around, it's again some dynamics that we have talked about for a long time. And the uniqueness about the obesity market is we have the more classical market where we have payers and insurance companies and then we have the self-paid market. And you need to address both. Of course, when you launch with a new category, which may provide a much more pleasant weight loss experience, there will be novel dynamics also with regard to pricing. So while the GLP-1 dynamics will affect entrant into that market, we do anticipate that novel themes will play out when you launch novel categories, just as we have seen in other therapeutic areas. So -- but it's too early to provide any specifics on the net pricing when we launch petrelintide. Operator: We will take our next question. The next question comes from the line of Kirsty Rosergewart from BNP Paribas. Kirsty Ross-Stewart from BNP Paribas. Kirsty Ross-Stewart: Kirsty Ross-Stewart from BNP Paribas. So regarding the Phase IIIb development for petrelintide, can you just expand a little bit on the types of opportunities you're hoping to unlock with the broader clinical trial program? And how much of the total opportunity do you believe is represented by the monotherapy? Is that kind of the majority part? Is that what we should be thinking as the main part? Or just are you seeing this as a small portion and just the tip of the iceberg? And just related to that, can you remind us on the financial obligations from you and Roche regarding the future Phase IIIb development? Adam Steensberg: Thank you for your question. I'll just start with a few remarks and then hand over to David. So as -- as you know, our -- the focus for the team right now is to accelerate time lines to a potential launch of petrelintide and in parallel, invest deeply in making sure that petrelintide will become a foundational and first choice therapy and thus also having the data foundation to support that positioning. And we will have -- we'll share all costs with our partner us in those efforts. It's clearly the monotherapy that have our key focus right now. But as David also discussed, the combinations now starting with CT-388 is also carrying investments as we progress these programs. And we will hope to see more combinations really utilizing petrelintide's potentially as a foundational therapy. But perhaps, David, you can comment a little bit more on the Phase III considerations and why we have strong believe that it can become a foundational therapy. David Kendall: Yes. Thanks, Adam, and thanks, Kirsty. As noted, the Phase IIIb program beyond a rapid acceleration of the Phase IIIa program to ensure the earliest possible submission and potential approval. You can imagine that it is obviously the outcomes that matter most to patients and their providers that will be the focus, not only of the weight loss studies in Phase IIIa, but focusing on those complications, which we know are readily tied to weight reduction, such as obstructive sleep apnea, osteoarthritis and osteoarthritis pain, noting that amylin agonists may have the unique potential to favorably alter bone metabolism and impact pain markers as has already been shown with the GLP-1 agonist reduced weight has its benefits and going beyond that. But beyond those, I think attention to preserving muscle mass, maintaining functional status, focusing on the population that seeks weight-reducing therapies the most, specifically women and women's health implications. And finally, a very important impact of those coexistent comorbid conditions, cardiovascular outcomes being primary, looking at the impact on liver disease and other metabolic dysfunction associated comorbidities. As Adam noted, the focus initially is on monotherapy, establishing amylin-based therapies and petrelintide in particular, as a foundational therapy, but understanding that in complex metabolic diseases such as lipid disorders, hypertension, type 2 diabetes, we have learned that the complexity of these diseases often requires multifaceted approaches to therapy. So combinations with incretin-based therapies and other modalities as being investigated by us and others, we believe will become the cornerstone of the optimal treatment for obesity and its related conditions. To reemphasize what Adam stated, petrelintide as monotherapy, which we firmly believe can be foundational, but also substantially improve the patient experience will be the focus of Phase IIIa with the extension in Phase IIIb to unlock the full potential of this asset. Henriette Wennicke: And just maybe a comment from me, Kirsty, as well on the financial obligation. So yes, we will share costs both on Phase IIIa but also Phase III 50-50 with Roche. As I mentioned in my remarks, we will receive USD 575 million in connection with the Phase III initiation, and we will also receive USD 575 million in connection with Phase IIIb initiation from us. Operator: We will take our next question. Your next question comes from the line of Andy Hsieh from William Blair. Tsan-Yu Hsieh: Congratulations on a stellar 2025. Adam, I appreciate that you're moving the field away from the weight loss Olympics, as you coined the phrase. Just to gauge expectations ZUPREME-1, semaglutide and tirzepatide showed an additional 2% and 3% weight loss from 42 weeks to study end. So objectively, should we subtract that 2% to 3% from your TPP goal just to account for the timing difference and gender mix for the imminent readout? And also, if you don't mind, maybe a macro question on what Lilly has done recently. We wanted to recategorize as a biologic. So if they're successful, do you think that, that might set a precedent for all the peptides out there, including petrelintide? Adam Steensberg: Thank you for your question, Andy. And I would say when you -- and of course, everybody compares across studies. When we have designed our ZUPREME-1 study, we have had one key focus, and that is to generate the most robust data set to allow us for the most robust decision-making to move into Phase III. So we have not enhanced the study with a disproportional high amount of women or high BMI. And we've also decided to look at the data point of week 42 instead of week 48 as others would do in order to have the most robust data set for Phase III decisions. So when we then -- as David also shared in his prepared remarks, think about what are the weight loss that we anticipate to see -- we would expect in that study under these study conditions that translate into a 15% to 20% weight loss in a Phase III study setup. That's how we will look at the data. And I would say, historically, when you look into male-to-female ratio, if you take a study that is enriched with only females versus males, you could probably expect what, 5% more weight loss in the female-only cohort. If you then also enhance the BMI and the study duration, then you would see even higher differences. So we are looking for a data set that when we do our internal modeling will allow us to get this 15% to 20% weight loss. And the reason that we have called to end the weight loss Olympic is just the plain fact that patients are not interested -- most patients are not interested in a weight loss above 20%. So why is it that we, as an industry and a community keeps talking about those numbers as if they were so important. You can do these surveys among patients, and you will get the same answer across any survey that we have seen thus far. And that's why I call for the end. As I also said, and as we discussed also in one of the prior questions, the key to unlock the value in this market is to develop therapies that provides patients with the weight loss they're looking for and as importantly, therapies that they can stay on instead of therapies where they only take them for 3 to 6 months and then stop taking them. The big dilemma we have with people don't stay on therapy is that most will likely regain the weight and thus never get to the health benefits. So both from a patient, a society perspective, but also from a company value perspective, the focus has to be on treatments that deliver the weight loss that the most patients are looking for, 15% to 20% and then importantly, medicines they can stay on. And that's why I'm calling to the weight loss Olympic, focus on medicines that deliver what the patients want, and you will unlock the value in this market. On your other question, with regard to efforts to move from a small molecule designation to a biologic. I'm sure that industry is looking into different ways to enhance, you can say, the positioning of their drugs. And I will not share our specific efforts to protect the value of our programs. But rest assured that we also have that -- those efforts as key focus. Operator: We will take our next question. Your next question comes from the line of Yihan Li from Barclays. Yihan Li: Yihan from Barclays. So I guess I wanted to switch gear a little bit to survodutide and also MASH. So for MASH, based on our recent KOL checks, I believe the off-label use of including MASH appears increasingly common. So for example, our physicians would still use tirzepatide in MASH, if possible, even though we know it is not formally approved by regulators. So I'm just curious from your market research, are you observing something similar in terms of this physician behavior? And also more broadly, like assuming survodutide will be launched in 2027, and we understood you might be more offense on this partnership, but also wondering anything you could share regarding its commercial strategy across obesity and MASH? Adam Steensberg: Thank you for your question. And it's important to note that it is Boehringer Ingelheim, who is solely responsible for the development and the commercialization of survodutide. We will just get milestones and then high single to low double-digit royalties. The profile that we have seen thus far from the clinical data released by Boehringer for survodutide gives us a lot of confidence in the molecule, both with regards to weight loss, but also in MASH. On the weight loss parameters, as we have discussed before, we think the weight loss levels and the weight loss experience is going to be quite comparable to what we have seen with some of the market-leading GLP-1s on the market today. We look forward to seeing the Phase III data. When it comes to the MASH data, the Phase II MASH data that we have seen and is also expressed by Boehringer at the time when the data was released, we see them as breakthrough data. These are unprecedented levels of improvements. And I think that's also reflected in the fact that Boehringer have decided to invest in the largest ever Phase III program for MASH, not only addressing F2 and F3, but also F4 patients, which gives unique opportunities to broaden the potential label if approved beyond into the most severe cases of MASH, but also with the scope of the program could provide very early indications of clinical and not just biomarker improvements. With regard to what you mentioned as off-label use, if I heard you right, of the GLP-1s, I would say please remember that the majority of MASH patients are obese in the first place. And thus, of course, it's a logical choice to use the existing medicines to help patients achieve some weight loss as many MASH patients suffer from both obesity and other complications than MASH. So that is only a natural consequence. What we believe is that once you have a product that can make a significant larger effect on the disease status, we should expect to see a very attractive take-up also exemplified by the enrollment into the Phase III program and Phase II program for survodutide. So we have a high confidence in the program. We have a high confidence in Boehringer's ability to execute. They are one of the strongest large pharma players in the cardiovascular metabolic space, and we look forward to see the data coming out this year, including the cardiovascular outcome data in obesity. Operator: We will take our next question. The question comes from Xian Deng from UBS. Xian Deng: Xian from UBS. So 2, please. The first one is on ZUPREME-1. So really appreciate you emphasized -- reiterated the importance of tolerability. So just wondering, looking into ZUPREME-1, just wondering what sort of profile do you -- would you actually consider as really your target profile in terms of tolerability? Would you say -- let's say, do you think it's actually possible to achieve, let's say, placebo level similar to placebo level of vomiting and constipation. So any color on that, that would be great. So the second one is sort of a general question. So a few days ago, so Eli Lilly showed some quite interesting data combining tirzepatide and Taltz in psoriasis, which actually showed better skin clearance than Taltz alone. Of course, that's in psoriasis patients that are also obese. But just wondering if you have any thoughts on that? And would you consider, for example, in the future, collaborating with some other autoimmune players on something similar as well? Adam Steensberg: Thank you for your question. I'll just start by putting some thoughts on your second question and then hand over to David to follow up and also address your first question. I think maybe you also saw that yesterday, we also announced a Phase I data readout with our Kv1.3 ion channel drug, which is a broad autoimmune anti-inflammatory target, which has potential across a number of inflammatory conditions. And thus, we see that as a potential pipeline in a product. And -- there's another notion out there that in relation to the obesity pandemic, you actually see quite significant increases in the prevalence of some chronic autoimmune and inflammatory conditions, which had otherwise been seen as being rather stable. So we see a strong link between the obesity pandemic and the rising prevalence of some of these conditions. And it's clear that if you name things like psoriasis or even IBD, there are some strong links with the obesity pandemic. So we are highly energized by our own Kv1.3 data and the opportunity to perhaps link metabolism and inflammation in the future. But David, maybe you want to elaborate. David Kendall: Yes. And again, thanks for your questions. On the issue of tolerability, noting that tolerability is really a collection of factors. We focus, obviously, a great deal on the GI adverse events that have been made so central, particularly to incretin-based therapies. And while our Phase I data to date have suggested the potential for significantly lower rates of nausea, vomiting and certainly lower rates of the more chronic GI adverse events associated with GLP-1-based therapies, namely diarrhea and constipation in ZUPREME-1 and subsequent trials, tolerability and acceptability of the entire experience will be the focus of our evaluation. So looking obviously at GI adverse events, but in combination with the injection experience, the experience around dosing and dose escalation. And back to the question that was posed to Adam on orals versus injectables, if one thinks about the currently available therapies and the target product profile for petrelintide, we anticipate that the weekly injection will consume about 10 to 20 seconds of an individual patient's time, which clearly can be associated with the acceptability of a treatment, assuming that injection experience is without reactions, pain, discomfort, which we have seen in our Phase I trials to date. So I encourage you and others as we will be doing to look at tolerability and acceptability as a collection of these factors, GI adverse events and more. And to Adam's ultimate point, if that experience is highly acceptable to patients, that will further encourage long-term persistence on therapies and particularly therapies that give patients the weight loss they desire. Operator: We will take our next question. The question comes from the line of Jen Jia from Cantor Fitzgerald. Jennifer Jia: This is Jennifer Jia on behalf of Prakhar Agrawal from Cantor Fitzgerald. So I was wondering for the upcoming Phase IIb obesity readout for petrelintide, in what way can it differentiate on safety, tolerability versus Lilly's amylin eloralintide, and also for the combo with petrelintide with CT-388. Could you give more context on dosing across the 2 products, titration schedule as well as how you want to mitigate the GI tox previously seen with CT-388? Adam Steensberg: Thank you for that question. It's as we have tried to convey on this call, the most important aspect for us when we review these data is to confirm that we have a product that lives up to the target product profile, which we have discussed a number of times, which is delivering a 15% to 20% weight loss and a more pleasant weight loss experience. If we have that, we will have a leading category -- leading molecule within a new category. And I think it's really, really important to also look back at the data that have been generated thus far with petrelintide, which gives us the confidence when we look across the different amylin assets, we have what looks to be the best-in-class amylin analog in development. And that's why we move towards the Phase II data with a high level of confidence, both with regard to weight loss and tolerability data. But the most important part for us is to get confirmation in this Phase II data with what we have seen in the Phase I and thus, that we are fully on the path to deliver on our target product profile. And thereby, as we have also communicated several times, we think petrelintide and amylin in general has the potential to be a larger category for weight management than the GLP-1s because if you allow patients to stay on therapy and you don't have to go out and capture new patients all the time, you would rapidly see the volumes of such a category outgrow the volumes of a category where people stop taking medicines early on. So this is the key focus for us when we look at the data, and we move forward based on the prior data experience, which I think we have released to the market. So we all have the opportunity to look at those data that petrelintide has the potential to be the best-in-class amylin of those that are in the clinic today. The combination product, of course, is also a unique opportunity. And with CT-388, when we did the diligence and the partnership with us, our conclusion was that CT-388 look to be potentially also a best-in-class GLP-1/GIP molecule. And we look very much forward to seeing further data from that program. But the combination -- when we think about the combination with that molecule, our gut feeling, if you will, would be to max out on the potential of petrelintide and then add a teaspoon of the GLP-1 component to enhance the weight loss experience for those patients who need the highest weight loss. And so we look forward to share more on the study designs and of course, ultimately, the data that comes out of the Phase IIb study for the combination that we will start later this year. Operator: We will take our next question. The next question comes from the line of Kerry Holford from Berenberg. Kerry Holford: A question from me is just on the planned Phase IIIa study design. I wonder if you can share any more detail on that. It's clear the message here is to expect you to accelerate launch and deal with the CVOT data later. But can you discuss the endpoint, the study time period that you're looking at for the Phase IIIa study? I mean, for example, could we see a scenario where 6 months weight loss is sufficient to get a first approval for petrelintide? Adam Steensberg: Thank you for your question. I think what we can reassure you is that we, together with us, we are doing everything possible to accelerate, and we have some -- identified some very good levers and have a lot of confidence that we can accelerate and push this program as fast as possible forward. We cannot share the details also the exact details on submission time lines due to the fact that this is a partnership, so we need to agree on when to discuss these things. But we are all on in both organizations to make sure that things are being accelerated towards submission and ultimately a launch. What is also important here to note and one of the main reasons that we decided to partner this program at the time we did was, of course, investments into manufacturing capacity -- and we have been extremely pleased to see the announcements that have come out with, with regard to investments into high-volume, high-throughput manufacturing capacity, which, of course, is needed if you want to secure a successful launch when these products hit the market. And I think that's again coming back to the uniqueness of the partnership we have here and the uniqueness of Zealand today is that we are -- as I conveyed at our Capital Markets Day, and we continue to operate as a biotech company, but we -- and that's the -- we will bring in the best from that world. But in the collaboration with us, we will also leverage the strength of a pharma company as we approach the market with petrelintide. And I don't think you have seen many of these partnerships, but that is why we keep coming back to the strategic value and of course, the profit share we have in this partnership is unique and it's one which we are extremely pleased with to see also how it progresses. We will hopefully soon be able to share more on the exact time lines as we move the program into Phase III, but it's just perhaps one quarterly call too early. Operator: We will take our next question. The question comes from the line of Suzanne van Voorthuizen from VLK. Suzanne van Voorthuizen: This is Suzanne from Kempen. Looking beyond the Phase IIb readout that we're all eagerly awaiting and I believe how petrelintide could provide an alternative to incretins and the product profile you're targeting is very clear. But I wonder if you could elaborate for the longer run based on the knowledge today and the data sets that have been reported for the various amylin assets out there, how do you expect petrelintide to be positioned within the amylin class? What would you expect in terms of differentiation versus the other amylin later down the line? And maybe one clarification about the research site in Boston. What will this hub focus on? And how would that complement the capabilities in Copenhagen? Adam Steensberg: Thank you, Suzanne. It is too early for us to share our thoughts about the ultimate differentiation between the different amylin analogs. We have been extremely pleased with the data that we have seen thus far when it comes to the balance between weight loss and tolerability and safety findings also when we compare across the different modalities, different amylin analogs in the clinic today. So -- and we see a clear opportunity to continue to develop that differentiation that we have already observed in until today. Another key aspect, which I think is important to note as well is as we enter this market, this will be the #1, 2 and 3 focus for Zealand and to build petrelintide into a leading molecule within the amylin class. Others will have to spend more time thinking about existing franchises and how to protect current molecules that are already on the market. And that's a strength and a force which I don't think people should underestimate. On the research side, in Boston, as Utpal shared a little bit on our Capital Markets Day, but it's really going to be a site that will complement what we do in Denmark. In Denmark, we are one of the strongest, if not the strongest research group within peptide chemistry and also having worked in metabolic diseases and health for more than 25 years, have very unique expertise in those areas. In Boston, we will build complementary skills, including focus on high throughput research labs machines that are built -- labs that are built specifically to tap into the automatization that we are seeing in research these days. And on top of that, we are also going to broaden out to modalities beyond peptides. And part of that broadening out will be through partnerships. We just announced one in December with OTR, which has to do with small molecules, but we expect to announce more partnerships, but we will also build some in-house capabilities, so we can become best partners to these opportunities. So it's broadening beyond peptide modalities, and it's also with a high focus on automatization and high throughput, really leading to our firm conviction that we can deliver industry-leading times from idea to the clinic as we build our infrastructure in the coming few years. Operator: [Operator Instructions] We will take our next question. The question comes from Rajan Sharma from Goldman Sachs. Rajan Sharma: Could you just discuss the rationale for restarting development of a GIP analog? Firstly, just to clarify, is this the same asset which you previously deprioritized? And then just in terms of strategy here, do you expect to see monotherapy activity? Or is this really a combination asset for the future? And how should we think about that in the context of CT-388, which is a GLP-1/GIP co-agonist? Adam Steensberg: Thank you, Rajan. I'll hand it over to David. David Kendall: Yes. Thanks, Rajan. Yes, this is the asset that has been part of our pipeline all along. And as you have likely noted, I mean, the interest in leveraging GIP pharmacology, while it is still in its infancy, both with the development of tirzepatide and other GLP-1/GIP molecules, the recent announcement of Novo looking at combinations with an amylin analog. But our understanding, as we've stated all along, that combination therapies can ultimately be leveraged to target this complex metabolic set of disorders, obesity and beyond. And while GIP monotherapy, as has been reported by others, may not in and of itself have potent weight-reducing effects, the potential to further improve insulin action or insulin sensitivity, the ability to unlock even greater effect of other molecules, including amylin analogs, other incretin hormones and other peptide signals is becoming clearer. And for us, this is yet another venture into the potential for combination approaches to targeting these complex metabolic diseases. And again, our commitment to improving metabolic health overall goes beyond, as Adam said, simply reducing body weight, simply targeting MASH to improving things like insulin action, targeting aspects of fat cell or adipocyte behavior and using this pharmacology to really target multiple tissues, multiple organs and further enhance the effect of other peptide and non-peptide signals. So starting with the first in-human to ensure understanding of the PK and safety and tolerability, and then we hope to rapidly advance into assessment of unique combinations with amylin assets and other signals. Operator: We will take our next question. The question comes from the line of [ Susan Shaw ] from Wells Fargo. Unknown Analyst: This is Susan on for Mohit. Just a quick question on ZUPREME-1 dose titration cohorts. Can you speak a little bit more on the rationale behind the timing and the step-up doses that were chosen for the trial? And as a follow-up, where do you expect to see the most improvement on the side effects? Adam Steensberg: Thank you for your question. The rationale was for the dose titration or you could even say that it is even a titration because you can expect, of course, to see weight loss even at the lower doses, but it's is the ability to get to the higher doses is a dosing escalation every 4 weeks is a practical way to do it. Our Phase Ib data suggests that we could do more frequent dose escalation and not compromise the tolerability from a GI side effect profile. It was clean, as you remember, except for one dosing arm where they started at a higher dose than what we do here. So it's also about the practical timing for dose escalation. I don't think we have the same issues as you have with the GLP-1s, where you need to titrate carefully. And remember also a lot of patients, you will have to down titrate when you have decided to titrate up, then you have to back off for some weeks and then back off. That is what becomes -- that's why it becomes so complicated to get patients to the higher doses of the GLP-1, but we have not seen that with the amylin. In all our titration step, we have seen patients being able to tolerate the next dose with any significant new adverse events. So for us, it's more a practical decision rather than something that has to decide with how you have to do it actually from a side effect profile. Operator: We will take our final question. The final question comes from the line of Jen Jia from Cantor Fitzgerald. Jennifer Jia: On 9830, the channel blocker, what indication would you consider pursuing? And what would be the rationale for that? Adam Steensberg: Yes. So we have some very good ideas about where we want to take the molecule in next, and also -- but -- and what you should expect is that we will be pursuing several indications also in parallel, because if you look into the biology rationale, we are looking at what could become a pipeline in a product. It's too early for us to share which indications we are going for, but you should expect us to pursue several indications in parallel. It is a target that industry has been pursuing for a very long time without success because of the difficult nature of addressing this target. And that's also why, as David shared before, we are extremely excited about the fact that we have not only seen PK, but also clear effects of target engagement from a PD perspective in the Phase I study. So we think we have something that could be a future jewel in our pipeline. So -- but the specific indications, we'll have to come back with later. All right. Okay. And with that, I would like to thank you all for attending and for your questions. We look forward to future announcements and updates and to connecting in the coming weeks and months. Thank you. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Operator: Good day, and thank you for standing by. Welcome to the Fourth Quarter Tenaris S.A. 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 speaker today, Giovanni Sardagna, Investor Relations Officer. Please go ahead. Giovanni Sardagna: Thank you, Gigi, and welcome to Tenaris 2025 Fourth Quarter and Annual Results Conference Call. Before we start, I would like to remind you that we will be discussing forward-looking information during the call and that our actual results may vary from those expressed or implied during the call. With me on the call today are Paolo Rocca, our Chairman and CEO; Carlos Gomez Alzaga, our Chief Financial Officer; Gabriel Podskubka, our Chief Operating Officer; and Guillermo Moreno, President of our U.S. Operations. Before passing over the call to Paolo for his opening remarks, I would like to briefly comment our quarterly results. During the fourth quarter of 2025, sales reached $3 billion, up 5% compared with those of the corresponding quarter of the previous year and 1% sequentially as our sales to Rig Direct customers in the United States and Canada continue to show resilience and in Argentina, we resumed our fracking and coiled tubing services. Our EBITDA for the quarter was down 5% sequentially to $717 million or 24% of sales. These results include the full impact of the 50% Section 232 tariffs in the U.S. Average selling prices in our Tube operating segment decreased by 1% compared to the corresponding quarter of last year and were flat sequentially. During the quarter, cash flow from operations was $787 million. Our net cash position at the end of the quarter decreased to $3.3 billion, following the payment of an interim dividend of $300 million in November last year, $ 537 million spent on share buybacks and capital expenditure of $123 million during the quarter. The Board of Directors have decided to propose for the approval of the general -- Annual General Shareholders' Meeting to be held at the beginning of May, the payment of an annual dividend of $0.89 per share or $1.78 per ADR, which includes the interim dividend of $0.29 per share or $0.58 per ADR that we paid at the end of November of last year. If approved, a dividend of $0.60 per share or $1.20 per ADR will be paid on May 20, up 7% compared to the dividend per share of the corresponding period of the previous year. Thanks to the benefit of our buyback program. Now I will ask Paolo to say a few words before we open the call to questions. Paolo Rocca: Thank you, Giovanni, and good morning to all of you. 2025 was a year in which Tenaris demonstrated the resilience of its operation in the face of a disruptive geopolitical environment and lower activity in key markets. Thanks to our extensive geographical presence, the depth of the service we offer to our customers and the commitment of our employees, we were able to respond rapidly to the various situations we faced. Our results remained remarkably stable through the year, which we completed with an EBITDA of $2.9 billion and a net income of $2 billion on net sales of $12 billion. Free cash flow amounted to $2 billion, all of which was distributed to shareholders through dividend and share buybacks. We are proposing a further increase of the annual dividend per share of 7% over that for the previous year. At the same time, we maintained a net cash position of $3.3 billion. In the U.S. and Canada, the U.S. was marked by further oil and gas industry consolidation and productivity improvement, a lower rig count and the extension of Section 232 tariff to the import of all steel products, including the steel bars we require for our seamless pipe operation Bay City, and the subsequent increase to 50%. In this environment, Tenaris raised the performance of its U.S. production and supply chain system with its Koppel, steel shop, main pipe production plants at Bay City, at Hickman and Enbridge and various pipe processing facilities acting in concert to achieve a record level of production and supply, 90% of our U.S.A. In both the U.S. and Canada, we strengthened our market position and extended the differentiation we offer under our Rig Direct service model. As customers targeted operational efficiency, we continue to develop and roll out our run-ready and well-integrated services that support them by increasing safety and reliability at the well site. Major oil and gas companies are seeking new production reserves to meet a more resilient long-term demand outlook and they're looking beyond the shales with their fast-to-decline curves, to deepwater development and exploration in frontier region. Tenaris with its capacity to develop product for complex operation and to support fast track development with service and the supply of advanced coated line pipe solution at scale is working with most of these companies as they develop such projects. As new offshore projects are sanctioned around the world, we see many opportunities to renew our order backlog, while we execute on existing commitments. Currently, we are delivering casing for Shell's Sparta 20K project in the U.S. deepwater extending our services for ExxonMobil's operation in Guyana and preparing a service base for TotalEnergies, GranMorgu development in Suriname while planning the production of seamless and welded line pipe and coating for the third phase of TPAO Sakarya gas development in the Black Sea. In Latin America, the Mexican government is taking steps to address the financial difficulties Pemex, which took a toll on oil and gathering activity in the country last year. While in Argentina, domestic companies have been able to raise more than $4 billion in financing to develop infrastructure and expand production operation in the Vaca Muerta fields. We supplied the Vaca Muerta Sur pipeline and are currently supplying the Duplicar North pipeline. We are also investing to expand our new fracking and coiled tubing service business and expect to put a third set of equipment to work before the end of the year. In Venezuela, following the intervention of the U.S. government, we are resuming our service to Chevron operation and building up our service capability in the country to support an increase in drilling activity. In the Middle East, we continue to consolidate our presence with the award of a long-term agreement for the supply of OCTG to the Northwest field development in Qatar, while in the Emirates, we enhanced our Rig Direct service to ADNOC, delivering a record amount of OCTG. Saudi Arabia, also conventional drilling activity was reduced during the year. We completed an expansion at our local large diameter facility, from which we are supplying line pipe for the development of gas infrastructure. In addition to the OCTG, we supply for Aramco drilling operation. Our global integrated industrial and supply chain operations have been key to our ability to respond effectively to the different events we faced during the year. We continue to invest and enhance the efficiency and digital integration of these operations as well as reducing their environmental impact. We made further progress towards our midterm target of reducing the carbon emission intensity of our operations as we brought our second wind farm in Argentina into operation. The 2 wind farms now supply essentially all of the energy requirement for our electric steel shop and operation in Canada. As an industrial company, our commitment to the safety of our employees and to the environment sustainability in our communities is absolute. Also, our indicator have improved this year. We continue to reinforce our preventive action and monitor our performance in this aspect. Tenaris, with its presence across the world, competitive differentiation in product service, the quality and compliance of its operation and the financial strength to support its strategy remains well placed to confront an unpredictable and volatile future. I would like to thank all our employees and the communities which sustain our operation for their constant commitment and engagement that have made possible our results and achievement this year. I would also like to thank our customers and our suppliers for their ongoing trust and support. Thank you very much, and we are open to any questions you may have. Operator: [Operator Instructions] Our first question comes from the line of Marc Bianchi from TD Cowen. Marc Bianchi: I wanted to start by asking about the outlook here in first quarter and maybe you could talk about, to the extent you're comfortable how things progress beyond first quarter. When you talked about being close to current levels in fourth quarter, is that -- should we interpret that as meaning flat? And are there any nuances with volume and price that we should be thinking about as we build that out? And then any comments sort of beyond first quarter would be great. Paolo Rocca: Well, thank you, Marc. Well, within our visibility today and considering many parts moving in the energy market and also in the general geopolitical environment, I think it will not be easy to have a medium-term forecast. Now what we see is a relative stability of our performance and our position in the market during the first quarter and it is not so easy. We do not see today a point that should disrupt our operation even in the second quarter. But for the time being, as we say, we feel comfortable in forecasting the first quarter in which the level of margin and in general, the results we can get are more or less in line with the 4Q. But it's difficult to have a more long-term forecast considering the volatility of the environment in which we are moving. Marc Bianchi: Yes. That makes sense. And then the other one maybe somewhat related, the margin resilience in the fourth quarter was quite good. And I'm curious how much of that benefited from some of the actions that you're taking? I think you mentioned Koppel in the press release to try to offset some of the tariff headwind that you've experienced. I think previously, we talked about that being something like $140 million a quarter of tariff costs that you're having to deal with. So I'm curious how much progress did you make on that in 4Q? And what is the opportunity going forward? Paolo Rocca: Well, we are, let's say, continuously operating in the efficiency of our operation, including our capacity to produce more steel in the U.S. So we expect for the first quarter of next year, that a lower level of tariff we get into our IFRS because in the end, we are operating on this even in the past few months. And we think that what is getting into our results in the first Q will be relatively slightly lower of what we have in the fourth Q. But on the other side, the indicator of prices in North America, I mean, in spite of the impact on the hot-rolled coils and other products of the steel industry are moving relatively slow in the pipe business and especially in a welded pipe. So considering the impact of slightly lower tariff and where we are in terms of Pipe Logix and so I think what is moving around in the world, I think that this is the component that justify our vision of a relatively stable top line and margin data for the first quarter. Operator: Our next question comes from the line of Matt Smith from Bank of America. Matthew Smith: My first question was around the international business and on pricing. Just whether you have seen any signs at all of pricing pressure given how some of the international benchmarks have traded down, I guess, since summer 2025? Any color you could give on different regions could be useful. Paolo Rocca: Thank you, Matt. I would say that, as you know, our business globally is composed of many different niche, high-demanding product, different region, different level of service. So I would say, to some extent that the price impact is more easy to understand and project in North America than internationally. But by the way, I will ask Gabriel to give you a vision of what we see in front of us on the ground. Gabriel Podskubka: Yes. Thank you, Paolo. Good morning, Matt. On the pricing on the international markets, we see, in general, some stability, a balanced demand and supply, especially on the premium products, where we are mainly focused. So premium is our service, high technical qualified pipelines. This demand is quite strong, driven by offshore, by Middle East, in gas and our service development. So we see the demand on these segments quite stable. We have, in many cases, long-term agreements that have some formulas related to raw materials. So I would say that the majority of our backlog and our business in international market are driven by stability in the pricing. It is true that there are some spot tendering where we're seeing a slight deterioration in the environment, especially when we are talking about lower end applications, but this is not the most important part of our business, and this is something that we monitor. So I would say, given all the moving pieces and the increasing component of our offshore during 2026 in our international mix, I would say that the pricing in the international markets are quite stable for Tenaris. Paolo Rocca: Thank you, Gabriel. Let me just add one point on which maybe -- that is the European. In Europe, maybe it's early to perceive the impact, but the CBAM and the safeguard that is supposed to raise the quota -- to raise the tariff to 50% and reduce the quota by almost 50% may have a favorable impact on relatively important segment of our international business that is all supported by the industrial power gen activity into Europe. To some extent, I think in the view of the overall say, future of our operation, maybe not immediately, but we should be able to maybe improve our situation and pricing in Europe. And also this reflects with the present exchange rate gets into our -- to our top line relatively well. Matthew Smith: I wanted to ask a second question around the buyback, if I could. So I appreciate the current tranche of $600 million is still ongoing, and we'll have to sort of await the next announcement later in the year. So I just wanted to ask, check whether your philosophy around the buyback has changed at all since last year? Or should we very much expect this to continue to be a material component of shareholder returns in the near future? Paolo Rocca: Yes, thank you. As you are saying, the General Assembly and the Board decided for a program of share buyback of $1.2 billion from May 2025 until May in 2026 divided in 2 tranches. The second tranche has been approved again in October. Now the decision obviously is to the assembly and the Board for the decision on this ground. But let's say, the factors that were relevant for the decision on the shareholder didn't change so much. So we will see if in the assembly in May and the Board after this should decide on this, when the second tranche of $600 million will be closed. They will consider the different factor, the level of cash availability in the company, the perspective of this. And on this basis, they will consider a possibility to continue the program of share buyback. Operator: Our next question comes from the line of Arun Jayaram from JPMorgan. Arun Jayaram: I was wondering if we could talk about your expectations around potentially getting to an inflection point in the Pipe Logix pricing indices, just given your thoughts on import trends and where -- when and where could do you expect us to see that pricing inflection point? Because it continues to trend down, call it, in low percentage points at this point, looking at the most recent pricing data? Paolo Rocca: Yes. Thank you, Arun. Well, the factors that are, let's say, having an impact on the Pipe Logix are different. But you should also consider that there is a Pipe Logix for seamless and the Pipe Logix for welded. What we see is that, to some extent, the Pipe Logix for welded is having a drag down on the overall impact, something that maybe we were not estimating -- fully estimating before. Why? When we saw the hot-rolled coil index going up as it is going up today, we were considering that this should have driven an increase in the welded pipe. But the import of welded pipe coming in based on the Chinese or Southeast Asia or other sources flat product is, let's say, containing movement in the Pipe Logix for welded. And this is, to some extent, having also an impact on the Pipe Logix for seamless product. Now the hot-rolled coil went up so much. There is clearing the way for some import in the welded product and putting under stress the producer of welding product based on hot-rolled coils coming from the U.S. In my view, this is kind of temporary because antidumping action against importation or import of welded will contribute to the gradual alignment of the Pipe Logix to the higher level of the hot-rolled. But this is not something that we can anticipate immediately for the first quarter. But over time, should be acting, should be a factor. Arun Jayaram: Great. And my follow-up, Paolo, I was wondering if you could just provide us your thoughts on how Argentina could play out in 2026 versus 2025? I know that you're adding a third frac fleet in Argentina, but give us a sense of how you see things progressing in the ground because we have seen some IOCs adding rigs in that market. Paolo Rocca: Well, let me tell you that as I was saying in the previous conference, after the election in Argentina in November, the confidence on the investment community is increasing in Argentina. And even the oil and gas companies have been able to finance more than $4 billion, collect financing from different tools that will be used to, let's say, promote and carry on investment planned during 2026. This process has been relatively gradual, but I think that over the second part of '26 and also following the biggest investment in the infrastructure, we will see this collection of financial capability will transform into a higher level of drilling in the country. This has been slower than probably we were expecting 1 year ago because opportunity are there, but also the level of country risk stayed a little higher after the election than we maybe were estimating. And this is maybe slowing down or at least is making more gradual -- the pickup has increased. Also some of these resources has been used for consolidation in the industry, especially by local player. And after this consolidation, the investment will go in operation in the development. First, some of the acquisition has been completed and gradually in this field, drilling will increase. I would expect in the second half of 2026, we will see something moving in this sense. I remember, part of the drilling containment has been coming by the reduction of the operation in the south part of the country. Now this is obvious. There has been a closure of operation in the South. So the key and the core of it -- of everything will be Vaca Muerta. Operator: Our next question comes from the line of Sebastian Erskine from Rothschild & Co Redburn. Sebastian Erskine: I'd like to just start on the margin trajectory for Tenaris in 2026. And I think, Paolo, you mentioned earlier about the impact of kind of hot-rolled coil on ERW margins. I mean, looking at that, I think in the U.S., those have compressed about sort of $350 a ton since August. So I guess that would equate to something like a sort of $35 million, $40 million quarterly cost headwind, but that will take a while to show up. So when does that flow through into COGS? Or is it something we shouldn't really be thinking about as a meaningful impact? Any color there would be helpful. And then I guess on top of that and more positively, when we look into the second half of the year, you've obviously got a lot of offshore work to materialize. So you mentioned Sakarya, Suriname and presumably, obviously, that's higher margin. So can we expect you to operate at the top end of your kind of 20% to 25% EBITDA margin guidance? Is that realistic going forward through the rest of the year and a kind of second half weighting? Paolo Rocca: Maybe, Gabriel, you can give an overview on part of the question. And then eventually, we will ask Guillermo on the other pathway. Gabriel Podskubka: Sure, Paolo. Good morning, Sebastian. Going to the part of your question related to offshore and how they will play out during 2026. I would say that the market in the offshore is quite operating at high levels. We have a strong backlog that we need to execute. As Paolo commented in the opening remarks, we are getting ready to deliver this impeccable execution. These are complex projects that require local deployment. You mentioned the Suriname project. We are building the new service base in Suriname. The new -- the first shipments will arrive in June. So we are ready to deploy the OCTG and the Rig Direct services there into the second half of the year. We are also, for example, producing today thermal insulation coating in Nigeria to support the Shell Bonga North deepwater development. So these are important part of our focus and attention is on delivering this high backlog of orders. And we expect revenues in the offshore in the first half of 2026 to be higher than the second half of 2025. When we talk about the second half, it's true we have an important backlog of Sakarya and other projects. Some of these awards -- additional awards require FIDs. We see some of the FIDs being announced towards the end of this year or even in 2027. So this will depend. So we don't have fully confirmed the backlog of second half of 2026. But we are confident that it will be at least as positive as the first half of 2026. So overall, I would say, the offshore contribution will be important for Tenaris. And if you look at the industry projections, the level of FIDs of deepwater that we are seeing for 2027 are pretty strong, higher than the average of '25 and '26. And we are engaging with our customers early on in those projects much earlier than the FID. So we believe that we're in an offshore cycle that is going to be sustained for a multiyear period. Paolo Rocca: Yes. This is very important. When we look at the estimate of the investment in deep offshore for '27 and '28, the number apparently of estimation are showing level of investment in the range of $120 billion in '28 that are almost 3x some of the low-end years in the past 2, 3 years. So long term, look promising for this. Now Guillermo, maybe you can add on the U.S. operation best vision. Guillermo Moreno: Yes. Thank you, Paolo, and good morning, Sebastian. Well, regarding your question about the trajectory of margins in the U.S. and particularly for our ERW pipes, clearly, the recent increase of prices of the hot-rolled coil and still the reduction of prices for the same products is putting a lot of pressure on our margins. And that is going -- that are going to be reflected mainly in the second quarter. For the following quarters, with all the volatility that we are seeing, it's more difficult to forecast, as Paolo explained before, but -- and will depend mainly on the ability of the Pipe Logix to recover that we think that eventually will based on the push of the cost hot-rolled coil and scrap and also because of the expectation that the imports will continue to go down in the future. Operator: Our next question comes from the line of Stephen Gengaro from Stifel. Stephen Gengaro: So 2 things from me really. One is, can you talk a little bit about your expectations in 2026 for any material changes in working capital as we sort of try to think about free cash flow generation? And then maybe aligned with that, what level of cash do you feel like you need on the balance sheet to run the business? Like what level is excess versus what's sort of normal necessary operational cash? Paolo Rocca: Thank you, Stephen. Well, in general, remember, it's not only a question of the capital we need to run the business, but we also need to have always in mind the capital we need to have available for any expansion or opportunity that may come in front of us. This is an important consideration for the Board, for everybody when we consider the financial strategy in the flows to the shareholder. But as far as the working capital is concerned, I would ask Carlos an overall view because there are some areas like the receivable from some of the clients that is improving. And so you can give us a view of how you see this. Carlos Gomez Alzaga: Sure. Thanks, Paolo. For the 2026, we expect to be quite neutral in working capital, but we will have some swings over the year. Especially in the first quarter, we're expecting an increase in working capital, mainly driven by our accounts receivable. As you saw during the fourth quarter, we have a big reduction in receivables, mainly driven by collections in some -- big collections from Pemex. I think with Pemex, we have arrived to a level that from now on will maintain or increase a little bit. So we won't be seeing a working capital reduction coming from there. And then we are seeing also some terms, we negotiate some terms with customers in the U.S. that might impact a little bit our working capital needs. And also, we are seeing some slight increase in sales for the first quarter that will also imply an increase in account receivables. Paolo Rocca: In terms of inventory, maybe for managing our -- in our balance sheet, the service component of the company is very visible. We have the fixed capital that is slightly higher than our working capital because in the end, we have a lot of inventory to support our service strategy and our Rig Direct strategy. You think, Gabriel, we can imagine some reduction of this streamlining inventory or basically you imagine a stable situation here. Gabriel Podskubka: In general, Paolo, we are always looking for opportunities to improve. This is the case in all our Rig Direct programs, we are managing and balancing the ability to supply and have the right stock at the right moment and have efficient working capital. So this is a constant work. We have done an improvement during the year that we will continue this year on the work in process material. So this is something related to our industrial efficiency where we have been improving, and we have more room to improve. And then there is a part of steel as we have this important LSAW pipelines that we need to buy the steel in anticipation. So typically, there is a longer lead time on these large pipelines that are also reflected throughout the year. But this is an area of attention, and we always think there is room for improvement. Paolo Rocca: It is important for projects like Sakarya. Gabriel Podskubka: For example. Paolo Rocca: Long term, long period of time. Gabriel Podskubka: Yes. Paolo Rocca: And also our operation may demand working capital for serving ADNOC with a long operation and stock demand. Gabriel Podskubka: We are serving every month 550 rigs worldwide. So this requires to have the raw material close to this rig. Paolo Rocca: Serving 550 rigs every day imply to keep all the inventory even in a remote region or at least like in the Gulf. But still, we're working every day to understand how we can optimize this by the way. Sebastian Erskine: No, that's very helpful. Operator: Our next question comes from the line of Alessandro Pozzi from Mediobanca. Alessandro Pozzi: The first one is really going back to the Q2 guidance. You mentioned a bit of an impact from higher raw material costs. I was wondering if you could perhaps quantify or give a sense of what that could be in Q2? And also, as we look throughout the year, I was wondering if there is any quarter where we could see an impact from mix, for example, more line pipe versus seamless and having an idea of the cadence of line pipe volumes, I think it could be quite interesting? And also on maintenance, whether you have any big maintenance quarters? And second question on Argentina. Can you comment on the level of competition you've seen there? We've seen an Indian company getting a contract for a pipeline. And I was wondering your thoughts about the competition there as volumes, as you pointed out, are going up possibly from second half? Paolo Rocca: Thank you, Alessandro. Well, on the first point, there is, let's say, the impact of the row. When we look at the medium term in terms of this, we always keep -- follow basically 4 points: the Pipe Logix for seamless, the Pipe Logix for welded, the cost of hot-rolled coil and the cost of scrap. So on these 4 variables that are moving are acting on our, let's say, the indicator in the formula of our contract many times and also the costs that are underlying. Up till now, I mean, what we see is an increase in the hot-rolled coils that is not followed by the Pipe Logix in welded because there is import from companies that could stay below the line of price, even paying 50%. This is hitting our -- to some extent, in our margin, but we think that this will be a reaction by the Pipe Logix some antidumping action to contain import. And I will ask Guillermo, if you see this happening in medium term, I mean, when we can recover the increased cost of the hot-rolled coils in our top line. Guillermo Moreno: Yes. I think that following what I said before, I mean, remember, there is always a lag between the Pipe Logix and how they reflect in our prices. So normally, we have 1 quarter delay. And while the impact of hot-rolled coils, it comes sooner than that. Our expectation would be that we should start to see some reduction in Q3, but particularly in Q4. Paolo Rocca: Thank you, Guillermo. Now on the line pipe seamless after the acquisition of Shawcor, the line pipe for us is very relevant, and we are I think very competitive. But maybe, Gabriel, you see some changes in the balance between 2. Gabriel Podskubka: Yes, Paolo. Alessandro, regarding your question about the cadence of the pipeline projects, I would say that it's quite stable during the 4 quarters of this year. This is the visibility that we have today and pretty much in line in volumes on what we had on 2025, where we had important projects like Sakarya -- I mean, like [indiscernible] in 2025 in Brazil. This year, we are concluding some pipelines in Argentina in the first quarter and second quarter. Then we will have Sakarya in the third and fourth quarter. We have, I would say, a relatively stable plan of pipelines in Saudi Arabia as well. And then the deepwater pipelines that we have in different parts of the world. So I would say, there is not a significant imbalance in our shipments of line pipe. Paolo Rocca: Thank you, Gabriel. On the last point on the tender in Argentina. Well, this was a tender for a large project for producing LNG in Argentina. The project is carried on by a private company that, let's say, include different shareholders, but it's a private company. They made a tender, a very open tender to everybody. And basically, we lose the tender because they were higher than the lowest bidder. The bidder, as you were saying, was an Indian company. Things like this happens, obviously. Now what we are doing, we are analyzing the offer to see if this is an offer that is following the trade practice or is exposed to potentially an antidumping case raised by us. For the time being, we didn't take the decision here. We are just studying the condition, the condition of the local market for the Indian company, the condition of the pricing of this because we think this is important. We also remember that Argentina had signed an agreement with the United States in which both parties are committing themselves to address the unfair trade practices in both countries. It is logical for U.S. to advance or introduce close of this in the relation with different region, different areas. And this is part of the agreement, the reciprocal trader investment agreement between Argentina. So we think there should be a good environment to analyze the specific situation of this offer and this tender. Alessandro Pozzi: All right. I don't know if I can squeeze in a last one on Venezuela. In your opening remarks, you mentioned that Chevron is ramping up drilling activities. Could you quantify the Venezuela opportunities short term, longer term for Tenaris? Paolo Rocca: Yes. On this, Gabriel, you follow closely this. Gabriel Podskubka: Yes, Alessandro on Venezuela, clearly, the situation is evolving. It's a dynamic environment. But clearly, there are signs that things are going to move positively with the hydrocarbons law and the recent of licenses, I think there are clear signs that some resumption of activity will occur. Today, Tenaris is in a unique position. We are fully serving the Chevron, the only major that is operating in Venezuela. They have a plan to accelerate rigs and demand for 2-wheelers, and we are ramping up for that. This is today something limited, but we expect to expand into 2026. So we are also following the licenses of the other majors that might be coming back to Venezuela soon. So this is, I would say, still in the $50 million for 2026, but with a clear perspective of a higher potential into 2027 and when maybe more clear plans about the other majors are materialized. But overall, a big upside potential in the midterm, depending on how things evolve. Paolo Rocca: Remember, Chevron will not be alone. There will be other company moving. I think our position in Venezuela is unique. Remember, in Venezuela, we're operating the only seamless pipe plant until the plant was expropriated in 2008 by the government by [indiscernible] and at that time, we were the company serving the oil industry in Venezuela. So we also have human resources or people that are familiar with the operation in Venezuela, the service, the complexity on this, the product demand and so even if a lot of time passed, but we still, I think we have a very competitive and differentiated position. Alessandro Pozzi: Right. Sorry, did you say $15 million EBITDA, 1-5? Gabriel Podskubka: $50 million of revenue, 5-0. Operator: Our next question comes from the line of Luigi De Bellis from Equita SIM. Luigi De Bellis: Just one for me. On the Middle East and Mexico, could you share your view on the evolution for the coming quarter for both Middle East and Mexico? Paolo Rocca: Thank you, Luigi. Well, starting, let's say, from Mexico. Mexico, there has been a number of positive events in supporting Pemex. The government capitalized Pemex with a program of $20 billion that is important. And now Pemex is also issuing bonds and getting access into the market for important sum like $1.7 billion. I mean, relevant access with government guarantee. Now what we do not see yet is the definition of the plans that the Pemex will execute during 2026. We do not have clear indication of this. And the private company are moving slowly. And some of the group is moving. Obviously, Woodside in the Trion is moving on. But some of, let's say, the contract that may have enabled private company to come and develop the resources. In my view, this is moving relatively slowly today. Maybe by the end -- the middle of 2026, we will have a better understanding of how they will organize, let's say, the development of the clearly huge resources that Mexico has. Now the question on Middle East, medium-term vision, I think, Gabriel, you also may comment on this. Gabriel Podskubka: Yes, sure. Luigi, for the question on Middle East, I would say, there's not much change on what we have been reporting in the last couple of quarters. Activity remains high. All the main key countries are investing. We have a strong position there with our long-term agreements in Saudi, UAE, Qatar and part of the market in Iraq as well. So I would expect our revenues and shipment in the next 2 quarters, first and second quarter of '26 to be pretty much in line with the last 2 quarters of 2025. The only noticeable news is a probable uptick of drilling activity in Saudi. This is still to be confirmed, but probably during the second quarter of '26, maybe later in the year, we will see a comeback of rigs in Saudi, which reduce rigs during 2025. So we'll monitor that, and there could be a potential upside, but for the second half of this year on the [indiscernible] side. Operator: Our next question comes from the line of Marco Cristofori from Intesa. Marco Cristofori: My question which relate on shale oil, shale industry in the U.S. Let's say that since the end of 2023, we have seen declining rig count, but a growing crude output. So -- and also breakeven are going strongly down according to oil [measure]. So do you think that this trend could allow a further increase of your volumes in the U.S.? And secondly, there are several insights that the shale in the U.S. could reach a plateau in the second half of 2027. So how do you see the evolution of the shale industry in the U.S.? Paolo Rocca: Yes. Thank you, Marco. I would ask to Guillermo to give his view on the evolution of this. In the question of plateau, frankly, I wouldn't -- I don't think we are able to predict the plateau. It will depend on the overall price of oil around. And there are many issues that are unpredictable concerning the major production region and so on and so forth. So in U.S. the plateau has been forecasted in the past at a lower level, and it is continuous surprising us with higher. And so I wouldn't bet on where this number will be in '27. Guillermo, on the question of the productivity. Guillermo Moreno: Yes. I mean, as you said, I mean, the operators in the U.S. have been increasing their efficiency and productivity big time in the last 2 years. So with a much less number of rigs, they are not only producing more, but they are drilling almost the same amount of wells, and they are even going longer. So we are seeing much less rigs, but more production and slightly reduction in the consumption of OCTG compared to what we used -- I mean, so there is no such correlation that we used to have with the rig count. Now looking forward, we still see kind of a stable market for 2026 compared to 2025. We may see some reduction of activity, slight reduction in oil offset by an increase of activity in gas. And as Paolo said, difficult to predict about production. Everybody is talking about plateauing, but at the same time, we see them becoming more creative and producing more oil from each well with the new technologies in terms of fracking, but also in terms of the level of chemicals they use. So we need to see as to where the innovation of the industry can go. But clearly, if we are not at the peak, we are not far from it with this level of activity and rig count. The other variable that we need to take into account is that during the last 2 years, there has been a reduction of drilled by uncomplete wells. So some of the increase of the activity was also coming from wells that were previously drilled but not completed. The level of inventories of those wells has gone -- has come to kind of a bottom. So we don't expect much more of this in the coming quarters. Operator: Our next question comes from the line of Kevin Roger from Kepler Cheuvreux. Kevin Roger: I just have one question to follow on the U.S. and all those stories on the tariff implemented by the Trump administration and notably on the recent news flow that the Trump administration could reduce the tariff on steel and aluminum. I was wondering if you comment a bit more on what should be the implication on your side from a potential reduction on the tariff if, for example, we come back to a 50% steel tariff to 25% or something like that. Just to understand the potential impact on the U.S. OCTG market if we move in that direction, please? Paolo Rocca: Thank you, Kelly. Well, we don't know which is -- I mean, we only have an article on the newspaper. We do not have a written definition. If I should say, the issue may come from the impact of the U.S. economy of the extension of the 232 to the derivative of steel. There are in many products, derivative of steel, which means that they contain steel, there are basically affect price level in the states, but are not having a beneficial impact of industry in the states that is not producing this. Now this universe of derivative increased so much that I think the comment of Trump maybe are just indicating a willingness to reshape what is considered derivative and what is not. Remember, there has been stages of expansion of the definition of derivative 1, 2. And before going to the third, he is considering what would it be, let's say, not creating undue distress in the pricing system. So this is what I understood. We will reconsider the derivative more than reconsidering the level of 50 for 25 because this is a key component of the 232. I don't see this to change. Operator: Our next question comes from the line of Jamie Franklin from Jefferies. Jamie Franklin: So firstly, and apologies if I missed the answer to this one, but I just wanted to focus on your other business segment. Obviously, a big revenue and margin recovery in 1Q, driven by your fracking and coiled tubing services in Argentina. Can you just talk about how you expect that to trend through 2026 and whether we can expect a similar contribution in the first and second quarter and beyond that? And then the second question, just if you could give us an update on your CapEx expectations for 2026 and kind of an outline of where you expect to be spending? Paolo Rocca: Thank you, Jamie. On the oil and gas, I was saying, during the second part of 2026, we are considering that the activity of oil and gas fracking should go up. The drilling activity will also pick up later on. There will be more need to frac. We are just bringing in one additional set of fracking because we are anticipating some increase by the end of the year. And this should drive to some increase on our activity in the second half of '23. This is basically the position on this. The other point, CapEx, I mean, the CapEx will be more or less in line with what we have been spending in 2025. Looking at the forecast, we see even something lower. But I imagine that during the year, new need may come out. Usually, there is something that is coming out from specific intervention. So there will be something lower when we look at this from a planning point of view today. But maybe in the end, we will be close to the level of today. Operator: Thank you. At this time, I'm showing no further questions. I would now like to turn the conference back over to Giovanni Sardagna for closing remarks. Giovanni Sardagna: Well, thank you, Gigi, and thank you all for joining us today. Bye. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Operator: Welcome to the review of VGP's financial results over full year 2025. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead. Jan Van Geet: Good morning, everybody, and welcome to the presentation of our full year 2025 financial results. My name is Jan Van Geet, and I'm the CEO of VGP, as most of you know, I think. I'll first start with a little executive summary and the highlights of 2025. We recorded a pre-tax profit of EUR 338 million, an increase of EUR 19 million or 6% higher than the full year of 2024. Our net asset value grew 8.3% up to EUR 2.6 billion, and that's -- the EPRA NTA is up 9%. We have an EBITDA growth of 28% to EUR 454.7 million, 13.5% increase. And what makes me happy is the historic record of EUR 106.7 million of new and renewed leases, which I will go to more detail later on. The annualized committed leases at the year-end stand now at EUR 468.3 million. We have 1,052,000 square meters under construction and our development pipeline is 75% pre-let. I can add to that, that we have signed a lot of LOIs, which are in final negotiation. We think that by the end of the first quarter, most of them will translate into new lease agreements. And if they do, and we expect they do because we are finalizing the lease agreements with them, we will have a new record of more than EUR 80 million of signed lease agreements to be started up in the new year. So we are having a solid pipeline to be started up already, which is fully pre-let. We delivered almost 500,000 square meters last year, 99% let. And the last unit has just been agreed upon. It's a small unit in Koblenz with somebody from the defense industry. We have 1.4 million square meters of land acquired and our total secured land bank stands at 10.3 million square meter, which represents a development potential of at least 4.3 million square meters. We did a net cash recycling of EUR 389 million through a transaction with our joint venture partner in the Saga joint venture, and that led to an additional EUR 60.5 million realized profits in 2025. And we target another material closing with the Saga, as we already announced it in August last year. We announced that we were going to do EUR 1 billion. I think we'll do a bit more in the second half of 2026, for which we have already all of the assets aligned. It will be a material closing. We'll go more in detail also later on that. And then finally, VGP and East Capital have agreed to set up at least EUR 1.5 billion of gross asset value of pan-European fund with an emphasis on Central and Eastern Europe. We know East Capital already for 15 years. They are a very reputable boutique fund manager from out of Sweden, which have quite some track record in Eastern European assets and they manage the fund, management thereof. The Board of Directors proposes an ordinary dividend of EUR 92.8 million, which is 3% higher than the ordinary dividend of 2024, or EUR 3.4 per share. If we look at the summary of the financial results, and you see that the steady growth of the total portfolio value goes up from -- for the full year at 100%, including the joint ventures portfolio at 100% with EUR 900 million almost from EUR 7.8 billion to EUR 8.7 billion. We have a continued strong growth in committed annualized rental income. It grew 13.5% year-on-year. So we're getting bigger every year. It's more and more difficult to beat that, but we're going to do our best this year. I think we're going to be able to set another nice year. We have a lot of demand in the pipeline. And the full year of 2024, we had EUR 412.6 million at the end of the year committed annualized rental income, and at the end of 2025, we had EUR 468.3 million. The EBITDA increased 28% -- Piet will go more in detail later on -- which followed actually a very solid performance in all of our business segments. It went up from EUR 354.4 million in 2024 to EUR 454.7 million in 2025. And then I already told you about the dividend, which will grow with 3% to -- we're proposing, anyway, to EUR 3.4 per share. I'll first go a little bit on the market and the market update. These are not our slides. These are slides which we got from Jones Lang LaSalle. And I will compare our own performance a little bit to that. If you look at demand and occupier segments, then you see the take-up share by sector, and then you see that the third-party logistics are still the biggest one. We have very little third-party logistics inside of our own portfolio. We have most end users and also longer-term lease agreements. And we see a very big comeback from e-commerce. It is bigger than what we have in here. And what we have in the pipeline now, what we are working on, is also very e-commerce determined. So we see them coming back, and we see that there is more and more and more demand from out of that sector. It's not only Chinese companies. Also, they are here. But it's mostly Western European and American people who are coming back to the market. We also see a lot more demand now from the defense sector. We have been able to secure some of them, and we are also currently negotiating with some of them for some new manufacturing things in the pipeline. The vacancy rate has come up a lot over the past quarters. It actually doubled from 3% to 6.2%. But that compares in our own portfolio to -- we are a little bit more than 98% let at the moment. And we see healthy demand. And we also see that there is a lot less speculative construction in the market. So the vacancy levels, we expect them to go down in the future. If you compare to all the markets which you see right next them, there where we are in Budapest, we have 0 vacancy; Madrid, we have 0 vacancy. If you look at Bratislava, we have 0 vacancy at the moment. In Milan, we have 0 vacancy. In Prague, we have 0 vacancy. Of course, some of these are also speculative buildings which have been started up over the last quarters. On the supply, you can see that the build-to-suit over the last 3 years is quite flat. The 2023, '24 and '25 levels have remained stable. But you see that the speculative development is coming down quite a lot, which gives us a good view on that there will be soon not so much available anymore in the market because there is quite some take-up over the last year also. We have 16.2 million square meter space under construction, which is the lowest level in the past 5 years now. Capital markets, I don't know if we can say something intelligent on it. Last year started very well, and we did a very large transaction, EUR 509 million, in the second half year. So that also contributes to it. But we saw that the -- overall, over the whole year, the transactions went up both in volume and in size. And -- but mostly in the smaller markets on the major markets, only U.K., the Netherlands and Poland posted a year-on-year growth. The yields have been relatively flat. You can see that very well. We've had a devaluation on some of our German assets because our valuator takes the view that vacancy levels in Germany should go up -- no, not should go up, but the reletting should take a longer period. He has made that from 12 months to 18 months. Pete will go in detail to it. But we have seen that in Germany what has come available over the year, we have been able to relet on average in 2 days, not more, and we have a 21% uptake on the rental income of what we have relet. So we can't really concur to that view, but it is what it is in the market. That's what our valuator thinks of it. But it's not visible in our own portfolio. I will go through the operational performance for the full year. Maybe I'll just go back. This is our park in Arad, which we've just started. And the building which you see on the right side is a building which we constructed for VAT. VAT is a vacuum valve producer for the semiconductor industry, a very specialized product production. It's got 12,000 square meters of clean rooms inside at a very high level. And we have achieved with that building, BREEAM outstanding score of 96.2%, which is the highest of any industrial building in the world last year -- no, over all the years in BREEAM outstanding. And this is our park in Valsamoggia, which is also fully let and which we've transacted last year through our joint venture with Saga, with our friends from Areim. As I already said, we had a record year in committed rental income, including the JVs at 100%. The group has 465 tenants, but that's divided over more than 650 lease agreements, as you can see. So we have a lot of tenants which come multi times back into our buildings. The committed annualized leases as of 31st of December stand at EUR 468.3 million; occupancy rate, 98%; and it's filling up really very well. At the moment, we really have quite some demand in our portfolio. And if we make the bridge, then you see that the committed annualized rental income started with -- and I think it's 13 -- yes, EUR 412 million and a bit. We signed new leases, almost EUR 57 million. We had EUR 6.5 million of indexations. We had some amendments in leases, people who wanted some other space or differentiate their space. And that EUR 8.9 million of terminations. And we sold one building in Riga to its user, to Jysk, which declined also EUR 2.4 million of rental income. And that brought us to the EUR 468 million, which we had at the year-end. But meanwhile, we've signed quite some leases already, and we're looking forward to be able to report to you after the first quarter, because, as I said, we have quite some nice LOIs in the pipeline. The majority of the new contracts which we signed were within the Logistics segment. I have some examples. Logistics was 67.9%. But as I said, we have very little third-party logistics. You don't see many third-party logistics also in the names here. We signed with Studenac, which is one of the largest retailers in the Balkan, a very nice cooled warehouse, which is delivered this week. We signed with Aldi a very nice new warehouse, which we're going to start construction in a couple of weeks in Frankenthal. That's a big one, 60,000 square meters. We signed a very nice lease with Movianto, healthcare dedicated logistics. That's a third-party logistics. But you see Heineken, Eureka, Duomed, Ursus, Farmol, Studenac, they are all end users and they use their own facilities and sometimes use somebody to operate it. This is something which changes all the time. But e-commerce was last year 16.5%, and I expect it to be quite a bit higher this year. Light industrial, 14%, but that's just a move in time because we also had quite some demand from light industrial over the past year. Our portfolio is leased to a very diversified and blue-chip tenant base. The weighted average lease term is already here stable. It's 7.8 years. As we keep on growing and most of the leases are relatively long term signed, we have -- the top 10 tenants represent 29.7% of committed leases. But also there, we have -- these represent 28 different lease agreements in many different jurisdictions. So it's well spread, the risk of it. And yes, if you look in here -- but this is a little bit longer term. The logistics represent 47% in our total portfolio, light industrial, 34% and e-commerce, 17%. And we have some others. We have some -- it's mainly Siemens, yes, where Siemens is in Nuremberg. It's a site where we have offices and which we are going to start rebuilding this year completely. This year, we have some quite iconical projects which are upcoming and about which I will tell a little bit more afterwards in the outlook, because we are going to really have some land plots coming online which are -- from which we expect really a very nice contribution in the coming 12 to 24 months. If you look at VGP at a glance and you look -- we are always looking forward in how can we grow and where can we grow, in which segments can we grow. And of course, the main part -- the main raw material to be able to grow is the land bank because we always grow organically, we develop everything ourselves. We don't buy any standing assets. And if you look at the December '24 net cash generative rental income, so things which were delivered and really generated cash, it was EUR 350 million or EUR 240 million at share. During 2025, we activated EUR 39 million of new leases. So it went up with 11% to EUR 389 million or EUR 236 million at share, so including 50% of the joint ventures, if you look at it. The signed leases, which are still under construction and which will be added on in the next 12 to 18 months, is another EUR 79 million. And so that's another 18%, and that takes us to EUR 468 million of income-generating activities or EUR 310 million at share of income-generating lease agreements, of which EUR 321.7 million sits in the joint ventures. But if you look at our land bank which we have today and the ERV of the vacancy and the development pipeline which we have, that's another roughly EUR 300 million, which takes us -- the potential up to EUR 766 million, or, at this moment, EUR 602 million at share. And we are trying to accelerate our development pace as much as we can now. The development activity, talking about acceleration, drives our second strongest EBITDA in our history. And if you look, there is a couple of notes which I need to say to this. You see very well the division between East and West. In 2021 and in 2020, we had big start-ups in Western Europe because we had these big leases in Giessen and in Munich, which started up at that time. You see also that in 2022, we delivered and then we started up a lot less because of the big inflation. I told you that I was standing very much on the brake at that point because I was afraid about having too much vacancy with buildings for which we paid far too much. Now we have our costs very well under control. Our margins are going up relatively quickly. We have very sound margins again, which you can also see in the revaluation result, because the revaluation result in this year, I think it's EUR 183 million, is pure and only revaluations from new activities from things which we have started up. And whereas, in 2021, it was a little bit a distorted image because there was also a big uptick in valuations, of course, in the standing portfolio as yields were going down with very steep declining interest rates. Out of the EUR 634 million record EBITDA in 2021, only EUR 81 million was cash -- was really cash income, recurrent income. Out of the EUR 455 million EBITDA in 2025, it's EUR 249 million, which says a little bit also about the resilience of our result going forward. It's more and more regenerative income. The net rental and renewable energy income at share has grown a lot year-on-year with 18% in 2025. If you look at it, we are now at EUR 223.384 million in 2025, which we expect a continuous growth in 2026. In the renewable energy, about which Martijn will tell you a lot more later on, we have now a lot diversified also into battery projects, battery projects which have a very high yielding on their investment, and of which we have foreseen to construct quite a lot in 2026 as now we have the permits coming into place to -- in order to be able to do that. We also thanks to the brownfields which we have been buying over the past years -- most of them have been big factories with enormous electrical connections. For example, we bought Hagen. Hagen has 90-megawatt connection of energy, which not only allows us, if we can, to deliver back very nice battery projects, big in size, but it also opens the potential. And it's very congested today to be able to do a more data center exercise. So we are trying to take a look at it, whether we could implement a data center also in Hagen, whether the location is the right one. And at the moment, we have 2 identified together with Sarah, our new employee who came from Microsoft. One is in Russelsheim and one is in Bodenheim. And on both, we are very well advanced on our permitting. On the permitting side, we are advancing very well. It will take a little bit more time. These are complex exercises also, but we are on a good way to be able to realize them soon. And it's our ambition to have something by the year-end to be able to say something more concrete about our data center developments going forward. The portfolio is virtually let on a long-term basis, and you can see there is very little variance. Combined occupancy of the portfolio stood at 98%, WALT at 7.8 years, with the first brick at 7.4 years. Top 10 customers, as I said, that's 28 lease agreements, and the biggest one is still Krauss Maffei. But when we first contracted them, they were 21%. And now thanks to all this growth, it's only 6% left of the total portfolio which is now Krauss Maffei. And Opel is 5.1%, which is a short-term lease, but it will be replaced. And we are going to redevelop, of course, Russelsheim, and we expect to be able to do quite a significant uptake in the leases going forward. Our own weighted average lease term on our own portfolio is 9.6 years at the moment. On the delivery side. And here, you see our park in Vejle under construction in Denmark. We delivered 21 buildings, which represented almost 500,000 square meters in gross lettable area. That was EUR 32.9 million rental income, 39 new contracts, and they were 99% let. And as I said, we've now have -- we have a tentative agreement with somebody from the defense sector to take the last unit in these buildings, and it will be 100% leased. 100% will be rated BREEAM actually excellent, of which 31% is BREEAM outstanding over the last year, which I think in Europe, at least we believe we have done the best performance with the rating of BREEAM outstanding. You see 2 of our buildings, the VGP Park Parma in Italy, which last year, we delivered to Mutti, the tomato producer, and our Park in Keckemet, where, amongst others, we also have Mercedes as a customer. The deliveries in 2025 trending towards logistics, but you see immediately that there is also some quite big productions inside. Hyundai Mobis was a very nice one. We delivered a 50,000 square meter facility in Pamplona. And we delivered to VAT, as I already said, this building for this vacuum valve producer. On the 2 pictures which you see in the -- you see VGP Park Cordoba, which is a production, by the way. And then you see our VGP Park in Montijo, which we delivered last year and which for the biggest part is a cooled and deep cooled warehouse for Logifrio. The portfolio at share has grown organically and completely organically because we only develop everything ourselves and then we place it in our joint ventures. But it has grown at an annual compounded growth rate of 21.9% and it's gone up from EUR 5 billion to EUR 5.6 billion. We offloaded since 2022 EUR 3.4 billion of gross asset value into the joint ventures. And we aim this model works very well. We aim to continue to do that. Yes, it's -- if you look at it, Germany is still the strongest market, although the others are now growing maybe a little bit faster relatively. The Czech Republic is now almost EUR 1 billion in assets. Spain is growing quite well. And in the Netherlands, this year will be a huge uptick because we already leased out 60,000 square meters, which is under construction. But we are working on a very big new lease agreement in the Netherlands, which will take out our entire park in Nijmegen. The investment portfolio on 100% view has grown to EUR 8.7 million, which is up 11% year-on-year. And Western Europe represents 74% of the total portfolio value as of December 2025. You can see the completed is EUR 7 million. Development land is EUR 770 million or 9% of our total investments. And under construction, we have almost EUR 1.930 billion, which is also 11%. On the development side, the portfolio under construction represents EUR 85.3 million of new leases. And as per today, 43 buildings are under construction, which represents 1 million -- just 1 million of square meters. It's 75% pre-let, including pre-lets on development land. When we finalize these LOIs which we have in the pipeline, it will be well over 80%. So I think it's on a very healthy basis at the moment. We have started last year 761,000 square meter of new buildings in 2025, and we aim -- we have to already start up 450,000 square meters if this materializes, which is already pre-let, which is the highest which we ever had at the beginning of the year, pre-let, to be started up in a given year. So that's a very nice forward-looking thing to have. You can see again on the right side, you see our park in Rouen, which is now virtually fully let. We only have one last unit left. And then -- and a small one, 4,500 square meters out of the total more than 100,000 square meters -- total more than 150,000 square meters, which we are constructing there. And then you see our VGP Park in Veijle, Denmark, where we also have one last unit left, also 4,500 square meters. Yes. Again, it's well spread across our geographical footprint. You saw what is the income-generating assets or the assets overall, which are already that Germany in the income is more than 50%. In the -- what is under development, it's only 36%. You will see that the other countries are relatively growing a little bit faster now. They also are becoming more and more mature. France is a big market. Spain is a big market. The United Kingdom, I'm sure, will come up to speed soon. So we think that we will be able to do some very nice developments all over Europe. 2025 was also the first year where we had buildings under construction in literally every country where we're active in. That's never happened before. So that is now -- we have everywhere now buildings under construction. On the landbank, the picture you see is our beautiful park in Nijmegen, where we have Ahold Delhaize and Bol.com in one of these buildings which you see. And the land bank in front, that's only a very small part of it because we still have more than 20 hectares available, where we now have started groundworks already and we are already under construction for one client which we signed at the end of last year, Pragma Trading. And then we are negotiating -- we have signed an LOI for the rest of the land bank. The land bank, of course, it's something I am very much dedicated to because it is our -- it is the source of our future growth as we develop everything ourselves. And the land bank -- Piet likes to make bridges, so we have also this in a nice bridge. We owned in 2024 when we started or beginning of 2025, 7.4 million square meters, which is fully permitted, by the way. We acquired 1.37 million of square meters, which we always acquire subject to having the permit in place. So that's also fully permitted. We deployed 1.6 million square meters last year. We sold a little bit, a couple of square meters, but that's nothing. And then -- so we owned at the end of 2025 7.09 million square meters. But we committed, and in December, we had 3.15 million square meter of committed. So that's land which we have binding agreements on and which we then buy at the moment when we have the permit in order to be able to use it for its intended purpose. So that brings the owned and committed in December 2025 to 10.25 million. And we have another under option and PV contract of 1.51 million square meters. And this means that roughly -- because the 4.3 million is just the ground floor space, you need to calculate mezzanines and offices to it, but at least 4.5 million can be developed on this total land bank versus the 7 and a bit million of buildings which we currently have either finished or under construction. I also try to take a look -- a very pragmatic look at the land bank. And everywhere, we need to have a nice margin, which, of course, makes it -- in Germany, the yields are a bit lower than the exit yields than they are, for example, in Romania. But we try to target everywhere the same margin. So we -- and we have been able to target lands in all of our countries and the land bank is geographically well diversified. We have some specific countries we really need to take a look at going forward, but we were able to secure quite some really nice land plots, and I will talk a little about it also in the outlook later on. This is the first part of our operational results. I'll come later back to the JVs. But I'm now going to first give the word to Martijn to talk a little bit about our renewable energy company and its income. Martijn Vlutters: Thank you, Jan. First, giving a short overview of how our renewable energy business has now actually developed 2 segments. Jan already mentioned it at the beginning. Photovoltaic has continued to grow, and we added a good 50% to the revenues for the photovoltaic business. But something that is still a bit nascent, but for which we see good prospects is on the battery projects. You see there's in total 258 projects on the photovoltaic side. There's a few less on the battery side. But actually, it's -- in terms of investments, we see a good opportunity both to deploy capital. There's around EUR 4 million invested now, but yes, we see that grow substantially over the coming 2 years. And certainly, if you see the megawatt hour deployment that becomes -- with 173, that's a good 30% of the total in renewable energy. So -- and as Jan mentioned also, the profitability of this business is typically much better than for the photovoltaic. So this will start to add to the EBITDA line for renewable energy in 2026, but even more so in 2027 and onwards. The big constituent of renewable energy remains the photovoltaic business. Certainly, in 2025, we've seen a good growth. As I mentioned, the revenue came from EUR 8.3 million, and we've added another EUR 4 million to the total revenue, which was driven by additional production that was now over 130 gigawatt hours. Energy price at which we've been able to sell has remained broadly constant. If you look at the outlook, we've added another 13% in operational photovoltaic this year. So you will start to see that also in the production figures for 2026. And then there's another 35-megawatt peak that is under construction, which we expect to become operational in the course of this year. And I think the last thing to add is that the overall yield for photovoltaic has now popped over 10%. So the overall investment of the projects that are operational is EUR 110 million. And as said, gross revenues was EUR 12 million. So the gross yield has actually for the first time now popped over 10%. Then maybe also briefly on the corporate responsibility. There is one thing here highlighted on the left-hand side, which was something that was recognized at the end of last year by Time Magazine in cooperation with Statista. They've done sort of a science-based and quantitative assessment of all the listed companies across the globe. And based both on our financial revenue growth as well as the sustainability metrics that we have been able to accomplish in 2025, they've highlighted us as one of the top 100 companies globally in terms of realizing sustainable growth. I think one of the big contributing factors to that is the EU taxonomy, which you see on the third on the left in the smaller boxes. We've now achieved 68% of the total portfolio. But certainly, if you look at the new productions or new construction, we've actually been able to verify EU taxonomy for 95% of the buildings that we are currently constructing. That's all under the EU taxonomy new construction regime. So that's quite a strict regime, which we've set ourselves. And yes, with the 95% you hear, that really has become our internal market practice to adhere to across the group. A couple of other metrics that we've highlighted here that I'll leave to you to read at your leisure. I think we can move on to the joint venture update. Jan, back to you. Jan Van Geet: Yes. Our joint venture model is a little bit the cornerstone of our growth model going forward. And so far -- I'll go to the next slide -- we have -- you can see it's been growing consistently. We have done a new transaction last year with Saga, which is our fifth, sixth, whatever you call it, joint venture. And it's now more than 60% invested. And when we are going to do the next transaction, which is planned for the second half of this year, we will be virtually for a big part already fully invested. There will remain some parts of it, but we foresee a very material transaction in the second half year. And we have very positive and constructive talks ongoing also with Saga to continue with the next stage, next vehicle, which we would like to start up in the course of 2027, then going forward after Saga is fully invested. If you look at Saga -- well, as I said, it's 60% deployed. There remains roughly EUR 600 million of gross asset value. And as some of the parks which we have transferred have some little spaces left, which -- where tenants have expansion option, et cetera, we think that we will do a transaction which will exceed EUR 500 million in the end of the year, where actually everything is already identified. And we have been able to go a lot faster than originally foreseen, also thanks to the fact that we have enhanced the scope of countries in which we do our investments. In the beginning, what you see, the original scope, the dark green, it was Germany, France, Czech Republic, Slovakia and Hungary. And we have added to that Denmark, Austria, Italy and the Peninsula, Spain and Portugal. And so we now have a lot of assets which we can do. We have 989,000 square meters or 39 assets already spread over all these countries which are in site, and that's 60% of the total gross asset value which we have foreseen to deploy over the first 5-year period, which will become a 3-year period, I think, because by the end of this year, we should normally be fully invested. We also announced today for the first time that we are working with East Capital, a company which we know already for a very long time. Very nice people out of Sweden. I don't know if they are looking, but hello. VGP and East Capital is to set up a partnership to launch a Luxembourg-based real estate investment fund focused on European industrial logistics real estate with an emphasis on Central and Eastern European countries, not only but mostly. The targeted gross asset value we have agreed upon is at least EUR 1.5 billion. We hope to be able to do a first closing and we trust to be able to do a first closing in 2026 in the second half of the year. VGP intends to keep up to 50% and the remaining equity should come from third-party investors. The management will be shared between parties. There is no difference between the asset management and property management profile, which we had with the former joint ventures. It will become -- it will be the same. It will be East Capital's responsibility to do the fundraising and to do a little bit of investment advisory. And the portfolio will consist of -- what we are going to buy will be income-generating assets, all ESG aligned in the countries which you see. So it will come a little bit from everywhere, but with an emphasis on Central and Eastern European countries. That's it a bit on the JVs, and I will give the word now to my brother, Piet, for -- to explain the financial performance. And by the way, what you see on the picture is our park in Serbia, where the building on the right side is Ahold Delhaize, which we have built brand new, which has taken into operation. And the second building, the main tenant there is the Metro Group. And both buildings have been also delivered and both buildings also are BREEAM excellent awarded. Piet Geet: You stole my intro Jan. Jan Van Geet: Sorry. Piet Geet: As always, I have prepared for you a usual slide deck with P&L, balance sheet, cash flow movements and some further details. And I'm happy to walk you through and also happy to report an increase in our profitability from pre-tax EUR 319 million to EUR 338 million. And as always, there is really a lot playing through our P&L given the fact that we have a hybrid model between own developments and a JV. So I think the best thing is, as also in former formats, to walk you through it in more line by line. We had an issue with some sound, so... So first and foremost, you see that our net rental and renewable energy income, it has increased with 31% to EUR 88.7 million, basically exists out of the gross rental income or the rental income and the renewable income. The gross rental income on our own balance sheet increased 32.7%, which is EUR 86.7 million --- to EUR 86.7 million. But if you look at it on a proportional basis, meaning this EUR 86.7 million and our share in the joint ventures' gross rental income, this effectively grew from EUR 203 million to EUR 235.5 million of gross rental income. Maybe just to make a quick recap to what has Jan been presenting before, is we have in the group on an annualized basis EUR 468 million of contracted rental income. From that EUR 468 million, EUR 146.6 million is on our own balance sheet, of which EUR 78 million is active. That EUR 78 million could compare to this EUR 86.7 million, but it is, in fact, more. That is because, of course, we had done a transaction with Saga at year-end, and that still delivered us EUR 15 million of rental income that portfolio before we transferred it into the JV. And on an annualized basis, that transfer was actually EUR 29 million of rental income. So that's it about the rental income, a good positive increase, all built up organically. In terms of the renewable income, we also see a strong increase, 43% to EUR 11.9 million, coming from EUR 8.3 million on gross renewable income. As Martijn has presented, this was an effective increase in production from 90 gigawatts to 132 gigawatts or a 47% increase. So that brings it down on the net rental and renewable energy income, an increase from EUR 67.7 million to EUR 88.7 million, but also at share from EUR 189 million to EUR 223 million or up 18% in comparison to 2024. The next line in our P&L is the joint venture management fee or the joint venture fee income. It's EUR 32.7 million last year. That grew with 59% to EUR 52 million. Here, there are also some -- quite some particularities. The joint venture fee income basically exists now out of 3 components. One is our property facility or asset management fee, which on a recurring basis grew with EUR 4 million, and then there is also a provision for EUR 18.4 million on a promote. Just as a quick reminder, we have multiple joint ventures. The first joint venture, Rheingold, comes up to maturity in May 2026. It has already been extended for 10 years. But after the 10-year -- or the lapse of the 10-year period, VGP is entitled to a promote based on the net IRR performance of that joint venture. Now the net IRR performance, and we are particularly proud of it, has been very good, and we have a 12.4%. This is really net IRR really on a cash level basis after all asset management fees, taxes and whatsoever. And since we have surpassed the hurdle, we have now at 31st of December booked a provision of EUR 18.4 million. This provision, of course, will be updated in the first half at 31st of May based on the valuation of the portfolio as of then, plus its operational performance. So it is our best estimate based on the track record until 31st of December. And then finally, the remaining part is the development management income. We perform works on behalf of the joint venture. This decreased with EUR 3.2 million to EUR 2.5 million. But overall -- so the joint venture management fee significantly increased to EUR 52 million. And on a recurring basis, we do expect it to increase further in 2026 because we have done a transaction, for instance, in December, where we also have an asset management fee on, which will be accounted for in 2026. Plus then, of course, all of the transactions that we foresee to do, one with Saga and also with the new East Capital fund, which will also lead into increases of our fee income with the JVs. The next line, that's always a strong influencer on our P&L, that's the net valuation gains that we record on the investment properties. These increased from EUR 187.1 million to EUR 243.6 million, and they are actually composed out of 2. Jan has already hinted to it also that we have an unrealized gain of EUR 183 million, which is an increase of EUR 89 million, which is mainly related to our development activities. That's the profit on our developments. Whereas there's also a second component, which is the realized gains. That means that we have sold assets towards the JVs or, for instance, also the disposal of VGP Park Riga at a higher level than it had been recorded for in our books, versus the fair value in our books. This led to a EUR 6.5 million additional profit. And our own portfolio has a weighted average yield of 7.48% versus 7.22%. Of course, the number, sometimes we get a question, is a bit higher than in our JVs. But in JVs, it's 5.22%. That is because it's more skewed to Western European countries in the JVs and fully stabilized assets, whereas here, we are still having assets under construction and also quite some Central and Eastern European assets, which have a higher yield, on which, of course, we have also now the nice opportunity with East Capital. The next line on our P&L is the administration expenses. They are quite, you could say, broadly in line with last year from EUR 61 million to EUR 63 million. In average, the remuneration went up with EUR 1.6 million. But we also had a depreciation increase of EUR 2.2 million. That is mainly related to our renewable energy installations, which are recognized in a cost model, so at acquisition cost and depreciated. We have a general -- I need to move this -- EUR 5 million increase in general admin. Part of that was also the marketing campaign that we launched in 2025. And then since we have more assets under construction in comparison to previous years, we have also higher capitalized expenses on our assets or investment property, which offsets the extra cost of the above with EUR 6.7 million. And at year-end, we have 434 FTE. Next line is the share in the net profit. And there, we actually see a decline from EUR 92.7 million to EUR 41.3 million. But I can actually explain, I think, what has happened there in the bridge versus last year. First and foremost, the -- and I don't know if you see it also what I'm seeing, but there is a line missing. There is a -- but anyway, the net rental income increased from EUR 121 million to EUR 134.7 million. That's an increase of 10.7%. But the big driver or change in the JVs is the net valuation gains, where it was a positive of EUR 54 million, it actually reduced with EUR 65 million to minus EUR 10 million. This was driven by a number of facts. One is we have done a few settlements with the JVs where the JV had to pay us a top-up on previous closings, which was a negative impact on the valuation in the JVs. But the second element was mainly that there was -- and there is a strong German portfolio inside of the JVs, which was negatively impacted by a valuation change. So the average yield went from 5.05% to 5.22% in the JVs and the German part was a devaluation of approximately 2%. The appraiser effectively reviewed its prime yields for the country, and as Jan was referring to before, also had -- updated also his discounted cash flow model, foreseeing rather an 18-month vacancy period than a 12-month vacancy period when contracts would come to an end. Now as we mentioned before, we do not see that trend at all in our German portfolio. In fact, everything what we released last year was at 21% prices, averagely higher, as well as the average term to release something was 2 days. So we didn't really see this. But nonetheless, it did impact a bit our German portfolio and within the joint ventures. Then the other expenses that you see there, it's actually the promote at share. All of these -- what we see on the bottom table is at share. So it's EUR 18.4 million for us. But it's a cost to the JV. And at share, since we own 50% of the JV, it's EUR 9.2 million. Admin expenses were broadly in line. And I think if we disregard once the valuation movements, then we are actually seeing a very strong set of EPRA results on the joint venture, which is a testament to the very strong operational performance of the joint venture because the EPRA earnings are up 25%, but also our cost ratios are down. So in general, we are actually very satisfied with the performance of the joint ventures. Hence, also, for instance, the above 12% net IRR that we could achieve on the Rheingold joint venture. Next point in our P&L is the net financial result, which went from an income to a cost of EUR 24 million. This is -- of course, we raised the EUR 576 million of debt last year at a coupon of 4.25%, which gives already a delta in a higher interest cost. On the other hand, also in 2024, we profited quite a lot, also in 2025, but the interest came down on interest on cash on hand. We usually put quite some money on term loans and try to optimize it maximally as possible. But last year, this was an income for us of EUR 12 million. Now it was EUR 5 million. So it's a decrease of EUR 7 million. We have some higher capitalized interests of EUR 3 million. That is because we -- just like the capitalization on the admin expenses, we have higher amount of volume of assets under construction. So this leads to a high capitalized interest of EUR 3 million. And we have a decrease in our interest income from the JVs. I would say the shareholder loans in the JVs, they effectively increased. But of course, there have been distributions through repayments of shareholders during the year. And only at the end of the year, we created a new shareholder loan with the Saga joint venture because the transaction only materialized in the second half of December. And also, we partly capitalized part of the noncurrent receivables or the shareholder loans on the Deka JV, which also decreased a bit the interest income. And then finally, as you may recall, we raised EUR 576 million of bonds. But we also bought back in 2025 EUR 200 million worth of bonds, for which we paid EUR 195 million. So we made a profit on that of EUR 5 million. Going to the next slide. He doesn't want to go to the next slide. Jan Van Geet: Yes, he did. Unknown Executive: Okay. Where Jan also already referred to, and it's a particularly good performance over EBITDA. So the EBITDA is up EUR 100 million versus 2024. So up to EUR 455 million or an increase of 28%. And the increase is to be noted in all of our segments. So in the Investment segment, where we show the EBITDA of our completed portfolio, excluding any valuation gains, you see an EBITDA going from EUR 204 million to EUR 249 million. This represents, actually, if you look at into our balance sheet, EUR 2.9 billion of our total assets. In terms of Development, as I explained before, net valuation gains of EUR 243 million, composed of the good development profit traction that we have -- something is happening here on the -- with the -- yes, I'm back here. The good traction that we have on the development profits and realized gains. So our EBITDA also increased from EUR 145 million to EUR 199 million. And then the gross renewable energy also has a nice EBITDA increase given also the 47% extra production that we managed to produce in '25 or a 43% increase in its gross renewable energy income. In terms of the balance sheet, we see a strong increase of our total assets and total liabilities from EUR 4.6 billion to EUR 5.2 billion. The investment property is now EUR 2.4 billion, which, of course, composed of a completed portfolio of EUR 915 million, under construction EUR 777 million versus EUR 579 million. So you see here also the increase versus '24. And then development land, as we did buy quite some very attractive land plots, also increased from EUR 645 million to EUR 728 million. We did about a total CapEx of EUR 660 million, which is composed of about EUR 490 million on assets and EUR 150 million roughly on land acquisitions. And I mentioned already the weighted average yield of our investment property, 7.48%. The property, plant and equipment, the EUR 141 million, it's an increase of EUR 18 million versus last year. This is mainly related to our renewable energy installations, where we had a EUR 19 million CapEx. And the completed installations, where also then the EUR 11.9 million of gross renewable energy income is coming from, is generated from a complete installation of EUR 109 million, and what is still under construction is EUR 18.6 million. And our investments in joint ventures increased quite significantly with EUR 109 million. Now we have done quite some transactions with the JVs, not only the Saga closing, but as I mentioned also before, there were some settlements on previous closings which were to the benefit of us, which increased the equity contribution into our joint ventures altogether with roughly EUR 100 million or EUR 98 million. Then we, of course, have -- since it's reported under equity methods, the allocation of our result or our share in the result of the JVs, which is EUR 41 million. And then we received equity repayments from the JVs, so dividends of EUR 30 million. I will come back on the distributions of the joint ventures in the cash flow statement. I already mentioned the other noncurrent receivables. So they increased with EUR 63 million following the transactions with Saga, but we also got EUR 32 million of joint venture loan repayments. These were the 2 main movements, I would say, on the noncurrent receivables. And then we ended the year with a cash position of EUR 523 million, got EUR 31 million more than we had last year. And on the disposal group held for sale, the EUR 27 million, that is the VGP Park Tiraines, which is going to be sold in H1 '26. That is under a call option of its tenant. It's located in Latvia, and the transaction is about to be materialized. Everything is more or less done. The shareholders' equity increased, as already mentioned before, from EUR 2.4 billion to EUR 2.6 billion, very easy movement, EUR 290 million profit, EUR 90 million dividend going out. So that makes the movement there. And then in terms of our financial liabilities, that increased from EUR 2 billion to EUR 2.360 million (sic) [ billion ]. This follows a EUR 576 million bond that we raised in H1. It was actually EUR 500 million with a top-up of EUR 76 million. Then from out of that, we did a tender on our outstanding bonds of January '27 and '29 of EUR 200 million. And '27 was reduced with EUR 179.9 million. The one of '29 was reduced with EUR 20.1 million. But we effectively paid EUR 195 million on that. And then there was also a bond that came to maturity in March of EUR 80 million, which was also repaid. And then we moved to current financial debt at year-end, now the EUR 190 million bond, which is due in March. I'll come back on the debt also in one of the next slides. But our average cost of debt is now at 2.7% as at 31st of December '25. And as you may recall, we have also revolving credit facilities, which are untapped. They amount to EUR 500 million. We increased them during the year, and we also prolonged to them. There are more -- there's more info to that in our press release on what and to what extent it has been prolonged. But in the end, it comes up to a consolidated gearing ratio of 35% or a proportional LTV of 50%. We also have a Fitch, and also since 2025, an S&P Global rating. Both investment grade with BBB- and a stable outlook. I already made a reference to this I think in -- on the previous slide. So our average cost of debt increased to 2.7%. We have a significant liquidity position. And the bond maturities, I've updated it here already, given the January '26 -- in January '26, a few weeks ago, in fact, or 1 month ago, we raised EUR 600 million bond. And from that bond, we also repaid EUR 100 million on the outstanding January '27 bond, which was originally EUR 500 million. We reduced it with EUR 180 million in '25, and we reduced it again in January with EUR 100 million. So it's now still EUR 220 million. And then the remaining bonds to be paid are listed there. But you can see the one in 2025 has a maturity, the EUR 576 million, in '31, and the new one, which was raised in January, has a maturity in 2032. Speaking of the cash flow statement, we started the year with EUR 492 million. The net cash generated from operating activities is EUR 51 million. Just as a side note, we did an update to our cash flow this year, where interest paid, as you can see now in financing activities, has been moved from operating to financing activities. We felt it's more correct there. It has also been restated in '24. So we go from EUR 33 million to EUR 51 million. I have a bridge on the left. But in essence, we have spent EUR 171 million in investing activities. The proceeds from disposal, the EUR 389 million, is related to the Saga JV and the disposal of Riga, plus some settlements with the joint ventures. From the EUR 660 million of CapEx that we see on investment property, an effective EUR 642 million has been spent. The remaining will move through our working capital on CapEx payables. Loans to JVs is a loan to one of our development joint ventures. And then distributions by joint venture, what I referred to before, EUR 82.7 million, broadly in line with last year. The EUR 82.7 million is a combination of interest payments of EUR 20 million, shareholder repayments of EUR 32 million and equity distributions of EUR 30 million. It depends a bit joint venture-by-joint venture, how we take out the excess cash that is inside. That's why I also group it here for simplification purposes. But we all consider this as distributions. There were no investments in joint ventures. That's mainly then related to development joint ventures. And then in our financing activities, so we paid an interest of EUR 48 million. We paid out a dividend in May of EUR 90 million, which we now propose to increase from EUR 3.3 to EUR 3.4 in '26. So that will go to EUR 93 million as cash out in '26. Then we had proceeds from loans, which is the bond raise of EUR 576 million. After costs and deductions, it's EUR 565 million net cash in. And then the loan repayments, it was a bond that we paid back of EUR 80 million. And then the EUR 200 million that we paid back for EUR 195 million. So EUR 195 million plus EUR 80 million is EUR 275 million that we actually repaid. So that means that we end the year with EUR 523 million of cash. I think I maybe explained all of this already, but maybe there's one more nice thing to note that is that we raised the bond in April of EUR 576 million at a coupon of 4.25%. We did one in January at 4%. But underlying, there is quite a big difference, because the EUR 600 million bond that we raised in January was at our historic lowest spread ever, 150 basis points. Of course, it was a bit upset and offset with the increase of interest versus the previous bond. But nonetheless, it was still at a cheaper and it was a very successful transaction that we've done. And now the maturity profile of our bonds are as follows. I believe this was, I think, my last slide. So I hand it over back to Jan. Jan Van Geet: Yes. Thank you all for listening until now. A summary and the outlook. I am personally very happy that our result is even more and more cash generative and that the profitability of our new developments going forward is going up again. With all that we are going to start up this year, and we are quite bullish on it, we think that we are having a good year in front of us in 2026. On the relettings, as we have seen, our portfolio is -- we've never had to transact something to the joint ventures with a loss. And if you look at our relettings, they were during 2025, 14% higher than the rental price which they were let at before. And as Piet already said, on average, it took us 2 days to relet in Germany, where our reletting was 21% higher than the one before. And we have heard through the former reporting periods a lot of concerns about the German market, where we have a big exposure to. But we feel very confident in site, and we also see a lot of activity. We have a lot of new things going on. So we feel really very confident on that. The margins on our new developments, they are EUR 103 million. But there is really a lot in the pipeline, and I already talked about it. There are a couple of LOIs on which we are now finalizing. So cost reimbursement agreements is a better term for it, where we have agreed with tenants mainly out of the e-commerce sector that we're already going to line up everything so we can negotiate the relatively complex lease agreements because they are also relatively complex buildings. But we are on track to close them all before the end of the first quarter, some of them even in this month. So we're really in final negotiations. We already signed one with [ PE ] Capital last week in Bucharest. And if we look at it, we see that e-commerce is back on track and starting to look really again -- what they had over rented in 2021 and '22 has now been consumed, and they are back on track with growth, which is I think a very positive for us. So if these things materialize, we will at least start 450,000 square meters now in 2026, EUR 80 million which we need to start of rental income, which is already contracted, which is the best position I think we've ever had in our history. So looking forward. And that's very much supported also by the unlocking of some of the historical iconical parks which we have bought and which are mainly brownfields. And brownfields always take a little bit of a longer time to develop. But if I look at it, we're going to start construction this year on La Naval in Bilbao. We are going to start demolishing Nuremberg, for which we have a lot of demand. It's a super location, and we're going to start construction. We also are talking to some people out of the defense industry. We have already paid a visit to Hagen, which we bought just after the year-end with a very big tenant and which has been welcomed. Hagen is Dortmund, right next to Dortmund. It's a very nice site, which disposes of a 90-megawatt peak capacity of electricity, which is active. And so which opens a lot of opportunities for us. We're well proceeding on our Russelsheim development, and we're also very well proceeding on our permitting there because we needed to do a new B plan in Russelsheim, in which we also incorporated our data center and development which we aim to do. And I was puzzled by the presentation which Sarah gave to me about data centers coming from Microsoft. If you look at the actual installed capacities in the big conurbations of Europe where it is -- where everybody talks about, it's actually not that much as you would think. London is 1.7 gigawatts, Frankfurt also. And if you think about us in Russelsheim probably being able to do quite a bit more than 100 megawatts, that gives a total different perspective about the possibilities of our land plots. And we also have a very nice opportunity in Italy, and we're looking at other land plots in Germany. We think that, that would be nice. We also are going to have Verona coming online this year, our new land plot in Velizy, Paris, which is now -- for which we have also received the building permit and for which we're going to sign our first lease in the next couple of weeks. So all-in-all, we think that we have a very sunny future in front of us, as you can see on this picture, which is our park in Montijo, which is in Portugal. And then, of course, we are looking very much forward to the further diversification of our joint venture model. We are in continuous talks with our friends from Areim to do the follow-up of our Saga transaction. And also now we have announced it now publicly and we're very much looking forward to our cooperation with East Capital. And we have 2 legs to stand on them going forward and we hope it's going to be a big success. That's a bit, I think, the summary and the outlook for the next year. And I think that we can now move to questions from your side. Operator: [Operator Instructions] The next question comes from Marios Pastou from Bernstein. Marios Pastou: I've got a question mainly around the new partnership with East Capital. I think on the slide, you mentioned the potential for at least EUR 1.5 billion of gross asset value in scope. So I'm just thinking maybe part of the agreement, if you could give some more details on kind of what that total investment volume could scale to, if you've agreed a time frame or a target to reach that fully invested level? And whether the structure is broadly similar to what you've agreed in your prior partnership? Jan Van Geet: Yes. Shall I take it? We can develop on our total -- on the total land bank at the moment, roughly something between EUR 6.5 billion to EUR 7 billion of new assets, which we are -- including what we have already -- which we still have on our balance sheet. So that is all possible to transfer into new joint ventures going forward. And we have already envisaged and we've already defined quite a large portfolio, which we could transact because it's already income generating and delivered in this year. So we have said we want to do at least EUR 1.5 billion. I think we're targeting more, something like EUR 2 billion. But that is a momentarily view at the moment. When we start, it can also grow bigger. We're very confident on the fact that we are going to be able to deliver -- well, VGP is delivering all the time new assets and all the time starts up new assets. So it will keep on growing in the future. Piet Geet: I think in general, it's indeed more or less a copy of our current joint venture model with an investment period, 3, 4, 5 years. And what we develop, we will offer. And it's broadly similar. We will retain the asset management services on the -- as it is in the current joint venture basically. Jan Van Geet: Yes. Structurally, it's actually the same. What is different is that we are not targeting one single partner per JV, that we are targeting multiple partners at the other side. More something like a fund structure than just a single JV with one single investor at the other side. Operator: The next question comes from Vivien Maquet from Degroof Petercam. Vivien Maquet: I hope you can hear me. I had a follow-up question also on the JV. Just to understand from the fundraising perspective, what kind of precommitment do you have on the third-party investor because I just wanted to see because you mentioned a closing in the course of the year. But do you have the -- I would say, the equity already being raised within the fund? Or what [ commitments ] you have on that fund? And also on the structure. Is it closed-ended or open-ended fund? Jan Van Geet: It's foreseen to be a closed-end fund. And the raising of the funds is an ongoing exercise, which East Capital is predominantly occupied with, knowing that, of course, East Capital has a solid investor base inside of their existing funds. And this is an addition, more of a unique product that they can offer. But it is an addition to what they have in their current fund business. And the exercise is currently ongoing. We are targeting a closing by the end of the year. I think that's about it what we can say today. Martijn Vlutters: Yes. It's a regulated business, Vivien, raising capital. So we can't really say what's been committed already. It's prescribed quite precisely what can and cannot be set in such exercises. Vivien Maquet: Okay. And then just on the shares management agreement. I understand that deviate a bit from the previous joint venture. What does it mean for you in terms of recurring income you're going to drive from that joint venture? Jan Van Geet: We expect a similar income model that we have with our current joint ventures also. There is indeed a sharing of services with East Capital, but it's somewhat similar, for instance, with what an Areim or an Allianz also does with their investors behind who are invested into our joint ventures. So East Capital will mainly look into gathering the funds and also doing the investor relations with the investors that they have been able to target. But other than that, our services remain the same. And we expect broadly the same revenues to be incurred from all of the disposals into the JVs. Operator: The next question comes from Wim Lewi from KBCS. Wim Lewi: I've got 2 questions. One is a small one on East Capital, if I can bother you with, is does the new fund also allow for countries that were not eligible for the other joint ventures to be transferred? I'm thinking, for instance, on Serbia or maybe other countries that you can now offload more into the future? Jan Van Geet: The East Capital fund is a Pan-European fund. So every country where we are active in is, in fact, targeted. But it will be skewed more to the Central and Eastern European countries. But in essence, everything -- all countries are on the target list of the fund. Wim Lewi: Okay. And then a follow-up, if I may. It's really on these valuators increasing yield in Germany and then especially in the JVs to 5.22%, which you explained that it's based on vacancy. Now you obviously have good leasing activity, which you explained many times. But could there be like a timing difference, because they do that at the end of the year, whereas you have done the re-leasing over the year. Can you give an indication of the amount of re-leasing you have to do in '26 and what you expect from that? Jan Van Geet: We have very little re-leasing to be done in 2026. And so far, what we see is that, again, also for the things in 2026, which are coming available, we already know on beforehand and mostly months on beforehand that we are going to have a follow-up tenant. So what the valuators have taken as an assumption from a 12-month vacancy period, which we never had in Germany, to an 18-month vacancy period, we find it -- and we've tried to argue about it, but they take a view of the market. We find -- we can't say that we see that reflected in our own portfolio. I don't know what it is about. Maybe it's about older buildings or maybe it's about the total market view. But in our own portfolio, Wim, we are very confident and very -- that we have solid demand for everything. So we don't see, neither expect any deterioration of that in the months going forward. On the contrary, we have a lot of new lease negotiations ongoing also for new buildings. Wim Lewi: Maybe if I may, because what we see or what we hear from WDP and Montea is that they can't find anything to buy above 5%. So could there be deals maybe in the near future that could review their case, that if we see that yields come down in deals. Is that something that you expect? Jan Van Geet: Well, we hope so. We certainly hope so. Also the promote calculation which we have done is based on our risk valuation at the year-end. So it's just our current valuation, where okay --when we are going to have the valuation in May that's going to be based on the capital markets valuation, where the valuator really looks at the transactions as if we were to really sell -- and that's probably going to be a little bit different. We don't know north or south. But we think it's going to be different than what is our risk valuation. Until now, every transaction which we have done with our joint venture partners when we had a real discussion about the valuation, we always had a better exit yield or we always achieved a better exit yield than what we had it in our books for. So we're trying, of course -- we want to be a fair partner, but we are trying, of course, to defend our position also. That is more than normal, I think, in business. And I don't... Operator: [Operator Instructions] The next question comes from John Vuong from Van Lanschot Kempen. John Vuong: At the end of last year, you had 780,000 square meters under construction. Deliveries came to just short of 500,000 square meters. Were there some delays in the deliveries? And if so, what has been the reason for these delays? And looking at your pipeline going forward, it's currently sitting at a pre-let ratio of 75%, and you're saying that you're seeing quite some strong demand. So how do you think about the size of the pipeline under construction? And what are your thoughts about more speculative developments over the next 12 months? Jan Van Geet: Yes. Yes, when you report, you always have a cutoff, which is at the 31st of December, and you need to take a look at it. Whereas in development, it's not always really linear. You have sometimes customers which have demands for changes in the building, which entail relatively complicated situations and which makes the delivery going over the reporting period. That's one of the things where we are. So I think you need to look over a period of -- a longer period of time to see really the tendency and not just in the cutoff of 1, 6 months period. That's the thing. We -- I want it to be -- although we have a big incentive to construct more because we now have our costs really back under control as inflation has come down tremendously. And in the construction industry, in every country at the moment, we can achieve attractive pricing. At the same time, we're also trying to manage our portfolio, so not to create too many vacancy or too many speculative buildings. So we look at on a country-by-country basis, but we try to limit really our speculative buildings to an acceptable level, which for us is -- it should be -- we should be pre-let above 70%. And ideally, by 8 months under construction, we should be above 80% -- above -- after 6 months under construction, above 80%, which we currently also are. So that's the parameters in which we make the decision internally, do we do speculative developments, yes or no. And it's also depending on the demand which we see in the locations, because not all countries run at the same pace at the moment. So we are also a bit careful in starting up too much square meters where we don't see the demand for it. And on the contrary, where we see a lot of demand, we start up a little bit more. But as I already said, and I hope I was -- it came across enough, at the moment, we really have a very strong pipeline in demand. We divide up our demand, we categorize it in a first contact, a second where we already have commercial negotiations, a third where we have virtually an LOI agreed, and a fourth where we started the negotiations on the lease agreement. And if I take the 2 last things, we have roughly EUR 50 million of negotiations ongoing, which I don't say we're going to sign all of it, but it's a very healthy indication that there is really demand which wants to contract at some point, because people don't engage with teams and with lawyers and with things if they have no intention to close the lease agreement. So from that point of view, we, at VGP, with our current portfolio and our land bank and the quality of what we offer, we feel comfortable to start a bit more construction over the year. But I can't tell you a number. As I already said, we have roughly 450,000 which we need to start up anyway because it's already pre-let if these LOIs also materialize. And then, of course, we'll do a bit more because it will bring our vacancy levels -- our pre-let levels up. And then we have a bit more room to also start a bit of speculative buildings in those jurisdictions where we feel demand is strong and supply is very low. Operator: The next question comes from Francesca Ferragina from ING. Francesca Ferragina: I have 2 questions. The first one is about guidance. I understand that you never disclose the guidance. But can you just give at least some qualitative type of comments on 2026? Consensus is pretty dispersed and it doesn't help. And then the second question is on data centers. You managed to hire a dedicated person. Can you provide an update about the opportunities you see here? Jan Van Geet: We -- indeed, it's a bit difficult for us to give a guidance because we are not a REIT. Our VGP is a multiline model, where we have the development portfolio, where we have the rental income and we have -- it's different than a REIT. If you would only look at a REIT, it would be a little bit more easy to say what it's going to do. And going forward, we can also maybe make a projection of the rental income, what we expect for the year, because there we -- but also there, because we always transact between our own balance sheet and the JVs, it's not so easy to give you a reasonable view because we -- there is always movements from rental income, which is either on our own balance sheet and then it goes into the JVs and then it only accounts for 50%. So we'd rather not say something which we then cannot fulfill. We always give guidance on things where we think that they are achievable and where we feel ourselves also comfortable that we can achieve. And so far, I think, we've never promised something which we haven't delivered. That's something which we are proud of. On the data center things, so we are not actively buying land plots with the aim of developing really a data center. I see too many accidents in the market. Just last week, there was a big announcement in the press in Germany where a EUR 2.7 billion investment in [indiscernible] was stopped by the local authorities. People had paid a tremendous land price for it and done all the efforts and then it was stopped. So it is really a very risky business because we have a huge congestion in electric energy. And starting to build a land plot and then going for it, it is a very difficult business going forward. But VGP has a very big land bank, in the very big land bank, has some brownfields. Those brownfields come with a very big historical electric connection, which is there and available. And that's already a very big part of the transaction. And by coincidence, we are also 10 minutes away from Frankfurt Airport in Russelsheim. We've signed an agreement with Stellantis. That's the only one who can develop a data center on that land plot. They also still have a big reserve. But we have an exclusivity on data centers. And we have an agreement with the city on where the data center will come. And that it is going to be incorporated. It's currently part of the new B plan. And Sarah is working on that one and another one in Milan, where we also have a similar constitution, and where we think that -- and where we also have very intensive negotiations ongoing with most of the hyperscalers and some of the colocation investors, and where she is trying to manage that. And we are trying to take a look at where in the value scale of from just selling the land to core and shell to power shell to completely finished, build-to-suit, and then to completely finished and operational, what we are going to offer and whether we should do that alone or whether we should do that with a partner who has already all the accreditee to -- because he already has done it, something. And as you can hear from me, we are in a very intense process of aligning ourselves in order to be able to bring the best result. But this is a work which is not just -- it's not like developing a logistic warehouse. There are so many parts running around that it really -- it doesn't go so quick. So also the energy connection, it's not from today and tomorrow. Yes, in our case, it is. And then there is also the connectivity, the grid, et cetera, which you need to do for. And then we still have also to demolish in Russelsheim because now there is building standing on it. So it is not for tomorrow. But we're well on track. And that's everything which I can describe about it and disclose about it. Paul? Unknown Analyst: A couple of questions from me. Just wanted to check. Coming back on the pre-letting point, because I think that's been declining since 2022. I think you had a high of 89%. Now you're down at 69%. Just wonder what level are you comfortable going to in terms of pre-letting level? And what gives you the comfort in starting more and more speculative schemes as you have been over the last few years? And second question is, linked to that, is just looking at the yield on cost on completed developments. Did you have to give any rent concessions to lease these up? I think in the past you talked to tenant incentives or rent-free periods. Just to get a sense on that. And if you could quantify those, it would be great. And then I do have a very quick third question, but let's see if you let me ask that one. Jan Van Geet: Paul, on the first one, I think I already answered quite a lot of it. So yes, we've done a bit more speculative construction last year because our construction price came so much down. And we are currently -- after 6 months period, if you look at it, we are 80% pre-let. And we also have a lot of things in the pipeline where we feel very comfortable that we're going to sign it, which will take our pre-lets even more up. So we feel comfortable with today's level of pre-lets of speculative buildings under construction because we also see good activity and good demand on that pipeline going forward. So -- and we've built it for a very good price. On the activity for the -- from the tenants, we are always -- because we did not buy land at excessive prices and because -- at the time when the land was so expensive, I told you all, I don't find this thing sustainable. In 2022, we really stopped. We didn't buy anything, if you look at it going backwards. We only bought Russelsheim, which we bought for a very good price. But the rest, we couldn't make working. So today, we are in a very good position because we can be aggressive on the rental price but still make a very beautiful margin. Our margin is actually going up instead of going down because we have so good control of our construction cost. So we don't see anywhere where we need to give excessive rental incentives more than what we have been doing over the last 5 years. It's still the same. So we are -- it's a healthy market, I would say. Also the vacancy level which we see today in the market, 6%, it's not like we haven't had before, a lot more even than that. And I find it still very healthy that people finally have something they can look at, take a look at. And it's an advantage for us as a developer offering new things, where we can be aggressive on the price, that we can grow in a healthy way going forward. And yes, we can be maybe more aggressive than somebody else on some of our land plots because also we act as a general contractor in every country nowadays. And I think we have our -- I wanted to use the word shit, but it's our things very well under control. So it's really going well. Did you have another question? Unknown Executive: Rent incentive wise? Jan Van Geet: That's what I said, just answered, [ Tom ]. So no special rent incentives, yes. And you had a third question, Paul. No. Operator: The next question comes from Steven Boumans from ABN AMRO, ODDO BHF. Steven Boumans: So I have some questions on what to expect for signing new leases. So on the LOIs that you mentioned, could you please remind me how much in annualized rental income you expect to sign in Q1? And second, to respond to John's earlier question, how does the EUR 50 million in lease discussions you talked about compare to 6 months ago? Jan Van Geet: As we said, we don't give guidance. So you've asked me to give a guidance on the first quarter. Well, we have really, let's say, EUR 25 million of lease agreements in final negotiations at the moment ongoing. Whether it will all be signed in the first quarter? I do think so that there is quite some nice things which are in final negotiations. And that's about the guidance which I can give. And if I look at going backwards, I think that the market today, it's -- last year, we signed a lot of lease agreements, really a tremendous amount of lease agreements, but they were all relatively small to the years before when we always had these 1 or 2 big ones standing out, which were really very big lease agreements. Last year, it was a lot more spread over many, many little -- or not little, but smaller lease agreements. On average, before, we signed 22,000 square meters. I think last year, on average, it was below 20,000 square meters. So that was a bit different in demand than it is maybe today, because today, again, we are looking at some very big leases which we are negotiating on. Yes, the one in the Netherlands is huge. There are a couple of very huge ones in Germany ongoing. There is a very big one in Spain ongoing at the moment in final negotiations, I would say. So that's about what we can say about it. Operator: The next question comes from Thomas Rothaeusler from Deutsche Bank. Thomas Rothaeusler: Just one question on data centers. I understand you plan to provide concrete plans by the year-end, yes. But maybe you could provide a rough idea about the capacity for Milan and Hagen already. And any indications if it will be powered cell or fully fitted? I mean, considering the high-profile recruitment you have announced, I assume it won't be gas powered land. Jan Van Geet: You're asking me difficult questions to answer, Thomas. Yes, we hired a high-profile person, and she's a very lovely lady if you meet her with a lot of ambitions. And that's good because that's why we hired her for. We can do quite big -- I don't want to say anything about numbers because I'm going to say something and then it's going to be different, because we actually don't really know yet. But we have -- at the moment, we have a 50-megawatt connection available in Russelsheim from the grid. There is a power plant on our land plot, which is another 100-megawatt available. The question is, can we use it, yes or no, because it's a gas-powered power plant, and we are looking into it. We can expand that power plant quite significantly with gas turbines, and the gas can come from several ways. And that's an exercise which is ongoing. So it's quite complex to give an answer to your question, as you understand yourself because we are still looking and puzzling the pieces together. And we need to take a look also at what is acceptable for a hyperscaler, which risk he wants to go because he needs to have absolute reliability and the Tier 2 at least supply of energy, which we don't have our things all aligned yet because it's really complex. And the same is ongoing for our land plot in Milan, where, yes, we do have an agreement on the power supply. We know, plus/minus, when the power supply also will be available. But it's -- we are dependent on a third party. And yes, it's a very big capacity which we have been awarded. And the land plot is perfectly suited for it because it lies really on the super location for it. But as I said, there is a bit of work to be done on it. And we are going to disclose in the right time when it's ready to disclose where we are and what we do. And I don't want to overpromise. I just wanted to give you an update on where we stand today. And that's in all honesty what I can tell you today. Frederic. Operator: The next question comes from Frederic Renard from Kepler. Frederic Renard: A lot of questions already been answered, too, on it. Maybe to have a view on Allianz and the intention from here? And anything new with regard to potentially new JV? And then maybe another question. If I look at the sequential increase in H2 from new construction activity, and you mentioned already a good LOI of demand, so should we expect H1 2026 to actually be sequentially even more bigger than H2 '25? Jan Van Geet: I will answer first on your last question, whether it's going to be more in H2... Piet Van Geet: Which one? Jan Van Geet: In H1 versus H2 last year is -- I don't have immediately in my mind. But we are going to start up roughly -- we have to start up quite some buildings in the first half year of 2026 because they are pre-let and we need to deliver within a certain time frame. So we need to start up. But I would need to calculate how much that is that is going to be for sure in the first half of 2026. On general, I expect somewhere between the same amount as last year and a bit more to be started up during the year. I think we feel confident that we are going to start up a bit more than last year. So that's the answer on your last question. And then on the first question regarding the JVs, I think we disclosed -- because it's a regulated business, so we've disclosed on the new JVs where we could. We can't say anything more than what it is. In the current JVs running, actually, everything is running well. There are no divestment plans immediately there. And all partners seem to be very happy with the performance of the things. As Piet said also, the EPRA results of the JVs are outstanding. The relationship -- the day-to-day relationship with Allianz but also with Deka and all the others is going very well. And the only real discussion which is ongoing at the moment is about our promote, where we have now tentatively agreed on the metrics of how we are going to do it. Because originally, it was, of course, foreseen that there would be after 10 years a liquidation of the JV. But that is not going to happen. So now it's an exercise on which we need to agree. And that will crystallize by -- in the next few weeks. But I'm sure we will find an agreement with Allianz about what it is about. And for the rest, operational-wise, everything is running well. We are going to -- we have also a refinancing upcoming in the Rheingold joint venture. That's all agreed. We have the term sheet signed. So there is no -- everything is aligned. So there is no clause on the horizon as far as I can see. Everything is good. I think I answered on your questions. Operator: There are no more questions at this time. So I hand the conference back to the speakers for any closing comments. Jan Van Geet: Yes. I want to thank you all first in the first place for being here, both my colleagues and analysts and investors. Thank you very much for listening to what we had to say. I'm looking forward to speaking to you again on our Annual Shareholder Meeting maybe or then in August with the update of our half year results and then we have this year or maybe before on some conference. I hope that I can see all of you soon. As you could have heard from our side, it was a very busy year because we've done so many things and going forward, and it's grown all the time. But all-in-all, I have a good confidence in our sector that it has still a lot of growth capacity and growth possibilities and that VGP can play a significant role in that. And I hope all the others too, there is room enough on the market. Thank you for listening, and goodbye. Unknown Executive: Goodbye. Thank you. Piet Geet: Thank you. Operator: Thanks for participating. You may now disconnect.
Operator: Hello, and welcome to the Claros Mortgage Trust Fourth Quarter 2025 Earnings Conference Call. My name is Becky, and I will be your conference facilitator today. [Operator Instructions] I would now like to hand the call over to Anh Huynh, Vice President of Investor Relations for Claros Mortgage Trust. Please proceed. Anh Huynh: Thank you. I'm joined by Richard Mack, Chief Executive Officer and Chairman of Claros Mortgage Trust; and Mike McGillis, President, Chief Financial Officer and Director of Claros Mortgage Trust. We also have Priyanka Garg, Executive Vice President, who leads Credit Strategies for Mack's Real Estate Group. Prior to this call, we distributed CMTG's earnings release and supplement. We encourage you to reference these documents in conjunction with the information presented on today's call. If you have any questions, please contact me. I'd like to remind everyone that today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those disclosed in our other filings with the SEC. Any forward-looking statements made on this call represent our views only as of today, and we undertake no obligation to update them. We will also be referring to certain non-GAAP financial measures on today's call, such as distributable earnings, which we believe may be important to investors to assess our operating performance. For reconciliations of non-GAAP measures to the nearest GAAP equivalent, please refer to the earnings supplement. I would now like to turn the call over to Richard. Richard Mack: Thank you, Anh, and thank you all for joining us this morning for CMTG's Fourth quarter earnings call. CMTG made a meaningful amount of progress last year, executing on several critical path items. In 2025, we accomplished the priorities we established at the start of the year, including resolving watchlist loans, enhancing liquidity and further deleveraging the portfolio. One year ago, we established a $2 billion total resolution target for 2025, and I'm pleased to report that we meaningfully exceeded this target, closing the year with $2.5 billion of total resolutions. This included the resolution of 11 watchlist loans, representing an aggregate UPB of $1.3 billion. This activity reflects our commitment to repositioning the portfolio by transitioning out of watchlist loans through thoughtful and decisive action. We also generated significant liquidity over the course of the year, which we used to meaningfully delever the portfolio and to reduce corporate debt. This momentum has carried into the new year with $389 million of full loan repayments happening, including a New York City land loan that was a watchlist loan that had been on nonaccrual since 2021. More importantly, subsequent to year-end, we retired the Term Loan B that was scheduled to mature in August of 2026. The term loan had a balance of $718 (sic) [ $712 ] million in the first quarter of 2025 and was replaced with a new $500 million senior secured loan from HPS. This facility has 4 years of duration. Mike will provide additional color on this financing later in the call. We view this financing agreement with HPS as a positive for CMTG as it extends the maturity of our corporate debt to 2030 and provides the necessary flexibility to continue executing our business plan of resolving watchlist loans, delevering our balance sheet and reducing our capital costs over time. Looking ahead to the coming year, we remain optimistic but mindful of the macroeconomic backdrop and the uncertainty that has been a defining theme across the broader financial markets. With regard to real estate, we do not believe there will be a single catalyst that will drive an overnight recovery. Rather, we anticipate a period of gradual and steady improvement that will support transaction volume and investor confidence over time, especially if the bond market rally holds and rate cuts continue as expected. As it relates to property market fundamentals, we continue to observe encouraging indicators, including a reduction in new supply, tightening credit spreads and improving financing costs for new originations. We also see increased demand for industrial space and significant investments in areas such as artificial intelligence and domestic manufacturing. We believe that investments in domestic manufacturing will support job growth and incremental demand for real estate over time. While AI investments are likely to support future productivity gains, the impact on commercial real estate, excluding data centers, is still quite uncertain. Overall, we see a constructive backdrop for commercial real estate and CMTG in the years ahead. But in 2026, our focus will remain on asset management and decisive execution as we continue to resolve watchlist loans and work through our REO assets. Our goal is to position the company to begin to evaluate new lending opportunities towards the end of 2026 and lay the groundwork for portfolio growth in subsequent years. Before turning the call over to Mike, I want to acknowledge that the last 24 months have been the most challenging business period of my career and for many others in the real estate industry. And so I want to thank Mike, Priyanka and our entire team for their dedication and hard work during this difficult time and their commitment to overcoming the remaining challenges that are still ahead. I look forward to providing an update on our continuing progress in the coming quarters. And now I would like to turn the call over to Mike. John McGillis: Thank you, Richard. For the fourth quarter of 2025, CMTG reported a GAAP net loss of $1.56 per share and a distributable loss of $0.71 per share. Distributable earnings prior to realized gains and losses were $0.02 per share. CMTG's held-for-investment loan portfolio continued to decline in the fourth quarter, decreasing to $3.7 billion at December 31 compared to $4.3 billion at September 30 and $6.1 billion at year-end 2024. Over the course of 2025, we reduced our exposure to select asset types that have generally been experienced secular headwinds. As of the end of 2025, the portfolio no longer includes stand-alone life science, office exposure decreased from $859 million to $589 million and land exposure decreased from $489 million to $187 million. It's worth noting, however, that the decline in portfolio UPB over the past year was an inherent result of our strategy to turn over the portfolio and prepare for an eventual return to originations. Specific to the fourth quarter, the quarter-over-quarter decrease in UPB was primarily the result of 4-loan resolutions, consisting of 2 regular way loan repayments, one on a multifamily asset and the other on a life science asset, both in Pennsylvania. The other 2 were resolved by way of a discounted payoff and a foreclosure. In addition, as previously reported, we executed a sale of a $30 million Boston land loan. This transaction did not impact fourth quarter portfolio UPB because it was previously classified as held for sale at the end of the third quarter. The discounted payoff related to $150 million previously 4-rated office loan in Connecticut. Given the valuation of the collateral, we agreed to repayment at approximately 70% of par, which we view as a good outcome given current market values and a challenging submarket and tenancy. The borrower was motivated to arrive at a resolution due to additional credit support that had been provided. This transaction enabled us to resolve a watchlist loan, reduce CMTG's office exposure and generate approximately $35 million in net liquidity for CMTG, which was then used to reduce outstanding debt. The discounted payoff resulted in a $46 million principal charge-off. However, it's worth noting that the impact to fourth quarter book value was marginal as the potential loss had been previously contemplated within our general CECL reserve. Additionally, we resolved an $88 million New York City watchlist and nonaccrual land loan through a foreclosure process. The underlying collateral is a well-located undeveloped land parcel adjacent to Hudson Yards that allows for a mixed-use development. After reviewing the facts and circumstances of this loan's history, we concluded that foreclosing and ultimately marketing the land for sale was the best path to resolving the loan. Upon foreclosure, we assigned a carrying value of $94 million based on a third-party appraisal, approximately $6 million greater than our UPB, which further supported our decision to foreclose as a means to optimize recovery. We do not anticipate being long-term holders of this land and expect to seek an exit sometime in 2026. As Richard mentioned, last year, we exceeded our $2 billion loan UPB resolution target, achieving $2.5 billion of UPB and resolutions for the year. This progress has continued into the new year with CMTG reporting an additional $389 million in UPB of resolutions across 4 loans, which include 2 regular way repayments. The first repayment was on a $67 million New York City land loan that was previously a 4-rated loan that had been on nonaccrual since 2021. The other was $174 million loan collateralized by a newly built multifamily property in Salt Lake City, which generated net cash proceeds of approximately $52 million. This asset delivered last fall, which allowed the borrower to secure refinancing to lower its cost of capital. In addition, in line with our previously mentioned plans, we foreclosed on a multifamily property in Dallas with $77 million of UPB that was previously 5 rated. Previously, the loan had a carrying value of $49 million and was written down to $37 million upon foreclosure. And last, we resolved a $71 million loan collateralized by a newly completed but vacant office property located in Seattle. Given the collateral value relative to our equity position, net of nonrecourse note-on-note financing, we determined the most prudent path was to transfer our rights and interests in our loan and the underlying collateral to the financing counterparty. Turning to portfolio credit. During the fourth quarter, the portfolio experienced a mix of ratings, upgrades and downgrades. We downgraded a $220 million loan collateralized by a luxury hotel property located in Northern California to a 4 risk rating. We continue to have conviction in the asset given the exceptional asset quality and highly desirable location and meaningful year-over-year improvement in operating performance. That said, the loan matured in August of 2025, and we have not reached terms in a modification with the borrower, which resulted in the downgrade to the loan's risk rating. We have also commenced foreclosure proceedings to provide additional optionality of outcomes. We also downgraded 3 loans to a 5 risk rating. In each case, the downgrades primarily reflect our decision to take a more aggressive approach in turning over the portfolio. I'd like to provide some color on these loans. The first loan is a $170 million loan collateralized by a multifamily property located in Denver. We're actively pursuing a near-term resolution for this loan and are currently in the process of executing our plans related to the asset. While we are limited in what we can share at this time, we have adjusted the carrying value of the loan as of December 31, 2025, to appropriately reflect our expectations for the anticipated resolution. We look forward to providing an update on this loan in the near future. The second loan is a $225 million loan collateralized by an office property located in Atlanta, Georgia, which matures in March. This asset, similar to other office assets in the area, continues to experience the challenges that have generally weighed on the office sector. We're currently evaluating our options for this loan. The last loan was the Seattle office loan that I just spoke to that we resolved subsequent to the quarter. During the fourth quarter, we recorded a provision for current expected credit losses of $212 million, which primarily consisted of $283 million provision to our specific CECL reserve prior to principal charge-offs and $62 million decrease in our general CECL reserve. The $283 million specific CECL reserve provision was primarily attributable to the 3 loans that were downgraded to a 5 risk rating during the quarter, changes to collateral values of previously 5-rated loans and the previously mentioned $46 million principal charge-off relating to the Connecticut office loan. It's important to note that of the $283 million specific CECL provision, $75 million was related to loans that were resolved during the fourth quarter or in 2026 year-to-date. The decrease in general CECL reserve was primarily attributable to a reduction in the UPB of loans subject to general CECL reserves. As a result, our total CECL reserve on loans receivable held for investment increased from $308 million or 6.8% of UPB at September 30 to $443 million or 10.9% of UPB at year-end. Our general CECL reserve decreased from $140 million or 3.9% of loans subject to our general CECL reserve to $78 million or 2.9% of UPB of loans subject to our general CECL reserve. Turning to REO assets. We made significant progress with our mixed-use New York City REO asset during the quarter. As a reminder, we completed the commercial condominiumization of the building in May. And as of year-end, we've sold all of the office floors as well as the signage component, generating total gross proceeds of $67 million, which was generally in line with our carrying value. We now intend to conduct a sale process for the fully leased retail component of the property. We believe this asset has served as an example of how we can leverage our sponsors' real estate expertise to creatively execute asset-level strategies and optimize outcomes. The New York REO hotel portfolio continues to perform well with operating results, exceeding expectations and annual NOI growth of approximately 14%. This asset has been accretive to earnings and given the refinancing, we executed last year. We will continue monitoring the market for an opportune time to pursue an asset sale. Over the course of 2025, we strengthened the balance sheet by focusing on generating liquidity and reducing leverage by $1.7 billion. We continued this focus into the new year by reducing leverage by an additional $300 million, of which $90 million was applied to asset level deleveraging payments and towards the repayment of the Term Loan B. As Richard mentioned, at the beginning of 2025, the Term Loan B had a balance of $718 million and was scheduled to mature in August of 2026. In January 2026, we subsequently retired the Term Loan B and replaced it with a $500 million senior secured term loan from HPS, which matures in January 2030. This new senior secured term loan is priced at SOFR plus 675 basis points. And in connection with this financing, CMTG issued 10-year detachable warrants to purchase approximately 7.5 million shares of its common stock at an exercise price of $4 per share, which represents a 46% premium to the closing price for CMTG's common stock on January 30, 2026. In conjunction with the closing of the new term loan, we aligned and relaxed financial covenants across all of our financing facilities, which provides additional flexibility to execute our business plan going forward. Over the course of 2025, we decreased our net debt-to-equity ratio from 2.4x at December 31, 2024, to 1.9x at December 31, 2025. Following the closing of the senior secured term loan, we now have $153 million in liquidity, representing a $51 million increase compared to the prior year-end despite the significant deleveraging that occurred in 2025. We accomplished a great deal in 2025, and we recognize there is more work ahead. By resolving watchlist loans, generating liquidity, reducing leverage and subsequently addressing the Term Loan B maturity, we have strengthened the balance sheet and positioned the company well for the coming year. We look forward to building on this progress as we continue to execute across the portfolio. I would now like to open the call up to Q&A. Operator? Operator: [Operator Instructions] Our first question comes from Rick Shane from JPMorgan. Richard Shane: Look, I realize there's a lot of progress, both in terms of repayments and loan sales and foreclosures. Obviously, the significant reserves allow you guys or put you in a position to be able to negotiate resolutions for the loans. But obviously, the stock is trading at an enormous discount to book. It's a very, very long path to earning -- generating a return that's anywhere near your hurdle rate. I think you guys know where I'm headed, which is we've seen at least one transaction in the space where a REIT who was much further along the path in terms of recovery decided to sell their assets near NAV. Are there opportunities here outside of resolving this portfolio to extract shareholder value or to create -- not extract, but to create shareholder value? Richard Mack: Rick, thank you for that question. We are clearly always open to everything. But our goal right now has to be cleaning the book up so that it is a much more transparent and easier to understand business. And I think we have to wait until we're able to deliver that before we can really understand if the market can evaluate our business properly. And so I think that's where we are headed at the moment. Richard Shane: Okay. And then to follow that up, [ NAI ] has fall -- has been cut in half throughout the -- over the course of the year. I am curious as we head into Q1 '26 and you think about the nonaccruals and the movement in the portfolio, NII just pure net interest income was about $12.5 million in the fourth quarter. Is it likely that it will be again lower in the first and second quarter of the year, given how the portfolio is marked at this point? John McGillis: Yes, Rick, I think that's -- this is Mike. I think that's a fair assumption because what's -- as we resolve loans and delever the book and get regular way payoffs, that top line interest income level is going to continue to compress. Deleveraging will offset that to a degree on the interest expense side. And then further resolutions of the nonaccrual loans or sub-earning assets should give us some capital to delever, which should help further reduce interest expense. But I think it's -- I think that's a reasonable assessment. But we are in a process of transitioning the portfolio. So that net interest income line is going to be choppy until we sort of turn the corner on the book and can get back to originations. Richard Shane: Got it. And then just one last question. I apologize for asking -- going first and then asking so many questions. But obviously, you guys are -- you've indicated that the reserve levels position you to aggressively start to resolve or continue to resolve loans during 2026. When we look at the reserve levels and it's over $400 million, and I apologize, I won't look up the specific number. Realistically, what percentage of that reserve do you think could be translated into losses over the next 12 months? Is it 25%, 50%, 75% just -- so that we can start to get some sense without knowing specifically what you guys are going to resolve, how quickly you think you're going to start resolving things? Priyanka Garg: Rick, it's Priyanka. I'll take that one. I'll start. Look, we're reserving based on what we think is appropriate at this time. We've resolved a tremendous number of loans in 2025. Half of them are on our watchlist. And year-to-date, we've already resolved 3 additional loans on our watchlist. So we think we have a good sense of the reserves that we need to take in order to accelerate resolutions and turn over the book. And so we think we're appropriately reserved for that. Now, there can be new information and we might have changes in this really dynamic environment depending on where negotiations with borrowers or financing counterparties or anything may go, but we think we're appropriately reserved today, and we have a lot of data points in a lot of different ways in terms of loan sales, which have really tapered off throughout 2025, more doing DPOs and other transactions, foreclosures, we think we have a really good sense of where the reserve level should be. Richard Shane: Okay. But I appreciate that. The question is more about the timing of those resolutions as opposed to the level of the reserve. Priyanka Garg: Yes, the timing -- look, I think -- I was just going to say, I think we -- okay. I'm going to start. So I think that the pace -- I mean, we're really, really focused on accelerating the pace of dispositions. I mean, both within the loan book as well as in the REO book. We realize the value exactly what Richard said earlier, we need to turn over this portfolio, and we need to make very clear where -- to demonstrate our book value. So I can't -- I don't want to give you specific time frames, but I would hope that 2025 and our progress in 2025 suggests that we're moving very quickly, and we hope we're continuing to accelerate that. And furthermore, the stability of our balance sheet after the transaction that we just closed in January really helps us do that with even more strength and speed. Operator: Our next question comes from John Nickodemus from BTIG. John Nickodemus: With the Term Loan B refinancing completed, several more resolutions completed as well since we last spoke, how are you thinking about liquidity levels here in '26? I know you're looking to improve them and it is up year-over-year, but we did see it come down significantly since November, which is to be expected. Just trying to get a better handle on how we should think about the trajectory there for this year. John McGillis: Sure. Thanks for the question. Well, I think a lot of the liquidity that was generated over the course of the year was used to deleverage the balance sheet, which we expect to continue to do as we continue resolving loans and REO assets over the course of 2026. We -- given the deleveraging that we've done, we now have a pretty significant level of liquidity cushion over a minimum liquidity requirement. And faced with that and a very de minimis amount of future funding on our -- that we expect to occur on our existing loan portfolio, we feel that our liquidity is in a very good position right now. And to the extent we generate incremental liquidity above those levels, we'll continue to look to deleverage the balance sheet. But success for this year, by the end of the year, we're evaluating a variety of capital allocation options for available liquidity, whether that's originating new loans, further deleveraging the balance sheet or other kinds of capital allocation alternatives. John Nickodemus: Great. That's really helpful. And then for my second question, this kind of goes into what Priyanka was mentioning in response to Rick's last question. But we've heard a lot about improvements for the greater commercial real estate sort of transaction activity, liquidity and also I have seen some of your peers talk about being more aggressive about resolving challenged loans or REO assets during this round of earnings. Given that backdrop, has that changed your expectations for sort of the pace or timing of sales out of both the REO portfolio as well as resolutions from the watchlist? Richard Mack: So John, thanks for that. This is Richard. I think we're in a much more constructive environment such that things that we had held off resolving, we're going to have much better performance out of. However, I want to say that the market is not fully back. Transaction volume is still lower than we had anticipated we'd be by this time. So I think we are trying to both react to the market and make the best execution that we can while being mindful that we need to quickly clean up our book. So it's a balance. I think on the whole, we are more focused on execution and delivering a clean book than we are waiting for the market to recover, but we're getting a little bit of the benefit of having waited on some of the assets that we're going to be able to resolve this year. And just -- I think I'm sure Priyanka would like to add something to this. Priyanka Garg: Yes. Thanks, Richard. The only thing I would add, I agree with everything Richard said. I would add, though, that the -- because of the healthier capital markets, both CMBS, banks coming back into the mix, we're just -- we're seeing more regular way repayments on larger loans. So I think the theme we're going to see in this coming year are fewer extensions and modifications and more repayments, which -- on performing loans, which will then have an impact on NII as we talked about during Rick's question, but it will still help turn over the book, getting that excess cash and then having the decision on how to allocate that capital. Operator: [Operator Instructions] Our next question comes from Chris Muller from Citizens Capital Markets. Christopher Muller: I guess looking at your REO portfolio, most of the properties have some financing against them. And I see your comment that the hotel portfolio is the most profitable than the aggregate contribution to DE. But can you guys talk about some of the individual NOIs within that REO portfolio? Priyanka Garg: Yes. Chris, I'll take that one. It's Priyanka. The NOI, so in the -- we have the mixed-use asset, which we're now -- the only thing we're retaining is the fully leased retail. And so that's 100% leased, tenants paying rent. So there's NOI coming off of that. That happens to be one that we're holding unlevered. In the multifamily assets that we have, REO, it is a mixed bag. There are some that are generating real NOI, others that are a little bit more challenged from an NOI standpoint, but that is all part of the plan to foreclose. The ones that are now generating NOI weren't generating NOI when we foreclosed. So the point is to come in there and make sure that we're spending capital in smart ways accretively to market the asset appropriately to potential renters and also be a present owner who's holding the property managers accountable. So I think that to the extent that assets don't have positive NOI or meaningful NOI, it's all part of the plan and certainly was expected. And the last thing I would say is that capital that we're putting in there, you mentioned that these are financed, the financing facilities have structure in them where there is capital being held back for us to spend at the properties, and that's not cash coming off the balance sheet. Christopher Muller: Got it. And that's a good segue into my follow-up here. Do you guys expect a lot -- or could you give a ballpark dollar amount of what you're expecting on CapEx for these REO properties? Priyanka Garg: It's not going to be a meaningful amount. I mean, it's -- I hesitate to give you a specific number because a lot of that is going to depend on our hold periods. So again, we are -- we're accelerating dispositions. You can see that in our earnings supplement on Page 8, we sort of call out where we're accelerating dispositions. And so I think to the extent these are shorter-term holds, we're going to spend less capital, but we want to be prepared to spend more if the hold is longer. Christopher Muller: Got it. That makes a lot of sense. And just one last quick one, if I could. Does the new term loan allow financing of watchlist loans? John McGillis: It's -- we have a -- we already have a facility that allows us to finance those loans. The new term loan is more of a corporate debt facility. So those aren't -- even though it's senior secured, it's more of a corporate mezzanine loan kind of structure as opposed to an asset-specific financing structure, which is what we use at the direct asset level. Christopher Muller: Got it. Makes lot of sense. Operator: We currently have no further questions. So I'll hand back over to Richard for closing remarks. Richard Mack: Well, I want to thank everyone for joining and for the questions and maybe summarize some of the things that we've mentioned today. 2025 and beginning of 2026 have been about resolving watchlist loans, enhancing liquidity, deleveraging the book by $2 billion. In 2025, there was $2.5 billion of resolutions. 2026, almost $400 million so far. We got the TLB retired. We now have a relationship with HPS, who's part of BlackRock, the largest asset manager in the world. All this amidst a constructive and improving real estate credit market and real estate capital markets in general. And so while we're not here to declare victory, we are seeing life at the end of the tunnel, and we are getting closer to a clean book that we expect will allow the [ Street ] to more appropriately value our stock. And that's really our goal every day when we come to the office. And so it's been hard. It's been a long road, but we are really excited to be feeling like we're -- we can see the light at the end of the tunnel and that the capital markets are cooperating with us. So we thank you for joining us and for monitoring our progress and for the questions, and we look forward to speaking again at the next quarterly call. Thank you all. Operator: This concludes today's call. Thank you for joining us. You may now disconnect.
Satoshi Ito: Hello. This is Ito from IR Department of T&D Holdings. Thank you very much for coming to the Telephone Conference of our financial results. Our materials are under our website on the Investor Relations under IR Events tab. First of all, I will be making approximately 10 minutes of presentation, after which we would like to move on to the Q&A session. So we'd like to move on with the presentation. Please turn to Slide 3. First of all, I would like to present the key highlights of the financial results for the third quarter. Group adjusted profit amounted to JPY 122.5 billion against the full year forecast of JPY 146 billion with a progress rate of 83.9%, demonstrating a steady progress. Sales results of new policies of all 3 life insurance companies progressed smoothly against the plan. Surrender and lapse rate increase in Taiyo Life remained at the same level year-on-year in Daido Life and a decline in T&D Financial Life. Value of new business as a combined total of the 3 life insurance companies amounted to JPY 144.3 billion, with full year forecast is JPY 168 billion and a progress rate of 85.9%. Group MCEV amounted to JPY 4.3974 trillion. ESR was 225%. There is no change in full year earnings forecast as well as for dividends. Please turn to the next page. The key revenue and profit items of each company are shown in the table. The 3 life insurance companies recorded increase adjusted profits, but T&D United Capital decreased. Page 5 shows you the breakdown of group adjusted profit and difference from net income. Please turn to the next page. This page shows the key performance indicators of the 3 life insurance companies. The 3 life insurance companies saw an increase in their core profits. Taiyo Life and Daido Life recorded capital gains on sale of domestic and foreign equities. Meanwhile, Taiyo Life recorded mainly losses on sales associated with the reduction of its foreign bond holdings. Daido Life posted losses on sale of bonds, mainly due to replacement as part of its cash flow matching strategy. T&D Financial Life recorded a profit increase mainly due to an improved insurance margins resulting from growth in policies in force. Please turn to the next page. The charts describe factors contributing to changes in core profit for both Taiyo Life and Daido Life, decreased currency hedge costs and increased interest dividend income contributed to an increase in core profit. This effect was partially offset by an increase in operating expenses. Please turn to the next page. Average assumed investment yields of Taiyo Life and Daido Life were 1.35% and 1.21%, respectively. Please turn to the next page. T&D United Capital's adjusted profit decreased by JPY 5 billion year-on-year to JPY 5.4 billion. Please turn to the next page. This page describes the quarterly trends in the profit and loss of closed book business. In its consolidated results for the third quarter, the company recorded approximately JPY 8.9 billion as adjusted profit, equity and gains and losses of affiliate related to Fortitude Re's financial results for the third quarter, July to September. The adjusted profit related to Fortitude's fourth quarter, October to December, earning is under calculation. Please turn to the next page. Viridium's fourth quarter results, October to December will be incorporated into the company's Q4 financial results. In our consolidated financial results, profit and loss based on IFRS will be recognized for financial accounting purposes. While for group adjusted profit and loss equivalent to Luxembourg GAAP will be included. Due to the acquisition of Viridium, JPY 75 billion of goodwill was recognized under financial accounting. However, as an amortization of goodwill is excluded from the group adjusted profit, it has no impact on adjusted profit. Next page, please. At Taiyo Life, annualized premiums of new protection-type policies remained at the same level as the same period of the previous year, while surrender and lapse rate increased mainly due to increased surrender and lapse in the agency channel, annualized premiums of in-force protection-type policies increased from the end of the previous fiscal year. Please turn to the next page. New policy amount of Daido Life continue to be strong and achieved a year-on-year growth. Surrender and loss rate was broadly in line with the same period last year and policy amount in-force increased from the end of the previous fiscal year. Please turn to the next page. Annualized premiums of new policies at T&D Financial Life declined year-on-year mainly due to the lower sales of foreign currency linked products. In addition, the surrender and lapse rate declined due to a decrease in policies reaching their target values for foreign currency-linked products, resulting in an increase in annualized premiums of policies in force compared to the end of the previous fiscal year. Next page, please. Group MCEV increased by JPY 451.7 billion from the end of the previous fiscal year to JPY 4,397.4 billion, driven by the accumulation of new business value, the rise in domestic/foreign stock prices and the adoption of LDTI at Fortitude Re. The combined new business value of the 3 life companies increased by JPY 5.3 billion year-on-year to JPY 144.3 billion, mainly due to higher new policy amount and rising domestic interest rates. The new business margin was 9.3%. A breakdown of MCEV by company is provided on Page 16. The factors impacting the group MCEV is on Page 17. Next page, please. This page shows you the status of investment at Taiyo and Daido Life. The combined amount of the domestic and foreign equity sales by the 2 companies was approximately JPY 209 billion, exceeding the full year sales plan of JPY 180 billion that was set at the beginning of the fiscal year. We intend to continue making progress on sales in the fourth quarter as well. Daido Life's interest rate matching ratio reached 86.4%. And for Taiyo Life, it reached 96.6%. And Page 19 shows you the status of foreign currency denominated bonds. Please turn to Page 22. This page is the status of net valuation gains and losses on general account assets. Unrealized foreign and domestic bonds have increased due to rising domestic interest rates. Page 24, please. As of the end of December 2025, the ratio of strategic equity holdings to net assets stood at 19%, reflecting an increase in the market value of the holdings. The ratio of strategic shareholdings to net assets, adjusting for roughly JPY 100 billion already agreed for sale is around 13%. We'll continue to work on reducing the strategic shareholdings to 0 by the end of March 2031, setting aside those for business partners and collaborators. Please turn to the next page. Sale of stock reclassified from strategic shareholding to pure investment is in process as part of our effort to reduce equity risk. As of the end of December 2025, 57% of such shareholdings was divested on an accumulative basis. Next page, please. As of the end of December '25, ESR declined to 225% from the end of the previous fiscal year. While surplus increased, this reflects the investment in Viridium along with increased mass surrender risks due to higher domestic interest rates. Next page, please. There are no changes to the full year earnings forecast for the fiscal year ending March 31, 2026. For the remaining 3 months of the fiscal year, the group adjusted profit is expected to decrease by approximately JPY 0.2 billion for every JPY 1 of appreciation. A breakdown of each life insurance company is provided on Page 28, significant subsequent events on Page 30 and change in presentation of financial data on Page 31. This concludes the briefing of financial results for the 9 months ended December 31, 2025. Unknown Executive: I would now like to move on to the Q&A session. We would like to introduce the first question from SMBC Nikko Securities, Mr. Muraki. Masao Muraki: So this is Muraki from SMBC Nikko Securities. I'd like to post two questions. The first question relates to Page 4 of the materials. The progress rate is 84%, slightly high as of this moment. If you can give us an update on the full year forecast. So I'm pretty sure you have some loss in the sales of JGB and also gains from the sales of equities in Q4. So what are your assumptions right now? That is the first question. Satoshi Ito: Mr. Muraki, thank you very much for the question. I would like to answer that question. So in terms of the performance up until Q3, it has been quite brisk vis-a-vis the full year guidance. So the group adjusted profit of JPY 146 billion, we are confident that we can achieve this. However, there are certain factors we'd like to confirm as of this moment. The first point relates to Fortitude and Viridium. So the Q4 results has not been closed right now. So we'd like to confirm the results for Q4. And next is Taiyo and Daido. So in order to improve the investment portfolio, we are selling the equities and conducting the bond replacement for the asset liability cash flow matching. So we'd like to see the progress. Because in terms of the loss in the sales and also the gains from the sales will be impacted by the market. So we'd like to assess this correctly. So of course, in terms of bond replacement that will contribute to reduction in the interest rate risk and also enhancement of the portfolio yield. But as of the current interest rate level, we will incur some loss in the sales. So in terms of group adjusted profit of JPY 146 billion, it is not likely that we may see a significant upside given the current situation. To summarize, we'd like to confirm the Q4 results for Fortitude and Viridium; and also, we like to see the progress of the sales of the equities and bond. So within the fiscal year, we'd like to have a highly probable forecast and try to assess whether revision is necessary. And if it's necessary, we'd like to disclose that at the earliest stage possible. That is all. Masao Muraki: And the second question relates to Page 12 about Taiyo Life's surrender. So the third quarter appears to be high. So in comparison to the initial assumption, how do you assess the current state of surrender? Also what sort of impact would it pose on EV at the end of the fiscal year. If you have the calculation, please let us know. Satoshi Ito: Thank you for that question. In terms of Taiyo surrender, we've seen an increase in the bancassurance OTC channel. With the rate hike, the surrender is actually increasing more so than initially anticipated. Now in terms of the surrender, so we've actually conducted some risk transfer with the feeding. So the risk on the financial basis, the risk is limited. But in terms of EV, if you look at Page 17, we have as one of the various factors. So the variance between assumptions and results, you can see the number here, JPY 33.1 billion, and Taiyo accounts for minus JPY 17 billion or so. So in terms of the assumptions, we intend to update and review that at the end of this fiscal term. But in terms of its magnitude, we haven't conducted the calculation yet, so we don't know that. But on the 3-quarter cumulative basis, it's JPY 17 billion. And this product has been on sales for 3 years up until the year 2022. So that should give you some idea. Now in terms of the investment, given the current state of surrender and also the anticipation of the interest rate hike as a way to conduct ALM on a forward-looking basis, we have been shortening the duration on the asset side. Specifically, we are selling the 10-year or longer bond sales and replacing those with short-term bonds or cash. So basically, that is how we're addressing the surrender situation. That is all. Operator: So next question is from Ms. Tsujino of BLA Securities, please. Natsumu Tsujino: I have one question. To date, by reshuffling your JGB portfolio, how much benefit did you read in terms of the increase in positive spread? What will be the impact for this fiscal year and the subsequent impact for next fiscal year. Can you share your view? Satoshi Ito: Yes. Thank you for your question, Tsujino-san. The impact on positive spread stemming from reshuffling the JGB portfolio is projected to be JPY 3.1 billion for next fiscal year. The final yield on EM bond on book value basis is improving significantly, and this is supporting the growth in positive spread. Natsumu Tsujino: And looking at your results, you are enjoying a very good progress on booking the investment gains. Strong distribution from the alternative investment, good dividend stream on equity holdings, lower hedging costs and growing positive spread. So there are multiple positive factors. And I think this will make it difficult to project for next fiscal year. My impression is that the actual investment gain driven mainly by our alternative investment was much stronger than expected. May I ask the magnitude of that impact? Satoshi Ito: Thank you, Tsujino-san. That is actually a tough question to answer, but I can comment on how much upside we had against the plan for this fiscal year. At the end of Q3, we see alternative investment. The upside was roughly JPY 20 billion. And I will not be able to reveal much more than that. We don't have the projection for next fiscal year. But the upside from our alternative exposure for this fiscal year was JPY 20 billion pretax. Operator: We'd like to move on to the next question. From Daiwa Securities, Mr. Watanabe. Kazuki Watanabe: This is Watanabe from Daiwa Securities. I also have two questions. The first is related to Page 30, Taiyo Life, the transfer of the loan receivables and credit guarantee company. So what is the impact on Q4? Satoshi Ito: Mr. Watanabe, thank you very much for the question. So in terms of the transfer of loan receivables, this has already been factored into the budget at the beginning of the year. So if you look at the question, if you look at the recurrent -- the profit and the net profit, there is a variance. So that is because we anticipated this transfer. So we don't know the actual amount as of this moment, so we cannot comment on that. In terms of the transfer of loan receivables, in terms of the economic impact, it is quite similar to the sales of bonds. So we may see some recurrence of bonds. But beyond that, we shall see improvement in the yield. And of course, Daido Life will continuously sell the equities after. So in terms of the loss incurred from the transfer of loan receivables, we should be able to offset that with the gains from the sales of equities. Kazuki Watanabe: I'd like to move on to the second question. This is Page 11 related to Viridium. So Luxembourg GAAP will be included for the group adjusted profit. So what sort of impact would it pose, any difference in the definition with the Japanese GAAP, for instance, related to fair value measurement due to market fluctuations. Satoshi Ito: Mr. Watanabe, thank you very much for the question. First of all, as related to Luxembourg GAAP method. Basically, it is very similar to J-GAAP. So the bonds, it will be treated under amortized cost method and the policy reserve is under lock-in method. In comparison to J-GAAP, it is somewhat more prudent. So first point in terms of the unrealized gains from securities, it would not be recognized on the balance sheet. However, the loss for the lower [indiscernible] cost method, it will be recognized. Also at the time of rate decline, there will be a mandatory provisioning of policy reserve required. So in comparison to J-GAAP, it is somewhat more prudent. However, in terms of the fluctuation in economic value, that will not be reflected on the profit. So in comparison to IFRS, there's not much less variance in comparison to IFRS. So in other words, it's quite similar to the J-GAAP method. Operator: We'd like to move on to the next question. Mr. Sakamaki from Mizuho Securities. Naruhiko Sakamaki: Yes. This is Sakamaki from Mizuho Securities. I have one question. And it is something that happened during the quarter. With a significant rate spike in January, how much was your ESR push down? And under a scenario where the long-term rate remains high, what are the things that you are paying attention to. Can you update me on your risk management framework. Satoshi Ito: Thank you for your question. We don't have the impact on our ESR stemming from the yen rate spike in January. So I will have to point to the sensitivity disclosure we made in November at the IR meeting. So with every 50 basis increase in domestic rate, the ESR goes down by 7 points. And to elaborate on the rate impact, basically, for the bond exposure matched against the policy reserve, as long as we maintain level and ability to hold, there is no need for asset impairment and hence, we intend to hold. That said, as long as we are not confronted by mass surrender, which would force us to sell our bond holdings, the impact will be minimal. On the other hand, we would benefit more by capturing higher yield by reshuffling the portfolio and making new investments. So that's all for me. Naruhiko Sakamaki: I see. So just to confirm, the rate spike in January and that level would not require you to do asset impairment. Is that correct? Satoshi Ito: Yes, your understanding is correct. Operator: Next, I would like to move on to the next question. Mr. Takemura from Morgan Stanley MUFG. Atsuro Takemura: This is Takemura from Morgan Stanley MUFG. I have two questions. I also would like to understand the impact of the rising ultra-long rate. I understand that the bancassurance products offered by T&D Financial come with [ MBA ] clause. Do that mean that even under the environment where the ultra-long end rate goes up, the MBA will be effective to prevent a surrender rate to rise. What are your thoughts around the surrender risk for your bancassurance channel when the ultra-long rate is rising. So that's my first question. My second question is also related to your investment activities, namely your PE exposure. I understand that for Taiyo and Daido, the PE exposure is 2.9% or slightly less than 3%. And nowadays on the media reports on the [ death ] of the SaaS business model, and that seems to be dampening the performance of the overseas PE fund. What is the exposure to SaaS companies or IT sector in general? And how do you manage that risk. So those are my two questions. Satoshi Ito: So thank you, Takemura-san, for your question. For the products with MBA clause, basically, there will not be impact on the earnings, but there are some risk of surrenders in a rising rate environment. And regarding our exposure to SaaS companies, for foreign equities, we basically invest in ETFs, so it's part of index investment. So our exposure will be similar to market rating. As for the private equity exposure, to the extent that we can confirm, there is no concentration to a specific sector, and we have a diversified portfolio that would assure the impact to be limited. At this point, we have not been reported on any major loss. Atsuro Takemura: I see. I have a follow-up to my first question. And apologies for the lack of my understanding, but is there a cap on the MBA coverage regarding the magnitude of the bond value decline? So if it crosses that threshold, the quality for the policy holders would be limited and we may see a rise in surrender. Is that the case? Satoshi Ito: Thank you for the question again. Basically, MBA defines the change in surrender amount subject to the right movement. And there is no concept of a cap in the coverage. Atsuro Takemura: I see. Thank you very much.
Operator: Ladies and gentlemen, thank you for standing by. My name is Jericho, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Taseko Mines 2025 Q4 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Brian Bergot, Vice President of Investor Relations. Please go ahead. Brian Bergot: Thank you, Jericho. Welcome, everyone, and thank you for joining Taseko's 2025 Fourth Quarter and Annual Results Conference Call. The news release and regulatory filing announcing our annual financial and operational results was issued yesterday after market close and is available on our website at tasekomines.com and on SEDAR+. I am joined today in Vancouver by Taseko's President and CEO, Stuart McDonald; Taseko's Chief Financial Officer, Bryce Hamming; and our COO, Richard Tremblay. As usual, before we get into opening remarks by management, I would like to remind our listeners that our comments and answers to your questions will contain forward-looking information, and this information, by its nature, is subject to risks and uncertainties. As such, actual results may differ materially from the views expressed today. For further information on these risks and uncertainties, I encourage you to read the cautionary note that accompanies our fourth quarter MD&A and the related news release as well as the risk factors particular to our company. These documents can be found on our website and also on SEDAR+. I would also like to point out that we will use various non-GAAP measures during the call. You can find explanations and reconciliations regarding these measures in the related news release. And finally, all dollar amounts we will discuss today are in Canadian dollars unless otherwise specified. Following opening remarks, we'll open the phone lines to analysts and investors for questions. I'll now turn the call over to Stuart for his remarks. Stuart McDonald: Great. Okay. Thanks, Brian, and good morning, everyone. Thanks for joining our call today to discuss our fourth quarter and 2025 annual results, which were released yesterday. As usual, I'll start by providing some comments and additional detail on the operational aspects of our business, and then Bryce will review the recent financial performance. So I'm going to jump straight to the exciting news that we announced yesterday. Florence Copper is now producing copper as of just a few days ago when we turned on the electrowinning circuit. Copper is now being plated, and we're just a few days away from harvesting the first cathodes. This is a great achievement for everyone at Taseko and especially the construction and operating teams at Florence. As we've talked about, wellfield operations commenced in the fourth quarter, so we've actually had solutions flowing in the commercial wellfield for about 3 months now. Initial results from the wellfield have been very positive as we've been able to achieve higher injection flow rates than expected in these first few months. As a result of those higher flows, the acidification of the ore body has been faster than planned and the grade of copper recovered in solution or PLS has actually ramped up faster than expected. So it's still early days, but the initial leaching results have been quite positive. And actually, our PLS grade was high enough to begin copper production several weeks ago, but the commissioning of the SX/EW plant took a few weeks longer than planned. We're expecting Florence to produce approximately 30 million to 35 million pounds of copper this year. And by the time we report first quarter earnings, we'll be in a good position to provide some operating metrics in terms of flow rates, PLS grade and production from the initial wells. A key factor in the ramp-up will be our ability to expand the wellfield and bring on new wells through the year. Drilling resumed in the fourth quarter, and there are now 3 drill rigs running. It's taken some time for the new drilling crews to get ramped up. We have a fourth drill rig being added in the next week or so and expect to see improved drilling productivity going forward. Before we turn to Gibraltar, I'd like to start by commenting that safety is a core value at Taseko. Nothing is more important than ensuring that the people who work at our operations go home each day the same way they arrived. In November, a tragic accident occurred at Gibraltar that resulted in the death of a contract worker. We're deeply saddened by the loss of a colleague and again, offer our condolences to the coworkers, friends and family of the individual. Findings from that incident are in the process of being reviewed with employees on site. In terms of production at Gibraltar, in the fourth quarter, we saw copper head grades increase to 0.26% and recoveries of 81%, which led to 31 million pounds of copper production. So it was a strong production quarter. The higher grades and recoveries were slightly offset by throughput, which was about 8% under design capacity for the period due to unscheduled mill downtime. Molybdenum production was 800,000 pounds and also benefited from higher grades and recoveries. Copper and moly production for the quarter was the highest level of 2025 as we expected it would be. And for molybdenum, it was actually the best production quarter in the history of the mine. With higher production, our total operating costs dropped to USD 2.47 per pound in Q4. For the year, Gibraltar produced a total of 98 million pounds of copper and 1.9 million pounds of molybdenum at a cost of $2.66 per pound. Production was heavily weighted to the second half of the year as we mine deeper into the connector pit to access higher grades and better ore quality in the third and fourth quarters. Looking ahead to 2026, mining operations are much better situated in the Connector pit, so we expect higher annual production and much less quarterly variability than last year. We are, however, taking a more conservative view on copper grades due to the impact of small higher-grade zones that have not been realized through our mining so far in the Connector pit. Over the last 18 months, we've also encountered more oxide and supergene and transitionary ore in the Connector pit than we originally expected. The oxide ore has been stacked on leach pads and would be processed through the Gibraltar SX/EW plant. But the supergene ore goes through the concentrator with lower recoveries. For 2026, we're expecting average recoveries between 75% to 80%. And that's really a similar level to what we saw in the second half of 2025. Taking all of this into account, we're expecting Gibraltar to produce 110 million to 115 million pounds of copper this year. And given that the Connector pit will be the primary source of ore for the next 3 years, we expect annual production will remain in the same range, plus or minus 5% through the end of 2028. With copper prices now roughly 25% higher than last year's average price, we are well positioned to benefit from our copper price leverage supported by higher production from Gibraltar and production growth at Florence. Tight supply due to global mine disruptions, combined with strong demand from traditional end users and new demand from AI data centers and grid modernization all support continued strong copper prices. So Taseko is very well positioned for cash flow growth in the future. We also have significant long-term optionality and value in our other projects. And in 2025, we achieved some significant milestones at both Yellowhead and New Prosperity. The new technical report from Yellowhead confirms strong economics, and we will continue to advance the project towards an ultimate construction decision and begin unlocking the net present value. And talking about leverage to copper, that NPV also benefits from a strong copper price environment. When we published our report in June, we used a price of $4.25 per pound, which gave us a $2 billion NPV. At today's pricing, that's more like $4 billion after-tax NPV or even higher. So the project is getting a lot of attention from potential partners. And when you consider the lack of large-scale open pit copper projects in North America that can be brought online in this time frame, these opportunities are very rare. So it's a great asset, I think, for the company going forward. Permitting efforts are very active, and we continue to engage with the local communities and open houses in recent months with no major issues arising so far. Our Yellowhead project team is also preparing the detailed project description that will be filed later this year. So 2026 promises to be another busy and productive year on many fronts. And with that, I'll turn the call over to Bryce for some commentary on the financials. Bryce Hamming: Thank you, Stuart, and again, welcome, everyone. I'll give some further color on some financial details before we get into any questions. Total copper sales for the fourth quarter were 32 million pounds, including 800,000 pounds of cathode from Gibraltar's SX/EW facility at an average realized price of $5.13 per pound. Including $25 million of revenue from moly, we generated revenue of $244 million in the quarter. For the year, revenues of $673 million were recorded for the sale of 99 million pounds of copper and 1.9 million pounds of moly. The average realized copper price in 2025 was robust at USD 4.61 per pound, and we benefited from a generally weaker Canadian dollar. Both quarterly and annual revenue are the highest Taseko has ever recorded now that we own 100% of it. For the quarter, we recorded net income of $4.5 million or $0.01 per share. And on an adjusted basis, after removing unrealized marks on our liabilities, which are tied to the higher copper price and other unrealized items, it was $42 million or $0.11 per share of adjusted earnings. Adjusted EBITDA in the fourth quarter was $116 million as compared to $56 million in the same quarter in 2024 and $62 million in Q3. For the year, adjusted EBITDA was $230 million, slightly higher than the prior year. So production in Q4 contributed to half of our annual earnings. Also for the quarter, cash flow from operations was $101 million, which was significantly higher than previous quarters, with Gibraltar contributing free cash flow of $72 million. For the year, $220 million of cash flow from operations was generated from Gibraltar. Overall, financial performance was strong and definitely benefited from the higher copper pricing in the second half of the year with improved production and sales levels. I will remind everyone that we do have copper price collars in place that we put in place to support our Florence copper project development and project finance. It has a ceiling price of $5.40 per pound until the end of June, which had a mark at year-end of $22 million. For Q3 of 2026, we have added copper price collars that have secured a minimum price of $4.75 per pound for 8 million pounds per month in the third quarter, and that have much higher ceiling prices of $7.50 and $8.50 per pound. As we move beyond the ramp-up of Florence, we do plan to revert to our longer-term strategy of just buying copper put options over shorter-term time horizons and leaving the entire upside to copper price open with 2 mines running. Now on to Florence, where things have been going very well, as Stuart mentioned, we completed the capital project in the fourth quarter. Capital spending decreased dramatically from prior quarters to just USD 8 million in the quarter as construction activity started winding down. Final capital costs for the commercial facility were USD 275 million, which was approximately 3% over the revised budget from early 2024 when we started construction. In the fourth quarter, $60 million of site operating costs and commissioning costs were capitalized for Florence. With cathode production now underway, we will begin expensing operating costs, which to date have been capitalized significantly still in the first quarter. We ended the year with a cash balance of $188 million plus our undrawn revolving credit facility for USD 110 million. So that brings our total liquidity to a very strong $340 million. With strong cash flows expected from Gibraltar in 2026 and the development capital spending behind us at Florence, our balance sheet will improve throughout the year in the current copper price environment. As Florence Copper begins to provide cash flow as the second operating mine, our credit rating will naturally re-rate, and we will prioritize delevering the balance sheet with our excess cash later this year. And with that, operator, I'll open the lines for questions. Thank you. Operator: [Operator Instructions] Our first question comes from Ernad Sijercic from TD Securities. Ernad Sijercic: Congratulations guys on Florence. Just a quick question here. What should we expect for CapEx and stripping this year? Bryce Hamming: It's Bryce. Yes, I think with respect to CapEx, last year, we had $80 million of capitalized strip and we'll have slightly less this year as we're kind of in -- we're past some of the heavier strip sequences of Gibraltar. So we'll see that come down to some extent. I think we have on the sustaining CapEx side as well, the main thing is some additional tailings work that we're going to do this year, but that should also be contained. So nothing really unusual compared to some of the capital projects that we've had in prior years like the crusher move and so forth. Ernad Sijercic: Great. And just one follow-up. How should we think about grade and throughput this year as it relates to your guidance? Stuart McDonald: Well, I think -- I mean, I think throughput, we're always expecting to achieve something in the range of design capacity, which is 85,000 tonnes a day, just over 30 million tonnes for the year. That's always the goal. And I think we've been successful. I think last year, we achieved that. Grade, as I noted in my remarks, I think the reserve grade in the Connector pit is 0.25. But what we've actually seen is the impact to some -- of that reserve grade being skewed a little bit by some smaller high-grade zones. So we're being a little more conservative now in our expectations and expecting something potentially 5% to 10% lower than that. So yes, that's generally how we get to the guidance figures. Operator: Our next question comes from Dalton Baretto from Canaccord Genuity. Dalton Baretto: Congratulations on Florence. And maybe I'll start there. Stuart, as you're thinking about the ramp-up on a go-forward basis now, is -- how do you think about some of the risks? What are you keeping your eye on? Is it purely a function of wellfield expansion? Are you sort of concerned around homogeneity of the ore body? What are you keeping an eye on? Stuart McDonald: Yes. I think -- I mean, obviously, we're very pleased with the initial leaching results, right, and our ability to solidify new sections of the wellfield, get our PLS grade up. Obviously, we still have a lot of work to do to stabilize the whole process from wellfield through to actually plating the copper. So it's still very much a ramp-up, but early days, but so far, so good. One thing I would say on the ramp-up, as you noted, is definitely the drilling. We do need to add new wells. And in our mining plan, we plan to add 80 to 100 new wells essentially every year for the next decade or longer. So that's normal course, going to be normal course at Florence, and that's an important part of the ramp-up. So, yes, I don't know, Richard, if you have any comments. Richard Tremblay: Yes. No, that is exactly, Stuart. Really, the thing we're watching closely is just the drilling performance and how the drilling is moving forward to bring on the new wells that we know we need as the production profile increases. Dalton Baretto: That's great, guys. And then maybe switching gears to Gibraltar. Can you talk a little bit about some of these issues you're seeing at the Connector pit? I mean what happened? Why aren't you picking up some of those higher-grade zones? And maybe why some of the higher oxide and supergene material was maybe missed in the reserve? Richard Tremblay: Yes. I think the easiest way to explain the high-grade zone is there's very high -- there's a kind of isolated drill hole -- exploration drill hole results that are skewing the geological model, and we're in the process of kind of going through and I guess, reinterpreting those drill holes. And in turn, it's going to downgrade the grade that we're encountering because we've mined through a few of those areas and not realized the grade that we expected. So we know those, I would describe as ultra-high grade pockets that are in the model need to be adjusted, which we're in the process of doing, and that's why we provided the guidance we did today. Dalton Baretto: And what about on the supergene and oxide material? It sounds like you're seeing more of it than you anticipated. Richard Tremblay: Yes. The oxide has been a positive that's allowed us to go to the oxide dumps and will actually allow us to run the SX/EW plant longer than was originally envisioned. So it's actually a good case scenario from an overall cathode production perspective. The supergene hypogene kind of transition zone is there's interpretations of where that is. And in some places, we've seen it not be properly reflected where the supergene actually is more than we have in the model. And those things are -- we just need to adjust it to reflect the reality of what we're seeing. Dalton Baretto: Got it. And if I could just squeeze in another one here just on the portfolio. I mean, in this environment, clearly, Yellowhead and Prosperity are very valuable assets and niobium looks like it's going to have its day in the sun as well. Stuart, how are you thinking about next steps for each of those? Stuart McDonald: Well, Yellowhead is very much a permitting project now. We've got a lot of work underway. We have a big -- good solid team in place that's working closely with the regulators and with the community. We've got solid relationships, I think, there. I think in the coming -- over the next year or 2, I think we're going to probably advance some discussions with potential JV partners there. There's a lot of interest, as you would expect in this copper price market. And as I mentioned in my remarks, this is a pretty unique opportunity with a large-scale open pit greenfield project in North America. There are very few of these out there that could be brought on in the next 5 years, 4 to 5 years. So that's heading on a path, I think, on a good path to realize value. New Prosperity, obviously, the big news last year, we signed our agreement with the Tsilhqot'in Nation in BC. I think generally, look, we all know that is an incredibly valuable deposit. But to really unlock it and move forward, we need the consent of the Tsilhqot'in Nation, and that was clarified, obviously in our agreement last summer. So we're allowing their land use planning process to move forward, and we'll be patient and respect that process, obviously still in the future. Yes. And then niobium, you mentioned, it's obviously one that's a little bit off the radar perhaps for some of our investors, but it's a very large open pitable niobium deposit in Northern BC. It's one of the largest undeveloped niobium deposits in the world. And we continue to work on that in the background. We don't talk a lot about it, but we do have a strong technical team that is pushing forward on and doing some very good work. And we're also expanding our work and looking for potential offtake partners and partners to help us develop that project. So lots happening there. Yes, so it's good. We've got -- I think one thing about our company. We've got obviously immediate growth with Florence, but we've got a lot of longer-term options as well in our portfolio. So pretty exciting, we think. Operator: [Operator Instructions] There are no further questions at this time. That concludes the question-and-answer session. I would like to turn the call back over to the Taseko management for closing remarks. Stuart McDonald: Great. Okay. Well, thanks again, everyone, for joining. Yes, we will continue to keep you updated as the Florence ramp-up progresses and obviously look forward to talking again next quarter. Thanks. Operator: This concludes today's conference call. Thank you for joining. You may now disconnect.
Operator: Good morning, and welcome to the SiriusPoint Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to Mr. Liam Blackledge, Investor Relations and Strategy Manager. Please go ahead. Liam Blackledge: Thank you, operator, and good morning or good afternoon to everyone listening. I welcome you to the SiriusPoint Earnings Call for the 2025 Fourth Quarter and Full Year Results. Last night, we issued our earnings press release and financial supplement, which are available on our website, www.siriuspt.com. Additionally, a webcast presentation will coincide with today's discussion and is available on our website. Joining me on the call today are Scott Egan, our Chief Executive Officer; and Jim McKinney, our Chief Financial Officer. Before we start, I would like to remind you that today's remarks contain forward-looking statements based on management's current expectations. Actual results may differ. Certain non-GAAP financial measures will also be discussed. Management uses the non-GAAP financial measures in its internal analysis of our results of operations and believe that they may be informative to investors in gauging the quality of our financial performance and identifying trends in our results. However, these measures should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. Please refer to Page 2 of the Investor Presentation and the company's latest public filings with the Securities and Exchange Commission for additional information. I will now turn the call over to Scott. Scott Egan: Thanks, Liam, and welcome, everyone, to our fourth quarter and full year 2025 results call. The fourth quarter rounded out another very strong performance year for SiriusPoint. Our disciplined underwriting strategy, customer-first mindset and relentless focus on delivery means we have a lot to be pleased about as we look back on our progress in 2025. Our top line for the year grew 16%. We improved the quality of our underwriting earnings year-over-year by 1.5 points. We grew our diluted book value per share by 28%. We delivered a 49% increase in operating earnings per share over prior year, and our leverage will reduce to an all-time low of 23% by the end of February. Our 2025 operating return on equity of 16.2% has improved for the third consecutive year and more importantly, outperformed against our 12% to 15% across the cycle target. The performance momentum I have talked about many times in these calls can be seen in the metrics that we've delivered in 2025. Looking at the fourth quarter in isolation, we delivered operating return on equity of 17.1% with a 44.9% return on equity on a GAAP basis as we closed the sale of Armada for $250 million. Our diluted book value increased by $1.70 in the quarter as a result. We continue to produce strong underwriting results with a Core combined ratio of 92.9% despite some historical one-offs in acquisition costs, which Jim will unpack for you. In addition, the fourth quarter saw a strong growth trend continue with gross written premiums growing 18%. Turning back to look at 2025 as a whole, there is much to be proud of beyond the financial headlines. We simplified our ownership structure through the closing of the CM Bermuda transaction in the first quarter. We earned positive outlook upgrades from 3 of our rating agencies. We saw employee engagement scores rise again to an all-time high. We completed the sale of Armada MGA and announced the sale of Arcadian MGA, which crystallized $390 million of liquidity and almost $200 million of off-balance sheet value while agreeing long-term capacity deals on underwriting. Finally, it has been important to attract top talent to the company while growing talent internally. We have had great momentum. And in 2025, we welcomed 18 senior leaders to the company as well as promoting 6 from within. Focusing back on our full year 2025 operating return on equity of 16.2%, there are a number of important points I would like to make. It is ahead of our 12% to 15% across the cycle target, having only set this 12 months ago and is the highest the company has achieved. We have also improved this metric every year for the past 3 years as we execute hard to build performance momentum across all of our business lines. Despite our return on equity target being an annual one, we have managed to deliver either within or above our range in every quarter this year despite impacts from events like California wildfires. We believe this is an important evidence point to our lower volatility portfolio and the track record we continue to build demonstrates our approach to underwriting, risk management and capital allocation. I want to take a moment to briefly focus on Slide 9. Even though it is one that we've included for a while, it is actually a very important one to pause on at the end of another calendar year. It clearly shows the underwriting track record we have been building since we reshaped the portfolio late in 2022. Since the third quarter of 2023, our combined ratio has been relatively stable and benchmarks well against our peers. We do recognize that insurance market conditions will be tougher in 2026, but it is also important to highlight that not in every market. We strongly believe our diversified portfolio and distribution focus on partnering with specialist MGAs positions us well to maintain our current levels of performance. It is worth noting that in 2025, 60% of our growth came from lines that are less correlated with P&C pricing cycles with accident and health being the largest contributor. The last quarter of '25 and the start of 2026 has been in line with our planning assumptions. Our focus will be on underwriting performance first over growth. Slide 10 focuses on volatility. I want to briefly touch on 2 actions, which help us to deliver against our lower volatility strategy, which we've added some new slides for this quarter. Firstly, as part of this strategy, we do target higher growth in insurance over reinsurance. We continue to believe the growth opportunity in insurance is more compelling in order to meet or exceed our target ROE year in, year out, while operating within the risk corridor we are comfortable with. That said, reinsurance is a key part of our business mix and many of our relationships with MGAs can either start as a reinsurance relationship or be a blend of reinsurance and insurance. This mix of capabilities is compelling both for us and for our partners and gives us and them great flexibility. We will also be opportunistic in reinsurance, where we see rates driving returns that are commensurate with the volatility and risk that we take and that fit within our overall portfolio volatility appetite. We are happy to allocate capital for these opportunities, and we'll continue to do so in 2026 as they arise. Our evolution over the last few years has meant that roughly half of our premiums are now U.S. specialty, and this is by far our largest underwriting platform. Secondly, our Accident & Health business is a strategically important part of our portfolio. With a long track record of high returns, its low volatility and low capital intensity acts as a volatility shock absorber to some of the other lines we write outside of A&H. We manage this mix carefully and dynamically to achieve our overall strategic aim of a lower volatility portfolio. Our Accident & Health gross written premiums grew by 23% in 2025 to around $1 billion. And overall, it makes up around 27% of our business mix. It also has a low correlation to wider P&C pricing and market trends. The profit consistency of Accident & Health, which boasts over 20 years of profitability, allows us to plan a wider portfolio mix with high levels of confidence. Following the sale of Armada in October, we now have 100% owned A&H MGA, IMG, which is consolidated into our P&L. IMG is a core part of our future plans. It drives a strong set of fee income profits in its own right as well as providing around 1/4 of the gross written premiums to our accident and health underwriting business, underlining its strategic importance. We believe the combined A&H underwriting business and IMG is compelling strategically. In 2025, we appointed a new CEO for IMG, Will Nihan. We also recently announced a small acquisition of Assist America. Assist America has been privately owned since it was founded in 1990 and provides global emergency travel assistance services to insurance companies worldwide. The client base includes many of the leading insurance companies in the U.S., Asia and the Middle East, widening our worldwide offering in these services and building on the already strong U.S. and European infrastructure we have at IMG. With a target addressable market of around $4 billion in medical and travel assistance services, we believe the acquisition is a great opportunity to further build out our service fees. Following completion and integration in 2026, we expect the fully integrated business to add around $4 million to $5 million of EBITDA annually. More recently, we also announced the acquisition of World Nomads by IMG. World Nomads is a global travel insurance platform with a strong recognizable lifestyle brand and distribution model. The acquisition presents the opportunity to increase our trip cancellation premiums and revenues and meaningfully expand our global distribution capabilities. These are areas that we have grown significantly over the past 12 months under the IMG brand. Following completion and integration in 2026, we expect this business to also increase EBITDA by around $4 million to $5 million annually. I would like to welcome our new colleagues from Assist America and World Nomads to IMG and the SiriusPoint Group. We expect our IMG business to generate over $30 million of fee income and over $35 million of EBITDA in 2026. The [ adding ] value of IMG on our balance sheet at year-end was $77 million. And although this will increase upon completion of the new acquisitions, we continue to strongly believe it is undervalued relative to IMG's enterprise value and as a result, understates SiriusPoint's overall book value. Looking more holistically at the acquisitions, these investments into IMG and our A&H business reinforce the importance of both the specialty as part of our portfolio and our diversification from capital-light fee income. We strongly believe these are additive to our story and performance momentum. Touching briefly on our distribution relationships with MGA partners. The fourth quarter saw us add 3 new partners who we have spent several months getting to know and doing due diligence on. As I have mentioned many times before, we take a very disciplined approach when onboarding new distribution partners. We reject over 90% of opportunities presented to us and we will only partner with MGAs who we believe we will work with on a long-term basis and where we have an aligned philosophy in relation to underwriting excellence and data sharing. As a general principle, we also take our time with new partners and taking underwriting risk. This slide shows this. While roughly 1/3 of our partners have been onboarded in the last 2 years, their premiums make up under 10% of our MGA premium mix. Higher premium volumes with partners where we have greater historical experience is core to our philosophy and approach, which we think makes a lot of sense. Almost all of our partners risk share with us and have skin in the game. We think this is an important part of the relationship. A few points from me to close before I pass across to Jim to go through the financials in more detail. Since our third quarter results, we have now closed on the sales of Armada and Arcadian for a combined value of $390 million and the proceeds have been received. Armada closed in the fourth quarter, and the sale is now included in our financials, whilst Arcadian closed at the end of January and so will be included in our financials in the next quarter. As a reminder, Arcadian will be less significant from a capital and book value perspective, given the $96 million value recognition we took upon deconsolidation in the second quarter of 2024. As we announced last quarter, we intend to use part of these proceeds to fully redeem the $200 million worth of 8% preference shares next week at their upcoming rate reset. We announced this formally via an 8-K filing at the end of January. This will reduce our leverage ratio to 23% by the end of February, which is a historic low for the company and is actually below the levels we were operating at before the settlements agreed with CM Bermuda in 2024. We believe this is a good use of funds, provides us with greater capital flexibility and points to a continued strong balance sheet management. Our overall capital remains strong, and our fourth quarter BSCR ratio has improved to 247%. Pro-forma for the upcoming Preferred Share Redemption, it is still a very healthy 232%. Our standard practice is to assess our capital position at the end of each year. And so today, we are pleased to be announcing our intention to repurchase $100 million of our outstanding common shares over the next 12 months. At our current market price, this represents over 4% of the total shares outstanding. We expect this to be accretive to EPS and ROE throughout 2026 and book value per share by 2027. We believe our strong capital position and the continuing earnings profile of the business leaves us in a very strong position to fund growth opportunities in 2026. Before I conclude, I want to briefly look back to this time last year. 12 months ago, when delivering our 2024 full year results, I commented how our repositioning was materially complete and that SiriusPoint was a business with an earnings profile of $300 million. This year, we have demonstrated that again, delivering operating income of $310 million. Importantly, on an operating earnings per share basis, this is up 49% year-over-year, meaning our shareholders are benefiting from our continued execution and value creation. And with that, I will end back where I started. This year saw consistent and improving underwriting performance, strong premium growth, book value and operating earnings per share growth and significant value brought onto the balance sheet from our ongoing MGA rationalization. We continue to lay further foundations for continued profitable growth, investing in people and technology to improve our performance further. We achieved another record operating return on equity, which could not have been possible without our greatest asset, our people. The team has worked tirelessly to achieve these results, and I could not be more proud of them or grateful to them for their unwavering support. I do not take it for granted. While 2025 was another strong year for the company, complacency is not in our DNA. We are relentless in our ambition to become a best-in-class specialty underwriter, and 2026 is another chance for us to showcase our progress. We remain focused and determined to deliver against our ambitions, and we are positive about our outlook. And with that, I will pass across to Jim, who will take you through the financials in more detail. James McKinney: Thank you, Scott. Let me begin by echoing previous comments on how pleased we are with our financial results this quarter and for the year and the progress we are making to become a best-in-class underwriter. Net income for 2025 increased 141% or [ $216 million ] to $444 million as we delivered excellent financial results on a core and consolidated basis. Return on equity was 22.1%. The full year underwriting results were strong on an attritional and as-reported basis as our diverse portfolio continues to showcase profitable, low-volatility premium growth at attractive combined ratios. Starting with our fourth quarter results on Slide 18. We had a strong quarter, reporting operating income of $86 million or $0.70 per diluted share and net income of $240 million or $1.97 per diluted share. Core gross written premiums grew by $134 million or 18% in the quarter versus the prior year. A continued significant driver of our growth was Accident & Health that year-over-year grew 20%. Apart from Accident & Health, core Gross Written Premiums grew at a strong double-digit rate in aggregate compared to the prior year. Turning to our underwriting results. Our core combined ratio of 92.9% was driven by strong attritional loss results, modest catastrophe losses and a couple of legacy and one-off items that affected our acquisition and OUE ratios. The impact of these items added about 2 points to the acquisition ratio. This was partly offset by a point of favorability within OUE related to the new Bermuda tax credits and a onetime compensation benefit. We earned Net Service Fee Income of $4 million with a service margin of 9.4%. As a reminder, Net Service Fee Income can be a bit lumpy due to seasonality trends. Investment income for the quarter was $69 million, flat to last year despite the lower asset base following the CM Bermuda shareholder buyback. Net investment income continues to benefit from a supportive yield environment. Last, the quarter benefited from a lower effective tax rate due to Bermuda tax legislation and foreign exchange rate changes, partially offset by higher effective tax rate associated with the Armada transaction. On a go-forward basis, excluding potential changes in tax laws and foreign exchange rates, we are modeling an effective tax rate of approximately 19%. In summary, we had a strong fourth quarter that continues to demonstrate our ability to profitably grow and create meaningful value for our shareholders. Moving to our full year results on Slide 19. Themes here are consistent with the fourth quarter. Strong execution, disciplined underwriting and focused capital management is producing profitable growth. Core Gross Written premium, Net Written Premium and Net Earned Premium grew 16%, 19% and 18%, respectively. Common shareholders' equity increased $532 million to $2.3 billion, resulting in diluted book value per share, excluding AOCI, growing 24% or $3.46 to $18.10. Moving to Slide 20 and double-clicking into our underlying earnings quality. Our underwriting first focus continues to deliver strong underlying margin improvement. The attritional combined ratio chart on the left-hand side of the page strips out the impact from catastrophe losses and prior year development as these inherently vary over time. We believe this metric is useful to examine the quality of our underwriting income. Our 91.6% core attritional combined ratio for the year represents a 1.5 point improvement versus the prior year period of 93.1%. The attritional loss ratio improved 0.8 points as enhanced risk selection lowered the attritional loss ratio by approximately 1.6 points, partially offset by 80 basis points of mix headwind. For the year, acquisition costs increased 0.3 points, offset by 1 point of OUE improvement. OUE continues to align with our guidance of 6.5% to 7%. Looking forward, for 2026, we project a similar OUE expense ratio of 6.5% to 7%. The right-hand side provides a bridge from our underlying earnings quality to our core combined ratio. This displays 2.8 points of favorable prior year development in the year, partially offsetting 2.9 points of catastrophe losses that are largely due to the first quarter California wildfires. Turning to our Insurance and Services segment results on Slide 21. Gross written premium increased $106 million or 23% to $556 million in the quarter, driven by strong growth within all of our specialties. Year-to-date, gross written premium increased $473 million or 26% to $2.3 billion. The Insurance and Services segment fourth quarter combined ratio is 93.3%. As mentioned earlier, this contains some one-off noise in the quarter, particularly on acquisition costs. Our full year combined ratio of 91.7% is indicative of the current run rate as we head into 2026. Double-clicking on our Accident & Health book of business. As Scott outlined earlier, this book of business is strategically significant within our portfolio, acting as a volatility shock absorber, allowing us to write more volatile business elsewhere. During the year, premiums for this specialty grew 23% and have now reached almost $1 billion. It accounts for 43% of the segment's gross written premium. The areas we focus on are supported by a market environment that meets our risk-adjusted return requirements. We continue to see growth opportunities within Accident and Health. Turning to casualty. Full year premiums have increased by 8%, driven by strong rate offset by decreased volumes. Casualty is a broad term. And overall, there are many classes we remain cautious on due to pricing challenges, notably public D&O and commercial auto, where, as previously indicated, we have substantially reduced premium and exposure. Correspondingly, there are pockets we are seeing strong opportunity in such as general liability. In terms of pricing, our casualty writings continue to be firm, particularly on excess layers benefiting from rate in excess of trend. Other specialties continue to see strong growth, highlighted by Surety growth in 2025. The focus on these specialties is deliberate as we continue diversifying our portfolio and writing lines that have less correlation to the wider P&C pricing cycles. Within the marine book, cargo and hull generally saw single-digit rate decreases, while marine liability rates saw low single-digit increases. Marine war rates continue to fluctuate due to regional geopolitical tensions. Looking at energy, liability rates remain positive and averaged 5%, while upstream is more challenged. Last, premium for our Property Specialty is strong on both a fourth quarter and full year basis. This is driven by growth from our international business, where we are writing select opportunities, mostly in the U.K. This business has a controlled volatility profile with a focus on lower limit residential and small, medium-sized enterprise properties protected by excess of loss reinsurance for larger events. Moving to our Reinsurance segment results on Slide 22. This quarter, gross written premium increased $29 million or 9% to $341 million. We saw growth in casualty offset a decrease in property premiums with other specialties broadly flat. On a full year basis, gross written premium increased by 3%, while on a net basis, premiums written increased by 2%. The combined ratio for the quarter decreased by 1.1 points to 92.1%, driven by a lower OUE ratio, while the full year combined ratio of 91.8% increased versus the prior year, driven by lower levels of favorable prior year development. Double-clicking into Casualty Reinsurance. Gross written premium increased 7% for the year. At 1/1 renewals, casualty reinsurance saw pricing in line with expectations as underlying rate performance remained stable. The January renewals did not see any deterioration in terms and condition. This quarter, other Specialty gross written premiums was broadly flat and up 4% for the full year. The reduction is the result of reduced aviation premiums. January renewals saw flat pricing for both excess of loss and pro rata treaty classes in aviation, while direct and facultative rates for major airline renewals saw 10% to 50% increases in the fourth quarter with U.S. airlines seeing the greatest rate changes. We welcome the firming pricing environment as we seek further rate increases to achieve rate adequacy. Elsewhere in other specialties, credit and bond pricing continues to be pressured, stemming from favorable historical results and ample market capacity. Within property reinsurance, premiums were down in the quarter and in 2025. At 1/1, we saw U.S. property catastrophe reinsurance rates decreased roughly 15% to 20%. International property catastrophe reinsurance pricing also saw declines at 1/1 with some accounts failing to meet rate adequacy benchmarks. In response, we came off certain programs to reallocate capital to better opportunities. Slide 23 shows our catastrophe losses versus peers and the reduction in the volatility of our portfolio. Following portfolio actions taken before 2022, we have materially decreased our catastrophe exposure in order to deliver more consistent returns to our shareholders. We now boast a 3-year track record of low volatility in our combined ratio due to catastrophes. At 1/1 renewals, we took the opportunity to further strengthen our risk transfer of property catastrophe risk by purchasing a new property aggregate program covering select property catastrophe events. This cover became available with strategic partners at attractive levels based on our underwriting track record. For 2026, our new aggregate cover attaches at $90 million of accumulated catastrophe losses throughout the year. This structure provides meaningful protection against the frequency and clustering of small- to medium-sized events. Furthermore, our 2026 combined retrocession protection is more efficient than 2025, particularly in managing our volatility. Importantly, we were able to achieve this improved efficiency at a lower overall cost than the prior year while also increasing the total limit purchased. Taken together, these actions enhance the resilience of our earnings and capital position and provide us with greater confidence in delivering our financial targets. As of February 1st, we purchased multiline aggregate reinsurance coverage with $100 million annual limit designed to limit retained underwriting volatility in key lines of business of property reinsurance, aviation, marine, energy, among other perils. Catastrophe losses in the year represented 2.9 points of our combined ratio and were largely driven by the first quarter California wildfires. We have a comparatively low loss ratio, demonstrating the benefits of our diversified portfolio. Property catastrophe premiums are just 5% of the overall business mix. Moving to Reserving. Our strong history of prudence is shown on Slide 24. For the quarter, core favorable prior year development was $15 million and $22 million on a consolidated basis. This marks the 19th consecutive quarter of favorable prior year development. Our track record of consecutive favorable releases significantly exceeds the average duration of our insurance liabilities, demonstrating our prudent approach to reserving. Additionally, we show here the strong level of protection we have on each of our 3 loss portfolio transfers that were completed in 2021, 2023 and 2024. In short, we have significant limit remaining on each of these treaties. Turning to our strong investment results on Slide 25. Net investment income for the year was $275 million, down slightly from the prior year period as a result of a lower asset base following the first quarter CM Bermuda transaction settlement. This quarter, we reinvested over $500 million. New money yields were in excess of 4% as we increased cash and treasury holdings in advance of our upcoming preferred retirement. Our portfolio continues to perform well. There were no defaults across the fixed income portfolio. We are committed to our investment strategy that focuses on high-quality fixed income securities. 81% of our investment portfolio is fixed income, of which 98% is investment grade with an average credit rating of AA-. Our portfolio duration was 3.2 years, up from 3.1 years at the end of the third quarter. Moving on to our Slide 26, looking at our strong and diversified capital base. Our fourth quarter estimated BSCR ratio increased to 247%, up 22 points in the quarter following the Armada MGA sale. On a pro-forma basis, accounting for the Series B preference share redemption, the BSCR ratio is 232%. Evidencing the strength of our capital position, we provide a stress test scenario for a 1 in 250-year PML event. Post this hypothetical event, our BSCR ratio is strong and above rating agency capital model targets. Looking at our balance sheet on Slide 27. We continue to have a strong balance sheet with ample capital and liquidity. During the quarter, the leverage ratio fell to 28%, driven by an increase in shareholders' equity. Our leverage levels remain within our target and will fall to 23% following the redemption. As Scott mentioned earlier, today, we are announcing a common share buyback intention of $100 million of shares over the next 12 months. We believe this action will be highly accretive to ongoing shareholders. Lastly, we view our balance sheet to be undervalued in relation to the consolidated MGAs, which we own, namely IMG, that is a core component of our future offering. Our book value now includes the sale proceeds of Armada. In the first quarter, our book value will increase by a further $25 million related specifically to the completion of Arcadian. With this, we conclude the financial section of our presentation. This quarter saw a continuation of strong double-digit growth in our top line that delivered a Core Combined Ratio in the low 90s with continued attritional loss ratio improvement. This is our eighth consecutive quarter of attritional loss ratio improvement. Operating return on equity for the quarter of 17.1% contributes to a full year operating return on equity of 16.2%. 2025 marks another year with a strong return on equity at or above our 12% to 15% across the cycle target. We've built a track record of delivery. This quarter's results further validate the significant progress we have made to becoming a best-in-class specialty underwriter. With that, I hand the call back over to the operator. We can now open the lines for questions. Operator: [Operator Instructions] And our first question comes from Michael Phillips with Oppenheimer. Michael Phillips: Congrats on the quarter and the year. I know you guys are doing. First question would be kind of a summary, I think, of what Scott opened with and that Jim kind of commented on. Scott, you said tougher market conditions in 2026, but maybe maintaining the current levels of profitability. And then Jim was talking on insurance about, I think you said like the 91.7%, 91.8% is a good run rate. And obviously, insurance had an elevated acquisition cost for the year. So I guess, first off, just to confirm for insurance, that 91.7%, 91.8%-ish number, is that what you mean, not much pressure on that over the next year? And then I guess, because the acquisition costs, maybe if you could speak specifically to, I guess, what you call the attritional loss ratio, I think in the year, it was 60.8%. So how do you see that 60.8% for insurance trending over the next year, given your comments? Scott Egan: Mike, thank you. Appreciate the questions, and thanks for your opening comments. Look, the way I think that we're thinking about '26 is in line with what I said, which is, look, we recognize that there are parts of the market that will be tougher. I think Jim gave an example of that in property [ cat ] but he also gave a context for us, which is that's sort of 5% of our overall premium. So I think the way that we're thinking about '26 is where we don't see the opportunity to make a return commensurate with the risk. The great news, Mike, is that we can move capital quickly around the group and seize other opportunities, which then takes us, I think, to a wider portfolio, where I genuinely believe both from the lines of business that we write, Accident and Health, Surety, et cetera, we are able to deploy capital in areas where the rating pressure is not the same and is less correlated, if you like, to the wider P&C. And in addition to that, I do think that the distribution focus we have on MGAs working with what I would call very specialist niche partners who really give true dedicated specialist advice to customers. I do think there's partial insulation from some of the wider market pressures on general rate. So look, I think that's sort of how we're thinking about '26. I think importantly, Q4 and sort of opening of Q1 in Jan was in line with our expectations. So there was no sort of negative surprises. Things like aviation that Jim mentioned for us, I think I highlighted that, Mike, on my Q3 call, I said aviation need rate. I think everyone in the market have been saying that. And we carried high on average, high double-digit teens rate in aviation. More to do, but I think that's really a good step forward. So look, for us, I think we are off and running in '26 in a good space. I think that the combined ratio number that you mentioned for insurance, look, indicatively, that's a good run rate as we go in to 2026. We'll try and do better, I promise you. But we think that's a good level of return for the risk that we're taking. And I think your comment on loss ratio, I think, look, we're not going to trade margin where we don't see return for the risk. The great news, though, is we've got a really strong pipeline of growth opportunities that we'll be very disciplined about in evaluating, but we believe that we've got other opportunities for our capital. So look, I think that gives you, hopefully, my quite a comprehensive answer. I'll pause in case Jim wants to add anything else to that. James McKinney: Yes. So yes, I agree with everything that Scott highlighted. I think those are good comments. I think the biggest thing, Michael, that I would point you to as you think about us and I think the number that Scott highlighted and that I highlighted earlier is the right number to begin with. I'd say there's probably potentially when you think about us on a go-forward basis, maybe 0.5 point that you could kind of shift over time, plus or minus related to mix and how it actually comes in over kind of 2026. I would not be confused by that. One of the comments that I highlighted inside the quote was kind of the component of mix, right? And that we have continued to improve on a loss ratio performance basis, inclusive of that mix element. That's actually a real positive in total because it means that we're getting more leverage actually on our premium to surplus ratio. So different things kind of come in at different ratios. But in short, what I would say is I'd start exactly with that 91.7%. And I would think depending on how mix comes in over the year, where we outperform, where we see the best returns from a capital perspective, that the right way to think of that is maybe plus or minus kind of 0.5 point as a starting position from that kind of given just how things come together. Michael Phillips: Okay. That's very helpful, both of you. Appreciate it. I guess next question is on the fee income side and just trying to think about 2026 here. I guess, first off, can you say of the 2025 number, I think the $42 million, how much of that was Armada? James McKinney: So I would tell you that generally speaking, you're in a range of about $26 million inside there. I would think about it as like a run rate of about $30 million with potential of kind of post completion of everything, I think you're looking at about a run rate base expectation of around $40 million. Michael Phillips: Sorry, Jim, that $40 million is what, what do you mean by that. James McKinney: That include the 2 bolt-on acquisitions, which won't be up to full power, Mike just to be very clear, right? So the guidance that we've given for '26 is that obviously we'll be focused on integration. As an example, World Nomads won't complete until later on this year. But our aim when they're up to full power and fully integrated within IMG is they will be $40 million and hopefully plus of EBITDA. We'll try and do better. In addition to that, for World Nomads, which is obviously underwriting business, we will obviously channel that across over time into a wider Accident & Health underwriting division as well. So hopefully, that knits that together for you as well, Mike. Michael Phillips: It does. Yes. I guess that's what I was trying to get at. So 2026, we'll see probably the 30-ish that you're guiding to, obviously, it is decline from '25 level, but that does not include the 2 acquisitions, right? So you won't see any benefits from, say, World Nomads until 2027? James McKinney: Not materially, Mike. And that's why, look, I mean, plus or minus 1 or 2 perhaps, but not materially. That's why we're trying to be explicit in the guidance going forward. Michael Phillips: Okay. No, perfect. Just want to clarify. And then I guess just last one for me for now is on just the growth. And you've talked a lot about how you've got these lines that are contributing more than 60% in the quarter of the year was from A&H and Surety. I guess if we can focus on Surety for a second. I get a lot of questions on this of how sustainable that is over the next 2 years. How much of your Surety business in 2025 came from either government infrastructure growth or from data centers that was a big boom in 2025 and therefore, how much of that is sustainable over the next year or 2? Scott Egan: I'll make a comment and then Jim can jump in, Mike. So look, I think the sort of data center aspect and stuff like that is a red heading. So look, when we think of the profile of what we have, we view it as sort of pretty sustainable on a go-forward basis, Mike. So we're not projecting any sort of falloff for the 2 areas that you've highlighted, although I recognize within the wider marketplace that those are absolute pressures. But Jim, anything you want to add to that? James McKinney: Yes. I would just say that minimal amounts of kind of our book follow that. I mean, we feel pretty good about where we've entered. Again, we're kind of at the early stages, I would say, in terms of where some of our relationships are inside of that, not from how long we've been partners or other, but we're at, I would tell you, kind of more the early innings of kind of the total build-out from a premium perspective on the Surety side versus necessarily kind of our longer-term kind of run rate stabilized portfolio. So I think we've got some nice tailwinds there and feel pretty good about the growth in 2026. Scott Egan: And Mike, just to amplify the point that Jim made the just now, which I appreciate is a wider than Surety comment, which is, look, the reason we've tried to give some additional disclosure, which we started at Q3, particularly around our MGA relationships is I think you can really see the difference between number and premium from what I would term newer MGAs. Of course, that's not an exact science, which I completely get. But I think you can see that we're being thoughtful and cautious in newer relationships. And so just to amplify the comment that Jim made, that's really the slide that shows we have potential from existing partners as well as a healthy funnel of opportunities to work our way through from a diligence perspective. Operator: Our next question comes from Andrew Andersen with Jefferies. Andrew Andersen: On the insurance segment, I think you talked about casualty growing 8% for the year. I think that's about 30% of the overall segment. Could you maybe just talk a bit more about how you're seeing kind of the rate environment into '26? Are you thinking still kind of staying firm or harden further? What is the outlook for casualty insurance? James McKinney: Yes. So thanks for the question. Generally speaking, relative to the specialties in the areas where we focus, we think -- and what we're seeing is that rate is broadly moving in line with trend. We're seeing relatively disciplined activity, people being thoughtful about the lessons that I think we learned kind of in the 2019, '20, '21 kind of time period and some of the surprises. You've kind of just seen some of the development and other components kind of work their way through the books on those things over the last year. And I think it was more than what folks expected. And so I think people are looking at the environment with a healthy thought process, and we feel pretty good about where we're at and what we expect kind of going forward. Andrew Andersen: And Scott, I think you talked about attracting some more talent and doing some more senior hires. Where have some of these focus areas been on? Is it kind of specific lines of business where you're seeing growth opportunities? Scott Egan: Right across the firm, Andrew. So we're obviously attracting a underwriting talent to the organization, but I would also say we're attracting sort of functional talent, et cetera, as well as we sort of strengthen our capabilities. The great news is we're attracting people from organizations with good caliber and we're attracting really high-caliber individuals. That's very different, Andrew, to when I first arrived when obviously, the company was in quite a different position. Also, and I want to just sort of emphasize this point as well, really pleasingly, the talent from within is also growing and prospering. And so we feel in a really good spot. When we are -- really simply, when we're advertising roles, we've got a really good internal pool to think about and consider, and we're really attracting external people to the organization. I think we've caught people's attention. Andrew Andersen: And maybe last one, back to insurance. The retention rate has been improving over time. I guess, Jim, do you still see some more opportunity to retain a bit more business here into '26 and '27? And is that specific on any one line? James McKinney: Yes. I mean we continue to see opportunity there. I think what I would highlight to you is more a risk management prudence mindset. We start with a really thoughtful kind of composition. We make sure that we get to know our partners as well as kind of the components in the market. And then we -- through time, as we have everything kind of in place, the data feeds, the interactions, just a really great way of kind of forecasting for in the future that we feel like gives us kind of a high confidence, then you see us gradually kind of increase our net in those components. And so that's a trend again that I think is going to continue as we move forward in the future, but it's going to be done with where we see the appropriate returns on capital. It's going to be done with the same type of risk management and prudence that we've kind of taken to date. So we feel good about it. And yes, we think there's additional opportunity there, but it's going to be prudent and disciplined. Scott Egan: Yes. And Andrew, I just want to amplify what Jim said at the end. Look, we think -- I think I called it, it makes a lot of sense when I gave my overview. But we think that approach really is the hallmark of sort of our discipline and should give our investors confidence and comfort. We're not chasing growth right? We could turn taps on if we wanted and take more growth. We think our approach is based around things like underwriting philosophy, getting to know people, data sharing. And we just think that's a really sensible approach. But there's no question we've got potential within the pipes, and we've got new potential to evaluate outside the pipes, but we will be disciplined. Operator: [Operator Instructions] We'll go next to Mitchell Rubin with Raymond James. Unknown Analyst: This is Mitch on behalf of Greg Peters. Congratulations on the quarter and the year. So with roughly 2/3 of premiums now coming from insurance and services, how do you see that mix evolving over the next few years? And is there a longer-term target for where you'd like that balance to settle? Scott Egan: Mitch, thanks for your comments. Very kind, and thanks for your question as well. Look, I think we've given a very strong steer that we want to grow insurance over reinsurance. I think it fits within our sort of strategic ambition of lower volatility, but I wouldn't want that misinterpreted, which is why I elaborated that reinsurance is a very important part of our armory when we approach the market. Not only does it give us flexibility in lines of business to come at them in different ways, but it's actually an incredibly useful tool in working with our MGAs. So I really want to make sure that, that message lands because it's really an important part of how we do business. We haven't given a specific target, and I'm loath to do that. And the reason for that is because it can ebb and flow. But I would say to you that proportionately, insurance is growing much quicker than reinsurance. You can see that in the numbers that we disclosed this year. Insurance and services grew gross written premium 26%, reinsurance 3%. Those can move around quarter-on-quarter, sometimes year-on-year. But I think indicatively, we expect the trend to increase. Unknown Analyst: And just on the $100 million buyback, how should we think about the cadence? Is that going to be front-loaded, more evenly paced or opportunistic based on valuation? James McKinney: So look, I'll kind of -- we'll tag team this a little bit. What I would highlight is likely to be a little bit kind of opportunistic, but also with we feel like we're -- we feel we're in a really attractive position from a market perspective or other. We see a lot of value in the company. We think that there's a good value trade here for our ongoing shareholders. And so we're going to be disciplined and thoughtful about that. But we're going to take a programs [ mount ] and we'll see how things kind of trade from a market perspective. So some opportunistic, but likely to play out throughout the year with potentially some front-loading kind of given where things are at today. Scott Egan: Yes. Look, the same mix actually, which is, look, I think the reason we said over 12 months is want to give ourself some flexibility. I think that's a good thing. The most important part of it is we think it's good for shareholders. And therefore, depending on where the price moves, it could be even better for shareholders. There's no liquidity constraints in terms of when we might do it. The great news is Jim is get the money in the right place to do it when we need to do it, and we'll be opportunistic. And if that means it's more front-loaded than back loaded, then we are very happy to take that. We'll do what's right for shareholders. Operator: And this now concludes our question-and-answer session. I would like to turn the floor back over to Scott Egan for closing comments. Scott Egan: Yes. Listen, thank you very much, everyone, for joining. Obviously, the full year results is a very important one for SiriusPoint. I really just want to end with a few key takeaways and messages from our results. Number one, this is our third year of operating ROE improvement, and there really is a strong performance momentum within the organization. That's number one. Number two, our attritional loss ratio improvement, and therefore, our quality of earnings continues to improve year-on-year. We are very proud of that. And I think that's a really important measure for the business as we go forward. Three, there is strong growth momentum within the company, and I think we've outlined our disciplined approach to that. Our book value has increased by 28% in the year. That's added significant value for our shareholders. And we are positioned very well from a balance sheet perspective to take opportunities as they present themselves. So in summary, the future is bright for SiriusPoint. Thank you very much for joining. We appreciate your questions and your attendance. Have a good day. Operator: Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.
Andreas Spitzauer: Good afternoon as well as good morning, ladies and gentlemen. I hope all of you are very fine. My name is Andreas Spitzauer, Head of Investor Relations, and I want to welcome you to Knorr-Bremse's presentation for the full year preliminary results of 2025. Today, Marc Llistosella, our CEO; and Frank Weber, our CFO, will present the results followed by a Q&A session. The event will be recorded and is available on our homepage in the Investor Relations section afterwards. It is now my pleasure to hand over to Marc Llistosella. Please go ahead. Marc Llistosella Y Bischoff: Thank you, Andreas. Ladies and gentlemen, I'm pleased that you are participating in the capital market call on our preliminary results for 2025. The most important news first. Despite geopolitical uncertainties, we were once again able to steer Knorr-Bremse successfully through a challenging year. Thanks for the stringent execution of our BOOST measures and the dedication and expertise of our colleagues worldwide; we strengthened existing businesses, developed new areas of growth during demanding times. Let's go to Page #2. We are reporting strong financial results today. Fiscal year 2025 clearly demonstrates Knorr-Bremse's excellence and resilience once again. With our BOOST strategy, we have delivered what we have announced. Phase 1 is almost completed, creating a more stronger and cleaner cost base. This now enables us to clearly shift the focus towards accelerating margin accretive growth. BOOST Phase 2 centers on growth and expansion while maintaining strict cost discipline. This means BOOST and the regained efficiency are not over as management culture is here to stay and a permanent part of how we run and steer our business. Our Rail Division delivered strong margin accretive growth and reached its midterm target margin 1 year earlier. We promised the numbers and we see it already 1 year ahead. RVS now represents around 55% of total group revenues so we've become more railish as indicated in the past. At the same time, CVS showed disciplined cost management, solid performance despite a tough truck market backdrop. A great achievement by our truck colleagues. In total, we achieved our full year '25 guidance and have issued a solid '26 outlook in line with our existing midterm targets from the past. We will provide an update on new midterm targets together with the release of our quarter 2 results end of July this year. Ladies and gentlemen, let us now take a quick look at our guidance for last year on Page 3. We were able to achieve all of our targets; including revenues, EBIT margin and free cash flow. The strong order book, the strong cash conversion rate and the low leverage underpin these results and confirm our strong resilience. We are in top financial shape ready to continue with our BOOST strategy from a position of strength. I'm very pleased that we are able to present such convincing results today. They are a clear proof that our collective efforts over the past years have paid off. Let me continue with more details of our BOOST program on Page 4. When we launched BOOST in the summer of 2023, our ambition was clear: to make Knorr-Bremse faster, more efficient and structurally stronger again. Two years later, the benefits of the program have become clearly visible in our financial results. The consistent execution of sell-it and fix-it measures have delivered tangible margin expansion driven by a lower breakeven. BOOST is firmly anchored in value creation. Every initiative is designed to contribute to profitability, which remains our top priority. With the brownfield part very well advanced, we are now transitioning into the next stage of BOOST. In 2026 and beyond, the focus of the whole management team will clearly shift towards greenfield initiatives, accelerating margin accretive growth and expansion while maintaining the operational discipline we have built. As a result, we expect the company to continue benefiting strongly from BOOST in '26 both through sustained efficiency gains and an increasing contribution from margin accretive growth initiatives. Let me now turn to our sell-it program on Page 5. Overall, we are close to complete all key actions. The sales process for our HVAC business is advanced and we are fully committed to sell the business if we can realize a fair value. Therefore, we prefer a long-term and sustainable solution instead of a hasty action. We are not a forced seller and we will never be. HVAC is classified as an asset held for sale on the balance sheet. The sell-it program is only 1 side of the coin. Over the past years, we have so far divested businesses and units with revenues of more than EUR 400 million and an average EBIT margin of well below 5%. Once the HVAC business is sold, it will make up to EUR 750 million in total as promised and as said in 2023. On the other side, we have added businesses with revenues of roughly EUR 600 million, generating margins of 15% or above. This is our definition of portfolio optimization, respectively, portfolio rotation. In other words, we have deliberately exited lower margin activities and reinvested capital into higher quality, more profitable growth platforms. Our motivation behind this strategy is very clear and remains a top priority, creating shareholder value by continuously improving the quality, profitability and growth profile of Knorr-Bremse. Let me now turn to fix-it and our efficiency measures on Page 6. Over the past years, we have made very solid progress in improving key financials. For me and the whole management team, keeping fixed costs under tight control remains and is very important. This is not a one-off exercise. It is a permanent discipline for us. We are permanently monitoring our fix-it businesses and drive them into improved performance. The breakeven, respectively, the control of our fixed cost is particularly important to me. In the past, it suffered from revenue headwinds in countries like China, Russia and it was impacted by high inflation. This is, therefore, very important to us as a management team to regain this financial flexibility and strength. So far, we have already been able to improve the breakeven by 4 percent points or 400 basis points. In our internal business reviews, I therefore explicitly challenged the operating units on cost structures and efficiency. Frank in parallel places a strong focus on cash flow generation. This combination has proven to be very effective. Our persistence has clearly paid off. Over the last 3 years, we have reduced headcount by more than 2,400 people, of which only 1/4 was achieved through divestments and the majority through real reduction measures with particularly strong progress in the CVS division so far. In addition, the migration of operating activities to lower-cost countries in our major regions such as Hungary, Poland and India is already well advanced. Importantly, cost optimization goes far beyond administrative functions. We are systematically adjusting our operational footprint across engineering, production, R&D, service activities and purchase in order to achieve an optimized strategic global footprint. At the same time, we have established global shared service hubs in all major regions and are doubling down on those. These hubs are already delivering tangible benefits. Overall, fix-it has made a meaningful contribution to margin expansion, cash flow improvement and return on capital employed enhancement of 20.2% -- at 22.8% of Knorr-Bremse. And let me be very clear, fix-it is not finished. Efficiency and cost discipline will remain an integral part of how we run Knorr-Bremse going forward. Let me briefly outline the strategic logic behind how we intend to develop Knorr-Bremse in the coming years. The main focus of our greenfield strategy is to drive revenue growth and margin expansion beyond historical levels. Our portfolio strategy remains clearly anchored in rail and truck combined with opportunities in adjacent and other existing growth areas. The rail industry provides very attractive profit pools. As a result, future organic and inorganic investments will take place more in rail going further. Wayside signaling is an interesting segment strengthening our sustainable margin accretive growth. In truck, mobility as a service via our CVS service platform represents another greenfield pillar. Here, we are evolving towards a technology-enabled solution partner and we are systematically expanding digital and service-based aftermarket solutions, a market that is just emerging in trucks. In energy technologies, we are building on our existing nucleus to explore attractive opportunities in intelligent grid solutions and the field of energy distribution not in a rush, but step-by-step and accretive. Beyond our core, we are selectively analyzing and developing additional growth fields like dampers and electronics business. Green technologies are still at a very early stage for Knorr-Bremse, for example, supporting our existing but small Reman business. Overall, our ambition is to put Knorr-Bremse on several strong profit pools to reduce cyclicality and grow profitability. Let me be very clear. To be part of Knorr-Bremse, every business must meet its target margin. This discipline is central to create long-term shareholder value, an important part of our financial guardrails regarding M&A. Let me now turn to signaling on Page 8. Signaling itself is clearly a success story for Knorr-Bremse so far. We acquired a good asset and made it even stronger. KB Signaling is well integrated and it is a market leader in an attractive segment, which can be seen in the favorable growth prospects. Over the past year, our focus was deliberately on cleaning up the project portfolio of KB Signaling. This led to a slight decline in revenues, but significantly improved the quality and risk profile of the business. At the same time, we reduced the cost base through targeted staffing optimization. With this groundwork completed, our focus is now firmly on profitable growth. We aim to defend and further strengthen our market leadership in the United States and to expand into markets that have adopted U.S. rail standards such as Australia and South America. In Europe, we have extended our signaling footprint through the acquisition of duagon, strengthening our electronics and system capabilities. Beyond organic growth, we also remain open to selective nonorganic investments to further expand our European activities in signaling. Overall, our objective is clear to build a global high-quality wayside signaling portfolio and to fully capture the attractive growth potential of this market. Moving please to Page 9. Let me now turn to energy, which at first glance may appear less obvious for a company noted and rooted in rail and truck braking systems. However, there are 2 very clear reasons why this field is highly relevant and interesting for Knorr-Bremse. First, energy is not new to us. For Zelisko, we have been active as a Tier 1 supplier in the European and American energy distribution market for more than 50 years. Together with Microelettrica in Milan, we already generate meaningful revenues in this segment today and the business is both growing and highly profitable. Second, the European energy market is currently undergoing profound changes. Investments in grid modernization, intelligent power distribution and network management are increasing and demand for smart reliable solutions is high. Given our long-term standing, customer relationships and technical expertise; we see a clear opportunity to benefit from this development. Currently, we are screening this market globally and are interested in opportunistic moves. We are responding to increasing demand and concrete requests from our existing customers in the areas we are already in. Our approach is, therefore, deliberate and disciplined. We intend to expand our positioning in energy technologies step-by-step through organic investments and being open to selective M&A opportunities, always fully aligned with our strict financial guardrails. In this way, energy represents a value-accretive extension of our portfolio by reducing cyclicality and cyclical dependency and support sustainable margin accretive growth over time. Our CVS service platform addresses the truck aftermarket for primarily digital solutions, a segment that is structurally outgrowing the OE market and offers a more attractive margin profile. We call it the truck aftermarket ecosystem. We are already well positioned with Cojali providing a strong base in diagnostics, data and workshop solutions. Cojali generates annual revenues of more than EUR 130 million with a very, very attractive EBIT margin. We are now accelerating our expansion in truck services with TRAVIS at the core of the CVS service platform. We are bundling services that are essential for fleet operators, but which are not part of their core transportation businesses. Over time this will include services such as repair, parking, charging enabled by TRAVIS as an asset-light data-driven platform. Together with TRAVIS [indiscernible], we are at the start of being a digital solution partner in the truck aftermarket, strengthening the CVS ecosystem and expanding Cojali's opportunities. Overall, this is a strong strategic fit for our Truck Division; high growth, attractive margin, asset light, scalability and a higher share of revenues less depending on cycles. And this is exactly what BOOST Greenfield stands for: building new growth platforms in structurally attractive markets that enhance the quality, resilience and growth profile of Knorr-Bremse's portfolio. 2025 was a good year for Knorr-Bremse. Let me briefly highlight the key points. In Rail, we secured several important contracts. Siemens Mobility awarded us an order covering braking systems and for the first time a coupling system for 90 lightweight trains for the Munich SVA. In China, we contributed to growth with CRRC, supplying equipment for more than 1,000 metro cars in major cities as well as technologies for around 150 trains complemented by export orders, including braking systems for over 100 locomotives for Kazakhstan. We also entered India first high-speed rail project for an equipment initially with BEML initially equipping 2 prototype trains. Beyond that, with the opening of our new artificial intelligence center in Chennai, we are continuing our global digitalization strategy and also strengthening our presence in India. Just a few days ago, we laid the foundation stone for a new site there, which will be built over the next 1.5 years. In the future, we will bundle engineering production capacities here for both divisions together with a capacity of more than 3,500 people long term. Digitalization in rail freight was another highlight. In the U.K., we signed a long-term agreement with VTG Rail U.K. for the supply of at least 2,000 freight control sentinel wagon sets; improving safety, availability, efficiency and infrastructure use. In simple words, we make freight trains smart. We make them smart for the first time and after more than 100 years. In Truck, we extended a major contract with a leading OEM for 200,000 electronic leveling control system while continuing to expand our digital aftermarket business. The extension of Nico Lange and my personal contract are further strong signals of continuity and stability. It reflects the confidence in the leadership team together with all my colleagues, a strong collaboration across the organization and a shared commitment to long-term value creation. Together, this provides a solid foundation for Knorr-Bremse continued success and a very promising future. Deliberately leverage the benefits of artificial intelligence, we are now further advancing our AI transformation together with strong partners like Amazon Web Services. Our objective is to build a new operating model for the company over the long term powered by high-performance AI agents. This is an exciting initiative for which we are shaping the digital future of Knorr-Bremse, enabling us to become faster, more agile and more efficient. Let us now take a look at the current market situation for rail and truck as well as our market expectations for the current year. Starting with rail. The overall picture remains very robust and continues to be our least concern within the group. Underlying demand is strong across all regions supported by high order books at OEMs and our customers. There has been no material change in market fundamentals and we expect a full year book-to-bill ratio around 1 or slightly higher. In Europe, demand remains solid with passenger rail continuing to outperform freight, which is still somewhat softer. Same picture for North America where the passenger business continues to more than compensate for the still subdued freight environment. The APAC region continues to develop at a high and stable level. After good growth driven by increased ridership and pent-up demand, the Chinese rail market should normalize this year. On the other hand, we are quite convinced and we get clear indications to be part of a new rail platform in China in the future. Turning to the truck markets. The market picture overall has improved compared to 3 months ago although regional differences remain pronounced. In North America while the market is still at a low level, we are now seeing first signs of stabilization. Orders activities and customer sentiment have improved sequentially suggesting that the market may be starting to bottom out. For 2026, we expect slightly increasing demand year-over-year. That said, uncertainties remain and we continue to assume a gradual recovery rather than a sharp rebound with half year 2 expected to develop better than half year 1 in North America. The European truck production rate should continue its positive momentum seen in '25 and it should slightly grow in '26. I would now like to hand over to Frank, who will outline the preliminary financial figures for you. Frank Weber: Thanks, Marc. A big welcome also from my side. I would say let's first turn to Chart 13 to discuss the financials for the full year at first. Knorr-Bremse generated total revenues of almost EUR 8 billion, a strong figure and slightly up in organic terms. On a divisional level, RVS more than compensated for the tough truck market development especially in North America this year. From a regional point of view, Europe and APAC contributed to the organic revenue increase while North America reported a decline. The improvement in our operating EBIT margin was driven by a strong contribution from Rail supported by an attractive regional mix and good aftermarket in general. Together with our operating leverage and structural initiatives from the BOOST efficiency program, this led to a 70 basis points increase in the group operating margin to 13%. Rail achieved its midterm target ahead of schedule with 16.5% while CVS successfully fought against the very challenging truck market and achieved a resilient and stable EBIT margin of 10.4% despite the weak market situation in our stronghold North America. Order intake and backlog also achieved great results, 6% and 8% up year-over-year on organic level. These developments once more demonstrate KB's outstanding position in both markets and provide a great backbone for future growth. The very strong cash flow is again one of the major highlights of '25. We were able to generate EUR 790 million in free cash flow, a new record on operating level, which resulted in an improved cash conversion rate of 131%. Looking at these superior full year results, I would like to also thank all our colleagues, business partners and customers for their great collaboration and dedication in '25. Let's continue this year and support KB to become even stronger. Let's now focus on our balance sheet on Chart 14. A core pillar of our financial policy is and remains the fostering of our superior financial profile. This strong financial foundation has proven its value over recent years and continues to provide a high degree of flexibility. This enabled us to achieve our strategic objectives and operational needs while managing -- at the same time, managing the cycles of the market dynamics. A robust equity base continues to be a key priority for us. At year-end '25, Knorr-Bremse reported an equity of almost EUR 3.2 billion corresponding to an increase and very solid equity ratio of 36%. Our liquidity decreased to around EUR 1.7 billion solely driven by the repayment of our last year's bond maturity of EUR 750 million. Looking at the real operational effect, liquidity increased by nearly 15%. Our net debt, therefore, declined by 31% to a very healthy EUR 627 million. This was strongly driven by the repayment of the beforementioned bond translating into a strong and comfortable net debt-to-EBITDA ratio just below 0.5. As a result, KB's credit ratings of A3 and A- remain at a very solid level with stable outlooks underscoring the resilience and strength of our financial balance sheet. Let's move to Chart 15. CapEx amounted to EUR 319 million corresponding to 4.1% of revenues. In absolute terms, capital expenditures declined by EUR 30 million year-over-year. This development is fully in line with our strategy to optimize CapEx spending to a level of 4% to 5%. Net working capital in operating terms declined by EUR 85 million year-over-year with an annual reduction of more than 3 days resulting in a once again improved net working capital efficiency year-over-year. This sustained progress reflects the continued success of our collect program, delivering improvements across all key net working capital drivers, especially inventories and trade receivables. Importantly, these efficiency gains were achieved while maintaining the highest level of supply reliability for our customers, which is our clear priority. Since end of last year, we have accounted HVAC under IFRS as asset held for sale. Driven by higher EBIT and continued improvements in capital efficiency, ROCE increased by 200 basis points to 22.8%. This demonstrates disciplined asset input and utilization while simultaneously increasing our profitability in absolute terms. I would like to provide more details regarding our free cash flow on Chart 16. We improved the free cash flow sequentially last year reaching EUR 471 million in the last quarter alone. Overall, the free cash flow came in at EUR 790 million on a full year level, a new record and the best operating figure in 120 years of KB. The increase was supported by stronger EBIT generation, disciplined capital expenditures and the successful execution of our persistently lowering net working capital. As a result, we delivered broad-based improvement across all the key drivers. The cash conversion rate remained at a superb level reflecting our ability to effectively translate earnings into cash once more. In '25, it reached 131% in operating terms, which is an extraordinary figure even well above last year's level. If you include the one-off effects of around EUR 80 million for the severance packages in '25, the cash conversion rate would have even been at 138%. Let's move to Chart 17. We continued our way to strengthen KB's sustainability performance to identify efficiency potentials and increase resilience in our operations and supply chain. Our sustainability strategy continues to deliver measurable progress across all dimensions. Since 2018, we have reduced Scope 1 and 2 CO2 emissions by 79%, keeping us fully on track to achieve our 2030 climate target of 75% reduction. Despite market-driven revenue headwinds, our emission intensity has slightly improved year-over-year while self-produced renewable power increased by 41%, further strengthening our energy resilience. From both a regulatory and financial standpoint, EU taxonomy aligned revenues show a slight increase primarily driven by comparatively higher RVS business. This progress is supported by a very strong external validation, including the first allocation and impact report for our green bond, the leading ESG ratings and multiple sustainability awards we achieved. Let's turn to Chart 18 to discuss the financial highlights of the fourth quarter. Order intake was strong with almost EUR 2 billion with a strong organic growth of almost 6%, which was well supported by trucks. A book-to-bill ratio of 1 again is important and good support for our future capacity utilization. Our revenues almost amounted to EUR 2 billion with a strong organic growth of more than 6% driven by both divisions. Operating EBIT margin increased to 13.5%, which is a very strong improvement year-over-year. Both divisions contributed to this development. As already outlined, free cash flow improved to EUR 471 million and followed the typical seasonal pattern over the course of the year, which we also expect for '26. Let's take a closer look at the RVS performance on Chart 19, therefore. In terms of order intake, RVS again recorded more than EUR 1 billion, but showing a decline of 10% year-over-year which was driven by all regions except for China and needless to say, including significant FX headwinds. In quarter 4, we had expected a larger order in North America in the mid-double-digit million euro range, which was shifted into '26. Global rail demand is very strong and will continue, but sometimes as regularly mentioned, does not really fit into quarterly reporting. In general, we expect order intake in '26 to be in the range of EUR 1 billion to EUR 1.2 billion each quarter. For the year as a whole, the book-to-bill ratio should be around 1 or slightly above 1 after also consistently recording a value well above 1 in recent years. As in '25, we expect order intake to be stronger in the first half of the year than in the second half. In the fourth quarter, the book-to-bill ratio stood at 0.91. Order book at year-end with almost EUR 5.6 billion came close to our existing record level. Organically, the backlog grew by around 9% year-over-year. This high order backlog underpins strong visibility and provides a solid basis for growth well into 2026 and beyond. Let's move to Chart 20. Quarter 4 revenues from RVS amounted to nearly EUR 1.1 billion, which is an increase of 3% year-over-year. Especially pleasing was the growth in organic terms accelerated now to more than 7%. Our aftermarket business was almost flat year-over-year with all regions except Europe showing declines. OE business on the other side grew nicely year-over-year by almost EUR 30 million. From a regional point of view, revenue growth was fueled by Europe while APAC remained stable and North America and China very slightly declined. In Europe, aftermarket business and OE sales grew nicely. North America recorded almost stable aftermarket business, but a decrease in OE business. The APAC region saw a stable development with OE overcompensating slightly lower aftermarket figures. China also saw flat OE revenues while aftermarket business slightly declined after some catch-up demand has been satisfied. Please keep in mind that we have had very strong China business in '24 and '25, which benefited from a meaningful increase in ridership. As a result, we expect that our China business could slightly normalize in '26, but still being well above our long-term expectation that we shared with you in the past. Operating EBIT margin recorded an increase of 140 basis points to 17% driven by operating leverage and our efficiency measures within BOOST. In addition, we worked off all remaining legacy projects meaning the inflation burdened order backlog. In quarter 1, normally a rather weaker market quarter due to the seasonality of aftermarket business and the impact by Chinese New Year, we expect the profitability of RVS should be slightly up year-over-year. For the full year '26, the operating margin of RVS should be only slightly below 17.5% including HVAC. Therefore, and as in '25, we expect the operating EBIT margin in the second to fourth quarter of this year to be higher than in the current quarter. Let's continue with our Truck Division on Chart 21. Order intake in CVS amounted to EUR 977 million representing an increase of around 10% year-over-year and around 20% compared to the third quarter. The very strong year-over-year organic growth of 20% was partly offset by M&A and FX headwinds. From a regional point of view, Europe was very strong and also the APAC region posted growing orders. In contrast, North America recorded significant declines due to market and FX factors. The strong development quarter-over-quarter in all regions is quite promising. Especially in North America, we feel reassured that we have seen the bottom. Nevertheless, we still expect no sharp increase in market demand from this level. Our book-to-bill reached 1.1 in the past quarter and therefore, the order book with almost EUR 1.8 billion at the end of December remains on a good level. Order intake in the current quarter should be good as well and only slightly lower quarter-over-quarter. Nevertheless, the start into '26 was very solid so far. Let's move on to Chart 22. Revenues decreased nominally by 4% to EUR 881 million. A rather good organic growth of over 5% could unfortunately not fully compensate for the headwinds driven by M&A and FX. Against the backdrop of a continuously challenging U.S. market, especially in the U.S. this development reflects a very resilient and solid operational performance by our Truck Division. Our OE business decreased by around EUR 30 million compared to the prior year. This was driven by a significant decline in North America as anticipated while Europe showed good growth and the APAC region recorded solid momentum as well. The aftermarket business, on the other hand, was overall robust and saw a more or less stable development driven by Europe and China despite FX headwinds. North America was down by 10%, but slightly up in organic terms. Turning to the bottom line. Our operating EBIT amounted to EUR 99 million in the past quarter representing a strong increase of 14% year-over-year. Consequently, the operating EBIT margin improved by 180 basis points to 11.3%. This margin expansion was driven by a quick and consistent adjustment of workforce and the continued reduction of structural cost as well as the support of our accretive aftermarket business. Looking ahead to '26, we anticipate organic revenue growth in the range of low to mid-single digit versus '25 driven by a slightly positive development of truck production rates in our major regions, Europe and North America. Based on the related operating leverage by the already lowered and continuously further optimized cost base, we expect to improve the operating EBIT margin towards 12%. We also believe that the profitability of CVS should improve step by step throughout '26. In the current quarter, we expect a slightly lower operating EBIT margin quarter-over-quarter, which will increase in the quarters ahead. With that, I hand over to Marc again. Marc Llistosella Y Bischoff: Thanks, Frank. So let's have a look at our guidance for '26 on the next page. Based on the assumptions outlined on the right side of the chart, we expect the following for full year '26. Revenues in the range of EUR 8 billion to EUR 8.3 billion, an EBIT margin of 14% and a free cash flow between EUR 750 million and EUR 850 million. We will give you an update of our new midterm targets with the publication of our quarter 2 results on the 30th of July. Ladies and gentlemen, as you can see, we continue to deliver and especially what we have told you and what we have announced. KB is well on track to all strengths and beyond. Be assured that we are setting the path for further growth and value creation. In '26, we want to enter into the next area of KB, which clearly focuses on sustainable and margin accretive growth. Thanks a lot for your attention. Looking forward to your questions. Andreas Spitzauer: We will start the Q&A session shortly. In case you would like to ask questions, please dial in via the provided telephone number. Mute the webcast and ask the question via telephone. Please limit yourself to 2 questions. All other participants can stay in this webcast in the listen-only mode. Operator: [Operator Instructions] And the first question comes from Gael de-Bray from Deutsche Bank. Gael de-Bray: Two questions, please. Maybe 1 at a time. So firstly on your growth initiatives, what makes you think that you can win in the electrification market? I mean the grid and electrification markets are characterized by well-established very large players with extensive distribution network. So what's your positioning exactly? Are you a sub-supplier for the likes of ABB and Schneider or do you compete directly against these guys? And I'm also curious to understand if your focus area is just around the grid side or whether you also see opportunities to supply data center customers as well? Marc Llistosella Y Bischoff: I think I take this. So saying about energy market, for us there's 2 vectors of potential growth. The one is that we go in the supply of components like instruments, transformers, like protection relays, circuit breakers. That's where we are very, very interested in because these are Tier 1 and Tier 2 suppliers to the Project TRS. Number two, are we aiming to get into direct competition with Schneider, Siemens or others of this size? No, that's exactly where we are not because the market has such a size, roughly EUR 480 billion, that's our definition of the market where we see absolutely a massive growth area especially when it comes to key components. These key components, some of them we have already. We have never focused on them, but we see now that there is a massive growth in our internal units already. So we see here a growth between 25% and 30%. And this is where we say there is granularity in the market currently and we see a massive potential that we can be a creator of a new market structure. That means we accept absolutely the big guys. We will not get in competition with them. Furthermore, we are more interested to be a competent partner for this kind of customers, which so far are seen in the fragmented granularity of market. This is our strategy. And number two, when we speak about the next vector, then we see also midsized projects and there we see Project TRS, which could be interesting for us. You know better than me that we have seen in the recent past someone -- some American went public and this is exactly where we are interested to step into. Gael de-Bray: Okay. And the second question is around the communication of the new midterm targets. I mean any color around this, maybe around the time horizon that you've said? Is it 2030? And I suspect we will hear from you around growth and margins, but any view on maybe the targeted net debt-to-EBITDA at this stage would be useful. Maybe a theoretical maximum debt-to-EBITDA level that you don't intend to exceed. Frank Weber: Gael, I take this one. As we outlined and Marc outlined precisely, we will shed definitely more light on that on the 30th of July. We are prepared to take it. It will be not hugely surprising for you that we are striving for more at Knorr-Bremse. I will not take any figures now in my mouth. We occasionally drop the one or the other elements of what we are pursuing going into the future. We will also not give you a 5 to 10 years midterm guidance range, but rather focus towards -- like you always knew it from us, towards the next 2, 3 years kind of. That's the way we are thinking. And as I said for some businesses, we have already here and there shared with you in the quarterly call some expectations what we can think of the businesses to achieve in the future. But let us wait for July, please. Let us first bring home all the targets that we have still at hand to be achieved. Operator: And the next question comes from Sven Weier from UBS. Sven Weier: First one is also a follow-up on the new midterm targets. I mean in a way, don't we know some of the targets already; the 19% in rail, 13.5% in trucks. Now you said this is like on a 2-, 3-year view. So is the focus then end of July more around the expected growth that you see because the margins we kind of know already? Frank Weber: We have not fully talked about CVS for example and we have, as you rightfully said, not really talked about the clear time horizon for RVS and whether the 19% will be there. Let's see, maybe it's even a bit more. So let's see what we are talking about then in July. But of course for sure, there is some further need to discuss on our strategic revenue path going into the future and how we operationalize ultimately our greenfield ideas that Marc outlined nicely regarding the business areas and we can also shed some more light on this or we will definitely shed some more light on this. So I would say you're rather right. It will be a bit more focused on the revenue side, maybe how to generate accretive growth for this company, but also the margins of course. Sven Weier: And the other question I had was just on the greenfield side. First one there being on the CVS side because obviously recently we heard a lot about the truck fleet management powered by AI, that the load of the truck fleets could be much, much better in the future. And I just wonder with the products you have there, I mean would you have any inroads into that helping the truck fleets on that end or is that not going to be your focus? Marc Llistosella Y Bischoff: Yes, it's less product in terms of hard assets, it's more services. And what now is the time is -- and this is why TRAVIS is so important because their customer leads are important. As you know, the captives are trying their best to cover the new areas. The problem with most of the fleets, they don't want to be only covered by 1 captive. They want to have a brand independent approach. And for us, this is a the chance to step in and this is where we stepped in already. We have with our PleaseFix a massive real connection to hundreds, close to thousands of independent dealerships where there is no brand dedication and which is for us very important because that's what the customer wants. So we follow the customer and they want to have a free choice of services and exactly this is where we step in. So it's more a service. It's more a transaction-based service than it is a form of asset transfer. This is the product, this is the part. This is not where we see our trade going on. What we see is that I sometimes refer to it like Amazon for trucks. It doesn't depend what you buy, it depends where you buy it. It doesn't depend what kind of service you ask for, it depends only on which platform. And the time of this platform is only one thing; size, speed, agility and services. And this is why we think it's a game of speed. The faster and the quicker you have a network connected on this platform, the more it is very hard to reach your position. So here, speed is the name of the game. This is why we were very happy with TRAVIS. It's a Dutch company as you know, very agile, very aggressive and this is what we need. And everywhere where we as Knorr-Bremse, a little bit located by ourselves in terms of an old German company, we need different ingredients of entrepreneurship. Cojali is another good example because their form of business is not brand dedicated. It's not 1 brand they serve. They serve everything what is in the market. So it's a very, very indiscriminative approach to the market, which I think and we think that's where the growth will be. That's where the margins will be. And that is we have to take the place because if we don't be quick and fast, others could be tempted to do so. So far we are in a relatively good position and we want to keep this position and we want to build it up. Sven Weier: And on the energy side, did you say that you have data center exposure or not because I didn't fully capture that on Gael's question? Marc Llistosella Y Bischoff: The data center exposure from our side is relatively limited, but we are already supplying Project TRS who are equipping data center. So what we will -- currently not in a position to give data center the full-fledged program, but what we do already is that we provide with the ingredients, with the components, with the systems which you need to give this kind of service to data center. And this market we see also absolutely not only in America, we see it also in Europe and we see it also in Asia. And as I said, currently the market of component suppliers is extremely granularized. So we have a lot of little ones, small size, midsize providers of components and that's exactly our chance. We could scale it and we will scale it. Operator: And the next question comes from Meihan Yang from Goldman Sachs. Meihan Yang: Just the first one, you mentioned there was an order shift into 2026 on the RVS side. Could you give us a bit more color on this and do you expect it to be signed in 1Q '26 or any color would be helpful. Frank Weber: I would say it's just an example of how things go usually on a regular basis in quarters. When it comes to the bigger project business of RVS, sometimes orders are outspoken or signed kind of sometimes it doesn't happen on a last-minute notice. So it's just a EUR 50 million to EUR 100 million order in North America. It's the regular thing that you would expect. It's not signaling. So it's just happening and with that, we would be pretty close to EUR 1.1 billion and that's what we wanted to indicate with this message kind of that's how things go when it comes to quarterly reporting. But it's not a spectacular kind of all of a sudden order that's coming. It's something that's pushed out from one quarter to another and that's an example. Nothing more I think to add. Meihan Yang: Got it. And on the second question, you talk about how you could expand the aftermarket services to your customers from AI. On your internal operating leverage, is there anything that you're seeing big benefits -- like for example you're doing your R&D or your software development much more quicker and do you see any benefits coming through in '26 already? Marc Llistosella Y Bischoff: I think you're on the right track when you say especially in software engineering, we can accelerate massively and this is exactly what we are going to do. You remember when I said that the output per person, the output per employee has to be improved and increased. For 22 years, the output per person in this company was stable and it was not improving in terms of output and this is exactly where we are focusing for the next 3 to 4 years. We have a clear target and that includes purchasing, that includes accounting, that includes controlling, that includes HR, that includes every form of legal and compliance. It includes every functionality, which can be seen as repetitive. 80% to 90% of the software coatings are repetitive. So we have to focus with our people, human people. We have to focus on the 10%, 15%, which are really creative. The rest has to be done by AI or I would call it by algorithms because that is not the differentiating part. So we focus on the differentiating part where we put our engineerings in and everything what is repetitive is being more and more handled by algorithms and we call it the agents. And this kind of agents when the first impact is, we are starting now. We have started already a project in accounting and controlling. We see here effects, real effects not just a vision or so, we see real effects of 30% to 40%. That means you can say 30% to 40% of more output per person or in reduced workforce. That's the call and that is why we say so far we have a very clear plan that the output per person has to reach in, I would say, visible time 300,000. And either we grow or if we don't grow, we have to shrink our workforce. With shrinking workforce, that means we have the breakeven in mind and with that, we have the personnel expenses in mind. And you know that our personnel expenses, especially in rail, they are now in a reach of EUR 1.2 billion. There we are not happy, I tell you this very clear because the output has to be improved. In truck, we are already on a much better way because we are here in the range of EUR 700 million coming from EUR 800 million. So we reduced our personnel expenses around EUR 100 million within 1 year in CVS. This is a potential where we have to leverage everywhere not only with trucks. And now the question is how do we get it? We get it by standardization of processes, we get it also by automation of processes and we get it also by using agents more and more in some areas. Operator: And the next question comes from Ben Uglow from Oxcap Analytics. Benedict Uglow: I had a couple. The first was just about the kind of qualitative view, the sentiment around the CVS outlook, particularly for North America. I guess some of the truck OEMs that have reported seem to have been a little bit more optimistic, mid- to high single-digit growth in truck production rates. What I kind of wanted to know was do you see anything fundamentally different from them or are you just being sort of naturally conservative? That was my first question. Marc Llistosella Y Bischoff: So thanks for the question. We are naturally more conservative. Why? Because you know better than me what happened in the years '21, '22. We were eventually a little bit erratic with our predictions and since that, we are more conservative and we are only claiming what we can really achieve. That's number one. Number two is for us, the best indicator for the truck American market in North America is PACCAR. PACCAR is known to be the most agile one when it comes to layoffs. It's the most agile one when it comes to production capacities. PACCAR is Champions League, absolutely Champions League when it comes to reacting to the market's ups and downs. We see that there is some upside. But I would say the results what we have in truck -- and it's just a mathematical calculation. We have managed to make in the fourth quarter 11.5% in a market which was still very sluggish. Now you can imagine what happens when the market is going up and you know also that we are generating roughly USD 1.3 billion to USD 1.5 billion in America alone with Bendix. So it's one of our biggest markets and it's one of the most profitable market. So that is for us the significant upside which we see, but we stay conservative. We say everything what we have predicted so far is based on the cost by slightly stable market size. So if the market goes up, you know exactly what that means. There's a potential and this is what we are not claiming, but we are preparing. Benedict Uglow: Understood. And then coming back, I guess we're all excited about this energy technologies business that, frankly, I certainly didn't know existed. Can you talk a little bit more about Zelisko and the production setup? I mean presumably you've got 1 large facility or something like that. Are you expanding capacity? What are you doing organically to build that business? And I guess my follow-up question is if you think about M&A in that segment, are we talking about sort of bolt-ons, i.e., EUR 50 million, EUR 100 million type transactions or are you more ambitious in your thoughts there, i.e., there are certain assets available, which are bigger. But the question is is that what you're sort of signaling or not? Marc Llistosella Y Bischoff: Ben, you're very curious, I have to admit that. Very smart questions, exactly the same questions which we have discussed for the last 7, 8 months. I try to do my best not to spoil our own story because otherwise everybody would know where we go and what we do. We are not -- I make it simple from the beginning. We are not shying away from a bigger ticket, number one. Number two, as long as we don't have the perfect big ticket in sight, we are going step by step. And as I said, the granularity of this market is very interesting and we see here a lot of opportunities of, let me say, smaller size tickets. The problem is -- not the problem. The opportunity is that with 2 or 3 assets, you can already have a very, very really good market position worldwide. So for us, it's very important to do both. We are not choosing left or right. We're not saying the big bang is the only thing what we search. We go absolutely both ways. The one is we go components for components, markets increase, market share increase wherever possible. This is permanent. This could include also smaller-sized businesses, what you said, EUR 50 million to EUR 100 million tickets. But parallel to that, we are ready and we are scaling ourselves up to have expertise in this regard so that we could imagine also a bigger ticket. So this was #3 and #2 of your question. Number one of your question was what is the current size and where are you located? We are located in Vienna, we are located in Milano and we have now a massive aggressive turn that we go to Americas with our existing business partners. That means Zelisko and Microelettrica. Zelisko is now your question is and I think it was also a little bit of a critical hint what you gave. We didn't know that it is existing. The funny thing is 3 years ago nobody took care of this business so much. It was a little bit like a bifung in Germany, to say and this company was staying very, very solid alone, but very profitable, very small with EUR 50 million. Now within exactly 2.5 years, they doubled their revenue to EUR 100 million to EUR 110 million. Their profitability is in the range of 18% to 20%. So it's a very, very promising business and the competence is also enlarged and increasing. So we have the nucleus. The same with Microelettrica. The business is doing quite, quite well. We have already organic growth areas not only for Europe, but also for America. But as we are not that patient and I think you are also not that patient, we say organic growth would take us too long. This is why we are very open for inorganic growth in this area. Operator: The next question comes from William Mackie from Kepler Cheuvreux. William Mackie: My first one goes to the Rail business and quite similar or aligned with Gael's question around energy. I mean signaling is clearly another target for your greenfield. But when we look at the signaling industry, it's typically dominated by the likes of Siemens, Alstom or Hitachi that treat signaling as the brain of the train and a core part of their expertise. So when you look at growing within that marketplace with a focus on profitability, what structural evidence is there that a component-led player can actually capture premium margins within the signaling industry? Marc Llistosella Y Bischoff: Okay. With signaling, superior margins, we stepped in. It was an occasional opportunistic step and we did it. And now, excuse me, I would love to do that. I have a list of 5 assets which we have in mind; 2 of them would be very significant, 3 of them would be additional. Of course you understand that I can't give it to you. But the second of your question -- the first was more where do you see yourselves competing with Siemens, competing with ABB, competing with others, Hitachi. Yes, you're right. This is eventually not what we want. We want to be a brand independent offerer of services and the market is really interested because before we step into the market, we always ask is there a market for us? So we ask potential customers, we ask competitors, is there an area or are we just a me-too into an existing market where you differentiate yourself with pricing or whatever. This is never going to happen with us. We are not interested in a price war. We are not interested in competing with something which is not differentiating. So we see differentiators. We see different sizes. We see sizes which eventually for the big players are insignificant because the big players are now overrun by demand and also in energy and that gives us a massive opportunity. It's a time -- a window of opportunity for the next 3 years to go. In the next 3 years this kind of games will be decided and after that, it will be very, very hard to get into. So this is why we decided in signaling and also in energy to be very quick now. We need to make our mind. We have to be very clear what is an asset which is helping us and what is an asset which eventually is not helping us at all. The profitability of these 2 markets and especially in signaling is different. We have here very, very profitable market players and we have very average market players. This is where we have to focus on the ones which we manage to improve and this is why we always refer to this accretive growth. It can be that in 1 year we excuse you. In the second year, we don't excuse you any longer. In the third year, you have to be at our level otherwise it is a wrong move to do. And before we acquire any asset and if we touch any asset, this growth and accretive EBIT margin plan has to be secured. If it's not secured, we don't touch it. It's very clear. And to your question, what is the evidence of your success? The evidence of our success is whatever we said the last 3 years happened, whatever we said happened. And the evidence in the future is never given by any evidence of the past. It is also the -- yes, you can only say it's the players and it's a probability and it's a logic. If the logic is clear, then it is very unprobable the logic will be broken. If the logic is not clear, then I'm with you, then you need evidence. Future has no evidence. It has only a track record. And our track record -- and this is why it was so important that Frank and the whole team, we have now delivered everything by the number, by the number. Remember when we came in 2023; you were shattered, you were absolutely out of trust, you were not believing anything because everything what we said was perceived as an excuse. Now for the last 3 years, we delivered every number what we have promised. Even when markets were tough in CVS last year, we delivered the double-digit number. We delivered it. We never deviated from our targeted numbers and that's exactly what we do in the future. What we have done the last 3 years will follow the next 3 to 5 years. That's what we stand for. This is what we go for and this is exactly the logic which we follow. William Mackie: My second question and there's a short follow-up relates to CVS. And when we think about the fact that the future is based -- is going to be different, you've done a lot to demonstrate the cost flexibility of the business. You've highlighted the opportunity to drive out some of the structural costs in the business and you've allocated capital to enhance the profit profile of the business as a whole. So with those structural factors in mind, how should we start to think about the through cycle ability for CVS to generate returns? Should we look at the past and think actually you could achieve more as you develop around the service activities and structurally change the mix? Frank Weber: As we have a historical meeting where more questions addressed to the CEO, he just pointed at me so I take this one. Yes, I mean very well described. So that's why we believe we have created or will be having created a cost structure in CVS towards the end of the year of '26 where the truck business can run in a rather weaker market environment on an operating margin basis of around 12% kind of. And if the markets get then overall a bit more normal than the weak situation, then they should be able to come along with close to 13% maybe. And if the markets are even good, they can come to the 13%, 14% of margin. That's what we believe in and that's, by the way, also the way how we on a daily basis kind of steer the truck business according to those kind of 3 inherent scenarios. And please keep in mind that the 13.5% we took already in our mouth some time ago when we had the expectation originally that markets could be quite nice, not strong, super strong, but quite nice and we still stick to that. This is what's possible with the truck business given that cost measurements that we have been taking over time. That's the way to think about the truck ambition going into the future depending on a certain market specification; weak, normal and good markets. That's the way we think. William Mackie: If I can ask one short follow-up related to the new business operating model. When you described the application of AI, it was with many references to indirect functions in the business. What type of direct value-creating functions such as R&D or operational performance do you see the opportunities in as you develop a new business model? Marc Llistosella Y Bischoff: So in this context, AI is not a cost cut. It's an accelerator. It's faster. It's quicker. In our case, it's relatively simple. We have here more than 6,000 engineers. These engineers are occupied with repetitive work, which from our point of view is not the most substantial added value work they could do. The more we get them liberated from this repetitive work, the more output they will generate and that's exactly where we see AI. At the current level of AI, there is where we see. I'm pretty sure you have seen what happened the last 5 days. We spoke about large language models and we spoke about Claude and we spoke about a lot. And now we see OpenClaw coming into the game, relatively cheap, relatively interesting. So it is a completely disruptive approach when it comes to AI. This we have not still incorporated. But what we do, and this is why it's so important that we go to a greenfield approach like GenAI, we let it go. We let it just try it out because one thing is for sure. If you use an algorithm for your existing business, you are limiting already the opportunities for the algorithms. If you let the algorithm do things which normally are not foreseen to be done, not only repetitive work, but eventually also generating work, accelerating work, that is something where you sometimes need a new environment and a new spirit. And this is why we have chosen Chennai because there we have absolutely -- we are ensured also that these guys and these girls who are working in there have a completely different view on it. They make it happen instead of excusing and telling us why it does not work and they will be more risk taking. So what we will not do is that in our current processes especially when it comes to safety and security relevant assets, we will not step into it directly with AI. But in terms of services, in terms of new ideas, new services and especially new applications, which eventually are not that safety relevant, we can see whether the algorithm can accelerate us and give us also new solutions. So that is where we go. We don't go full fledged now in AI and say blindly that's it. We utilize it as a tool and when the tool gets better, it has the right environment to accelerate and to leverage. Operator: The next question comes from Akash Gupta from JPMorgan. Akash Gupta: Most of my question has been asked. Just 1 left and that is on China. Can you talk about what are you seeing in China? I think when we look at your Q4 orders, you had some growth in both of the segments. But in general when we look at for the year 2026, what have you embedded in your outlook? And particularly in rail, how do you see the business overall between high-speed and metro and services? Frank Weber: Akash, I would say nothing is rocking the boat here in very general regards to China. We still see quite better numbers than we have initially guided you with for China some kind of 2 years, 3 years ago. We should be slightly weaker maybe in absolute terms in revenues than in the year '25. That's the only thing. We see a bit of weaker metro demand. It's market driven. It's not market share driven. It's solely market driven, maybe a bit less metros in the year '26 to be built than in the year '25. So maybe even below 4,000 metros overall. So I would say a small or below EUR 50 million year-over-year reduction in China could happen, maybe EUR 30 million less next year compared to '25. So nothing spectacular, but it's 1 aspect of the business developing into '26. High speed: number of high-speed trains always a bit unclear, but we expect a similar amount, maybe 10 less also, like we had in '25; but similar amount, stable market share for us. Metros is the point maybe a bit less. That's all. Marc Llistosella Y Bischoff: There's one thing which is not based on our recent years. Eventually you know that for the last 8 years, we were excluded -- 9 years, we were excluded for the newest latest platform of high-speed trains as a system component supplier. So we lost our position from -- in 2014, '15, we were the one, the one which were equipping the high-speed trains in China. For the last 8, 9 years we were not discriminated, but we were set back. So we were excluded in the latest new forms. Since September last year, there is a massive shift that Knorr-Bremse is reconsidered to be a potential system component supplier to the Chinese CRRC in terms of high-speed trains. So that is something which it was hard work, it was very, very hard to reach that and it is an opportunity for us to compete currently with the best and that is in China for high-speed trains. And if we are perceived as a full-fledged provider of services for the high-speed train, that would be and that is exactly what we were fighting. And since September, we have indications that we are back in the game which we were out for 8 years. And that makes us very, very proud because it was hard work to get there back and there's a potential that not only for metros, you know it better than me, but also for high-speed trains, we could get back to be seriously a contender in this business. Frank Weber: No order yet, Akash. Operator: And we have 1 last question from Alexander from BofA. Unknown Analyst: Maybe I can follow up, first of all, on that last question. You talked about the exciting opportunity for the latest generation of high-speed trains. Could you give any idea of the sort of magnitude that could add to your Chinese rail business in due course if that comes through? Marc Llistosella Y Bischoff: Yes, it's more repetition than immediately in orders because when I came here on board in 2023, everybody told me the story is over and the party is over and we have a defense to make and it is like a long tail, which we have to defend. If this comes true and if we are really a contender and if we will succeed, this story is no longer valid. It's a game changer. I can't give you the numbers in terms of quantities for the next 2 or 3 years, but it would be a completely repositioning of Knorr-Bremse in the Chinese environment. And you know we have done a lot for the last 2, 3 years to be seen more and more as a contender, as a market player who takes the Chinese specifics very, very serious. And sorry to tell you and you know it; you can Google it, you can search it; more than 65% of high-speed train in the world is China. So China is the place to be and high speed is the grail of the rail industry. Everything else is very important. Nothing to say about it, but that's the grail. That's the S-Class, that's the top. And if you're out of that, if you're no longer a serious contender in these kind of tenders, then you have a reputational issue and this reputational issue of course for a world market leader as us. We want to stay not only there. We want to be back in the game. That is what we tried the last 2, 3 years. You haven't seen it in the numbers because the numbers which we have seen in rail, sorry to say, that was we were providing the services of the past and we did it well and we did it very, very well. In metro, we are very absolutely competitive. We are very good. We are good. But the grail of the rail industry is the high-speed trains in China. If there you make it, you have an excellent position for the future. Unknown Analyst: Understood. And then maybe if I can squeeze in 1 more on M&A. You've talked about it several times as a sort of key part of the greenfield strategy. Could you share a little bit about the pipeline you're seeing there and whether valuations appear acceptable? And linked to that, remind us of the sort of financial thresholds you're using to assess those deals in terms of return on capital or otherwise? Frank Weber: Yes. I mean I've told you several times that we have a very healthy balance sheet and we are not shying away from net debt-to-EBITDA ratios of 1, absolutely no issue. And if good or great market or business opportunities would come along, we could even go higher with a clear path to bring margin accretive revenues to this company and to help us profitably grow into the future. So that's definitely something we will -- we have our clear financial guardrails. We are searching basically only for businesses that fulfill those criteria. We have businesses with 14% of return on sales. Given ourselves as a hurdle rate we said should be on the cash side accretive and return on capital employed above 20%. All those 3 will be measured rightfully, as Marc said, after we have a clear plan that within at least 2, 3 years, those businesses should be able to achieve this. If there is no clear visible plan for us, recognizable, we wouldn't touch it. So that's pretty clear. I would say, a clear set of criteria. Marc Llistosella Y Bischoff: And to add on this and to finalize it, there is 1 thing and I think you're all aware of the club of the 25%. Growth and EBIT margin together has to exceed the number of 25%, capital goods. That's the Champions League. We are currently not in this Champions League. Rail is close, truck is not. And our aim is that the whole company, including truck, rail and whatever, is a significant part of this Champions League Top 25% club. That's our aim. That is not a forecast for the 30th of July. This is what we aim. This is what we want. This is where we have been in the past. We haven't been there for the last 5, 6 years, but now our aim is to get back on this Champions Club League. We will not be the top of that not at the beginning, but we have an aim. There we want to get back. Andreas Spitzauer: Okay. Thank you very much for your questions. We wish you a great springtime and happy to talk to you next time most likely in May. Thank you very much.
Operator: Good day, and thank you for standing by. Welcome to the Kadant 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, Michael McKenney, Executive Vice President and Chief Financial Officer. Please go ahead. Michael McKenney: Thank you, Marvin. Good morning, everyone, and welcome to Kadant's Fourth Quarter and Full Year 2025 Earnings Call. With me on the call today is Jeff Powell, our President and Chief Executive Officer. Before we begin, let me read our safe harbor statement. Various remarks that we may make today about Kadant's future plans and expectations, financial and operating results and prospects are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results to differ materially from these forward-looking statements as a result of various important factors, including those outlined at the beginning of our slide presentation and those discussed under the heading Risk Factors in our annual report on Form 10-K for the fiscal year ended December 28, 2024, and subsequent filings with the Securities and Exchange Commission. In addition, any forward-looking statements we make during this webcast represent our views and estimates only as of today. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views or estimates change. During this webcast, we will refer to some non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is contained in our fourth quarter and full year earnings press release and the slides presented on the webcast and discussed in the conference call, which are available in the Investors section of our website at kadant.com. Finally, I want to note that when we refer to GAAP earnings per share or EPS and adjusted EPS on this call, we are referring to each of these measures as calculated on a diluted basis. With that, I'll turn the call over to Jeff Powell, who will give you an update on Kadant's business and future prospects. Following Jeff's remarks, I'll give an overview of our financial results for the quarter and the year, and we will then have a Q&A session. Jeff? Jeffrey Powell: Thanks, Mike. Hello, everyone, and thank you for joining us. Today, I'll review our fourth quarter and full year 2025 results and our outlook for 2026. Let me begin with our operational highlights. We closed the year with solid performance despite a challenging macro background that included tariff volatility and continued cost pressures. Our performance led to solid margin results and strong cash flow in the fourth quarter, which I will outline in the next slide. Additionally, at the end of 2025, Newsweek recognized us as one of America's most responsible companies for the sixth straight year, and we're honored to be included on that list once again. Our fourth quarter performance benefited from the acquisitions we completed in 2025 and solid demand in our Flow Control and Material Handling segments. Revenue increased 11% to a record $286 million, led by contributions from our recent acquisitions and record aftermarket parts business. Demand remained solid across all 3 operating segments with bookings increasing 12% compared to the same period last year. While acquisitions accounted for most of the growth in the new orders, organic demand was stable year-over-year and improved sequentially. Adjusted EBITDA was up 11% compared to the same period last year, and our adjusted EBITDA margin was 20.3%. Strong execution by our global operations teams played an important role in delivering value to our customers and driving our fourth quarter operating performance. Our Q4 operating cash flow was excellent at $61 million. Next, I'd like to review our full year financial metrics on Slide 7. Stable demand, combined with contributions from our 2 recent acquisitions drove solid revenue performance of $1.05 billion in fiscal 2025, with aftermarket parts making up a record 71% of our total revenue. Softness in capital project activity, combined with rising tariffs and other cost pressures resulted in adjusted EPS of $9.26 a share compared to the prior year record of $10.28 per share. Despite ongoing economic and geopolitical headwinds, our free cash flow increased 15% to a record $154 million. The volatility and magnitude of the tariffs proved to be quite challenging for us in 2025. I'm proud of our employees for the innovative work done to maximize value for our customers and our stockholders. Next, I'd like to review our performance for our 3 operating segments. I'll begin with our Flow Control segment. Q4 revenue increased 5% to $100 million with strong performance in North America, offsetting weaker performance in Europe. Aftermarket parts revenue was up 9% compared to the prior year period and made up 73% of total revenue. Adjusted EBITDA and margin were down compared to the same period last year due to weaker gross margins related to tariffs and product mix. While bookings were up 7% compared to the same period last year, softness in manufacturing sector persisted, particularly in Europe and Asia. We believe the long-term market trends impacting industrial markets such as automation, defense and energy will continue to drive new opportunities for growth, though business activity continues to be influenced by geopolitical and macroeconomic challenges around the globe. In our Industrial Processing segment, capital project activity remained relatively soft throughout 2025 and continued at similar levels in the fourth quarter. Our performance in this segment, however, benefited from the additions of Clyde Industries and Babbini, both of which were acquired in the second half of the year. Integration efforts for these businesses are progressing well, and they are expected to contribute positively in the years ahead. Revenue rose 16% to $118 million compared to the same period last year, and aftermarket parts revenue grew 31% in the fourth quarter and represented 76% of revenue. Adjusted EBITDA margin improved by 90 basis points year-over-year, driven largely by a more favorable product mix. As we look ahead to 2026, there's increasing project activity, and we expect demand for our capital equipment to strengthen as customers move forward with planned capital projects. In our Material Handling segment, we delivered solid year-over-year performance improvement in bookings, revenue and margins. Fourth quarter revenue increased 11% to $69 million, driven by strong growth in capital revenue compared to the prior year period. Aftermarket parts made up 53% of total revenue and remained steady throughout the year. Margin performance strengthened as well with adjusted EBITDA margin increasing by 130 basis points to 22.1%. Looking ahead to 2026, we are encouraged by the high level of project activity and are well positioned to secure new business. Ongoing modernization efforts in the recycling and waste management sectors as well as infrastructure and data center construction are expected to drive the anticipated increase in order activity. Looking to 2026, capital project activity is looking to improve demand for aftermarket parts and continues to be steady as we start the new year. Additional -- although industrial demand is projected to pick up, uncertainty persists regarding the timing of capital orders due to ongoing economic and geopolitical instability. Overall, our healthy balance sheet and ability to generate significant cash flow position us well to pursue new opportunities that develop, and we are committed to achieving improved financial results this year. With that, I'll turn the call over to Mike for a review of our financial results and our 2026 outlook. Mike? Michael McKenney: Thank you, Jeff. I'll start with some key financial metrics from our fourth quarter. Revenue was a record $286.2 million, up 11% compared to the fourth quarter of '24, including an 8% increase from acquisitions and a 3% increase from the favorable effect of foreign currency translation. Gross margin increased 50 basis points to 43.9% in the fourth quarter of '25 compared to 43.4% in the fourth quarter of '24 due to a favorable increase in the proportion of aftermarket parts, which increased to 70% of total revenue compared to 67% in the prior period. There was a 40 basis point negative impact from the amortization of acquired profit and inventory in both periods. As a percentage of revenue, SG&A expense increased to 28.3% in the fourth quarter of '25 compared to 27.3% in the prior year period. SG&A expenses were $80.9 million in the fourth quarter '25, increasing $10.3 million or 15% compared to $70.6 million in the fourth quarter '24. The increase in SG&A expenses includes $7 million in SG&A expense related to our 2025 acquisitions and a $1.7 million unfavorable effect of foreign currency translation. Our GAAP EPS was $2.04 in both periods, and our adjusted EPS increased to $2.27 and was just above the high end of our guidance range of $2.05 to $2.25 in the fourth quarter. Adjusted EBITDA increased 11% to $58 million and represented 20.3% of revenue. For the full year, revenue was $1.52 billion (sic) [ 1.052 billion ] compared to $1.53 billion in '24, including a 3% increase from acquisitions and a 1% increase from the favorable effect of foreign currency. Gross margin increased 90 basis points to 45.2% compared to 44.3% in '24 due to a favorable increase in the proportion of aftermarket parts, which increased to a record 71% of total revenue compared to 66% in 2024. Gross margin included a negative impact from the amortization of acquired profit and inventory of 20 basis points in '25 and 40 basis points in '24. Excluding this impact, gross margin was up 70 basis points over '24. As a percentage of revenue, SG&A expenses increased to 28.7% in '25 compared to 26.6% in '24. SG&A expenses were $301.9 million in '25, increasing $21.9 million or 8% compared to $279.9 million in '24. Approximately 60% of this increase relates to our acquisitions. which had SG&A expenses of $13.2 million in '25. The remainder was primarily due to a $2.2 million unfavorable effect of foreign currency translation and higher compensation-related costs. Our GAAP EPS was $8.65 in '25, down 9% compared to $9.48 in '24, and our adjusted EPS was $9.26, down from $10.28 in '24. Now turning to our cash flow performance. We finished the year with very strong cash flow. As you can see from the chart, we had stronger operating cash flow in the last 2 quarters of '25 compared to the first 2 quarters. For the full year, operating cash flow increased 10% to a record $171.3 million, compared to $155.3 million in '24. Our free cash flow was also a record at $154.3 million in '25, increasing 15% over '24. We had several notable nonoperating uses of cash in the fourth quarter of '25. We paid $173.7 million for the acquisition of Clyde Industries, net of cash acquired. We borrowed $170 million to fund this acquisition, and we repaid $53.7 million of debt in the quarter. In addition, we paid $6.1 million for capital expenditures and a $4 million dividend on our common stock. We continue to focus on utilizing our strong cash flows to accelerate the paydown of debt, and I'm pleased we were able to repay $122.2 million this year or approximately 42% of our outstanding debt at the end of '24. Turning to adjusted EBITDA. In the fourth quarter '25, adjusted EBITDA increased 11% to $58 million compared to $52.4 million in the fourth quarter '24. As a percentage of revenue, adjusted EBITDA was 20.3% in both periods. For the full year '25, adjusted EBITDA decreased 6% to $216.3 million or 20.6% of revenue compared to record adjusted EBITDA of $229.7 million or 21.8% of revenue in '24. The weaker performance in '25 is due in large part to lower capital revenue, which was down 16% compared to the prior year. Let me turn to our EPS results for the quarter. Our adjusted EPS increased $0.02 from $2.25 in the fourth quarter of '24 to $2.27 in the fourth quarter of '25. This includes increases of $0.17 due to higher revenue, $0.15 from the operating results of our acquisitions, excluding the associated borrowing costs and $0.09 due to higher gross margins. These increases were partially offset by $0.22 due to higher operating expenses, $0.10 due to a higher tax rate, $0.04 due to higher interest expense and $0.03 due to higher noncontrolling interest. Our tax rate was 30% in the fourth quarter of '25, higher than we anticipated due to the impact of global minimum tax regulations as well as a change in geographic distribution of earnings. Collectively, included in all the categories I just mentioned was a favorable foreign currency translation effect of $0.04 in the fourth quarter of '25 compared to the fourth quarter of last year. Now turning to our EPS results for the full year on Slide 17. Our adjusted EPS decreased $1.02 from $10.28 in '24 to $9.26 in '25. This includes decreases of $1.06 from revenue, $0.70 due to higher operating expenses, $0.13 due to a higher tax rate, $0.07 from higher noncontrolling interest and $0.02 due to higher weighted average shares outstanding. These decreases were partially offset by $0.46 from higher gross margin, $0.27 in lower interest expense and $0.25 from the operating results of our acquisitions, excluding the associated borrowing costs. Collectively, included in all the categories I just mentioned was an unfavorable foreign currency translation effect of $0.01 in '25 compared to '24. Now let's turn to our liquidity metrics on Slide 18. Our cash conversion days measured calculated by taking days in receivables plus days in inventory and subtracting days in accounts payable, increased to 130 at the end of the fourth quarter '25 from 122 days at the end of '24. The increase in cash conversion days was principally driven by a higher number of days in inventory. Working capital as a percentage of revenue increased to 18.5% in the fourth quarter of '25 compared to 15% in the fourth quarter of '24 due to the lack of full year revenue for our 25 acquisitions. If you exclude the impact of our 25 acquisitions from this calculation, it would be 15.5%, which is slightly above the end of '24. Net debt, which is debt less cash at the end of '25 was $251.8 million compared to net debt of $131.1 million at the end of the third quarter '25. Our leverage ratio, calculated as defined in our credit agreement increased to 1.33 at the end of '25 compared to 0.94 at the end of the third quarter '25. At the end of January, we announced that we had entered into a definitive agreement to acquire voestalpine BÖHLER Profil GmbH for approximately EUR 157 million, subject to certain customary adjustments. The closing is subject to certain Austrian regulatory approvals and the satisfaction of customary closing conditions. We anticipate that our leverage ratio will increase to just above 2 with the increase in our outstanding debt once this transaction closes. We had $383 million of borrowing capacity available under our revolving credit facility at the end of '25, which will be reduced by the anticipated acquisition borrowing. Before I review our guidance, I want to remind you that our '26 guidance does not incorporate any assumptions related to the pending acquisition. We anticipate that the closing will occur in the first quarter of ' 26, and we will revise our '26 guidance as part of our next earnings call. For the full year '26, our revenue guidance is $1.160 billion to $1.185 billion. And our adjusted EPS guidance is $10.40 to $10.75, which excludes $0.13 related to the amortization of acquired profit and inventory. Looking at our quarterly revenue and EPS performance in '26, we expect that the first quarter will be the weakest quarter of the year. This is primarily related to soft capital bookings in the back half of '25. Our revenue guidance for the first quarter of '26 is $270 million to $280 million, and our adjusted EPS guidance for the first quarter is $1.78 to $1.88, which excludes $0.09 related to the amortization of acquired profit and inventory. I should caution here that there could be some variability in our quarterly results due to several factors, including the variability of order flow and the timing of capital shipments. I wanted to highlight that due to the delayed timing of capital orders, we have a number of large capital projects where we have been actively working with customers and have provided proposals with a cadence solution to meet their needs. We have taken a conservative approach to our '26 guidance given the order delays we experienced in '25. These orders are waiting for customers to have enough clarity with the economic environment to commit to these capital expenditures. As soon as the customers place these pending orders, we will be able to determine the timing of the associated revenue recognition, which provides upside potential for our '26 guidance. We anticipate gross margins for '26 will be approximately 45.2% to 45.7%. As a percentage of revenue, we anticipate SG&A will be approximately 27.7% to 28.3% and R&D expense will be approximately 1.4% of revenue. In addition, we anticipate net interest expense of approximately $15.5 million to $16 million for '26, which does not include any estimated interest expense related to our proposed acquisition. We expect our recurring tax rate will be approximately 27.3% to 27.8% in '26, and we expect depreciation and amortization expense will be approximately $60 million to $61 million. We anticipate CapEx spending in '26 will be approximately $23 million to $27 million. That concludes my review of the financials. But before we go to our Q&A session, I want to discuss our plan starting in the first quarter of '26 to add back recurring intangible amortization expense in our adjusted EPS calculation. Many of you have suggested that we add back noncash amortization expense in our adjusted EPS calculation. Historically, we have only added back intangible amortization expense related to acquired backlog, which amortizes relatively quickly in the post-acquisition period. Recurring intangible amortization expense has grown steadily given our significant acquisition activity with a projected annual increase of 22% in '26. These acquired intangible assets are initially recorded as part of purchase accounting and then reduced via a noncash amortization expense for periods which can extend over 15 years. With this change, our adjusted EPS will be more consistent with our adjusted EBITDA and cash flow metrics, which are not impacted by intangible amortization expense. We believe that the exclusion of this expense from adjusted EPS will allow for more consistent comparisons of our operating results over time into peer companies. Now I will summarize the '26 adjusted EPS guidance and comparative '25 information with this change. For '26, recurring amortization expense is $33.4 million or $25.1 million net of tax and represents $2.13 per share. Our adjusted EPS guidance presented today and in yesterday's earnings release was $10.40 to $10.75. After adding back recurring intangible amortization expense, our adjusted EPS guidance for '26 is now $12.53 to $12.88. For '25, recurring intangible amortization expense was $27.4 million or $20.6 million net of tax and represented $1.75 per share. Our previously reported EPS of $9.26 for '25 is now $11.01. Recurring intangible amortization expense is $0.53 and $0.40 for the first quarters of '26 and '25, respectively. Our adjusted EPS guidance for the first quarter of '26 is now $2.31 to $2.41, and our previously reported adjusted EPS for the first quarter of '25 of $2.10 per share is now $2.50. We will be issuing an SEC Form 8-K filing shortly with formal reconciliations of prior period information. I'll now turn the call back over to the operator for our Q&A session. Marvin? Operator: [Operator Instructions] Our first question comes from the line of Gary Prestopino of Barrington. Gary Prestopino: Mike, just a couple of housekeeping things here. Do you have the numbers for current assets and current liabilities at year-end, Andy? Michael McKenney: Yes, I do. Hang in there and let me look that up. Current assets are $542 million and current liabilities are $228 million. Gary Prestopino: Okay. And just I was going through this as you were talking, given your narrative, but consumables in Flow Control were 73% of revenues, Industrial 76% of revenues and material handling, 53% of revenues. Is that right? Michael McKenney: Yes. Yes. Gary Prestopino: Okay. And then you're seeing a lot more increased demand for consumable products. Now some of that is a function of your acquisitions, right? But are you still seeing that your customers are running their equipment really hard and using a lot more consumables in their processes, and that leads you to feel that the capital projects will get better as the year goes on in 2026? Jeffrey Powell: Yes, Gary, we've kind of said actually most throughout a lot of last year as we reported that the parts were -- aftermarket was slightly overperforming our expectations based on the operating rates. As you know, we tend to say that traditionally, our aftermarket is a function of operating rates and operating rates really around the world have been quite -- were quite low in '25. And the parts business really outperformed that. And the -- and they did it consistently. And so it clearly was a case where they're running the equipment harder. There's been some capacity taken offline, and they're trying to make up for that. Overall demand, of course, increased last year in most of our markets. And even though some capacity was taken offline in certain markets. And so because of that, they had to run the existing equipment harder and it's older because they've been underinvesting now for nearly 3 years. And so that's the only explanation you can have for aftermarket overperforming consistently for such an extended period of time with these lower operating rates is that they're making up for that capacity taken offline by pushing everything harder and the equipment is just older. Gary Prestopino: And then lastly, what -- obviously, there was a lot of confusion on tariffs as we entered 2025 last year. What's the thought process of your customers now? I mean you're saying that you're going to see the capital projects start increasing in 2026. I mean, have they basically just got the mindset that, hey, this is going to square out to maybe a 10% to 20% tariffs and let's reinvigorate our capital projects? Jeffrey Powell: Yes. I mean I think it was the volatility and the weekly changes that really -- and the breadth of the implementation in early last year that really shocked everybody and really caused everybody to take a wait-and-see attitude. But things are a little more stable now and people realize that they have to continue running their business. You can't stop running your business, you can't stop investing in your business. You lose your competitiveness. And so as things have started to stabilize a little bit and people have absorbed whatever tariff impact for their respective businesses, they've kind of absorbed that. Things are starting to rationalize. And and they've got to get back to increasing efficiency, increasing outputs. So everybody -- I would say right now, the main focus is on improving productivity and driving down costs, not so much on adding new capacity. That tends to be where we're at with a few exceptions in a couple of markets we're in where they are adding capacity. But in most places now, it's really trying to squeeze more out of their existing operations and just be more efficient and more productive. Operator: Our next question comes from the line of Ross Sparenblek of William Blair. Ross Sparenblek: A couple for me here, and I'll pass it along. Did you guys give a backlog figure? I may have missed it and then also the equipment backlog when we include the Clyde acquisition? Michael McKenney: Yes, I can give you a number here. When we brought in Clyde, they had a backlog of about $30 million, just as a reference point for you. Our backlog currently at the end of the fourth quarter was $288 million, and the split on that is 60-40, 60% capital, 40% parts. Ross Sparenblek: Okay. That's helpful. And then, I mean, did you guys give organic assumptions within the 2026 guidance? Michael McKenney: We didn't, but I'm happy to do that. What it was really, I would say, kind of flat, a little less than 1% to 3% was what we modeled. And the point I was trying to stress is that, as you know, Ross, through '25, we had line of sight on some nice capital projects. And the customers have yet to place the orders for those. So the approach we're taking for '26 is those orders are there. We think the customers will place those. They're significant orders. There's -- that would be meaningful upside for us, but we did not bake that into our guidance. Of course, at 1% to 3% organic, there's not a lot of big capital jobs in there. But there are big capital jobs that are ready to go. And we're hoping that we're going to get to midyear and customers will have placed some of those orders, and we'll be able to take our guidance up. Ross Sparenblek: Okay. So I mean, I get the sense that most of that organic in the guide is just your confidence around the parts and consumables business. Michael McKenney: Yes. The capital is up, but not substantially. You're correct. We're really -- it's confidence in parts and consumables. But we do anticipate the kind of, I'd say, single unit capital business to still keep plugging along. Ross Sparenblek: Okay. So that seems to imply then that the capital equipment orders is kind of $290 million, $300 million run rate we've had in the last 2 years that's kind of the static base case with potential for upside from there? No expectation that that's going to be going lower. Michael McKenney: Yes. Operator: Our next question comes from the line of Kurt Yinger of D.A. Davidson. Kurt Yinger: Mike, you had talked about a large number of capital orders where you've provided proposals and you're sort of waiting to hear back from customers. Can you maybe just talk a little bit about how unique that is in terms of the time that proposals have been outstanding or maybe the typical time line where you would expect a proposal to turn into a booking and how that's different today than what you've seen in the past? Jeffrey Powell: Yes, Kurt. So I would say the discussions have been ongoing. A lot of projects that we thought were going to be released in the back half of last year didn't go away. But again, people -- because of the constant changes in the geopolitical kind of discussions around tariffs and things really just caused them to say, well, we're just going to wait another quarter. We're going to wait another 2 quarters here before we do anything. So we really haven't seen any projects kind of go away. We have some projects that we've actually gotten the order, but we're waiting for letters of credit or down payments before it becomes a booking. So there is some activity that has started to move forward, but it's taking longer in some cases to get the bank set up and get the letters of credit and the down payments. And others are just proceeding more slowly. It's just one of caution. I think everybody is looking to see if we bottomed out and we're going to start to see some growth from a macro level. And so it's probably been, I would say, the capital business has been -- the bookings have been as slow, as soft as they've been any time in history when we haven't had a significant recession. We normally -- the bookings we've seen in the last kind of 2.5 years have been -- stuff we saw back in '08, '09, back when you have a real recession. So it's really unusual to see this kind of softness when the economies are still growing. And I think it's just because of all the uncertainty. The tariff thing, notwithstanding what the current administration says, the tariff thing has been highly chaotic for our customers to manage and to plan and to budget around. It just created a tremendous amount of instability. And -- but as I said earlier, when Gary was asking the question, they are starting now to say, okay, things seem to have calmed down a little bit. I mean we don't like where we're at, but at least we know where we are now, so we can start to plan around that. And so that's what we're seeing. But we do know our companies are -- many of our companies are over 100 years old. We know history tells us they cannot go forever without investing in the business. The markets we're in are still growing. Even the paper and packaging business, which is a chunk of our business right now, it's growing low single digits, but it's still growing. So you cannot underinvest forever in that. So they will have to start to make some investments. Kurt Yinger: Okay. That's super helpful. And then thinking about last quarter, you talked about some of those larger fiber processing orders that you could kind of recognize on an overtime basis. Is that kind of the main component that maybe element of conservatism where you just have assumed that those won't necessarily come in, in the guidance? Or are there other percolating areas of kind of capital activity across the portfolio that might be beneficial in there as well? Michael McKenney: Yes. You've really hit it exactly, Kurt. We're just -- we're being cautious here as we move into '26. And as I said, hopefully, we'll get some good traction here. And we get to midyear, we'll be able to raise guidance if some of these capital bookings are placed. Jeffrey Powell: We are a little bit gun-shy because we thought things were going to strengthen. We remember back when they were talking about things improving at the end of '24, then it moved to the end of '25. And so we're just being -- trying to be as cautious as possible. As you know, we tend to always try to -- and traditionally have always kind of underpromised and overdelivered, and we want to continue that trend. And so we just said, look, it's early in the year. We're going to come out of the gate cautiously. And hopefully, some of these things that are out there that we believe will come in will come in, and we'll be able to then kind of update you guys accordingly. Kurt Yinger: Got it. Okay. And you talked about how aftermarket has kind of outperformed expectations and it's maybe been consistently surprising. It's interesting, some of the European peers have talked about a greater focus on that area, parts and services. Are you seeing that or hearing from your teams about that kind of showing up in kind of any meaningful change in the competitive environment and maybe any of these smaller kind of parts and consumables category? Or any commentary on that just in general? Jeffrey Powell: No. I would say '25 was a good year for us. We did have a lot of our competitors come at us hard, and we were able to defend that. And in many cases, if they did get their foot in the door, we were able to kind of turn that around as the year progressed. And so from our standpoint, it was a good year. And our customers' relationships tend to be quite sticky, and they've been very -- we've had them for a very long time. And so it's held steady. And that many of our companies had kind of record -- if you look at the percentage of revenue aftermarket, it was a very high level. So we're quite pleased with the way our guys performed around the world. That is the daily challenge. Every day when our guys get in the morning, that's what they're focused on. That's a big challenge, is serving the customers with that aftermarket piece to help our customers stay as efficient as possible. And so it's our primary focus, and our guys, I think, did a great job in '25. And there's always people coming after us. If it's not the big guys from Europe, it's the regional players that can be quite competitive from a cost standpoint. So it's a challenge that we face every day and always have. But we're quite pleased with the way our guys performed. Kurt Yinger: Perfect. Okay. And just last one, Mike, if you have it in front of you. Can you just give us kind of organic parts and consumables versus capital kind of sales and bookings for Q4? Michael McKenney: Yes. I have -- you wanted both revenue and bookings on that, Kurt? Kurt Yinger: Yes, it's possible. I realize it's a lot of numbers, but... Michael McKenney: No, that's okay. Organically, I have -- for the fourth quarter, parts on the revenue side up 3%, capital on the revenue side down 7%. So overall, organically, that would -- that comes out to flat. And then on the bookings side, I have parts up 4% and capital down 6%. But organically, with the weighting on parts, it puts us up 1% on bookings organically. Operator: Our next question comes from the line of Walter Liptak of Seaport Research. Walter Liptak: I wanted to do a follow-up on that last question about the aftermarket competition coming out of Europe, it sounds like. If that's the case, how do they compete? Is it -- are they competing on like a quality aftermarket? Or is it like a pricing thing? Like if you had seen any changes in the marketplace for aftermarket because of that? Jeffrey Powell: Traditionally, when somebody is coming in and trying to steal market share away from you, assuming your customer is happy with your product, your service, your performance, the only real leverage they have is to try to undercut you on price. And our customers will always take advantage of that to try to lower their overall cost. And so that's typically what they do it. I mean we -- in the markets we're in, as you know, we tend to be #1 or in 1 or 2 slight cases, maybe #2, very strong relations with our customers and really serve them well. So the only way they can really make any real entrees into those markets is to try to really reduce pricing. And frankly, the European companies, they've got a cost structure that isn't substantially less than ours. So that -- the only way they can really do it is to just make less money. And if you follow our competitors in Europe, you'll find that they often do make a lot less money than us because they try to undercut our price. But there's a lot more to it. That total cost of ownership is so critical. The technical services that we give them are important. We have guys living in the operations supporting our customers. And because of that, we kind of were able to defend our territory and in some cases, pick up market share. So it's -- it's really nothing new. I mean, like I said, if it's not the big guys coming after us, it's the small regional guys actually the ones that can create more havoc for you because they try to come in and really undercut you on price. But it's -- we work very hard to understand our clients' operations and how we can help them create value and stay competitive and increase their throughputs and reduce their inputs. I mean that's our value proposition. And so we -- that's our daily mission. We work it very hard, and our guys do a great job of it. Walter Liptak: Okay. Great. Okay. And during your prepared comments, Jeff, I think you commented about a good funnel for projects in recycling and waste and data center. And I wonder if you could talk a little bit about those, especially the data center part. Jeffrey Powell: Yes. So as you know, the housing has been down, but data center construction is booming. They're massive facilities. And of course, they -- all the materials they use to make those, for instance, our material handling group is involved with, right? So you're talking about aggregate, sand, concrete, copper, aluminum. Everything that goes into building those structures starts out as a natural resource that is mined, processed, screened, size, cleaned, things like that. And of course, our material handling group is in all those sectors. And so if you look at some of our big customers out there, the Martin Marietta and people like that, that on the sand and gravel side, they're doing quite well in part because it's providing the materials required to build these facilities. The amount of copper, for instance, going into these facilities is quite substantial. So we support the copper mine operations around the world, of course. the amount of concrete that goes into building one of these -- if you've ever seen one of those data center farms. It's some of the biggest buildings that I've ever seen and they just go forever. And so it's basically all that material has to get processed by equipment that we build or our competitors build. Operator: [Operator Instructions] And our next question comes from the line of Ross Sparenblek of William Blair. Ross Sparenblek: Can you just give us a sense on where the OSB segment shook out within Industrial Process for the year? Michael McKenney: Well, I will say, Ross, we usually -- we don't bifurcate that. We usually just talk wood and fiber processing. But that isn't -- that's a bright spot for us, frankly, in the wood processing side. The debarking business servicing dimensional lumber and North American housing is really on the capital side is quite soft right now. But the OSB just keeps plugging along. They're doing fantastic. Jeffrey Powell: They're finding -- first of all, we supply them globally, and we're one of only, I guess, technically 2 companies that are doing that. And they're finding more and more applications, more and more uses for the product. So it just continues to grow. Ross Sparenblek: Okay. That's good to hear. Jeffrey Powell: Siding, of course, they're going into higher, higher value, higher dollar applications for it and new applications for it. They're even starting to do it for dimensional and structural elements and things like that, looking at it for things that traditionally would be laminated products. So it's just -- we continue to see more and more demand. Ross Sparenblek: Okay. And then one of your competitors recently called out the vertical integration of the pulp and processing market in China as a secular opportunity over the coming years. Anything you can speak to as to like cadence, content or how you guys argue that market today? Jeffrey Powell: Yes. So when you put pulp mills in, of course, one of the big issues there is the recovery boilers. And Clyde, of course, who joined us recently serves that market. So they've got -- they provide a lot of the technology into the Chinese market as these pulp mills are being built. Traditionally, China was almost 100% recycled fiber. But when they put the -- when the Chinese government put the ban in the importing of waste paper, they had to go out and search for fiber. And one of the things they're doing, of course, is they're putting these pulp mills in. And so Clyde is over there supplying the boiler cleaning technology for those applications. Ross Sparenblek: Okay. And then maybe just one last one on your 80/20 expectations this year, you guys usually target 2 to 3 divisions. Anything more material to call out as like the mix within the segments? Jeffrey Powell: No. I mean we're constantly trying to increase the size of our team that leads those efforts and starting more and more companies up. But it's continuing to progress. I think it's -- some of the businesses, I think, starting the program late last year. And so we're expecting maybe towards the end of this year to start to see some results from that. And then, of course, there are others that are just entering it or on schedule to enter it. The -- as you know, normally with acquisitions, the first year, we don't like to do anything with them. We like to kind of get them stabilized and integrated, get them kind of understanding the programs and kind of deciding when they want to undertake that initiative. So I'd say for some of the newer companies that are out there, they're still to be started. But it's continuing along. Our team, I think, continues to get better and better at implementing it. And it will be -- continue to be a primary internal initiative of ours for the years to come. Operator: I'm showing no further questions at this time. I'll now turn it back to Jeff Powell for closing remarks. Jeffrey Powell: Thanks, Marvin. Before wrapping up the call today, I just want to leave you with a couple of takeaways. We finished the year with improving business conditions. We acquired 2 great companies in the second half of 2025 and the integration of this business into the Kadant family is going well, and I'm confident that they'll make meaningful contributions in 2026 and beyond. The outlook for 2026 is optimistic with expectations of increased project activity and stable aftermarket demand. And we look forward to maximizing the value that we create for our customers and for our stockholders in 2026. And with that, we want to thank you for joining us today. Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Operator: Welcome to the NiCE conference call discussing fourth quarter 2025 results, and thank you all for holding. [Operator Instructions] As a reminder, this conference is being recorded February 19, 2026. I would now like to turn this call over to Mr. Ryan Gilligan, VP, Investor Relations at NiCE. Please go ahead. Ryan Gilligan: Thank you, operator. With me on Today's call are Scott Russell, Chief Executive Officer; and Beth Gaspich, Chief Financial Officer. Before we start, I would like to point out that some of the statements made on this call will constitute forward-looking statements. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, please be advised that the company's actual results could differ materially from these forward-looking statements. Additional information regarding the factors that could cause actual results or performance of the company to differ materially is contained in the section entitled Risk Factors in Item 3 of the company's 2024 annual report on Form 20-F as filed with the Securities and Exchange Commission on March 19, 2025. During today's call, we will present a more detailed discussion of fourth quarter and full year 2025 results and the company's guidance for first quarter and full year 2026. You can find our press release as well as PDFs of our financial results on NiCE's Investor Relations website. Following our comments, there will be an opportunity for questions. Let me remind you that unless otherwise noted on this call, we will be commenting on our adjusted results of operations, which differ in certain respects from generally accepted accounting principles as reflected mainly in accounting for share-based compensation, amortization of acquired intangible assets, acquisition-related expenses, amortization of discount on debt and loss from extinguishment of debt and the tax effect of the non-GAAP adjustments. The differences between the non-GAAP adjusted results and the equivalent GAAP figures are detailed in today's press release. The information and some of our comments discussed on this call may contain forward-looking statements that are subject to risks, uncertainties and assumptions. I will now turn the call over to Scott. Scott Russell: Thank you, Ryan, and good morning, everyone. I am incredibly proud of what our team accomplished in 2025. We achieved our financial guidance each quarter and for the full year, delivered total revenue growth of 8%, cloud revenue growth of 13% and non-GAAP EPS of $12.30, all at the high end of our guidance range. Since I joined, we sharpened our focus on execution and speed. We leaned into the AI-first platform-led strategy and doubled down on international expansion and strategic partnerships. Our 2025 results reflect strong execution against that strategy. In 2025, we extended our CX AI market leadership with AI ARR increasing 66% to $328 million, representing 13% of cloud revenue. We set records for acquiring new AI logos, growing 300% year-over-year and closed a record number of seven-figure ACV deals for CXone with 100% including AI. We further strengthened our competitive position with the acquisition of Cognigy, the enterprise leader in agentic AI, making NiCE the only player in the CX market with a fully AI native CX platform. In our international markets, 2025 was a breakthrough year. We landed our largest international deal ever and ultimately grew international revenue by 16% with growth accelerating to 29% in the fourth quarter. We also expanded our strategic partner ecosystem through deals with ServiceNow, AWS, Snowflake, Salesforce, Deloitte Digital, PwC and RingCentral as well as several other international SI partners. Our partners continue to be an incredibly valuable and exciting part of our growing contribution, and we expect these partnerships to bring even more in the coming years. Coming out of Q4 with a strong booking momentum and retention, we are entering 2026 on track to reaccelerate cloud revenue growth, which Beth will, of course, cover in more detail shortly. None of this would be possible without a healthy core CCaaS business. We have the leading platform in a growing and healthy market. Seats and interactions on CXone continued to grow in 2025. And importantly, only about 40% of contact centers have migrated to CCaaS today, leaving a large and durable on-premise to cloud migration opportunity ahead. We are delivering real transformative value to our customers, and this is translating into strong performance in our core CCaaS business. In Q4, cloud revenue grew 14% year-over-year and excluding NiCE Cognigy, grew 12%. Q4 was a record quarter for new cloud ACV bookings, including and excluding Cognigy, driving cloud backlog growth to 25%, including Cognigy and 22% excluding it. Our win rates continue to improve against key CX competitors as customers increasingly favor holistic end-to-end CX platforms over fragmented point solutions. This is reflected in several key deals during the quarter, including a large enterprise win with a leading North American financial services firm. They selected NiCE in a competitive displacement of a legacy on-prem environment and will adopt NiCE's AI-powered CXone platform, including NiCE Cognigy to increase service automation, reduce low-value interactions and deliver more personalized client experiences. Additionally, we won a seven-figure ACV deal with a leading financial services group in EMEA, which selected NICE CXone to replace a legacy on-premise ACD and consolidate multiple platforms into a unified AI-ready CX foundation. With a strong core, we are positioned to capitalize on the significant CX AI opportunity in front of us. AI is expanding NiCE's CX market opportunity beyond the contact center, creating new use cases that are still early in adoption and driving faster expansion as customers scale AI across their organizations. NiCE Cognigy NICE strengthens that position. NiCE Cognigy is ranked #1 by industry analysts and was recently recognized as the only conversational AI platform to receive the customer choice distinction in the latest Gartner Peer Insights Voice of the Customer Report. That customer validation extends across our core platform as well with CXone also now recognized as the only CCaaS platform to receive the customer choice distinction. Combining the market leaders in CCaaS and agentic AI for CX into the only AI native CX platform that can operate seamlessly across voice, digital and AI at enterprise scale allows NiCE to be uniquely positioned to seize the significant CX AI opportunity ahead. Our platform owns the point of engagement and is built on the industry's largest CX data foundation. With decades of CX experience and a platform that supports 20 billion interactions annually, NiCE understands customer experience better than anyone, and this leadership is showing in the results. 2026 is the year that NiCE Cognigy begins to act as a force multiplier. We recently launched Cognigy Simulator, an AI performance lab that allows for faster, scalable and more reliable testing of AI agents. And soon, we will expand NiCE Copilot capabilities with Task Assist for agents powered by NiCE Cognigy. Later this year, we will complete the integration of NiCE Cognigy into a single fully native CXone platform, delivering a seamless AI native experience at enterprise scale. As we enter 2026, I am very excited about the significant pipeline growth from our NiCE installed base that we -- and we expect that pipeline to grow as we further integrate NiCE Cognigy into CXone. While we're incredibly excited about what the future holds for our seamlessly integrated capabilities, NiCE Cognigy is seeing strong momentum today. More broadly, we continue to see strong AI-driven enterprise software demand with customers prioritizing investments that deliver clear ROI and measurable outcomes. In Q4, seven-digit ACV wins included a leading North American consumer services company that expanded its relationship with NiCE by adding Cognigy for self-service to its existing CXone platform. This expansion will replace an AI solution from a CRM provider, providing -- delivering a compounding benefits of a unified platform with improved orchestration, deeper insights and more seamless experiences across channels. In another large enterprise win, a leading North American energy company and an existing CXone customer expanded its relationship with NiCE to accelerate AI-driven customer engagement. By adopting Cognigy for self-service and Copilot to support agents on more complex interactions, the customer aims to improve containment and call handle times while scaling efficiently during periods of elevated demand. The market is still in the early stages of AI adoption, yet it's already driving our growth. But as you heard me say in the Capital Markets Day, we need to make strategic, targeted and time-bound investments in 2026 to seize this opportunity. These investments will focus on innovation, including integrating NiCE Cognigy and advancing our agentic AI capabilities, while also expanding our go-to-market and delivery capabilities, so we're able to execute on the significant growth catalysts we see in 2026 and beyond. These catalysts, including driving AI-first growth across every customer touch point, automating end-to-end customer journeys with AI -- agentic AI on our platform, capitalizing on the CCaaS cloud migration, accelerating our international expansion and partner ecosystem and expanding beyond the contact center. Before handing it over to Beth, I want to emphasize two points. First, 2026 is all about speed, and we're moving quickly to seize the opportunity in front of us. And secondly, my conviction today is stronger than when I joined that AI is a clear tailwind for NiCE. Let me be really clear here. NiCE is an AI company. Enterprise CX AI requires deep domain expertise, unified data, orchestration and governance at scale, and that is what we do. We have the technology, the data, the domain expertise and the customer base to win, and we will seize this opportunity. With that, I'll now hand the call over to Beth. Beth Gaspich: Thank you, Scott. I'm pleased to close out 2025 by sharing our strong fourth quarter and full year results, which reflect continued disciplined execution across our business. Our fourth quarter performance has further strengthened our confidence in the recent financial targets we shared at our Capital Markets Day in November 2025. Later in my remarks, I will share our first quarter and full year guidance for 2026, which reflects the healthy momentum we experienced exiting 2025. 2025 was a transformative year for NiCE with Scott and our NiCErs across the globe laying the groundwork for accelerating top line growth in the years ahead. Before I dive further into the fourth quarter 2025 results, there are several financial accomplishments from last year that I would like to highlight. First, our full year 2025 results were impressive and came in at the high end of our previously communicated guidance ranges. Full year total revenue was $2.945 billion, representing 8% year-over-year growth. Full year cloud revenue grew 13% year-over-year and 12% excluding Cognigy. 2025 reflected consistent execution in our core cloud business with 12% cloud revenue growth delivered each quarter, excluding Cognigy. Operating margin tracked as expected, while free cash flow margin of 21% exceeded our guidance, reflecting disciplined execution while absorbing Cognigy starting in early September. Second, we completed the acquisition of Cognigy, which was financed entirely with cash on hand, supported by our strong balance sheet and robust organic operating cash flow. Third, we fully repaid $460 million of outstanding debt. Our balance sheet is now debt-free, providing us with significant financial flexibility to invest prudently in our business and return capital to shareholders. And fourth, we continue to return significant capital to our shareholders through our share repurchase program, underscoring our confidence in the durability of our cash flow generation and long-term value creation. In 2025, we repurchased $489 million of our shares, representing 32% growth year-over-year and 79% of free cash flow generation, ending the year with approximately 60.4 million shares outstanding. Shifting to fourth quarter financial results. Total revenue was $786 million, representing 9% year-over-year growth. Cloud revenue totaled $608 million, growing 14% year-over-year and represented 77% of total revenue, continuing the steady mix shift toward our cloud-first model. Excluding Cognigy, cloud revenue increased 12% year-over-year. Cloud growth in the quarter was driven primarily by continued momentum in our CX AI offerings with AI ARR of $328 million, up 66% year-over-year as customers increasingly adopt our AI-powered automation across both self-service and human-assisted workflows. Cloud growth also benefited from ongoing CCaaS migrations and a very strong international performance, including a modest incremental contribution for an earlier-than-expected go-live of a large international enterprise deployment originally planned for 2026 as well as a small foreign exchange tailwind of approximately 50 basis points in the quarter. As we've noticed previously, while AI is already a meaningful contributor to growth, we remain early in fully monetizing its long-term potential. That context is important as we continue to invest in this opportunity today while building operating leverage over time as our AI revenue compounds. Our cloud net revenue retention for the trailing 12 months was 109%, remaining healthy and stable with the prior quarter, reflecting continued customer retention and expansion activity. Turning to our business segments. Customer Engagement revenue was $658 million in Q4, representing 84% of total revenue and growing 10% year-over-year, driven by double-digit cloud revenue expansion across all geographic regions with strong performance internationally, reflecting increased enterprise adoption of CXone and growing demand for our AI-powered CX solutions. Financial Crime and Compliance revenue totaled $128 million, growing 2% year-over-year and represented 16% of total revenue. Actimize is the clear market leader and is benefiting from the positive momentum we are experiencing in shifting this segment to a higher recurring business with healthy cloud revenue growth. From a geographic perspective, the Americas region represented 82% of total revenue, growing 5% year-over-year, and this performance was supported by double-digit cloud revenue growth in the region alongside the continued evolution of our revenue mix from on-premise related revenue towards cloud-based solutions. EMEA revenue, which represented 13% of total revenue, grew 38% year-over-year or 32% on a constant currency basis, and APAC revenue representing 5% of total revenue grew 11% year-over-year, consistent on a constant currency basis. This strong growth is reflective of continued healthy demand in international markets, one of our key growth drivers. International revenue is now majority cloud, while cloud adoption internationally remains underpenetrated, supporting a significant growth runway in 2026 and beyond. Turning to profitability. Our total gross margin for the fourth quarter was 69.3%, consistent with our expectations. Our gross margin reflects our continued investments in scaling our global cloud infrastructure and supporting increased AI workloads, particularly as usage expands across regions and use cases. Operating income for the quarter was $301 million, resulting in an operating margin of 31%. Earnings per share for the quarter were $3.24, a 7% increase compared to last year. Cash flow from operations in Q4 was $180 million, underscoring the strength of our operating model and our ability to fund growth internally. Free cash flow was $156 million in Q4, and we ended the year with $417 million in cash and short-term investments. Our strong free cash flow and balance sheet are key strategic assets that provide us flexibility to invest in innovation, support strategic initiatives and continue returning capital to shareholders over time. We remain committed to disciplined and thoughtful capital allocation. To further enhance our financial flexibility, yesterday, we entered into a new $300 million revolving credit facility, which provides additional liquidity and optionality while maintaining our strong balance sheet. In addition, we are announcing that our Board has authorized a new $600 million share repurchase program, reinforcing our confidence in the durability of our cash flow generation and our disciplined approach to capital allocation. This brings our total remaining share repurchase authorization to approximately $1 billion. Before closing with guidance, I do want to spend a few minutes on how we are thinking about 2026, specifically around the cadence of investments and how that should translate into margins throughout the year. At our Capital Markets Day, we shared a midterm framework for growth, margins and cash generation. Today, we are confirming that framework with additional clarity on timing and cadence. 2026 will be a year of deliberate targeted investment to support our next phase of growth to capitalize on the immense CX AI opportunity. These investments are focused on three primary areas: cost of goods sold, R&D, and sales and marketing. As we've shared, near-term margin performance expectations reflect intentional investment choices. These investments are designed to optimize our AI market-leading position, drive durable growth, expand our competitive differentiation and position the business for long-term operating leverage. While we plan to increase organic investments during 2026, our margins remain industry-leading, outperforming our market peers even with the addition of the focused spend, and we expect to build on this strength with steady margin expansion in 2027. In tandem with investing for growth acceleration, we are investing in AI internally to enhance productivity and execution across the organization. Within our go-to-market operations, we are applying AI to accelerate customer quoting and surface key signals from customer interactions, enabling faster deal execution, improved forecast accuracy and reduced deal risk. Beyond go-to-market, we're using AI to improve internal operations, including applying AI to HR knowledge and deploying Cognigy within our internal help desk to resolve IT queries more quickly and with a more human-like experience. These are just a few examples where we're already leveraging AI internally to deliver long-term operational efficiencies. In 2026, we expect the pace of incremental margin investment to be highest in the first half of the year as we execute against our growth priorities, including integrating Cognigy and scaling its operations with operating margins improving in the second half. This positions us to exit 2026 near the upper end of our 25% to 26% operating margin range and sets the stage for margin expansion in 2027 and beyond, driven by the benefits of our 2026 investments, including stronger cloud revenue growth, continued scaling of our AI business and the increasingly accretive contribution from Cognigy. Cognigy remains on track to be accretive within 18 months of the acquisition close. Now I'll close with our total revenue and non-GAAP EPS guidance for the full year and first quarter of 2026. Full year 2026 total revenue is expected to be in a range of $3.170 billion to $3.190 billion, which represents an increase of 8% at the midpoint. We expect cloud revenue growth in 2026 to be in the range of 14.5% to 15% with Cognigy expected to contribute approximately 200 basis points. Turning to financial income. It's important to note that our cash and short-term investment balance was reduced by approximately $1.2 billion in 2025 as we financed the Cognigy acquisition and fully repaid our outstanding debt, which will naturally impact financial income in 2026. We expect our effective tax rate throughout 2026 to be in the range of 20.5% to 21% due to tax law changes in certain jurisdictions that became effective at the start of this year. Full year 2026 fully diluted earnings per share is expected to be in a range of $10.85 to $11.05. For the first quarter of '26, we expect total revenue to be in the range of $755 million to $765 million, representing an 8.5% year-over-year growth at the midpoint. We expect the first quarter 2026 fully diluted earnings per share to be in a range of $2.45 to $2.55. In summary, we exited 2025 from a position of strength. anchored by a stabilized and growing cloud business, a differentiated customer experience platform with embedded agentic AI and a strong balance sheet that supports investment and continued capital returns to our shareholders. Our large and expanding installed base reflected in healthy cloud net revenue retention, continued growth in cloud backlog from both customer expansion and new large enterprise wins and an increasing number of enterprise go-lives gives us confidence in the durability of our growth as we enter 2026. Our 2026 guidance reflects our excitement about the market opportunity ahead and our confidence in our ability to accelerate top line growth through our market leadership and unmatched assets. Together with Scott, we would like to thank all our dedicated teams across NiCE for their disciplined execution and focus throughout the past year, which drove our strong financial performance. We remain confident in our strategy, our execution and our ability to deliver durable shareholder value over the long term. With that, I'll turn the call back to the operator for questions. Operator? Operator: [Operator Instructions] Your first question comes from the line of Rishi Jaluria with RBC. Rishi Jaluria: This is Rishi Jaluria. Nice to see solid execution to close out the year. Maybe two questions, if I may. First, look, looking at the market, it's pretty clear that the market is scared of AI disrupting and displacing your business. Clearly, that's spread to all of software and is something that we've all been dealing with really in a big way over the past couple of months. You made it clear over the past couple of years and at Analyst Day and now today that you're viewing AI as a real tailwind for NiCE and something that could pick up accelerating momentum in kind of the coming years. Can you maybe help us understand where is the disconnect? Where do you think that the market is wrong? And kind of where is your opportunity to kind of disprove those bear cases and kind of prove yourselves as an AI beneficiary? And then I've got a quick follow-up. Scott Russell: Sure. Thanks, Rish. So let me try to take that. So there is clearly a disconnect between the fears in the market and the reality of what we're seeing in the business. So let me try to break it down, if I can. First of all, there's a concern about competition from new AI point solution. And the reality is this, the CX AI market is expanding rapidly. And it's large enough actually to support multiple approaches. But our growth -- the growth of our business is not coming at the expense of those competitors. Actually, it's a beneficiary. If you look at NiCE's business, 13% of our cloud revenue is AI. We've already proven that we've embedded it into our core platform. We're able to deliver durable value to our customers. And why is that? Well, CX is complex, and we are domain experts in CX. You look at what is required from our customers, it requires orchestration, really rich and unified data governance. It requires deep domain expertise across the customer journey. And so whilst point solutions and some AI solutions can address use cases and narrow use cases, they don't actually fulfill the full customer journey. They're -- in fact, in some ways, they're actually complicating or creating more complexity. So a unified platform that is able to deliver across voice, digital and AI is what the market needs and expects. And that's where a combined platform that we offer, which is unique in that we've got the best-in-class in both cases helps us. And that -- and I guess, ultimately, we're showing that in the numbers. The growth rates, I indicated at Capital Markets Day, if you remember, Rish, that we expected our cloud growth in 2026 to be between 13% to 15%. We're already indicating at the high end of 14.5% to 15%. That's on the back of customer demand, real backlog that's growing at 25%, real pipeline that we're converting into ultimately revenue for NiCE, but ultimately, it's value for our customers. So I'm confident that our growth indicators reflect the tailwind that AI brings, and I'm sure the market ultimately will see NiCE in a favorable way. Rishi Jaluria: All right. That's super helpful. And maybe just a follow-up on that. In kind of the AI native space, we've obviously seen a lot of funding for voice AI start-ups. And it feels like maybe piggyback on that earlier point of conversation, the market is kind of viewed it as -- at least the stock market is viewed it as kind of an either/or. But it really feels like there might be opportunities for even partnerships and integrations and kind of focusing on customer success. Can you maybe talk about your opportunities? I know, Scott, you talked a lot about increasing partner ecosystem traction, et cetera, but maybe an opportunity to even just have deeper integrations and partnerships with some of these AI natives just to kind of leave the choice up to the customers even if it may sound potentially competitive. Because at the end of the day, they do need the pipes that you have, they do need the call routing piece. Maybe help us understand what could that kind of ISV or AI partnership look like? Scott Russell: Yes. It's a great question, Rish. I'll probably break it into two parts. The first is we're an open platform. We've made a very conscious decision to be a platform that allows the customers to utilize their data because it's their data that all of the billions of interactions that sits on our platform and being able to leverage it across not only the NiCE CXone, but an open stack that supports the use of other tools. And that's why the partnerships with Salesforce, with AWS, with ServiceNow and many others are essential to it. And we're -- at the enterprise, you're dealing with a complex technology landscape, and so we're able to use that to our advantage. But let me just zero in on the AI side. One of the questions that we often get is, hey, these new frontier models and what does it mean? And is that going to be a disruption to us? And actually, it's a benefit. It's actually a significant positive because if you look at it, the labs, these frontier models, they are tremendous advancements in agentic capability. But we leverage those models. We have partnerships with those AI players that we can use those models in our stack, but then we've built a purpose-built AI around customer engagement data. And so we differentiate by our specialization. Those models are really powerful, but then we process it on those billions of interactions, the specific learning loops, the optimization. So the specialization around the customer intent resolution, the compliance-heavy workflows, the guardrails that enterprise have, the real-time voice orchestration. So the reality is it's not replacing, it's enabling a more powerful and differentiated outcome with the combination of what we bring and what they bring to give a better outcome for our customers. So it's not replacement. It's actually expansion and extension from what we've already done, and it gives us more opportunity to deliver ROI. Again, that's why we're seeing the backlog and the bookings growth that we're getting because the customers are voting by their choice of NiCE, and we're benefiting that in our revenue outlook. Operator: Your next question comes from the line of Samad Samana with Jefferies. Samad Samana: Great to see the solid 4Q results. Maybe first, just one on the guidance. I think we're all happy to see the upward revision to the 2026 cloud revenue growth forecast. I was curious, Beth or Scott, if you guys could break down what led to the upward revision? Is it the core organic cloud revenue? Is it Cognigy doing better than expected? Because if we assume Cognigy is at 200 basis points of revenue growth contribution, that kind of implies an acceleration for the organic business. Just help us unpack that. And then I have one follow-up. Beth Gaspich: Yes. Thanks for the question, Samad. And I'll take that, and Scott, feel free to chime here. I think generally, as a starting point, we feel confident that both will contribute to that mix and give us that confidence as we step into 2026. Scott has already highlighted the strength of the backlog. We had a record in terms of new cloud ACV bookings in the fourth quarter that led to that strength of the 25% growth in our cloud backlog looking ahead. So that's a mix of both the strength of that AI force that we see, inclusive of both our own homegrown AI and of course, amplified by the addition of Cognigy. So when we look both at the core, which you've seen was consistent at a 12% growth throughout each and every quarter this year, we feel confident that there is opportunity to accelerate growth both in that core as well as continue to drive that growth through Cognigy, which had very strong fourth quarter showing as well. So it comes from a combination of both those places. Samad Samana: Great. And then, Scott, a follow-up for you. And I know that this topic came up at the Capital Markets Day as well. I think it's appreciated by investors that the company is putting the foot on the gas with AI being this massive opportunity, right? You guys are literally putting your money where your mouth is. I'm curious maybe as you think about deploying new investments and how that's going inside the organization? And are you starting to see a shift inside of the sales organization, whether it's win rates, whether it's productivity as maybe the accelerated investments drive enthusiasm in the organization as well? Scott Russell: Yes. It's good question. So first of all, there is, I guess, a positive energy and momentum that we're seeing in the business. And that's obviously on the back of the bookings and the backlog generated in Q4, the momentum that we've been able to generate, but also the pipeline and what we see. What was interesting is the Cognigy business continues to grow remarkably on a stand-alone basis, just acquisition of new market where NiCE has no footprint at all and our ability to be able to go and compete and win in that new marketplace where they don't have a need for a CCaaS, but they really want an AI CX platform as a leadership, that's given a real positive energy inside of our sales organization, combined with the obvious opportunity that we see with existing installed base, the large customer base that we have and our ability to be able to serve that. So I think first on the positive momentum, fantastic. The other point, and Beth touched on this in her opening comments, we're embracing the use of AI inside of our business as much as we expect our customers to. We're living and breathing that reality. So for our sales teams, being able to use it to be able to get better understanding of customer signals, intent, our ability to automate quoting and being able to do fast turnaround for business for our customers when we're competing, these were deployed and we're up and running. So I think our go-to-market are also seeing higher productivity that allows them to get more at bats to be able to get more customers engaged and ultimately improve our win rates. So you need to do both. You need to have a great capability that you take in a market, but you've got to walk the talk, and we're definitely doing that. Operator: Your next question comes from the line of Arjun Bhatia with William Blair & Company. Arjun Bhatia: Scott, maybe one for you to start out with. Obviously, it's good to see the continued traction in your AI and self-service ARR. I imagine the distribution of customers in that group of those that are advanced versus those that are still starting is quite wide. But when you're looking at your more sort of advanced customers, what are you seeing in terms of seat dynamics there? Has that changed at all over the past couple of quarters? Or is this still like something that's being contemplated for years or quarters in the future in terms of what they do with their seat counts and agent counts? Scott Russell: Yes. It's a great question, Arjun. So I think there's a couple of things to maybe highlight here. As I mentioned in my opening comments, our core CX CCaaS platform is really strong. And to Beth's earlier comment, we see reacceleration in our outlook for '26 and beyond. Why is that? Well, I guess I'll best answer it by discussions that I've been having. This week, I had a number of meetings with customers, CEO, CTO and we were just talking about their CX environment and their existing use of their contact center. And right now, they both had indicated that their contact centers are capacity constrained. They're not overstaffed. And so they plan to use AI to actually free up their agents for higher value engagement, proactive outreach, more revenue generation or more value orientated. So rather than elimination of roles, they're using it as an efficiency driver so their people can be driving more value-added activities. And so they had no plans, no plans to reduce agents in the short to midterm. Now that's not to say that as we continue to build out our platform that we don't see the opportunity to be able to reduce the human capacity as the AI picks up. But we -- that's why in these complex environments because remember, CX is tough. you've got to have accuracy of data at high volume, the guardrails, the domain expertise and ultimately, it's got to fulfill a great consumer experience for the brand. And so what they don't want is a point solution that gives them a bit of automation, but then increases the complexity when it has to interoperate with their AI agents. And I think we've really seized upon this. What we see at the top end is that customers value a unified customer engagement platform. We call it the front door. So whether it's voice, whether it's digital, whether it's AI or what is most likely to be a combination of all three at the same time, real time at enterprises at the top end, they need a platform that can give that in a scalable, reliable way. And obviously, we differentiate on that basis. So it's interesting about the, I guess, the perceived concerns that you're going to see this erosion of the seats. We -- the data does not support that assertion, but we're growing on both levers, and we continue to expect to do so. Arjun Bhatia: All right. Perfect. Yes, that's super helpful color. And then Beth, I had one for you. Just in terms of the investments that you're making, I think I fully appreciate, right, it's the right time to sort of lean in given the precipice of the tech change here. But how are you just monitoring that you're making the sort of the right investments and you're allocating capital appropriately? Like what are the ROI signals you're looking for? Or is it just continued sort of revenue reacceleration here? Beth Gaspich: Yes. Thank you. We're very excited about the opportunity ahead of us, and we absolutely believe this is the appropriate time to lean in. We really have at NiCE a fence investment approach where we are very closely monitoring a very tightly the exact areas that we plan to invest, which we've talked a lot about. It's around the go-to-market. It's bringing in more integration of Cognigy into the platform, agentic capabilities as well as using additional AI technologies internally, accelerating our delivery time line, all of those areas are very intentional, and we are very much closely monitoring that the dollars are being spent in the right places. In parallel, as a general muscle that we have in NiCE, we are constantly also driving initiatives that drive long-term operating leverage. Scott talked about the use of AI. There are other initiatives as well that we're always putting in place. So we're also monitoring the effectiveness and seeing that we get the ROI from those initiatives and investments through key specific metrics. And when you add all of those together, ultimately, the big test is that we see that we are delivering on the growth that we've signed up for on the top line. And so those are a combination of all of the things we monitor very, very closely to ensure we're on track and that we're getting the ROI from those investments. Operator: Your next question comes from the line of Tyler Radke with Citi. Unknown Analyst: This is Kyle on for Tyler. It was great to see the significant acceleration in international revenue. And I'd be curious to hear how you'd expect that trend to continue into FY '26? And what -- maybe any color on what would be embedded in the total revenue guidance on a constant currency basis? Scott Russell: So let me cover the international expansion. So first of all, I need to highlight. I've inherited a beneficiary from a significant investment that had been made in our international expansion. So the footprint of our data centers, the sovereign cloud, the capacity in key markets in U.K., Europe, in parts of Asia. So what we saw in '25 was a real breakthrough in terms of -- obviously, our bookings and the backlog, we saw in Q4 a significant acceleration of our revenue that you saw in those results. And so for '26 and beyond, what we see is expansion opportunity. And if I give you a couple of data points to color. First is the CCaaS shift in the international markets is not as progressed as what it is in North America. So there are more opportunities with our platform to be able to win the on-prem to cloud migration, leveraging those investments, leveraging our momentum. The second is they're doing it with AI from the get-go. They're not doing this in a two-part move or sequential. They're doing it at the same time. So the unified platform where we can embed Cognigy and our AI agentic capabilities in that -- in those deals gives us competitive edge, but it also allows us to be able to accelerate revenue because the AI adoption time frames are faster, whilst often the CCaaS migration is a complex onetime undertaking. And then the last, what I would say is those international markets are benefiting from our investments in the ecosystem. Practically, all of our go-to-market in international is through our partners. And so the strategic ecosystem is part of the reason why our international expansion is performing strongly because we've really made sure our go-to-market motions with both SI partners, resellers, technology partners internationally be the core vehicle that we use. And that gives us reach that goes beyond the 4 walls of the NiCE capability. We really do leverage their breadth and strength in those international markets. So it is -- you can expect to see continued momentum in that area. Beth Gaspich: And then I would just quickly, Kyle, address on the currency side. I think, first of all, I'll start with the overall outlook for NiCE in totality. I think it's important to highlight that in total, NiCE is still predominantly concentrated in terms of mix out of the Americas, which is mostly USD denominated. So 82%, for example, of our revenue in the fourth quarter was coming from the Americas, mostly USD. Any impact that we may see within the international business, which is thriving and growing for us, has been considered and is factored in. We're always looking at the environment generally on a macro for exchange rates and other factors as well that is inclusive in the expectations that we're looking at. Again, you may see that more noticeable as you've seen in the fourth quarter in terms of the impact on the international markets, but not any expectation that is not already baked into our expectation for the full year. Unknown Analyst: Understood. And then regarding the Better Together story with NiCE and Cognigy, the ability to win more deals as a combined CCaaS and AI domain expert. How did the joint go-to-market motion play out in 4Q? I know it's early, but also how to think about the Cognigy opportunities from current CXone customers versus sales to customers on competitor CCaaS platforms as well? Scott Russell: Let me take that one. So I was really pleased. I've got to say that despite it being -- with Cognigy coming into the NiCE family at the -- in September, coming into our busiest and most hectic quarter of the year, it was remarkable to see two things. One, Cognigy and our ability to win and grow as a stand-alone AI market-leading platform, it was fantastic. But then secondly, our -- I've got to give it to our -- the NiCE go-to-market team, we were able to quickly pivot. And so the fourth quarter performance also on a Better Together where we were able to embed it into our big wins and the strong performance we had in fourth quarter, Cognigy was well and truly a part of that, which is why, by the way, 100% of our seven-digit deals included AI and that pretty much nearly all of them was inclusive of Cognigy. So the early collaboration was really strong. What we're really now focused on is how do we then capitalize and expanding on that rapidly in '26. So we're very early days in the AI expansion. We see obviously new competitors with AI point solutions. We've got a differentiated offer. So really, we're doubling down on the Better Together, unified platform, but also winning and competing in the AI-only market where the situation exists and being able to win and win well. So competitive win rates were good. I feel very good about the fast integration, and it's a credit to Phil Heltewig and the Cognigy team and the way they've really embraced and coming to the NiCE team and led the way. Operator: Your next question comes from the line of Siti Panigrahi with Mizuho. Sitikantha Panigrahi: Great. If I look at your cloud backlog that excluding Cognigy, it's organic cloud backlog, now 22% growth, that is quite a step-up from 13% in Q3. So a few things, like what's the composition like for that step-up? And you guys earlier talked about it takes longer to convert to recognized revenue. So how should we think about the lag from the backlog to cloud revenue growth over the next 2, 3 years? -- 2-3 quarters? Beth Gaspich: Yes. Thanks, Siti, for the question. I would start and just say that when you think about the 25% growth we had in the backlog, you highlighted the 22% growth that we had, excluding Cognigy. When you think about how that will play out in the coming years and months, essentially, the substantial majority of that will actually be recognized in the next 24 months. It is not, however, linear. Of course, it is dependent upon various go-lives that happen throughout that period. So the expectation and as we continue to shift that from the backlog over into recognized revenue, you should see that gradual expansion playing out in the cloud revenue growth over that period. Sitikantha Panigrahi: Okay. And then on the Cognigy side, Beth, you talked about before exiting Q4, $85 million ARR. Is that still -- does that still holds good based on what you're guiding for the year? Beth Gaspich: It is. We had a very nice performance of Cognigy since the start of the acquisition and the close. So yes, very much on track and looking forward and excited about our ongoing opportunity during the course of '26. Operator: Your next question comes from the line of Jamie Reynolds with Morgan Stanley. James Reynolds: This is Jamie on for Elizabeth. And congrats on the strong quarter. It's just the first question. It'd be great to just unpack a little bit more about how that displacement with the CRM vendor materialized. What capabilities did NiCE bring where that vendor fell short? Scott Russell: Yes. I'll answer this one, Jamie. So there's a couple of factors here. First of all, customers -- the customer that we're referring to had a need of an integrated customer engagement platform. What they didn't want is one platform to handle the AI piece, another platform to handle digital and another platform to handle voice because what it did was it created friction in their engagement, and it was actually impacting a positive customer experience. What they wanted was the data, the operational flows, the process to be orchestrated end-to-end. So it was more about clear conscious strategy for customers. And we're seeing this more and more where they're distinguishing a customer engagement platform, the front door to the enterprise by their customers in a unified single approach rather than fragmented through differing technologies. Now that's not to say that they don't need and orchestrate with the CRM because you still want your sales data, your commerce data, your other information, your customer data that you've got there. But when it comes to the interaction and understanding the customers' intent and then having a simple way of being able to orchestrate between a human agent, an AI agent, synchronous, asynchronous, inbound and outbound, they wanted it on a single stack. And obviously, we see the benefits of that. Ultimately, they chose it because it will deliver better ROI, better customer experience. And it was one customer example. We've got many others that are doing the same journey. James Reynolds: Got it. That's helpful. And then just as a quick follow-up, it'd be great to get any color on how the performance among the more seasonal customers kind of trended in the fourth quarter relative to your expectations? Beth Gaspich: Yes, thanks. When we looked at the seasonality, we had highlighted that we had a strong bar to climb when compared to the fourth quarter of 2024, but we were quite pleased with the seasonality that we experienced in the fourth quarter this year. I did highlight a couple of things in my formal remarks around we had about a 50 basis point tailwind coming into the cloud revenue in the fourth quarter coming from foreign exchange that was included there. We also ended up having a go-live of a very large international deal earlier than anticipated that came into that. So those also kind of triggered some health in the quarter. But generally, we were pleased with the seasonality that we saw, which was healthy for our fourth quarter across our diversified vertical customer base. Operator: Your next question comes from the line of Michael Funk with Bank of America. Michael Funk: So Scott, earlier you mentioned -- I think you mentioned that only 40% of enterprise have moved from on-prem into the cloud. So I'd love to hear more color around the pace of that migration and then net new versus migration internally and the increase that you see in TCV when customers do migrate internally? Scott Russell: Yes. So as I mentioned, there's a significant market in front of us. Now the international side, Michael, is particularly strong because they've not progressed in the migration compared to the Americas. So just from a geographic standpoint, we see real momentum on the international side and obviously, we're benefiting from it. I think what -- if I take a step back, what's happening in the market is customers were previously forced to choose, do they do the on-prem, the cloud migration? Do they do an AI move? They had to distinguish between their methods. Now we give them the choice to do that as well. But what we've now seen and the results are undeniable around all of our big wins, all of our CCaaS moves are embedding AI in. So what we're seeing now is they're using AI to be able to drive the automation capability, give them fast return, early deployment while they're still doing their CCaaS shift, and that is able to help make sure that they've got early return on investment. It gives us a competitive differentiation because we unify the journey of not just the on-prem to cloud and the AI, but it's combined together. So it actually has given us a really significant differentiation compared to where we were a year ago, where we were obviously able to still capitalize on that. The last comment I would make is the routes that customers are choosing will -- that they will -- migration paths will continue to be a key part of the differentiator. What customers aren't prepared to do on the CCaaS migration is long time to transition. So the other thing that we've really focused on is reducing the time to turn up or the time to value. We improved our delivery time frames by 20% during 2025. I mentioned that, that was a focus area at the beginning of last year. And I think the more we're able to show that we can do a time-bound, efficient migration while capitalizing on the AI capability, we're going to be able to seize an acceleration of those CCaaS moves as the customers evaluate the use of this technology in their landscape. Michael Funk: Maybe one more, if I could, quickly. Financial crime and compliance business, love to hear your thoughts on the operating and strategic benefits of owning that business versus maybe some strategic alternatives? Scott Russell: Yes. It's such a great business. What makes me smile is it continues to be seen and perceived and understood as the market leader. We serve the most sophisticated financial institutions with a level of trust that, honestly, it is a joy. I meet with banking executives and our clients. And the first thing they tell me is, we trust Actimize, we rely upon it. We need your help to continue to support our ability to fight financial crime, fraud and compliance factors. So from a brand point of view and from a trust point of view of that segment, which is also a big segment inside of our CX business, it really does enhance our -- the trust position that we have as a company. So great business, strong performance, really profitable. And yes, we're proud for it to be a part of the NiCE family. Operator: Your next question comes from the line of Thomas Blakey with Cantor Fitzgerald. Thomas Blakey: Maybe just first one, Scott, I just wanted to talk about these increased win rates that you're talking about and obviously evidenced by the increase in backlog. If you could maybe -- in answering another way about the increased win rates on pricing and any levers you might have there with regard to your to Cognigy or other kind of consumption-based AI levers that you have here in the market, that would be helpful? Scott Russell: Yes. I'll try to answer it simply. We're definitely seeing customers being more astute in their expectations of ROI and that leads to more quantifiable outcome. Now they're not buying outcome-based pricing, but they're negotiating an understanding proven ROI that we're able to deliver. One of the advantages we obviously have is that we understand their volumes, their interactions on their existing seats, how efficient their platform is. We use data to inform them about what the automation that AI can do to improve upon that and then how that then delivers measurable return and we put that into our offers. So look, we've seen our pricing continue to be effective in terms of profitable business for NiCE, but also as a differentiator. But we're watching it closely. I think the market in AI will continue to be scrutinized, the promise versus the reality. It's easy to come in with an AI solution and say, we'll build you a bunch of AI agents. But if it doesn't deliver the real value, they go to vendors and partners that have proven to deliver that before. And we leverage that. There is no doubt that we're using our historical strength and benefits to our advantage. And if that means updating our pricing models, we'll do so. Thomas Blakey: Yes. No, that's helpful. And you're definitely balancing that well in terms of the backlog growth. Maybe for Beth, you've broken out in the past the consumption-based AI ARR. I don't know if it's something you'd want to help with here. And just understanding the increase in backlog and the jump in AI ARR in total, I wanted to know if consumption is driving that. And when we can kind of expect as folks are finding value here, looking to expand AI in terms of the CX role internally, NRR to start maybe expanding? Is that more of a '26 or more of a kind of an out-year kind of environment when you kind of look at your contracts and backlog wins, that would be helpful? Beth Gaspich: Yes, sure. So I think I would start with where Scott just led to, which is we have a flexible pricing model that allows that fluidity, and we're driving more and more increasingly towards interaction and consumption-based pricing, which is demonstrated in our overall AI ARR growth, where we're leaning in more and more towards pricing, which is coming from that increasing and ongoing expansion of interactions that we see. With respect to our backlog, we actually -- it demonstrates we have even further upside. When we look at our backlog, we're actually only including there our minimum contractual commitments. So our pricing model and the way we commercialize with our customers generally is on a subscription basis over a multiyear period. So that's what's being reflected in our model. We're still in very early stages of deployment with a lot of those enterprise customers. So as we continue to see those interactions increasing, that's further upside that we have even beyond what's already captured in our backlog. Operator: Your final question comes from the line of Patrick Walravens with Citizens. Patrick Walravens: Great. Let me add my congratulations. I was wondering if you could give us an update on your two $100 million deals. I think you had one that was in APAC and one that was in EMEA. And Beth, maybe you commented on that when you talked about something that went live. So what's the state of those two now? And then are there anything else -- are there any more this big that are in the pipeline? Beth Gaspich: Yes. So I'll take the first part, which is -- thanks for the question. Those -- both of those deals that were internationally driven are actually within our recognized revenue. They've both gone live. We're very excited about them. We're delivering to the customers. I would also add that there are additional opportunities. Those customers are continuing to look to do more with us. So we're off in a great start of those relationships, and we'll have more to come. But yes, they are already live and contributing to our revenue. Scott Russell: Yes. And in terms of the outlook, look, I guess you're getting a sense on this call, both with our backlog, but our optimism. There is some big opportunities that are in front of us. It's highly competitive out there, but I think we're proving that we've got a differentiated ability to win those. And so I look forward to being able to share more significant wins going forward, both internationally, but also in North America. Operator: That concludes our question-and-answer session. I will now turn the call back over to Scott for closing remarks. Scott Russell: Look, I just wanted to, first of all, thank everybody for the engagements, not only today, but throughout '25. It was a year of clear transition, but we're really excited about what we delivered, but also about the future in front of us. And in particular, I just wanted to thank all the NiCE employees, the NiCE is all around the world, our partners and our customers that contributed towards this. We've got exciting times ahead. It is an exciting market, but we've got the momentum to be able to seize upon it, which we will do. So I appreciate the time, everyone, today. Operator: Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.
Satoshi Ito: Hello. This is Ito from IR Department of T&D Holdings. Thank you very much for coming to the Telephone Conference of our financial results. Our materials are under our website on the Investor Relations under IR Events tab. First of all, I will be making approximately 10 minutes of presentation, after which we would like to move on to the Q&A session. So we'd like to move on with the presentation. Please turn to Slide 3. First of all, I would like to present the key highlights of the financial results for the third quarter. Group adjusted profit amounted to JPY 122.5 billion against the full year forecast of JPY 146 billion with a progress rate of 83.9%, demonstrating a steady progress. Sales results of new policies of all 3 life insurance companies progressed smoothly against the plan. Surrender and lapse rate increase in Taiyo Life remained at the same level year-on-year in Daido Life and a decline in T&D Financial Life. Value of new business as a combined total of the 3 life insurance companies amounted to JPY 144.3 billion, with full year forecast is JPY 168 billion and a progress rate of 85.9%. Group MCEV amounted to JPY 4.3974 trillion. ESR was 225%. There is no change in full year earnings forecast as well as for dividends. Please turn to the next page. The key revenue and profit items of each company are shown in the table. The 3 life insurance companies recorded increase adjusted profits, but T&D United Capital decreased. Page 5 shows you the breakdown of group adjusted profit and difference from net income. Please turn to the next page. This page shows the key performance indicators of the 3 life insurance companies. The 3 life insurance companies saw an increase in their core profits. Taiyo Life and Daido Life recorded capital gains on sale of domestic and foreign equities. Meanwhile, Taiyo Life recorded mainly losses on sales associated with the reduction of its foreign bond holdings. Daido Life posted losses on sale of bonds, mainly due to replacement as part of its cash flow matching strategy. T&D Financial Life recorded a profit increase mainly due to an improved insurance margins resulting from growth in policies in force. Please turn to the next page. The charts describe factors contributing to changes in core profit for both Taiyo Life and Daido Life, decreased currency hedge costs and increased interest dividend income contributed to an increase in core profit. This effect was partially offset by an increase in operating expenses. Please turn to the next page. Average assumed investment yields of Taiyo Life and Daido Life were 1.35% and 1.21%, respectively. Please turn to the next page. T&D United Capital's adjusted profit decreased by JPY 5 billion year-on-year to JPY 5.4 billion. Please turn to the next page. This page describes the quarterly trends in the profit and loss of closed book business. In its consolidated results for the third quarter, the company recorded approximately JPY 8.9 billion as adjusted profit, equity and gains and losses of affiliate related to Fortitude Re's financial results for the third quarter, July to September. The adjusted profit related to Fortitude's fourth quarter, October to December, earning is under calculation. Please turn to the next page. Viridium's fourth quarter results, October to December will be incorporated into the company's Q4 financial results. In our consolidated financial results, profit and loss based on IFRS will be recognized for financial accounting purposes. While for group adjusted profit and loss equivalent to Luxembourg GAAP will be included. Due to the acquisition of Viridium, JPY 75 billion of goodwill was recognized under financial accounting. However, as an amortization of goodwill is excluded from the group adjusted profit, it has no impact on adjusted profit. Next page, please. At Taiyo Life, annualized premiums of new protection-type policies remained at the same level as the same period of the previous year, while surrender and lapse rate increased mainly due to increased surrender and lapse in the agency channel, annualized premiums of in-force protection-type policies increased from the end of the previous fiscal year. Please turn to the next page. New policy amount of Daido Life continue to be strong and achieved a year-on-year growth. Surrender and loss rate was broadly in line with the same period last year and policy amount in-force increased from the end of the previous fiscal year. Please turn to the next page. Annualized premiums of new policies at T&D Financial Life declined year-on-year mainly due to the lower sales of foreign currency linked products. In addition, the surrender and lapse rate declined due to a decrease in policies reaching their target values for foreign currency-linked products, resulting in an increase in annualized premiums of policies in force compared to the end of the previous fiscal year. Next page, please. Group MCEV increased by JPY 451.7 billion from the end of the previous fiscal year to JPY 4,397.4 billion, driven by the accumulation of new business value, the rise in domestic/foreign stock prices and the adoption of LDTI at Fortitude Re. The combined new business value of the 3 life companies increased by JPY 5.3 billion year-on-year to JPY 144.3 billion, mainly due to higher new policy amount and rising domestic interest rates. The new business margin was 9.3%. A breakdown of MCEV by company is provided on Page 16. The factors impacting the group MCEV is on Page 17. Next page, please. This page shows you the status of investment at Taiyo and Daido Life. The combined amount of the domestic and foreign equity sales by the 2 companies was approximately JPY 209 billion, exceeding the full year sales plan of JPY 180 billion that was set at the beginning of the fiscal year. We intend to continue making progress on sales in the fourth quarter as well. Daido Life's interest rate matching ratio reached 86.4%. And for Taiyo Life, it reached 96.6%. And Page 19 shows you the status of foreign currency denominated bonds. Please turn to Page 22. This page is the status of net valuation gains and losses on general account assets. Unrealized foreign and domestic bonds have increased due to rising domestic interest rates. Page 24, please. As of the end of December 2025, the ratio of strategic equity holdings to net assets stood at 19%, reflecting an increase in the market value of the holdings. The ratio of strategic shareholdings to net assets, adjusting for roughly JPY 100 billion already agreed for sale is around 13%. We'll continue to work on reducing the strategic shareholdings to 0 by the end of March 2031, setting aside those for business partners and collaborators. Please turn to the next page. Sale of stock reclassified from strategic shareholding to pure investment is in process as part of our effort to reduce equity risk. As of the end of December 2025, 57% of such shareholdings was divested on an accumulative basis. Next page, please. As of the end of December '25, ESR declined to 225% from the end of the previous fiscal year. While surplus increased, this reflects the investment in Viridium along with increased mass surrender risks due to higher domestic interest rates. Next page, please. There are no changes to the full year earnings forecast for the fiscal year ending March 31, 2026. For the remaining 3 months of the fiscal year, the group adjusted profit is expected to decrease by approximately JPY 0.2 billion for every JPY 1 of appreciation. A breakdown of each life insurance company is provided on Page 28, significant subsequent events on Page 30 and change in presentation of financial data on Page 31. This concludes the briefing of financial results for the 9 months ended December 31, 2025. Unknown Executive: I would now like to move on to the Q&A session. We would like to introduce the first question from SMBC Nikko Securities, Mr. Muraki. Masao Muraki: So this is Muraki from SMBC Nikko Securities. I'd like to post two questions. The first question relates to Page 4 of the materials. The progress rate is 84%, slightly high as of this moment. If you can give us an update on the full year forecast. So I'm pretty sure you have some loss in the sales of JGB and also gains from the sales of equities in Q4. So what are your assumptions right now? That is the first question. Satoshi Ito: Mr. Muraki, thank you very much for the question. I would like to answer that question. So in terms of the performance up until Q3, it has been quite brisk vis-a-vis the full year guidance. So the group adjusted profit of JPY 146 billion, we are confident that we can achieve this. However, there are certain factors we'd like to confirm as of this moment. The first point relates to Fortitude and Viridium. So the Q4 results has not been closed right now. So we'd like to confirm the results for Q4. And next is Taiyo and Daido. So in order to improve the investment portfolio, we are selling the equities and conducting the bond replacement for the asset liability cash flow matching. So we'd like to see the progress. Because in terms of the loss in the sales and also the gains from the sales will be impacted by the market. So we'd like to assess this correctly. So of course, in terms of bond replacement that will contribute to reduction in the interest rate risk and also enhancement of the portfolio yield. But as of the current interest rate level, we will incur some loss in the sales. So in terms of group adjusted profit of JPY 146 billion, it is not likely that we may see a significant upside given the current situation. To summarize, we'd like to confirm the Q4 results for Fortitude and Viridium; and also, we like to see the progress of the sales of the equities and bond. So within the fiscal year, we'd like to have a highly probable forecast and try to assess whether revision is necessary. And if it's necessary, we'd like to disclose that at the earliest stage possible. That is all. Masao Muraki: And the second question relates to Page 12 about Taiyo Life's surrender. So the third quarter appears to be high. So in comparison to the initial assumption, how do you assess the current state of surrender? Also what sort of impact would it pose on EV at the end of the fiscal year. If you have the calculation, please let us know. Satoshi Ito: Thank you for that question. In terms of Taiyo surrender, we've seen an increase in the bancassurance OTC channel. With the rate hike, the surrender is actually increasing more so than initially anticipated. Now in terms of the surrender, so we've actually conducted some risk transfer with the feeding. So the risk on the financial basis, the risk is limited. But in terms of EV, if you look at Page 17, we have as one of the various factors. So the variance between assumptions and results, you can see the number here, JPY 33.1 billion, and Taiyo accounts for minus JPY 17 billion or so. So in terms of the assumptions, we intend to update and review that at the end of this fiscal term. But in terms of its magnitude, we haven't conducted the calculation yet, so we don't know that. But on the 3-quarter cumulative basis, it's JPY 17 billion. And this product has been on sales for 3 years up until the year 2022. So that should give you some idea. Now in terms of the investment, given the current state of surrender and also the anticipation of the interest rate hike as a way to conduct ALM on a forward-looking basis, we have been shortening the duration on the asset side. Specifically, we are selling the 10-year or longer bond sales and replacing those with short-term bonds or cash. So basically, that is how we're addressing the surrender situation. That is all. Operator: So next question is from Ms. Tsujino of BLA Securities, please. Natsumu Tsujino: I have one question. To date, by reshuffling your JGB portfolio, how much benefit did you read in terms of the increase in positive spread? What will be the impact for this fiscal year and the subsequent impact for next fiscal year. Can you share your view? Satoshi Ito: Yes. Thank you for your question, Tsujino-san. The impact on positive spread stemming from reshuffling the JGB portfolio is projected to be JPY 3.1 billion for next fiscal year. The final yield on EM bond on book value basis is improving significantly, and this is supporting the growth in positive spread. Natsumu Tsujino: And looking at your results, you are enjoying a very good progress on booking the investment gains. Strong distribution from the alternative investment, good dividend stream on equity holdings, lower hedging costs and growing positive spread. So there are multiple positive factors. And I think this will make it difficult to project for next fiscal year. My impression is that the actual investment gain driven mainly by our alternative investment was much stronger than expected. May I ask the magnitude of that impact? Satoshi Ito: Thank you, Tsujino-san. That is actually a tough question to answer, but I can comment on how much upside we had against the plan for this fiscal year. At the end of Q3, we see alternative investment. The upside was roughly JPY 20 billion. And I will not be able to reveal much more than that. We don't have the projection for next fiscal year. But the upside from our alternative exposure for this fiscal year was JPY 20 billion pretax. Operator: We'd like to move on to the next question. From Daiwa Securities, Mr. Watanabe. Kazuki Watanabe: This is Watanabe from Daiwa Securities. I also have two questions. The first is related to Page 30, Taiyo Life, the transfer of the loan receivables and credit guarantee company. So what is the impact on Q4? Satoshi Ito: Mr. Watanabe, thank you very much for the question. So in terms of the transfer of loan receivables, this has already been factored into the budget at the beginning of the year. So if you look at the question, if you look at the recurrent -- the profit and the net profit, there is a variance. So that is because we anticipated this transfer. So we don't know the actual amount as of this moment, so we cannot comment on that. In terms of the transfer of loan receivables, in terms of the economic impact, it is quite similar to the sales of bonds. So we may see some recurrence of bonds. But beyond that, we shall see improvement in the yield. And of course, Daido Life will continuously sell the equities after. So in terms of the loss incurred from the transfer of loan receivables, we should be able to offset that with the gains from the sales of equities. Kazuki Watanabe: I'd like to move on to the second question. This is Page 11 related to Viridium. So Luxembourg GAAP will be included for the group adjusted profit. So what sort of impact would it pose, any difference in the definition with the Japanese GAAP, for instance, related to fair value measurement due to market fluctuations. Satoshi Ito: Mr. Watanabe, thank you very much for the question. First of all, as related to Luxembourg GAAP method. Basically, it is very similar to J-GAAP. So the bonds, it will be treated under amortized cost method and the policy reserve is under lock-in method. In comparison to J-GAAP, it is somewhat more prudent. So first point in terms of the unrealized gains from securities, it would not be recognized on the balance sheet. However, the loss for the lower [indiscernible] cost method, it will be recognized. Also at the time of rate decline, there will be a mandatory provisioning of policy reserve required. So in comparison to J-GAAP, it is somewhat more prudent. However, in terms of the fluctuation in economic value, that will not be reflected on the profit. So in comparison to IFRS, there's not much less variance in comparison to IFRS. So in other words, it's quite similar to the J-GAAP method. Operator: We'd like to move on to the next question. Mr. Sakamaki from Mizuho Securities. Naruhiko Sakamaki: Yes. This is Sakamaki from Mizuho Securities. I have one question. And it is something that happened during the quarter. With a significant rate spike in January, how much was your ESR push down? And under a scenario where the long-term rate remains high, what are the things that you are paying attention to. Can you update me on your risk management framework. Satoshi Ito: Thank you for your question. We don't have the impact on our ESR stemming from the yen rate spike in January. So I will have to point to the sensitivity disclosure we made in November at the IR meeting. So with every 50 basis increase in domestic rate, the ESR goes down by 7 points. And to elaborate on the rate impact, basically, for the bond exposure matched against the policy reserve, as long as we maintain level and ability to hold, there is no need for asset impairment and hence, we intend to hold. That said, as long as we are not confronted by mass surrender, which would force us to sell our bond holdings, the impact will be minimal. On the other hand, we would benefit more by capturing higher yield by reshuffling the portfolio and making new investments. So that's all for me. Naruhiko Sakamaki: I see. So just to confirm, the rate spike in January and that level would not require you to do asset impairment. Is that correct? Satoshi Ito: Yes, your understanding is correct. Operator: Next, I would like to move on to the next question. Mr. Takemura from Morgan Stanley MUFG. Atsuro Takemura: This is Takemura from Morgan Stanley MUFG. I have two questions. I also would like to understand the impact of the rising ultra-long rate. I understand that the bancassurance products offered by T&D Financial come with [ MBA ] clause. Do that mean that even under the environment where the ultra-long end rate goes up, the MBA will be effective to prevent a surrender rate to rise. What are your thoughts around the surrender risk for your bancassurance channel when the ultra-long rate is rising. So that's my first question. My second question is also related to your investment activities, namely your PE exposure. I understand that for Taiyo and Daido, the PE exposure is 2.9% or slightly less than 3%. And nowadays on the media reports on the [ death ] of the SaaS business model, and that seems to be dampening the performance of the overseas PE fund. What is the exposure to SaaS companies or IT sector in general? And how do you manage that risk. So those are my two questions. Satoshi Ito: So thank you, Takemura-san, for your question. For the products with MBA clause, basically, there will not be impact on the earnings, but there are some risk of surrenders in a rising rate environment. And regarding our exposure to SaaS companies, for foreign equities, we basically invest in ETFs, so it's part of index investment. So our exposure will be similar to market rating. As for the private equity exposure, to the extent that we can confirm, there is no concentration to a specific sector, and we have a diversified portfolio that would assure the impact to be limited. At this point, we have not been reported on any major loss. Atsuro Takemura: I see. I have a follow-up to my first question. And apologies for the lack of my understanding, but is there a cap on the MBA coverage regarding the magnitude of the bond value decline? So if it crosses that threshold, the quality for the policy holders would be limited and we may see a rise in surrender. Is that the case? Satoshi Ito: Thank you for the question again. Basically, MBA defines the change in surrender amount subject to the right movement. And there is no concept of a cap in the coverage. Atsuro Takemura: I see. Thank you very much.
Operator: Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver Fourth Quarter and Full Year End 2025 Results Conference Call. [Operator Instructions] At this time, I'd like to turn the conference call over to Siren Fisekci, Vice President, Investor Relations. Please go ahead, ma'am. Siren Fisekci: Thank you for joining us today for Pan American Silver's conference call and webcast to discuss our fourth quarter and full year 2025 results. This call includes forward-looking statements and information and references non-GAAP measures. Please see the cautionary statements in our MD&A, news release and presentation slides for the period ended December 31, 2025, all of which are available on our website. I'll now turn the call over to Michael Steinmann, Pan American's President and CEO. Michael Steinmann: Good morning, everyone. I'm glad you could join us to discuss Pan American's 2025 results and our outlook for 2026. I'll start with the headline. We delivered record financial results across the board in Q4 and for the full year 2025, reflecting strong execution of our business and meaningful margin expansion from higher metal prices. Net earnings were a record $452 million in Q4 or $1.07 per basic share, which included $61 million of income from our investment in Juanicipio. For the full year, net earnings were a record $980 million or $2.56 per basic share. On an adjusted basis, earnings were $470 million in Q4 or $1.11 per share, and for the full year, $959 million or $2.54 per share. The record financial results reflect both the operating strength of our assets and the leverage we have to metal prices. Importantly, that translates into record attributable free cash flow of $553 million in Q4 and $1.2 billion for the full year. Cash and short-term investments increased by $408 million from Q3, totaling $1.3 billion at year-end or $1.4 billion, including our 44% interest in cash at Juanicipio. To allow shareholders to participate directly in rising net cash levels, we declared a dividend of $0.18 per common share, our third dividend increase in a row. Turning to operating performance. Attributable silver production of 22.8 million ounces in 2025 exceeded the top end of the guidance range we have increased in November, while attributable gold production of 742,200 ounces was within guidance. Silver segment all-in sustaining costs, excluding NRV inventory adjustments, were $9.51 per ounce in Q4 and $13.88 per ounce for the full year. Silver all-in sustaining costs in 2025 were below the decreased guidance. The key contributor here is Juanicipio, which has been performing better than expected since we acquired the mine in September 2025 through the MAG Silver transaction. For the gold segment, all-in sustaining costs, excluding NRV inventory adjustments, were $1,699 per ounce in Q4 and $1,621 per ounce for the full year, which was within our guidance for 2025. It's worth noting that both silver and gold segment costs in Q4 were impacted by higher royalties and worker participation expenditures reflecting the increase in metal prices. The silver segment is also affected by additional royalties at La Colorada related to mining and adjacent concession, where we paid the concession owner a share of net profits earned on ores from their concession, which we treat as a royalty expense. Royalties are also impacted at San Vicente to reflect profit sharing with the state-owned mining company, COMIBOL. In 2025, we made good progress on our major projects, investing $94 million, in line with our guidance, to advance several major projects. Most notably, at La Colorada, where the discovery of multiple high-grade silver zones and the segment expansion of mineral resources have led us to reevaluate the development plans for the Skarn project. We now see an opportunity to integrate the mine plans and infrastructure of the La Colorada vein mine with this current project to a phased approach to development. The phased approach would allow us to focus on higher grade, lower tonnage and less capital-intensive initial stage with the option to target lower grade material in a future expansion. We are aiming to release an updated technical report for La Colorada in the second quarter of 2026 to include a preliminary economic assessment of the new development approach for the Skarn project. There are also continuing discussions with our potential partners on this project to include the proposed changes. At Jacobina, our investment in 2025 were directed at strengthening operational reliability and to advance long-term growth initiatives. We have provided more details on these initiatives in our MD&A, so I won't run through them item by item. But at high level, they include plant upgrades, tailings filtration and filter stack and paste backfill plant. At Escobal, the Guatemalan Ministry of Energy and Mines continued meetings in Q4 2025 to advance the ILO 169 consultation process, and in December 2025, posted an update on progress for the October 2024 to November 2025 period. The ministry also conducted an inspection in Q4 and confirmed our activities are compliant with the court order and suspension of operations. As we have said previously, there is no time line for completion of the consultation process and no date for restart. Turning to 2026 guidance. For silver, we are guiding attributable production of 25 million to 27 million ounces and silver segment all-in sustaining costs of $15.75 to $18.25 per ounce. The year-over-year increase in silver production reflects, in part, the full year contribution from Juanicipio, along with mine sequencing into higher silver grade at Cerro Moro. For gold, we are guiding attributable production of 700,000 to 750,000 ounces and gold segment all-in sustaining costs of 1,700 to $1,850 per ounce. We expect higher grades at Timmins, plus the full year of production from Juanicipio, offset by a lower contribution from Dolores as residual leaching declines and at El Penon from the exhaustion of low-grade stockpiles and lower ore tonnes processed. Our all-in sustaining cost guidance for both the silver and gold segments reflects higher metal price assumptions, which flow through to royalties, worker participation payments and increased smelting and refining costs due to price participation. Needless to say, increased metal prices far outweigh these additional royalties and provide superior return to our business, as seen with record earnings and cash flow in Q4. Sustaining capital is expected to be similar to 2025 with the addition of capital for Juanicipio. We also plan increased project capital to advance La Colorada Skarn and Jacobina and at Timmins, with part of the increase directed toward satellite deposits, reflecting positive drill results and continued work on exploration and preliminary engineering. Please refer to our MD&A for further detail on our 2026 outlook, including an operating outlook by quarter. As we look ahead, we see several meaningful catalysts for 2026. First, with metal prices currently well above Q4 and last year's average, we see potential for strong free cash flow and high returns of capital to shareholders while also funding an expanded exploration program, internal growth projects and further strengthening of our balance sheet. Second, we expect to release an updated La Colorada Skarn PEA in Q2 2026, which we believe will demonstrate higher risk-adjusted returns than the original PEA for the project. And third, the Jacobina optimization study is advancing well, and we look forward to sharing findings and opportunities as the engineering work progresses. Before I wrap up my prepared remarks, I would like to provide a few thoughts on the metal price environment. This is an exceptionally fortunate period for Pan American Silver and our investors, as the increase in metal price coincides with increased silver production, driving higher levels of free cash flow. Gold strength has been driven by sustained Central Bank purchases and renewed investor interest and volatile geopolitical backdrop, U.S. policy uncertainty and weakening confidence in fiat currencies, particularly the U.S. dollar. Those underlying drivers are similarly supportive for silver, in addition to supply/demand fundamentals, with the silver market expected to remain in a deficit for the sixth consecutive year in 2026. We are well positioned in this environment, remaining unhedged on both gold and silver, and with a focus on delivering margin expansion. To close, 2025 was a record year for Pan American: record revenue, earnings and free cash flow, paired with strong operating execution and a stronger balance sheet. We are entering 2026 from a position of strength with a clear plan: Execute safely and reliably, generate strong cash flow, advance our high-quality growth pipeline and return capital to shareholders in a disciplined way. And with that, I'd like to open the call for questions. Operator: [Operator Instructions] Our first question today comes from Cosmos Chiu from CIBC. Cosmos Chiu: Maybe my first question is on Juanicipio. Michael, as you mentioned, very strong results so far. So it's been about half a year now. How would you describe your overall experience with the asset so far? And what has exceeded expectations? Is it throughput? Or is it grade? Or is it both? And is that sort of outperformance sustainable? Michael Steinmann: Yes, it's a bit less actually than half a year. I think we took over mid of September, somewhere around that, from MAG. Great experience so far. And as you can see in the results, I'm very, very happy, but I see -- continuously very happy, but I see what Juanicipio is producing. Of course, when you look at long-term production profiles and the geology of this kind of deposits -- and by the way, that's the same for like a deposit of La Colorada -- when you look at that geology, there's a clear zonation with metals. So you go from precious metals to more base metals. Lead, zinc, and deep down, you would go into copper really, really deep down. So that's kind of the geology of this kind of deposits. So over long term, that's change as you see, but exploration, of course, a good example is La Colorada [ again ] for that or the neighboring mines of Juanicipio as well. With exploration, you keep finding new veins as well, which, again, have higher precious metal content on the top and then go deeper down into base metals. So over the long term, you should obviously expect that the silver grades will be reduced and the base metal grades increase, but that's -- you can look that up in the technical report for it. But as you said, last year, this year, it looks like a very strong silver producer for us and very low cost. Cosmos Chiu: Perfect. And then good that you brought up La Colorada. I wanted to ask a question about La Colorada Skarn. As you mentioned, new technical report is coming out sometime in Q2 2026. But ahead of it, I don't know how much you can share with us, Michael. But what kind of -- in terms of that phased approach, what kind of different tonnages are you sort of evaluating? What kind of size are you sort of evaluating at this point in time? What's kind of like the cost/benefit analysis are you considering right now? And what can we expect when that comes out? Michael Steinmann: Sure, Cosmos. And yes, you need to be patient a little bit more. In a few more months here, it's coming soon. And it's a very exciting project. And that phased approach really has changed the project quite a bit. If you recall, the original PEA, that called for up to 50,000 tonnes a day. Very, very large bulk minable ore body. Of course, that's still the case. It's still a very, very large, even bigger now, bulk minable ore body. But over the last 2 years, we have discovered a lot of high-grade material inside the Skarn and also between the Skarn and the surface in additional structures. And that's really what we're going to mine in Phase 1. So it's going to be quite a long time for Phase 1. It's going to be way more than a decade. And when you look at tonnage, I don't have to file the numbers yet, but you should probably expect somewhere in the 10,000 to 15,000 tonne kind of range for Phase 1, but substantially higher grades than what we showed in the very large bulk kind of cave method in the first PEA. So it will be higher grade, less capital, and really, a focus on silver production for quite a long time before it will go to a more bulk minable, much bigger tonnage and more base metal rich production after that. Cosmos Chiu: And then maybe one last question. When I look at your 2026 guidance, I look at the asset level production compared to 2025 guidance. One asset that is expected to increase year-over-year is Cerro Moro. I guess this is your only asset in Argentina, but Argentina looks to be getting better as a country for mining. So I guess my question is, is this a country or an asset where you might be willing to commit more time and resources into it? Or how should we look at it? Michael Steinmann: Well, Cosmos, in general, I'm always happy to commit time on exploration to any of our assets. We have been incredibly successful over the last 20 years in replacing reserves and adding additional value through our brownfield exploration programs, and La Colorada Skarn is the best example in the company's history with a potential huge value creation through the drill bit. So I'm always happy to continue to drill and exploring our assets. And of course, in the current metal price scenarios, that's even more so. So you've probably seen that we assigned quite an increase of capital to our exploration programs for 2026, and that includes, for sure, Cerro Moro as well. So as you say, lots of positive changes in Argentina and a place that we are active and working for many, many years. And yes, looking forward to more positive exploration results from Cerro Moro as the year goes on. Operator: Our next question comes from Francesco Costanzo from Scotiabank. Francesco Costanzo: I just wanted to ask a follow-up on one of Cosmos' questions actually, just on La Colorada Skarn. Have discussions on a potential partner progressed in the last quarter? And is there any update you can provide us on what the economic terms might look like given the new phased approach or timing of when we might see a deal signed? Michael Steinmann: Yes. Look, the discussions have progressed. But as you can imagine, with the change we made here on this phased approach compared to the single approach we had before, there has to be quite some changes, how we look at that partnership and in that discussion on how that would fall out. So discussions are in full swing. So I don't really want to share right now, details yet on it. But we included that change on the approach and are in full discussions. Francesco Costanzo: Okay. Fair enough. And then just switching gears slightly. With record silver prices, there's obviously a lot of value sitting in the ground at Escobal. So I'm just wondering if you're able to provide us any insights on your view of how the consultation process has progressed in recent months? And whether you feel that things are beginning to reaccelerate compared to this time last year? Michael Steinmann: Well, in general, of course. And we see it worldwide, right, that there is much stronger emphasis on mining and mining projects. High metal prices, of course, helping that. A lot of declaration of critical minerals across the globe and countries that try to secure future metal production for their own use. So that will accelerate from now on, and I'm sure about that. And we'll bring additional projects into production across the globe. Let me have Sean giving us some more details on Escobal, especially. Sean McAleer: Yes. We've been meeting with the Ministry of Energy and Mines through Q4 and a few times earlier this year. And we're standing by for the next updates for meetings and schedules for activities. So there's not a change in the activity that we've seen in the past. But certainly, the engagement continues. And I think the report that was published by the Ministry of Energy and Mines at the end of the year is encouraging, that they are providing some information from the government on their commitment to the process and the status of the process and the fact that it's ongoing. So we're looking forward to meetings here in the coming months and progressing with the process. Operator: [Operator Instructions] Our next question comes from Don DeMarco from National Bank. Don DeMarco: Just a couple of financial bookkeeping questions. First off, how often are the Juanicipio dividends paid? I mean, I see that there was a line item in the Q4 financials, full year financials, but none on the Q3 financials. And I remember back in the MAG Silver days, where there were some agreements at the JV level just to pay out those dividends once a year, although there were some discussions to maybe change that more quarterly. But I'm just wondering what the current arrangement is at this point? Ignacio Couturier: Don, it's Ignacio here speaking. The dividend -- the payments from Juanicipio come in the form of dividends, and there was a payment in Q4. Pan American's share of that payment was around $44 million. Right now, the dividends are being paid out of tax paid retained earnings, and we're currently waiting for Juanicipio to pay its taxes and [ back ] and book its tax return, which will happen sometime in Q1. So soon after that, we're expecting another dividend from Juanicipio, which would be higher than the one we received in Q4. So right now, it's just being driven by just the regular cycle, the financial statements and the tax returns in Mexico. Don DeMarco: Okay. Got it. And Ignacio, also -- looking at -- you've got the senior notes maturing, $278 million at a 4.6% coupon. Obviously, with your free cash flow and cash balance increasing, would this be a consideration to potentially repay early? I mean, obviously, the August 31 have a very favorable interest rate. There'd be no motivation there, but wondering about these 2027s? Ignacio Couturier: Yes. So that's something that we look at from time to time. They are -- as you mentioned, they are coming up in 2027. The bonds aren't very liquid, we know that. So if an opportunity came where a bondholder was interested in potentially some, we would consider it for sure. But this comes down to bigger capital allocation questions which are coming up this year. So look, if the opportunity came up to buy some of those bonds back to 2027, we would consider it for sure. But as I said, our bonds have not been trading very -- with a lot of liquidity in the market. Operator: And with that, we'll be concluding today's question-and-answer session. I'd like to turn the floor back over to Michael Steinmann for any closing remarks. Michael Steinmann: Thanks, operator. Strong production and cost control in Q4 in combination with high metal prices resulted in record financial results across the board, as you have seen in the press release. And I'm really proud of what we have achieved in 2026, including the very swift and quick integration of the 44% of the low-cost Juanicipio mine. So please keep in mind that the average metal prices in Q4 were only around $58 for silver and I think a bit more than $4,100 for gold. So we have seen substantially higher metal prices in the new year so far. And additionally, we will be increasing our silver production again by about 14%, largely driven again by the low-cost production of Juanicipio. And to top that, we'll release the updated PEA in La Colorada Skarn in Q2 and further information on the Jacobina optimization as the year advances. So you can imagine, I'm really looking forward to 2026, and I'm looking forward to give you an update on Q4 in our May call. Until then, have a good time. Thanks, everyone, for calling in. Operator: This brings to a close, today's conference call. You may now disconnect your lines. Thank you for participating. Have a pleasant day.