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Adrian Mulcahy: [Audio Gap] meet the CEO quarterly update with CEO, Coby Hanoch from Weebit Nano. So we're going to step through. I'll get Coby to make some introductory remarks with respect to the quarter, and then we'll work through your questions. We've got a pretty strict time line. So we're going to hopefully, we can conclude it in just around about an hour, but I'll be the timekeeper on this, Coby. So don't be concerned about that. But look, thanks, everybody, for joining us, a really big group that has joined us, Coby. So why don't I throw it to you for some opening remarks on the quarter to get us underway? Jacob Hanoch: Thanks, Adrian. So welcome, everyone. Glad to have everyone here and talk to you again. Yes, we had another good quarter, strong quarter. Obviously, the big highlight was at the end of the quarter with signing TI. I think that was a really important milestone for us. I think you can follow the trend that we went through from SkyWater. We grew an order of magnitude to DB HiTek, another order of magnitude to onsemi and now another order of magnitude to TI, and we're really now dealing with the biggest semiconductor companies. And this is really exciting. The reaction from the world in the semiconductor space and in general, has been remarkable. And I think with TI and onsemi and DB HiTek, people see that this is really catching. This is moving forward. I always said that each deal makes the next one a little easier. So it doesn't make it easy. It makes it easier. We're still pushing forward. We're still not in what I call the tornado, but we're really heading there. And it's really exciting, and we're hitting the ground running with them. We're having a big kickoff meeting next week and really pushing forward this project. So that's very exciting. We had a lot of other good things happened in the last quarter. We finished the qualification of DB HiTek. So now we saw that we meet all of the JEDEC requirements, et cetera. And it's in the hands of DB HiTek now to really take it and do all the final bureaucracies and work on officially announcing to their customers, et cetera. There still are several steps that they want to go through, but it's definitely going in that direction. We already have some product companies that are designing with our ReRAM planning to tape out at DB HiTek. So we're starting to see the light towards that mass production that everyone is waiting for. It's everything always takes so long with these fabs, but it's moving. And we actually got wafers from onsemi, which was kind of record timing. And in a year from when we signed with them, we got the wafers. We have the dies now being tested. We have good initial results with those dies. So that's another important step forward and they are already working obviously as an IDM, they're working on their products and things. And we're very excited about the partnership with onsemi. And I would say the last point, of course, to note is we had another quarter of record cash coming in. I repeat what I said last quarter. This is based on all kinds of milestones and sometimes you just have several milestones hitting together or things like that. So I don't want anyone to have the expectation that every quarter will be a record cash quarter or that this is an indication of the future, but it is very nice to have that. So we are maintaining the guidance of having over $10 million revenue in fiscal year '26. Yes, I guess that's -- I'll let you go to the question part. Adrian Mulcahy: Thanks, Coby. The question have started coming in. So what -- but one that's popped up straight away. I'll just get you to address, which is obviously part of the quarter and a good announcement. So Weebit has licensed, it's ReRAM technology to Texas Instruments. So can you talk us through the deal and the significance of the agreement for Weebit? Jacob Hanoch: So Texas Instruments or as everyone refers to them, TI, they are really one of the top, I would say, 5 IDMs and really a major player in the semiconductor space. I think everyone knows they've been around for ages, and they've managed to maintain their position. TI has over 80,000 products in their price book. Of course, a lot of them are variants of each other, et cetera, but they're a very big player. They're the #1 analog player in the world. And it was a very long process. Actually with TI, it was almost 3 years to close this. So when I was saying even 2 years ago that we're talking to the majority of the big players, I meant it obviously. And you can see just some of these deals really, really took a long time. Weebit insisted on terms that it should get. Obviously, it's very easy to say, "Oh, we want to get this big player on board, and we'll just cave in and give them all kinds of crazy terms just to have them signed," but we're building a company that needs to be a big and strong company moving forward and with strong future revenues and everything. So we are well aware of what we have in our hands and the fact that today, I think the fact that TI, and obviously, they were looking around trying to see if they can get another option, something else that won't be with royalties or all kinds of things like that. So the fact that we ended up closing the deal for me is a great sign that we really -- we have a great technology. They were definitely impressed by it. We really are the only supplier, only, let's call it, serious supplier. There's obviously all kinds of other small things or whatever. But if you look at anything that's really serious, and we're feeling very comfortable, very bullish with this. They wanted to push straight to advanced geometries. They're not allowing me to say which one, but they are starting with an advanced geometry. They obviously have the option, which I'm quite confident they will want to materialize of going to the additional geometries once the first one is working. So we have definitely high expectations of this deal. The relationship is really good. We already have delegations that went to Dallas and sat with their teams. And as I mentioned, next week, there's going to be a big kickoff with a lot of Weebit people going to TI and spending several days getting the project off the ground. So it is a very exciting agreement I was at CES in the beginning of January. And everyone was all over us with this announcement, the bankers, the different institutions. Of course, customers and the press and everyone. So it was very exciting, and I think we're off to a very good start for '26. Adrian Mulcahy: Just one question. Will we -- obviously, somebody is getting pretty enthusiastic. Will we see the same enthusiasm for Texas Instruments as we have from onsemi when it comes to tape-out time frames? Jacob Hanoch: Each company is different and has its own internal bureaucracy and things like that. So I can't really say right now, but I can tell you that the beginning is very exciting. They are excited about the technology. They are very -- now that the agreement is signed, it's really -- you can sense that they are going to be putting a lot into this, and this is going to be moving very nice and very fast. Adrian Mulcahy: Just another one on Texas. You mentioned in the past that a particular customer wanted an architectural agreement. Is Texas Instruments that customer? Jacob Hanoch: So I won't go specifically into these things. There were -- we've been going with many of the customers that we're talking to. We've been going through a lot of different business models. And sometimes they get excited and they say we want to have one type and then they go and they say, no, actually, we checked it. And financially, we prefer another type of agreement. I think also the architectural license -- when we refer to architectural license, there was one of the fabs that just wanted on day 1 to say, "I want access to everything on all geometries. Then there were all kinds of backtracking and so on. At the end of the day, both onsemi and TI, I mean they want to look at this for not just one geometry and that's what's important. I mentioned TI has the option to go to additional geometries, and I'm quite confident once they see the first one that they'll decide to expand to additional geometries. So the terminology and whatever is more of a technicality for me, what counts is really the fact that we're moving forward now, and I do expect to expand in both of these major players to other geometries. Adrian Mulcahy: Turning to AI. Is the new AI offering that's being led by Giddy and just storing weights in ReRAM? Or is it using in-memory or neuromorphic computing? Jacob Hanoch: The near memory compute is actually more of using ReRAM in kind of the traditional sense. So you basically have an embedded ReRAM that replaces the big SRAM that people have. But in essence, you don't really need something very special for it. The place where ReRAM really shines is when you move to in-memory compute and then to neuromorphic. And Giddy is really looking at those kinds of applications and how to really make our ReRAM easily accessible. There's going to be a lot around it. One of the best examples is when you look at how NVIDIA grew. NVIDIA had hardware and GPUs for a long time. I think what's really pushed NVIDIA forward was when it added also the user interface layer, the CUDA. And that really made it so much easier for people to use their technology and really it made the whole AI thing blow. And I think that's what we're looking at. We want to have both the hardware and the in-memory compute requires the ReRAM to be designed in a different way. And there are all kinds of ways to do it, and we need to really research and decide how exactly we want to do it. And then there will be the algorithms, the software layer interface and all of that. So we really want to do something that gives a real solution for customers and not just some basic hardware sales or something like that. I think this is a very fast-growing space in-memory compute has huge applications. When you think about it, and without going too much into technology. But in AI, one of the key activities, the thing that it does almost all the time is what's called multiply accumulated, it multiply matrices basically. So it's not a broad, I want to do anything and you don't need these very complex programming and being able to do a lot of different functions. It's really one main function that you do most of the time. And it turns out that -- and by the way, that function when you do it in a traditional computer, you basically have a processor and you have a memory and the processor keeps reading from the data from the memory and then writing data to the memory, and there's a lot going on. And that's where a lot of time and a lot of power are spent. When you do in-memory compute, you basically don't move the data. It's in the memory and it stays in the memory and it doesn't go anywhere. And that makes the whole computation, orders of magnitude faster and low power consumption. So ReRAM is an ideal solution. I obviously think it's the most ideal solution for this. There are other memories that you can do in-memory compute with but ReRAM has the additional value that it's just very cheap to manufacture. It's much lower cost to manufacture and makes it -- and it's easy. You manufacture it basically on a CMOS line on a standard manufacturing line. So that's the big advantage that we have, and we want to capitalize on it. And Giddy is the best person for it. He has such a background and such a broad understanding of this that I can't think of anyone better than him to lead this activity. Adrian Mulcahy: Next one. Last year, you spoke of possible future fab IDM customers, which may include a household name and an architectural agreement. Looking forward into 2026, are there any other descriptors which may describe future signings? Jacob Hanoch: Well, I think after we signed TI now, you can't really go a lot higher than that. It's kind of you're already, as I said, in the top 5 IDMs, and you're really in a good position. I think TI is very much a household name. I mean onsemi in many parts of the world is also pretty much or close to a household name. TI is definitely a household name. It was a disappointment for me that we didn't manage to close the third deal that we were talking about, onsemi and TI both under the category of between AGM '23 and the end of 20 -- I'm sorry, AGM '24 and the end of '25. We really believed and hoped that we would have a third one. Some of these agreements, again, they just drag. Now with the TI announcement, it did give others a certain push forward, and we are meeting these guys. We are going to push forward. I believe, I hope that this year, we'll see additional agreements with people big and small and I can't commit yet to who and what, but we're definitely going to see much more activity moving forward now. Adrian Mulcahy: With a lot of fabs selling out 100% of 2026 production. Will this reduce access to potential customer fabs and delay any deals with fabs and IDMs? Jacob Hanoch: That is actually one of the factors that's impacting us sometimes when a fab is at full capacity, and it sees that for the next year, it's going to continue to have a full capacity. They have less of an appetite to go and make this big investment now on ReRAM. And by the way, when they make that investment, it's also -- they need to run ReRAM wafers through the line at the expense of running stuff that generates revenue. So that has been over the years when we're in touch with some of these big guys. That has been one of the factors that delayed the negotiations or really -- a strong engagement, I mean there's been an engagement, but really progressing forward. With some of the guys, it's just that, hey, the fab is full. We can see that it's going to be full for another year. We just -- management wants us to focus on getting the money in, right? And it's normal, and I can definitely understand them. So we just wait for the moment that they can start seeing that they're going to have a downtime and that makes it much easier to engage. Adrian Mulcahy: Coby, here's kind of a simple question, but probably pretty important from a commercial perspective. So I'm hoping to get a better understanding of what Weebit Nano AI product offering may look like. What are the types of companies who would visit target market end users? And how does Weebit charge derive revenue? Jacob Hanoch: So we are -- we are in the process of defining what we're going to be doing in AI. That's kind of the initial task of Giddy is to really analyze the market, analyze all the requests that we've been getting and talk to the customers that we've already had engagements with and define what we want to offer them. So I think it's a little too early for me to say what exactly that offering is going to be. I want to let him go and do his analysis and come with. He'll probably have several options, and we'll have a brainstorming session on how do we prioritize and what we want to do first. It is -- I mean I've been talking in the AGM and different meetings about how in-memory compute is something huge and so many companies are interested in it, and it is reaching commercialization already. In-memory compute is something that it's really consumer -- or commercial companies are already looking at it and wanting to move forward with it. So we really want to get something good. We want to learn the market. And we'll be, I guess, hopefully, in the next months or year. Over the next year, we'll be releasing more information on what exactly the plans are and it's probably going to be obviously a staged plan where we'll have some initial offering, and then we'll improve on that and grow and add, et cetera. Adrian Mulcahy: Another very fundamental question. So your group suggested that ReRAM is forecast to increase 45-fold over the next 6 years, representing more than half of the USD 3.26 billion of embedded emerging NVM market by 2031. How does this directly relate to the TAM, total addressable market for Weebit that Weebit can address? For example, if Weebit gets 20% of the ReRAM market, would we get 20% of the $3.3 billion? Jacob Hanoch: So the old analysis always challenges me because Yole did not think of Weebit revenues or the revenues of the semiconductor IP companies. What we understand from Yole is that -- what they did was they basically said a key market is MCU, microcontrollers. And in an MCU, the nonvolatile memory takes about 10% to 15%. So if the MCU market is USD 30-something billion, then we expect the NVM part of it to be 10% of that, and that's how they got to the 3 -- whatever billion that they put there. Now that's obviously the emerging NVM that they're expecting to see there. I mean, they took the 10% of the of the MCU market and then they extrapolated how much is going to be emerging, what percentage, and that's how they got to those numbers. So for me, the old numbers are, first of all, an indication of just how rapid the growth is going to be. And that's what I think most people or people should be taking from it is this is a leading analyst and according to -- I mean, when they do an apples-to-apples comparison of what they think is happening now and what they think will happen in 2030, they're kind of seeing this huge growth, and that's what people really should take. If you want to start doing your own extrapolation and say, "Oh, wait a minute. So if $3 billion is 10% of the MCU market, and Weebit can get -- I mean, average numbers that people normally talk about are 1% to 3% royalty from that, then this is how much potentially royalties are going to be, and this is the market share that I'm expecting Weebit to have. And everyone can do their own research and analysis on that and then think about the fact that there's beyond MCUs, there are other markets and so on. And of course, there's going to be the AI market, which is an adjacent market, but that's one. So I mean people need to do their own research here. This is kind of roughly how the basics of what we understood from Yole in how they did their analysis. For me, the important thing is just the message this market is going to really grow rapidly. Weebit has to be very focused. A company undergoing such rapid growth it's so easy to make mistakes, and we need to be laser-focused on what we're doing. I'm very glad to say we have the team that knows how to do it. And we have the plan, and we have been setting the infrastructure this past year, the announcements that you didn't see are all of the infrastructure that we set up, bringing in all these different tools that help you manage projects in an organized way tracking even the simple things like how many hours did this engineer put into onsemi and how much how many hours did they put into DB HiTek or into the R&D work or whatever, being able to track what's going on, being able to have the management and everything in an organized tool where you can get easy snapshots. Having -- we have now a PMO that's defining all the internal processes and procedures and really defining how do you do this? How do you do that? How do you manage all these things? So I mean, the customer success team that we set up, all of these things are going to enable us to go through this massive growth, really crazy growth, and it's going to be a lot of fun. Adrian Mulcahy: Next one. Now the qualification at DB HiTek has been successfully completed. Can you explain expected time lines to earning license fees and/or royalties from that agreement? Jacob Hanoch: So we basically went through the tests and we showed that we're ready. Now it's really in DBH, DB HiTek's hands. They need to see how they bring it to the production line or to their customers. They have their internal procedures and their internal ways of dealing with things, working on things like yield, et cetera. And so we are obviously waiting to see this move forward faster. But foundries, as you can understand. And I think as people have already learned, they have their own pace and so on. So we -- I definitely expect that this year we'll be seeing getting to mass production. But it's not going to happen tomorrow. They still need to go through their procedures. And I hope it will be done faster and not just drag over a long period of time. Adrian Mulcahy: And Coby, just following on from that same kind of question. So the quarterly report mentioned that Weebit has several products in design and with the expectation of first product will tape out this year, is that through DB HiTek? Jacob Hanoch: Well, we definitely have designs that are in DB HiTek right now, and I think it is reasonable to expect that we'll have tape-out of designs at DB HiTek this year, yes. Adrian Mulcahy: Okay. Stepping back. So how far off are Weebit from signing deals with Tier 1 customers? Are we mainly dealing with smaller customers at this stage? Jacob Hanoch: No, we're dealing with all sizes. We are definitely engaged with big companies, I guess, order of magnitude of TI and also smaller ones, and there's -- I know people are tired of hearing me say we are engaged with the majority of the big guys, but it is true. And with TI, it took us 3 years to close. I hope that with -- others will start closing faster. There are other big guys that we're engaged with already for a long, long time. That's how it works in semiconductor. Weebit is -- I think the key message to the shareholders is we want to build a big, strong, solid company, and we are not caving in or agreeing to what I consider unacceptable terms just in order to be able to announce that we have yet another customer or whatever. I could have done things -- we could have agreed to different terms that have enabled us to get big-name customers a long time ago. But it's not how you build a strong company. And in the beginning, it's very tough, and there's nothing that I would have loved more than to come and tell the shareholders, hey, we have another customer. I mean this it uncomfortable situation that I have to keep telling everyone we are engaged with these guys and we are pushing forward and people roll their eyes already, okay, how many times are you going to tell me that, but this is the only way I know to build a strong company, is to hold your ground, to know the value of what you have and to end up -- these guys will be coming in. They will come in. They don't have another option. They need to work with us. Now they're seeing that their competitors are moving forward. And this is what will enable Weebit to be a very big and strong company, and that's my goal. Adrian Mulcahy: Yes. And Coby, I think it's probably fair, in this last quarter, there's evidence of investment in people, which is obviously a necessary pathway to executing on some of these opportunities. So I can encourage you on that. So next question. Outside of NDAs, does the partner section of the website list all product companies signed with Weebit? Or is there a lift maintained elsewhere? Jacob Hanoch: I have to admit I haven't looked at the website for a while, so -- but I would say, Weebit, I think the shareholders have already learned. I try to be as transparent as I can, and we -- the partners, we haven't signed any agreement that is not -- I mean, any final agreement, definitive agreement that is not public. I won't go into what level of NDA and MOU and whatever other types of agreements we signed with companies. Once we get to a definitive agreement, that's when we announce it, and I believe that that's what you're seeing on the website. Adrian Mulcahy: Sure. Next one, is testing of the demo chips at onsemi now complete? Or are there additional steps before qualification commences? Jacob Hanoch: Well, we actually just got them. I mean, again, as I said, it's really a record time in 1 year to finish, to get to the point where you take out and to -- you already have silicon in your hands. That in itself is just amazing. The first tests are positive, but we have a lot of testing to do, a lot of checks to do before we get to the point that we say we feel like we're ready for qualification. So it's just the very beginning of the testing phase. Adrian Mulcahy: Thanks, Coby. I think I know your answers to these questions. Did TI look at other ReRAM providers? And if so, what were the winning factor -- factors for Weebit? Jacob Hanoch: Well, it's a question to TI. I can tell you that from what we saw and we understood and actually, they even told us, I mean, they definitely and you would expect a company like TI to check the market, right? You wouldn't expect such a big company to just say, oh, we like Weebit. They -- Coby waves his hands in a nice way or whatever, and we want to work with them. They did a very, very, very thorough analysis. They talk to their customers. They did the market check. They looked around. I'm sure that they looked around to see what other ReRAMs were available. I guess I have indications that they looked around. And I think that, at the end of the day, the combination of -- I mean, our technology is here. It's qualified. It's qualified at AEC-Q100. It's qualified for very extreme situations. For analog dies, it's really a great solution. I believe that the onsemi deal was also something that helped give them a little bit more confidence, but they met our team. We -- as I said, we sent people over to their site. They were sitting there for days in conference rooms and reviewing the technology and analyzing it. I mean it was a very, very thorough analysis that they did, and I'm glad that they were impressed by the team. I think that's the key factor. They saw the quality, the unbelievable level of experience that the Weebit team has. They saw the results, the technology. And I believe that -- again, it's a question for TI, but I'm sure that those were the key factors that they were looking at. Adrian Mulcahy: Thanks, Coby. So what is the latest on the sub-22 Newton meters, 12, 14, 16 or teens process fab? Is this the fab that slipped from 2025 to 2026? Jacob Hanoch: I really can't go into that. I apologize. But as I said, we're in different steps with different companies at a very, very, very broad range of geometries. So from the teens up to the 130 and even 180 sometimes, so it's really a very broad range. And once something materializes, we'll announce it. Adrian Mulcahy: Thanks, Coby. Next one, how are discussions progressing with other foundries, IDMs? And have you seen an increased urgency from them since the TI deal was announced? Jacob Hanoch: I mean things are progressing. I think I can definitely say that the TI announcement did make an impact. People noticed it. And I think that it did give a nudge to some of the people. Let's see now how much we actually managed to really leverage that and push them to closure. So it will be very interesting. Adrian Mulcahy: A difficult one to answer here, Coby. But what sectors are you seeing the most customer interest from? Jacob Hanoch: Well, I think the first one is easy. You look at onsemi and you look at TI and even to a certain extent, DB HiTek, they're all very strong on the analog side and the power management, et cetera. So obviously, that's the first sector that has been moving forward. By the way, when you look at the whole analysis on the slide that we normally show on the right-hand side, you can see that the first market they expected to grow was analog and that prediction is true. We also see a lot of interest from automotive. I mean, especially when we did the AEC-Q100, we see a lot of interest from automotive. But we get a lot of interest from medical companies, from industrial, from IoT. We have had discussions, quite a few even, with companies in the aerospace. So it's pretty across the board. But the first ones are really the analog, power management, automotive. Those guys are -- they have such huge advantages with ReRAM and onsemi and TI or their direct competitors. So those guys are the ones that are now feeling the least easy in their seats right now. Adrian Mulcahy: Thanks, Coby. So recently, BM LABS ran a competition for their in-memory compute. Does that mean the Weebit product will optimize the ReRAM and include the algorithms? Jacob Hanoch: Yes, I mentioned earlier, we don't want to just look at the hardware side of things. We believe that in order to really be successful in this market, you need to have the software and the algorithms and give people a development kit. So I mentioned NVIDIA, and that's a great example of a company where the real growth came when they delivered CUDA. So I -- for me, that's kind of the example that I'm looking at, and that's what Giddy's role is, to define not just the hardware but what should be the package, the development kit, what makes it really easy for people to adopt the -- our ReRAM for in-memory compute that it won't be just bare metal and then they need to develop everything on top of it. Adrian Mulcahy: Thanks, Coby. Turning to the U.S., sort of the comments made with respect to the U.S. subsidiary. Can you provide some more details about the subsidiary in the U.S.? Is it aimed at building sales support? Or do you intend to build a technical team to support engineering projects, to accelerate commercial deployment as a result of a large number of engagements? Jacob Hanoch: Yes. So actually, I forgot to mention that already with all the stuff that happened last quarter. I forgot to mention it when I talked about the summary but definitely -- I mean, we're seeing significant interest in Weebit, in our ReRAM in the U.S., in North America. And it really became -- the time has come that we needed to set up already a local presence, a local subsidiary. It is focused on sales. Now sales is a very broad word. It's -- for me, sales means, more than anything, very, very strong customer support. I want every customer working with Weebit to be successful, to be happy. I've been doing sales for so many years, and I know that when people are happy, yes, they might tell a friend or so. When people are not happy, they'll tell the whole world, and you have a real problem. So I just want to make sure that we have really good success stories with these customers, that everything goes well. People know that when they come to Weebit, they get quality support. We definitely demand to be paid for it, but people will know they get a good technology, good support. We have already a lead technical person in the U.S. now who's setting up the technical support activity there. And then he is a very experienced person. He came from another ReRAM company and has done a lot of work there. So he's very experienced in ReRAM. He knows what we're doing. And I'm very happy to have him onboard. So yes, this is going to be a very strong sales organization. Adrian Mulcahy: Thank, Coby. Next one. The quarterly report says Leti have achieved many milestones this quarter. What are they? Jacob Hanoch: We talked about Leti milestones? I somehow don't -- I don't think we mentioned Leti milestones. We -- I mean, oh, okay. I think I know what you're talking about. So traditionally, when you look at the Weebit reports, and this thing comes up every year after December, Leti works according to the calendar year, and they kind of structure the different work packages. So many of them have a major milestone in December because they want to be paid before the end of their fiscal year or calendar year. So you can see it every year that the big expense that Weebit has on R&D is in the last calendar quarter. And that's what happened to us now. So we basically -- in the notes to the expenses, we mentioned that there was a big expense to Leti because of these payments. There wasn't anything special specifically in this quarter. We have very good cooperation with Leti. We have ongoing -- a lot of R&D work that we're doing with them. They are a great partner. I said that many times, and I'll say it again. We're very happy to work with Leti. And the payments just happen to always kind of somehow coincide in December. They really like us to pay us as much as we can in December. That's how their finances work. Adrian Mulcahy: So on AI now. Will the AI offering be aimed at the edge or data center? Jacob Hanoch: I think the edge is really where we see ReRAM shining at this point. The edge also in terms of capacity of memory, et cetera, we are able to address much easier. So I mean, it's really Giddy's job to define what he wants -- what he thinks we should be doing. And I want to give him his space to really analyze the market and come with his recommendations. So again, we'll just have to wait until -- by the way, we already hired a PhD in AI to work with him, and that's a team that we'll want to grow so that they can really do a good analysis and come with good recommendations. I don't want to just decide on what their conclusions will be before they do their studies. Adrian Mulcahy: Thanks, Coby. There are a couple of anonymous attendee questions, and we normally -- it's not really a great way to submit your questions, but let me just go through a few of them because everybody else has actually nominated who they are, which I think is really important for them. But Coby, just this one. Jacob Hanoch: I agree. Adrian Mulcahy: Yes. But some of these are interesting, so let me just go -- and I think probably this would be on the minds of some of the audience anyway. But the company previously targeted 3 new licensing agreements with fabs, IDMs by the end of 2025. With onsemi and TI secured, the third has slipped into 2026. Can you provide color on the status of negotiations for this third agreement? Jacob Hanoch: Actually, there have been several that were candidates to be the third. It's not just one. These things sometimes, as I said, drag out for all kinds of reasons. So we are continuing the discussions with these guys. I -- again, we'll announce when we close it, when we do because many times, there are surprises that just cause things to drag a little longer than we expect. So I don't want to just try to predict and then -- it's really in the hands of these fabs, the speed that we progress. Adrian Mulcahy: This is a question that I've had from a number of investors, Coby, and you have, too, but just probably worth sharing with this audience around DB HiTek qualification. So can you explain why this wasn't announced to the market via the ASX? And what are the next steps with DB HiTek, which I think you've spoken about already? Jacob Hanoch: Well, maybe it's a good opportunity. People know that I've been struggling, that was an understatement, with the ASX regulation, disclosure regulation, et cetera. I won't go here into the issues there. But sometimes, I joke that closing the announcement on TI was harder than closing the actual TI agreement, and it sometimes feels that way. So it is a challenge for us, the whole ASX regulation. I believe that, moving forward, many times, we will not be making ASX announcements. We'll just wait for the quarterlies to announce things. It will just be easier. There's just so much time and effort that I can spend on these things. And yes, let me stop at this point. Adrian Mulcahy: No, no, that's fair point. I can hear and feel your frustration, Coby. So just -- you may not be comfortable answering this question. But outside GF, have any opportunities been lost? Jacob Hanoch: I don't consider GF lost by the way. I don't -- I mean, I -- you can see, GF is right now struggling to try to make whatever they're doing work, and they haven't qualified it. I mean they are late on their schedules. But I don't want to go into GF. I believe that Weebit has and will definitely, in the future, have the best ReRAM technology in the market. This is our goal. We're investing a lot in R&D. You know how many people asked me in the last month, so when is Weebit going to be breakeven? And guess what, I can just stop the massive R&D investment and I'll be breakeven today, right? But that's -- I'm sure that that's not what the shareholders want. We are investing heavily in R&D. We want to continue to improve our product. We want to be -- to have undoubtedly the best ReRAM in the market hands down to the point where -- and I tell people, to me, it's a fact. I don't even consider it is an if. One day, someone will come and go to GF, go to TSMC, go to UMC and all these other guys and say, hey, guys, I want to manufacturer here, but Weebit has a much better ReRAM for my application, in my specific SoC or whatever. They give me better support, or I want to use Weebit, and that customer will be big enough to actually move the needle. And those fabs will agree because, at the end of the day, these fabs are making money off of selling wafers. They're not making money off of ReRAM. I mean the decision to try to develop a ReRAM at GF, that's something that you need to ask their CEO, what the logic was. I won't go into his considerations, and I don't understand his considerations. But all of these guys, all of them, I do look at them as potential customers. I don't look at any one of them as a lost opportunity. Adrian Mulcahy: Kind of coming to our final questions now, we seem to have exhausted the audience, and there's a bit of feedback saying thank you for the session, by the way. I just thought I'd share that with you. But just going back to the investment in the people, which, as I called out, is a really important initiative for your business. So which parts of the business have the new staff been appointed? And where do you expect new staff to be appointed over the next couple of years? Jacob Hanoch: So I think that right now, the place where we need more people is the whole -- the staff that supports sales, that supports customers. So we need -- on the design side with each new customer, especially when we start talking to product companies -- and maybe this is a good place to kind of explain a little bit how good IP company functions. A good IP company always wants to have a lot of royalties come in. And when you talk about the royalties, when you talk about the product customers, the goal is to have as many of them use your standard modules. So you want to have a certain set of modules that you develop. And then most people, the vast majority will take one of those, and you'll basically have 100% margin on those sales. So that's really where I'm focused. I -- we want to get to the point where the product company -- well, we have a lot of product companies coming onboard, et cetera. Obviously, that's not now. That's not this year, but it's going to happen. And we want to have that offering of these base designs or modules and then basically get very, very high margins on the royalties that we get there. But some of the customers will need additional tailoring, additional help. They will be paying us NRE so that we help them optimize the module in their SoC, and that will happen also. So right now, the work on the design side is where we need to have some growth as we -- especially the first product companies, they require more support. We don't have that big library of modules yet, so we need to develop it. And right now, we're going to have -- if I look at the budget for this year, the biggest growth is going to be on the design side and supporting the sales activities. Adrian Mulcahy: Thanks, Coby. So there is one other question here, a relevant question. Are there any plans to get additional broker coverage? I think I know the answer to this one. Jacob Hanoch: Well, it was challenging to start getting some of the brokers to cover us, and I'm very thankful for both UCP and MST now. I think they're doing, by the way, an amazing job. I have to give the complement to both [ Jona ] at UCP and Andrew with MST. It's unbelievable how they picked up. They both started from practically 0 knowledge of semiconductors, and they really went through very intensive studies in order to give coverage, but I think they're giving very good coverage. So I recommend people to actually go and look at that. And I really hope to see more coverage starting this year. Hopefully, now more people are realizing that this is an interesting technology and an interesting company. Adrian Mulcahy: That's very good. I'm sure that [ Jona ] and Andrew would love that, but they're both high-quality analysts as you and I both know, Coby. Here's a bit of a tongue-in-cheek question to finish the meeting. Coby, if I offer you a year of free ice creams and by the end of February, will you sign Analog Devices? Jacob Hanoch: Someone knows me. I don't know if that was anonymous or not, but someone knows me. Adrian Mulcahy: No, it wasn't. It wasn't. It's very good though. And just a final one. Just a final question, too, and then we'll get you to wrap up with some final comments, Coby, as well. So comparing Weebit to eMemory in terms of people, does -- Coby, do you forecast Weebit will have more design people? Jacob Hanoch: Well, I just mentioned we're going to be hiring. That's the team that's going to grow the most this year. So we do need more design people. I am, by the way, very, very cautious with hiring. I had someone make the comment to me that he was looking at another nonvolatile memory that was in Israel in the past called Saifun, and he said, you know that today with 40 people, you're managing to do what Saifun had 200 people doing. So yes, we are very cautious in the hiring. We hired very high-quality people, but I'm very, very cautious with the shareholder money. I know that the money that we have today is basically money that we got from shareholders, and I'm very cautious in how I spend it. So we're trying not to grow to huge numbers, but at the end of the day, when sales grow when you have more customers, you need to grow. So we're doing a very delicate balancing act between these 2 things. Adrian Mulcahy: No, that's good. I think investors always like to hear executives and boards talk about the discipline about deploying capital. So well done, Coby. So we've exhausted the audience, so wanted to throw back to you with any kind of closing remarks before we wrap up. Jacob Hanoch: Well, I think calendar year '25 was a really, really good year for Weebit. It was a transitional year. I mean it started a transition. We're now engaged with big-name customers, onsemi and TI. We built that infrastructure being ready for the big growth. I think we're going to start seeing that during this year. It's still going to be tough. These guys don't move so fast. So '26 is going to be a year of really getting things moving a little bit more, I think maybe '27, the way that I see it, is going to be the year where we really will have that big tornado happening. But it's very exciting. We're having a lot of fun in the company. The AI activity now is very exciting as well. So I'm looking forward for another amazing year in '26, and I wish all of our shareholders a great '26 and that we'll all celebrate together. Adrian Mulcahy: That's great, Coby. Thanks. It was great to share your insights with the group. And thanks, everybody, for joining us this afternoon. That's a wrap. Enjoy the rest of your day. Cheers. Jacob Hanoch: Thank you.
Suguru Miyake: Good afternoon, ladies and gentlemen. Thank you very much for coming to our third quarter results briefing for the fiscal year ending March 2026. And today, we also have a simultaneous translation. So we are communicating all around the world. For those in Europe, it must be in early morning. For those from the U.S., but I bet you are in very late at night. Thank you very much for joining this call for those hours. So I am the President of the company. And also, we also have Naraki-san and Takeuchi-san with me. Takamaro Naraki: I am the Vice President for the company. My name is Naraki. Naoki Takeuchi: And I am a Senior Managing Director. I am Takeuchi. Suguru Miyake: Okay. So let's get started. In 2026, we are having the 35th anniversary of the company. So we made the anniversary logo, which we put on the front page. The bird in the middle is a Mascot character. She is called MAppy, M and A and happy. And those 2 words were combined together to be named as MAppy. And let me first start with the summary. In this Q3, showing the 9 months total and Q3 alone, basically, we recorded the highest sales and recurring profit ever, and we were able to surpass 40% for our recurring profit margin. For 9-month total, we accomplished JPY 37.7 million, which is increasing by 26.5% year-on-year. And the recurring profit went up by 46.8% to be JPY 15.7 billion. The OP margin was 41.7%, which is up by 5.8 percentage points. The number of transactions closed increased by 9.8% to be 810 deals and also M&A sales per transaction increased by 15.3% to accomplish JPY 45 million. On a Q3 alone results was JPY 15.1 billion revenue, and that was a record high number, up by 34.6% year-on-year. And ordinary profit was JPY 7.1 billion, which increased by 51.5% and OP margin was 47.2%. And number of transactions closed was 322 deals, which are progressing pretty good. And M&A sales per transaction was JPY 45 million, maintained at a very high level. So where are we at for the overall against the guidance numbers? I think that is important to note it. And for the sales, our target was JPY 46.3 billion. We are at JPY 37.7 billion, which is 81.5% progress. And ordinary profit against the forecast of JPY 17 billion, we are at 15.7% with 92.5% progress. And even more, we are quite pleased to see a very steady progress in returning back to our growth cycle. So M&A jobs, we do see many different conditions and situations, and we do see a lot of extension of the deals. So in Q4, March, if we were to trying to target at Q3 to accomplish the target, then we tend to see some delays into the next year. So we need to accomplish the certain business performance while satisfying customers. We will need to bring up the high performance as much as possible in Q3. So we can work on more preparation work in Q4, so we can have a rocket start for the next fiscal year and matching and also receiving a lot of commission work. And so that way, we can accomplish the stable growth. And finally, I believe we were able to come back to such a business cycle, and that is the most pleasing information that I have for this time briefing results. And let me go one by one, a little bit more in detail on the sales of 37.7% -- sorry, JPY 37.7 billion. And of course, we saw increases both in the number of transactions closed and also the unit sales, and that helped to see a substantial increase in the sales. The best part was the number of consultants who accomplished budget. We saw a substantial increase in such a number, such members and also department who accomplished the budget increased drastically. At the same time, Takeuchi-san, who is the President of M&A Center, always talks about each individual will need to accomplish the target to be happy and also each department to accomplish the target to be happy. And as a result, the company to accomplish the budget to be happy. So he is always pursuing to accomplish both the individual and the whole group. And such a policy and thinking is now being understood and spreading among the employment -- employees, and that was accomplished this time. And I think now we were able to build a very solid foundation to accomplish that. And the number of transactions closed. I think we were quite successful in implementing a very scientific approaches. It wasn't the result of a coincidence to increase the number of success rate and also on time closure of the deals, and we implemented 2 measures to accomplish them. One, when we start the deal negotiation, we had -- we are now having kickoff meetings, both sellers and from the buyers, the person in charge and their managers and accountants, lawyers and tax accountants and all these professionals, they all got together to confirm the schedule. We also confirm the stakeholders, and we also confirm the challenges, which is more important. So we identified those challenges ahead of the project kickoff, and that is very important. And we are making a smooth flow in the deal procedure. We conducted an M&A audit. And if we were to find the challenges at the time, then that could actually cause a situation that people might wonder, maybe they were hiding this information or they were deceiving us. And such a concern will be rising. So at the beginning of the whole deal, we need to assume what the challenges are so that way, both sellers and buyers can prepare themselves to be able to take action towards them. And that will actually increase the trust in us and also trust in between sellers and buyers, and that helps to have a smooth process going forward. The other thing is, and since this scandal we had, we actually increased the number of managers drastically. Of course, some of the -- a lot of managers are still not fully experienced, but we created a role for the deal management in place. So every Monday, we instructed them to give right instruction of the deals to their subordinates. So those are the 2 actions we implemented, which supported us to have such successful results, which were led by the President Takeuchi as well as the sales General Manager and their leadership actually worked quite well to permit this type of thinking among all the staff members to increase the number of transactions closed as well. And we are also able to maintain a very high M&A sales per transaction. And as I've been talking in the past, we're not trying to grow the sales per transaction. That's not our main purpose. Our target is to maintain around JPY 40 million per deal. But as we grow the number of deals, the unit sales goes down. So to stop that, we basically trying to capture the mid-cap business deals as much as possible, and that was quite successful, and that's also sustaining good unit prices. And the number of large deal was 85 cases. We did see a huge increase, increased by 66%. So our volumes on the midsized deals are properly secured. And but also for small deals, actually, we passed those deals over to our affiliate companies, the companies by the equity method, the patents. We have patents to handle those smaller deals. And I think that was also effective at the same time. And because of that, the percentage of smaller deals are now declining with us, and that is actually helping to see a stronger performance. That's how we understand right now. And talking about the cost and expenses, I pass the floor over to Naraki-san. Takamaro Naraki: On this page, so we are showing the cost of sales and SGA expenses. So those costs and SGAs for this year, starting from March 2026, we have changed the classification of human resources that actually changed some of the number changes. And so we are talking about comparison after the reclassification change. Then cost of sales was increased by 19.1% to be JPY 13.7 billion. SGA expenses was JPY 8.37 billion, increased by 7.7%. Referral fees ratio was 13.1%, increased by 0.9 percentage point. For the SGA expenses, the IT cost was JPY 848 million, and it increased by 46.7%. And let me also touch on the overview of the expenses and numbers. This is the total income statement. And towards the top on the cost level in total as Line 3, JPY 13.725 billion, and it was 36.4% of the sales. Last year, it was 38.6% and this ratio went down year-on-year. And 2 lines down from here. the SGA and operational cost, so it was 22.5% with JPY 8.49 billion. It was 25.6% last year. So percentage reduced this year because of the sales increase. So as I mentioned, ordinary profit came out to be 41.7%. So now it's back in the 40s. Suguru Miyake: And next is talking about the commission status. So it's very important to understand how many that we are receiving as mandates. In total, we received 328 mandates, which is down by 3% year-on-year. Of that mid-cap mandates were the 58 deals, which is down by 10.8%. For the buy-side mandate was 383 mandates, which is down by 6.6%. And number of new transaction negotiations was 295 deals, which is down by 13.2% compared to last year. I will have more details to come later on. This is nothing really negative. Actually, in the first half last year, we did have a huge amount of mandates that we received. And based on that, we decided to focus on the business performance. We wanted to revive our business performance. That was the main purpose of this fiscal year. So the number of transactions closed, and we try to focus also on the track record of the closed contracts. So we did not focus too much on receiving mandates in the first half. But second half, we will focus more on the quality of the mandates. And that was the policy we had in the second half. For those with no possibility of getting concluded, we try not to pursue to conclude them and close them. And so that is why the number is declining, but this is not because of a negative situation. So I hope you can understand this is still a result of positive effort, and this is the overall flow. Mandates in the central area are in green. These are the mandates in the city areas. We've been acquiring city area mandates quite well and local area mandates are about 45% of the total. So revitalizing the local economy and also contributing to the central area I believe that we have a really good balance of achieving mission and achieving good results at the same time. And about the fourth quarter, when it comes to receiving mandates or matching, we will put in bigger efforts. So I believe that we will be able to have overall good performance in the whole year. And the summary of the status of acquiring mandates is this. These are detailed figures. So please take a look at this later. And about the number of new mandates we have acquired, we believe that we're not experiencing a deterioration. We think that we are in a transitional period. About last year, we, as a company, were finally trying to be revitalized. So our focus back then was on acquiring more mandates. We were going after volume. However, since the start of this fiscal year, our focus is more on closing mandates and eliminating troubles. Therefore, when it comes to acquiring mandates, we've been refraining from the mandates with limited possibility of closing them after -- later on. And also, there can be inappropriate buyers. So really delegate projects that are close to renewal type of mandates, we've been cautious in receiving those mandates to improve customer satisfaction rate and also to improve our productivity. So we've been raising our productivity, and we've also been trying to improve customer satisfaction. And also, we plan to further improve the quality of the mandates we receive. And at the same time, we plan to improve the quality of our business and our service and the customer satisfaction level. This is going to be our direction. And I would like to hand over to Naraki-san for summary. Takamaro Naraki: Okay. About our balance sheet assets. JPY 60.011 billion. And below that, total net assets, JPY 48.257 billion. So ratio of this was 80.4%. And we have the same for the previous fiscal year on the right-hand side, JPY 47.5 billion in net assets. The ratio of net asset was 77%. So there is an increase by 3.4%. And about headcount, as I said, we had a reclassification of employees. So at the top of this table, we have the role for M&A consultants. These are the sales representatives belonging to the sales headquarter of Nihon M&A Center and the sales staff at local -- foreign local entities. And as I said, we've been doing effective hiring in M&A consultants. However, we have the increase in turnover of our employees with tenure of less than 3 years. So we've been implementing measures to improve retention of our employees. And we plan to provide more information about that later. Next page, Page 14. This one is about our current fiscal year. This fiscal year, we've been showing numbers both as reported and both -- and also on a reclassified basis as well. Thank you. About our headcount. We've been doing a lot of things. And headcount is the area -- the only area where we feel there's an issue, especially turnover ratio of the employees with tenure of no more than 3 years is declining or rather it's worsening this fiscal year. So we have already started taking measures to address this. However, we have a lead time, about half year's lead time until we start to benefit from these initiatives. So until then, we are going to continue root cause analysis, and we've been taking measures. And we have multiple issues, but the issue of the increase in the turnover of the people with tenure of less than 3 years, this is the largest issue we think we have in our company. So we want to address this immediately. We want to reduce turnover. We want to have a net increase in sales representatives. Just having a net increase itself is not good because when there are a lot of turnover, that means that we have relatively beginners -- more beginners in the company that leads to lower productivity. So we have to reduce turnover while securing enough personnel. And we've been taking measures. So we think that we'll be able to have major improvement next fiscal year. Next, let me touch on the shareholder returns. So for this fiscal year, we try to face the change in the external environment and trying to go back to the accomplishing cycle that we used to do in the past. So we intend to continue sustaining the dividend JPY 29 same year. So we had JPY 29 for March 2025. Therefore, for March '26, we intend to go with JPY 29 with no change from the beginning. In during the midterm plan period, the dividend payout ratio is to be 60% or higher. So we maintain this basic policy as well. And next, the ROE trend. In 2024 March, we conducted share buybacks. And with that, we were able to get back on 20% -- and also March 2026, we expect to be at 22.9%. And next, shareholder situation and also the market cap trend. And shareholder mix is shown here. Individuals are decreasing. And now we see increases from institutional investors in this pie chart. Individuals showed 30.7%. And last year, a year ago, it was 33%, but it came down to 30.7%, down by 3.2 percentage points. For financial institutions, sales 30.2%. Last year, it was 25.1%. So it increased by 5.1 percentage points. The foreign investors -- foreign institutional investors was 28.9%. The last year, it was 30.4%. So it went down by 1.5%. And next, talking about the forecast number, there is no change to our forecast numbers. We maintain the same number. And so we can move forward according to the guidance numbers. In a midterm target, there is no change in our midterm target. And of course, we will make sure to have an upside to the midterm target to be accomplished. So we ensure to accomplish them, and we will try to have as much upside as possible so we can lead to the next phase from there on. And related activities. Currently, the other sales is about JPY 1.2 billion. This is only about 3.3% within total sales that's coming from fund business and PMI business. And so this is still a small business, and our intention is to grow this with other business. And also TOKYO PRO Market, we are making good progress. And this year, the number of IPOs were not that many. The listing to the market, it takes about 2 to 3 years for preparation. So those deals that came 3 years ago and 4 years ago are going to be IPO this year. With the scandal, right after the scandal, TPA commissioned project have decreased. So therefore, we see less IPOs this year, but we intend to accelerate the number of IPOs, and we do have enough backlog of the potential IPOs to come in, in the coming years. The most important thing is the PMI. Both FSA and SME agencies, they say not just closing M&A. What they need is having a successful PMI activities as well. That's their direction. And we think that we are the only company in Japan who is doing M&A consulting, but is also doing PMI support activities. And the plan for this fiscal year is to receive 120 mandates, and we have already acquired 95 mandates. 120. We think that we're going to -- we'll exceed 120 this fiscal year. And we think that this is going to be a major differentiating factor going forward for our company. So we're going to do more aggressive sales activities. And at the same time, we would like to enrich our activities or enrich our support to customers, but we cannot do this on our own. Therefore, we would like to do more collaborations of private, public and academia collaboration. And we have ASEAN-based local entities. And they have been working really well. they closed their financial years in December. And this fiscal year, they achieved their budget sufficiently. So from the next fiscal year, they are going to enter into the next stage of growth. So I have been really counting on this overseas business, and I am excited to see the development of this business going forward. And about our fund business, its contribution in terms of profit may be limited. However, A2G Capital, J-Search and Japan Investment Fund, they are all going quite successfully, respectively. And about J-Search, they have already established companies in 4 locations, and they've been working together with local banks. And Japan Investment Fund, they have launched their second fund that's been working effectively. And roll-up activities are done, which are the add-ons of generating synergies with companies with good affinity after acquiring a company. And we have done 2 of such roll-ups this fiscal year at the Japan Investment Fund. Topics. DX and AI usage, especially AI-based activities have expanded quite significantly. And Takeuchi-san has been talking about data-driven management. Bring out is a name of our analysis soft of conversations and discussions. With this AI-based software, we've been collecting a huge volume of various information that's used for our sales approach improvement. And we've been also accumulating customers' qualitative information. When it comes to quantitative information, we can accumulate the data by receiving financial documents. But when it comes to qualitative information, we have to do interviews to customers. And just like in human marriage, qualitative information can be more important than quantitative information. This is the same in M&A. So when we get more qualitative information, eventually, we believe that we will be able to have more accurate AI-based auto matching. So activities that we've been doing based on DX and AI are -- have huge potentials, and we've been doing all of what we can do. And about seminars, we've been holding physical marketing, and we've been getting a lot of applications. We had 80% more applications compared to the same time last year for these kind of events and 2 major reasons. One is that our planning has been quite getting better. And the second is that customers' interest in M&A are growing. And in the next fiscal year, we would like to do such real marketing more actively. And we've been having successful area marketing activities as well. For example, signage advertising that you often see at stations, railway stations, like you can find in the photo on this page, we've been doing advertising there. For example, in Tokyo, Osaka, Nagoya, Fukuoka, Hiroshima, Hokkaido, Okinawa as well. And it seems that we have one at Haneda Airport. I saw the video of our ad there. And also, we've been doing things that are based on the local communities. For example, local representative office with discussion desk. We now have one Yamaguchi, Niigata, Miyagi, Ibaraki, Shizoka and Yamaguchi finally. This is the fifth one that we have established. Thanks to customers' support and thanks to our efforts. We are recognized by Guinness World Records for 5 consecutive years. The number of closures last year was 1,088. This was the highest in the world. We would like to use such track records and awards for our branding activities. And the next one is about integrated report that I hope everybody will read. We publish them or we have published them at the same time in Japanese version and English version. And we plan to do the same in the same manner this year as well. And this is not just about senior management thinking. We have been including the dialogues and stories and thinking of the various people, including external directors, executive offices, et cetera. I hope that you will feel our culture and momentum. And about our industry trends, we are experiencing increasing the number of intermediary agencies and SME agency had the second revision of their guidelines and also introduction of qualification systems. So in such initiatives, they announced their skill map and qualification system committee was established and inappropriate buyers. We've been enhancing our activities to avoid getting involved by them at the M&A association. And also, we would like to be an exemplified or we would like to be a model in this industry. And our 3-party collaboration, tri-party collaboration, we've been doing that quite widely with University of Kobe, Kyoto, Waseda, Hitotsubashi, et cetera. We've been doing joint research with them. And also with Kwansei Gakuin University, we're going to do the same going forward. So we've been inviting many universities to do this. So the company is not an object. It is a place where we create and look at the lives of many different people. It's not just completing all the contract to be closed, but we hope to be able to be successful in accomplishing the best M&A to make everyone involved to be happy. So in order to accomplish such a success and the best closure, we intend to implement various measures, as I mentioned. So this is all for the results briefing. And now we want to move on to a Q&A session. Suguru Miyake: Thank you very much. So let's move on to the Q&A session. [Operator Instructions]. While we are waiting for your questions, first, we want to pick up some of the major questions that we received in our shareholder interviews in the Q&A session. This is a question first. So regarding your initiatives to maintain high retention, is there any issue in your hiring policy and hiring environment? Okay. Thank you for the question. This is the only challenge I am feeling the most and also the largest challenge that we are facing. And we are making a very detailed analysis and taking various actions. So we want to have Takeuchi-san to explain more details on this. Naoki Takeuchi: Thank you very much. Regarding the hiring environment, in the last time results briefing, so we are getting a good response in terms of receiving applications. But of course, we need to look at the conditions in market. So we have a close watch on the market situation. But currently, we are receiving good application, and we are selecting the right candidate. When it comes to hiring policy, so the turnover rate is on the rise. So -- what we did to address that for the past 6 months or 3 months, we try to understand the reason why they left the company and where they went. And what was the reason they decided to leave the company. So I myself went into more details to understand one by one. And the major reason for leaving the company was that they had an expectation for M&A Center before joining the company. But after joining the company, they saw a huge gap against the ideal they had. That's what we found, let's say, they thought, okay, they could do more, they could work a lot and hard. But due to the compliance and the governance, it wasn't really giving enough flexibility to do a lot of work. And some people thought this was a large company, but why do we have to be bound by certain behavioral rules. So those gaps, we thought that they were in the different directions. So basically, the major challenge was that in a final interview with those candidates, we needed to communicate our company core value to the full extent to them. So therefore, since February, every Friday, and I spent half day every week, I decided to be part of the final interview with a potential candidate, every interview. And we also had the channel General Manager as well. So in the final interview session, first, I'm trying to eliminate those gaps that they may have in the future. So that's why I'm now involved in a hiring process that we are able to improve the hiring situation. That is where we focus the most. May I add one more? Yes, there is one more thing. This is the biggest challenge I'm facing right now. So the other thing is once they join the company, once they start working, and then those who decide to leave the company. Of course, if they are not able to perform fully during the first year, they tend to leave. And what is the definition of being successful? So I think the important thing is to have closing the deal within a year. So last year, also the year before and even this year, for those who joined the company for the past year and only 60% of those members have accomplished closing deals. So we first want to raise this percentage to 80%. For those members who accomplished the first closure, those 60 members are not leaving. But the remaining 40 are the ones who are leaving. So that's why we are focused on increasing the number of success rate up to 80% during the first year. So as you can read on the slide, of course, I look at all the members, I see all the members through the hiring process interview. And then I myself will have an interactive communication with all the people so I can give them more confidence. And a year later, even with the channel General Manager, if they are having hard time getting closer, then we think about reassigning them to a different channel. So we want to show the value to those employees for the first year as a part of the flow. So we need to pay extra attention and proper care of those who joined -- who just recently joined the company and so we can develop their capability, and this will be led and adopt top-down manner. Suguru Miyake: Next question. M&A sales per deal has been trending at a high level. Is this a onetime trend? And how reproducible are mid-cap mandate-related initiatives? How do you see your current M&A sales per deal and the level you'd like to be in the future? Thank you. I have always been talking about JPY 40 million as our target M&A sales per deal. Our social mission is to grow in volume so we can save as many companies as possible. When we have more volume, it's natural that, that sacrifices our M&A sales per deal. That means lower productivity. So we want to acquire mid-cap mandates, both them so we can maintain M&A sales per deal. This is what we've been trying to do as mid-cap measure. And this measure has been actually been more successful than we had anticipated. Fortunately or unfortunately, it's not really coming from the mid-cap mandates per se. It's rather coming from the fact that we have established a team of mid-cap dedicated consultants and targeting all sales representatives, these mid-cap -- we have established a system where they can educate and instruct about acquiring mid-cap mandates. Actually, companies have only 2 ways of closing their business or getting acquired. These are the 2 only scenarios they have. However, with us, they have new options, for example, fund option and others or maybe handing over the business to their sons, owner, sons and so on, IPO possibly. So in order to convince customers, we need to create proposal documents and however, beginners are shy about those options. And we have established a consultant team that can make such proposal documents when they receive referrals about those mid-cap potential mandates. So this has been working effectively and leading to the improvement of our closure rate. Things have been more smoother -- more smooth than we had anticipated. And of course, increase in M&A sales per deal is something that we welcome. But we want to maintain this. And the level that we would like to be is JPY 40 million, in my opinion, basically JPY 40 million. So maybe JPY 42 million, JPY 43 million should be enough as our M&A sales per deal. So when it comes to JPY 45 million or JPY 46 million, I think that's too good for us. Next question. Could you tell us the number of the deals under negotiation, which are left open at the end of December? Thank you for the question. So the number of deals under negotiation, currently, there are about 944 -- right now, 449 deals, 449 deals are under negotiation. and 295 are newly opened deals. I believe this is a pretty good condition. We are coming to the end of the fiscal year in March. We are able to have enough negotiation. We have secured enough pipelines, which are those deals under negotiation. And for the next year, to have a rocket start in Q1, we want to actually increase more of such a pipeline. So in Q4, in February and March, we will be working more on matching activities that is going to be quite important. Next question, leading indicators that determine your business results from the next fiscal year. So the number of new negotiation starts and the number of consultants, these indicators are deteriorating for 2 consecutive quarters. Is there going to be any negative impact from this on the likelihood of exceeding your budget in the midterm plan? I don't have a concern about this because our productivity is increasing and our closure rate has been growing solidly, meaning that we are more capable of doing effective management than before. And also, the quality of our pipeline mandates or pipeline projects are improving as well. So I do not have a concern or anxiety about not being able to exceed our budget under the midterm plan. And about the number of new negotiation starts, I think there is limited possibility of not being able to achieve this indicator target. And even so, the shortfall -- potential shortfall can be covered enough by good closure rate. And also the number of consultants, I have a major concern about that. So we're going to reduce turnover rate enough, and we will establish a system where new people can grow sufficiently. And at the same time, we want to do more recruitment so we can have net increase. This cycle is something that we have been establishing in the recent 3 months. And we think that the level of success in this measure will impact the level of how much we can achieve our midterm guidance -- midterm plan targets. So we will do more about this. Next question. Regarding the decrease in number of sell-side mandates, do you think SME agency policy is affecting because they encourage the regional banks to be the intermediary for M&As. So can you tell us the current status of the direct network ratio in the sell-side mandates? And what do you think is the forecast? Regarding the first part, that is nothing to do with the situation. Actually, their policy is working on a positive way. The SME agency and FSA and they are talking regional banks to work on revitalizing regional economy and trying to accelerate M&As and also asking them to develop the businesses, which is making more than JPY 10 billion. And so regional banks are actually collaborating and working in tandem with us. So that's why the regional bank team in our company are going quite well so far. They're receiving a lot of mandates and having a lot of closures as well. So the decrease in number of sell-side mandate is because in the first half, as I mentioned earlier, so this year, we had -- this year will be almost a conclusion year coming out of the scandal. So it's going to be the year for recover from -- fully from the scandal 4 years ago. So first, we wanted to focus on the number of closures and also the amount, the yen amount as well. And so that's where we focused on first half. And that was affecting the result in the first half. But second half, now we are focusing on improving quality of the mandates, and that's what's also putting some pressure on the number of mandates. And so that's also causing a slight decline. But there is no major impact by them. And rather, we see a much positive impact on our business with those policies by the governments. And so the ratio between direct and network, the network is increasing for the mandates. And right now, in Q3 of fiscal '25, regarding sell-side mandates, in ratio-wise, 37% versus -- no, correction. 74% versus 26%. Network, 74% and 26% for direct. So ratio for network is increasing. And the network is increasing more. Of course, we need to increase the ratio -- direct ratio. But recently, pretty recently, direct market is exposed to very fierce competition. So, so many, too many boutiques out there in the market. And it's very difficult to obtain mandates. So that's why for network channels, we pretty much have an exclusive relationship, and we receive also the retainer fee as well from them. So we are receiving good revenue through the network. So that's where we can leverage on our strength. Next question. About dividend, do you have a plan to change your dividend of paying JPY 29, including special dividend of JPY 6? Thank you for the question. Of course, we have to make a decision to announce. So we cannot say anything definite on this occasion. But to share with you my thinking, we're not planning to cut dividends. At least when we are steadily growing and when our share price and our market cap are growing steadily, we would like to make sure that shareholders can enjoy capital gains. And until we go into that phase, we're not going to cut our dividends at least. So I would like our shareholders to be believed about the possibility of dividend cut. Next question. And so regarding returning to your normal performance achievement cycle, how do you think its repeatability or continuity for next year onward? Takeuchi-san, can you answer this question? Naoki Takeuchi: We next year beyond, repeatability and continuity have such a cycle. So this year, we are looking at this progress. And the answer could be a little abstract, but I think the people in the field did great work. You don't misunderstand this -- my comment, but I think it was actually too good to be true, but still, we are making such a great progress so far. And we have taken every strategy measures that we are able to take in details. The important thing is not to rush too much. If you rush too much, if you just try to accelerate the performance, that can actually cause too much pressure or the burden on the field members. So we need to avoid that. We need to focus on completing good quality M&A. And so the whole industry is focused more on safety and security and the responsibility accountability for the result. So we need to be seriously addressing that trend and what's been required by the society, and that will lead us over to a strong performance. So repeatability and continuity will be accomplished by pursuing this policy. Suguru Miyake: Next question. Your interim fee grew by 28% year-on-year. When does that lead to you receiving contingency fee or a success fee? If you go along with the flow that you were in, in the recent few years, I can assume that this level -- this increase in interim fee will lead to an increase in success fee in the next quarter. However, since your company seems to be able to get back to the customary cycle of achieving results earlier than planned, do you think that -- do you plan to carry this over to Q1 next fiscal year? This is not something that we're going to make a decision about because for M&A, we need a buyer and a seller. These are our customers and they have their schedule. They have their conveniences and they have emotions as well. So timing is not something we adjust. They determine the timing of M&A closure. So in accordance with the normal cycle, we tend to close deals in the following quarter. However, unlike major M&A, like an M&A between listed companies, they actually make decisions at respective Board meetings. So there is no change basically. But when it comes to M&A among SMEs, there can be pretty natural doubts. There can be a half month or 1 month deferral of closure and also buyer can be involved in a sudden major trouble and President of the buyer may have to go on a business trip to foreign country. So there are many cases where there is about a 1-month lag in closing deals. This can happen to us as well. There can be deals that can be closed smoothly by the end of this fiscal year. Takeuchi-san, what do you think? Naoki Takeuchi: I completely agree with what he has said. It's our customers who form and decide on market results. So of course, we pay attention to the expected results on a quarterly basis, but we pay attention to our customers. Our senior management will, at the same time, closely monitor our results. So I completely agree with what Miyake-san has said. Thank you. Suguru Miyake: Today, thank you very much for staying with us for a long time. We have explained our results for the third quarter, and we had a Q&A session as well. Thank you for staying with us till the end. And finally, from the appropriate incident, we experienced many things. And in FY '22, we had a shift to a compliance-based management, and we implemented many prevention measures. And in FY '23, we tried to be a more united company and a more cheerful company. And in FY '24, we received a huge volume of mandates in this fiscal year '25 is about recovering in our financial results and getting back to the primary customary cycle of achieving results. This has been the direction of our company's management. And thanks to these efforts, we had a rocket start, really good start in Q1 this fiscal year. And we had an upward revision in the second quarter. And in the third quarter, I think that we had good enough results that matches with what we have been doing, and we are now almost back to the customary cycle and the level of enthusiasm among our employees is quite high. It's been rising. And of course, we have some issues, including an issue of higher turnover rate. There can be some potential issues. However, we are trying to be transparent to shareholders and investors and we've been discussing with them about our issues. And we will continue to do the same as our manager company going forward. And our Q4, the next briefing session will be the full year briefing session -- full year results briefing session. So our company will be united and make efforts and also acquiring mandates, so we will be able to have a rocket start next fiscal year. We will not ease up on our efforts for that. Please continue to support us. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]
Terje Pilskog: Good morning, everyone, and welcome to our fourth quarter presentation. Our growth continues, and we deliver on our strategy with a high level of activity across all of our segments and all of our portfolio. We are growing our pipeline. At the same time, we continue to also strengthen our financial position. And we are operating in markets with strong underlying demand, and we're focusing on markets with strong underlying demand for clean, affordable and flexible power. Renewable energy is the most competitive source of power generation in our markets, and we continue to see strong and attractive long-term demand for renewable energy in our markets. And this is reflected in the additional projects that we are able to secure in our markets, and it's also reflected in the growing pipeline that we are presenting today. And today, I will start with a summary of our 2025 achievements, and then I will take you through the highlights of the quarter. Hans Jakob will go through the financials. And then at the end, we will also provide comments on our outlook for 2026. And then to summarize our full year 2025, we are scaling the platform while maintaining -- continuing to maintain financial discipline, and we have also strengthened our balance sheet. We see strong near-term growth, and we have 11 gigawatts of generation capacity across our projects in operation, in construction and in our backlog. And this is our largest near-term growth that we have ever had. We have also significantly strengthened our position in storage and hybrid solutions, reflecting the increasing demand for flexible and hybrid systems. Our growth portfolio now includes more than 6.5 gigawatts of battery storage systems. And this development is supported by battery prices falling over the past 2 years, and we aim to continue to increase our pipeline in this space. During the year, we have also reduced our gross debt -- corporate debt by 25% and our corporate debt now stands at NOK 6.7 billion. And this is something that we have done while we continue to invest in new projects and new capacity. So overall, I'm very happy with the performance that we have achieved last year, and we are proving that we can execute on growth while we continue to deleverage, building a resilient and a very scalable platform. So let me then take you through the highlights of the last quarter. We delivered strong group revenues of NOK 3.4 billion. This is an increase of 25% relative to the same quarter last year, and this is mainly driven by high activity in our Development & Construction segment. We have very good progress on our projects under construction. And in the quarter, we recognized NOK 2.3 billion in revenues and also a gross margin of 14%. And the key drivers here were Obelisk in Egypt and also the Mogobe BESS project in South Africa. And it's important to emphasize that the attractive gross margin that we are recognizing, it is based on a very strong underlying economics of the projects that we currently have in our construction portfolio. We also continue to mature our pipeline and secure new projects for future growth, with the backlog now reaching an all-time high of 5.3 gigawatts of generation capacity and 4.7 gigawatt hours of battery storage capacity. This is driven by new PPAs that we've been signing over the quarter in Egypt, in Tunisia and also in the Philippines. And one of these projects, which is Energy Valley, is really a landmark project in Egypt, and we will come back and talk a bit more about that later. In parallel, we have also improved our corporate debt maturity profile. We have issued a new bond in November during the quarter. We also paid down the term loan. And at the end of the quarter -- at the end of the year, we have a very strong liquidity position of NOK 5.6 billion. So with that, let me also then take you through the key elements of the Power Production segment. Last quarter, we generated 1 terawatt hours, and this is in line with last year when we adjust for the divested assets. New projects contributed with 73 gigawatt hours. This is from Grootfontein in South Africa and it's also from the Mmadinare project in Botswana. While when it comes to the Philippines, we generated slightly lower megawatt hours, and this is due to hydrology. Revenues from power production amounted to around NOK 1.1 billion, and this is broadly also in line with last year when we are adjusting for the divestments that we've done. And overall, this demonstrates the resilience and the predictability of our contracted generation portfolio even as we continue to actively optimize our portfolio. Now a few words on Ukraine. And here, the ongoing war obviously represents challenging environment, a challenging environment for operations. We own and operate 5 projects in Ukraine in the central and the southern parts of Ukraine, with a total capacity of about 336 megawatts. And during the fourth quarter, the substations and transformers related to one of our projects were targeted and damaged by Russian drone attack. Our first priority in this situation is our employees in the country, and it's very good to know that those are unharmed at least physically after this drone attack. But the power plant is disconnected due to the damage and is currently not delivering energy onto the grid. Ukrenergo, the state-owned utility and our team is working very hard to repair the damages, and we are currently targeting to get the plant reconnected to the grid and start delivering energy again in the beginning of the second half of this year. This is obviously impacting the power generation from Ukraine during the year, and Hans Jakob will come back and comment on this also in the outlook for the year. So let me now talk about the Philippines. Here, we delivered yet another solid quarter, and the Philippines continues to be a major financial contributor to the company. We generated 249 gigawatt hours in the quarter. And despite the slightly lower generation compared to last year, the financials from Philippines were better than last year. Overall, we reached net revenues of NOK 403 million. This is up from NOK 390 million same quarter last year. And here, we are now seeing the benefits of having a flexible asset portfolio and active trading operations in the country. This is now demonstrated based on the several -- as we have several revenue streams and that we're able to capture attractive trading opportunities. And through this, we are able to deliver good and strong financial results despite the fact that the hydrology is slightly lower in the quarter. And we also continue to allocate a significant part of our capacity to the ancillary services market in the country, again, based on the fact that we are seeing attractive revenue opportunities, earnings opportunities in that segment and based on our ability with the flexible asset portfolio that we have. Prices in the quarter were also up. And additionally, we've been able to capture higher-than-average prices on our contracts, and this is also contributing to the financials. So in terms of EBITDA, that increased by NOK 31 million in the quarter to NOK 363 million. Then in terms of construction, we currently have 1.5 gigawatts of solar and 700 megawatt hours of battery storage projects under construction in 5 different countries. Andreas is fixing that. In addition to this, we are also progressing well in our release platform, and we are also having a few projects in that platform being installed as we speak. Since last reporting, we've had a very good construction progress across the portfolio, and we have recorded NOK 2.3 billion in revenues and a gross margin of 14%, as I've already said. And the EBITDA for the D&C segment was NOK 251 million, which is a very high level. Grootfontein in South Africa and also the second phase of Mmadinare project in Botswana reached COD during the quarter and is now in operation. In Tunisia, we target COD for the Tozeur project and the Sidi Bouzid project by the end of the quarter. And for the solar project in Brazil and also for our battery projects in the Philippines, we are expected to reach COD by the end of the first half of the year. When it comes to Mogobe in South Africa, our first battery project in South Africa -- so when it comes to the solar project in Brazil and also the battery projects in the Philippines, we are expecting to have COD by the end of the first half. And then when it comes to Mogobe, our first stand-alone project -- stand-alone BESS project in South Africa, we are for this project expecting to reach financial close in the second half of this year. In general, I'm very pleased with the progress that we're seeing on the construction activities across our portfolio, and I'm very proud of the teams that are doing a very good job on this. At the end of the quarter, we have NOK 1.8 billion in remaining contract revenues related to the projects that we currently have in construction, and we continue to expect to have a gross margin of 10% to 12% related to these projects. Beyond this, obviously, we continue to mature the projects that we have in backlog, and we foresee that we're going to continue to have a high activity level in the Construction segment going forward. Now let me also take some time to appreciate our largest project to date, the Obelisk project. Total CapEx of this project is close to NOK 6 billion. And then it's finished, it will generate in the range of 3 terawatt hours on an annual basis, and it will provide 1.3 million tonnes of CO2 emission reductions. It's a massive project, and it's being constructed at record pace. We have already completed phase 1, which is including 50% of the solar capacity, 100% of the battery capacity and obviously also a very large substation. And this is only about 15 months since we signed the PPA. We are having about 5,000 people on site, and this team is installing in the range of 200,000 modules on a monthly basis. So we're working very hard to secure commercial operation for phase 1 ahead of schedule by the end of this quarter and also accelerating the completion of phase 2, and we're targeting to reach COD for phase 2 already this summer. And obviously, building this project, constructing this project gives us a lot of very valuable experiences and learnings. And we will use these learnings when we're now moving forward also and preparing to start construction for the other projects in Egypt, like, for instance, Egypt Aluminium and also the Energy Valley project. I will now zoom out a bit and talk about our growth portfolio. We have an all-time high backlog of 5.3 gigawatts of generation capacity, and this is including projects in Egypt, in South Africa, in Tunisia, in Romania and in Colombia. And then the construction of these projects, including the ones in backlog, have been completed over the next few years, we will reach a total generating capacity of 11 gigawatts. This is up 2.5x relative to where we are today. In addition, behind this, we have a pipeline of 7.4 gigawatts that obviously we will continue to mature and convert into backlog also over time. Our growth portfolio also includes battery storage, either in hybrid systems or as stand-alone storage systems. Here, we have a backlog of 4.7 gigawatt hours in South Africa, Egypt and the Philippines. And we have now chosen to show this portfolio separately so that you can see also how this is growing over time, and we believe that there's going to also be significant growth opportunities in this space going forward. And let me now also turn at the end to a landmark agreement signed in Egypt, which is a 25-year PPA for 1.95 gigawatts of solar and 3.9 gigawatt hours of battery capacity. So the Energy Valley project, as you will see on this page, includes 2 stand-alone BESS installations and 1 solar and battery hybrid facility. And part of the production from this hybrid facility will be used to provide 24/7 green baseload power. And this is a first of its kind. The project will generate about 6 terawatt hours when it is in operation, it will provide about 2.4 million tonnes of CO2 reductions, and it will save Egypt $150 million on an annual basis in saved fuel costs related to the alternative, which is running their thermal power plants, $150 million on an annual basis. And with the signing of this agreement, we are cementing our position in Egypt as one of the leading players in renewable energy in the country, and we have a very strong team on the ground, which is driving this. And in total, we now have 5 large growth projects in Egypt across different technologies, solar, wind, batteries and green hydrogen. These projects, they will generate substantial D&C revenues over the next few years as we move them through construction. And on a longer-term basis, obviously, they will also generate predictable revenues in the Power Production segment related to the 25-year PPAs that we have for these projects. And finally, also this portfolio will contribute to reduction of 5 million tonnes of CO2 emissions. And just for reference, this is more than 10% of Norway's CO2 emissions on an annual basis, more than 10%. So we now focus on finalizing construction of Obelisk and securing partners and financing for this portfolio with the aim to move this portfolio into construction by the end of this year. So with that, Hans Jakob, I will hand it over to you to take us through the financials. Hans Jakob Hegge: Thank you, Terje. Is the Microphone okay? Yes. So it's been said before, but we are pleased to present strong results across the group, high D&C activity and a good quarter in the Philippines. I'll walk you through the group financials and the performance of our operating segments. And I will also comment on capital structure and further improvements. Starting at group level performance. The last 3 years has been a transition period with increased capital recycling and accelerated growth. The full year consolidated revenues was NOK 5.2 billion and EBITDA NOK 4 billion. Our proportionate revenues was NOK 11 billion and EBITDA NOK 4.6 billion, both positively impacted by the D&C segment. Looking at the quarter on group level, the all-time high D&C activities driving proportionate revenue growth, positively impacting our group financials. Consolidated revenues was NOK 1 billion compared to NOK 1.1 billion in the same quarter last year. EBITDA reached NOK 697 million compared to NOK 816 million year-on-year. The reduction is mainly driven by divestments, which has been instrumental to our long-term strategy of funding growth and reducing debt. This will result in additional revenues from new projects and lower interest expenses and reduced debt. Our proportionate revenues was NOK 3.4 billion compared to NOK 2.7 billion in the same quarter last year. And the proportionate EBITDA was NOK 1 billion compared to NOK 1.4 billion year-on-year. Now let me take you through the segments. Starting with Power Production, which delivered revenues close to NOK 1.1 billion compared to NOK 1.6 billion in the same quarter last year. The reduction is mainly explained by the divestment gains of NOK 380 million booked in the fourth quarter last year. EBITDA was NOK 842 million. And on a 12-month rolling basis, you can see stable development adjusting for sales gains as we are managing to offset the EBITDA from divested assets with new projects. The last 12 months, we have delivered NOK 5.2 billion in revenues and NOK 4.3 billion in EBITDA. Overall, we are very pleased with the value generated from our operating assets. In our Development & Construction segment, activity levels continue to increase. Proportionate revenues more than doubled to NOK 2.3 billion and EBITDA was NOK 251 million, significantly up from the NOK 51 million in the same quarter last year. The trend from the last 12 months confirms the long-term strength and scalability of our D&C business, underlying strong growth. D&C revenues in the last 12 months have reached NOK 5.8 billion with a steady increase over the last quarter, 5 quarters in a row. The rolling EBITDA ended at NOK 462 million, with contribution from high-margin projects and disciplined cost control. The increasing trend reflects higher activity levels across several geographies with Obelisk in Egypt and Mogobe in South Africa being in the forefront in this quarter. With a strong backlog, including 8 projects in 5 countries expected to start construction in the first half of this year, we expect D&C to remain a key engine on our continued profitable growth. At the end of the quarter, we had available liquidity of NOK 5.6 billion. Let me explain some of the main movements. We received NOK 631 million in distributions from power plants, had positive working capital movements of NOK 596 million, mainly related to milestone payments for Obelisk. We invested net NOK 220 million in growth projects and paid NOK 130 million of interest and reduced our corporate debt by NOK 73 million. The EBITDA from the D&C covered investments in the quarter, which is a confirmation of our robust business model and the RCF is currently undrawn. We continue to strengthen our capital structure. Net corporate debt was reduced to NOK 3.4 billion, down from NOK 5.6 billion in the second and NOK 4.3 billion in the third quarter. The reduction was mainly driven by the change in cash of NOK 900 million. We also repaid the outstanding term loan with the proceeds from the NOK 1 billion bond. On project level, net debt increased by NOK 800 million to NOK 16.7 billion, and the project debt in operation increased by NOK 2.3 billion as Grootfontein in South Africa and Mmadinare project in Botswana, debt moved to operation after COD and the net debt for projects under construction was reduced by NOK 1.4 billion. And now the outlook for the year. So commenting on the 2026 outlook, I will start with the full year estimate of Power Production between 5.2 and 5.6 terawatt hours. Our estimated full year EBITDA is in the range of NOK 3.8 billion to NOK 4.1 billion. And let me explain some of the main items affecting the guidance compared to the NOK 4.3 billion we delivered in the full year last year. Last year, we reported NOK 500 million in divestment gains and operational EBITDA related to Uganda, Vietnam, which we sold during the year, we had NOK 200 million of retroactive payments for tariff adjustments in the Philippines and Pakistan. In this year, we expect reduced EBITDA from Ukraine due to the repair of one of our plants and lower payment levels for the remainder of the portfolio in the country. Lower EBITDA from the Philippines and Laos due to the normal hydrology expected compared to the high levels we saw in 2025. These effects will be partly offset by contributions from new projects that are starting operations during the year and other operational improvements. For the first quarter, we expect that total Power Production between 950 and 1,050 gigawatt hours. EBITDA in the Philippines of NOK 180 million to NOK 240 million based on the normal hydrology and strong contributions from ancillary services. In our D&C segment, we have NOK 1.8 billion remaining contract value and a gross margin estimate of 10% to 12% on average across the portfolio of projects under construction. For corporate, we expect a full year EBITDA of NOK 125 million to NOK 135 million negative. And these estimates reflects a strong base of operating assets, high construction activity and healthy cost control. And by that, I invite you back, Terje, to take us through the summary. Terje Pilskog: Thank you, Hans Jakob. So to sum up, 2025 was a very good year for Scatec. We've had good financial performance, high construction activity during the year. We have significantly increased our pipeline and backlog during the year, and we have also strengthened the balance sheet. I'd like to think that 2025 was a transformative year for Scatec. We also launched our new targets and our strategic priorities during our Q3 presentation. And in 2026, in line with this, we will focus on strong operational performance, execution of our significant growth portfolio, divestment of noncore assets and also take further steps in terms of deleveraging our corporate balance sheet. I think it's going to be a very exciting and a very active and hectic year. Thank you very much. And now we will move to questions. Andreas Austrell: Thank you, Terje and Hans Jakob. Over to the Q&A. We will as usual, start with the audience in the room, and then we will take some online questions. So if you want to ask a question, just raise your hand. Unknown Analyst: [ Andreas Obst ], SEB. In your guidance for 2026 on Power Production, you provided some soft comments about the changes in Ukraine, but could you be more explicit on how much the contribution in Ukraine is expected to be compared with 2025 levels, some rough indication? Hans Jakob Hegge: Yes. I think in one of Terje's graphs, he showed the impact in the fourth quarter last year of NOK 67 million. I think it's also in the fact sheet. Looking at the outlook as Terje said, the team is working incredibly hard to reinstall the capacity and is anticipated to take until summer. And we haven't provided a figure, but ballpark around NOK 100 million. Unknown Analyst: Okay. So -- but you also made a comment about which I've interpreted as somewhat lower payments from you... Hans Jakob Hegge: Lower payment levels, that Terje is very much aware of. And as the rest of us, we have basically had very higher-than-expected payment levels last year. So starting the year with a more cautious approach to more normal as expected payment levels is a fair assumption. Unknown Analyst: So if I just to summarize, the base line should be somewhat lower and roughly NOK 100 million below the baseline for the first half. Hans Jakob Hegge: Yes. Unknown Analyst: Okay. I have another question as well, if I may. In the Development & Construction segment, I appreciate that you're progressing projects and are trying to sustain activity also in the first half, but there are some financial closures, which needs to be in place for that to happen. How should we think about the first half in D&C upon completion of the projects currently under construction, the NOK 1.8 billion? Terje Pilskog: Your question is what is going to come potentially in addition to... Unknown Analyst: Yes, or how quickly, is that a second half event? Or are you still comfortable with the commencement of construction, as you indicated in the past, during the first half of... Terje Pilskog: Yes. I mean we're typically not commenting on specific dates or exactly sort of when the projects in our backlog are going to come into financial close and start of construction. But we see that sort of across the backlog that we currently have. There are also some projects that we anticipate will come into construction -- reach financial close and coming into construction in the first half of the year. Andreas Nygard: Andreas Nygard, Nordea. You have huge projects now going on in Egypt. Should we assume that you can continue to originate to 2 to 3 gigawatts of projects annually in Egypt? Terje Pilskog: I think now -- I mean, as we went through here, we now have 5 significant projects in Egypt that we're going to focus on securing financing, bringing in investors, bringing to financial close and start construction during this year. And I think that's going to be a main priority for the year. There's still significant more opportunities in Egypt related to renewable energy. Renewable energy makes sense in Egypt. It's basically saving costs related to the alternative sources of power generation. So -- and Egypt is trying to accelerate their program for reaching their targets when it comes to renewable energy in the power mix. They had certain targets. I think it's 42% by 2035. They took it back to 2030, and now they're trying to reach it even earlier. So in that context and based on our position in Egypt, we see more opportunities in Egypt. Andreas Nygard: Okay. That's very clear and very nice to hear. But this scale of projects, could you find it outside of Egypt? Or is Egypt quite special right now in terms of the scale of the projects? Could you see 2 gigawatt projects in South Africa, for instance? Terje Pilskog: Yes. I do think you could also see projects at that scale also in South Africa. But obviously, it also depends a bit on how the regulations are developing. But I think as the power sector also in South Africa will continue to be deregulated, we will also see more opportunities to do corporate PPAs and to build out large portfolio of projects that can basically sell energy to more corporate offtakers. So I think that's a development that we will see. And then we will obviously look for developing large clusters of projects also in South Africa. So there is also potential for larger projects in South Africa. Andreas Nygard: So in summary, the activity level you're expecting in '26 and '27, that run rate could likely just continue in '28, '29 and for eternity? Terje Pilskog: Let me answer your question like this. I continue -- or we continue to see that renewable energy becomes more and more competitive in the markets where we operate. With batteries, it becomes more flexible. It can provide baseload green power. And in many of the markets where we operate, we are -- the countries are, in principle, saving money, reducing alternative cost of power generation from implementing renewables. So I don't see a reason why the current pace in the industry is not going to continue. And I think based on everything that we are currently doing and the track record, capabilities of the organization that we have, I think that we are in a good position to capture part of that growth. Andreas Austrell: We have a couple of questions from our online listeners as well. We can start with Jørgen Lande from Danske Bank. In terms of recent movements in input costs like silver and copper, can you comment on how this potentially has impacted the progress of reaching FID? Terje Pilskog: I think there's a couple of things happening in the industry. Some component prices are going up. The VAT rebate in China has been removed or is being removed over time related to panels and batteries. On the other side, we also see that other components that we are using, we are able to achieve savings. And the things that are happening in this industry is obviously not -- it doesn't come as a surprise to us. So we don't see that any of these things that are happening in the industry will have any significant impact on where we will be able to reach FID and take financial close and start construction of the projects that we currently have in the backlog. We will obviously continue to be very disciplined in terms of our hurdle rates, in terms of making sure that all the projects that we are doing are value creating for us and our shareholders. But based on what we are currently seeing, we see that sort of the changes in the industry is manageable and not also surprising. Andreas Austrell: Thank you. One question from Helene Brondbo from DNB Carnegie. Can you shed some more light on the status of your ongoing asset rotation program? Hans Jakob Hegge: Yes. That's the one we are not sharing a lot of detail on announcing transactions. What we have said is, of course, that we have clear ambitious targets, another NOK 3.4 billion proceeds to 2030. This is within a time frame, which should be manageable and its main focus on the noncore. It's also reaching certain ownership stakes deliberately on project carefully timed. So we have discussions ongoing and we are in terms of our long-term plan according to plan. Andreas Austrell: Thank you. Helene also asked about the input costs. I think we have covered that. Another one from Helene, to what extent can we expect the solid D&C gross margin in Q4 to be repeated? Terje Pilskog: Yes. Here, I mean, we have commented on that in our outlook, and we're saying that with regards to the NOK 1.8 billion that we have remaining in construction revenues or contracts, we are expecting and we are indicating that we will continue to reach in the range of 10% to 12% gross margin of those contracts. Andreas Austrell: Thank you. Another one from Jørgen Lande, Danske Bank. You guide 2026 Power Production to a midpoint of 5.4 terawatt hours, which is higher than the midpoint of consensus while EBITDA implies a very softer margin. Can you comment on how you think about our Power Production EBITDA in 2026? Hans Jakob Hegge: Yes. So I understand -- I think I understand at least where Jørgen is coming from. So is there a misalignment on the EBITDA side, and it has to do with the composition of the contribution. So I think we have to stick to the guiding that we have provided today and NOK 3.8 billion to NOK 4.1 billion is explained also in contrast to last year, the one-offs, any divestments is, of course, a potential deviation but also the impact on the pace of the new projects coming in. And I think it feels at least a bit special for us taking the development into account Kenhardt and then doubling to Obelisk and then we have Energy Valley. But we're not pre-announcing anything. We just signed a PPA, but we are working very hard to mature this project, and that is, of course, a significant potential contribution. How this is forecasted? I think we have to stick to professional secrets. Andreas Austrell: Thank you. We have some questions from Anis Zgaya from ODDO BHF, one on Ukraine. I think we covered that one. Another one on the Philippines, you show a sustained contribution from ancillary services and a favorable water fee settlement in 2025. How should we think about AS, ancillary services pricing and volumes in 2026 versus 2025? And what's your assumption for hydrology normalization embedded in the guidance? Terje Pilskog: I think when it comes to the ancillary services market, there are 2 elements of the ancillary services revenues that we are currently generating. It's partly related to a contract that was secured a couple of years ago, where we have very predictable revenues. And that contract is representing maybe around 50% of the volumes that we are typically seeing in that segment. And in general, when it comes to the pricing, on a short medium-term basis, I mean, it's very difficult to provide input and outlook in terms of prices, but we don't see a reason on a short medium-term basis that the prices in the ancillary services market is going to change. Hans Jakob Hegge: Yes. And on normal hydrology, it's just that when you use these data for up to 10-year period, you see variations. And last year, I think we agreed that it was above normal hydrology. And it's a bit hard to start the year without normal hydrology as an assumption. So that's where we start off, just being transparent about the relative change. Terje Pilskog: And obviously, the interesting thing when it comes to the Philippines now is that we have 2 new projects, 2 new battery storage projects that are in construction and that we are anticipating to reach financial COD in the first half of this year, and that is increasing our capacity related to battery storage from 24 megawatts to 80 megawatts in the country, so a tripling of capacity that comes into operation first half this year that enables us to increase our participation in the ancillary services market. And then on top of that, we are also intending to move more projects. We have more projects in backlog also related to battery storage, but we will also aim to move into financial close and start of construction also relatively soon, and that will further then increase our capacity on the ancillary services market and increasing our flexibility in the Philippines and increasing our ability to tap into several revenue streams, as I talked about in the commentary. Hans Jakob Hegge: I just flip to the slide that you showed how significant ancillary services has been sustained over several quarters. So with the ramp-up of battery capacity, it's even more robustified. Andreas Austrell: One follow-up on your Ukraine. Any insurance recoveries or compensation mechanisms you can detail? Terje Pilskog: No, currently in the current situation in Ukraine, and we have to remember that the war is soon entering its fifth year. It's not really possible to get insurance, which is going to cover these kinds of events in Ukraine. Andreas Austrell: Okay. Quite a lot of questions today. Just I think, 2 more. Lars Christensen, Fearnley Securities. Congratulations on the strong results. For the Energy Valley project in Egypt, should we expect any asset rotation to help fund the investment? Terje Pilskog: As we said, we are continuing to work on our divestment program, and we will continue to work on optimizing our portfolio over time and have a very active perspective on our portfolio. And then we also, in previous presentations, discussed the fact that we will, in certain projects, also go down in ownership stakes through a layered structure, where we are still able to maintain control over the project, but to take down our direct equity investment into the project and through that, manage also the capital investments over time. Andreas Austrell: Okay. I think we'll take just one last question. Do you see any problems of the power grid in any of your countries you have -- where you have large projects? And how do you solve these problems? Terje Pilskog: It is clear that sort of with the increased penetration of renewables, especially intermittent renewables, there are situations, I think in all grids, in all countries, where, you will have temporary challenges with the grid that will either have to be managed through strengthening the grid over time or also with the addition of storage capacity and batteries. And there, I would like to draw the attention to Energy Valley projects. It's 3 installations, 2 pure battery installations at 2 different locations and 1 hybrid facility. And obviously, those stand-alone battery installations, they are put where they are in order to help balance the grid and mitigate those types of concerns in those situations. Similarly, same thing is happening in South Africa, where we are now building one stand-alone battery project and where we have another one in our backlog. And these batteries are obviously also put into places where they help balance the grid and mitigate the challenges that will, in certain places, come into the grid. So this is an important part of our business going forward. We have to be very -- we have to be on top of the grid situation in the markets where we operate and make sure that we focus on the areas where there is grid capacity and where we will be able to implement new renewable energy projects and deliver the energy onto the grid. Andreas Austrell: Thank you, Terje and Hans Jakob. One more from Andreas, SEB? Unknown Analyst: Just a final question on asset rotation, the NOK 3.4 billion when you refer to asset rotation, that relates to projects already in operation as of today, right? Terje Pilskog: That's correct. Andreas Austrell: One more from Andreas, Nordea. Andreas Nygard: So just the last one on your investment target, NOK 1 billion of equity annually. The Energy Valley project, I guess, you will structure it perhaps the same way you're doing Obelisk, aiming for an equity bridge perhaps. The way you're seeing your backlog now, are you actually using the full of your NOK 1 billion equity injection capacity the way you're looking to structure that backlog? Terje Pilskog: I think Terje will fight to answer that question, do you want to go? Okay. Under construction and in backlog, there is equity around NOK 3 billion, and that is excluding Energy Valley. So Energy Valley is sizable as you could imagine. And we will come back to more granularity on the project as it is progressing, but we are well underway to reach our target and the guiding from the strategy update. That's basically directionally what I would like to say. But under construction and backlog is around NOK 3 billion equity. Andreas Nygard: And will that be cash? Hans Jakob Hegge: We haven't provided super detailed analysis of this today, and I think we will come back to it. But I read your question, Andreas, is this in line with what you said you would inject of equity. And I think we are fairly aligned what we have on the plate as is. Andreas Austrell: Okay. With that, I think we say thank you to everyone and end today's presentation. Thank you. Terje Pilskog: Thank you very much.
Michael Yun: Hello. This is Michael Yun, Head of IR Group. Welcome, everyone, to Hyundai Motor Company's 2025 Q3 Business Results Conference Call. On behalf of Hyundai Motor Company, I appreciate your time for participating in today's call. Please refer to the presentation HMC 2025 Q3 business results on our IR website. This presentation includes quarterly key messages, sales performance and profit analysis and for quarterly summarized cash flow statement and detailed regional sales breakdowns, please refer to the appendix. First, Q3 key messages. Despite concerns over tariff impact and the resulting slowdown in demand, strong sales performance led to the highest third quarter revenue on record. Particularly in the U.S. market, we reached a record high quarterly market share of 6.3% post-COVID, driven by strong sales of volume models and hybrids such as the Palisade. This led to an all-time high hybrid sales mix of 20.4%. Finally, following the previous quarter in which the combined share of hybrid and Genesis sales surpassed 20% for the first time ever, this third quarter also recorded 29%. Next, the sales performance. In the third quarter of 2025, global wholesale records recorded 1.04 million units, an increase of 2.6% compared to the previous year, while retail sales also reached 1.04 million units, reflecting a 4.8% increase year-over-year. Next, I will go over details about the increase or decrease in the wholesale sales through key market summaries. In the U.S. market, sales increased by 2.4% year-over-year, totaling 257,446 units. We continue to see strong growth led by SUV and hybrid sales and especially hybrids accounted for a record high 20.4% of total sales. Sales of eco-friendly vehicles, including EVs and hybrids, rose 16.4% year-over-year, reaching 70,680 units. Due to concentrated demand ahead of the termination of EV subsidy programs, EV retail sales surged 90.3% year-over-year. Going forward, we will leverage the launch of the new Palisade hybrid to drive incremental growth and strengthen our market share. In Europe, sales increased 8.3% year-over-year, totaling 150,123 units. Growth in key markets such as the U.K. during the September peak season as well as Turkiye and Spain contributed to the overall sales expansion in the region. Sales of eco-friendly vehicles rose 41.6% year-over-year, reaching 73,990 units, driven by a strategic increase in the share of electrified models. Despite reductions in EV subsidies across major markets, we continue to expand our EV sales mix, reaching 49.3%, driven by the strong performance of the in-store. We will pursue our annual sales targets through strategic allocation of new models such as the Inster and IONIQ 9 alongside optimized sales strategies tailored to each market. In the domestic market, sales increased by 6.3% year-over-year, totaling 180,558 units. Driven by the new model effects of the Palisade and IONIQ 9, we maintained a high proportion of the SUV sales. Sales of eco-friendly vehicles reached 69,259 units, a 28.7% year-over-year increase, supported by the strengthening of our EV lineup. Despite intensified competition from rival hybrid model launches, strong sales of the Palisade Hybrid drove hybrid sales to grow 22.6% year-on-year. Next, I will explain the sales analysis by vehicle types. Global SUV sales, including Genesis, totaled 659,024 units, accounting for 63.5% of total sales. Global passenger vehicle sales reached 327,099 units, representing 31.5% of total sales. The trend of a high proportion of SUVs continues, supported by the enhancement of our key SUV lineup, including the new Palisade. Eco-friendly vehicle sales increased by 24.8% year-on-year, driven by a shift towards eco-friendly models in Europe to meet emission regulations and strong sales in the U.S. market. EV sales rose 24.6% year-on-year, supported by robust EV growth in Europe, while hybrid sales continued their strong momentum, growing 22.9% year-on-year. This concludes the discussion on sales, and I will now provide an explanation regarding profits and losses. This page first summarizes our income statement. Consolidated revenue increased by 8.8% year-over-year to KRW 46.7 trillion, and operating income decreased by 29.2% year-over-year to KRW 2.5 trillion. The Automotive Division's revenue increased by 7.9% year-over-year due to favorable FX environment and expansion in high-value segment, especially hybrid vehicles. The operating profit decreased by 48.7% year-over-year with tariff impact in the U.S. market and general increase in incentives. Revenue from finance division increased by 10.7% year-over-year due to continuous growth in the U.S. market penetration rate and asset size. Operating profit increased by 32.4%. Net income decreased by 20.5% year-over-year to KRW 2.5 trillion. Next is quarterly revenue and operating income analysis. Revenue benefited from favorable exchange rates contributing KRW 849.3 billion and increased global wholesale sales added a volume effect of KRW 617.8 billion. Additionally, an improved mix driven by higher hybrid and Genesis sales contributed KRW 1.23 trillion. Combined with growth in the Financial segment, total revenue rose 8.8% year-on-year. Despite a record high third quarter revenue, unfavorable business conditions negatively impacted our profitability, including the full effect of tariffs, negative foreign exchange impact on sales warranty provisions due to quarter end exchange rate increase and higher incentives driven by intensified competition in key markets. Although contingency plan partially offset tariff effects, the operating profit decreased by 29.2% year-over-year. Our Q3 cost of goods sold ratio recorded 82.3%, a 2.1 percentage point increase year-over-year. SG&A recorded KRW 5.7 trillion, which is a 16.9% increase compared to last year due to the increase of marketing-related expenses and warranty. Finally, our net profit decreased by 20.5% to KRW 2.5 trillion. That concludes the end of the presentation of the 2025 Q3 business results. Thank you. Next, Executive Vice President, Seung Jo Lee, the Head of Planning and Finance Division, will assess the company's business results in Q3. Seung Jo Lee: Good afternoon. This is Executive Vice President, Seung Jo Lee, Head of the Finance Division. I will now present Hyundai Motor Company Q3 2025 business performance and Q3 dividend and shareholder return policies. Sales revenue reached KRW 46.7 trillion, an increase of KRW 3.8 trillion compared to the same quarter last year. This was driven by strong sales in the North American market and an overall increase in sales volume. Additionally, the rising proportion of hybrid vehicle sales contributed to the growth along with increased sales of high-value models. Operating profit saw a KRW 1.8 trillion decline due to the full impact of tariffs. However, the tariff impact was partially offset by the proactive implementation of contingency plans. Moreover, due to the rising trends in average market incentives across major regions, incentives increased by KRW 212.1 billion compared to the same quarter last year. Despite a KRW 26 increase in the average won-dollar exchange rate compared to the same period last year, a sharp rise in the exchange rate at the end of the quarter resulted in a negative FX effect of KRW 280.7 billion. Nonetheless, the combined share of hybrid and Genesis vehicle sales based on wholesale volume reached 21%, surpassing the 20% mark for the second consecutive quarter of first in history. This improvement in fundamentals, along with active efforts to mitigate tariff impacts enabled the company to achieve operating profit of approximately KRW 2.5 trillion and an operating margin of 5.4%, in line with market consensus. For the full year 2025 performance, in line with the updated annual guidance shared during the recent CEO Investor Day, we expect to achieve a sales growth rate of 5% to 6% and an operating margin of 6% to 7%. Next, let me address the dividend for the third quarter of 2025. In accordance with the value of program announced in August 2024, we plan to distribute a quarterly dividend of KRW 2,500 per share for both common and preferred stocks. The record date for the Q3 dividend is November 30, and the payment date is December 31st. Next, I would like to elaborate on our approach for our shareholders' return policy, which targets a TSR of at least 35%. This shareholder return policy or TSR also reflects a dividend policy with a minimum payout ratio of 25%. And the basis for calculating TSR similar to the payout ratio is annual net income attributable to controlling shareholders. Accordingly, at the time of Q4 earnings call in January 2026, we plan to disclose the final dividend amount that meets the minimum TSR of 35%, along with plans for share repurchases or cancellations. Considering the timing required to calculate TSR based on final net income after the annual closing, we will provide further details then. We intend to maintain the same approach going forward. While share purchases and cancellations may be executed at any time during the year through Board resolutions, given the nature of our shareholder return policy, which is based on profit, the portion of share repurchases and cancellations required to meet the TSR target of 35% will be finalized at the time of annual results announcement. Despite an increasingly uncertain business environment driven by tariff impacts and other factors, we have been making every effort as an individual company to maximize profitability and strengthen fundamentals. This includes implementing contingency plan to actively offset the tariff impact. Additionally, the final agreement on a 15% tariff will reduce the burden compared to previous levels. In the mid to long term, we anticipate that this will contribute to achieving the annual operating profit target ranges outlined during the CEO Investor Day in September. We will provide additional communication to the market as soon as possible. We sincerely appreciate the continued support of our shareholders and investors. Thank you for listening. Michael Yun: Next, Vice President, Hyungseok Lee, the Head of Planning and Finance Division of Hyundai Capital, will assess the Q3 results for the finance business. Hyungseok Lee: Good afternoon. I'm Hyungseok Lee, Head of Finance at Hyundai Capital. Let me now present the finance sector's Q3 2025 performance and Q4 outlook. In the first quarter, Hyundai Capital and Hyundai Capital America continued to support vehicle sales as the group's captive finance companies, delivering solid results. I will now continue with the detailed performance by company. First is Hyundai Capital. Despite sluggish domestic demand and weakened consumer sentiment, we expanded collaboration with the group and launched specialized financing products for SUVs and Genesis models, driving active sales efforts. As a result, new car installment volume rose 40.1% year-over-year, leading to a 2.7% increase in product assets. The share of auto finance within total assets rose to 83%. Although loan interest income declined due to regulatory impact, lease interest income and gains on sales of loans receivable increased, resulting in a slight year-over-year growth in operating revenue, excluding FX effect and derivatives. We have achieved 75% of our annual funding target and including Green bonds in April, sustainability-linked bonds in July and social bonds in September, 21% of our domestic bonds were issued as ESG bonds. We also continued efforts to reduce funding costs through a diversified portfolio, including overseas bonds and ABS, leading to a 2.8% year-over-year decrease in interest expenses. In terms of asset soundness, while the capital industry overall saw deterioration due to real estate PF and unsecured loans, Hyundai Capital maintained a sound portfolio centered in auto finance and actively sold distressed debt. As a result, our delinquency rate hit a record low of 0.77% in Q3 and credit loss expenses also declined. Operating expenses fell 2.1% year-over-year and operating profit rose 34.7%. And including equity method gains from overseas subsidiaries, pretax profit increased 44.6% year-over-year. In the fourth quarter, we will continue our efforts to defend profitability through cost and funding efficiency, while proactively securing liquidity to strengthen financial stability amid rising market volatility. We also plan to ramp up operations at our newly launched Indonesian subsidiary in September and diversify our auto finance offerings to further support the group's global vehicle sales. Next is Hyundai Capital America or HCA. In the third quarter, supported by strong vehicle sales across the group, HCA's acquisition rate rose to 75.1%. Combined with expansion of EV lease volumes, total product assets grew 18.6% year-over-year. Driven by growth in eco-friendly vehicle leases and rising product interest rate, operating revenue increased 7.3% compared to the same period last year. On the funding side, HCA successfully issued USD 2 billion in bonds in September, achieving 88% of its annual funding target. Despite volatility in the U.S. financial market, cumulative bond issuance reached $11.3 billion this year. As a result, total borrowings increased and interest expenses rose 16.9% year-over-year in Q3. In terms of asset soundness, over 85% of customers are prime rated and less than 1% are subprime, reflecting our strict credit management. This contributed to a decline in delinquency rate. However, additional provisions were made in response to macroeconomic uncertainty and asset growth led to a 6.3% increase in operating expenses. Reflecting this, our operating profit rose 28% year-over-year. Looking ahead to Q4, we expect a challenging environment due to continued inflation, reduced consumer purchasing power, the termination of IRI subsidies and slowing demand. However, HCA has secured $19 billion in liquidity as of the end of September and is actively managing residual value risk through remarketing efforts. We will continue to strengthen business synergies with this group through sales finance collaboration, closely monitor market conditions and respond flexibly. This concludes my presentation. Thank you for listening. Michael Yun: With that, we will conclude the presentation and take your questions. Operator: [Operator Instructions] The first question will be provided by Paul Hwang from Citi Securities. Paul Hwang: [Interpreted] I am Hwang Paul from Citi Securities. I have two questions. First regarding tariffs, next regarding performance. So going on to my first question, so just today, to confirm that tariff will be 15%. You might not be able to give us much details, but what would be the overall direction now that you know that the tariff is set to 15%? For example, what would be the mid- to long-term strategy, and what will be the direction that Hyundai Motors will be taking? So if there's anything concrete or details that you could share, that would be appreciated. My second question is regarding performance. You did mention in Q3 that the effective tariff, what that was. But what are the non-tariff effects that will take into -- that you need to take into account? You said that you were able to buck off tariff by 40% in Q3 and mitigated by 5%. But is there any more room to further mitigate the impact of tariffs? And how can you quantify that effect by what? So is there an example that you give us? And finally, the effect of the mix -- the product mix, what do you see the changes in that in terms of Q4 and for the next year? Unknown Executive: [Interpreted] Thank you for your question. To answer your first question regarding tariffs, yes, we did see a good news regarding the 15% agreement on tariff. So that's very good news for us. But regarding specific numbers, the detailed numbers for the future, we still are in the process of calculating these numbers because the government has recently announced that it will be retrospectively reflected as of 1st of November. But the specific date and what direction the government is going to take has not been announced. So -- and I think the government is still in the process of trying to see how we can maximize the benefits on this. So my answer to your question would be that the numbers are still being calculated. So with the government's efforts making fruitful results, right? I think the biggest win for us was that the unclearness, the uncertainties regarding tariff is now cleared. We now know what the conclusion is. So that would -- we know -- we now know how to operate in the future, and we now have a clearer direction on which way we need to operate. So that will be the biggest benefit impact for us regarding non-price factors. Regarding what we can share in terms of any specific number strategies or our response, we have been emphasizing from the very beginning of the year that with the cost going up due to tariffs, this will be taken as an opportunity for us to re-diagnose what our core competitiveness is, what our capacity is and also an opportunity for us to change our fundamentals so that we can secure our future competitiveness. And as part of that process to improve our fundamentals, we are looking into identifying various collaborative projects that are out there, and we are regularly checking what performance are being made through these projects. So I will give you a couple of examples. I mean we do have plans for all of these projects, but we cannot share everything. So just to point out some of the key examples. In the past, we focus our cost saving efforts on new models. Of course, some efforts are being made for models that are already being produced. However, as of this year, we will be making same efforts for cost reductions, for not just the new cars, but also the cars that are already in production by improving the R&D competitiveness. And also with hybrid becoming ever more important, and we're also expanding sales of our hybrid models, and we are able to, through this effort, secure profitability that is pretty much on par with ICE vehicles as well. So we believe that improving and securing the cost competitiveness of hybrid systems are extremely important. And now we have made this opportunity where we can review the mid- to long-term cost structure of our hybrid model. Another example would be in the past, we were emphasizing how we are going to expand the commonization of parts, common use of parts. And now that is just a given. That is something that we need to do. But from now on, we're also trying to expand the common use and commonalities for manufacturing itself, how we can share the manufacturing cost and competitiveness is something that we're focusing on. So all the efforts that are currently in progress regarding these projects, we believe that the outcome and the actual performance will be seen as of next year. And you all know that during COVID-19, we were one of the key OEMs that were able to continue growth and take the prices as an opportunity for opportunity. So we do have that experience. And even right now, we believe that it will be a big chance for us to reflect on our key competitiveness and also to continue strengthening our competitiveness. Now to address your second question, what were some of the non-price efforts that were made to offset the tariff. Actually, we've already offset the tariff impact by 60% and a majority of the efforts that we have made are -- were non-price efforts rather than price, for example, saving the material costs and also regarding the current account. I think, we saved over KRW 700 billion in terms of the final effect. We also are looking to all other areas, for example, the product mix as well as the service areas. So I cannot really pinpoint out a specific area that we are looking into because we are covering everything in all areas regarding how we can save cost. As for the price area, like we said that we are trying to take the fast follower strategy, so we are closely monitoring the market to see what actions we can take and the decision will be made later on with that kind of monitoring result is seen. However, our key fundamental is not to hurt the customer value. And you also asked regarding what will be the mix impact for Q4 in next year. You already know that we are continuously trying to expand our sales proportion for hybrid and Genesis. So that effort will continue. And next year, we will be aggressively launching new cars, which will allow us to go into a golden model cycle. And with the launch of new cars, the incentive will obviously go down. So next year, we will continue to improve our mix. Operator: [Interpreted] The following question will be presented by Ji-Woong Yoo from DAOL Investment & Securities. Jiwoong Yoo: [Interpreted] I'm Yoo Ji-Woong from DAOL Securities. I have two questions. My first question is regarding the EV strategy in the U.S. market. As we see the fourth quarter, the sales volume will go down and then the incentives will go up, which will obviously help you to improve your profitability. However, someday when the subsidies are gone, then there should be a new strategy for you to make a reentry into this market. So I was wondering what kind of short term and also the long-term strategy in the coming years in 2027 and 2028. My next question is regarding our key models such as Palisade. So I know that you are currently making export to the U.S. market for our key models like Palisade and other SUVs. And like you said, the current situation of tariff rate going down from 25% to 15% is indeed favorable to HMC. However, if you see our competitors -- your competitors that in the mid-SUV segment, a lot of them are locally producing vehicles in the U.S. So I was wondering what kind of response strategy you have for the key models that you are not producing in the U.S. market? Unknown Executive: Let me answer your first question about profitability and the third -- when we look at the profitability in the third quarter performance, of course, with the IRA subsidy gone in September, in order to retain our inventory level in the U.S., we have increased our promotional activities, which has resulted in EV sales going up. So like you said, in fourth quarter, the incentive level will go down. In the coming years, in 2027 and 2028 in the EU, obviously, we need to ramp up our EV sales in order to respond to the emissions regulations. And in the U.S., we have originally designed the HMGMA plant as an EV dedicated plant. However, we are trying to produce all the different kinds of model, not just the EV models. So therefore, when we think about the U.S., the EV will not make up a significant growth in the short period of time. But in the long term, from 2030 or so on, the EV volume will likely recover. That may be a little bit slower than the two years that have been initially expected with the EV chasm going up, but we are expecting EV volume to recover in the long run. And I'm not pretty sure I understood your question regarding the incentive improvement and reentry into the market, but you said in the fourth quarter, if there will be a decrease in the volume, then the incentive will likely improve, and you may think about the reentry into the U.S. market. And I'd like to clarify that we have never backed off from the market. So we will continue to increase our sales volume going forward. And about the competitiveness enhancement activities, although I have not shared you all the details due to time constraints such as PE parts, but we are actually engaging in various activities to enhance competitiveness and PE part is one of them. And for PE parts activities, we can say that batteries and motors and other EV dedicated parts are included. And previously, we only focused on reducing the raw material cost of these parts, such as battery and motors. But now we are examining all the different types of parts because irrelevant of how costly or non-costly it is, I think in the long run, all the parts are important for the competitiveness of our [ SUVs. ] So that is why we are reviewing all the different activities. So regarding your second question, like you said, we are not currently locally producing our mid SUV segment, but we are locally producing Tucson. And like we have mentioned at our CID, we are increasing our proportion of U.S. local production. And from the fourth quarter, the new Palisade hybrid model will be launched, and we'll start selling that model. And thanks to the good news of yesterday of rate decrease from 25% to 15%. Since Palisade is a very profitable model, we will likely to improve our profit on this model as well. And regarding the local production of Palisade hybrid model in the U.S., we are internally reviewing this matter. And although nothing has been confirmed as of yet, we will likely increase the production incrementally of this model like we said in -- at the CID. Operator: [Interpreted] The last question will be presented by Theo Hadiwidjaja from JPMorgan Asset Management. Theo Hadiwidjaja: I have two questions. So the first one is, I think, following up on earlier question about your U.S. EV strategy. You mentioned that you are not planning to break down on your original plan. So can you confirm that it is the plan for you to continue with your EV strategy in the U.S.? And also, I guess, in relation to this, I understand that you also have a number of JVs in the U.S. producing batteries. What are your general plans on those JVs producing batteries for EVs in the U.S.? Zayong Koo: [Interpreted] Hi, Theo, this is Zayong Koo. Basically, on your first question, I think our CFO has actually answered many of that before. Basically, our EV strategy will continue. As we earlier mentioned, I think the timing is a bit pushed back, but nevertheless, we do believe that the EV will continue to grow. In the past, we had anticipated that will be maybe in the next 2 or 3 years. However, as we had pointed out in the CEO Investor Day, we are looking more at hybrids at least for the short to medium term, but EV from a longer term is on schedule basically from that perspective. Again, although it is a bit delayed. And your second question was on the battery JV. Yes, as you know, we do have two battery JVs, one with LG and the other is SK. That is actually continuing -- we don't have an exact timetable, but it will hopefully be in the next -- in the short term. Basically, I cannot give you an exact timing, but nevertheless, we are -- we will be working with LG and SK in acquiring or getting the batteries for the U.S. market. And again, this is a little bit more related to the timing of the EVs in general. So I mean, we are definitely moving along -- moving ahead with the joint venture. But nevertheless, the exact timing, I cannot give you, as I mentioned earlier. Michael Yun: [Interpreted] That ends the Q3 2025 earnings call for Hyundai Motor Company. Thank you for your time. Operator: [Interpreted] If you have any questions, please contact Hyundai Motor Company's IR group. Thank you very much for your attention. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]
Operator: Welcome to Hemnet's Q4 and Full Year 2025 Conference Call. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead. Jonas Gustafsson: Good morning, everyone, and a warm welcome to this 2025 Q4 release call and full year review for Hemnet Group. My name is Jonas Gustafsson and I'm the Group CEO of Hemnet. With me, near my side today at our headquarters in Stockholm, I have our Chief Financial Officer, Anders Ornulf; our Chief Operating Officer, Lisa Farrar; and our Head of Investor Relations, Ludwig Segelmark. Today, we've called for an extended session to cover an update on some important strategic and commercial topics and will, therefore, have a slightly longer presentation than usual. Firstly, we will start with a normal quarterly presentation where we go through the financials from Q4 and the full year of 2025. After that, we will follow up with a deep dive on Hemnet's market position as well as our strategic and commercial focus areas going into the first part of '26. Anders will also quickly break down what this means for our financial reporting going into this new year. As always, there will be opportunities to ask questions at the end of the presentation, and we will combine the Q4 Q&A and the deep dive Q&A into one session. Today's presentation will be moderated by our operator, so please follow the operator's instructions to ask questions through the provided dial-in details. So with that, let's get started, and let's move on to the next slide, please. Despite a very difficult market backdrop, Hemnet demonstrated strong performance and resilience in the fourth quarter. Net sales decreased by 4.4% in Q4 driven by a continued weak market with low published listing volumes. New listings were down with 26.4% in the quarter. Around 5 percentage points of the volume decline during the quarter was attributed to a new business rule introduced in February 2025, impacting the year-on-year comparison. This new business rule is allowing sellers to change agents without buying a new listing. ARPL, average revenue per listing grew by an impressive 29.2% in the fourth quarter driven by a continued increasing demand for Hemnet's value-added services fueled by a continued conversion towards Hemnet premium. EBITDA declined with minus 12.8% to SEK 154 million as the low listing volumes lead to lower net sales and lower fixed cost leverage. For the full year of 2025, the results demonstrated strong resilience with net sales increasing by 9% to SEK 1,526 million and EBITDA increasing by 7% to SEK 768 million, corresponding to an EBITDA margin of 50.3%. This was driven by yet again strong ARPL development of 28% for the full year, and this underscores our ability to maintain strong underlying value creation even in a challenging and unpredictable market. Going into this new year, we have several exciting product launches planned for the first half in 2026. This includes the rollout of Sell First, Pay Later”, which will start on Monday next week in Stockholm. We will talk more about why we're so excited about the new product launch later on in the presentation, but the pilot results have indicated a fantastic opportunity to drive both more and earlier listings to Hemnet. Now let's turn to Page 3 for a quick look at the financial performance. Net sales amounted to SEK 348 million, down by 4.4% compared to the same period last year, driven by the significant decline in listing volumes during the quarter. EBITDA decreased by 12.8% to SEK 154 million. The decrease was driven by the lower listing volumes, which drove lower net sales and reduced fixed cost leverage. The EBITDA margin amounted to 44.2%. As per usual, Anders will break down these profitability dynamics in more detail as we move further on into the presentation. Now let's turn to Page 4 for a look at the property market and the listing volumes. On the left-hand side of this slide, you'll see a combined chart showing published listings per quarter and yearly as well as the year-on-year change between quarters. Published listings decreased by 26% year-on-year in the fourth quarter and by 13% for the full year. The slow market continues by negatively impacted by longer selling times and the average listing duration on Hemnet has increased by 20% year-on-year to 55 days in Q4 compared to 46 days in the same period last year. In addition, a sell first mentality is continuing to impact the value chain and the industry dynamics. The volume decline was partly attributed to the changed business terms in February 2025 for changing agents, which explained approximately 5% of the new listings decline compared to last year. While the overall picture remains bleak, there have been some positive signs of renewed activity during 2025 with rising prices, record villa sales and a supply that started to decrease towards the latter part of this year. With that said, the inflow of new homes remains constrained going into the new year as the market positions itself for a stronger expected market from the second quarter and onwards. Let's move on to the next slide to look a bit closer on the strong ARPL development. ARPL, average revenue per listing grew by 29% in the fourth quarter. The ARPL growth was again mostly driven by a strong demand for value-added services. The conversion rate to higher-tier packages continued to increase during the quarter and is at all-time high levels. Hemnet Premium which was launched in late 2019 is the main driver of our ARPL growth in the fourth quarter. When looking back on its history, it's important to keep in mind, and it's important to remember the Hemnet Premium was initially met with some skepticism from both agents and buyers, and it took more than 2.5 years after the launch before Hemnet Premium was able to reach double-digit conversion. With that in mind, Hemnet Max is well positioned to capture the next level of demand for customers seeking to maximize their chances of a successful sale and become a key growth drivers for many years to come. The initial results and the product performance of Hemnet Max has been stellar. Before moving into the financial section, let's have a look at what has happened during 2025 from an overall Hemnet and from a product perspective. While 2025 was characterized by resilience, it was above all a year in which we geared up for the future. Through an increased pace where AI tools have notably helped us to become more efficient, we entered the new year with a significantly strengthened product portfolio and an organization ready to drive the market forward. In 2025, we made significant progress in developing our consumer-facing proposition and we've taken actions to strengthen our relationship with the industry, and we're well prepared for our large strategic product initiatives being brought to the market in early 2026. With these elements in place, we do look forward to 2026 with great pride and confidence, ready to deliver more value to our users, to our customers and to the real estate agents than ever before. And with that, I will hand over to Anders for the financial update, starting with Page 7. Anders, please take it away. Anders Ornulf: Thank you, Jonas. Let's turn to Page 8 and the financial summary. As Jonas alluded to, we ended the year in a property market that remains challenging, characterized by continued hesitation to list new properties. This resulted in a decline in published listing of 26% for the quarter. However, despite the significant headwind in volumes, our financial model demonstrated resilience. Net sales for the quarter amounted to SEK 348 million, a decrease of only 4.4%. Another noteworthy point is the average listing time, which on a rolling 12-month basis increased from 46 days in '24 to 52 days in Q2 2025 and now 55 days in Q4 2025. The year-on-year effect of the longer listing time is a positive SEK 12 million in revenue for the quarter, and the sequential effect of the 3 additional days from Q3 to Q4 is negative minus SEK 2 million. To smooth out system variation, we recommend tracking ARPL growth on a rolling 12-month basis, as shown on Page 4 of the presentation. The bridge between the volume drop and the revenue performance is once again the ARPL. You can see that it grew by 29% to SEK 10,900, historic high for a single quarter and was driven by continued strong demand for our value-added services, specifically Hemnet Premium. Looking at profitability on the top right, EBITDA for the quarter came in at SEK 154 million. The EBITDA margin was 44.2%, margin contraction compared to last year is primarily a function of lower listing volumes. Since a large portion of our cost base is fixed, lower volumes naturally lead to lower coverage of these fixed costs. I will walk you through the specific cost dynamics in more detail on the following slides. One important component in the margin development is, of course, the compensation to real estate agents. When expressed as a percentage of property seller revenue, this ratio increases year-on-year from 31.5 to 32.3 in Q4 '25 driven by a further improvement in both recommendation rates and actual conversion. Higher commission reflecting a substantially stronger underlying improvement of our Bas products. And as always, the effective commission is a variable component and tends to fluctuate somewhat between quarters, making what's suitable to measure over longer periods. Free cash flow. Free cash flow was SEK 745 million, a 7% increase year-over-year. This robust cash generation underscores both the scalability of our business model and our strong profitability even in a very soft housing market. Our operations continue to convert a high portion of revenues into cash, highlighting the quality of our earnings. We continue to uphold a strong financial position. Net debt leverage ended the quarter at 0.7x. The increase in leverage is primarily an effect of our active capital allocation strategy, combined with the low listing volumes during the period. Notably, during this year, we expanded our share buyback program from SEK 450 million to SEK 600 million following the mandate approved at the AGM 2025. We have continued to return capital to shareholders, while at the same time, maintaining a conservative balance sheet. Importantly, this demonstrates the strength of our position, we're able to execute the capital returns and still retain a very high degree of financial flexibility going forward. Headcount increase of 15 largely reflects the organization has been selectively strengthened, primarily within tech and product as well as new leadership within marketing. However, regarding the total number, it's important to take into account that we had an usually high number of vacant fills at the end of '24, which impacts the year-on-year comparison. With that overview, let's turn to Page 9, the revenues by segment to take a closer look at the Q4 figures. Starting with our largest segment, property sellers revenue amounted to SEK 298 million which again, very modest relative to the drop in listing volumes. Turning to the B2B segment, net sales decreased slightly by 0.8% to SEK 50 million -- SEK 51 million. Within this segment, revenue from real estate agents grew by 3% to SEK 24 million. This growth was driven by strong performance in our Sold by Us product and other value-added services for agents, which effectively offset the impact of fewer published listings. Revenue from property developers decreased by 14%, sector remains under pressure, fewer project starts and the general cautiousness regarding marketing spend from these customers. Finally, revenue from advertisers grew by 4% to SEK 16 million. This is a positive deviation from the trend we've seen in the recent quarters despite the challenging macro environment for display advertising, we managed to grow this line item due to strong sales to banks and other advertisers. Let's go deeper into the profitability dynamics on Slide 10, showing the EBITDA bridge for the fourth quarter. First bar shows the net sales impact, which then, of course, had a negative effect of SEK 16 million. Next, we have compensation to real estate agents, costs decreased by SEK 2.5 million since commission is largely linked to seller revenue, the decrease in seller revenue naturally leads to lower absolute commission payments. Moving to other external expenses. They are flat year-on-year. We have maintained cost discipline with slightly higher costs but licenses were balanced out by lower spend on consultants and marketing compared to the same period last year. Personnel costs increased by SEK 10 million, representing a 17.7% increase in the quarter and is driven mainly by increase in number of FTEs and annual salary inflation. We ended the year again in the headcount with 167 employees. Finally, other costs had a minimal positive impact brings us to Q4 EBITDA of SEK 154 million. Now let's zoom out and look at the full year '25 on Slide 11. While Q4 was impacted by specific volume headwinds, the full year picture demonstrates the robust growth profile of Hemnet over time. For the full year '25, net sales grew by 9.5% to SEK 1.5 billion. This was achieved despite a full year decline in published listing of 13%, driver again is ARPL. Full year ARPL increased by 28% to 8.1 -- SEK 8,200. This consistent ability to grow ARPL faster than volume is, of course, core. EBITDA for the full year increased by 7% to SEK 768 million, corresponding to a margin of 50.3%. The effective commission is a significant component of the P&L, again, and it's increased from 30.4% in full year '24 to 30.7%, driven by the strong conversion to our value-added services and the compensation model launched in July '24. Turning to Slide 12 for the full year revenue breakdown. Property sellers revenue grew by 11% to SEK 1.3 billion. This segment now accounts for 86% of the total revenue in the year. And again, it really underscores the strength of our business model. B2B revenue for the full year was essentially flat, declining 0.7% from lower display sales partly as a result of lower number of published listing in later part of the year. Real estate agents revenue grew by 3%. The highlight here is our Sold by Us product, which grew by more than 2x compared to 2024. This product, as an example, is becoming a big part of the agents marketing mix. But it's also a further proof that we are able to launch new products that create real value for the customers, even if it may take some time before it's fully gained traction. Property Developers revenue was flat year-on-year, which we consider a stable result given the severe headwinds in new construction markets. Advertisers revenue declined by 7% for the full year, reflecting the broader weakness in the digital advertising market and lower traffic resulting from fewer listings. All in all, very encouraging that we are able to maintain revenues in our B2B segment despite the low level of listings, which negatively impact impressions. We have carefully offset -- we have successfully offset this to growth in our Hemnet Premium products, which creates value for the priority customers, real estate agents, property developers and banks. On Slide 13, we see the EBITDA bridge for the full year '25. Starting from SEK 720 million in '24, the primary positive driver was, of course, the net sales growth, which contributed SEK 132 million to EBITDA. Compensation to real estate agents increased by SEK 44 million. The increase is the direct result of the higher revenue from property sellers and the successful launch of the new compensation model, which rewards agents for high recommendation rates of our premium products. Other external expenses labeled C increased by SEK 24 million, reflecting the decision to normalized investment levels in marketing and product development after a more cautious '23, '24. Personnel costs increased by SEK 20 million, driven by mainly the salary inflation in headcount investments I mentioned earlier. All in all, this resulted in an EBITDA growth of SEK 48 million for the year, landing at SEK768 million. Finally, let's turn to Slide 14 to review the cash flow and financial position. On the left, you see our free cash flow on a rolling 12-month basis, generating SEK 745 million of free cash flow over the last year with increase of 7%. I would like to briefly comment on the operating cash flow for the isolated fourth quarter. In addition to the impact on weaker listing volumes, we also saw a more technical effect of negative change in working capital driven by the timing of settlements for our payment service providers. This is a temporary timing effect and does not affect any underlying change in the cash generation. Our strong cash flow allows us to continue returning capital to shareholders. And as you can see in the middle of the chart, we have been very active with the share buybacks. In Q4, we repurchased share for SEK 160 million. Looking at the right-hand chart, our leverage is increasing, but put in perspective very low. Net debt-to-EBITDA ended the year at 0.7 slightly up as I commented earlier, but also remaining well below our financial target of 2. Reflecting our strong financial position and confidence in the future, the Board of Directors has proposed a dividend of SEK 1.90 per share. This represents an increase of 12% compared to last year and corresponds to approximately 1/3 of our earnings per share, in line with our policy. With that, I will hand the call back to Jonas to wrap up the first section. Jonas Gustafsson: Thank you, Anders. And let's move on to the summary slide on Page #16. To summarize the fourth quarter, the full year of 2025 and the news we announced today. First of all, we saw a continued pressure on new listings published in Q4, negatively impacting both net sales and EBITDA in the quarter. A strong ARPL growth of 28% for the full year offset the negative impact from lower listing volumes, leading to a total net sales growth of 9.5% in 2025. Going forward, we have a clear focus on addressing market friction and being a partner throughout the entire property journey. We have everything in place to start rollout Sell First, Pay Later on Monday next week on the 2nd of February. We look forward to 2026 with our focus set on delivering more value to our customers and the Swedish property market than ever before. With that, let's move on to the second part of today's presentation, a deep dive into Hemnet's business update on Slide 17. In this second part of the presentation, we wanted to take the opportunity to do a deep dive on Hemnet's strategic initiatives going into 2026. Some updated related to our financial reporting as well as some additional color to the market dynamics. So let's move on to the agenda on Slide 18. So for today's agenda on the Hemnet business update, firstly, I will go through and discuss Hemnet's current market position and what the Swedish property market looks like today and how it has changed over the last years. Secondly, our Chief Operating Officer, Lisa Farrar, will provide an update on our key product initiatives and commercial road map. Thirdly, Anders, our Chief Financial Officer, will cover how we structure our financial reporting in 2026. Lastly, I will provide a summary and a wrap up before we move into the Q&A session. With that, let's start by looking at Hemnet's market position on Slide 19. To start it off, Hemnet is the #1 property portal in Sweden. Hemnet continues to have a fantastic market position. Over 95% of property sellers in Sweden know our brand and close to 90% consider Hemnet that the first choice when selling a property. If you look at our weekly active users, we've had an average of 2.7 million weekly users in 2025. Despite the soft Swedish property market during especially the second half of the year when market activity and interest went down, we see that our users to a very large extent, continue to come back to our platform on a weekly basis. This is also shown in the reach that we have. When comparing Hemnet with other websites in Sweden, regardless of industry, Hemnet is the third largest commercial website after the 2 largest Swedish tabloids and newspapers being Aftonbladet and Expressen. Hemnet is a strong brand and engagement are also evident from the share of direct traffic that comes to our website. Between 70% and 75% from our traffic comes directly to us, either by typing Hemnet straight into the browser or going straight to our app. The high share of direct traffic shows that Hemnet is top of mind for users, and we have limited dependency on external traffic sources. Lastly, Hemnet has more than 25 years as the #1 property platform in Sweden. Our platform is deeply integrated into the working ways of the entire real estate industry. With that, let's move on to our role in the ecosystem on the next slide, please. The Swedish property market has a long history of being efficient and attractive and Hemnet has played an instrumental role in creating that ecosystem over the past 25 years. The market has been characterized by short sales cycles, a buy before sell mentality, ease of transacting and strong underlying price development. The attractiveness of the market has further been aided by highly professional of well-respected real estate agents coming from a professional educational background. In addition to these dynamics, the market demand is spurred by high-income ownership, limited buy-to-let segment and the dysfunctional rental market. This has led to a highly attractive market over time. Hemnet platform is at the center and the heart of this market and serves as the natural meeting point where agents, where sellers and where buyers meet. As you can see here on the next slide, Hemnet has been able to build an impressive business based on the strong market position. Hemnet has shown strong revenue and EBITDA growth in the past couple of years. The lion's share of the growth development has come through growing ARPL, average revenue per listing over time. This has been achieved through adding and growing new packages and products to our proposition. In late 2019, when Hemnet launched Hemnet Plus and Hemnet Premium, and these packages have grown in popularity steadily every single year and single quarter since then. In late '25, Hemnet Plus, Hemnet Premium and newly launched Hemnet Max together announced accounted for more than 75% of all listings, more than 3x compared to the end of 2020. The product-driven growth paired with price increases and payment alternatives, have been a key driver of financial success and has fueled investments into the platform, which has helped Hemnet maintain its strong position as the largest property platform in Sweden. If we then move on to the next slide, please. Hemnet is the undisputed #1 property platform in Sweden in terms of traffic and reach. Our traffic has been stable over time with the exception of the outlying years during the pandemic. When most digital platforms saw a significant surge in peak in traffic and activity as people spend more time at home and spend more time on digital platforms. When looking at Hemnet's traffic over time, it is important to understand the relationship between market activity and traffic. When market activity goes up, and more properties are listed for sale, so does activity and engagement on the platform. As seen on the graph on the right-hand side, there is a clear correlation between the number of newly published properties on the platform and the user behavior. In 2025, we saw a slight decrease in the average vehicle users, especially during the second half of the year as the number of new listings on the market decreased. Today, between 40% and 50% of Hemnet session come from the Hemnet app on iOS or Android. Hemnet's platform is mobile first, and the user on the app are typically much more sticky and much more engaged than the average browser user. With that, let's move on to the next slide, please, to elaborate a bit on our overarching ambition going forward. Our ambition is simple. We want to create value across the entire property journey. But what does that mean for us in practice. First of all, we want to have all relevant listings. If a property is for sale in Sweden, you should find that property listing on Hemnet. We know our users and provide them with a superior experience. Searching for a property on Hemnet should be a great user experience that is personalized to your needs and to your preferences. We are the #1 partner for agents, property developers and banks. And as a partner, it is clear that Hemnet generates superior value. We have the most comprehensive and valuable data. We can leverage more than 25 years of data on search behavior to further enhance the consumer experience and customer proposition. We are top of mind and have the largest property audience in Sweden, and we can never take our possession for granted. This is all enabled by the strong relationship that we've built with the real estate agent industry over the past 25 years. So let's move on to the next slide to take a closer look at what happened with the market in the past few years. Looking at the data, it's clear that the Swedish property market has gone through a few difficult years since 2022. The post pandemic era has brought changes to the Swedish property market dynamic. As you can see in these 3 graphs below, multiple trends have changed the industry dynamic. First of all, we've seen selling times increasing by almost 3x since 2022, driving a less efficient and less transparent market. Secondly, we have also seen a shift in buy behavior where 2/3 now sell before they buy a new property compared to the inverse ratio in early '22 and the years before. This has impacted the way of working for agent and has been driving a less efficient market. Thirdly, price development has been very weak since the pandemic years compared to historical levels, both real price development and nominal price development. The price development has led to lock-in effects impacting the overall market, especially in the apartment segment, which is a high-volume segment. This new dynamic has led to a more prominent pre-market that is characterized by lower seller intent, longer sales processes and a changed way of working among real estate agents. Let's continue on this topic on Slide 25. The role of the pre-market has become increasingly important over the last years. Lower seller intent, lower sales -- longer sales cycles and a changed way of working from agent has fueled a larger so-called pre-market. The pre-market is commonly defined as the stage of the market where a property is not outright listed for sale, and this part of the sales cycle has become longer and more pronounced. This has become problematic for buyers, for agents and for sellers as the pre-market is characterized by lower efficiency and a high variation when it comes to actual seller intent. Today, large proportion of the so-called Swedish premarket is actually old content with low seller intent. Approximately 50% of pre-market listings in Sweden today are older than 6 months. From a Hemnet perspective, that means that not all of the pre-market is relevant. But there is an active part of the market that Hemnet historically has not addressed in a satisfactory manner. This is now something that we are clearly and actively looking to change and will address with our strategic initiatives that we will elaborate further on in the presentation today. Next slide, please. Hemnet's value proposition has predominantly in the past, focus on the own sales segment. The core strength of Hemnet's model align very well with traditional for-sale segment. When the goal is to sell the property as quickly as possible at the highest price as possible, Hemnet has a very strong and undisputed customer proposition. With Hemnet, you maximize the number of eyes on the listing, increasing the chances of attracting more potential buyers to open house and maximizing the bidding process, which hopefully will lead to a successful sale at the highest possible price. The core model of Hemnet remains strong, which is important as it addresses the needs of the absolute majority of the market but we also need to ensure that we adapt our value proposition to cater for the current market environment that has changed over the last years. With a larger share of sales cycles taking place on the pre-market, we see that some more properties are being sold before reaching Hemnet. Looking at 2025, transactions on Hemnet decreased by approximately 5% compared to the overall market that was stable year-on-year. We're now addressing this. We're now executing on several strategic actions, including strategic partnership and the launch of Sell First, Pay Later, to ensure that we better serve the full market spectrum and have the strongest possible customer proposition in all different types of markets. Let's quickly look at this on Slide 27. We're now moving into execution on significant strategic actions to address the full market. Our key strategic actions in the first half of 2026 are Sell First, Pay Later, which will be rolled out in Stockholm from Monday and onwards. Thereafter, it will follow with a Western Sweden launch, a rest of Sweden launched in March and April. We will speak more about the findings that we've seen from the pilot and why we're so excited about the launch. Secondly, we are going into a number of different strategic partnerships, and this will also start to be rolled out in February. Already today and what we have announced today with more than 60 strategic partnerships in the early days. Leveraging AI and product innovation will ensure that we consistently update and improve our customer experience. And lastly, an increased sales and marketing focus continuing to build on the increased focus that we implemented during 2025, where we need more agents than we've ever done in the past. We work closely with the industry, and we invest in marketing with relevant returns. With that, I wanted to wrap up this initial session and hand over to Lisa to do a deep dive in all these exciting product initiatives and product launches that we have ahead of us. So with that, over to you, Lisa. Lisa Farrar: Thank you, Jonas. Let's move over to Slide 29, please. As Jonas has pointed out in his section, we are now launching 2 key strategic initiatives under the umbrella Hemnet hela vägen” or Hemnet all the way. The first initiative is Sell First, Pay Later. This is a new model where sellers pay only if they successfully sell their property. We're also rolling out strategic partnerships our next step in our 25-year collaboration with the Swedish real estate agent industry. As the pre-market place has become increasingly important, Hemnet is now accelerating our role earlier in the housing journey. By lowering the threshold for early publication and strengthening our collaboration with agent industry, we are reducing fragmentation, improving transparency and creating better conditions for sellers, buyers and agents to fully leverage the value of our platform. Today, we will also elaborate on how we work with AI at Hemnet. As the leading and most trusted property platform in Sweden, Hemnet has a fantastic position to leverage AI to further strengthen our position and significantly elevate our user experience. I will spend some time today describing our general approach to AI, but also disclosed a number of exciting customer-facing AI product features that we are rolling out on the platform as we speak. These 3 areas will be accelerated through our existing marketing and sales engine built over the past 2 years. By continuing to target brand investments and fully leveraging our strength in CRM and digital marketing capabilities, we can drive traffic and engagement efficiently ensuring strong execution of our strategic initiatives without adding material cost. Our sales team remains a strategic pillar of our go-to-market execution and a key competitive advantage through our close collaboration with the real estate agent community. In '26, we will continue to strengthen this proximity by meeting more customers and engaging on the full Hemnet value proposition, including the supply side of the Hemnet platform. Now let's dive into some of the different initiatives on the next slide. With Sell First, Pay Later, we are expanding Hemnet's present throughout the sales journey and driving more volume to the platform by significantly lowering the threshold to list your property on Hemnet. As we announced in the Q4 report, we ran a pilot between the first of October and 31st of December last year across 10 real estate agent offices in Sweden. The data and feedback from the pilot has been very supportive and exceeded our expectations. Volumes in the pilot were significantly stronger compared to the nonpilot population with the pilot offices having almost 40% higher year-on-year listing volume change compared to the nonpilot offices. That means that in a soft market, where listings on Hemnet were down by 26%, the pilot offices increased their number of listings on Hemnet year-on-year with 4%. In addition to the very strong volume effects, we also saw a larger willingness from both agents to recommend and from sellers to choose our value-added services and to use the Hemnet pre-market product. Moreover, when asking the participants in the pilots, more than half of the sellers stated that Sell First, Pay Later played a role in their decision to list on Hemnet, showcasing the strong value proposition of the new model for sellers. I want to point out that the business rules of the pilot differed from those that will apply when the actual rollout and therefore, these results should be treated with some caution. But with that said, we're extremely encouraged by the pilot results, and we look forward to rolling it out in Stockholm County next week. Let's move on to some of the feedback that we have received. The feedback that we have received from both sellers and partners have been very positive throughout the pilot. For sellers, the Sell First, Pay Later model helped lower the barrier to list what has been an uncertain market with longer sales cycles and weaker price development. As seen in one of the seller quotes from the surveys sellers said, no reason not to list on Hemnet when the payment becomes success-based. For agents, removing the upfront risk made it easier for them to pitch Hemnet already in the intake meeting ensuring that the listing received maximum reach during the full sales process. And for buyers, more high-quality listings were made available from committed sellers. And with that, let's move on to some of the technicalities of the new model on the next slide. Sell First, Pay Later will be available to all agents who choose to go with Hemnet all the way and publish a listing on Hemnet within 2 days from the time the listing is published on the agency website. That means that all real estate agents in Sweden will get access to the model, and it will be available regardless of what package you recommend. Sell First, Pay Later will be added as an additional alternative to pay now and pay when listing is removed. It will also be priced at a premium to pay when listing is removed. The way the payment to Hemnet works is that once the listing is sold, the agent is liable to mark the listing as sold and the invoice will be sent to the seller. The seller is liable to pay for the Hemnet listing as long as the property is sold during the time the listing is live on Hemnet or within 6 months of deactivating the listing on Hemnet. And the agent commission is paid once the property has been marked as sold. This model will be rolled out in Stockholm County from the second of February, which is Monday next week, followed by Västra Götaland on the second of March and the rest of Sweden on the 30th of March. In connection with the launch, there will be a grace period when agents will be allowed to publish all the listings on Hemnet, similar to what was done in the pilot. Let's move on to the next slide, please. Let's talk about the strategic partnerships that we announced in the Q4 call and that we are rolling out from February. We're incredibly excited to be able to roll out what is the next step in our 25-year win-win partnership with the Swedish real estate agent industry. With this partnership model, we are taking a more holistic approach to how we interact with the entire industry. Historically, Hemnet has focused a lot on engaging with franchise owners as this is where we have the existing commission model that incentivizes agents to make a tailored recommendation of the best product fit for each property seller. Now we are addressing both the HQs and brand owners as well as the actual agents to a much larger degree. The strategic partnerships at HQ and brand owner level are built around our brand concept Hemnet hela vägen or Hemnet all the way. The changed market dynamics of recent years where behavior has shifted towards selling first and buying later has led to more homes being published late on Hemnet. This means that sellers risk missing out on important product values, including upcoming, which is included in all listing packages and which has recently been enhanced to strengthen the value of early exposure on Hemnet. We are continuing to develop Hemnet to maximize the value for sellers, buyers and agents across the full sales journey. Our data shows that earlier listings on Hemnet drives higher interest and create stronger conditions for a successful sale. These strategic partnerships create a clear win-win for both real estate agent brands and Hemnet. Partners integrate Hemnet across the full sales journey, including the premarket phase, driving earlier and increased supply on the platform. In return, partners gain enhanced brand visibility, increased lead generation, access to under the radar listings and monetary compensation linked to successful use of Hemnet's pre-market offering. The desired outcome is this collaboration around the pre-market with shared incentives to use Hemnet as a marketing channel throughout the entire sales journey. Initial market reception, as Jonas mentioned, has been very strong with agreements signed with more than 60 real estate agent brands across Sweden, including major agencies such as Svensk Fastighetsförmedling, Notar, Erik Olsson and Croisette. This represents 1/4 of the market and 5 of the top 15 brands in Sweden. Additional discussions are ongoing, and we expect to onboard further partners in the coming months. Let's move to the next slide, please. As part of the strategic partnerships, we are introducing performance-based compensation to further incentivize agents to use Hemnet across the full sales journey and fully leverage the value of the platform. Compensation is linked to the share of premarket listings published on Hemnet relative to the total number of premarket listings available on the agent's own website. To qualify, an agency must increase its share of premarket listings on Hemnet compared to its baseline level at the time of entering the partnership. Partners have successfully increased their premarket listing share and exceed defined thresholds are eligible for compensation ranging from 1% to 5% of revenues, net of agent commission. The different tiers and thresholds are illustrated on the right-hand side of the slide. This performance-based model is similarly structured to our existing compensation model, creating a clear win-win for agents, sellers and Hemnet, while supporting growth in both top line and EBITDA. Let's move on to Slide 35 to see some examples of what the strategic partnerships look like in practice. As I outlined, the strategic partnerships include a set of new features and added values for agents. These include enhanced branding on listing pages, increased agent exposure in the My Home tab and the ability to surface under the radar listings on Hemnet. Several of these branding features are already live on the platform with additional functionality and partner onboarding planning for the coming months. With that, let's move to the next slide. As the leading and most trusted property platform in Sweden, Hemnet is uniquely positioned to leverage AI to further strengthen our market leadership and materially enhance the user experience. We operate in one country, one vertical and one market-leading platform with fully rights cleared data, resulting in a level of data quality and depth that is unmatched in Sweden. This allows us to move faster, go deeper and deploy AI in ways that is compliant, scalable and sustainable over time. The combination of historical, behavioral, geographic and transactional data is difficult to replicate and provides Hemnet with a durable competitive advantage. We are currently executing along 3 parallel AI tracks. Each designed to embed AI deeply into the core of our product and operations while leveraging our key strengths. Our first focus is to build a strong and reusable AI foundation. We have completed large-scale semantic tagging of more than 1.4 million listings and historical content. This capability underpins multiple AI-driven features across the platform and provides high operational leverage through a shared foundation. We continue to develop AI-enhanced models across the business, including the property valuations, where AI-driven image recognition feeds directly into our automated valuation models. Internally, we're also increasing efficiency through an AI-enabled operating model. This includes AI-assisted product and technology development as well as conversational analytics directly connected to our data warehouse. The result is shorter lead times, higher output and tangible efficiency gains, allowing us to execute our AI strategy at pace while maintaining disciplined cost control. Our second track focuses on delivering a materially improved user experience. We are using AI to personalize discovery, recommendations and insights enabled by our unique behavioral data and deep understanding of listing contents. We are rolling out conversational search on our platform to complement, not replace our existing search experience. This improves intense understanding and makes discovery more relevant and intuitive. We're also deploying AI-generated summaries that help users quickly understand complex information and make more confident decisions. These summaries are tailored to user intent and behavior while also preserving the full access to the underlying data. Our third track focuses on exploring new AI-driven frontiers and products. We are present with selected AI ecosystems and we'll expand our presence where it is strategically beneficial for Hemnet. From a risk perspective, we view AI-driven discovery as a potential shift in distribution rather than a disintermediation. While traffic from large language models currently accounts for less than 0.1% of our total traffic, we want to ensure that Hemnet is present where users are and where they will be in the future. Our approach is to treat large language models as distribution channels, not platforms. We integrate selectively and under strict data governance and control principles. This ensures that traffic, trust and user relationships remain anchored with Hemnet while still allowing us to benefit from innovation across multiple AI ecosystems. Finally, we continue to roll out consumer-facing products built on increased personalization, using our data to meet user needs with high accuracy, create partner value and unlock new revenue streams for Hemnet. Let's move to the next slide to see some product examples. We're shipping several AI-enabled products to meet emerging user needs and to accelerate how people discover and engage with homes on Hemnet. This week, we launched a conversational search beta that bridges human language and housing data. It improves discovery today while shaping how users will search and interact with Hemnet over time. We have also submitted a Hemnet in ChatGPT app for an integrated experience within ChatGPT. As outlined earlier, we view large language models as distribution channels rather than competitors. By integrating early, we ensure Hemnet is present, where users are beginning to experiment with new ways of discovering properties rather than reacting to distribution shifts after they occur. Go-Live is subject to OpenAI's approval. And as with all LLM integrations, this will be done selectively and on the strict data governance and control, ensuring that traffic, trust and user relationships remain anchored with Hemnet. On Monday, we are rolling out a personalized starting page built on AI. It introduces a personalized searches and recommendations, creating clearer and higher relevancy entry points into property discovery. And next week also marks the Go-Live of All Properties. This feature allows users to explore approximately 1.6 million homes directly in the map view, follow multiple properties and engage more broadly with the housing market beyond listings that are currently for sale. So to summarize the product and commercial update today. We are being more ambitious than ever in our product development. We're moving faster, being bolder, catering for a more dynamic market and deploying products that solve real user pain points. By deepening our connection with customers and leveraging AI at scale, we are strengthening the Hemnet experience today while building the foundation for long-term growth. And with that, I'll hand you over to Anders on Slide 38. Anders Ornulf: Thank you, Lisa. Let's move on to the next slide. So as you know by now, we are rolling out a number of changes to our business this year with the start on Monday next week with the launch of Sell First, Pay Later in Stockholm. These changes come with a few implications for how we structure our financial report in 2026. Revenues from sales with a Sell First, Pay Later option are recognized at a point in time when the invoice is issued i.e., when listed object market sold on Hemnet. The reason for the difference in revenue recognition compared to our existing payment models has to do with factors that need to be met in order for revenue to be recognized under IFRS 15. This means that the launch of SFPL will have a timing impact on reported revenues when launched. How big that timing effect will be is highly dependent on the uptake on SFPL and how that changes over time. In addition to the revenue recognition effect, the rollout of SFPL will also have a short-term cash flow impact, which will impact our working capital. This will be financed through a temporary increase in our existing revolving credit facility. Let's move to the next slide to see an example of what the revenue recognition effect could look like in practice. On this slide, you see an example on how different level of SFPL adoption will impact reported revenues in a highly hypothetical scenario. Please note that this example is based on certain assumptions and should, under no circumstances be seen as guidance from the company. For the sake of simplicity and to be able to understand the timing effect, we have assumed a scenario where 100% of properties on Hemnet is sold within 15 months. In this case, we assume no volume or price upside, which is obviously different from what we will see when we roll this out next week as the price for SFPL will be higher than the current payment options. We believe that it's easy to understand the timing effect in all else being equal scenario, not lending in too many assumptions. In this scenario, a 30% SFPL adoption will negatively impact the amount of recognized revenue in Q1 after launch by minus 11%. Similarly, a 50% SFPL adoption will negatively impact the amount of recognized revenue by 18%. As time goes and more properties are sold, the revenue recognition effect goes away. On average, approximately 50% of Hemnet listings are sold within the first 2 months and 70% are sold within the first 6 months. Very few listings are sold after the first 15 months. Moving on to the next slide, we will look a bit more on how long it takes for properties to be sold on Hemnet. As Jonas pointed out in his section, the steep market downturn in the spring of 2022 had a negative impact on the market as a whole and on how long it takes to sell a property. However, even though sales duration times have increased significantly, there has not been a large movement in how many properties that are eventually getting sold. Historically, between 82% and 92% of listed properties on Hemnet have been sold depending on the state of the market. In a strong market, like we had in '16, '17 or 2021, properties tend to transact very quickly, as you can see in the graph on this page. As stated on the previous slide, in the current market, approximately 50% of the properties are sold in the first 2 months and approximately 70% are sold within the first 6 months. After the first 12 months, roughly 81% are sold and roughly 85% are sold within the first 24 months. After 24 months, 2 years, very few transact. Let's move on to Slide 42. To be able to monitor the performance better going forward, we will update the definition of our ARPL, alternative performance measure, APM. The reason behind this change is to increase transparency and provide a better snapshot of the actual ARPL generated in the quarter. As the sales duration times have increased in the past 3 years, the ARPL metric has become more and more volatile on a quarterly basis. Therefore, we will start in 2026, we will change the ARPL definition from average revenue per published listing to average revenue per paid listing. As you can see in the graphs on the left, this will decrease quarterly volatility in the performance measure, but will have more or less no impact on the LTM numbers. We are confident that this definition change will make it easier for the capital markets to understand our business performance. The 9-quarter historical disclosure as seen in this graph has also been made available over the Q4 release this morning. Let's move to my last slide. We do recognize that the new launches we are doing this year makes it slightly more difficult to track and predict the short-term performance of our business in 2026. Therefore, we want to ensure that we are as transparent as we can when it comes to disclosure. And as a result, we will report preliminary sales figures on a monthly basis in 2026. Please note that our ambition is to only do this during 2026, and then go back to our normal reporting calendar in 2027. This means that starting in early March, Hemnet will report preliminary sales figures for February. The reporting will be issued in the press release 2 times per quarter, but only one time in Q1 as SFPL was not launched in January. Moreover, monthly volumes will continue to be published on the first working day of each month. The monthly volumes will include the breakdown of both paid and published listings from February and onwards. That sums up the changes to our financial reporting. And with that, I will leave it -- over to Jonas to summarize today's session. Jonas Gustafsson: Thanks, Anders, and thanks, Lisa. So we have now covered an update on our very exciting market position, the very exciting opportunities that lie ahead of us and how excited we are to bring our new initiatives and products to our consumers over the coming months. Looking more long term, we do see multiple growth levers for Hemnet. To elaborate a bit further on this, let's move on to Slide 45. We're very confident and eager to deliver strategic actions, but we're equally excited about the growth prospects that lay ahead. Hemnet has a unique market position and a great step of growth levers to pull to continue our success growth journey. We will start looking at value-added services. Value-added services have been the main driver of our ARPL expansion over the last years, and we see room for additional growth in this area. Please keep in mind that Hemnet Plus and Hemnet Premium were introduced back in 2019, and continued expansion of these packages has been the main driver of the 28% year-on-year ARPL expansion that we saw in 2025. 6 years after the launch. We need to enhance our customer proposition and the features that are included in our existing packages to optimize the packages and the overall package composition. During 2025, we launched Hemnet Max that will allow us to continue to grow ARPL over the years to come. Max penetration is still at low levels, but the product performance has been stellar. We see that Hemnet Max gets more engagement, more visitors and has a positive effect on the bidding price to justify a premium price level. Pricing. Pricing represents an important component for our value creation toolbox. We will continue to invest into our proposition to increase exposure on the platform and the value we deliver to sellers, to our agents and to our buyers. Our data shows that the estimated value of 1 additional bid in an auction process is worth around SEK 80,000. And even in a small increase in the number of interested buyers can have a significant impact on the financial outcome for a seller. That is a healthy investment if you compare the SEK 80,000 upside compared to our ARPL. In addition, with our dynamic pricing model, we see significant opportunities to add more granularity and work with data-driven pricing to better reflect market demand. Payments. Payments is the third lever to continue to drive ARPL expansion. With the launch of Sell First, Pay Later, we're taking the next natural step in our customer journey to improve the value proposition for sellers, buyers and agents. By lowering the threshold to list on Hemnet and tying the payment to a successful transaction, we make it easier for sellers to list on Hemnet and increase their chances for a successful sale. Going forward, we will continue to work closely with our real estate agent partners to further enhance our different payment options to ensure that we have a smooth and flexible payment options that are well aligned with traditional payment flows of a property transaction. And there is more to come in this area. Our B2B offering today has been strengthened over the last years despite being highly exposed towards cyclical underlying markets like new property development and more traditional display ads. We've taken significant steps ahead and are now launching a new package tracker towards property developers as well as our bank customers. Going forward, this area offers significant opportunities ahead. Hemnet is a powerhouse in terms of traffic and engagement. At the same time, we are very close to the actual property transaction, meaning while we have high-quality data. If we combine high-quality data with a high quantity of traffic that we do have, you have a currency. That data and that currency is currently undermonetized, and we will capitalize more on this going forward. 2025 was a tough year for the overall market, but we do see positive underlying fundamentals moving into 2026. If we please move to the next slide, please. There are several metrics that point towards an improved 2026 underlying market trajectory with increased levels of supply. Projecting the market development depends on numerous factor and easily turns into active crystal ball gazing. However, there are a number of key indicators that are pointing in the right direction. First of all, ease of credit restrictions will be implemented by 1st of April. Historically, we've seen that these rules and regulations have had a large impact on market activity and Hemnet's listings volumes. We expect that the easing proposed for 1st of April will stimulate mobility and have a positive effect on both prices and activity. Secondly, improved market conditions. Looking at the overall market situation, there are also positive signs in terms of macroeconomics. We see healthy interest rate levels in Sweden paired with an expected uptick in GDP growth. We also expect to see higher disposable incomes on the back of proposed tax release and an expansive budget. Rising price expectations. Signs of optimists are already returning among prospective buyers. 43% of those planning to buy a home believe in rising prices over the coming 6 months according to our Hemnet buyers barometer for January. That represents an increase by 10 percentage points compared to the December levels. We also see that several banks and financial institutes are predicting a stronger property market on the back of the strong price development. After a tough 2025, we look forward to 2026 with confidence and look forward to a year that has [ in store ] for sellers, buyers and agents on the Swedish property market. So let's now move on to the next slide for a brief summary of today's session. To summarize today's session. First of all, Hemnet is the #1 property portal in Sweden with a large and stable audience, reaching almost 3 million active users on a weekly basis. We're highly integrated to the ecosystem with plus 25 years of experience and have a unique set of data. Secondly, Sweden's property market dynamics have changed post-pandemic, which has favored the pre-market. This has been visible through longer sales cycles, Sell Before You Buy dynamics, and a very weak price development. Thirdly, building on our strong core business, we are now implementing significant strategic initiatives to cater for the changed market conditions. Sell First, Pay Later, the pilot has shown very strong results, both in terms of getting earlier listings to Hemnet and more listings on Hemnet, as Lisa elaborated on, given the 40% difference. I'm now very excited to start launching this in Stockholm next week. We've launched strategic partnerships, and we are in the early days but we've seen a strong initial response with more than 60 brands joining in the initial phase, including some of the biggest agent brands in the country. Last but not least, Hemnet has an unmatched position to leverage AI and significantly elevate our user experience. AI has changed the way we operate our business internally and created significant efficiency gains across our organization. We're now moving faster. We are acting more broadly, and we're happy to be able to announce a number of product news, including conversational search, an AI-enabled personalized starting page all properties and the Hemnet ChatGPT app for approval. Finally, before we open up for the Q&A, we wanted to take today's opportunity to invite you all to the Capital Market Day ahead of the summer. If we kindly could move over to Slide 48, please. We're happy to announce that we will arrange a Capital Markets Day in June this year. The exact date is yet to be confirmed and we will be able to share more details within a short period of time. The event will feature a presentation from Hemnet's management team on a number of various topics, including Hemnet's business strategy, our financials, our product and commercial road map but also our AI strategy. So with that, we very much look forward to seeing you all in Stockholm in June. So that was it. Let's now open up for the Q&A. Operator: [Operator Instructions] The next question comes from Thomas Nilsson from Nordea. Thomas Nilsson: I'd like to ask how you intend to price the pay only upon sale offer for Sell First, Pay Later? And exactly how was it priced in the trials you ran with 10 real estate agent firms? And second, what are your expectations in terms of volume in 2 years' time. How large a share of your total volume do you think will be connected with the Sell First, Pay Later payment option? Jonas Gustafsson: So 3 different topics. So on the first one, as we mentioned as part of the presentation, what we communicate now is that the Sell First, Pay Later will be priced at the premium compared to the payment alternative of Pay Later if removed. We are rolling this out on Monday, and we will have various price points. And please keep in mind that if you look at the overall price dynamic of Hemnet, we have more than 70,000 price points per day, but you'll see it on Monday. When it comes to the actual pilot, we elaborated on different price points. And obviously, the outcome of that trial and elaboration both from a qualitative perspective, but also from a quantitative perspective led to the price point that we're now launching. The last question in terms of volume, it's too early to tell. We are excited about the results that we've seen from the pilot, but we don't know exactly in 6 months' time, 12 months' time or in 24 months' time. Operator: The next question comes from Georg Attling from Pareto Securities. Georg Attling: So just the first one on the transactions. You said down 5% on Hemnet versus, say, a flat market. So just wondering if you have any more color on this where you're missing out? Is it ads that only reached the premarket? Is it under the radar listings or even those that actually come all the way to for sale? Jonas Gustafsson: The simple answer is that the exact details we don't know. What we've seen is that number of transactions or number of properties that have been marked as sold and taken down from Hemnet was down with 5% compared to the year before. As you know, Georg, we have -- we've had a strategy in the past where we use 1 source of data to provide our market share, and that comes from the SCB, the Swedish Statistical Bureau. And also for 2025, this will be published in mid-2026. Please keep in mind and also, I mean, if you look at our historical market share development, it's been fluctuating between 90% and 86%, depending on what market we're in. Georg Attling: Yes. That's clear. Second question, you say that 25% of the markets have signed up for these commercial partnerships, 60 agent brands. I mean, to me, that sounds like quite a low number. I understand this is a ramp up, but are there any agent brands that have said no? And what's the pushback in those cases? Jonas Gustafsson: I think -- and I would disagree with you. I'm quite happy with the results that we are already now at a sort of adoption rate of a 1/4 of the total market. And I think, please keep in mind that this is a completely new way of working for Hemnet, but it's also a completely new way of working for the agents. And it takes time to change a way of working. And there is many positive ongoing dialogues, and we haven't received a single no but there's ongoing discussions. And I think many people are waiting to see sort of what this means and how many other that go. But I would disagree with you, Georg, to say that it's quite low, given the fact that we're now sort of in end of January, and we announced this just a few months back, it takes time. And as you could imagine, signing 60 deals takes also quite some time. So it's a quite sort of operational work included into this as well. Georg Attling: Understood. And I'm just thinking of how you view the net effect of this fee sold. I mean you say that 8% to 18% of listings are sold within 2 years. And this is -- I mean, you mentioned the other day that this will be priced at a 7% premium to pay later. So it sounds like this will have a net negative effect on sales. Is that correctly understood? Jonas Gustafsson: I think when it comes to -- I can start and then Anders can jump in. When it comes to the Sell First, Pay Later business case, it's pretty simple and straightforward, I would argue. It's 3 components. I mean the first one is, will we get more volumes? Will we get more listings and implicitly more revenue? Our hypothesis is that we will get that. Secondly, per your point, and as you referred to, there are a share of the listings that will not get sold. So that's a downside compared to where we are today. Thirdly, we have a price component, per your point, and that will have an upside to this. We do like positive business cases at Hemnet. And I think -- I mean, if the first 2 parameters, how large share of volumes we will get an increase of and how large share is on. So those are unclear, but price is something that we can steer on a direct basis. And we always have that tool to play with to ensure this is an attractive and positive business case. Anders Ornulf: I can just add that the price point you referred to is versus the Pay Later option. And we are quite certain we know that we will have customers, property sellers coming from the Pay Now option as well. So you can -- you cannot use that 7% and take that into a model. Also commenting on price, we're launching on Monday. And as Jonas said, it's not a fixed price forever. We will launch in Monday, we will monitor in Stockholm, and we will learn from that. And we will follow conversion uptake and outcomes in real time. So if adjustments are needed, we will make them. And you had a comment on the volumes Jonas, but also there was an upgrade in the conversion. We will see what happens with that as well. It was a positive sign from the pilot, as Lisa stated. So yes, we're in a good shape. Georg Attling: Yes. That's clear. Just final question for me. I mean, when you think of the phasing of this year's price increases, will that look sort of similar to the last few years? We see what you did here in January, of course. But how should we think of price adjustments for the remainder of the year? Anders Ornulf: It's hard to say. Look, over the last year, because it has been very different '22, '23, '24, '25. So you should not take anything into account. We didn't -- we did look at the prices 1st of January and did some adjustment there. We look at it all the time. Now our focus is very much on SFPL but like-for-like pricing is always up for debate and discussion. But yes, that's what the focus is at the time being at least. And then we'll see how the year evolves. Jonas Gustafsson: And I think just to add one final thing there, Georg. I think also what we spoke about when we look at future ARPL growth from a more long-term perspective at Hemnet, payments was one of the options or levers that we mentioned as part of that toolbox. And I mean the most concrete example that we're launching today is obviously Sell First, Pay Later. We do see this as a long-term ARPL growth driver as well. Operator: The next question comes from Eirik Rafdal from DNB Carnegie. The next question comes from Will Packer from BNPP. William Packer: Three, if I may. So firstly, thanks for sharing the update on the progress of the testing. And it sounds pretty encouraging with a kind of healthy rebound in listings. Could you just help me think through where that rebound comes from? I suppose you framed that you haven't really been losing market share to the likes of Booli. So is the right way to think that, that is a phasing of listings that would have come to you eventually, or is there kind of more substantive underlying market share gain, which you're getting back from your peers from the pre inventory? Secondly, could you help us think through the cost outlook for 2026? In the context of the presentation, I think it's very fair to say the revenue visibility is low and perhaps the commission visibility is low in terms of personnel costs, in terms of marketing spend? Is there anything you could share for the year ahead and help us think through the scenarios in which margin expands or contracts, depending on the revenue growth? And then finally, there's been some noise around regulator. So my understanding from the trade press is that you complained regarding the SBAB's involvement with Booli, and how that was distorting the market? What's been the response there? On the other hand, there's been some press speculation that you've had to separate out your partnership from your prelisting product. Is that fair? Or is that accurate? Any visibility on the sort of the regulatory response to those items would be helpful. Jonas Gustafsson: So I think we'll be a bit back and forth between me and Anders on the various topics. So firstly, if we go to the uptake on the pilot, and I think, I mean, it's a mix. What we allowed as part of the pilot and what we also will allow when go live now next week in Stockholm is that we allowed the agents to also take old listings that they have in their premarket inventory. And so that is obviously a sort of a catch-up effect. And I mean eventually, they would most likely have ended up at Hemnet, but it's a phasing effect because we get the listings earlier at Hemnet, which is also -- I mean at the end of the day, that's the strategic ambition that we do have with this product launch, get more listings and get earlier listings on Hemnet. So there is definitely a catch-up effect. Whether that's sort of -- it's difficult to say whether there are listings that would not have ended up at Hemnet. But part of the -- sort of the qualitative assessment, the analysis of the pilot indicates that the threshold is definitely lower to use Hemnet, and that's really what we wanted to achieve. Secondly, there was a question around the cost outlook. So if you could take that, Anders. Anders Ornulf: I can. Regarding the cost development in Q4, yes, thanks for your questions, Will. Fixed OpEx, excluding admin and commission were up 11%, driven by the cost increases I went through in the call earlier. Very much related to personnel, but also marketing and sales. We don't do guidance. You know that, and you comment on that yourself. And looking ahead to 2026, that strategy remains. And we will continue to invest. We believe it makes a significant difference for the long-term position, particularly coming back to sales and marketing efforts and the examples supporting the rollout of SFPL and the new strategic partnerships. I also want to say that one of the reasons we don't guide on cost is we believe that agility is core, but we have to make sure that we have to be prepared and whatever happens with the market or whatnot. So without giving a guidance full year, in '25, we grew by 14%. The year before, we grew by 30%. So as a CFO, I like 2025 more. But as always, with OpEx, we monitor, and we'll see what happens. When it comes to effective commissions, I think you've heard me say this many times before, I hope it increases because then again, we hope to see more recommendation and conversion to especially Max, but it would also be offset 1st of January because of the -- that the admin fee is fixed, right? So we saw that in '25, and we will see that in 2026 as well. That was a bit of color on the OpEx and outlook. Jonas Gustafsson: And if we go to the third question, Will, so we can confirm that we, as Hemnet has turned to the Swedish Competition Authority regarding SBAB and its subsidiary Booli. This concerns a fundamentally important issue of assuring that the state-owned companies comply with their specific competition rules designed to protect the market from competition being restricted by public actors. We note that Booli is a loss-making business that has built its position through extensive state support via SBAB and it's our assessment that these operations are conducted in violation of the specific rules governing anticompetitive activities by state actors. And we've now referred this matter to the Swedish Competition Authority for investigation, and it's up to them to investigate this further, and we will not sort of comment that more in detail. Then there was another topic on your question, William, that I'm -- maybe I misunderstood it, but was that the question? If not, please elaborate a bit further. William Packer: Just maybe just sort of moving on to one other topic I wanted to cover, I think you've covered the rest of the stuff. On Slide 34, you talked about monetary incentives of successful partnerships. Is the right way to think about that if the partnerships really scale that becomes kind of a new cost outflow associated with incentivizing agents to help Hemnet product, which is an additional to the commission, or I misunderstood? Anders Ornulf: No, you haven't misunderstood. It refers to the partnership program. It's a performance-based model where -- when a partner, signed up partner, agrees to commit to Hemnet, if they increase the share of premarket listing on Hemnet above an agreed baseline, we reward them with the share of net revenue. The revenue is, of course, based on the revenue after the ordinary compensation, admin and commission to agent offices. It only pays out for meaningful growth, and it's -- even then the payout is capped at 5%, as you can see on the slide you referred to. It will be included as a separate cost item in interim reports going on, and it will be rolled out gradually as part of the launch, so we will see how it evolves. Jonas Gustafsson: I think just to add there, Anders, I think it's definitely something that will drive revenue and it will drive EBITDA, right? So it is a self-financing approach. Anders Ornulf: Absolutely very similar. The structure, at least, is similar to the one we have already with the real estate agent offices. Operator: The next question comes from Eirik Rafdal from DNB Carnegie. Eirik Rafdal: Yes. I got a couple. We can do them one by one. On the trial, you say 9 out of 10 SFPL sellers choose Bas. Could you share some light on the relative share of Plus, Premium and Max within those 90%, and also how that compares to the Bas in kind of similar regions? I know you said 75% of total, Jonas, but just good to know if that 90% and 75% number is comparable. Jonas Gustafsson: Eirik, good to talk to you. So when it comes to the trial and when it comes to the Bas penetration, you're right, we've seen roughly 9 out of 10 of the packages having a Bas component. And I think -- I mean if you look at, just a step back, I think this has been done in 10 different offices across Sweden. So I think there's not a specific geography that is overrepresented. So that's part of it. What we've seen is that no major differences in terms of sort of variation of the various packages compared to that sort of the underlying or the nonpilot offices. So it is no material differences in that area. Eirik Rafdal: That's very clear. And also kind of on the same slide, you say 6 percentage points higher upcoming listing market share on Hemnet versus the pilot start. Would you be able to share the market share at the start and finish? Jonas Gustafsson: No, we wouldn't be able to do that. But sort of -- we saw a material movement of 6 percentage point market share increase during 3 months and something that we're very happy with. Eirik Rafdal: Perfect. That's very clear. I just wanted to follow up on some of the questions around the relative pricing of SFPL and our understanding based on channel checks, is that around 7% to 8% higher price than Pay Later? And I think you mentioned that as well, Anders, which in turn is 7% to 8% higher than Pay Now, which means that the ultimate difference between Pay Now and Sell First, Pay Later is 15%. Can you confirm this number? And also just on your being on relative pricing, in my opinion, at least, it seems like it's fairly small price to pay to significantly reduce your risk as a seller. Just your thoughts there would be good. Jonas Gustafsson: I think when it comes to -- I mean, it was pretty clear before that we didn't mention the exact price point. But I think what you're sort of getting to the 15% is ballpark right, and then we will have variations, given the fact that we have a quite complex and dynamic pricing model given the fact that we already today have more than 70,000 different price points. So that's one thing. I think please keep in mind that when we're now rolling this out, there's -- we don't know what penetration and uptake it will have. From a strategic perspective, it is important that this should drive more listings and earlier listings to Hemnet. So we want to ensure that we get more volumes on this. But in terms of price, we can steer price. Price is something that we can move every single day, I was about to say, but sort of in real time. And we can change it, and we will make sure this becomes attractive. But we're very eager to also get a broad uptake on this, given the fact that I think this will also have a very positive effect in terms of how satisfied the agents are and also very positive for the seller NPS of Hemnet. Anders Ornulf: And I can also, as a reminder, the price effect will also be very much dependent on the uptake from Pay Now and Pay Later listing is removed, right? So it's not really that easy to just say, 15% or 8%. Definitely correct, so.... Eirik Rafdal: Very fair point. And just one final one, if I may. I know it's been a bit of an investor concern around how you handle content quality for maybe particularly the coming for sale ads, like how would you deal with ads, for instance, like photos or asking price? How will you kind of structure the UX for the buyers? Just any thoughts there would be good. Jonas Gustafsson: I mean I think at the end of the day, we want to have more listings, and we want to have more listings earlier. I think, I mean, Hemnet is today a quality property portal, and we will make sure it remains a quality property portal. Please keep in mind that, I mean, Sweden compared to many of our international -- sort of other geographies outside Sweden, Sweden has a highly functional property market. We have a highly professional, highly educated agents. It is -- if a listing is going to go on Hemnet, it always needs to go through an agent. And I have full trust in the agents' community that they will ensure that we sort of remain the high quality at Hemnet. Sweden is very different compared to other markets. And at the end of the day, I mean, what matters for an agent is to sell the property. That's where they make their money. The quicker they could sell a property, the more property they could sell, the more happy they would be. And using Hemnet and using the Sell First, Pay Later will be a perfect way to get there. Operator: The next question comes from Ed Young from MS. Edward Young: Two questions from me, please. First of all, on Max. Could you talk a little bit about what the plans are there? You said that it's sort of the next leg of driving package improvement, but you've not really touched on what that might include today. And as part of that, could you perhaps comment on whether you expect Sell First, Pay Later initiative to influence the adoption of Max relative to other listing tiers significantly? And then second one, on the pre-listings, you spoke about areas you're actively looking to address. Is that just essentially fresh pre-listings or are there certain segments like the higher volume apartment area that you were talking about sort of segments you're trying to attack. So any color on what it is you're looking for from pre-listings or alternatively what you're not? Maybe, as you said, you've got a big jump on these targets, 30%, 40%, 50%. So I'd be interested to know what you're really trying to focus agents attention on? Jonas Gustafsson: Yes. So in terms of Max, I think digging one step back, Max was launched back in April 2025. So it's been around now for more than -- slightly more than half a year. We've seen quite slow adoption. I think a large part of that has been driven by a very slow and challenging market. I think -- I mean, if we would have launched Hemnet Max during like a peak market like 2020 or 2021, you would have seen a different development. But also keep in mind what we refer to as part of the presentation that Hemnet Plus and Hemnet Premium also had a very slow uptick in the initial phase. In terms of Max, and we're continuously working on -- I would say it's two-folded. I mean, first of all, the product performance that we do see with Hemnet Max, the engagement, the number of listings or number of views per listing and also the speed that we can sell a property when you use Hemnet Max, those results are great. So it's a lot about spreading that goals also in the agent community and ensuring that seller understands that this is, if you pay for a Hemnet Max, it's a product that you get benefits from. We need to be better and we need to communicate that in a clear way. Second to that, I would say that Hemnet Max is still, if it's -- even though it's been around the block for 6 months, it's still a baby. We are continuing to develop the various product features and kicking in an open door, we're running a marketplace here with a tiered product structure. It's all about relative differences both in terms of relative price differences but also in terms of relative feature differences. So the team are testing various things now to see sort of what could catalyst further penetration when it comes to Max. Then in terms of the pilot. It's clear that what we saw is that we said that in Q3, we had roughly 75% of all our packages having a Bas component. And then we said that the pilot had a -- sorry, the Sell First, Pay Later pilot had a Bas conversion of 90%. So there's obviously an impact across the broad regardless if you talk about Hemnet Plus, Hemnet Premium and Hemnet Max. But it's a bit too early to tell. I mean the Sell First, Pay Later pilot was a sample, and we're looking forward to continue to follow this. In terms of the premarket, it's -- I mean, at the end of the day, the ultimate goal, which is embedded into our strategic ambition, is to get the properties that sell in Sweden that they should be on Hemnet. That obviously means that the sort of the higher the seller intent is the more attractive it is from our perspective. So we want to focus on ensuring that we get the premarket listings where there's an intent to sell. That's our primary goal with this. But we also want to have the broad volume. Operator: The next question comes from Marcus Diebel from JPM. Marcus Diebel: Just 1 more question on the pricing of Sell First, Pay Later, again. Obviously, you talked about it in detail, you said clearly you can't give any more sort of data on pricing, we're going to see this very soon. But more conceptually, what has driven the decision to really price this as a premium? Is it not now the time to really get the listing sped relatively quickly, have a very strong sort of like current developments, why do you feel that this should, at this point, still deserve a premium? Second question will be on your comment on rolling out an app within ChatGPT. If you can just comment a bit more what has driven this? Why do you feel this is the right move to do. And also if you could talk about the terms here? Is it just a partnership? Or how free, or so free or how should we think about it? Jonas Gustafsson: Marcus. So in terms of the price point for Sell First, Pay Later, I think that we've elaborated on the more sort of financial aspects of it more from a strategic level. I think that -- I mean, it's so clear to us that this comes with a fantastic customer value. The results from the pilot, both from a quality but also from a quantity perspective comes out very, very clear. This is something that the consumers are willing to pay for. This is a threshold reduction parameter, and it is a component that sort of reduces the barriers to use Hemnet to a large extent. And we've done a comprehensive pricing work looking at all those various parameters. And I think it's very clear to me that given the pilot test that we ran, that this is a fantastic customer value and a fantastic proposition towards the consumer. Then if I sort of -- if we move over to the ChatGPT question, we have Lisa here who's the expert. So I'll hand over to Lisa to elaborate a bit on that. Lisa Farrar: Thanks, Jonas. Marcus, I would describe our app within the ChatGPT app as a move to learn, both for us but also for our users. We want to be where our buyers and sellers are going to be both now but also in the future. So this is an early stage way for us to integrate with new technology, a new ecosystem, and learn from that. In this app, you will still be circled back to Hemnet, so we're not losing our users. We're just seeing it as a distribution channel. And I would say this is the first move to learn and go from there. Marcus Diebel: Yes. Anything if you can just comment a bit more about the sort of like terms. I mean -- do you feel that this will be exclusive? Do you see others will follow and also sort of like how the dialogue with OpenAI has been, if you can share anything more would be very helpful. Jonas Gustafsson: I mean, I think it's difficult for us to comment any on our competitors if they would follow. I think we stand very strong in our foundation with more than 25 years of experience and more than 1.4 million homes of user tagging, which makes us feel that we have a benefit in also the AI world. In terms of the exact sort of details in the discussions with OpenAI, there's -- I mean, we don't want to comment on discussions in terms of details with our partners at this stage. Operator: The next question comes from Nikola Kalanoski from ABG Sundal Collier. Nikola Kalanoski: So firstly, on the SFPL model. When these pilot offices tested the new model, they were, in essence, I guess, you could say, given a super power compared to some of the other offices in terms of being better able to win listings, if you will. As an agency, you're a little bit more attractive, of course, if you can offer this. Has this discrepancy, do you recon, helped drive new strategic partnership signings with more agencies and offices being eager to take part? And do you expect that this will drive additional signings going forward? Jonas Gustafsson: Nikola, I mean, so just to clarify the background and the circumstances. I mean, this SFPL product will be available to all agents regardless if you have a strategic partnership or not. So this goes out to the full market, right? This is not part of the strategic partnership just to make that clear. However, if you look at -- you referred to it as a super power and just looking at the results, I think that, that's a fair analogy. I think -- I mean, obviously, they had a benefit being part of the pilot during this 3-month period of time. And we know for a fact that day 1 number of sort of competitive discussions with their competitors just because of the fact that they have this tool or the super power, as you referred to it, I think that given the fact that we will open up for the full market, you will still have a super power towards the consumers if you're actively using Sell First, Pay Later. So I think this is something that will drive and accelerate the development of Sell First, Pay Later. Nikola Kalanoski: Yes. That's very good. And I guess this is just technicality then, but I think in your slides you referred to a disclaimer that says that the business rules of SFPL differed for -- from that of the pilot versus the actual role. Are there any big differences here that we should take into consideration qualitatively? Jonas Gustafsson: I think when it comes to -- I mean, we elaborated -- I mean there was a question before, I think -- we had a question before around how we price the SFPL. I mean, one thing that was an important part of the pilot was obviously to test different price points. And the price point that we now landed on and that we will go broad with starting off on Monday, it was not the same across all offices. Obviously, it was for 1 or 2 offices in that range, but we test the different price points. So that's one difference. Also, I mean, what we allowed was that as part of the -- as part of the pilot, we also allow them to take old listings. Now when we go live, we will have a grace period of 30 days. And so that's the initial hypothesis when we rolled this out. So there are some differences. And that's why we don't want you to just take the number of 1 by 1, but this should give you a good indication. We're very happy with the results. Nikola Kalanoski: Yes. That's very good. And just a final one for me. And I believe there was a question before on the cost base, but this is more specifically with respect to the ChatGPT integration. Does this change in any way your cost structure? Or is there any meaningful costs associated with doing this integration? Lisa Farrar: No, nothing there to add to our cost base today. Nikola Kalanoski: Yes. Perfect. That's all for me. Operator: The next question comes from Annabel Hames from Deutsche Bank. Annabel Hames: Just 1 for me. And is there a cost with monitoring the Sell First, Pay Later to ensure that it's not being abused? Anders Ornulf: No, no, it's not. We have many things in place, all from technical to agreements with the customers. So we sit very well on that front. Operator: [Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments. Jonas Gustafsson: So first of all, many thanks, everyone, for tuning in today for a bit of an extended session. And thanks, everyone, for joining the call. A lot of great questions that are, as always, truly appreciated from our side. So with that, that is all from us. Make sure to have a good day, and thank you.
Richard Dierker: Okay. I think we're ready to get started. So thank you for coming out today, especially in a cold, blistery New York City day. I really appreciate it. I want to walk you through a quick 170 slides and the management team is going to come up and talk as well. But we're just a ecstatic to be here, and we finished the year with momentum, in 2026, the future looks bright. So just as a reminder, we have a safe harbor statement. We're going to make forward-looking statements today. So please check this out on our website. So who's going to be presenting. I'm going to start and end the presentation. Lee is going to come up and talk about our financials and our outlook. And then Chuck will talk about our brands and the categories; Andrea is here, Founder of Touchland. She's going to talk about that business and how excited we are about it. Carlos is innovation. Surabhi is all things digital, and then Mike Read will talk about international and SPD. I'll also go through some of the growth initiatives today as well. I'll just walk through the agenda. I already told you welcome. So let's look back at 2025. We grew faster than all of our categories across all 3 divisions. That is quite the accomplishment in a tough and rugged 2025. 4 of our 8 power brands grew share. 4 of 7 if you exclude Vitamins. Hero and TheraBreath are growing double digits. Strong innovation and marketing spend supports these brands and growth. And then we acquired Touchland this year. Tariff response and mitigation. These 3 bullets are really important to me. I would say our tariff mitigation and response wasn't just industry-leading, I would say it's just leading. I was super impressed with how the company reacted to that. Portfolio. Portfolio changes were executed. We divested Spinbrush and Vitamins. We shut down Flawless and Showerheads. There is a lot of momentum because of the portfolio changes we were able to make in 2025. So we also have a strong balance sheet, 1.5x levered. You know this, right? Our long-term investors know this. We have been able to acquire businesses. We have the ability to identify, acquire, integrate and grow brands and the future is bright for that as well. Joe, can you just let them know they switched the prompter up here. It doesn't have anything on it anymore. It's fine. But -- this is one of the most important things to understand about the business portfolio. In 2025, our brands grew about 1% consumption. If you strip out all the businesses and portfolio changes we made, it would have grown 3.5%. What a great resilient portfolio to have the wind at our back for 2026 and beyond. Lee will talk about the Evergreen model in detail. I will tell you that Evergreen model is alive and well. You saw how we had those brackets in our outlook today for 2026. There's a lot that goes into this, but this is the output. We have to make sure we have innovation and brands consumers love. We have to make sure we have productivity programs, the right advertising. All those things are the inputs. And we have a strong track record of TSR. If you look back at 3, 5, 10 years, we're always near the top. 2025, we went backwards and we're off to a great start in 2026. What's our winning formula? We have a balanced and diversified portfolio. We have low private label exposure. This is going to be my new favorite slide. You're going to see the updated one in a few minutes. We have online success and strong, consistent category-leading innovation. Half of our growth to fleet comes from innovation. And again, we're an acquisitive company. We know how to identify, acquire, integrate and grow brands. Church & Dwight is about a $6.2 billion company, 77% domestic, 18% international and 5% SPD. 7 brands make up 75% of our sales and profits. And we have a balanced and diversified portfolio. About half of our portfolio is personal care, the other half is household. 64% premium, 36% value. low private label exposure. So for many years, we've been showing this slide that weighted average exposure to private label across all of our brands, across all of our categories is around 12%. And it's been very consistent 12% year after year after year. And why is that? We don't have private label exposure, for example, in laundry. But look what the portfolio reshaping did to that stat. We're down to 5%, right? Vitamins was an extremely large private label business. So we went from 12% to 5% because of portfolio reshaping. Online success, all things digital. We went from laggard to leader, 2% to 24%. Surabhi and her team are doing a fantastic job. Strong and consistent category-leading innovation. About -- again, half of our growth is typically tied to new products. We measure this maniacally, incremental net sales growth, not gross sales, stand-alone but incremental net sales growth. And this drives our brands. It creates value for the consumer. Acquisitive company, #1 or #2 share brand is one of the first things that we always want to make sure when we buy a brand or a business. Number two, high growth and high margin, fast moving consumable, that's what we're focused on. Asset-light, leverage our manufacturing skill set and then deliver a sustainable competitive advantage. And we're as excited today about acquisitions, both in the U.S. and probably also internationally, right? I think that's the nuance. It's always been the U.S. It's an and. Now we're talking about international as well. And why is that? Like this company has been transformed through acquisition, and I'll show you in a few minutes. We have a slide, $6 billion, $2 billion is really the ARM & HAMMER brand, $4 billion is from the brands we've built and bought over the many years. And that tranche started back in 2004. We go from $1.5 billion to almost $3 billion. And then you go from $3 billion to $5 billion. And now we're about $5.5 billion go into what? We're $6.2 billion this year, and we think that's going to continue to grow through acquisitions. Okay. So here's the new news. We haven't talked about this before. I think the reality in the world that we live in is categories have decelerated, right? Our categories have grown for a decade or longer at 3%. And if you look back at 2024, it was closer to 4%. And then in 2025, the first half grew 2%, the second half grew 1.3% and the full year grew 1.8%. That was not just us, that was everybody. Many categories were doing the same thing. Bad things happen and you have people to react to it. Consumer sentiment is weak, right, 5-year lows on consumer confidence. So we have to be able to control our own future. And so what are we doing about it? We're focused on these 3 aspects of growth internally to help drive results in the future. So that if categories slow, we can still hit our Evergreen model. If categories don't slow, we can do even better. So grow ARM & HAMMER from $2 billion to $3 billion. There's 3 or 4 pillars behind that. Number one is continue to do what we've been doing, grow the core, ARM & HAMMER laundry, ARM & HAMMER litter. Good, better, best. We can round out our portfolio for good, better, best across the ARM & HAMMER sub-brands. In-house licensing. We're going to consider that more of an incubator, and I'll talk through that in a few minutes. And then new categories. So we're going to launch a couple of new categories this year. But over the next few years, you're going to see a handful of other categories. And those are going to be fewer, bigger, better. We're not going to go everywhere to every one. That's not the strategy, is to make sure that we're in the right category where ARM & HAMMER can play and win. Drive oral care expansion through TheraBreath, really behind TheraBreath from $1 billion to $1.5 billion. And then to scale our international business. We've been doing a great job doing that for many years, and now it's a little bit double down on M&A. We have the scale. We have the infrastructure to do it. So that would go from $1 billion to $2 billion over time. Here's the slide that we've shown before. This is the makeup of the $6.2 billion over time, $4 billion is really from acquisitions. But I'm going to talk about it in the inverse for a second. It means that we've gone for ARM & HAMMER from $1 billion to $2 billion over the last 25 years. Our aspiration is to go from $2 billion to $3 billion a heck of a lot faster than that. And again, this is the core, grow the core. Look at the stair step up over time for liquid laundry and for clumping cat litter. We have a great brand. It's the innovation behind laundry, the marketing behind laundry. We're hitting the consumer right where they are. And year after year, we continue to gain share. What are some reasons to believe in the ARM & HAMMER strategy? Well, number one, we've proven over time that we can go into other categories. And it's not 1846 anymore, but baking soda was founded back in 1846 with Church & Dwight. Laundry was in 1970. Toothpaste was in 1980s. Deodorant and cat litter were in the 1990s. We know we can do this. We've been in large categories before. Our equity is fantastic. Our brand stacks up with other brands like Nike and McDonald's in terms of awareness. And then the last one, which I believe is a competitive advantage is the ARM & HAMMER brand has a halo effect on advertising. If we advertise cat litter, baking soda and laundry benefit. If we advertise laundry, ARM & HAMMER toothpaste benefits. That's a unique position and capability that we have. ARM & HAMMER is known for cleaning, deodorization, cooking, laundry, the list goes on. It's a premium in some categories, it's a value in others. It's personal care in some categories, it's household in others. There's very few brands. I can't name one that has the ability to do that. It's also uniquely extendable. It's in more aisles of the grocery store than almost any other brand through either our owned brands or licensees. There's over 100 uses of baking soda. It's used everywhere. It's in the laundry room, of course, it's in the kitchen. It's in the bathroom. It's everywhere. So there we go. So grow the core we talked about. Good, better, best. Again, there are subsegments within the ARM & HAMMER portfolio that can get rounded out. We've proven time and time again that we're good at ARM & HAMMER doing good, better, best. I'm going to show you those 2 examples. I'm not going to go through them today, but there are new categories that are ripe for ARM & HAMMER. And then number four is the in-house licensed brand concept to be an incubator, to be able to say, here are some categories that we may want to go into. How do we explore that? How do we get a business up to $10 million or $20 million or $30 million. And then when it makes sense, to actually buy that back and be able to scale it like we normally do. So here are the 2 examples that I would tell you are just textbook for good, better, best. First one is litter. Orange box is good, black box is better and then HardBall is best. And HardBall is known for the best, we're trying to make that the best lightweight litter. We think that might be the best litter period, full stop. We also have laundry, good, which is the ARM & HAMMER model, better, which is ARM & HAMMER plus Oxi and then the best, which is deep clean. We have almost $1 billion of licensing and retail sales out there with partners. There are many categories in which ARM & HAMMER has already proven that can play in. And once we decide that we think that we can be a better owner at some point in time with the right partner, then we believe we can scale it and take it to the next chapter of growth, like we did for Hero and TheraBreath. Okay. Next pillar of growth is really oral care. Now as we grow, we want to make sure we're focused on the right large categories. And mouthwash and toothpaste are huge categories. On the far right, $2.4 billion and $4.8 billion. We would much rather have a share point in toothpaste and even in dry shampoo as an example. So we're laser-focused on mouthwash and toothpaste. And what's uniquely different about us is TheraBreath gives us a great entry point for oral care now, right? ARM & HAMMER is always to a select subset of the market because of the taste profile and for baking soda, but TheraBreath can reach and penetrate a lot more households. Speaking of penetration, TheraBreath is 12% household penetration. Mouthwash is 65%. Chuck is going to go through more details, but we have a lot of room to still run. We have aspirations to be the #1 mouthwash. Number 2 is toothpaste, huge category, almost $4 billion. We have been playing in toothpaste for quite some time. And collectively, we're a small player, if you add up all of our brands. We think TheraBreath has a unique right to win. We think there's a loyal following for TheraBreath. It hits on best-in-class performance. It's better for you. It has superior flavor. So all those things come together to make this a great chance for TheraBreath to become a meaningful brand in toothpaste. Last but not least is International growth. And Mike will walk you through the reasons to believe as well. But we have a long track record of organic growth. This has been a fantastic story for Church & Dwight and for International. And there's a lot of room to run. We're underpenetrated, our company versus most other multinationals. And we've done a fantastic job taking businesses even faster than our history, I would say, and applying those distribution gains. So Hero, TheraBreath, Touchland, they have all expanded rapidly, and a large part of that is because of international. And so today, I'm just saying we're doubling down M&A within our international business. It doesn't mean we're doubling down less in the U.S. It's just an and, not an or. But we want to acquire brands because we already have a great footprint or we want to shortcut like we did with Graphico in Japan, right? We added our OxiClean distributor, and now we can start to add some of the brands that we have into that infrastructure. All right. With that, I will ask Lee to come up and talk about the financials. Lee McChesney: Thank you. All right. Good afternoon. For those of you who haven't met, I'm Lee McChesney. I have the privilege of being the CFO for Church & Dwight. And with that, we probably to dive into some numbers. So we'll do that quickly. So we obviously, this morning released our 4Q and '25 results, came in at 3.9% total sales, a bit higher than our outlook. Certainly, Touchland was a big driver of that performance. Organic was 0.7%, a little bit lighter than our outlook, but that was really driven by the VMS business, they now exit the VMS business and then just the category itself was a little bit lighter. I try to give you also this perspective in the release as well. You take out the VMS business in the fourth quarter, organic sales were 1.8%. So some nice momentum as you started thinking about '26. We had another great quarter with gross margin, 90 basis points higher than last year. higher than our outlook. Really great work from the team across the globe to bring this to life. First half of the year, gross margin was going back for 50 basis points in the back -- in the first -- back half, it was up 50 basis points. So some really good momentum there. So that favorability in the sales, favorability in gross margin rate, we put more into marketing, and then really helpful for the brand today, but also as you think about '26. Ultimately, that led to an EPS of $0.86 higher than our outlook and up 12% over the prior year. So overall, a really nice quarter. And obviously, if we pivot to the full year, that all flows through. Again, you see the overall total sales of 1.6%. And then again, organic for the year was 0.7%, but when you adjust out VMS, it was 2% organic growth. So again, that's kind of the entry point as we go into '26. I mentioned, obviously, the progress on gross margin and we continue to invest in SG&A. The other element is cash flow. We had a great cash flow year. We upped our outlook throughout the year, and we actually exceeded that in final form at $1.2 billion. So really just a ton of strength again, on the sales side, gross margin, EPS and cash flow, all higher than when we put out our outlook on Halloween early in '25. So that's the numbers. But I also wanted to just reflect a little bit on what we did beyond the numbers. And because it also is a good starting point when you start thinking about '26. So once again, we continue to have the strength of brands to grow 4 of our 8 brands. We changed the portfolio. And hopefully, you saw in the release some of that insight. But moving away from those 4 brands, we now have a portfolio that has the ability to grow at a faster rate, has a higher gross margin rate. I mean those are all going to be -- you see those in the outlook -- walk through '26 in a second here. We had another year of incredible productivity, record levels of good to great productivity. And then we faced into tariffs early on. So liberation Day in early April. And by the end of April, we told you what our plans were. So $190 million of tariff exposure that we've now moved down to $25 million and continuing to decline from there. It's -- you see it in the outlook for '26 here, and we get through a second. And then the cash flow I talked about, we had great cash flow. But this year, we bought Touchland, we returned $900 million to our shareholders. And we still have the same debt-to-EBITDA ratio. So we have tons of optionality as we move here into '26. So I have an observation since March. And I just think this is really our culture coming to life. Things come at us. We quickly assemble the facts, we come up with actions and we execute. And we all did this in '25. And again, all this momentum carries us into '26. And certainly, I think you'll see that when we go through the outlook. With that said, let's run to '26. So you know Church & Dwight, you know our Evergreen model. This is the foundation. This is what's running through the organization. When we get together, when you think about the plan, people know what's expected of them. So you're going to see this certainly coming to life as we walk through the outlook. So again, this morning, we put out a release, 3% to 4% organic growth range for the year. Reported sales will be down negative 1.5% to 0.5%. That's solely the business exits. I'll walk you through that in more in a second here. Gross margin improvement of about 100 basis points, continue to invest in marketing at 11%. And ultimately, that's an EPS outlook of 5% to 8% for '26. And then again, we expect to have another strong year with cash flow, $1.15 billion. So I know you're going to ask a lot of questions later, but I'm trying to get some of those out of the way here with some of the tailwinds and then the headwinds as well. So I think you're going to see on display from really everyone presenting today, a lot of the reasons behind this. Again, the brands are still performing well. You're going to see a ton of innovation from us. I mentioned the portfolio change. Again, this is helping us on the organic growth, it's helping on gross margin. We get to reallocate our focus as a leadership team to use faster-growing value brands and premium brands that we have in our portfolio. I mentioned Touchland. Touchland is 2 quarters now, really strong results. You're going to hear more about where Touchland's going in the future today. And then as Rick just mentioned, we have the growth initiatives. So again, it's an extension of already what we have going on in the portfolio driving us here. And then I make the comment here that in 2025, if you look at almost every metric it got better year-over-year in the second half than the first half. And that's our entry point as we go into the year here. So sure, the categories, we're not expecting them to transform. We're still expecting kind of 2% category growth. There's going to be inflation, but also behind that outlook is we do have these exited businesses. It's $400 million of sales that have come out of the portfolio. We've worked through the stranded costs. That's all covered in the outlook for '26. So let's go from there, just walk through a couple of extra details here. So again, organic growth, the Evergreen model calls for 4%. Our range is 3% to 4%. We have a 10-year history of 4.1%. I mentioned the reported sales. I just want to give some color here. So again, $6.2 billion of sales in 2025. Our outlook refers to $6.1 billion to $6.2 billion. You have the $400 million coming out from the exited businesses. And then with Touchland and the core businesses growing, we almost fully mitigate that on a reported sales basis. But obviously, underneath that is the organic growth of 3% to 4%. And I'd also note in our outlook just the importance of volume. So our organic growth is driven on volume growth. It's not driven on price, it's driven on winning at a unit level with the brand. That's what we've been doing historically, and that's obviously the foundation also of what we're planning to do here in '26. It's a volume-driven organic growth outlook. So I mentioned gross margin. I don't think we typically show 100 basis points of improvement in gross margin. The Evergreen model is 25 to 50 basis points. And so let me walk you through some of the drivers to that. So on this page here, you really see what we try to bring to life every day. So whether it's good to great productivity, supply chain optimization, whether it's bringing NPD to life, that's obviously good for growth. That's typically also good as a mix element. And then we buy acquisitions that are higher gross margin levels and then we expand them. It gives us positive mix. Those are usually the elements that drive the 25 to 50 basis points. We're looking for an Evergreen. And then as I mentioned, the portfolio change is also enabling us to go from that 25 to 50 up to 100 here in '26. And hey, there is inflation, I call it's 160 basis points. But all those actions I just talked to you through are offsetting that. So sure, we have natural gas is up, ethylene, things like that. We're going to have a normal batch of labor inflation. We have some capacity improvements. We're covering that. That's what we do with our good to great productivity and all those other amounts we drive normally in the Evergreen model, okay? Talked about marketing. This has been 11% is called out in the Evergreen model. That's what we're looking at again here in '26. And this has been an important formula. We invest in the brands. And when we have opportunities like we just did in the fourth quarter, we'll even invest more here to support the brands. Just to note, marketing will be based on this outlook, a few basis points lower than it was in '25 because the Vitamin business had a higher marketing rate than the core portfolio. SG&A, I mentioned earlier, is going to be a bit higher. Really just a couple of drivers there. Certainly, we have a half a year of Touchland's SG&A and there's amortization. So that will be a pressure point in the first half of the year. And then we don't have the same leverage of the portfolio because we have the business exits and then we have a bit of stranded costs. But again, that's all factored into the outlook. We're still continuing to invest in the international business in e-commerce. And then those growth initiatives we just talked about, that's all still going on within SG&A. So all that, again, brings an outlook of 5% to 8% in EPS. The Evergreen model is 8%. So certainly, that's within the range here. Today, obviously, we're talking to you thinking about that as a midpoint perspective, but you obviously have a 10-year history of what we've done there. We'll certainly focus on bringing that to life. Now we noted also in the release, it's a bit of a first half, second half. So the second half is a little bit higher. But just to give you a color there, I mean, the growth perspective for the year is similar. The gross margin improvement is similar to the year. But again, you do have that Touchland SG&A and amortization in the first half of the year. And then when we look at our marketing programs, they're more heavily weighted to the first half than the second half. And that's solely the driver and the difference. So I think Rick said last time, when he was a CFO, this is his favorite chart. I think as CEO, it's still his favorite chart. And when you look at the free cash flow conversion, right? I mentioned, obviously, the cash from operations, but 127% in '25. This gives us so much optionality as we look to invest in the business here. That obviously shows up in the debt-to-EBITDA ratio Again, we did Touchland. We did the share buybacks and we basically have the same level of debt-to-EBITDA. So all that firepower we had in the past is still there for us. And that certainly shows up here. It's over $5 billion. I think this is almost the exact same chart as last year despite all those things we did with the portfolio, how we've added to it and how we've returned dollars to the shareholders. This speaks to the cash flow capability of the organization. So what do we use the cash flow for? This chart hasn't changed. We've seen it in the past. Number one, TSR-accretive M&A. So the Touchlands, the TheraBreaths, the Heroes, finding the next version of that domestically or internationally and bringing that to life. That's the #1 goal. That's certainly what we're out in the marketplace to do. And again, we have all that capability financially and organizationally to add to the portfolio today. Next up is certainly CapEx for organic growth and productivity. Number 3 is NPD. Number 4 is debt reduction. But at this point, we paid down all our variable debt. So this is just -- we're just sitting at the fixed that we have today, and then returning cash to shareholders. And on that note, we also announced today that we have a 4.2% dividend increase from the Board in '26, our 125th consecutive year of paying dividends and our 30th year in a row now of increasing our dividend. Again, another great example of the cash flow coming to life. So what should come through here for '26 and what you're going to hear from the rest of the team today is our confidence in the outlook we put out there. So whether it's the strength of the brands you're going to hear about in a second from Chuck, the innovation from Carlos. You're going to hear from Andrea on Touchland. You're going to hear from Surabhi on what we're doing in e-commerce and how that continues to be a great story. You're going to hear from Mike on the international business and now even more focus under our growth initiatives there. And then that cash flow giving us so much ability to invest in acquisitions or organically in the business. So with that said, I'll move away from the numbers and then let the team walk you through some of the stories behind that. So I'm going to pass you on to Chuck. Charles Raup: So as Rick and Lee have talked about, we have great optimism in our future and our ability to grow. And as we look at the U.S. business, we're targeting a strong 3% growth rate. And that's going to put us in a great position to continue to win share in the categories that we compete. And this growth is going to be driven by our 7 power brands. And the great thing about these power brands is they compete in categories that have been resilient and traditionally deliver growth. And in fact, when we look at 2025, 7 of the 8 categories that we competed delivered growth, a little bit under 2%. And that's despite a suppressed consumer environment. And as we take a look at share, we grew share in about half of the categories that we compete, so 4 of 8. And the drive going forward, of course, is to accelerate the momentum in categories where we're strong. And in categories where we fell a little bit short, we have powerful plans to return to share growth. So let's take a look at some of these power categories. First, laundry detergent. We had a great year in laundry detergent. We outpaced the category by 1%, growing about 20 bps a share. Now why is that? Well, a big reason is the performance of the value sector. So if we look at the value sector, that's what's winning and that's what's growing share of the category. And importantly, this is where ARM & HAMMER thrives. We delivered that great performance and a great value at accessible price points. And in fact, when we look at 2025, we won a record share of 14.5%. That is in an environment where competition is increasing and promotional levels are up. And I'm very proud to say that we are now -- that the ARM & HAMMER brand is now #1 in wash loads. So what are the implications for moving forward? Well, we're going to embrace what's special about ARM & HAMMER. And that really is delivering that great performance at these accessible price points. And the way that we're going to do this is by embracing and driving forward on our good, better, best strategy. So in that good tier offering that good basic ARM & HAMMER clean. And then as we move up price tiers, adding value like things like OxiClean and odor blasters and greater cleaning efficacy with problems with products like Deep Clean in our best tier. Now moving along to another ARM & HAMMER power brand, cat litter. And we had a strong year in cat litter as well. We grew 20 basis points of share, and we also outpaced the category by about 1%. And we have room to grow in cat litter, especially in the lightweight segment. So if we look at the lightweight segment, we're only at an 8.5% share. But we're a 27% share in traditional weight. And that's where a product like our HardBall SKU comes into play. This is a product that is our best performing. It's in that best tier for us. And it averaged -- and has a 48% repeat rate, which is 14 points higher than the category average. So we have high confidence that this product can drive growth and continue share momentum. Now as Rick pointed out, we don't just play in laundry detergent and litter. We play across multiple categories that can -- that really cover a number of consumer benefits. And so as we drive forward, we're going to expand on this strength as we move from $2 billion to $3 billion for ARM & HAMMER. And as we do that, what we need to do is we need to evolve the relationship that we have with our consumers, and we're evolving our consumer communication. So I'm going to share with you guys the update that we're doing to our ARM & HAMMER campaign. And the idea behind this campaign is that we're not just bringing the HAMMER, ARM & HAMMER is bringing the whole darn arm. And what that really means to our consumers is no matter what they're facing during their day, as long as they're with ARM & HAMMER, they've got this. [Presentation] Charles Raup: Now a little bit of my background. I came from Hershey. And I can tell you, you can't do all that with a peanut butter cup. And so it's just this incredible brand, and we have great optimism that we can drive it forward and meet new consumer needs and occasions. And we're very happy with the performance of this campaign. So we saw share gains across the categories that we are playing, and we saw important movement in consumer metrics. So consideration and purchase interest also went up double digits when we showed this campaign. Now moving on to another brand that has tremendous upside for growth and that's TheraBreath. And TheraBreath didn't just outpace the category, it actually drove category growth. And TheraBreath is now the #2 mouthwash and we clearly have aspirations to be the #1 mouthwash, and we attained a record share of just a little under 22%. And there's room to run in our rinse business. So as Rick mentioned, we're about 1/5 of what the category penetration is. So there's tremendous headroom there. Additionally, there's upside in building our on-shelf presence. And so if you look at TheraBreath's share and then you compare it to what we have on shelf, we want to continue to drive our TDP growth because competitors are having 1.5 to almost 2x what we have on shelf. So a focus on distribution growth is going to be key as we move forward. And then paste. We're very excited about our paste launch. Now why is that? Well, it's a $4 billion category, and it's the third largest category in which we play. Additionally, we know that consumers will spend more on premium oral care products even in a suppressed environment. Additionally, we had the great brand momentum that I talked about, that double-digit growth. And when we talk to TheraBreath consumers, it's pretty amazing. A little under 90% said they're interested in buying this product. And we have an outstanding proposition. So first, what it really lets us do strategically is expand further into our consumers' oral care routine, which is a big deal. We have 8 clinical studies that confirm the efficacy of this product, and it really delivers on the TheraBreath brand. And so what I'm going to do now is I'm going to share the launch advertising that really captures the essence of TheraBreath, which is great tasting products that deliver epic long-lasting fresh breath. [Presentation] Charles Raup: Okay. I think you'd be hard-pressed to find a consumer that's more excited to brush their teeth. Moving on to another brand that really has high growth potential, and that's Hero, our acne brand. In 2025, Hero grew at about 3x the rate of the category. And Hero is not only the #1 patch brand, it's the #1 acne brand, and we attained a record share in 2025 at 19%. And much like the TheraBreath, Hero has a ton of room to run. So if you look at our penetration, we're about 1/3 of the category. And again, we're the #1 in share. So tremendous headroom. And from a shelf perspective, it's the similar dynamic to TheraBreath. When we look at our share in our performance, we see that other competitors have 2x the average weekly TDPs. So we'll continue to focus on realizing that upside for Hero. And what gives us even more confidence in how Hero can grow is we're not just a patch brand, right? What we're going to be about is really owning the acne life cycle, which opens up a tremendous number of occasions. And so if you take a look at where we play, first, in that pre phase in preventing acne or when it just starts to develop, we've got our cleansers launch, which is going to be a huge launch for us in the back half of this year. Then as we move on, when you start having that first red bump, we have things like our MicroPoint that helps address that phase. When we move on to, as we say, the full on it, we have Mighty Patch original, and that really does a great job in getting it cleared up quick. And then there's always the aftermath from having the pimple. And so cleaning up dark spots and things like that. So as you look at it, it really is a tremendous opportunity to meet consumer occasions. Additionally, it opens doors for innovation, right? And so there's different ways that we can meet consumer needs across the span and Carlos Linares is going to talk a bit about some of the innovation that we have planned for Hero. Moving to BATISTE. So BATISTE, to be clear, didn't have the year that we wanted in 2025, declined about 2.5 share points. But what I want to emphasize is it's still a leading brand. It's #1 in category share, and it's #1 in loyalty. And as we added some support to BATISTE in the back half, we did see some results and some return of some momentum. And so dollars flattened out from more steep declines in the front half, and we started to grow share, which is very important. And as we take a look at what we intend to do to support and accelerate this momentum, there's really 3 areas that we're focused on in 2026. First, stronger, more consumer-relevant innovation. And so products like powders that fulfill a category need for non-aerosol products, fragrance-free, which we know there is a segment that's very interested in these products, a renovation of our colors line for better performance. And then we'll also be delivering custom items that drive interest among our key retailers. Additionally, we're going to be leveraging our price pack architecture to deliver against new occasions, right? And so we have things like our mini travel size, which moves us into a more of an on-the-go occasion. And then there's also a jumbo SKU that will be coming out that meets a more heavy user need. All of this will be encompassed with the brand recharge, right? And so we're going to be looking at really revitalizing the brand. And you'll see this in consumer communications, and you'll see it in store and you'll see it on pack. Now as Rick has talked about, we really have evolved our portfolio, and we are seeing that we're playing more and more on this intersection of personal care and beauty. And as we evolve our portfolio, we also have to evolve the way we're structured and the way we're working. So I'll share an example of this. And so what we've created to accelerate brands like Hero and BATISTE and Touchland is we've created what we call the specialty hair and skin pod. And what this does is this creates an environment for focus and acceleration. And so as you think about it, what we do is we've dedicated all of our consumer and customer-facing resources just to these categories, okay? So think marketing, sales, innovation. What that enables us to do is to mine insights faster and to get better insights quicker. That then results in our ability to deliver relevant and on-trend consumer communications with agility. Additionally, we're significantly cutting our innovation time line to develop new products. So we can deliver on emerging trends and be right there where our consumers are at. Additionally, as we've established this pod, it's enabled us to attract talent from the beauty and personal care space who can come in and complement our Church & Dwight talent. And then finally, I want to just talk a minute about growing share. Obviously, that's key. Whether you're winning or losing, that's the ball game. And we have seen intense competition. And we have seen the rise of value brands. Some of these getting to $1 billion, which is big. So we're maniacally focused on 5 areas that really give us confidence that we can continue to grow share. The first 2 are about driving consumer equity and differentiation. And so media plans that focus on driving awareness and engagement and penetration. And then equity campaigns that are involved to not just talk about the efficacy of our brands, which is very important, but also build that emotional connection. As we like to think our advertising needs to clarify and it needs to inspire. And then, of course, insight-driven innovation. That's just such a lifeblood of our company. And so consumer relevant information and always being a step ahead is a critical area of focus. Using price pack architecture, we are committed to delivering the right item at the right price, at the right channel, at the right time to the right consumer. And so that will play a big role as we move forward. And then finally, an omnichannel mindset, omni in everything that we do, and we'll talk a bit more about this later. But we are going to be with our consumer from discovery all the way to purchase. So when we take the focus on these areas and we look at the incredible brands that we have, when we look at the incredible team and heritage that we have in Church & Dwight, we're really confident in our future and very optimistic. And so with that, I'm going to turn things over to Andrea, who is going to talk about our exciting and newest brand, Touchland. Andrea Lisbona: Good morning, everyone. My name is Andrea Lisbona, and I'm the Founder and CEO of Touchland. I'm here today to talk a little bit more about the brand. I'm sure some of you already have used our products. They are amazing. Here are some stats about the brand. The brand has been distributing for 5 years hand sanitizer and we recently launched our second category, which is the body and hair mist. Last week, it was published that our Power Mist, which I have here was #2 in sales in Sephora.com. We recently made it to the 2025 Time 100 most influential companies. The brand has a lot of success in social media. So today, we have over 1.2 million followers between TikTok and Instagram. We have been distributing in the U.S. for most of our life and we've recently launched in Canada and Middle East this past year in 2025. We're being distributed in 4,800 doors. And we currently have a premium distribution outlook with partners like Sephora, Sephora Kohl's and Ulta Beauty. And also, we've received over 15-plus awards in the industry. We have today 5 Allure Best of Beauty, just as a fun fact, Allure didn't have Best of Beauty Award for hand sanitizer. They inaugurated for us because of our approach to being in beauty into personal care. Our vision for the brand is to lead the future of on-the-go sensorial essentials and really elevate those staples of modern life. We're building the next global lifestyle brand by blending design, fragrance and innovation. And our goal is to really deliver this movement of micro joys because we are all living in rush and always living under stress and having the capability to disconnect and find micro joys in the every day is our purpose. And one of the things that excites us is that it's a company and it's a brand and a movement that is embraced across generations. We intentionally decided to start our journey with hand sanitizer. And you would ask why? And we thought that if we could transform the most commoditized dilitarian category of the mall into something that everyone is excited about, we would have the customer permission and the strongest validation to elevate the ordinary into the extraordinary. And this is, again, how we've been able to get to where we are today, and it's our innovation framework. We've been extremely disciplined when it comes to our 4 core pillars of innovation. And it helps us know where do we innovate and how do we innovate. These principles ensure us that we create best-in-class products every time that bring excitement and delight to be every day. The first pillar when we think about innovation is it has to be on the go, and it really helps us to define our innovation pipeline. The second element is it's not just about design, it's also about form factor. If you know how the category was used before, it used to be a gel that you would have to squeeze. We truly not just transform how it looks, we transform how it applies. We created this micro spray, micro-joy that really delivers a different application. The third element is that we believe that you can get the best of both worlds, right? We never thought that we could get a hand sanitizer that actually takes care of your skin. We really believe in blending skin care into everything that we do. Our recent category, we launched a body and hair mist. It's usually a fragrance. We decided to bring skin care into fragrances to bring these 2-in-1 experience. And the fourth element, which we spend a lot of time on is sensoriality at the core of everything that we do. From how it feels in your hand, the sound, the smell, the -- how it feels in your skin, we deploy many, many months and years and to make sure that it's a full-on 360 experience when you try our products. And this is a clear example of how we did it, right? We have been the only brand that has been able to premiumize at a scale hand sanitizer category. As you will see here, these are the 4 pillars and how we've transformed them from how it smells, we all know how it smell before Touchland to the design and how sleek and modern it is compared to how it was before. The formula, again, being able to create a skin care forward experience that at the same time is non-sticky, which was very important at the core of sensorially and then the application, right? This micro-mist, micro-joy that you can ensure you can apply the right amount every time. This slide is really showing our current portfolio and how we've been able not only to innovate within the category, but inside the category, how we've been able to expand ourselves. So we started with the Power Mist, which is the one that I have here. It's our core line, it's a hydrating line. And then we decided because we need the customers of Touchland had appetite for premium formulas to launch 2 formulas that are the advanced formulations. We have the Gentle Mist and the Glow Mist. They are revitalizing and ultra soothing formulas. We then launched 2 years ago, these programs of seasonals. They come back every year. They sell out always. They are very successful. This year, we launched this. We had salted caramel, spiced pumpkin-tini and gingerbread -- cinnamon gingerbread, which were really, really talked to by every generation. And then we also brought in something that really enables us to have fun, which is collaborations, and we will talk more in detail later and accessories. In February 2025, we introduced our second category, the body and hair mist. And we really brought the same core pillars of innovation to everything that we do. So we also brought the power essence and the accessories because you may have seen people not only want to have Touchland in their packs, they want to have it outside showing as a charm. So when it comes to collaborations, we really think collaborations bring a playful twist into the every day. We have been able to partner with legacy brands, best-in-class brands like Sanrio with Hello Kitty, Disney Mickey, Crocs case, which launched in July this year. And you may have tried to get it in stores. It's always sold out. It has been an amazing experience to take the DNA of these brands and joining with Touchland create products that bring delight and joy to our consumers. And then the last piece is accessories. You may have seen it with the phones. Like people have cases for the phones and so on. We really wanted to create accessories that really enable people a tool of self-expression. You see a lot of trends in TikTok of matching my Touchland to my outfit, matching my Touchland to my makeup. This has become really successful for us, and it has become a way to really enable that self-expression through the brand. And then, an image speaks more than a thousand words. This is a little bit of some of the faces that have organically talked about the brand in their social media platforms, in interviews for what's in my bag in bulk and so on. And it is incredible to see the span of generations and celebrities and these makers that have supported organically the brand. It always makes me very happy that sometimes it pops randomly. The latest one was Celine Dion, which was an incredible surprise. And these are our current distribution partners. They are brand building partners, Sephora, Kohl's, Ulta. We started at Travel Retail recently, Amazon and TikTok. And then here are some TikToks where you can see, for example, here it's our beautiful Sephora, it's colorful, clean, and minimalistic, and it really shows all of our products in an incredible way. It's across different points in stores, so you cannot miss to get out of Sephora without buying Touchland. This is Crocs, and it is a very exciting partnership because it's not just, again, to create a product together, but you can actually find Touchland in some Crocs stores and Crocs.com, which really enables us to really maximize these partnerships. This was in Times Square. This is me, very excited because we got the time -- the Times Square, the top part of the store of Sephora to display our products for a month. I think that was one of my most iconic moments in Touchland. I couldn't even speak, but that was an incredible day. And then the last is this is in the Middle East. We did Sephora truck activation. It was very fun. I was there, then seeing with our customers. And it really shows like the tagline of the brand is move your moat. It's that capability of a brand of really driving that excitement and moving your moat. When it comes to growth drivers for us, the first growth driver is invest in marketing to increase the brand awareness and household penetration. We all have the feeling that we're just getting started, and there's so much to do still when it comes to brand awareness and household penetration. Second is select distribution opportunities in the U.S. The third is international expansion. We're very happy to be partnering with the Church & Dwight team to really bring the brand everywhere. We've received and you will see a lot of letters from all over the world asking us to bring Touchland to their countries. So we're very excited about it. And then the last piece, innovation and continue to bring unexpected delight everyday moments of care, like we know that our commitment with our customer is to deliver those micro-joys and really fuel that innovation. And I'd like to close my slides with my favorite part of my job. Every week would receive dozens of letters from customers from all over the world, from all ages sharing their experience with Touchland. In digital era where everyone is texting and using their phones, to receive hand-written letters is a testament of how much the brand is loved and how much it's changed people's lives. So this is my favorite part of what I do. And now I'll pass it over to Carlos. Carlos Linares: Thank you. Good afternoon. Glad to be back with you guys again. Last year, I presented a little bit of how we innovate and talked about the transformation that we've been going on through. Today, I'm going to just recap that a little bit, and then spend most of the time on a very exciting 2026 lineup. Two takeaways of how we innovate differently I would say it's unique and is sustainable. So those are the 2 takeaways -- 2 words to take away from this slide. So this is your new model. It's really 5, 6 different sources of innovation. But what's unique about it is that they're really interdependent, they're connected. The behavior in the company is really about teamwork. They're not competing, which is very different than other places that may have 1 or 2 dominated sorts of innovation. And as you can see from the bottom, as we've transformed this, most of our innovation, more than half of it is coming from some of these new sources that we put in, in the last several years. The sustainable part comes in -- when we put the program together, we were at the 1% to 1.5%. And this again, as Rick mentioned, this incremental net sales. So we had a target of going up to the 1.5% to 2%. So the good news is over the last 3 years, we've been at this yellow bar very, very consistently. 2026 is no exception. We're at the high end to deliver, again, half of the Evergreen model in growth. So I'm going to kind of take you through this. And one of the challenges of doing it within a few minutes is selecting which ones we have, because we have such a pretty strong pipeline for the year. But let me kind of go through that. The first one will start -- we'll start with the personal care portfolio. You've heard a little bit or maybe a lot of the toothpaste launch. We're very excited about this launch. It's very important to us. It ties into Rick's strategy around TheraBreath and oral care and how do you drive that. We had a lot of interest from the customer, from the consumer internally to go do this really, really quickly. And we actually kind of held it back a little bit, we want to get this right. We want to do the Church & Dwight way from an innovation perspective. And what does that mean? So one was we wanted to understand what does this TheraBreath user really want? Chuck mentioned 89% are interested in buying the toothpaste, but we wanted to define what that is. Reality, they want efficacy, they want a natural taste and they want a great experience. We also then put all of our science together. Some of the -- we can do toothpaste. We've been doing toothpaste for a while. But we had some upstream future works as we call it, technologies that we wanted to deploy in this particular toothpaste. So we did that, 8 clinical studies. We actually have 12 hours of fighting bad breath, which is, I think, pretty unique in the category. I've not seen anybody else make that claim before. So it's really performing. And then the consumer experience, the taste, the flavor, the texture, and you see that 4.7 average, which obviously is pretty good. You'll see that number again later on in the presentation. We're hitting a pretty high marks on some of our consumer experience in our NPD. Then let's talk a little bit about Hero, our other more recent acquisition. We have 2 innovative launches in the year. The first half, we're doing Mighty Shield, which is a liquid patch. Chuck talked about the pimples cycle. Obviously, you want to -- you have pimple, you want to zap it, but it's also a little bit of protecting the pimple, right? So if you think about it in the morning, there's dirt, there's debris. You want to protect that because the perception is that may make it worse. So this is a liquid product that turns into a patch. You put it out in the morning, you're protecting the pimples from debris, dirt and even makeup. You can makeup on top. Again, the perception is maybe makeup may make the pimple even worse. So you protect it and it goes on top of it. So at the end of the day, it's become a patch. So you apply it in the morning as a liquid. It becomes the patch, you peel it off just like a patch. Obviously, the exciting part is it's another occasion in the acne journey that we're offering a product for. The second half, we're introducing the cleanser line that was mentioned previously. It's designed specifically for acne-prone skin. So you got the efficacy of OTC formulas, but it's gentle enough for skin that may be irritated. We typically don't present second half products here. We hold them back because of the confidentiality, but we're really excited about this one. As Chuck mentioned, this gets us into another part of the skin care routine for the acne-prone consumer. So you're adding to the routine and adding to the regimen, which is incremental growth for us. And then not to forget about our other personal care brands that are a little bit older in our portfolio on Trojan. So Trojan, we've had a long history of innovation in Trojan, but this is actually our best condom ever. We actually -- it's our new-to-world material. We haven't done this type of innovation in 20 years in Trojan. So we're very excited about what this is. It is a patented non-latex material. Trojan is basically about -- and condoms -- they're about protection and they're about intimacy. This takes the intimacy to the next level. This is clear, orderless. The ratings are incredible. One of the interesting unique things is even feeling your partner's body heat. So we're feeling really, really good about this innovation. I mentioned the 4.7 stars that you see it again. We're very proud of this one. This is a brand-new innovation that I think is going to take Trojan to the next level. So let me kind of jump then to the household part of the portfolio. You've heard a little bit about ARM & HAMMER, the good, better, best strategy. This is our portfolio, but I kind of take you through a couple of launches in each of these segments here. On the good side, we're introducing a baking soda fresh detergent, 10x the baking soda we had before, our highest level of baking soda in any of our liquid detergent portfolio. On the better portfolio or segment, we're actually having a lot of success in sheets. We're the #1 brand in sheets. We're actually twice as big as the next competitor now in sheets. So we've taken that convenient form and now putting it into the better segment with ARM & HAMMER plus OxiClean. So you're going to get the same convenient, very consumer desirable form of sheets with premium cleansing, premium freshness and a premium design. If you look at that sheet, it looks very different, very unique, and I think it's going to take the -- our sheets business even further than it is today. And another better innovation that we're introducing, we're expanding this year is the ARM & HAMMER odor blasters. You're probably aware odor is a big unmet need in laundry. And you're also probably very aware that rinses have become a new category in laundry category. So we introduced this last year in select stores. In the stores that we're in, we're actually #2 brands. There's 3 others that are competitors, we're actually #2. So we're taking this nationally in 2026. Our other main laundry brand is OxiClean. And OxiClean has been a leader in additives for a long time. We want to make sure we maintain that leadership and kind of keep our advantage against both competitive entries and private label. So Max Force is our subline within OxiClean is the most powerful, highest performing line that we have on the brands. So we're actually taking that brand and I would say, almost revamping it. We've got a better powder, more concentrated, more powerful. We've got a new liquid with a new bottle that differentiates it from the rest of the segment. So it's very clear that this is an additive from OxiClean. And as you can see, the product in the Max Force is spread across all of our forms, powder, liquid and sprays. So we think both the ARM & HAMMER and OxiClean is going to give us some good momentum into the laundry category in '26. And then last but not least is litter. Chuck talked about ARM & HAMMER. The HardBall, it's not here, but we feel really, really good about HardBall. It's got a lot of momentum, and that's in our best category. But this year, we're also introducing innovation into our better, which is dual defense. So again, this is another one of those categories that it's all about odor control. So this product gives the odor control in 2 different ways. One is the ARM & HAMMER order control technology that kind of clumps and seals in the odor. But now we're introducing the Microban, which is an antimicrobial technology that prevents the odor growing bacteria from developing orders over time. So you actually have both a dual short-term and a long-term order control performance. So before I hand it over to Surabhi, I think generally, I've gone maybe 9 innovations in less than 9 minutes here, I've gone very quickly. But I'd say, overall, we're very proud of the team, very proud of the innovation. We've got category-leading innovation. We've gone into new segments with this portfolio, and we've upgraded some of the core to give us a competitive advantage. So with that, I hand it over to Surabhi. Surabhi Pokhriyal: Good afternoon, everyone. Good to see you all again. I'm Surabhi Pokhriyal. I do all things digital, e-commerce, media and a bit of AI now. So as you are familiar and as Rick and Lee introduced, e-commerce has been a fantastic growth driver for us as a company for several years now. I feel really proud to say that we went from 2% to 24% in under a decade. And for those of you who track a lot of other of our CPG peers, I'm sure that pops out as a head, shoulder, torso about all things e-commerce and digital in the consumer goods sector. I also want to reiterate, right, that we are not in the business of telling the consumer where to buy from, right? Our job is just to make sure, like Chuck was saying, we clarify the intent of our product, and we impress them and inspire them to buy. And that's what we do on the online channel. Sometimes it can be misperceived that e-commerce is just Amazon or pure-play channels. We have seen it, and I'm sure you see that as you do retailer earnings. There are retailers like Walmart, Target, Kroger, Sam's Club, name a retailer, everybody is doubling down on the power of digital, and that's what we call omnichannel. We saw above 14% growth for all of our brands, not just the flagship brand of ARM & HAMMER, but also our newer acquisitions like Hero and TheraBreath. International, as Mike will speak shortly, is a huge growth driver and priority for us as a company, especially as we compare to our peers, that's one area we want to double down super intentionally. In international, I always say, right, any market that has a cell phone and Internet penetration, that's right for e-commerce. And as you see by the flags on this chart, markets like Canada and China have always done well with respect to digital, but newer markets like Mexico, which traditionally have been nascent in terms of digital, have done really, really well for us, and that speaks to our double-digit growth there. Finally, in emerging, right? For those of us who cannot keep our cell phone more than a foot away from our hands and the next generation also, TikTok Shop is emerging as a major growth driver in terms of impressing the consumers where they spend a lot of their time. You might have heard of the trend, TikTok made me buy it a couple of years back, where people would get inspired in their discovery journey on TikTok and then go and buy in store. Now the platform is compressing that journey. You can see it, want it, click it, have it right on within the platform. And we are leaning into that in a very meaningful way with several of our brands. Fun fact for you, TikTok Shop is actually bigger in the U.S. in terms of GMV ahead of a couple of large beauty retailers already. So that just tells you how the consumer buying behavior is shifting online. This is our growth mindset, right? This is what I call as the how of what we do things at Church & Dwight, especially in terms of digital. We always engage, right? Like I was saying, we want to be there engaging with the consumer at the zero moment of truth being available, mentally available to the consumer. Then we always optimize in terms of test and learns, right? In the age of AI, we want to dip into how we drive our content and creative and continually test to see what works well. And because we are a lean company, we do not have much headcount. We are very intentional about scaling things really fast and scrapping things that do not work. And finally, that's what I call our secret virtuous cycle of innovation and the gift that keeps giving. These are a couple of examples. We are leaning into AI in a meaningful way. The good news is because there's no dearth of tools to be used there, be it on retailer platforms or from the large media platforms, you can make all things from cute cat videos, which are really thumbstopping to making sure our product lifestyle shots show up really, really well. I call this the age of disposable content, right? As you know from your own behavior, you will never have a day where you said, I finished my Instagram today, right, because the doom scroll just keeps going. What that means is we, as brands have to make sure there is disposable, bite-sized, snacky content that engages the consumer in a meaningful way and inspires them to buy us. And the next leg of that is we want to make sure there is productivity by making sure that content can translate and go across markets, and that's what we are leaning into doing now. Built for AI discovery. Some of you who shop on Walmart and Amazon might be familiar with Sparky as the agent or Rufus. All things said, right, that is one area we are leaning into because we already do a great job on making sure our product detail pages show well. Our content there shows well. The consumer loves us, and we see that in terms of the reviews that Carlos was speaking to. All of that makes sure that our products pop up on Sparky and Rufus. So technically, we have to do nothing special than what we are doing. Just make sure the product content is clean and our reviews are clean and the products show up where they need to show up. In terms of media buying and AI, we also want to make sure that we are adjacent and speak to our consumers who are our high-value consumers and the technology helps us by placing those advertisements to the right consumers at the right daypart and the right times of the day. Finally, I'm sure in the analyst world, you're familiar with the tax of retail media. I'm proud to say that we do not consider that as a tax because we are steadfast in making sure that the retail media we invest in really works its worth, and we get great ROIs out of that, much ahead of industry-leading benchmarks. As Carlos was speaking, we are super intentional about how we do our innovation. Online and digital, in particular, has been a great platform for us to launch products, create category creators/category disruptors. And once we have made it right on online, gather the feedback from the consumer, tweak the product as needed, that's when we call and we go make it big. Based on the products that you see on the screen, we launched laundry sheets online first and gained great momentum in a handful of months. We launched the premium baking soda that became #1 in just 3 months. And very recently, we launched the much loved TheraBreath toothpaste that's already topping all our category benchmarks expected from our any earlier toothpaste launches. In terms of capabilities, I already spoke about the social content, and this doesn't have audio, but you'll get a sense of how the bite-sized snacky content works in the social realm. And you'll notice something at the bottom called as the engagement rate, right? Brands typically have different variety of metrics in the marketing world because everything is measurable these days, which is fantastic. But engagement is what tells you how are the consumers talking back to you. They're not just following you, they're engaging with you, liking you, commenting you, resharing your post, and that's the metric we use. And some of our power brands do really, really well. The typical engagement rates are 2%. We do double-digit engagement rates for some of our larger brands. On the right, you'll see something interesting. We have a lot of experience in making sure we follow consumer search trends. What are they searching on Google and Amazon and other online sites. Recently, we are trying to lean into what is the consumer speaking about us and the category on Reddit, which is a great source for following organic chatter, which is unpaid. Similarly, because these things give us the leading surfacing of emotions and their intent, and that helps us define not just how to talk to them in a marketing world, but also tells us how to innovate and build products that they are searching for. On the right, you'll notice with the help of AI, we are leaning in to find where are the emerging brands across the world. Given in M&A, we are building tools internally to figure out what could be acquisition targets that are right for us globally and not just in the U.S. And sometimes it may not be an acquisition, it may be a brand doing really well in a category or an adjacent category, and we learn from that to innovate differently. With that, I feel really proud to say we are at the cusp of saying we are future-proofing our growth, digital or non-digital. I call it the era of we are just in the business of doing commerce. The E in e-commerce has become silent. And we are super proud to say we are always in the race of going towards where the puck is going to be and where it is not. On that Canadian reference, I'll pass it on to my international partner, Mike Read. Michael Read: Good afternoon. I have the privilege of representing our international and Specialty Products employees all over the globe. Let me just start with international. So international is about $1.1 billion size business. We kind of operate in 2 different ways. 2/3 of our business is through our subsidiary. We have 7 subsidiaries now, Canada, U.K., France, Germany, Mexico and Australia. And middle of the way through 2024, we acquired our long-standing partner, Graphico in Japan to form our seventh subsidiary. The other 1/3 of our business is done through value distributor partners all across the globe. We have 5 regional offices to support that, Shanghai, Singapore, Panama, London and Mumbai. And we operate through almost 400 distributor partners and have commercial operations in about 100-plus countries. We've had a long track record of growth in organic. This year, no exception, 5.5% organic growth. If you look over the last 3 years, we're averaging 8% CAGR, which is right on our Evergreen model. So really proud of the team's efforts and a long track record of growth with lots of opportunity ahead of us. We have -- our brands travel extremely well. We support dozens of brands across the globe. But similar to our U.S. domestic business, we're laser-focused on our core set of brands. And this is kind of how we think about our business and our core priorities. One is we have kind of U.S. scale brands, ARM & HAMMER, Waterpik, OxiClean, where we leverage assets and NPD pipelines to commercialize across the globe. We will modify as it makes sense. But generally, we're borrowing off U.S. scale brands and taking them globally. That's complemented with a fairly internationally based portfolio that's largely personal care and OTC, headlined by BATISTE, Sterimar, Femfresh and others. And then thirdly, and probably most importantly, kind of more in recent times is we've really started to accelerate our acquisitions. So we've had a long history of taking brands internationally. I think Hero, TheraBreath and now Touchland give us such a great opportunity to scale and enter markets with real purpose, and I'll give you a couple of headlines on that in a second. As I say, our brands travel extremely well. I'm proud to say 6 of our 7 track power brands have grown share in 2025. It's a really strong result. We don't track market share across all our brands. So in addition to that, our ARM & HAMMER business has grown almost 6% and Femfresh also grew positively in 2025. So really strong results across the portfolio and market share growth across the board. Just to double-click on some of our acquisitions. We launched Hero a couple of years ago. We're now in more than 75 countries. We'll be on our way to over 100 by the end of 2026. We have the #1 share position in acne patches across all our track subsidiaries. And very similar to the U.S., we have -- we're #1 in acne in a couple of those with still lots of room to grow. Similarly, on TheraBreath, we're now in over 50 countries. It's the fastest-growing mouthwash and retail in Canada, Mexico, U.K. and Australia. We have a #1 online position in several countries that we launched in. So we're really proud of these 2 acquisitions. And the next in line is Touchland. So you heard from Andrea, really strong results, obviously, in the U.S. We've launched in Canada and the Middle East. There's a ton of pent-up demand for this brand all around the world. So we're really excited about how we take the learnings from Hero and TheraBreath and apply it to the Touchland playbook. So this will be our third big one in a short period of time that we're pretty excited about. One of the things that we're really focused on as we continue to mature as a global business is just to get much, much deeper into our local consumer insights and region-led innovation where appropriate. We try to borrow assets and leverage them across the world, but where appropriate, we do make nuances and changes. Here's a couple of examples. Just recently launched a harmonized line of BATISTE into China and Japan. Again, using some of the properties and core equities of BATISTE, but softer fragrances, smaller sizes, less intense spray, less white residue, things that are fit for purpose for the consumer and to compete more effectively in that market. Another example is we've had a long-standing business of powders and OxiClean, our Japanese market where we're the #1 position in powders, the largest segment is liquid. So we've done some regional innovation and launched a strong liquid lineup that we launched last year, and it's performing extremely well. So again, where it makes sense, we will kind of make local adaptations and innovation. Just to keep going on the Japan theme. We bought that business in Q3 of 2024, talked a little bit about our #1 position in powders and OxiClean and moving it into liquid. That was the primary brand that we had in Japan. I think most notably is now that gives us a platform to introduce the rest of our portfolio. So we've already launched BATISTE and The Breath Co, Hero is soon to come and others to follow. So we've got a strong team there. We're starting to make more progress on the OxiClean brand and also widen the portfolio. And as Rick said, just to close on international is while we've had a really strong track record of taking U.S. brands and mobilizing them across the globe, we're also looking at international M&A to add to that. So that's either scaling up in current subs and/or entering into new geographies of interest. So with that, I'll switch to Specialty Products. Specialty Products is about a $300 million business. The lion's share is in our Animal Nutrition, which is a long-standing part of the business. About 1/3 is in our -- what we call specialty chemicals and the remainder in our commercial and professional products. From an Animal nutrition point of view, we've been traditionally prebiotics, probiotics, nutritional supplements for the dairy cow segment. We've expanded into poultry and also into swine. I think when we've talked about the kind of the business growth, we focused on a few areas. Number one is taking what has been largely a U.S.-centric proposition to growing it globally. We're now at 30% sales internationally. We've built a team and have been really focused on driving innovation in the space. We've had some really strong innovations, particularly in the poultry sector that's now starting to drive some major growth there. And we're investing in tools to make sure that we're interfacing with our customers and just selling better and improving our service. This is one example of the CRM that we've applied here and then also the other parts of the division. The other 2 performance products. So we're taking solutions into the bakery, water treatment, kidney dialysis, a whole section of different opportunities there. And then the last and the smallest segment is taking our consumer brands into things like hospitality, foodservice and JanSan. So those 3 segments together make up about $300 million worth of growth. 2025, we had another positive year of growth, 2.6% organic growth off the back of 7.1%. We've had 8 consecutive quarters of positive growth. But most importantly, I think we're really set up well for growth to the future. We've got a strong team and a really core portfolio that's working well in the marketplace. And with that, I will pass over to Rick Dierker for closing comments. Richard Dierker: All right. So we'll wrap up with how we operate, and then we'll go through Q&A. We have 5 operating principles: leverage brands, friend of the environment, leverage people, leverage assets and leverage acquisitions. So leverage brands, you heard Mike just talk about it. You heard Chuck talk about it. You heard Carlos talk about innovation. You heard Surabhi talk about how we do digital. So all those things come together, and we do a great job with our brands. Friend of the environment. We have a long track record of being a friend of the environment from the 1800s all the way through present day. And it's not just us saying it, it's many other third-party agencies recognizing that effort. Leveraging people. Highest sales per employee in the industry. And I think this is missed so many times by so many people when people evaluate the company. This isn't about the stat. It's not about trying to make that number go up. It's all about having the agility, speed of decision-making, being able to be nimble in a complex world. And so because of that, we believe that's one of our competitive advantages versus the industry. We have a simple compensation structure as well, 5 metrics for 20%. Everybody is tied into that, but gross margin is 20% of everyone's bonus. It's easy to say, but hard to do, but we believe it adds growth and margin expansion are 2 very important metrics. They lead to cash flow generation, just like Lee presented, right? That's how you get free cash flow conversion. That's how you get optionality to go buy businesses and do that virtuous cycle in the model again and again and again. Leverage assets. We're not a capital-intensive company. Again, it ties back to free cash flow conversion. That's due to our footprint, right? We have third-party manufacturing in many ways. We have distributors that are our partners internationally. And then we leverage acquisitions. We make good shareholder returns, great shareholder returns because time after time, we can have a great core business and then add on acquisitions. So to close, we have confidence in our future. You heard it from the management team. There's a lot of things going right. There are more tailwinds and headwinds even in an environment like we're sitting in today. We have portfolio changes. We have growth initiatives that support a healthy evergreen model. We expand household penetration, especially for businesses that we've recently bought. We have a great high and sustainable growth rate for international. We have great innovation, consistent and really industry-leading. Digitally savvy, and then we focus on domestic and international M&A. And with that, I'll invite the ELT, our executive leadership team to come up, and we'll answer a few questions. Richard Dierker: And Jill has the microphones. Why don't we go with Nik Modi. Why don't we go with Nik? Nik Modi. Nik Modi: Great. I really don't this thing. But -- so just 2 questions, Rick, on the ARM & HAMMER kind of from $2 billion to $3 billion. Much of that is international, and it's not, why not, given the value positioning and the credibility, the credentials that the brand has? And then just the second question was you had this initiative of smaller teams kind of working on a subset of brands, I think that you were going to focus on. I didn't hear about that today. So I was just curious what's going on with that, if you could just give us an update. Richard Dierker: Yes. So 2 questions, and then I'll let Mike kind of add on to the ARM & HAMMER. So the bulk of the ARM & HAMMER growth is domestic. But ARM & HAMMER is a great brand alive and well globally. I think it's just -- it's a longer curve as you grow a brand globally because you go to Europe and baking soda and ARM & HAMMER's not really recognized as much. We tried to plant the seed in China to some degree for fruit washing and other clean and cleansing and freshness attributes. But I'd say the bulk of it is in the U.S., although there is a great -- it's a sizable business internationally, and we expect growth there as well. And nothing but the initiatives we do in the U.S. is going to help with international. Unknown Executive: Just to add, it's actually a single largest brand for international. So it's just broken up into a few different pieces. But we have a strong litter business in China as an example, we've baking soda that's growing quite rapidly across the globe. And we do think that while laundry probably doesn't play as much of a role globally, most of the other segments will. So we're pretty excited about what ARM & HAMMER can do and it's absolutely part of the growth story. Richard Dierker: Yes. Litter in particular, this might surprise you, but the litter business internationally is larger than you would think and definitely in China as well, right? And so we're looking at how do we make that business even a faster growth business. The second question you had is really on a group that we call TAG internally. It just -- it's not ready for -- we've created it. It's called the Accelerator Group. It reports up through, Surabhi. And there's a couple of brands that we believe have every right and obligation to be hundreds of millions of dollars. And we're going to just manage those differently, let it be a little bit of an incubator in itself. And we'll probably report back once we see progress. In my mind, they're going to come into the incubator. We're going to -- some will do better, some will accelerate, some won't. And then they'll graduate back into the company and be managed more of as a traditional brand. But this is our chance to really take a flyer in a few key brands. Surabhi, do you want to add anything to that? Surabhi Pokhriyal: No, I think you got it. Richard Dierker: Okay. Javier? Javier Escalante Manzo: A quick one for me on Vitamins. Richard Dierker: Javier, we sold the Vitamins business. Javier Escalante Manzo: I know. Richard Dierker: I'm just kidding. Go ahead. Javier Escalante Manzo: I know. But a lot of it has been done in terms of what it means to growth. I wanted to see whether you can speak of what it meant for the cost side. It was up against Nestle in the drug stores, all the effort that you made to stabilize. So what does it mean to leave that behind and refocus those resources against all the innovation that you have? Richard Dierker: Yes. I think it's one of the single biggest -- we're going to look back in a few years, and I think one of the biggest strategic pivot points in our company history is when we acknowledge that we couldn't turn the Vitamin business around. And the amount of mind share that management had on Vitamins, which I talked about private label exposure. I mean, think about that. I mean, going from 12% to 5%, that is a private label heavy industry. And brands are having a very tough time in that industry. Competitive advantages that we thought were sustainable were not. So there's nothing but tailwinds from a growth perspective for the company now, margin. We were overinvesting in marketing. But more than anything, it was the amount of time, effort and energy that we had to divert to doing all the right things. We were. We did all the right marketing. We did all the right consumer research, all the innovation. But every minute we spent on Vitamins was a minute we weren't spending on ARM & HAMMER growing from $2 billion to $3 billion and for the rest of our business to grow. So I think that's going to serve us very well when we look back. Rupesh? Rupesh Parikh: So 2 questions on Touchland. So first, on the international expansion, so far in Canada and Middle East, how is that going? And then as you think of Touchland, like how do you think about the phasing of international expansion? And do you think you can get it to 100-plus countries somewhere here over time? Richard Dierker: Yes. I'll make a couple of comments and then either Brian or Andrea and then Mike can make a comment. We're really happy with the Touchland business. We talked about just a double-digit grower. But more than anything, you saw from Andrea today, it's not just a hand sanitizer business. Over the long term, it's a brand, and she's built a great brand. International has done well. I would say it's hitting or beating all of our expectations. We believe there's a path forward. Mike and our regulatory team with Carlos is working hard on getting to 20, 30, 40 countries just so that we have the optionality to go when it makes sense. The unique piece with Touchland is we're going to be more picky on what partners we go with, right? We're being very purposeful on what channels we participate in the U.S. We'll be very purposeful outside the U.S. as well. Brian or Andrea, anything you want to add? Brian Buchert: No, that was pretty good. Yes, we're trying to launch as fast as we can. It's alcohol-based. So there's some regulatory challenges to get it out in some markets in the world. But we're full steam ahead. We're going to have a handful of markets here this year. We started with Sephora in Canada and in the Middle East. That was part of the reason why we ended up in those 2 markets. And when you asked the question about being 100 over a longer period of time, potentially. But like Rick said, we're going to be purposeful which retailers and who we partner with in each of these countries. Richard Dierker: Peter? Peter Grom: Just a couple of questions on the guidance. So maybe first, the 3% to 4% organic sales growth. Can you maybe outline what you're expecting in terms of U.S. international SPD? And then you're -- in a couple of weeks here, you're going to start to lap this inventory destocking component. That was a big drag on sales last year. I think it was 300 basis points in the first quarter. So can you maybe just help us understand what's embedded in the guidance as you lap that this year? Richard Dierker: Yes. Sure. Lee, do you want to take that? Lee McChesney: Yes, sure. So just within the outlook, 3% to 4%, you have the U.S. business is 3% growth for the year. International is 8% and then SPD is 5%. And yes, as you talked about in the first quarter, we definitely had inventory destocking last year. This year, just simply, we have the Oxi loss at Costco. That's really a headwind we have in the first quarter. But as I said a little bit earlier, our outlook for all those businesses are relatively consistent throughout the year for growth. We just got to get through that last piece of that comp. Richard Dierker: Bonnie? Bonnie Herzog: I have a question on promotions. They've really been elevated in a lot of the HPC categories, and we're seeing a fair amount of negativity on price mix. So love to hear sort of your thoughts on the environment right now. And essentially, what is factored into your guidance? Where do you expect this promotional environment to land this year? And if you do expect it to remain elevated, how should we think about that in the context of your price mix? Richard Dierker: Yes. No, good question. I think what you're seeing is when consumers are pressed and categories start to decline on volume, then competitors price promote to gain share. But the value of the brand matters in a big way. Like in Q4, ARM & HAMMER laundry was the only one who grew share. And we're not outspending the category at all. The value segment is the only segment that's gaining share. So the macro is helping the ARM & HAMMER brand more so than most, I would say. That's true in cat litter, too. Cat litter competition is spending an awful lot on promotion. We're not. We're well below the industry average, and we're gaining share. So brands matter. You just can't promote yourself your way to growth. And so all the advertising that we're doing, the innovation, remember, it's a combination of value that you're giving to the consumer. So we've been very, very happy with that. I do think that promotional levels will drift back to normalcy. Like we're probably -- the category is under long-term historical levels for promotion, but we're well positioned. We're doing well. Mark, any other comments you'd like to make? Mark Magazine: Yes. I totally agree. I think one of the things we do is to build a great promotional plan with retailers, but we do watch it every week, right? And we continue to monitor how we're doing. To Rick's point on laundry, we feel really good. And we'll continue to do that. And if the category heats up, we'll make the right moves. Richard Dierker: Ana? Ana Garcia: Yes. I wanted to ask on your longer-term gross margin potential. You've historically said that your mix of business is around 40% value, 60% premium. And then with the last 2 acquisitions and the growth premium kind of ticking up here, we are seeing value now around 36%. So I wanted to ask if that's a driver of longer-term gross margin expansion -- sorry, behind, I guess, the premium side of the business. And if that should tick up slightly over time or revert back to that 40%, 60% split between value and premium? Richard Dierker: Yes. It's a great observation and question. I would say our acquisitions recently have been higher-margin personal care businesses, and that bodes well for that. Give us a year or 2 before think about changing the Evergreen model. We just got out of tariff control, and we have another year of 3% inflation. But I would say the problem with long-term gross margin guide is the world changes rapidly. But a lot of confidence in our gross margin expansion. I think to put up 100 basis points in this year amidst everything that we're going through is phenomenal. I think having flat gross margins in 2025 when we were faced initially with $190 million of tariffs is jaw dropping. Lee, anything you want to add? Lee McChesney: I think to Rick's point, it's -- things evolve. That outlook, obviously contemplates what we know now but we don't know what's going to come this year, just like what happened in '25. Richard Dierker: Chris? Christopher Carey: So just on Touchland, One of the things I hear about a lot is the risk of over distributing the brand, going to channels like mass, where you lose the cache of the brand. I think there was some activity at Costco in calendar Q4, where there was a debate about whether you're kind of blowing out distribution, and yet I hear there's a ton of growth runway. Can you just talk about -- maybe, I don't know if careful is the right word, but how do you think about keeping that brand exclusivity and -- but also having the ability to deliver really strong growth rates, if that makes sense, like staying in the channels that you need to be in, but still delivering strong growth? And if I just could, going to the back half of this year, Lee, I think you said the growth rates should be fairly similar through the year, but Touchland is going to enter the base into the back half and presumably, it's still growing quite quickly? Is that a phasing thing? Is there some conservatism in that? But any context on maybe how Touchland could be entering into the next 12 to 18 months? Richard Dierker: Yes. I think -- I mean, we were pretty public a quarter or 2 ago, even when we announced Touchland that we were going to be very careful and selective on what channels we go to because exactly the point you're making, there's a cache of the brand, and we have great partners. Sephora and Ulta have been great partners and Andrea has developed and nurtured that relationship. So we've said there is no plan in the near term to go into mass as an example. Club, we believe, is a different channel. It's a more premium channel. It's too early to tell now what we're going to do. I don't want to front run that. But I would say it's a little bit more unique than the traditional mass channel. Andrea or Brian, anything you want to add? Brian Buchert: Sure. We did do a quick test at holiday test in Costco. It went very well. That was purposeful to do it as a test to see how it did there. And so we're evaluating channels all the time. We're evaluating the existing channels. The important thing here that is a little different is that Touchland was not a Sephora-born brand as a lot are. It was born in Ulta and Target and Amazon and Sephora pulled us in, okay? So it's not just -- so we have more degrees of flexibility in terms of some of those channels, but they're a great partner. They're doing everything that we've asked of them, and we monitor it each quarter, 6 months, a year. And the day the support doesn't meet our expectations that we want Touchland to be in everyone's hands in the world. Richard Dierker: Yes. I think the other nuances when we did that club test, remember at stores at Ulta or Sephora, they're selling 100-plus units per store per week. It's very, very high-velocity units. We didn't see that drop off at all even when we were doing the club test. So that was encouraging. There was another question on the back half growth, Lee. Lee McChesney: Yes. I mean again, the range is 3% to 4%. So there's obviously some degree of freedom. You're right, Touchland does turn into a positive organic in the back half. The offset that you also have the TheraBreath and the Hero is growing at the rates they were growing this year. Obviously, they're going to keep growing, but I just think there's a balance to that outlook right now. Richard Dierker: Rob? Robert Moskow: Lee, I hate to keep asking about the guidance for organic growth. But did I get it right that the exit rate for the business, excluding Vitamins, is 1.8%. And therefore, does that assume that the business has to get better like right away? Most companies, you take the exit rate and that's the growth for next year, but this is a little bit different. And then I had a follow-up on ARM & HAMMER. I did the 25-year CAGR math, and I think the math is like 2.8% growth rate for ARM & HAMMER. But you think you can do better than that going forward. Is it going to do better than that this year? Like or is this year kind of like a similar pace of growth for ARM & HAMMER? Richard Dierker: Yes. So I'll take the second one first. My belief is ARM & HAMMER growth will be accelerating in 2026, '27, '28 and '29. Like I think the plans are being -- are in place for 2026. Plans are being laid for '27, '28, '29. And so I do think ARM & HAMMER accelerates from where it's at today. Your other comment on -- your first question was really on growth, right? And I think you got to be careful taking just Q4 and rolling it forward because you got to remember how high 2024 Q4 growth was. But I think the overarching comment would be we believe categories are going to grow 2%. We believe that ex the portfolio changes, we would have been growing 3.5% in 2025. We tend to take share over time. And so when you kind of add those 2, 3 things together, the absence of headwinds like not just Vitamins, not just Flawless as we wound down those businesses. But we did get delisted from Costco last year for OxiClean, that was a big headwind. We didn't make a big stink about it, but we overcame all that. And so when you layer all that in, that's why we have a lot of confidence in 3% to 4% next year. Andrea, then Steve. Andrea Teixeira: Andrea Teixeira, JPMorgan. So I wanted to still stay on the Touchland. The U.K., I was curious, usually brands go and fly to the U.K. and especially because you have BATISTE there, why the U.K. expansion didn't happen yet, I think, if I'm not mistaken, Canada and the Middle East is where you already have the brand. And then in terms of line extension, should we see line extensions within Touchland this year? Or this is something more long term? Richard Dierker: Yes. We're not going to comment anything on line extensions yet. I would just say that our plans would say that we believe the brand can be bigger than just hand sanitizers. You saw Andrea's slide, and it was about convenience. It was about the sensorial experience. It was about convenience. All those things come together, and there are other categories that, that could apply to. As to the U.K., remember, this is a team of -- for a long time of 12 or 13 people, okay, managing a business that now is almost $200 million. So I know for like -- for the company, for our company, we would be like, yes, we're going to go to U.K. on Thursday, and we're going to go to Portugal on Friday. For them, they were just trying to keep their head above water, and they're doing a great job. And so we're adding a lot of resources on regulatory, right, to lay the groundwork to do the next 20, next 30 countries. Regulatory is usually the answer with this product on where you can go and how fast you can go. Stephen Robert Powers: Okay. So 2 questions for me. The first one on the ARM & HAMMER aspect, $2 billion to $3 billion. Are you just calling that out to kind of quantify it, make it a priority or -- and be more intentional about it? Or I guess, to what extent are you doing something different going forward versus how you've been managing that brand, the center of your portfolio for a while? And then the second question is on just TheraBreath and moving that into paste. Maybe size the prize as you think about the incremental growth of the overall franchise, how much is oral rinse versus how much is paste? And just how you're thinking about bringing that to market? Are those going to be marketed and promoted separately, together, you're going to bundle the product? Is the -- are they individual initiatives? Or are they -- are you marketing paste to the rinse consumer? Or is it independent, I guess, is the question? Richard Dierker: So I'm going to -- on your first one, it was really about what are we doing different on ARM & HAMMER. And I would say that slide had 4 pillars. The first pillar is what we're doing today. And what we're doing today is doing a great job on innovation, on marketing, on promotional, on pricing, on sizing, all those things, and that's what's been driving our share on laundry and litter for many, many years. I expect that to continue. That's a core competency of the company. The good, better, best, we've done that really well in laundry and litter. I'm saying to you today that there's a few subsegments that we haven't been doing that. We haven't had the focus there. We're going to put a little bit more focus there. And so I think that's an incremental opportunity. The third one was incremental categories. That's incremental. Like where does ARM & HAMMER have the right to play and win, and we want to make sure we're very picky about that. But you're going to start seeing that over the next couple of years, I would say. I don't want to front-run any comments on where we would go or whatnot. And then the fourth one was, again, there are certain brands that we license today that when they get to critical mass, we should take them back and we can scale a lot faster. So that's really like an incubator or a test ground for us. There's also probably categories that we may want to get into, and that's a great test environment to do so. So those are what's new about it. I would say the numbers, $2 billion to $3 billion, I want to make meaningful progress over the next 4 years is what I would tell you. Chuck, do you want to take the TheraBreath discussion on how we're marketing it together? Charles Raup: Yes. We see tremendous upside. And so it's a balance of -- there's room to run in rinse, as I showed before, and penetration in paste. So there will be some individual efforts. But as we look at this, what we're really thinking about this is penetration of the consumers' oral care regimen. So where we can, certainly between online promotions, those type of things, looking to pull it together. And in our early results, what we are seeing is we are having a high conversion rate of rinse users going over to the paste. So it is going across that -- the oral care needs. Richard Dierker: Olivia? Olivia Tong Cheang: So value is obviously still a very big driver. So can you talk about your confidence in ability to capitalize on that value-seeking consumer while also thinking about the impact on margins? That's number one. And then your full year organic sales growth targets clearly are ahead of a lot of your peers, but you have the highest exposure to right now, the lowest growth market. So as you think about the opportunity in front of you to capitalize on international markets, how can -- what's the pace to be able to do that to kind of offset -- to capitalize on some of that international opportunity while also being mindful of the fact that the U.S. consumer is pretty challenged. Richard Dierker: Yes. I'll take the second one first. So I would just say, you're right, the U.S. market is a slower growing market these days than many of the international markets. We're doing really well internationally. We're growing, but not all the international markets are fantastic. We're growing above market rates internationally as well. Even though categories for us only grew 1.8% last year, like I said before, ex our portfolio changes, our brand consumption was 3.5%. So in a tough environment, our brands and consumers bought those brands, and that's pretty strong growth. So that gives me a lot of confidence. Your first question was -- remind me, Olivia, I lost it. Margin and value. Well, it's kind of my answer to what I said to Bonnie. Despite the promotional environment, the brand matters, right? And what's unique about ARM & HAMMER? We talked about it a little bit, but we have a halo effect for advertising. So even though we're a value detergent, we're advertising everywhere. And most competitors in value and anywhere else can't advertise at the same rate we can, but it just doesn't work. So that's number one. Number two is we kind of gloss over it quickly, but Carlos Ruiz and his supply chain team and Carlos Linares, who supports it with R&D, our productivity numbers are just astronomical. And we have a muscle there. Carlos Linares walked you through our innovation muscle on NPD and had 5 different vectors. And that's why we, over time, can innovate and do 2% of sales or half of our organic growth rate. We have that same -- and maybe we should tell that story next year. We have that same story on productivity to be able to have productivity year after year after year, guess where most of that productivity comes from? High moving throughput on widgets, which is fabric care and home care. It helps everywhere, but it really over-indexes on households. So that helps offset any inflation we have or pressure we have on gross margin typically. Filippo Falorni: Filippo Falorni, Citi. I wanted to ask on the laundry category. Rick, you showed us the chart that shows the value part of laundry outperforming the premium. Like it's been going on for a couple of quarters. What is your expectations heading into 2026. And as you think about innovation, you made a bet on the laundry sheet as an alternative way of laundry. One of your competitors coming in with a different format. How are you thinking the competitive dynamic will evolve in '26 on that part of the category? Richard Dierker: Yes. So yes, you're right. Proctor's coming out with Tide EVO. That does nothing but bring more awareness to a different form in the laundry category, fantastic. We are going to be a value to Tide EVO in a big way. Our efficacy actually is really good, especially with the better sheet that Carlos just went through. So we're the #1 brand right now in that smaller subsegment, which is probably around $100 million plus if you include kind of off-channel sales. So I feel really good, continued about that. It's still a small part of the category, okay? So just to give perspective out there. And then what was your first question? How long do we think the value piece? Look, I think there's a -- that's more of a macro -- more than anything, it's more of a macro environment question. And I think the consumer continues to get pressed. Consumer confidence continues to be shaky. And yes, the club class of trade and the high-end consumers feel good because of the stock market. But the everyday consumer, the share of wallet going to purchases is still high. You might not have the same year-over-year inflation, but that share of wallet is still impactful. And so I believe that they're going to continue to make choices on value period the end. And so I would expect that to continue is what I would say. Unknown Analyst: Yes. So gross margins performed quite well in 2025 and in the year stronger than you had anticipated and have a strong guide for 2026. But we didn't get the gross margin bridge like we normally get. So I'm wondering if we can hear what the drivers were of that, but also maybe how gross margins are performing when you exclude Touchland kind of in the base business. And then second, I saw quite a few mentions of an ERP transition. I think a lot of people tend to get nervous around ERP transitions. I'm wondering if there's maybe a sell-in that we need to be contemplating as we work through the model. Richard Dierker: Yes. So I'll let Lee walk you through the gross margin bridge. We wouldn't go through details on margin, excluding Touchland, but he'll give you some color on that. And then maybe Ray can give you some color on our SAP go-live. I would tell you that we are not -- I know a competitor had a massive sell-in, we are not contemplating something like that. Lee McChesney: Yes. So for '25, just give you a perspective, again, kept margin flat. The commodity pressures, things like that, plus the tariffs are actually close to 200 basis points of pressure. The productivity offset a large portion of that. And then you have the benefit of the mix of the acquisitions kind of closing that gap to keeping it flat year-over-year. As you said, for '26 here, we kind of have the normal -- all those elements coming to be in that kind of 25 to 50 basis points. And then it's really the portfolio change that drives the rest up to 100 basis points. Richard Dierker: Yes. And then we have gone -- Kevin Gokey is here too, our CIO, and Ray is our new CTAO. And we've gone through SAP go-live. My first job at the company was the Director of Operations Finance, and I was on the project of going live with the SAP reinstalled. And we have a great supply chain and finance team and IT team that are just full-time dedicated to that project. We have a lot of confidence in it. But I'll let Ray talk about his thoughts. Ray Bajaj: So the larger strategy out here is we are digitizing our core so that we can do faster M&A and we can grow organically. Our S4 transformation is on track, we have a great team and we are getting up for go-live in our SAP transformation. And you will see, like our business processes improve as we build this robust platform, and it's going to be the engine of growth in the future. Richard Dierker: Yes. The only other comment I would add on that is, a lot of times when you see ERP transitions that really, really struggle is they're going from something -- nothing to something. We are doing our upgrade. We've been an SAP shop for a long, long time. Not to say there's not risk, but we have a lot of confidence in it. Okay. Well, again, I just want to thank everyone for coming out on the cold, blistery day in New York City. As you can tell, the management team has a lot of confidence. I have a lot of confidence. The company's portfolio has never been stronger as we look forward, and we're looking forward to executing well in 2026. So thank you.
Kentaro Asakura: Ladies and gentlemen, thank you very much for your patience. Now we would like to start FY 2025 Third Quarter Financial Results Presentation. I am from Corporate Communications. My name is Asakura. I will be facilitating today's session. In this presentation, we are going to use Japanese and English. We have simultaneous interpretation service available. [Operator Instructions] We have uploaded Japanese and English presentation material in IR library on our corporate website. Whenever necessary, please feel free to download the material. Today's presenters are Mr. Ogawa, Senior Executive Officer, CFO; Mr. Abe, Head of R&D Division; and Mr. Ken Keller, Head of Global Oncology Business. Now Ogawa and Abe are going to take you through the financial results for the third quarter FY 2025, and then we are going to open the floor for the Q&A. Today's session will be recorded. I would like to ask for your cooperation. Now Ogawa-san, please. Koji Ogawa: This is Ogawa. Thank you for participating in Daiichi Sankyo's earnings briefing today despite your busy schedule. Now I will explain the consolidated financial results for the third quarter of fiscal year 2025 announced at 15:00 today based on the materials. Please look at Slide 3. The content I will discuss today is as follows. Fiscal year 2025 third quarter consolidated financial results, business update, research and development update. The research and development update will be explained by Abe, Head of R&D Unit. We will take your questions at the end. Please look at Slide 4. These are the highlights of the current earnings. Our flagship products, the anticancer agents, ENHERTU and DATROWAY continued to grow steadily and revenue increased significantly. The cost of sales ratio improved compared to the second quarter and core operating profit increased by 8.8% year-on-year. No additional major temporary expenses were incurred in the third quarter. There are no changes to the fiscal year 2025 consolidated earnings forecast from the October announcement. Please note that as reference information, the latest sales forecast for each product are listed in the supplementary earnings materials. Although there are some movements in individual products, there is no change in total revenue from the October announcement. Please look at Slide 5. This slide shows an overview of the fiscal year 2025 third quarter consolidated financial results. The revenue was JPY 1,533.5 billion, an increase of JPY 165.9 billion or 12.1% year-on-year. Cost of sales increased by JPY 13.8 billion year-on-year. SG&A expenses increased by JPY 93.7 billion, and R&D expenses increased by JPY 38.1 billion. As a result, core operating profit was JPY 249.2 billion, an increase of JPY 20.2 billion or 8.8% year-on-year. Operating profit, including temporary income and expenses, was JPY 233.8 billion, a decrease of JPY 14.5 billion or 5.9% year-on-year and profit attributable to owners of the company was JPY 217.4 billion, an increase of JPY 8.8 billion or 4.2% year-on-year. Regarding actual exchange rates, the dollar was JPY 148.75, yen appreciation of JPY 3.81 compared to the same period last year and the euro was JPY 171.84, yen depreciation of JPY 7.02 compared to the same period last year. Please look at Slide 6. From here, I will explain the factors for increases and decreases compared to the same period last year. Revenue increased by JPY 165.9 billion year-on-year, and I will explain the breakdown by business unit. First, for the Japan business unit and others. Sales of DATROWAY, Belsomra for the treatment of insomnia and Lixiana, direct oral anticoagulant and Tarlige, the pain treatment drug increased. On the other hand, sales of Inavir, influenza treatment drug decreased. And unrealized profit on inventory of Daiichi Sankyo Espha was recorded as realized profit in the previous period, resulting in a revenue increase of JPY 10.7 billion. The actual increase or decrease in the vaccine business, which is affected by seasonal demand after provision for returns was an increase of JPY 300 million. Next, I will explain the overseas business units. Here, the foreign exchange impact is excluded. Oncology business increased by JPY 113.3 billion due to growth in sales of ENHERTU and contribution of at DATROWAY sales. American region decreased by JPY 24.3 billion due to the impact of generic entry for the iron deficiency anemia treatment, Venofer, and the impact of price competition for Injectafer. EU Specialty business increased by JPY 13.6 billion due to growth in sales of Nilemdo/Nustendi for the treatment of hypercholesterolemia. ASCA business, responsible for Asia and Latin America increased by JPY 35 billion as ENHERTU grew mainly in China and Brazil. Contract upfront payments and development sales milestones related to partnerships with AstraZeneca and U.S. Merck in the third quarter resulted in an increase of JPY 20.9 billion. We received development milestone income from AstraZeneca associated with approval for first-line treatment of HER2-positive breast cancer in the U.S. for DESTINY-Breast09 and received a second upfront payment from U.S. Merck for R-DXd, which were recorded as sales revenue. The foreign exchange impact on revenue decrease was JPY 3.3 billion overall. Slide 7 shows the factors for increase and decrease in core operating profit. I will explain the JPY 20.2 billion increase by item. As explained earlier, revenue increased by JPY 165.9 billion, including a foreign exchange impact decrease of JPY 3.3 billion. Next, regarding the cost of sales and expenses. Excluding the foreign exchange impact, Cost of sales increased by JPY 12.4 billion due to increased revenue and the recording of inventory valuation losses for ENHERTU and others in the second quarter. SG&A expenses increased by JPY 100.3 billion, mainly due to an increase in profit sharing with AstraZeneca. R&D expenses increased by JPY 42.6 billion due to increased R&D investment associated with development progress of 5DXd ADCs. The expense decrease due to foreign exchange impact was JPY 9.7 billion in total and the actual increase in core operating profit, excluding the ForEx impact was JPY 13.8 billion. Next, on Slide 8, I will explain the profit attributable to owners of the company. As explained earlier, core operating profit increased by JPY 20.2 billion, including the impact of ForEx. Regarding the temporary revenue and expenses, again, as explained at the second quarter briefing in late October, same period last year included temporary income from the sale of shares in Daiichi Sankyo Espha. However, this year, we don't have such impact. Although there were incomes related to litigation with former shareholders of Ranbaxy, overall income decreased. Furthermore, there was a JPY 34.7 billion negative impact due to CMO compensation fee associated with the change in the launch timing of HER3-DXd as well as write-down of inventories of DATROWAY and HER3-DXd. Financial income and expenses contributed positively to earnings by JPY 9.5 billion, mainly due to improved FX gains and losses. Income taxes and so on decreased by JPY 13.9 billion, reflecting lower pretax income and the lower effective tax rate compared to the same period last year. As a result, profit attributable to owners of the company increased by JPY 8.8 billion year-on-year to JPY 217.4 billion. Next is business update. Please turn to Slide 10. This slide shows the sales performance of ENHERTU. Global product sales for the third quarter of FY 2025 increased by JPY 102.4 billion year-on-year to JPY 506.8 billion. New patient share remains #1 in all major countries and regions for existing indications such as breast cancer, gastric cancer and lung cancer. Regarding the new indications, we've started promotion for first-line treatment of HER2-positive breast cancer in the U.S. last December, driving growth in new patient share. In China, we've initiated promotion for hormone-positive HER2 low or ultra-low chemo-naive breast cancer patients in December, followed by promotion for second-line treatment of HER2-positive gastric cancer in January. The NCCN guideline has seen new additions and updates for multiple cancer types. First, ENHERTU has been newly added as a Category 1 recommendation for adjuvant therapy in HER2-positive breast cancer with high recurrence risk. For HER2-positive metastatic breast cancer, HER2 monotherapy was already recommended as first-line therapy based on data from the DESTINY-Breast03 trial, a second-line trial, which demonstrated extremely high efficacy. Additionally, based on data from the DESTINY-Breast09 trial, combination therapy with pertuzumab has been newly added with a category 2A recommendation. For HER2-positive uterine cancer, in addition to existing recommendations for endometrial cancer, ENHERTU has been newly listed with a Category 2A recommendation for endometrial carcinosarcoma. For HER2-positive esophageal and gastric cancers, the recommendation level has been elevated from Category 2A to category 1. ENHERTU is already listed in the NCCN guidelines for numerous cancer types and is recommended for use. We'll continue to generate data to pursue further new listings and category updates. Next, I will explain the sales status of DATROWAY. Please refer to Slide 11. Global product sales for the third quarter fiscal 2025 reached JPY 31.6 billion, representing 83.8% of the October forecast. In addition to steady market penetration for the breast cancer indication in Japan and in the U.S., the lung cancer indication rapidly gained market traction in the U.S., significantly increasing the number of new patients. Globally, prescriptions were issued to over 3,000 cumulative patients, approximately 1.5x more than the end of the previous quarter. Sales growth significantly exceeded expectations in both the U.S. and Japan with lung cancer indication, particularly driving sales in the U.S. Given these circumstances, we've updated our full year forecast to JPY 47 billion, up by JPY 9.2 billion from the October forecast. For both breast cancer and lung cancer, prescriptions have expanded beyond the projections. This is primarily due to much higher-than-expected unmet needs, especially in the third line and later, leading to prescriptions for more patients than expected. Additionally, awareness among health care professionals regarding AE management such as stomatitis and dry eye, an area where we have focused on since the launch has increased and experience is being accumulated. Furthermore, DATROWAY has seen new additions and updates in the NCCN guidelines. For triple-negative breast cancer, it's been newly added as a Category 2A recommendation for first-line treatment. For EGFR mutated NSCLC, recommended EGFR mutation coverage has been expanded from the existing category to existing, widening the opportunity for DATROWAY to make further contribution. We'll continue to pursue further market penetration in existing sales regions and expand into new countries and regions while advancing efforts to obtain new indications. We are committed to delivering ENHERTU and DATROWAY to as many patients as possible who need these medications. Slide 12 shows an update on Seagen U.S. patent dispute related to our ADC. Last December, the U.S. Court of Appeals for the Federal Circuit issued a ruling reversing the District Court's decision that ordered us to pay damages and royalties to Seagen, finding that Seagen's U.S. patent was invalid. The court issued a ruling affirming the U.S. Patent and Trademark Office decision that Seagen's U.S. patent is invalid, dismissing Seagen's appeal. We highly value this ruling by the court. Slide 13 is information about the briefing session. On April 8, Japan time, we will hold the sixth 5-year business plan briefing. Once details are finalized, we will inform you. From here, this is the R&D update. I will hand it over to Abe, Head of R&D. Yuki Abe: Thank you. This is Abe. I will talk about the R&D update. First, I will explain about 5DXd ADCs. Next slide, please. In December last year, ENHERTU in combination therapy with pertuzumab obtained approval for the first-line treatment of the patients with HER2-positive unresectable or metastatic breast cancer in the U.S. As you know, this indication based on the DB09 study was approved under breakthrough therapy designation, priority review and real-time oncology review program. Regulatory filings have also been accepted in Japan, China and Europe. And through Project Orbis, multiple regulatory authorities are proceeding with reviews. Next, please. I will talk about the final analysis results of the DESTINY-Breast03 study presented at the San Antonio Breast Cancer Symposium in December last year. This is a Phase III study that compared and verified the efficacy and safety of ENHERTU and T-DM1 for second-line treatment of HER2-positive breast cancer. As you can see in ENHERTU group, the median OS was 56.4 months and estimated 5-year survival rate was 48.1%, showing long-term significant efficacy compared to the T-DM1 group's median OS of 42.7 months and estimated 5-year survival rate of 36.9%. In addition, no new safety findings were observed through long-term follow-up. And the incidence rate of ILD adjudicated to be drug related in the ENHERTU group was 17.5% with no Grade 4 or 5 ILD observed. This indication has already been approved and launched in many countries and regions, including Japan, the U.S. and Europe. But these results reconfirmed ENHERTU's consistent sustained efficacy and long-term safety and substantiated its contribution to improving survival. Next, please. This slide summarizes updates toward expanding indications for ENHERTU. ENHERTU is making steady progress in expanding indications in various countries and regions centered around breast cancer. And in December last year, based on the results of DB05 for post neoadjuvant therapy for HER2-positive breast cancer with high recurrence risk, it received breakthrough therapy designation in the U.S. Also in December, based on the results of DB06, approval was obtained in China for the indication of chemotherapy naive hormone receptor positive and HER2 low or HER2 ultra low breast cancer. And this month, based on the results of DG04, approval was obtained in China for the indication of second and later line treatments for HER2-positive gastric cancer. Previously, in China, third-line treatment for HER2-positive gastric cancer had conditional approval. But with this approval, full approval has been obtained for second and later-line treatment. Next, please. This slide shows the progress of each ENHERTU study. Aiming to contribute to more HER2-expressing cancers, we started DESTINY-Lung06 in October last year, targeting first-line treatment of HER2 overexpressing non-squamous NSCLC. And in December last year, we started the randomized phase of DESTINY-Ovarian01 targeting first-line maintenance therapy for HER2-expressing ovarian cancer and DESTINY-Endometrial-02 evaluating adjuvant therapy for HER2-expressing endometrial cancer. Next slide, please. From here, this is the progress of DATROWAY. Data from the TROPION-Breast02 trial targeting TNBC not eligible for PD-1, PD-L1 inhibitor treatment was presented at ESMO in October last year. Based on this data, filings for approval were submitted in Europe and China and were accepted in December last year. Procedures toward filing are also progressing in other countries and regions. For TNBC, as shown in the table on the left, in addition to the TB02, 3 Phase III studies are ongoing in early stage and recurrent metastatic stage. Next, please. This slide introduces new Phase III trial. The TROPION-Lung17 trial compares DATROWAY monotherapy with docetaxel in patients with non-squamous NSCLC in second line or later setting. Building on insights from prior studies such as TROPION-Lung01, we target at patients with TROP-2 NMR biomarker positive. This trial aims to expand the treatment opportunity for DATROWAY monotherapy in NSCLC. Next slide. This slide introduces the latest status of the ongoing DATROWAY trials. The first is the TROPION-Lung07 trial, which targets first-line treatment for non-squamous NSCLC with PD-L1 expression below 50%. This trial had not previously applied the TROP-2 NMR biomarker, but following a protocol amendment, PFS and OS in the TROP-2 NMR-positive population were newly added as primary endpoint. The second is the TROPION-Lung12 study. This is an adjuvant therapy trial for Stage 1 NSCLC with ctDNA positive or high-risk pathological features evaluating combination therapy with rilvegostomig. Regarding this trial, due to complexity of study operation, we've decided to discontinue patient recruitment. No new safety concerns were identified, and there is no impact on other DATROWAY trials. Next slide, please. From here onward, I would like to talk about the progress of next wave. For EZHARMIA, we are preparing a Phase I trial combining darolutamide with EZHARMIA for metastasic CRPC. Regarding DS-9606, a modified PBD ADC targeting Claudin 6, we've decided to discontinue its in-house development following a strategic portfolio review. Meanwhile, DS-3610, a STING agonist ADC introduced at last year's Science and Technology Day commenced its first in-human trial in November last year. This slide shows that EZHARMIA received Prime Minister's award. EZHARMIA was approved in Japan 2022 for the treatment of relapsed/refractory adult T-cell leukemia lymphoma and in 2024 for relapsed or refractory peripheral T-cell lymphoma. Japan was the first in the world to obtain approval. This time, in combination of health care -- in recognition of health care contribution through establishing a new cancer therapy targeting EZH1/2 epigenetic regulation, we've received the Prime Minister's award at the 8th Japan Medical Research and Development Awards following Enhertu's award at the 6th ceremony. We are extremely pleased that the drug independently developed by Daiichi Sankyo is contributing to patients' treatment and that its achievement has been recognized by the society. Finally, news flow from now onward. Regarding upcoming regulatory decisions, we anticipate review results for DESTINY-Breast11 trial from the U.S. FDA in the first half of next fiscal year. As for the upcoming key data readouts, for the DESTINY-Lung04 trial of ENHERTU for the first-line therapy of HER2-mutated NSCLC, data is expected in the first half of next fiscal year. For the TROPION-Lung07 and Lung08 trials of DATROWAY for first line of NSCLC, data is expected in the second half of next fiscal year. Furthermore, AVANZAR trial data is now expected in the second half of calendar year 2026. Additionally, data from TROPION-Lung 15 trial, which targets EGFR mutated NSCLC after osimertinib is still expected in the next fiscal year as previously planned. Slide 29 and onwards are appendix. Please take a look at those slides later. That's all from myself. Operator: [Operator Instructions] The first question is from Yamaguchi-san, Citigroup. The sound is back now to the translation line. Sorry, we missed the question from Yamaguchi-san. Unknown Executive: Well, regarding 9606, we stated that our in-house development will be discontinued. As we proceeded in our development, we had the result. And regarding mPBD itself, its utility was confirmed. Hidemaru Yamaguchi: And then how should we do moving forward? Unknown Executive: We may have an option taking partnership with other companies who may be interested in out-licensing of this asset, but in-house development will be discontinued. Therefore, regarding mPBD technology, its usefulness has been confirmed. Therefore, the subsequent researches are ongoing. Therefore, changing the targets, the clinical programs will continue. That is our policy. Hidemaru Yamaguchi: So I'm sorry. But including the competition, for clothing -- regarding 9606, given the strategic value, you decided not to do it on your own. Is that right? Unknown Executive: In giant cell tumor, we had a positive result. So there is a room of making more development in that area. But given the portfolio perspective, we decided not to continue the in-house development in this field. I see. Hidemaru Yamaguchi: Another question is ENHERTU marketing. First, starting from December, promotion started. And I'm sure if it's already appearing quantitatively in the numbers, but what is your feeling in the market, DB09 marketing promotional activities, how effective the activities are producing the results? Unknown Executive: Thank you for your question. Regarding DB09 current status, Ken Keller is going to give you a comment, please. Joseph Kenneth Keller: Yes. Thank you very much for the question. So DESTINY-Breast09, which is the first-line HER2-positive metastatic breast cancer indication, it's been launched in the U.S. The team is now educating our oncology customers in the U.S. The data, as you know, is really outstanding. It's being received very, very well. I would expect the adoption to be very, very quick. At this point, the oncology community knows ENHERTU very well. They're comfortable with it. And with this data, I think they will embrace it very quickly. Hidemaru Yamaguchi: Do you have some sense of penetration rate as of today or it's too early to say? Joseph Kenneth Keller: It is too early to say what it is. We just launched it really just a little while ago. And so we'll be able to provide you with more information in about a quarter from now. Operator: Next question is from Daiwa Securities, Hashiguchi-san. Kazuaki Hashiguchi: This is Hashiguchi speaking. My first question is related to ENHERTU Japan, your sales situation. So this time, you have made a downward revision of your forecast slightly compared to the original forecast, what's going -- what is going differently? What is the background for you to take your forecast downward? Can you explain about the reason and the background for that? Unknown Executive: Yes, I would like to make one comment first, and then I would like to ask Ken Keller to make some additional comments. In Europe, we are seeing some adjustment. When we look at the quarter-on-quarter situation in Europe, there has been a change to the ERP system. As a result, we had to do some shipment in the second quarter, and that was affecting the quarterly sales. But I would like to ask Ken Keller to comment on the situation in Europe and sales from a full year sales perspective. Joseph Kenneth Keller: Thank you very much. When we look at ENHERTU in Europe, we're in a situation where all of the countries have launched the HER2-positive second-line metastatic breast cancer indication. And the market share, the penetration has already achieved a very, very high level. And so we see continued growth in that setting. But now as we look forward, we're going to see substantial growth in Europe as the different countries obtain access for the HER2-low indication. We've got the HER2-low indication in most countries in Europe, but now we're working through the typical reimbursement approval. As these occur, you'll see an acceleration of growth in Europe. Kazuaki Hashiguchi: For Japan, what's the situation in Japan? Unknown Executive: Yes. Let me respond to that question regarding Japan. Last year, in April, we had seen some impact. NHI drug price revision just before -- just before the start timing in April, we had seen some last minute on demand and that impact still lingered. Overall, ENHERTU future growth trajectory in Japan remains unchanged. Kazuaki Hashiguchi: Next, DATROWAY NSCLC Phase III trial progress, that's what I would like to understand. Avanzar study was changed from the first half to the second half in terms of the timing. And for TL07, your disclosure was always saying that FY 2026, but AstraZeneca is saying first half of the calendar year. And in your fiscal year, latter half, you've made a timing change to the latter half of your fiscal year. And what is the reason behind this timing change? Unknown Executive: Thank you very much, Mr. Hashiguchi. First, regarding AVANZAR, enrollment has been complete. And with the event -- with the incidence of event, we understand that there has been change made, and that's all we know. And for TL07, 08, we've disclosed second half of this fiscal year. So it's still being in line with our initial plan. Kazuaki Hashiguchi: Regarding 07, primary endpoint was added this time. And so when you get the overall primary endpoint data, I guess you are going to make a disclosure. Is that the case? Or if you collect -- can collect the data on already set endpoint, are you going to disclose those endpoints first or like all of them altogether? Unknown Executive: Thank you very much for your question. Regarding 07, NMR biomarker has been added to primary endpoint, as we have explained. And next year, second half, the PFS data is expected to be disclosed. So whenever we have event, we are going to make a disclosure. And as we have experienced at AVANZAR, when event becomes long or takes longer, then the timing of the disclosure may come later. But when that happens, we are going to communicate to you. This time it's protocol amendment, with regard to that, we've had a lot of sufficient discussion. And what's more important here is that is that we are going to get the positive study results. So we do our best, and we continue this study. Operator: Next question is Sakai-san from UBS. Fumiyoshi Sakai: This is Sakai, UBS. My first question is about the follow-up question of TL-07. There are 4 primary endpoints now. Is that right? And then what is the hierarchy of the statistical analysis? And how should we consider the alpha? And TL-08 and 10, don't you have to change their primary endpoints? Unknown Executive: Thank you for your questions. Whether or not in total, there are 4 endpoints in ITT and NMR positive population, PFS and OS will be evaluated as primary endpoints. And as a result, how we will be leading to the filing, we will consider risks and benefits, taking a look at the study results and make a strategy for filing. Therefore, at this point in time, which is going to be included or not, I may have to expect that anything is not yet definite. Therefore, I'd like to reserve my comment this time. But based upon data, we will proceed our filing. Fumiyoshi Sakai: What about 08 and 07. Unknown Executive: regarding TL-08, we are also having discussion. And we are currently considering to include NMR as of today. And if we decide and add to this change, then we will also let you know. Concerning TL10, we don't have any idea at the moment to make such an aggressive change. Fumiyoshi Sakai: Second question is the inventory write-down on the balance sheet. I think it was towards the end of the year, and it increased remarkably. What are the items contributed to that increase? And like the past case, don't we have to worry about any potential write-off of inventories? Unknown Executive: Thank you for your question. At this point in time, there is no potential impairment we anticipate. So that's one point. And for ENHERTU and DATROWAY, overall, they are accelerating the growth globally. And especially the stock takings are accumulating in the U.S. for the purpose of growth, and that is affecting most. Operator: Next question is from BofA Securities, Mamegano-san. Koichi Mamegano: I am Mamegano from BofA Securities. I would like to make one clarification on IDX. Phase III trial received a clinical hold, but I heard that this clinical study was reconvened -- recommenced. Is that the case? And for this, I think it was a trial to support the filing. And can you tell me like whether you've made -- you've submitted the filing already or not? Unknown Executive: Yes. Thank you very much for your question. And sorry that we've concerned you I-DXd, we've received a partial clinical hold, and it's been lifted already. However, I would like to explain the current situation. ED8-Lung-02 study shows ILD series serious, may have ILD serious cases and our R&D team came to realize that and we stopped the patient recruitment, and we made a report to the FDA. And then FDA has issued partial clinical hold and that's been already disclosed -- sorry, that's been already lifted. But in a meantime, ourselves and Merck decided to have a more strict risk management for ILD. So ILD high-risk patients are now excluded from the trial, and we have more strict inclusion criteria. Independent data monitoring data is looking at the safety and efficacy data more frequently. And on top of that, participating investigators and clinical site staff are receiving additional education and updated training amendment of protocol, ILD symptoms and ILD management are now more thoroughly implemented with those partial clinical hold has been lifted. Koichi Mamegano: And for ED801 study submission. What is the impact on the filing? Unknown Executive: There is no impact on such filing. So we are having a discussion with the regulatory authorities in different countries and regions. And we stick to the original time line. That's all. Koichi Mamegano: One more question. You're going to announce MTP, midterm business plan in April. And that's -- with regard to DATROWAY, I'm sure this is a growth driver for you. But now you have a AVANZA trial. And in the second half, you're going to have top line result. And in midterm business plan, DATROWAY's assumption. How should we expect DATROWAY's assumption to be laid out in the MTP? Unknown Executive: Thank you very much for your question. Well, we would like to make a detailed presentation on MTP when we make announcement. So I can't make a detailed comment at this point of time. But DATROWAY study result such as AVANZA study result and the others will make a big difference in coming 5 years business. So when we make announcement of MTP, we will explain about the assumptions and the scenario on which MTPs being formulated. We would like to offer you as much explanation as possible. Operator: Next question is from Ueda-San, Goldman Sachs Securities. Akinori Ueda: This is Ueda, Goldman Sachs. I have a question about clinical trials of DATROWAY. This time, TROPION-Lung07, which biomarkers were used. As a result, enrollment increased in terms of number of patients and the data affect to the data announcement timing? Or do you think that you still need to review all those? And also for 08 study, biomarker usage is now under review. And if you decide to use it, then should we anticipate that the timing of announcement will be changing. Unknown Executive: Thank you for your question. Regarding the timing, this time, the enrolled patients numbers have been increased and already we completed enrollment. Therefore, there is no delay anticipated. It's already complete. But as we experienced with AVANZAR, if any events happen and causing any delay, we will let you know. So for the enrollment of the patients compared to the original plan, we added on NMR, and we have already completed the enrollment. Did I answer to your question? Akinori Ueda: Yes. And it's the same situation for 08? Unknown Executive: Regarding 08, as of today, I'm sorry, I cannot comment in details, but a similar strategy is taken to move forward. Akinori Ueda: I understood. My second question is about ENHERTU indication expansion impact. First, in the first-line treatment, as you expand the indication more, I think the sales will be accelerated. And already in the U.S. DB09 positive results has been disclosed. And as a result, do you see already some positive impact in the clinical practice? Or can we expect more acceleration of the sales expansion? And DB05 and 11, those approvals are also expected. And number of patients seems to be big. But given the number of cycles of treatment, I may consider 09 contribution may be big or if actual the target population expands and if the clinical practices are conducted more efficiently, then there will be also a major contribution expected from 11's result. Which way do you consider? Unknown Executive: For this question, Ken Keller will answer to your question. Joseph Kenneth Keller: So if I heard the question correctly -- we're already seeing some spontaneous use in DESTINY-Breast09, from almost the moment when that data became public. So we are seeing people adopting it and using it already, even though commercially, we've launched this just a little while ago. As we project out to the early-stage breast cancer settings of DESTINY-Breast11 and 05, in these early settings, the goal is cure. And both of these studies provide standard of care changing new data. And I expect them and everything we're hearing from the community is that they will -- it will be embraced very, very quickly. Did that answer your question? Operator: Next question is from JPMorgan Securities, Mr. Wakao, please. Seiji Wakao: This is Wakao from JPMorgan. My first question is as follows. This time, you didn't have a temporary expense. But wasn't there any special factor? And then for the CMO compensation fee, I thought that there is something which is still under negotiation. What's the status right now? Unknown Executive: Temporary expense that we disclosed. And on top of that, is there anything else? The answer is no. And going forward, with regard to the CMO compensation fee, we did -- if we scrutinize the situation and when something comes up, we are going to disclose. But at this point of time, we don't -- we haven't identified any outstanding remaining compensation fee that we need to pay to CMO. Seiji Wakao: When are we going to see the conclusion of this? Unknown Executive: We are having an ongoing discussion with CMO and we cannot determine when is the expected timing of the conclusion of this negotiation. Seiji Wakao: TL-07 and 08, you are now adding NMR marker -- biomarker. And can you explain about the background why you've decided to do so? I understand that you are trying to improve the probability of success. But if you are confident in the result of Dato, I don't think it was necessary, but what's the reason behind? Unknown Executive: Thank you very much for your question. We've had a lot of internal discussion on that. And at one point of time, we thought that this biomarker is not necessary. But pembrolizumab and Dato-DXd, as we have experienced in breast cancer, these 2 are good match. And for lung cancer -- in lung cancer, patients are hetero as based on our experience. So NMR biomarker in lung cancer is very critical. That's one of the reasons. And although you haven't asked this, but TL-17 NMR biomarker study is going to take place. So in the area of lung cancer, with the existence of biomarker, we can offer better benefit to the patients. And in 07, 08, by using biomarker, we can enhance the probability of success. That's why we've decided to add biomarker in the protocol. Seiji Wakao: So I understand that you've discussed with FDA on this. And for NMR-positive population, if you meet endpoint, I would understand that you can successfully make submission and of course, depending on the data, but I think you can get the approval from FDA. Unknown Executive: Yes, we've consulted with FDA before we amended protocol. And it all depends on how good our clinical trial result is. MTP is to be announced in April. The other day, in the JPMorgan Healthcare Conference, CEO mentioned regarding the profit outlook into 5 years. So in 5 years from now, you have a sales milestone for ENHERTU, and you have cliff with Lixiana. So the profit somewhat may decline. However, if things go well, you can make some growth. Seiji Wakao: And I think that's the outline of the message of you. But can you explain about that once again? Unknown Executive: Well, with regard to the next MTP to be announced in April, I am very sorry, but we cannot offer you any detailed comment because we are having an ongoing discussion to formulate MTP. Lixiana, LOE, Injectafers being impacted by generic, you understand those things quite well. Those would be the downside factor, negative factors. So with 5 ADC growth, we are hoping to catch up or compensate those decline as much as possible. And that's all I can tell you for now, but we are still committed to improve profitability and that's the baseline for the next MTP. Operator: Next question is Muraoka-san, Morgan Stanley MUFG Securities. Shinichiro Muraoka: I'm Muraoka from Morgan Stanley. I have a follow-up question about Wakao-san's conference-related item. I'd like to understand the wording exactly. Did you say decline or a slight decline? And I think it depends on how much inclusion you assumed. And if you included Dato conservatively, is it a decline or slight decline? Could you share that part once again with us? Unknown Executive: In terms of wording, the word we used is slight decline. And overcoming the factors against the profit, we will be putting ourselves back on track for growth. And in that context, this wording was used. But how much -- I'm sorry, we cannot talk about it specifically. But at any rate, there would be some directions, negative direction putting us downside, but we would like to recover from that as much as possible and all those measures will be incorporated in our 5-year business plan. So if it is a slight decline, then I think naturally thinking you should be able to achieve a V-shaped recovery after that. Shinichiro Muraoka: Another question is smuggling point, are you going to make acquisition by the time of next 5-year business plan? And how many deals at what the scale? Unknown Executive: Well, excuse me, what you're asking about is to acquire external assets? Shinichiro Muraoka: Yes, yes. Unknown Executive: At this point in time, we don't have anything that we can talk about. But again, in our 5-year business plan, we look at our pipeline, especially in early-stage pipelines, if there are anything which we can expect working as a complementary, we would like to pursue toward the growth during the 5-year business plan and beyond, we'd like to explore externally any good candidates of assets. So that strategy is unchanged. And before the announcement of April, the announcement of the 5-year business plan, nothing is now moving at the moment in this regard. Shinichiro Muraoka: And just one more point. Well, actually, your stock price went down much, but it came back quite quickly. Did you conduct a buyback, share buyback? It is a sharp decline and recovery. So I think probably in the next week, you will disclose whether you conducted the share buyback or not. But could you comment regarding share buyback, as we have been talking about it. Unknown Executive: We will take into the stock price and others, and we make a comprehensive review and make a decision. And so far, on a monthly basis, we have the timely disclosure in the first operating day. And on that timing, we will continue disclosing the information. Operator: Next question is from Bernstein, Sogi-san. Miki Sogi: Regarding TL-07 and TL-08, I have question. NMR biomarker is now added in the primary endpoint. And I think this is a good news. Regarding this, I have 2 questions. Regarding 07, 08, it was a combination with KEYTRUDA and you use NMR and then this will increase the probability of success. And I think it will have a big commercial impact because you can combine with standard of care KEYTRUDA. 07, 08, for those 2 studies, I think you are done with the patient recruitment. And within 12 months, the result will be presented. So you have come to this end. Now you're making amendment. But you've got the kind of like consensus from the FDA. Does that mean that FDA understands the significance of NMR as a biomarker? Unknown Executive: Thank you very much. In terms of the marketability, I would like to ask Ken Keller to make some comment. And I would like to respond to your second part of your question, whether -- how FDA sees the significance of NMR. Well, this relates to the discussion of contents of FDA, so I can't make any comment. But by including biomarker, our intention is to improve the probability of success of this trial. That was the main intention, and please allow me to repeat that point once again. And depending on the result, study result, we will consult with FDA and figure out how we want to do with the filing. Joseph Kenneth Keller: And the question in terms of adding in and working with the standard of care, you are absolutely correct. KEYTRUDA is clearly the market leader, and we've got a number of first-line non-small cell lung cancer studies with KEYTRUDA. And also, to remind you, we've got the AVANZAR study with Imfinzi which is AstraZeneca's I/O drug. So we feel that whatever the preference is of that specific oncologist, we're adding DATROWAY in a way that is very convenient, and it should lead to very quick confidence in our drug adding to whatever they prefer. Miki Sogi: Next, regarding MTP, regarding health care conference hosted by JPMorgan. I know you're announcing MTP in April, so you can't talk much about it now, but slight decline, as you say, with regard to profit, It's not margin. Are you talking about absolute amount? Is that correct, not margin? And also when the profit declines, the driver behind is, I guess, the aggressive R&D cost assumption. So in your case, 5 ADC has many trials and you have partners. So with regard to the R&D cost, I would assume that with AstraZeneca, Merck, you've already, I guess, made alignment on the cost. And I don't think you alone cannot make adjustment or changes by yourself, correct? Unknown Executive: With regard to the future R&D spending, splitting R&D cost between us and the partner has been determined. So we stick to that. Which study is to be dealt by who. This is different in different trial. And when we've made agreement and then we just stick to the cost split structure we've predetermined with the partner. During the MTP period, how are we going to control R&D cost? I think that's what you wanted to understand. So to that end, we have trials where we work with partners, and we have development that we take care of all by ourselves. So in coming 5 years, what are going to be -- which projects are we going to prioritize. That project prioritization and the resource allocation needs to be well managed. Miki Sogi: Okay. I have a follow-up question. In next 3 years -- well, in next 3 years, not 5 years, am I correct to understand that you've already had a lot of discussion with your partners as to what kind of trials are going to take place for what product. Unknown Executive: Yes, depending on the product, we are in a different stage. And for each product, we have formulated joint team. So rest assured, we have sufficient discussion going on between us and our partner through the joint team. And we stick to the priority that we decide on. Operator: The last question is from Tony Ren from Macquarie. Tony Ren: So I want to go back to your Claudin 6 ADC, the decision to discontinue DS-9606. My question is about the construct of the modified PBD construct. You mentioned its clinical utility has by now been established. Can I confirm that the decision -- because I also noticed your peer company, Chugai also discontinued a Claudin 6 T cell engager in October. Can I confirm that it might be an issue with the target of Claudin 6. Can you also give us any sense about the toxicity of the modified PBD construct? So that's my first question. Unknown Executive: Thank you for your question. Regarding mPBD. In terms of technology, yes, we confirmed that technology utility, as I mentioned earlier. And the reason we selected Claudin 6, there are several reasons. Therefore, we expected in this asset, but there are things that turned out as it's expected or unexpected. And in terms of science contents, we'll be discussing it in some medical conferences. So allow me not to touch upon those. But in terms of utility in the giant cell tumors, if we can confirm the efficacy, then technology-wise, it should be very good. And for that point, we could confirm. And also side effect was manageable as well. Therefore, amongst the difficult challenging technology with PBD, we believe that our technology utility level is high. And talking about the Claudin 6 in, giant cell tumors, can't it be developed for this particular type of tumor. Well, I think it is possible. Therefore, any companies interested in this may consider development, including in-licensing. But what about the business viabilities or in terms of portfolio. Well, given our business portfolio overall, we decided to discontinue. That is the background reason. Did I answer to your question? Tony Ren: Yes. Yes, answered very well. I was mostly concerned about the toxicity. My second and the last question is about your CapEx plan. So Nikkei Asia reported that you guys were considering spending JPY 300, that is close to USD 2 billion on CapEx, right, in 4 different countries, Germany, Japan, U.S. and China. This obviously feels pretty big in relation to the JPY 800 billion in CapEx you guys already disclosed in the last 5-year plan. Can I confirm that this JPY 300 billion is in addition to above and beyond the JPY 800 billion already committed? Unknown Executive: Thank you for your question about our CapEx. Well, it is not a new additional investment. So what we announced is as we have been explaining so far within the range that we have been already talking about, this spending will be incurred. Therefore, there is nothing new, nothing additional to the CapEx that we have already announced. Tony Ren: Okay. So it is part of the JPY 800 billion already announced? Unknown Executive: Yes. Sorry. I'm not familiar with the articles detailed content. But yes, your understanding is correct. Operator: Thank you very much. So with that, we would like to conclude today's earnings call. Thank you for your participation today.
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