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Operator: Hello. My name is Vanessa, and I will be your conference call facilitator this afternoon. At this time, I would like to welcome everyone to Envista Holdings Corporation's Fourth Quarter 2025 Earnings Results Conference Call. [Operator Instructions] I will now turn the call over to Mr. Jim Gustafson, Vice President of Investor Relations at Envista Holdings. Mr. Gustafson, you may begin your conference call. Jim Gustafson: Good afternoon. Thanks for joining Envista's Fourth Quarter 2025 Earnings Call. We appreciate your interest in our company. With me today are Paul Keel, our President and Chief Executive Officer; and Eric Hammes, our Chief Financial Officer. Before we begin, I want to point out that our earnings release, the slide presentation supplementing today's call and the reconciliations and other information required by SEC Regulation G relating to any non-GAAP financial measures provided during the call are all available on the Investors section of our website, www.envistaco.com. The audio portion of this call will be archived in the Investors section of our website later today under the heading Events and Presentations. During the presentation, we will describe some of the more significant factors that impacted year-over-year performance. The supplemental materials describe additional factors that impacted our results. Unless otherwise noted, references in these remarks to company-specific financial metrics relate to the fourth quarter of 2025 and references to period-to-period increases and decreases in financial metrics are year-over-year. During the call, we may describe certain products and solutions that have applications submitted and pending certain regulatory approvals or are available only in certain markets. We will also make forward-looking statements within the meaning of the Federal Securities laws, including statements regarding events and developments that we believe, anticipate or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings, and actual results may differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements, except as required by law. With that, I'll turn the call over to Paul. Paul Keel: Thanks, Jim. Good afternoon, and welcome, everyone. On today's call, I'll kick us off with some opening thoughts on our Q4 and 2025 performance, our progress implementing the value creation plan that we communicated in March of last year and our guidance for 2026. Eric will then take us through the numbers in more detail, and I'll wrap up with some closing thoughts before we open it up for Q&A. Let's start with the value creation plan that we shared at our Capital Markets Day early last year. In our view, a good plan should be both achievable and aspirational, timely as well as timeless. A good plan should authentically describe who you are today and who you're striving to be tomorrow. Centered on the 4 foundational components that you see here, we think our plan does exactly this. We're guided by our purpose of partnering with dental professionals to improve patient lives. We're centered on our circle values of customer centricity, innovation, respect, leadership and continuous improvement. We're focused on our 3 key priorities of growth, operations and people. And our plan is framed by our medium-term financial objectives of 2% to 4% core growth, driving 4% to 7% EBITDA and 7% to 10% EPS growth, all underpinned by free cash flow conversion of 100% or better. Today, I'll focus on the strategic and operational progress that we're making in implementing this plan as well as our financial performance relative to our medium-term objectives. Let's begin with Q4 and 2025 progress on the next slide. Slide 5 is organized by the 3 priorities that I just mentioned. Beginning with growth on the left side of the chart, ours was widespread. All businesses posted positive growth for the quarter and year and all outgrew their respective markets in Q4, resulting in continued share gains across the portfolio. Consistent with what we've discussed on previous calls, increased new product activity and clinical training are contributing meaningfully to our accelerating growth. We trained 30% more customers in 2025, and we generated close to $100 million in revenues from products introduced in just the last 12 months. I'll touch on a few of these new products on the next slide. And looking to build on this momentum in 2026 and beyond, Q4 marked another quarter of double-digit increases in R&D investment. On the operations front, we continue to enjoy strong contributions from EBS, our continuous improvement methodology that is central to how we deliver results, develop our people and advance our culture. We reduced G&A spending by over $35 million last year or about 10% while maintaining our world-class safety, quality and customer service levels. We took action in 2025 that we expect will result in roughly a 4-point tax rate reduction in 2026. And supported by strong cash flows, we put in place a $250 million share repurchase program in early '25, a first for Envista and returned over $160 million to shareholders across the year. Finally, with respect to people, we're working to advance our high-performing continuous improvement culture. We refreshed our management team in mid-2024, bringing in new leaders from the outside to supplement a strong core team that was already in place. 18 months in, we're working very well together and stability and collaboration at the senior ranks have cascaded across our organization. We saw record participation in our 2025 employee survey with broad-based increases in employee engagement. We've redoubled our commitment to talent development with better than half of all management promotions going to the existing employees last year, a 40-point increase over 2024. And in addition to taking care of our customers, colleagues and shareholders, we've also stepped up support of our communities by reaching more than 19,000 underserved patients last year and donating over $2 million to charitable causes through our Envista Smile Project. New product innovation has long been the lifeblood of Envista. Having served dentists now for over 130 years and with more than 1,500 patents to our name, we've had a hand in several of the most important dental innovations over time, including the invention of dental implants, the introduction of both self-ligated and conventional orthodontic bracket systems, the first panoramic radiograph and the now ubiquitous endodontic K-file. We built on this strong heritage in 2025 with key new product launches in all major businesses, and you see some of those listed here. Four major new product introductions in Spark last year supported that business' robust growth. New platforms in both premium and challenger contributed to multiple consecutive quarters of growth for our implants franchise and our fastest full year performance since 2022. In consumables, launches like OptiBond 360, SimpliCore Composite and CaviCide HP helped propel above-market growth for that business. And we enjoyed another strong year of new product launches in diagnostics with an entirely new intraoral scanning platform as well as novel cloud and AI features for our market-leading DTX Studio suite of solutions. We have another strong wave of launches lined up for 2026, and we look forward to sharing more about these as they come to market. Now having given you a flavor for where we're investing our time, attention and resources, let's turn to the output from all this work. We'll begin with Q4 results on the left side of the slide. We posted another strong quarter, delivering good revenue, EBITDA and EPS growth. Core growth came in around 11% or something closer to the mid-single digits, excluding certain factors that Eric will explain shortly. Strong core growth converted to even stronger EBITDA growth of 22%, driven by Spark turning profitable in Q3 and continued good execution on price, tariff mitigation and G&A productivity. Adjusted EPS was $0.38, up more than 50% from Q4 '24, supported by strong operating profits, share repurchases and a lower tax rate. Moving to full year performance in the center of the slide. Core growth for 2025 was 6.5%, again, broad-based across the portfolio. Adjusted EBITDA was up 26%, resulting in a margin of around 14% or a 2-point improvement over 2024. And EPS was up over 60%, aided by many of the same drivers as Q4. All of this contributed to strong free cash flow conversion for 2025 of 114%. Rounding out the slide, you'll see our 2026 guidance in the column on the right. This year, we expect core revenue growth of 2% to 4% and free cash flow conversion around 100%, both directly in line with our value creation plan. We're guiding to adjusted EBITDA growth of 7% to 13% and adjusted EPS growth of 13% to 22%, both above our medium-term objectives. To summarize my introductory comments, Q4 capped a strong year of progress and performance for Envista, positioning us well for continued improvement here in 2026. And with that, I'll turn it over to Eric to cover the financials in more detail. Eric Hammes: Thanks, Paul. In the fourth quarter, we delivered sales of $751 million. Core sales in the quarter increased 10.8% and FX added nearly 400 basis points. As Paul mentioned, Q4 was another strong quarter for Envista with broad-based growth. It is worth noting upfront that our Q4 growth benefited from several items, which we do not expect to recur over the long term, namely Spark deferral and lower 2024 comparables, which I'll say more about in just a moment. Excluding some of these items, our Q4 core growth was closer to the mid-single-digit range. Q4 adjusted gross margin was 55%, a decrease of 220 basis points versus the prior year due to a significant FX transaction benefit in Q4 of 2024. Our adjusted EBITDA margin for the quarter was 14.8%, which was 90 basis points better than the prior year as benefits from volume, price and productivity were partially offset by investments and the prior year FX impact just mentioned. Adjusted EPS for the quarter was $0.38, up $0.14 compared to the same quarter of last year. Our non-GAAP tax rate for the quarter was 30.3%, slightly better than our expectations. We saw a beneficial trend throughout 2025 in our non-GAAP tax rate as a result of our strong business performance in the United States. As we've discussed previously, U.S. GAAP limits the amount of interest expense that companies can deduct to a portion of their taxable income. Our U.S. earnings have improved on several fronts, namely growth, Spark profit and G&A, all enabling higher deductibility of our third-party and intercompany interest expense. This drove the lower effective tax rate in 2025. Rounding out Slide 8. In Q4, we generated $92 million of free cash flow, down slightly from last year. The year-on-year cash flow decline in Q4 was primarily the result of a working capital improvement in Q4 of last year. Our absolute levels of free cash generation and conversion were strong in Q4 2025. Now I'll take you through our full year financials. In 2025, we delivered sales of $2.7 billion with core sales for the year increasing 6.5% over 2024. Similar to our trends in Q4, the business performed well throughout 2025. Our core growth was aided in part by the Spark deferral change and softer 2024 comparables, all netting to an underlying core growth of around 4%, in line with both our revised 2025 guidance and the medium-term objectives Paul covered earlier. 2025 adjusted gross margin was 55.1%, a slight decline year-over-year due to the impact of transactional FX penalties in the first half. Our adjusted EBITDA margin for the year was 13.7%, a 190 basis point improvement over 2024, with volume, price and productivity, all delivering well throughout 2025. Adjusted EPS for the year was $1.19, up $0.46 compared to the prior year as our growth and profit improvements were aided by a reduced tax rate and the share repurchase program we started in Q1 2025. Now let's turn to 2 bridges to help break down our fourth quarter year-over-year results, beginning with sales. Core revenues grew 10.8% in the quarter with positive growth in all businesses. We had good performance in both volume and price with a small tailwind from the Spark deferral change. Adding in the benefit of FX, a $25 million tailwind and 2 small acquisitions that contributed around $2 million, reported growth came in at 15%. As I mentioned previously, Q4 growth did benefit from 2 notable items we do not expect to repeat over the long term. The tariff price increases of 2025 are the first. We generated about 3 points of price in Q4 with tariff-related increases accounting for approximately 2/3 of this amount. Favorable comps are the second. As you recall, our China business experienced a high double-digit contraction in Q4 of 2024 due to VBP preparations and other market-specific factors. In addition, our Diagnostics business was down high single digits globally in Q4 2024. All in, prior year comps yielded about a 3-point benefit in Q4 2025. Turning to the adjusted EBITDA margin bridge on Slide 11. Volume, mix and the Spark deferral benefit combined to deliver a 330 basis point improvement. The previously mentioned price actions helped margins by 260 basis points. We had a net gain of 100 basis points from improved productivity with continued strong performance within our supply chains as well as year-over-year reductions in G&A. Partially offsetting these gains, gross tariff expense was about $10 million in the quarter or roughly 160 basis points. We continue to reinvest a portion of our productivity gains back into sales, marketing and R&D to support future growth, which amounted to 170 basis points in the quarter. And as mentioned before, year-on-year FX was a headwind to margins of 270 basis points as a result of the FX transaction gain in Q4 2024. Turning to segment performance. Revenue in Specialty Products & Technologies grew nearly 16% year-on-year with core sales up 10.9%. In our Orthodontics business, Spark was up high single digits before the additional benefit from the net deferral change. Brackets & Wires were up double digits year-on-year, aided by the low China comparable in Q4 last year that I mentioned previously. Excluding this, Brackets & Wires were up low single digits. Our Ortho business continues to capture share as having leading offerings in both Brackets & Wires and Clear Aligners provides us a distinct portfolio advantage. On the implant side, we grew mid-single digits globally, led by above-market performance in several geographies, including North America. Growth was especially strong in both the digital and regenerative segments of this business. Customers are looking for solutions that support both clinical efficacy as well as practice efficiency, and our products are helping meet these needs. In Q4, Specialty Products & Technologies posted an adjusted operating margin of 16.2%, up 470 basis points, driven by good growth as well as the year-over-year impact of Spark profitability. Volume, price and net productivity were all positive in this segment and consistent with prior comments, a portion of the gains were reinvested into commercial and new product development activities. Moving to our Equipment & Consumables segment. Core sales in the quarter increased 10.7% versus prior year, including high single-digit growth in consumables, where we delivered broad-based growth across the portfolio, including solid price performance. Diagnostic core sales was up double digits globally with high single-digit growth in North America. While our Diagnostics business did benefit from a soft Q4 2024 comparable, Q4 of 2025 was our third consecutive quarter of Diagnostics growth, driven by strong commercial execution, new product introductions and improving trends in the North America market in the second half of 2025. Adjusted operating profit margin for the segment was down 510 basis points, driven by continued investment for future growth and the prior year FX transaction benefit that I noted earlier. Now let's turn to cash flow. Q4 free cash flow was $92 million, a decrease of about $32 million when compared to the fourth quarter of last year, driven by very strong working capital results at the end of 2024 and higher CapEx in Q4 of 2025. For the full year, we delivered $231 million of free cash flow with a conversion of 114%. Free cash flow dollars were down year-over-year, primarily as a result of lower incentive bonus payments in 2024 related to 2023 performance and higher CapEx in 2025. Our balance sheet remains strong with net debt to adjusted EBITDA of approximately 0.6x, providing welcome stability in the current environment. In Q4, we deployed approximately $24 million in cash to repurchase 1.2 million shares of stock. On a full year basis, we repurchased $166 million or a total of more than 9 million shares at an average price of around $18 per share, making strong progress against our $250 million 2-year repurchase authorization. As Paul mentioned, today, we're providing guidance for 2026 using the same measures we introduced at the 2025 Capital Markets Day. Core sales growth of 2% to 4%, adjusted EBITDA dollar growth of 7% to 13%, adjusted EPS of $1.35 to $1.45 and free cash conversion of approximately 100%. Slide 16 provides additional detail on key assumptions underlying this guidance. First, we expect the dental market in 2026 to be similar to what we've seen this past year, continued stability with the potential for modest improvement across the year. Quarterly sales in 2026 will cadence a bit differently than last year and that we have 4 more selling days in Q1 and 4 fewer in Q4 relative to 2025. Specific to this effect, we expect stronger Q1 core growth and slower Q4 growth. The straight math on the days would imply a 6- to 7-point shift in growth, although with about 1/3 of our business going through distribution, we expect this to be closer to 4 to 5 points of additional growth in Q1 2026. We will update you throughout the year on how we see the progression playing out. We're assuming December ending exchange rates for our guidance. With the dollar ending 2025 at EUR 1 to USD 1.17, this would imply a 1.5% revenue benefit from foreign exchange in full year 2026. The impact of the 2024 change in the Spark deferral will continue to subside with about $15 million of remaining tailwind landing in the first half of 2026. We expect pricing to moderate across the year as we lap the tariff-related price increases implemented in Q2 of 2025. As the tariff environment has proven to be difficult to forecast, we have not modeled any material changes to tariffs in 2026. We incurred about a $30 million tariff headwind in 2025, and we expect around $40 million from tariffs currently in effect in 2026 due to annualization. We were able to offset tariff impacts in 2025 from a combination of price increases, cost reductions and supply chain adjustments and expect to cover tariffs currently in effect again in 2026. And finally, on the tax rate, as a result of improving U.S. profitability and the resolution of the intercompany loan that we discussed last quarter, we expect our 2026 non-GAAP tax rate to be approximately 28% of adjusted pretax income. Now back to you, Paul, to wrap things up. Paul Keel: Thanks, Eric. I'll start by circling back to our value creation plan. While we're still in the early days of unlocking the vast potential of our company, our first year executing the plan has us pointed in the right direction as we delivered above-target performance on all 4 of our medium-term financial objectives in 2025. As noted earlier, we're guiding to continued progress in 2026 with core growth, EBITDA, EPS and free cash flow conversion all at or above medium-term targeted levels. A few closing thoughts as we put a cap on 2025 and turn our full attention to 2026 and beyond. First, across most of last year, we described the dental market as slow but stable. On balance, that's still the best descriptor, although we are beginning to see some signs of market improvement. For example, the North American diagnostic market returned to growth in H2 and Q4 was the third straight quarter where all of our businesses posted positive growth. As we're a top 3 player in all of our categories, the breadth and consistency of our performance should be a positive signal for the broader market as well. Second, we feel good about the progress we're making in implementing the value creation plan that we shared with all of you last year. Underlying growth in 2025 was consistent with our medium-term plan, converting to even stronger earnings and EPS gains. Third, the full year guidance that we shared today reflects our confidence in building on this momentum here in 2026. Guidance for core growth and free cash flow conversion are right in line with our medium-term objectives, and EBITDA and EPS guidance are above the medium-term plan. Importantly, I'll close by noting that all this progress is made possible by the commitment, collaboration and deep capability of our global Envista team. We accomplished a great deal together in 2025, and we've only scratched the surface of what's possible. We're excited to build on this momentum here in 2026. That completes our prepared remarks for today, and we'll now open it up for Q&A. Operator: [Operator Instructions] We have our first question from Brandon Vazquez with William Blair. Brandon Vazquez: Congrats on a nice end of the year here. Can you -- maybe let's start at a high level, just talk to us a little bit about guidance. What are the potential upsides here? What are the risks to guidance, especially as we look at the top line and the bottom line, especially in the context of what is some pretty good momentum, I think, even when you back out some of these moving pieces exiting the year? Paul Keel: Thanks for the question, Brandon. Why don't I cover the growth part of your question, and then I'll ask Eric to cover the profitability component. Maybe I'll just begin by reframing core guidance for the year, 2% to 4% for 2026. And a reminder that this range is directly in line with the medium-term financial objectives that we communicated last year. And the high end of the 2026 range maps well to the roughly 4% underlying growth that we just delivered. I guess I would also say in terms of context that since we've not observed any material change in the underlying dental market, 2% to 4% feels like a good jumping off point for 2026. Again, noting that we expect relatively faster Q1 and slower Q4 growth due to the billing day effect that we just mentioned. Now having set the frame, let me answer your question, a couple of upsides and then maybe a few risks. I'd say there's 3 upsides worth noting consistent with your question. I guess I'd have to start with our momentum. Not only did we have positive growth across all the businesses, we had accelerating sequential growth across the 4 quarters. So carrying that momentum into '26 is naturally helpful. And related to this, with all of the businesses positive and generally accelerating, there's 2 businesses in particular that we don't typically say a lot about that I think do have upside this year. The first is Diagnostics. The overall diagnostics market, as we mentioned, turned positive in the second half of '25 after 3 years of contraction. We're a large player both in North America and globally. And while it's still far too early to say with confidence that, that market has turned, if indeed it does, that would naturally be upside for us. The second market that we don't say much about is our consumables franchise. It was up high single digits in '25 behind some really good work by the team on fundamental things like price, new product introductions, DSO penetration, et cetera. We have been intentionally investing more in our consumables business of late, which could yield some upside. Let's see maybe the third upside I'd mention, Brandon, would be price. As we said in our prepared remarks, our guidance assumes that we return to more normal pricing levels, call it, 1 point or so per annum once we lap the tariff-related increases that we took mid last year. There's just too many moving pieces to put it in our guidance, but it's not hard to envision scenarios where inflation, both general to the economy and specific to dental, continue at elevated levels here in '26. We've been working hard at improving our price execution. And so if inflation stays at higher levels, I think we'd be positioned to take advantage of that. Now giving you a balanced response on the growth side before I turn it over to Eric for profitability. I think 2 risks warrant mention. The first, of course, you'd have to start with macro volatility. No one gives a confidence interval along with their guidance. But if we did, you'd have to expect that it'd be unusually wide for this year for the reasons we all know well. Factors like tariffs and interest rates, consumer confidence, et cetera, all impact dental demand. And as we saw pretty clearly in '25, there's a real possibility of some or all of those recurring here in '26, which brings me on to a second risk worth noting, that being China. China now represents about 7% of our total sales. While VBP and ortho and implants are very likely in 2026, the specific timing is difficult to forecast. There's been a number of delays. Based on prior experience, we feel like we generally have our arms around the impact of VBP across a 12- or 18-month horizon, but the specific quarter-by-quarter effects can vary quite a bit depending upon government timing. So in sum, 2% to 4% for the year. I would say -- I would shade the upsides a little bit above the risks, but there's plenty out in the world right now to keep us cautious. Eric, do you want to say same on the EBITDA side? Eric Hammes: Yes. Excellent. Thanks, Paul. Brandon, thanks for the question, a good forward lean for us to talk through. So maybe just before the headwinds, tailwinds, what I would just start with is the fact that our profit improvement and our margin improvement in 2025 was pretty solid, double-digit growth in profit, almost 200 points in year-over-year improvement in margin. And I think if you just follow our bridges as we provided through each quarter and now fourth quarter, what you saw in 2025 is good growth in productivity, more than offsetting tariffs and FX, all while being able to invest for future growth, which you saw more predominantly in Q3 and Q4. So a good year for us, good equation in total. Just as Paul said, just a reinforcement on guidance, we're guiding to 7% to 13% EBITDA growth in 2026, so slightly better than our Capital Markets Day guide or outlook, which was intended to be an average year. We do think it's important to focus on the dollar growth versus the margin percentage, although, of course, we manage both. We think the dollar growth aligns better with value creation. We know our investors like to see that, and it allows us a little bit of flexibility on trade-offs between growth and margin. That said, if you take our guide and you back into margins, you'll get a guidance that implies about 50 to 100 bps in margin improvement in 2026. Tailwinds, I would say, would be core growth. So margin improvement based on the strong gross margins that we get. Paul talked about the fact that we've got a good momentum right now in terms of growth heading into 2026, and we see that as a tailwind for margin rate. Productivity, just like 2025, we'll continue to drive productivity. Factory productivity, G&A discipline, we'll just put another focus on that this year like we did last year. We've got good momentum in Spark, both in terms of growth and profitability. And I think we can expect more of that in 2026. And then FX, while certainly less predictable as a forward projection, we do think FX is a year-on-year tailwind to our margins. That's mostly because we took losses on what we call transaction balance sheet revaluation in the first half of last year. We have a hedging program in place, and that's why you've seen sort of a settling and more of a neutral inter-quarter view of that in the second half. And then if we just flip for a moment to headwinds, I think we gave a pretty instructive view of tariffs in our guide assumptions. About $10 million per quarter is the run rate that we've been at in second half. If you just annualize that, it means we've got about a $10 million headwind next year. We'll continue to offset that with the actions that we've had thus far. China. Paul mentioned sort of the uncertainty of China. He mentioned the 7% of our revenues. But I think in general, you should see China as a margin rate headwind, maybe a slight profit dollar headwind just based on how we expect China to play out in terms of growth and profitability. And then lastly, I would just say investments, just as we saw in 2025, we'll continue to invest in R&D, sales and marketing. That will certainly be at the pace of our business performance, right, how well we grow and how well we fund that investment by delivering on productivity. You kind of take all that together and the cadence for the year probably looks like slightly lower margins first half, slightly higher second half, most of that just being defined by the revenue profile of our business. Brandon Vazquez: Got it. And that's super helpful, very comprehensive. So maybe I'll ask a quick modeling touch-up on so some others can get in the queue here. But Eric, as you think of the tax rate, you guys have clearly done some good work there. Is there more work to be done? What's kind of the expectations of tax rates to go lower? Eric Hammes: Yes. Great question, Brandon. So I mean just kind of taking everybody back, we finished the year just under 32%. We put in our guidance assumptions, just to give you the sort of the answer on our EPS equation. We expect tax to be this year, 2026, around 28%. That's fully inclusive of the resolution of the intercompany loan that we've talked about. That is the majority of our 4-point tax rate reduction. Future benefits, I would say, would primarily come from one of three things: continued U.S. profit improvement. We still pay third-party interest, that's interest on our debt, and we have a little bit of a deductibility cap that we still have there, which pressures our tax rate. Continued U.S. income improvement will just help to absorb that effectively. The second would be any kind of paydown in debt. So if we choose to capitally deploy our balance sheet towards debt paydown, that may help our tax rate. That's also linked to that interest expense just mentioned. And then the last would just be if we have any geo mix benefits and the ability to improve profits in lower tax jurisdictions. But I would say the 28% is a good view. It's obviously showing a lot of year-on-year improvement. And most of the mentioned items on favorability would be minor at this point in time. Operator: We have our next question from Jon Block with Stifel. Jonathan Block: Great color on '25 and the '26 outlook. I think the only thing that I was a little bit unclear on and sorry if I missed it, but just the detail or assumptions on VBP for ortho and/or implants. In other words, sort of what's embedded in the '26 guidance regarding those variables? Is it one? Is it the other? A stub? Again, I know it's a moving part -- or moving parts to it, but just curious on how you guys are thinking about that going into the year? Paul Keel: Jon, thanks for the question. Yes, we didn't say much about VBP because there's really not too much new news to report, but let me recap what we do know. We continue to expect a first round VBP for ortho and a second round VBP for implants sometime in 2026, but specific timing has proven to be difficult. In our guidance, we assume a second implant VBP to occur likely in Q2 and the most probable timing for the Ortho 1.0 VBP would be the second half. Just to give you guys a little bit of a context for why the timing is so uncertain here. Recall that there are dozens of medical VBPs currently underway across China. To increase the complexity, some of these are specific to one province, some are cross provincial, some are national. And most of the large hospitals participate in multiple VBPs. All big hospitals have an orthopedic department, urology department, cardiovascular, dental, et cetera. So it is a complex thing for Chinese authorities to manage and why continued shifts in timing are certainly possible. But hopefully, that gives you a flavor for the timing piece. Just as a reminder, the way this typically plays out is we see a quarter or two of negative order growth in advance of a VBP go-live as the channel draws down inventory to avoid a restatement penalty. And then you get the opposite of that once the VBP gets announced, you get a quarter or two of order acceleration as the channel replaces that drawn down inventory at the new price level. Hopefully, that gets to what you're asking. Jonathan Block: No, it certainly does, Paul. That was very helpful. And the second one, I don't know, I feel like you guys are almost being a little modest. I mean, look, I get the 10.8% core is not the new run rate. Hopefully, none of us are going to go ahead and plug that in the model and we get it. It had some benefits like you mentioned an easy comp. But you guys knew about the easy comp. Your '25 guidance was 4% top line and it implied, I believe, around 2% core for the fourth quarter of '25. And again, you knew the easy comp. You probably knew most of the stuff around price. So where I'm just going with this is like what deviated to the upside for you guys, for the company in the last 3 months of the quarter to put up that close to 11% versus the implied 2%. And again, I get the variables that you are calling out going forward. But it still seems like a notable step function from where your heads were at 3 months ago. Paul Keel: Well, Jon, both Eric and I grew up in Minnesota. So we think of modest as a complement. The 2% to 4%, I think you understand why we see that as the proper jumping off point for 2026, lines up exactly with the medium-term guidance that we gave roughly a year ago and lines up pretty well with the underlying growth. Embedded in your question, we certainly wouldn't want anyone on this call coming off feeling like we're signaling that Envista expects a slowdown in our underlying performance or that we've come anywhere close to realizing the full potential of this business. We've now posted 5 consecutive quarters of generally accelerating growth. And today, we indicated that we expect to build on that momentum in 2026. We're committed to rebuilding our track record of consistent delivery. I think this is now my seventh earnings call, and it's probably Eric sixth. And hopefully, you're seeing a pattern develop both of steadily improving performance but also credible transparent reporting. And that's what we're aiming to build on here in 2026. Eric Hammes: Jon, I'd give you just a couple of other points maybe to consider. So we look at the full year 2025. So fourth quarter was good. I take your point fully. For the full year, our sort of normalized growth rate is about 4%. Any quarter could be a little bit more dynamic. Two things did stand out in our fourth quarter growth, maybe differentiated from what we saw going into the quarter. One was the shift in the China ortho VBP. So remember, we were talking sort of going into that call about a December VBP implementation. That meant that the ortho bracket and wire market for us and generally the channel was just stronger, material enough to move our growth by a point or so. And then we had a very good growth result in implants. We saw mid-single-digit plus growth, very, very strong in the sort of the broad digital portfolio that we have. That's everything from our prosthetic from treatment planning before that to some of our equipment and guided surgery. I wouldn't call it a surprise. Our teams have been out there. We've been investing in it, but it was certainly a better growth for us than we anticipated at least midway through the quarter. Operator: Our next question is from Kevin Caliendo with UBS. Kevin Caliendo: In the fourth quarter, implants were up mid-single digit in both premium and value. Do you think -- how do you think that was compared to the market? And just kind to get a sense of how much you think your new products actually contributed to your growth, meaning was it Envista's new products? Was it the market? Was it your positioning already, you're capturing more share? I'm just trying to get a sense because we have new products again coming next year, and I'm trying to also gauge how much of your top line growth might be coming -- or you think might be coming from your new product launches? Paul Keel: Yes. Thanks for the question, Kevin. We think that global implant market is growing mid-single digits, call it 5%. We were a little bit north of that in Q4, which was good for us. That's the first quarter since I've been here where I think we did outgrow the market in implants in total. So that's also now 5 straight quarters for premium growth and generally accelerating quarter sequentially. So building good momentum in implants. Maybe 2 parts of your question you asked, what do I think is going on with the -- what do we think is going on with the market and then how do new products play into that. The market, I would say we don't yet see any credible evidence that the market has changed. We'll learn more in the coming weeks as our peers report, but we don't think market acceleration was a driver of our acceleration. We think a couple of things played into our advantage. The first is, again, we made a significant investment in this business in 2024. Put $25 million in to the commercial front end to customer training and then into new products. Now a year or so past that investment, we certainly see a return on the commercial front end of that and on the customer training. I made some mention of that in my prepared remarks. I don't think we yet see the new product impact of that. We have a number of products we've now advanced through our pipeline that will launch in 2026, and we'll tell you guys more about those as they come to market. But I don't think that new product piece was in the 2025 result. The other piece I would point to, consistent with the broader Envista is that we did take price in 2025 and the tariff environment aided that. So I think we were advantaged in 2025 by a little bit of extra tariff price. Kevin Caliendo: And that you don't expect to continue. Is that -- that's sort of what you're saying, right? There isn't necessarily any of that built into the 2% to 4%? Paul Keel: Correct. Our guidance for this year assumes that the midyear increases from last year carry forward for the first 2 quarters, then we lap them. And without any further information on tariffs, we've assumed that market dental inflation returns to kind of that what I consider more normal point to 1.5 points in the second half. So I think it was Brandon's question to kick us off. We do see pricing as an upside, but it's not in the guide. Operator: Our next question is from Jeff Johnson with Baird. Jeffrey Johnson: Can you hear me okay? Paul Keel: Yes, Jeff. Jeffrey Johnson: All right. Sorry about that. I'm driving. So if you hear any crashes or anything, just ignore it, I'll put you on mute. But -- so just a question on Spark. This quarter, the high single-digit growth. Obviously, it's still going to be above market. But I think last quarter, pre-deferrals, you were up high teens. Just any change in competitive positioning and/or market trends in the quarter? And then, Eric, maybe you can help us just understand, last quarter was the first quarter you swung the profitability on the Spark side. Did we see further improvements on top of that in Q4? And how should we think about the gating over the next 3 to 6 to 8 quarters or something like that on how we get to that fleet average that you've talked about someday getting to on the Spark side? Paul Keel: All right. I'll take growth. Eric will take profitability. Yes, we think we outgrew the market again, that's many, many consecutive quarters now that we've done that. Now with the 2 biggest players on the ortho side having reported pretty decent numbers, maybe that suggests that the clear aligner market is getting a little bit of a boost. Maybe that helped a bit. And we did have a very big new product year in 2025, and we had 4 real new product introductions and several of those were completely incremental growth. So our retainer offering, for example, that's all incremental, no replacement. So I think all of those things really helped us. I haven't seen or we haven't seen any material change in the competitive landscape. In the orthodontic segment where we compete, there's 3 main players. All of them are good. All of them are competing aggressively, and I think that's good for customers and ultimately good for the market. Eric, do you want to talk about the profitability side? Eric Hammes: Yes. Just a couple of points, Jeff. So I mean we talked last quarter about turning profitable. We won't give you kind of specifics on the call here, but we were certainly profitable again in fourth quarter at consistent levels with where we were in third quarter. So nothing of a dramatic departure. And in part, it's because now we're sort of getting into this period where every quarter sequentially will depend really on underlying Spark profitability improvement, operations, unit costs, design and less, of course, about the roll-through of the deferral, although both have contributed to the profitability path over the last year. We were down year-over-year in unit costs. So we've, I think, given sort of a view in past calls about how much did we have our cost per aligner down year-over-year. We were down mid-teens year-over-year. We were modestly down sequentially. So a little improvement quarter-to-quarter, but mostly year-over-year. And then as we see the cadence for the business going forward, I'd say you can depend on 2 things. One would be just the annualization, if you will, into 2026. So the business sort of reaching profitability. We've told you that third quarter, fourth quarter was a good like absolute level of business to depend on. But that means that next year, we've got just a nice carryover from that improvement trend. And then fleet average is still the best way to think about it on an operating level, and our improvement will come from really sort of the 4 things we've mentioned, right? Continued focus on automation and manufacturing cost out. Growth will be a portion of it, but it's not fully dependable on it or dependent on it. Portfolio, as Paul just talked about, we've been very focused on new products and making sure that we have the best play both for customers but also for profit levels. And then design costs. We've been bringing our design costs down consistently. That's aided actually by one of the products that Paul mentioned or had on the slide rather in the earnings call, which we call StageRx. That simply helps us translate efficiencies from the front end at the clinician level into our treatment planning and design and then ultimately into manufacturing. Paul Keel: And Jeff, we'll send you a transcript. So hopefully, you're not taking notes while you are driving. Operator: Our next question is from Elizabeth Anderson with Evercore. Elizabeth Anderson: I was wondering if, Paul, as you said, this is your seventh call. And I think there are obviously a lot of immediately like fires that have to be put out and then you sort of -- and then you did a great job stabilizing the business and sort of getting it to where we are now. As we kind of think about the business and the market maybe being a little bit stable, I know you've talked about some new products and things that you're excited about rolling out as we think about 2026 and beyond. How do you kind of think about like where your focus areas are like heretofore? Is it sort of continuing to refine sort of things that you've talked about for? Is it new vectors of growth in terms of maybe either organic or M&A driven? Maybe just sort of at a high level, help us think through that as things are moving -- everything moving in the right direction and you're kind of thinking about the next leg. Paul Keel: Yes. Thanks, Elizabeth. Both Eric and I grew up in dental. We were pretty familiar with the Envista portfolio before we joined. We had bid against the assets when we were at 3M and then we competed against the business. And so we had a pretty good understanding of what a strong fundamental business it was. And as I think we've talked about on previous calls, there were a couple of pieces that were disrupted in that kind of '23 and '24 time period. And I put them into 3 buckets. The first is I felt we had inappropriate guidance in the market. And being a highly accountable company, we did what good companies do when they miss, which is anything they can to not miss again. So we were chasing the quarter, which caused us to cut back on investments, which then gets you on that kind of downward spiral in a high-margin business like this. If you don't invest in growth, you lose growth and then you lose gross margin and then you lose ability to fund future growth. So the first thing we needed to do was get the flywheel turning back in the right direction and the $25 million investment that we made in 2024 in retrospect looks like it did that. The second thing related to that is we're a 130-year-old company. And if you go back over time, every period of sustained growth was because we had a heavy focus on new products, not just development but also commercialization. And so we've been very intentional, not just in Q4, not just in 2025, but I think every quarter that Eric and I have been here to make an aggressive but measured investment in new product development. Some of that has already hit. We talked about the Spark piece of that. Many of those programs were underway before we arrived. But we have more in the pipe that I think you guys are going to hear about in '26 and beyond that should be encouraging. And then the third, Elizabeth, was organizationally. There was a lot of turnover at the higher ranks in the business, and that cascaded down through the organization. So at the same time that we're hopefully rebuilding confidence with the investors, job 1 for us is to rebuild confidence with our employees. Fortunately, these are good, high-quality products, and we never lost the confidence with our customers. So we had that stakeholder in decent shape. But I think over the last several quarters, we've rebuilt that confidence in our employee base. You can see engagement going up, and you can feel the energy around here. And so looking forward to what are we focused on now, we just put out the new plan a year ago. So we're squarely focused on executing against that. The 3 priorities of growth, operations and people. And we now have a building sample set of when we deliver against those priorities, it's reflected in the financial output. So the plan seems to be working. And as they say, we'll keep working the plan. Operator: We have our next question from Steven Valiquette with Mizuho Securities. Steven Valiquette: Sorry, on there. A couple of questions here. I guess, just first on really more of a geographic question. I guess really across kind of global dental orthodontic market, some of your competitors are highlighting better end markets in Europe and APAC, but still suggesting challenging end markets in North America in various product categories. But you guys seem to be posting pretty strong growth in North America really across all your key product categories. So I guess I'm just curious, how you think about this way or not, but is there a key variable you can point to in your go-to-market strategy in North America that's leading to these results, whether it's DSO relationships or something else? Or is it just strong execution across each key product area that's just adding up to overall North American results? Just any color if you think about it that way might be helpful. Paul Keel: Yes. Steven, if I understood the question correctly, it's about any geographic differences. So let me answer the question for Q4 and for 2025. In Q4, no, we did not see any major differences by geography. We had strong growth in North America, in West Europe and in emerging markets. And then I think Eric mentioned, we had extra high growth in China because of that comp from Ortho VBP preparation in Q4 '24. So 2025, Q4, we saw strength across all regions. The answer is about the same for 2025. We weren't as strong on a full year basis in China, but North America and Europe were very similar. And then a couple of emerging markets were double digits as well. You're on mute. Operator: Our next question comes from Lily Lozada with JPMorgan. Lilia-Celine Lozada: One on margins, you showed a lot of SG&A leverage. So can you talk through some of the sources of leverage you saw there in the quarter and how you're thinking about SG&A as a driver of margin expansion in 2026? And on R&D, that's been pretty consistently increasing as a percentage of sales. And so should we think about that continuing to outpace revenue growth in 2026? Eric Hammes: Yes, I can take that, Lily. Appreciate it. So the first part, if you look at our adjusted EBITDA margin bridge, I'll just give you the high points on that one again. So overall margins improving in the quarter. I would say the quarter was fairly indicative of what we've seen in each quarter this year or most quarters this year and then for full year 2025. So volume benefits, price benefits. We delivered good productivity across most of our businesses. Our Spark margin improvement year-over-year was significant for us. And then as you mentioned, within kind of the bundling of SG&A, G&A, in particular, was strong for us in the quarter as it was for the full year, where for the full year 2025, we were down 11%. All of that effectively is helping us to offset tariffs and a little bit of FX penalty and then reinvest in the business. And I would say, if you sort of go back to the first question that was asked post-prepared remarks, our guide for next year is not too dissimilar. We'll continue to get margin expansion from growth and productivity. We'll continue to use that to invest in the business at the pace of our performance. And maybe the only difference into 2026 is that we expect FX to be a benefit just given the first half transaction costs that we had. And then sort of the third part of your question on sales and marketing, R&D, I would say, expect us to continue to invest in R&D at a not too dissimilar pace, improving each year and likely improving at a rate higher than growth so long as we can generate productivity, obviously, to be able to do that. Sales and marketing, probably more flat to maybe modestly increasing as an intensity. That's a nod to percent of sales, but certainly less so than R&D. Lilia-Celine Lozada: Great. That's really helpful. And then just another follow-up on VBP. I appreciate it's kind of tricky to call the timing, but I was hoping we could get a bit more color on how you're thinking about the impact when it does eventually come. I think last time you framed it as a net positive to revenues for implants. And so how would you characterize it this time around? Any color on the size of the business is being impacted, the magnitude of the potential impact and whether you're seeing it being a net headwind or tailwind after taking into account the potential volume impacts would be helpful. Paul Keel: Sure. Why don't I take that one? So again, there's 2 VBPs that we anticipate, the first VBP in ortho and then the second VBP in implants. So let me just comment on each in turn. So for VBP ortho, we expect it to look a lot like VBP 1 for implant. What we saw there was kind of a 40% to 45% price decrease that was then met with an equal inverse volume increase. So 100% volume increase to offset the 40% to 45% price increase. And for us, it was a net benefit to total revenues. So we expect something similar in ortho. Of course, there are nuances to ortho, and I'd mention 2. The first is -- in implants, it's easier for the market to expand volume. It's a faster procedure and easier -- easy for me to say anyway, easier to train a dentist to do it. So we saw a more rapid expansion in the patient demand. I think we're going to see less of that on the orthodontic side. It's typically an 18-month procedure treatment, so a little bit harder to expand. And certainly, on the traditional bracket and wire side, harder to expand that available supply through orthodontists as quickly. The other nuance worth mentioning is specific to us, there's both traditional and the clear aligner VBP. We're a large player on the traditional side in China. We're smaller on the clear aligner side. So the clear aligner question is going to impact some of our peers greater in China. Coming on to the anticipated second VBP for implants, it will be much smaller, we think, maybe in the 10% to 20% price decrease level. It benefited us greatly in VBP 1. Because those with large market shares going in tend to get even larger market shares coming out because in the case of premium to challenger implants, that price differential was compressed. And when the difference is smaller, we found more clinicians just trading up to premium. So we were a benefactor of that. Hopefully, that gives you a little flavor, Lily, of the 2 VBPs that should be coming here in '26. Operator: Our next question is from Allen Lutz with Bank of America. Unknown Analyst: This is Dev on for Allen. I just want to maybe double-click on the diagnostic and equipment growth in the quarter and just looking at what that looks into next year. Granted this may be a tough one to parse out even in your seat. But just curious how you think about underlying growth for equipment, call it, versus more onetime-ish benefits. I'm thinking here sort of pent-up demand, maybe an impetus from the advantageous tax code recently or level of inventory in the channel. How do you see underlying equipment diagnostic market volume growth in '26 and then maybe Envista specifically? Paul Keel: So diagnostics, I'll talk in general. So equipment is a bigger category. Equipment includes chairs, handpieces, et cetera. We exited that part of the business previously. So we participate in 3 categories within diagnostics. We participate in 2D and 3D imaging. You're familiar with that. You sit in the chair, they take a picture of your anatomy. We participate in intraoral scanning, IOS, which is a different image capture technology. And then we participate in the software piece, the treatment planning as well as the image management piece. Those 3 categories tend to be the faster-growing part of the broader equipment. We had double-digit growth in our Diagnostics business in Q4, but that was aided by the easy comp from Q4 '24 that Eric mentioned. I think right now, I would call it a low single-digit growing category, and we have outpaced the market for the last couple of quarters. I would expect something similar in the first half of 2026, low single-digit growth, us doing a little bit better than that. And then we'll just have to see how that -- whether that growth catches and the market moves to more sustainable growth. So I'm going to hold off forecasting market growth in the second half for now. Operator: That is all the time that we have for questions today. I will now turn the call over to Paul Keel, CEO, for closing remarks. Paul Keel: Okay. Thanks, Vanessa, and thanks, everyone, for tuning in. Maybe I'll just quickly underline a couple of quick thoughts to put a wrap around the quarter and the year. First, Q4 was another encouraging step forward for Envista with double-digit sales, adjusted EBITDA and EPS growth, and that capped off a strong 2025 with 6.5% core growth also converting to double-digit EBITDA and EPS growth for the full year. Second comment is that our performance was broad-based with all major geographies and businesses once again in positive territory and a good contribution from volume, price and new products. We also drove 2 points of margin expansion and returned over $160 million to shareholders. Third, we continue to focus on executing the value creation plan that we shared at our Capital Markets Day last March. And I think we are seeing encouraging progress on all 3 of our main priorities: growth, operations and people, which brings me to 2026. Our guidance for this year reflects our confidence in building on this momentum. Guidance for core growth and free cash flow conversion are right in line with our medium-term objectives and guidance for EBITDA and EPS are above that medium-term plan. I think that pretty much covers it for today. Thanks, everyone. Have a great day and a great remainder of the week. Operator: Thank you, ladies and gentlemen. This concludes today's conference call. We thank you for your participation. You may now disconnect.
Operator: Ladies and gentlemen, welcome to the Soci�t� G�n�rale conference call. Gentlemen, please go ahead. Slawomir Krupa: Good morning, everyone, and thank you for joining us today. I'm very proud to report strong performance numbers for 2025. As a result, we are upgrading our 2026 target for profitability and confirming all other CMD targets as well. 2025 was a defining year. We set new records for revenues with EUR 27.3 billion and for group net income, which reached the EUR 6 billion mark. The successful transformation sets the stage for us to sustain long-term profitable growth. Significant improvement in our financial results in 2025 cuts across all metrics, outperforming the targets we upgraded in Q2 '25. Our revenues were up by almost 7%, excluding asset disposals. That's more than double our target of more than 3%. Even more remarkable is that all our businesses contributed to the strong performance. As you know, our commitment to reduce our cost base, both structurally and significantly is absolute. The proof point here is the 2% decrease in costs, excluding asset disposal over the past year. That's that 2% is far better than what we targeted, which was a decrease of at least 1% and it translates into a cost-to-income ratio of 63.6% in 2025, an improvement of more than 5 percentage points over the last year. Keep in mind, this is also better than the 2025 target we set of a cost-to-income below 65%. Cost of risk is within our guidance at 26 basis points, reflecting the strength of our asset quality and our capacity to effectively manage risks across the cycle. All of this has significantly boosted our profitability with a ROTE reaching 10.2% for the year and 9.6%, excluding capital gains on disposals. This is above our 2025 target of around 9%. These earnings allowed us to further strengthen our capital by 20 basis points. CET1 ratio now stands at 13.5% after Basel IV regulatory impact and after the extraordinary distribution of EUR 2 billion through 2 additional share buybacks. As a result, the Board has decided to propose a total ordinary distribution of EUR 2.7 billion, up 54% compared to 2024, including a dividend per share of EUR 1.61 and a share buyback of EUR 1.462 billion. Let me put all this into perspective. These results underscore the priorities we established 2.5 years ago and have consistently executed on ever since. Our first decisive step to significantly strengthen the bank's capital. ensuring us both ample capital buffers as well as means to support our growth. Today, with a CET1 ratio of 13.5%, the group is fully dedicated to fostering a sustainable long-term growth and consistently creating value for shareholders. Our second strategic priority to enhance efficiency. The decrease in our cost-to-income ratio of more than 10 percentage points versus 2023 is a significant accomplishment. We still have a lot more work to do, and we will do everything to make sure this positive trend continues. Third, to significantly improve profitability. In 2025, we achieved exactly that. Our ROTE is now more than 4 percentage points higher compared to the 2018, 2022 average. results, sustainable value creation is now a reality with a total shareholder return of 237% over the past 3 years. As I mentioned a moment ago, all our businesses contributed to the strong performance. First, French Retail, Private Banking and Insurance recorded strong revenue growth of 4.2% versus 2024, restated for asset disposals and the impact of short-term hedges. It was driven by a pickup in the net interest income and also by a record high assets under management, both in life insurance and private banking activities, where Bank gained 1.9 million new clients, and that brings its total close to 9 million. It is leading the market as a fully fledged bank with average client maintains a balance of around EUR 9,000 in assets under administration, remained profitable for a third year in a row, proving the strength and sustainability of its business model. BIS had a record year in terms of revenues, delivering another excellent performance with a high RONE of 16.7% under Basel IV. The result of our strategy, Global Markets continue to deliver current and predictable revenues reaching in 2025, a 16-year high and with a high RONE above 20%. FMA increased substantially its origination volumes at a high marginal rate of return, thanks to increased capital velocity. Business also benefits from strong positioning on key sectors like energy and infrastructure. Within International Retail, KB and BRD consistently demonstrated solid commercial performance with the successful optimization and continued digitalization of their respective distribution networks. And last, our teams at Ayven have done an outstanding job managing all the challenges that come with a complex integration. That integration is progressing as planned, and our decision to focus on profitability and risk management has resulted in a steady margin improvement throughout the year, but also allowed Ayven to maintain a sound position while reaching its 2025 financial targets. In light of this performance, the total distribution for 2025 will amount to EUR 4.679 billion, a growth of 169% versus last year. On ordinary distribution for 2025, we are proposing a dividend per share of EUR 1.61, of which EUR 0.61 were already paid in October 2025 through the introduction of our first interim dividend. As a result, the final dividend of EUR 1 per share will be paid in June 2026, subject to the AGM approval. All in all, the total dividend per share represents an increase of 48% versus last year. Our ordinary distribution also includes a share buyback of EUR 1.462 billion, up 68% versus last year. We have already obtained the ECB approval for this program. There's no change in our ordinary distribution policy with a 50% payout ratio, an interim dividend and a balanced mix between cash dividends and share buybacks. In terms of extraordinary distribution, as you know, in 2025, the group launched 2 extraordinary share buybacks for a total amount of EUR 2 billion. Please note here that in the resolutions, authorizing share buybacks is mandatory to include a maximum purchase price. The resolution voted during the last AGM when the share was around EUR 40, maximum purchase price authorized was EUR 75. Therefore, as the share price reached the maximum purchase price authorized by shareholders, we had to pause the buyback launched in November 2025 to remain compliant. This does not change our capital return strategy. And obviously, we will submit a new resolution to the next AGM to increase this limit substantially. Going forward, distribution of excess capital will continue to depend on our capital allocation decisions. And as stated last year, in the best interest of shareholders, we are proactively managing our capital above 13% CET1 ratio. This may include both extraordinary distributions and disciplined profitable growth. We will address potential extraordinary distribution once a year during the release of the Q2 results. At the same time, we will continue to apply strict capital allocation criteria towards the most profitable businesses. Given our current capital position, we are increasing our RWA growth target for the businesses. And in 2026, we expect an organic RWA growth of around 2%. Now our 2026 targets reflect our continued focus on value creation through growth, operating leverage and sound risk management. Execution of our road map to date leads us to upgrade our ROTE target versus the one set at the CMD in 2023. So for 2026, we expect an NBI growth above 2% versus 2025 on a reported basis, a net cost decrease of around 3% versus 2025 on a reported basis, cost-to-income ratio below 60%, cost of risk within the 25, 30 basis points range. And finally, a ROTE above 10%. In 2026, we will continue to deliver solid revenue growth plus strict cost discipline. We expect revenues to grow by more than 2%, driven by strong commercial momentum across all businesses. We'll support that growth by allocating higher levels of capital to the most profitable businesses. Revenue growth will also benefit from a strong decrease in BoursoBank's planned acquisition costs as we target a net profit above EUR 300 million in 2026 at BoursoBank. Global Markets revenues are expected to be above the top end of the guidance range between EUR 5.1 billion and EUR 5.7 billion. This new range is in line with our former guidance actually as we fully consolidate Bernstein U.S. starting January 1. And of course, cost control remains a top priority for the group. We're confident in our ability to further reduce operating expenses by around 3% in 2026. What makes this possible is our ongoing group-wide transformation process. Now at the business level, all of our 2026 financial targets are confirmed. As mentioned before, the Global Markets target is adjusted for the consolidation of Bernstein U.S. and is now between EUR 5.1 billion and EUR 5.7 billion. It's also consistent is our resolve to pursue these goals with precision, determination and a strong sense of discipline. I will now turn things over to Leo, who will review our Q4 performance. Leopoldo Alvear: Thank you, Slawomir, and good morning, everyone. Let's now deeper dive deeper into the details of Q4 '25 performance. The group's net income stands at EUR 1.4 billion, up 36% versus Q4 '24, resulting in a ROTE of 9.5% versus 6.6% in the same period the previous year. These solid results are supported by the continuation of the strong commercial momentum in all businesses as well as by a tight discipline over costs. Looking more closely, revenues are up 6.8% versus Q4 '24, excluding disposals, well above our natural target of above 3%. Meanwhile, costs fall further in absolute terms, down by minus 1.4%, excluding asset disposals and confirming, therefore, our constant cost control. As a result, our operational leverage improves further, the cost to income of 64.6% in Q4 '25, down from 69.4% in Q4 '24. Asset quality-wise, the cost of risk remains contained at 29 basis points within our annual guidance of 25 to 30 basis points. Let's move now to Slide 12 to further explain the main revenue and cost drivers in Q4. Group revenues increased by 6.8% in Q4 compared with the previous year when removing for comparison purposes, around EUR 325 million of revenues related to completed disposals. In French Retail, Private Banking and Insurance, revenues grew by 7.9% in Q4, excluding disposals. The increase is mainly driven by NII, which is up by 8.5%, excluding asset disposals. In Global Banking and Investor Solutions, revenues eased by 2.3% compared to a very strong Q4 '24, which was the best quarter ever in Global Markets. Revenues in Mobility, International Retail Banking and Financial Services were up by 8.6% versus Q4 '24, excluding disposals. Finally, revenues at the Corporate Center grew by EUR 157 million, supported by efficient management of our liquidity position. Regarding costs, operating expenses, excluding disposals, declined further by 1.4% this quarter. Group reports a structural cost reduction of EUR 89 million, which more than offsets the EUR 26 million of higher CTA. Moving on to cost of risk on Slide 13. Cost of risk stands at 29 basis points in Q4 '25 and 26 basis points for the whole year '25. This is in the lower range of our through-the-cycle guidance. Cost of risk this quarter mainly comprises Stage 3 provisions, which accounts for EUR 435 million and remained broadly stable versus Q3 '25. In Stage 1 and Stage 2 provisions, we had a limited net reversal of EUR 26 million, which conceals our prudent approach. As a result, total outstanding Stage 1 and Stage 2 provisions remained high at EUR 2.9 billion and stable from last quarter. Asset quality remains solid, as illustrated by the NPL at 2.8% in Q4, broadly stable when compared with last year and last quarter. And finally, the net coverage ratio remained high at 82% in Q4 '25 and stable versus Q3 '25. Let's now turn to Slide 14, where we can see the evolution of our strong capital position. The CET1 ratio closed at Q4 at 13.5%, which is 320 basis points above NPA. The ratio also reflects the minus 27 basis point impact from new additional share buyback of EUR 1 billion, which we announced and started executing in November. Before adjusting the additional buyback, the CET1 ratio increased by 9 basis points from Q3 '25, reflecting the following impacts shown from left to right in this slide. Retained earnings contributed with 16 basis points after accruing a 50% payout. RWA valuation represents an impact of minus 1 basis point. We had minor regulatory adjustment that had an impact of 5 basis points. And finally, other impacts account for 1 basis point. In addition, as you can see on the bottom right-hand side of the slide, all other capital ratios are comfortably above the regulatory requirements. On Slide 15, liquidity reserves remained high at EUR 318 billion in Q4 '25 with a relatively balanced mix between cash and securities. The liquidity profile of the group remains strong with strong sound liquidity ratios. The LCR ratio was 144% this quarter, and the NSFR ratio was 116%, both well ahead of regulatory requirements and in line with our steering targets. 45% of the 2026 long-term funding program has already been completed. We maintain good access to liquidity in all currencies on the back of strong long-term ratings from all agencies. The deposit base remains strong, granular and highly diversified. Overall, the loan-to-deposit ratio remains at 77% at group level. On Slide 16, we show a summary of the P&L for the group for Q4 '25, which we will cover in more detail in the following slides. Let's move now to the individual businesses on Slide 18, starting with subject network, private banking and insurance. In Q4 '25, loans outstanding increased by 1% compared to last year or by 2% if we exclude state-guaranteed loans, this is PGEs. Corporate loans production was sound and increased 19% versus Q3 '25. Outstanding deposits fell 3% versus Q4 '24 but increased 2% versus Q3 '25 in the context of continued strong growth of retail savings and investment products. These off-balance sheet products contribute to the continued strong momentum in overall asset gathering. On one side, AUM in private banking increased by 9% versus Q4 '24, we adjust for disposals and reached EUR 137 billion at the end of December '25. This is EUR 2 billion higher than at the end of September '25. On the other side, life insurance outstanding reached EUR 158 billion, increasing by 8% versus Q4 '24 or by EUR 5 billion versus Q3 '25, thanks to continued strong net inflows. Moving now to BoursoBank. In Q4, BoursoBank acquired a record number of 575,000 new clients. Since Q4 '24, it represents an increase of 1.9 million new clients or 22% with a consistently low churn rate, which remains below 4%. Assets under administration continued to grow steadily, reaching EUR 78 billion at the end of December or around EUR 9,000 per client. This represents an 18% increase versus Q4 '24, thanks in particular to the continued strong increase in deposits of 15% versus Q4 '24. Similarly, life insurance outstandings increased by 13% versus Q4 '24. Bank also saw record high openings of brokerage accounts, which grew by 25% compared to the previous year. On the lending side, total loans outstanding are up 9% versus Q4 '24. Looking now at the whole pillar on Slide 20. Retail Banking, Private Banking and insurance posted a solid increase in revenues of 4.2% versus 2024 when we exclude disposals and the impact of short-term hedges. And this included a sound 3.1% growth in NII. At the same time, operating expenses fell by 3.9% from '24, excluding disposals. As a result of both, the jaws widened significantly. And therefore, the cost-to-income ratio, it stood at 61.1% in 2025, represents a substantial improvement of 10 percentage points from 76.4% in 2024. All in all, net income lands at EUR 1,815 million for the year or up 80% versus 2024 with a ROE above 10% under Basel IV versus 6% last year under the previous Basel III standards. Let's move now to Global Markets and Investor Services on Slide 21. Global Markets consolidated a fairly strong year in 2025 with revenues reaching a record since 2009 of EUR 5.98 billion, while growing 2.7% versus 2024 in constant currency. In Q4 '25, revenues eased by 8% versus Q4 '24. Equities posted 5% lower revenues, affected by a high base in Q4 '24 and currency headwinds. Performance also reflected the lower commercial activity in Europe and Asia as well as our geographic mix, where Europe and Asia represent around 3/4 of 2025's total revenues. However, if we focus on the Americas, where market conditions were more conducive, we posted a very strong performance with revenues up by 24% versus Q4 '24. In fixed income and currencies, revenues fell by 13% from an also very strong Q4 '24 and affected by negative currency impact. Performance reflects as well the more challenging commercial dynamics in rates products, notably in Europe. Lastly, Securities Services revenues grew by 3% versus Q4 '24 on the back of sound activity levels and the continuation of a strong commercial momentum in all the main markets. Let's turn to Slide 22 on the evolution of Financing and Advisory. Again, it maintained a very strong performance with revenues growing by 5.1% versus Q4 '24. This strong momentum is even more visible when focusing on Global Banking and Advisory, where revenues grew by 8.6% versus Q4 '24, accelerating from last quarter. It represents our best quarter ever, driven by the solid performance in financing activities, combined with the continuation of good momentum in both originated and distributed volumes. In addition, our DCM and ECM franchise delivered one more quarter of sound revenue growth. Lastly, in Transaction Banking and Payment Services, revenues declined by 5% versus Q4 '24 due to negative interest rates and currency impacts. That, however, shadows the good underlying commercial momentum and the continued growth in deposits. For the whole of 2025, GTPS total revenues eased marginally by 1.2% versus 2024. Moving now to Slide 23 for the overall view of GBIS pillar. You can see that GBIS recorded record revenues this year at EUR 10.4 billion, growing by 2.6% versus 2024. That combined the 1% growth in Global Markets and Investor Services with a 5% growth in Financing & Advisory. Moreover, we managed to grow our revenue base while maintaining our strict cost discipline showed by reduction in operating expenses by minus 1% versus 2024. The results just widened and the cost of -- cost-to-income ratio improved 2.3 percentage points from 64.4% in '24 to 62.1% in '25. At the same time, cost of risk remained moderate at 18 basis points in '25. So all in all, GBIS posted a net income of EUR 2.9 billion in '25, up by 3.7% versus '24, which translates into a high ROE of 16.7% under Basel IV. Let's now focus on International Retail Banking in Slide 24. Overall, revenues improved by 2.7% versus Q4 '24 at constant perimeter and exchange rates. Europe posted a solid commercial momentum in both countries with an 8% increase in loans outstanding and 7% in deposits versus Q4 '24 at constant perimeter and exchange rates. The revenues were slightly down 1% at constant perimeter and exchange rates with lower fees in the Czech Republic compared to an exceptionally high Q4 '24 level. Situation is different in Africa. Outstanding loans and deposits were broadly stable versus Q4 '24 at constant perimeter and exchange rates, while revenues increased strongly by 9% in the same period, driven by strong fee income growth. On Mobility and Financial Services in Slide 25, the revenues increased by 11.7% in Q4. At constant perimeter, this is excluding staff. Ayvens revenues grew by 15% versus Q4 '24 on a reported basis, while when adjusted for depreciation and nonrecurring items, they fall by 8% -- this evolution reflects the continued normalization of used car sales results as anticipated. In Q4 '25, the results per unit sold was EUR 702 compared to EUR 1,267 in Q4 '24. On the other hand, the margin increases to 567 basis points in Q4 '25 or 26 basis points higher than in Q4 '24. This highlights the continued ramp-up in synergies and the strategic focus on profitability and asset risk. In 2025, Ayvens successfully reached all its financial targets, delivering total synergies by EUR 360 million, while the average UCS results for the full year '25 stand at EUR 1,075 per unit. This is at the high end of the EUR 700 to EUR 1,100 guidance. And the cost-to-income ratio was finally 56.1%, better than the guidance range of 57% to 59%. Regarding Consumer Finance, the business delivered a solid revenue growth of 5.9%, thanks to better margins. In Slide 26, focusing on the whole MIBS pillar, you can see that revenues increased by 6.1% in '25, excluding disposals and FX impacts, notably driven by Ayvens. Costs in '25 fell by 3.3% versus '24, excluding also disposals and FX impacts. The strong positive jaws evolution drove a substantial improvement in the cost-to-income ratio from 59.6% in '24 to 54.2% in '25, highlighting the strict cost discipline across the pillar despite the high inflation in certain geographies and the additional banking tax in Romania. Cost of risk improved from 42 basis points in '24 to 33 basis points in '25. And all this led to a net income of EUR 1.5 billion in '25, increasing by 28% after disposals and FX adjustments. This translates into a robust ROE of 13.9% in '25, up versus an 11% in 2024. To conclude with the quarterly results, let's move on to Slide 27 with the Corporate Center. In 2025, revenues increased by more than EUR 160 million, thanks to continued efficient liquidity management and improving funding conditions. Operating expenses in '25 include EUR 100 million related to the global employee share ownership program recorded in Q2 this year, which compared to only EUR 3 million in '24. In addition, the accounting impact for the various asset disposals closed this year, mostly SG Equipment Finance, Private Banking in Switzerland and the U.K. generated a positive impact accounted in net profits or losses from other assets of around EUR 300 million. On a quarterly basis, revenues increased by more than EUR 150 million for the same reasons I just mentioned for the full year, while costs are up by around EUR 50 million compared to a very low base in Q4 '24 and more in line with the quarterly historical average. I now give back the floor to Slawomir. Slawomir Krupa: Thank you, Leo. 2025 has been a year of accomplishments for the group in ESG as well. We are maintaining our pace and continuing to deliver on the commitments that we have set both in the decarbonization of portfolios and in the opportunities we see to support our clients with sustainable finance. Emerging leaders of the energy transition see us as a partner of choice. We are now deploying the EUR 1 billion investment envelope established at the CMD to support innovation in this sector. We have joined forces with partners like the EIB or the IFC to help design the best solutions to address the challenges of the environmental transition. Our Scientific Advisory Council helps us stay ahead in this world of rapid change. All these efforts have been recognized by external stakeholders. They have been upgraded to AAA by MSCI, making us 1 of only 2 major European banks to have received the star ESG rating. In conclusion, 2025 was a defining year for us. strong improvement in our performance, we still have a lot more work to do to realize our ambitions. Our objectives are clear and our progress is consistent, and we remain focused on delivering on the upgraded 2026 targets, and we will give you more details on the next phase of our plan during our CMD on September 21. Thank you very much, and let's now start the Q&A [Operator Instructions]. Operator: [Operator Instructions] The first question comes from Flora Bocahut of Barclays. Flora Benhakoun Bocahut: Yes. The first question I wanted to ask you is specifically on BoursoBank Bank because I think you said in the presentation that this is your third year in a row of being profitable, if I got it right Bourso. Could you give us a number because you give us the net profit target for next year -- I mean, this year, '26 of EUR 300 million, but so we have an idea of how big a swing this could be for the profit in French retail and at group level. And the next question is a broader question. I don't want to preempt, obviously, the September CMD, but I can't ignore either that you're not running at 1x the tangible book and you have this ROTE that is upgraded for this year, but still at 10% plus. So we need to start to have a better understanding on where it could go into the next 2 to 3 years. So can you maybe -- anything you can tell us there? What you think is plausible over the next 2 to 3 years? What can get you there would be helpful. Slawomir Krupa: Thank you. On BoursoBank, the short answer is no. We're not providing this number, but I'm, of course, going to try and give you a little bit of color. We have said minus EUR 100 million at the CMD, minus EUR 150 million of GOI to support the growth ambition. It has actually been positive. And -- but think about it as with 1.9 million additional new clients this year, you can see or feel that it can't be a big number because the level of our investment in client acquisition was very high, 1.9 million is, if not the best ever in terms of growth, close to it, right? So basically, it's been positive. So huge improvement over the minus EUR 150 million GOI that was initially our thinking. But obviously, at the annual level, not something that is very significant at this point. So the EUR 300 million improvement in terms of net income is the important number here, and it's a very strong commitment that we have for 2026. In terms of the CMD, so as mentioned in the presentation or in the past, we have basically close to double the our reported ROE, ROE performance if we compare the current performance versus the average of 2018 to 2022, for instance. So first spoiler alert, we're not going to double in the next phase of the plan. So that's one thing. But equally, you should take comfort in what we've done so far and in the way we try to speak about ourselves. So when we say that we do firmly intend to close progressively yet decisively the gap with our most comparable peers, you should build your reasoning around that, right? And we are committed in terms of the means to continue, and I know it's clear in the numbers to continue reducing our cost base regularly through deep transformational change in the way we operate the business in efficiency, right, in terms of sustainable cost savings because they are based on seeking out efficiency gains first that result in cost reductions, while growing and remember, growing not like in the phase we're in right now or finishing right now, meaning with a lot of fixing to do from a capital perspective, a lot of constraints, self-imposed constraints on, for instance, organic growth, right? These things because of our capital position right now are behind us. And so we will be able in a very controlled way, very mindful of risk management strategy and commitments from this perspective, but we will have means to sustain healthy levels of organic capital allocation to the most profitable business, right? So the combination of all this, an absolute commitment in terms of cost and efficiency with an ability to support and sustain basically higher level of profitable growth will be the main ingredients of the next plan. Operator: The next question is from Tarik El Mejjad of Bank of America. Tarik El Mejjad: A couple of questions on my side. First, on the -- on costs, just taken on the previous question. I want to go all the way to the plan, which I understand that cost will be a pillar -- cornerstone of your strategy. But looking at '27, I mean, you said '26 cost will be down, but there's still some effect of 3% effect of disposals. '27 will be a cleaner year from that aspect of scope effect. Should we still expect cost to go down in '27 versus '26? I mean you've talked in your introductory remarks about continuing trend and relentless effort to pursue that. So can you give an indication on '27? And on capital return, I mean, you took a decision to do it once a year in -- your competitor yesterday brought up FLTB as a kind of still a question mark, similar to what you've been doing last year, actually same time. Are you also factoring in into your buffer as potentially still a possibility that it will be a headwind? If not, doing the math as usual, you will be at 13.6 7% in Q2, keeping a small buffer, there is still a EUR 2 billion headroom of buyback. I mean you've asked for EUR 1.5 billion for the full year ordinary buyback. Is EUR 2 billion not too much to ask ECB in one go? I'll leave it there. Slawomir Krupa: All right. So first of all, thank you, Tarik. First of all, I have to present the cost number for '26 is a pretty clean one. because actually, it is in reported, obviously, as everything we do, right? And everything is on a reported basis. And we will not have major differences because most of the disposals were closed early last year. And so the 3% cost reduction in 2026 is actually a pretty clean number and doesn't benefit substantially from perimeter changes. So that's one. Second, on 2027, well, let me put it this way, right? It obviously depends also on the growth and the other opportunities that we will have. But certainly, what you should take away from these conversations is that we are committed to operating leverage, right? So imagine a 2027, which is very buoyant in terms of growth. Obviously, maybe the cost base doesn't go down in absolute terms. But definitely, we are deeply committed, should we experience higher levels of growth to a significant value creation through operating leverage. Now if everything continues as it was in the last few years, yes, further cost reductions are likely. It remains the bedrock of the improvement that we will continue to execute on in terms of transforming the group. As far as capital distribution is concerned, first, you should think about this decision, right, to discuss this at Q2 as the reflection of the fact that -- and I want to say this very clearly, this is a strategic decision for us, right? Last year, we had to make it a couple of times because we were getting out of a phase, which was, as you know, completely different, one of saving capital, one of restricting distribution, et cetera, et cetera. And because of all the progress we had made, we were able to shift quite rapidly from one, let's say, regime to a different one. But it is always a strategic decision, like I said in the past, between organic growth, return to shareholders or inorganic growth opportunities. And so from this perspective, we believe that this, let's say, once a year communication on this topic, the idea that this is a strategic decision. It's not an accounting decision that we make during closing. Oh, we have this excess capital, let's just dispose of it immediately right now. I think the pace for strategic decisions is the one we're setting here. So it's not about some logistics in terms of approval. At the end of the day, obviously, we have a very deep permanent dialogue with the supervisors who have insight into long-term capital projections and understand our trajectory at a very deep level. So it's not about logistics of approval. It's really about this idea that we have, and frankly, from a logistics perspective, we haven't even completely finished the share buyback from November. We're having an ordinary one coming our way right now. The dividend payment, et cetera, the decision -- strategic decision on exceptional distribution in Q2 and so on and so forth. So that's how you should think about this. Operator: The next question is from Giulia Miotto of Morgan Stanley. Giulia Miotto: I have 2. If I look at your target for '26, so first of all, taking a step back, you beat '25 where you had already upgraded the target. And so '26 doesn't seem particularly difficult to beat, especially on the cost side. So can you give us some color on how comfortable are you with these targets? Any initiatives, especially on the cost side that gives us conviction that you can do minus 3% or even more? And then secondly, F&A was quite high in the quarter. And you talked about financing activities led by infrastructure, transportation and fund financing. So is there -- when we forecast looking forward, is there any seasonality we should keep in mind? Was this an exceptional catch-up booking of some deals you had in the pipeline? Or yes, is it basically your growth strategy in this business coming through, and we should expect more of the same going forward? Slawomir Krupa: Thank you. Thank you very much. Listen, on the -- whether the minus 3% target is easy or difficult, Well, I'll leave that, obviously, with everybody on the call to make their own mind, but I'm going to still share my view. I mean, we're talking about 3% absolute decrease on a reported basis, and as I said earlier, without major perimeter changes. So from where we are, I mean, it's a fairly ambitious target. Let me put it this way. Now you do have our track record. So do we have the habit of giving you stretched targets that we're not going to meet? No, right? On the base case scenario, we do definitely intend to meet this target. If we can do better, we will. But again, right, I think it is an ambitious target from where we sit. We are doing everything we can to make sure that we will deliver on this, let's say, in normal circumstances. But on the cost side, I mean, normal circumstances are the rule. How -- it's everything we've already been doing. But as we go, right, so be it technology, efficiency of the technology spend, be it organizational changes that allow us to operate the same process better actually in the interest of everybody, both internally and externally in the interest of clients, getting a smoother client experience, working on efficiency and deepening the work on efficiency across the entire group through new programs, new ideas, et cetera, as you may have seen in the press recently. So it's really the continuation and the deepening of the work group-wide that we have been doing on efficiency throughout the group, right? And so this will continue to deliver not only actually in 2026, but it's going to be a process which we intend to make basically permanent to make sure that the company operates as close as possible to its highest potential in terms of efficiency, right? So that's the spirit here. And then some technicalities, you will have lower CTA expenses because we -- for the program that we had during the CMD, we've spent most of the CTA already. So there's a marginal spend to come in 2026. So that also supports the trajectory. But fundamentally, it's all the work we're doing. And as you may have seen in the latest adjustment project of adjustment that we announced and filed with the unions in France, we are also very careful to optimize execution, right? And for instance, this leg of our efficiency plan comes with no CTA, right? It's important to also recognize that pattern, which is -- not only are we working hard, but also trying to make sure that overall, right, overall, the expense stays under control and is optimized even in terms of the CTA itself. For the F&A question, you should think about this as -- no, there's no particular accumulation of closings or things like that. It's a genuine pretty wide momentum within this business, which, as you know, of course, has been historically a growth engine of GBIS and with a very good risk return profile. And it will continue as such with a very controlled approach in terms of risk still. But yes, it is an investment spot, a natural and very efficient investment spot for organic RWA growth, and it yields substantial marginal rates of return. Operator: The next question is from Delphine Lee of JPMorgan. Delphine Lee: So my first one is on your comments around '26, the 2% increase in RWAs, which is clearly a little bit of an acceleration. It looks like, I mean, volumes are still somewhat very moderate in France and feed volumes at Ayvens also are sort of still going down. So just wondering kind of like if you could give us a bit of color where that's coming from and where do you intend to step up a little bit growth? And my second question is on Global Markets. I was just trying to understand, if you take a step back, why compared to not just U.S. peers, but like some of the French peers, the trends have been a little bit weaker this year. Is that sort of less risk taking from your side? Or any color on how we should think about the trends going forward as well? Slawomir Krupa: Thank you. So on the 2% RWA increase on an organic basis allocated to businesses. So yes, it is an acceleration. Like I said earlier, one of the means that we have now is this one to support our growth in a very reasonable way. So I agree with you. The loan growth in France, especially on the retail side, should remain positive, but not very dynamic in 2026. In terms of the Ayvens opportunities, I would point to a slightly different statement, which is what we have done this past 2.5 years was to focus on a very significant merger, which we discussed in the past, but also on making sure that the business adjusts itself to both some rate environment and margin compression trends and working a lot on the margin on striking the right contracts on making sure that we do the right thing from this perspective, that we protect the value basically from a margin perspective, and you've seen the results of that. And the second piece is obviously risk management in a world which in these businesses was potentially challenged by some of the shifts in residual value or in all the electric vehicles topics, right? And so we've been very conservative from this perspective, precisely to come to, let's say, the new phase, both done with the restructuring, done with the integration, which will more or less be achieved during 2026, but also at the same time, have a very healthy base to resume growth, right? So while it shouldn't be an extremely high pace, let's say, in 2026, Ayvens is clearly well positioned today to be also an investment spot from this perspective. Now -- moving on. Clearly, International Retail has the capacity to deploy capital in a good way, in an efficient and profitable way. And finally, GBIS, starting with F&A, financing and advisory, but also within the cash management business as well can do better and will be one of the preferred spots for investments and again, providing high marginal returns. So that's the story on the organic growth. And your second question on Global Markets. It's really -- I mean, if you take a step back, it's a mix of -- if you look at the entire year, we're talking about the very good performance, which is the best revenue generation in 16 years, one. Two, and consolidating in 2025, which was a high point. And we're now close to EUR 6 billion, as you have seen. So that's one. Two, we've discussed this in the past. There is a perimeter, a business mix difference between us and a lot of our peers in the following way, right? One, we have exited commodities a way back and commodities were a driver of performance this quarter. Two, fixed income in our house is weighted towards rates and towards Europe more than the other jurisdictions. Three, we have prime brokerage businesses, which are smaller or substantially smaller than some of our peers. And so whenever the market dynamic is one which is particularly favorable to this business, you will always see us basically slightly different from this perspective. We are investing there. We are progressing, but in a very controlled way. But today, if you take a snapshot, it's a much smaller business at our shop than some of the others. And finally, our share in the business mix in terms of the U.S. business is also smaller, obviously, than our American peers, but also our competitors more actively, but also when you compare to some of our European competitors. And so when you combine all of this, you have most of the difference of Q4. But again, within a year, which has been good. I'm not going to go through some technical aspects. There is still some of that day 1. I mean, we were actually very dynamic in producing some of the solutions that carry negative day 1 accounting as they are originated when the origination is more dynamic stronger, right? But this is like a couple of percentage points, let's say, of difference since we're at minus 8% and the others are basically plus 5% in Europe. The rest of the gap is almost entirely explained by business and geographical mix differences. Two last comments on this topic. one, our U.S. business has grown in dollars. Remember also that we're reporting in euros, has grown 39%, which is actually well above the market average even in the U.S. So just showing you how we operate there successfully, but it's a 20%, 25% share of our Global Markets business. So that's one. And the last comment is going to your risk consideration and capital consumption consideration. Yes, in the last 5 years, we have dramatically turned the way of doing this business. And while reducing by a 20%, 30% our market risk RWA. We discussed that in the past, even much more so stress test consumption. We have been able to grow this business at a controlled pace with much lower capital allocation and a high ROE of 20%. I gave it all so that you have all the facts. Operator: The next question is from Jeremy Sigee of BNP Paribas Exane. Jeremy Sigee: My first question is just continuing on the Global Markets discussion, if we could. The guidance is unchanged at a level that's lower than both the 2025 run rate and the consensus. Is that just maintaining the existing target? It's conservative. It doesn't mean much you could well be better again? Or is there any kind of directional significance in that number that you're maintaining? And then a different question on Ayvens, the UCS results are normalizing down. And both from your comments and from their comments this morning, the indication is it could continue to go lower in 2026. And I just wondered, is that taken into account in your own guidance, including the 2% revenue growth? Slawomir Krupa: Thank you. So first topic on the markets, Global Markets target. So yes, I mean, we don't want to touch this at this point. So we simply adjusted for the perimeter change, if you will. And this is how we're ending up with that 5.7% top of the range. We're also saying that in our base case, we should be above the top of the range in 2026. So that's what we're saying, right? And the indication that you should, in my view, take from these statements is that we recognize and facts support this recognition that this is a target which -- target range, which has been conservative in a world which was, again, to say the least unusual if you compare the last few years versus, let's say, the previous decade. And so today, we think that, again, while maintaining this range, adjusting it for the perimeter change, we're also giving you the color that we believe that in a base case scenario, we should be above the top of the range in 2026. In terms of the UCS, it's exactly what you said, right? It is decreasing substantially, and we do forecast at this point that it will continue. And yes, this is taken into account in the projections, including in the growth projections and every other aggregate. Operator: The next question comes from Chris Hallam of Goldman Sachs. Chris Hallam: So I guess a couple of questions for me. A little bit of a follow-up on the markets. I think Slawomir great explanation as to how the footprint differs. I just wanted to take it forward a level. Do you feel any need to further address that sort of footprint imbalance versus the industry more broadly aside from what you've already done in Bernstein, i.e., you want to grow faster in the U.S., put more balance sheet to work, expand the product offering in FICC? Or should we just sort of assume that you're comfortable with the footprint and the plans you already have in place? And the reality is some quarters that will be a bit of a headwind versus peers and other quarters, that will be a bit of a tailwind. So that's the first question. And then second, it seems as though there is a bit of a sort of growing tech spend arms race across the industry, and you mentioned your real focus on transformational change in the way that you operate and how you become more efficient by design, I guess. With that in mind, there were some press headlines recently suggesting you've decided to focus your in-house AI infrastructure around Copilot. So just can you help us understand what the relative financial and nonfinancial advantages are of pivoting to a completely off-the-shelf solution versus the alternatives? Slawomir Krupa: So on -- the first question, on markets, I think a few -- it's a very important question. Thank you. So one, yes, unreserved, yes, we are continuing to work on the footprint. And you have some anecdotal at least, if not more, evidence of that through some of the hires we've made in fixed income, for instance, through some of the investments we're making through what I said earlier about continuing investments in the -- our prime brokerage business through also historically a real push to grow our business in the Americas and obviously, in the Americas, in particular and mostly in the U.S. So yes, we are -- and Bernstein is the other example that you gave, of course. And so yes, we are continuing to work on all these fronts to balance the business more from a mix perspective. and in order, yes, to make it both bigger over time, but also more -- even more diversified basically. But so far, it's exactly what you described. And actually, if you look at the patterns over the last few quarters and years, it were -- these were sometimes headwinds like in Q4 2025, but sometimes significant tailwinds when we were in some of the years of more significant trends and moves on the rate markets and in particular, in Europe. So it's exactly what you described, but we are working on making it different. Just one, for instance, example is the U.S. business is now double the size it was 10 years ago. in a very diversified, in a very sound way, which points to my last comment on the topic, right? Nothing will be done in terms of investments and execution on these investments in a hasty or oversized way. I'm explaining myself. In the past, we've tried that, right? We've tried that let's have this very big program to increase very substantially the fix size, and we're going to be competing with everybody across all the sub-asset classes, et cetera, never worked, right? So what we're doing right now is very controlled, slow progress, both to make sure, right, that we don't destroy profitability as we invest -- that's one. But two, that the investments are successful, right? And I don't believe in big moves, except when we had the opportunity to buy Bernstein, we did it. But I don't believe in, let's say, huge accelerations, revolutionary accelerations in organic investments in the market. That's not working usually. And when we're trying to do something right now, we're trying to make sure that this is going to work. That's for the market. In terms of the AI question and internal off the shelf, et cetera. I mean it's the idea more accurately that you need to use the best tools available at the moment in time where this whole AI opportunity and potentially threat, et cetera, is still partially unclear, right? Today, what works is effective summary and translation of text, effective extraction of data from large pools of more or less structured data and where it really works is indeed in IT services and coding, et cetera. These are the 3 areas where this new technology is actually able to perform at scale at a high level of reliability. And I remind you that in our business, the level of expectations from supervisors on, for instance, model validation is extremely high, right? So building on that, clearly, we prefer to use something which has a proven capacity to enhance the adoption, the understanding and the work on these topics in the somewhat still infancy stage of this technology. And from this perspective, we felt that it was much more efficient to use, again, an outside proven reliable tool at this point in time. Now as you may know, if you're interested in topic, you may have read, we have also created a specific structure dedicated to, let's say, the research on these topics and to the selection of the biggest at-scale opportunities in terms of efficiency or cost reductions, et cetera, to make sure that all this, let's say, bottom-up interest and activity is channeled towards value creation, right? And that we have a level of control on the underlying costs that obviously this whole revolution potentially carries with itself. So it's a combination of we have our own internal approach to look at the use cases and at the opportunities, et cetera. But yes, trying to use the best of the breed in terms of technology. Operator: The next question is from Andrew Coombs of Citi. Andrew Coombs: If I could have a follow-up on Global Markets. You mentioned in answer to Jeremy's question that the EUR 5.1 billion to EUR 5.7 billion range is purely because you left it unchanged, but your base case is that you expect to be above that range. With that in mind, can you just confirm the sub-65% cost/income ratio target for Global Banking and Investor Solutions, is that predicated on the EUR 5.1 billion to EUR 5.7 billion? Or is it predicated on your base case that you're going to be above that range? That's the first question. Second question, France, net interest income, another big improvement in the net interest margin Q-on-Q. Perhaps you can just elaborate on if there was anything one-off in that NII result? And also how you expect the net interest margin to trend going forward into 2026? Slawomir Krupa: So on your first question, so again, maybe a precision. The range is what it is. It's proven to be on the conservative end in the last few years, again, in markets which were in the end, particularly conducive for this business overall for the industry and for us. So the idea that today, we're saying that we, in a base case scenario, expect to be above that range, it's a little more than just a target discussion. It's a sense of what we think will be the market conditions and our ability to navigate them in 2026. So it's an indication of where we think we will be in 2026. Now in terms of the relationship between this target and the cost-to-income target of GBIS, it is predicated on -- in the end, to keep it simple, on our budget, right? So on what we see as being our operational target and on the basis of which we communicate the annual targets for the group. So that's the underlying process, right? And so you should take away that it's based on this range, but it's not based on the low end of that range. It's based on the budget. And since I also gave you a sense of what the vision we have for the year, I think you have all the pieces to make your judgment. So that's that. In terms of the NII in Q4, you have a few things. There's no one-off. There's no one-off. It's the full effect of the Livret A repricing down, which happened in August. So you have that. You have a good momentum in deposit gathering and the deposits are up 1.5% versus Q3 '25 in the French retail pillar. And you have the continued process of repricing of the back book, right? And so the combination of all these things and in a loan growth dynamic, which was fairly stable, but with a slight price effect, which was positive because you have basically commercial loans marginally down, individual loans marginally up, overall stable, but from a pricing perspective, a slight tailwind. So you have the pieces that explain the Q4 dynamic, which is indeed positive. Going forward, what we expect is basically a continuation of moderate growth trend because now there is no more perimeter effect, right? Because in 2025, we still have a perimeter effect linked to private banking, which is within that pillar. We no longer will have that in 2026. So you have no more hedges, of course, no more perimeter impact and something which would normally be a continuation of this trend, which is moderate tailwinds supporting moderate growth, which will also obviously depend on the macro dynamics in France, which at this point in time, we forecast to be in terms of loan growth, typically a slight increase during the year. Operator: The next question, sir, is from Joseph Dickerson of Jefferies. Joseph Dickerson: One question on the assumptions behind the greater than 10% return on tangible equity. If I look at the range that you have for markets revenues, if we assume the 10% return on tangible is the floor, does that assume, for instance, that the floor on market revenues is at the bottom end of your range? So in other words, if you were to print greater than the EUR 5.7 billion, we could assume a return on tangible above that. So I'm just trying to calibrate the bottom end of your ROE range, which, let's say, is 10% versus the bottom end of your markets range if the 2 can be compared. So that's question number one. And then question number two, is on how you define your balanced payout between DPS and share buyback? Because if we look this year, it was 45-55 in favor of buybacks. And then I think last year it was 50-50. Could it be 40 divi and 60 buyback next year? I guess, how do we think about calibrating that going forward? Slawomir Krupa: Thank you. Thank you very much. On the first question, so once again, our targets overall, the targets that we disclose here and commit to for the year are based on what we target operationally and the process that underpins this is obviously the process of budgeting. So the 10% ROTE target, above 10% ROTE target is not based on the bottom range of the market target. It is based on the target that we have for the year, and I commented upon that earlier saying that right now, we believe that it's going to be at the slightly above top of the range. So that's how you should think about this, right? Now slightly above top of the range, it's still less than what we've done this year. So just to make sure that this is clear, if we were to have a year better than 2025, it would support, obviously, mechanically, the performance from a group ROTE perspective. But that's how you should think about the targets are our best view of what we're going to achieve next year. So that's for the first question. And the second one, sorry, I'm blanking out. Okay, the distribution. So 55 -- 45. So first, the balanced mix between dividend and share buybacks was -- we were clear in the past about this was always something which meant that we had a leeway between basically 40 and 60 indeed to fine-tune the decision when it is made by the Board at the end of the year. So indeed, right, balanced means it's between 60-40, 50-50 as a base case scenario, but between 60-40 both ways, if you will. This year, the calibration, I mean, was simply -- you have a few inputs into the decision. One is the growth rate of the dividend. Two is the buyback opportunity in the context of a certain price to book. And the choice was made that with a 48% increase in dividend and the share where they traded, this seemed within the policy that I just referred to, the right choice. Operator: The next question, sir, is from Pierre Chedeville of CIC Market Solutions. Pierre Chedeville: Yes. One question regarding BoursoBank. I was wondering if you think that maybe you have to revise your future plan regarding investments and particularly marketing investment, considering the strong competition, particularly from one of your peers, which is targeting 10 million clients, I think, in 2027. And I was wondering if at the end of the day, your target of EUR 300 million in 2026 will remain at this level for the coming years because of this investment to counterattack this type of competition? My second question regards protection and P&C revenues, which are quite stagnant this year compared to last year. While when we look at our competitors, they are rather in good shape on this area. So I was wondering why it's not so good for you? And are you trying to hide, I don't know, but something like a bad combined ratio, for instance, can you give us a few numbers regarding undiscounted combined ratio in these 2 businesses, Protection and P&C? Slawomir Krupa: Thank you. So on the first question of basically the decision, the arbitration between growth and profitability. From a strategic standpoint, this is a growth asset. I was always very clear about this. This is why we took the decision at a time where we had lots of challenges, but we still took the decision in 2023 to continue investing substantial amount of money, energy and support to grow this asset. Now the growth at BoursoBank is not only about the number of clients, right? And we've been also very consistent providing some color about the assets under administration, which have simply nothing to do with most of our peers and certainly the one that you have in mind. And we have spend a lot of time and efforts also deepening the product offer, making sure that as a full-fledged bank, it can support customers in every single area of their banking needs and be able to do it at the highest level of client satisfaction and for the year in a row, BoursoBank remains the leading bank in France in terms of client feedback. And in terms of -- which also is reflected in a very low churn, which, again, despite the very dynamic acquisition of clients almost doubling in the last few years, you have a churn rate, which is substantially below 4%. So the point I'm making here is what we care about is that this bank right? This full-fledged bank with a complete product offer and a very high culture in terms of client satisfaction continues to deliver the service. The number of customers is a headline number, which in the end doesn't mean anything, right? Because what you really want to do is to provide the right service and generate the long-term profitability that you can extract from that particular business. So we're focused on this. Now is there going to be a slowdown in expenses in 2026, in particular, yes. But that doesn't mean that there's going to be a mechanical effect, one-for-one mechanical effect in terms of growth because obviously, we're not also static in the way we think about client acquisition and in the way we think about managing, let's say, this cycle of growth, which is going to continue way past 2026. I hope that gives you some color. On the protection side, there's -- let's say, I mean, in the end, you have choices to make, right? There are a lot of products in a bank that is -- that are offered to the customers. And you're focusing on this particular one, which has been basically stable. The premium are basically stable year-on-year. But you could point to the other piece of the insurance business, which is the investment piece, life insurance, where for a second year in a row, our pace of asset gathering is twice our market share, right? And we're leading the market from this perspective in a very substantial and meaningful way. So this is how you should look at this, right, that we make choices, including from a commercial standpoint. across all the businesses in French Retail in particular, has nothing to do with combined ratio, which is more than comfortable. Operator: The next question is from Matthew Clark of Mediobanca. Jonathan Matthew Clark: A couple of questions, please. Firstly, on the fee revenues in the French retail banking business. I mean, I think you've just described that the acquisition cost part of that is going to be coming down next year. But if we set that aside, does the 2% organic growth that you reported this year, is that a kind of good run rate for you? Or are there tailwinds or headwinds to that, again, if we set aside the BoursoBank acquisition cost aspect? And then other question is on the transaction banking business. in financing and advisory. Is the lower rate impact now digested there? And just your thoughts in terms of the outlook here. You had a very strong period of growth, but seems to be slipping a bit more recently. Slawomir Krupa: Thank you. So on your first question, I mean, you got it right. I think the base case scenario is the stability around the numbers that you have in mind. That's the base case scenario for the fee income with a substantial -- if you dig into the details, a substantial increase, as you would imagine, in terms of the financial fees, more than compensating a slight decrease in service fees, completely aligned with what I said earlier. And to your point, setting BoursoBank aside, the underlying trend should be this one. In terms of the transaction banking, yes, most, if not all of the effect of the rates obviously reducing and decreasing and thus impacting the NII generated in that business. So that trend is mostly behind us for 2026. And remember, on the flip side, it's a business which we have been investing in for the last now, I would say, 8 years. And we absolutely are determined to continue to invest in this business, both commercially and in terms of the technology that is used there. But like everything else we do in a controlled way and making sure that there's both an ability to self-finance, so to speak, this growth, but also that the returns remain meaningful. But from a rate perspective, the headwind that it was in particular, in '25 is mostly behind us. Operator: The next question is from Anke Reingen of RBC. Anke Reingen: The first is just on the core Tier 1 ratio at year-end 2026. Can you just talk about your thinking why is now specified at above 13% versus the 13% before? And then when you come to the second quarter and assess your potential extra distribution, what factors would you take into account? And should we look at the base last year, the EUR 1 billion or EUR 2 billion as a base basically? And then maybe just lastly, a tricky one, I guess you have the Capital Markets Day only in September, but is capital distribution another area that could be a topic? Slawomir Krupa: So if I forget something, let's -- please remind me, right? So first was CET1, so the fact that we added a little sign. So don't read too much into this, right? It's just like think about above 13% as 13.00001 is above 13%, right? Just to be clear, I mean, it was just a way of confirming that we do not intend in normal circumstances as a general rule to ever go below 13%. But it doesn't -- absolutely doesn't mean that there's any kind of accumulation above 13% as a matter of strategic intent. Second question is -- I'll take the last one first because I remember it. So would distribution and capital policy be a topic for the CMD? Yes, of course, right? There should not be a major surprises from an intent, right, from a general strategic approach, which is above 13%, we consider we have excess capital that we intend to use either in organic growth or in exceptional distribution or in inorganic growth. But of course, you will get much more color on these topics and a perspective that will cover the plan the plan -- the entire plan, right? So I think there's going to be a lot of content. But again, with the strategic thinking framework, which will remain unchanged. In terms of the one or EUR 2 billion in Q2, basically, well, we'll discuss that in Q2, right? Let me put it this way. Anke Reingen: But what factors will you be looking at basically as the capital ratio or... Slawomir Krupa: No, the factors is always the same. Okay. Thank you. No, listen, it's always the same story, right? It's always the same answer. It's -- I want to come back to this and make sure that this part is really heard. It's a strategic decision, right? This is not some everyday housekeeping, right? I have something left on my table, so I'm going to dispose of it, right, the fastest way I can. It's a strategic decision about the strategic resource for the company, right? And so the factors, very simple is the level of capital, the performance, the current performance and the strategic opportunities between organic growth, distribution to shareholders as an exceptional distribution or inorganic growth. Operator: The next question is from Alberto Artoni of Intesa Sanpaolo. Alberto Artoni: I have 2, please. The first one is on the tax rate. What do you expect for the tax rate for next year, also taking into account the changes in French law? And secondly, on the cost of risk on the French retail, what is the outlook there, please? Slawomir Krupa: Thank you. On the tax rate, I'll leave that with Leo. He's going to give you some color. Just one comment on the French context, which is that, as we've said in the past, because of the international nature of our business and the way it is operating mostly locally outside of France and the structure of the head office in France, et cetera, we are not experimenting a massive impact of some of the tax decisions in France. The impacts are rather marginal. But on the details, I'll let Leo answer in the second. In terms of the NCR for the retail in France, -- what you have is something which is fairly stable, as you see in the numbers, and that has a small increase on the SME side, very consistent, very granular, nothing specific and consistent with the increase in bankruptcies that we've seen throughout the year for the SMEs, a trend which is, by the way, decelerating recently, right? So right now, our vision for 2026 is fairly constructive. You have growth, albeit sluggish and small, but still you have growth and you have resilience in the system. So very consistent with the market trends at a granular level, nothing specific, neither from a specific fire perspective or specific sector to report at this point. Leo, on the tax rate, some more color. Leopoldo Alvear: Sure. So basically, in 2025, we've had a tax rate, which has been lower than the one that we had in 2024. That's basically been driven by the fact that we've had quite a few capital gains through the P&L, and those have relatively lower tax rate. So they had an impact on the mix. Now going forward for 2026, I think we're going to have a tax rate which is going to be higher than 2024 because of the reasons mentioned. So this year, we're not going to have so many capital gains coming through the P&L, and therefore, we will not have that mix impact, if you wish. So it will be higher than 2025, most likely will be perhaps lower than the one that we had in 2024. because the mix of our revenues from outside of France are still quite high. So we don't expect any big impact coming from the tax -- the potential tax changes within France for the overall tax rate. So basically, higher than 2025, but lower than 2024. Operator: The final question, sir, is from Sharath Kumar of Deutsche Bank. Sharath Ramanathan: I have 2. So I hear your -- hope I'm audible. So I hear your previous criteria for inorganic growth, but hypothetically speaking, should the relative valuation between SocGen and Ayvens shares turn more favorable for you, would you still be hesitant to buying out Ayvens minorities? In other words, is the residual value risk considering the fast-evolving automotive market, a constraint in your thought process? That is the first one. And second is a small follow-up on the equities question. Can you provide the revenue mix between the various products, i.e., cash equities, derivatives, prime and also by geography? Slawomir Krupa: All right. So thank you. On the inorganic growth question and specifically pointing to the, let's say, theoretical opportunity of buying minority stakes in Ayvens o increase our ownership there. So across any topic of using excess capital, first cornerstone statement, it has to make sense from a financial perspective, it's a decision that we will always take rationally. Is the opportunity good for the company and for the shareholders. So if we're talking about growth, whether organic or inorganic, the question is going to also be -- always be what is the expected marginal return and what is the risk attached to this investment, be it again organic or inorganic. So in that framework, it's clear that especially as at least from a theoretical standpoint, the obvious return of SBB, hopefully, will continue to decrease. You will have opportunities theoretically, like the one that you're referring to in Ayvens that would, in an Excel spreadsheet look potentially more and more attractive for sure. Now the second comment I've made in the past and today, I want to point you to is decisions we intend to make there need to be strategic, right? So today, the thinking is, right, we have control of this great asset, and we can continue to both improve its efficiency, improve its performance and position it for further growth without making from a strategic standpoint, any further investments, right? So I'm not saying never because you never should say never. But today, there is no strategic intent to do this because we believe that between the 0 execution risk share buyback opportunity and organic growth that we are able to do things that are strategically more meaningful for the group and for the shareholders at a level of risk, which we believe is acceptable. So that's how we think about this. In terms of the mix, we do not disclose the overall mix, but I gave you a few ideas in terms of the geographic split, the U.S. overall. So here, I'm not talking about the markets only, but the U.S. overall is roughly 27%, 30%, say, 25% to 30% of the overall GBIS business. In terms of the market, it's more or less the same, 25% to 30% U.S. from a geographical perspective. Then you can imagine a pretty significant weight of Europe and marginal and the marginal -- more marginal representation in Asia, but it's still meaningful, but smaller than the other 2 regions. And in terms of the businesses, what we do disclose is that you have basically a 60-40 more or less split between equities and fixed income. And in fixed income, you need to think about the mix as versus the average market, basically less commodities because there's none. So obviously, less commodities and a credit business, which is smaller and more focused on securitization and private credit than, let's say, on traditional marketable securities credit. So that's the color on fixed income and from a geographical standpoint there, heavy weighting towards Europe and Asia versus the U.S. In terms of the equity, you know that historically, our business has a big focus on the investment solutions, right? It remains true even if as intended and explained 5 years ago when we spoke at the Investor Day for GBIS when I took over, we did grow substantially the flow businesses, both on the equity derivatives side, as well and linear businesses as we call them and as well, notably through the acquisition of Bernstein, the cash equity piece, but we don't disclose further percentages. Thank you. Operator: Mr. Krupa, there are no more questions registered at this time, sir. Slawomir Krupa: Okay. Thank you very much. Thank you, everybody. Thank you for joining us this morning and sharing your valuable time with us. I thank you for your questions, and I wish you a nice day, a nice weekend, and I'll talk to you during the next release for Q1. Thank you very much. Take care. Leopoldo Alvear: Thank you. Bye-bye. Stephane Landon: Ladies and gentlemen, thank you for your participation. You may now disconnect.
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